Coca Cola

 In the mid-1980s, the Coca-Cola Company made a decision

to introduce a new beverage product.
 The company had evidence that taste was the single most
important cause of Coke’s decline in the market share in
the late 1970s and early 1980s.
 A new product dubbed “New Coke” was developed that was
sweeter than the original-formula Coke.
 Almost 200,000 blind product taste tests were conducted
in the United States, and more than one-half of the
participants favored New Coke over both the original
formula and Pepsi.
 The new product was introduced and the original formula
was withdrawn from the market.
What went wrong?

 First, there was a flaw in the market research taste tests

that were conducted: They assumed that taste was the
deciding factor in consumer purchase behavior.
 Consumers were not told that only one product would be
marketed. Thus, they were not asked whether they would
give up the original formula for New Coke.
 Second, no one realized the symbolic value and emotional
involvement people had with the original Coke.
 The bottom line on this is that relevant variables that
would affect the problem solution were not included in the
research.
Business Research

•A process of determining, acquiring,

analyzing, synthesizing, and disseminating
relevant business data, information, and
insights to decision makers in ways that
mobilize the organization to take
appropriate business actions that,
in turn, maximize business performance

1-3
Types of Decision Model
 Decision making under pure uncertainty
 Decision making under risk
 Decision making by buying information
 A Glass of water
 Optimist: The glass is half full
 Pessimist: The glass is half empty
 Manager: The glass is twice as large as it needs to be.

 A captain in a rough sea

 The optimist expects it to change
 The pessimist complains about the wind
 The realist adjusts the sails
Research Should Reduce Risk
 The primary
purpose of research
is to reduce the
level of risk of a
marketing decision
What’s Changing in Business
that Influences Research

New Research Information Technological

Perspectives Overload Connectivity

Shifting
Computing
Global
Power & Speed
Economics
Factors
Battle for Critical
Analytical Scrutiny of
Talent Business
Government
Intervention
The Marketing Research Industry:
Evolution of the Industry
 Charles Coolidge Parlin is known as the “father
of marketing research.”

8
 Marketing Research: A Brief History

• Pre-Marketing Research Era: colonization to the

Industrial Revolution
• Early Development Era: Industrial Revolution to 1920
• Questionnaire Era: 1920-1940
• Qualitative Era: 1940 to 1960
• Organizational Acceptance Era: 1960 to 1980
• PC Technology Era: 1980 to 1990
• Globalization-Online Era: since 1990
Scope of Marketing Research
 Marketing research can be used in:
 Product Management: One of the major scope of
marketing research is to manage the current products
and new products. In product management Marketing
Research is helpful in
 Competitive Intelligence – To understand the
competitive product strategy.
 Pre-launch strategy for new products
 Test Marketing – To monitor the performance of the
brand by launching in a select area and then taking it
across the country. In other words it is a small-scale
product launch used to determine the likely
acceptance of the product when it is introduced into a
wider market.
 Concept testing - to test the acceptance of a concept
by target consumers.
 Sales analysis: Marketing research is used to study the
sales trend and make suitable strategies when required. It
is used to
 Assess market potential
 Estimation of demand for a product
 Market share estimation
 Study seasonal variation for a product
 Market segmentation studies
 Estimate size of the market
 Need analysis to find out where the product fits in
 Corporate Research: Marketing Research is used to
analyze the corporate effectiveness. Some examples are:
 Assessing the image of the company
 Knowledge of the company activities
 Advertising Research: Advertising is an arena in which
Marketing Research is extensively used. Some scope are:
 Readership feedbacks – Mainly carried out for
newspapers and magazines
 Advertising Recall – To assess the recall of television or
other advertising and thereby assess its effectiveness.
 Syndicated Research: This is compiled by agencies on a
regular basis and sold to organizations on subscription
basis.
Role of Marketing Research in
Managerial Decision Making
Four Stages of Market Planning Process
 Situation analysis
 Strategy development
 Marketing program development
 Implementation
Situation Analysis
Analysis of
 Market environment
 Market characteristics
 Consumer behavior
Research Approaches
 Organize information obtained from prior studies
(secondary)
 Focus groups
Strategy Development
Market Research Provides Information to Assist
Management With Three Critical Decisions
 What business should we be in?
 How will we compete?
 What are the objectives for the business?
Marketing Program Development

 Programs embrace specific tasks

 Action program usually focuses on a single objective
in support of one element of overall business
strategy
Implementation
 Starts with decision to proceed to a new
program or strategy
 Commitment to objectives, budgets and
timetables
 Specific measurable objectives must be set for
all elements of marketing program
 "Did the elements achieve their objectives?"
 “Should the marketing program be continued,
discontinued, revised or expanded?"
P & G Luring Women with their
Feminine Toothpaste
 P & G has came out with “Rejuvenating Effects” a
gender specific toothpaste targeting the female
customers, who do 82% of the grocery shopping.
 The flavor and package of the product was
decided on the basis of the results from a
customer survey filled out by women.
 Though, the product is priced slightly higher
than the other brands P & G hopes to make
women think about the toothpaste in the same
light as skin care lotions and shampoo.
Who thinks they were right to try.
Marketing Research Types

Basic research

Applied research
Basic Research
Attempts to expand the limits
of knowledge
Not directly involved in the
solution to a pragmatic
problem
Basic Research Example
Do consumers experience
cognitive dissonance in low-
involvement situations?
Applied Research
 Conducted when a decision must be
made about a specific real-life problem
Applied Research Example
 Should McDonalds add Italian pasta
dinners to its menu?
 Marketing research told McDonald’s it
should not
 Should Procter & Gamble add a high-
priced home teeth bleaching kit to its
product line?
 Research showed Crest Whitestrips
would sell well at a retail price of $44
Types of Market Research
By Source By Methodology By Objectives

- Primary - Qualitative - Exploratory

- Secondary - Quantitative - Descriptive
- Causal
(or experimental)
Types of Market Research: By Source

Primary Collection of data specifically for the problem or

project in hand
Secondary Based on data previously collected for purposes
other than the research in hand (e.g. published
articles, government stats, etc)
Primary research
Benefits Drawbacks
•Directly relevant to the •Time consuming
business
•Often expensive
•Up-to-date data obtained
•Results may be misleading
•Competitors do not have if the sample size is too
access to the findings small, questions are unclear
or there is interviewer bias
Secondary research
Benefits Drawbacks
•Often quick and easy to •Data may not be reliable or
collect up-to-date

•A wide range of secondary •May not be totally relevant

data is available, especially
on the internet •May not be in a form that is
easily interpreted and
analysed
 TABLE 4.2
Criteria for Evaluating Secondary Data
_______________________________________________________________
Criteria Issues Remarks
_______________________________________________________________

Specifications/ Data collection method Data should be

Methodology Response rate reliable, valid,
Quality of data and generalizable
Sampling technique to the problem
Sample size at hand.
Questionnaire design
Field work
Data analysis

Error/ Examine errors in: Assess accuracy by

Accuracy Approach, Research design, comparing data
Sampling, Data collection, from different
Data analysis, Reporting sources.

Currency Time lag between collection Census data are

and publication. periodically
Frequency of updates updated by
syndicated firms.
 TABLE 4.2 (Continued)
Criteria for Evaluating Secondary Data
___________________________________________________________________
Criteria Issues Remarks
___________________________________________________________________

Objective Why were the data The objective will

collected? determine the
relevance of data.

Nature Definition of key variables Reconfigure the

Units of measurement data to increase
Categories used their usefulness,
Relationships examined if possible.

Dependability Expertise, credibility, Data should be

reputation and obtained from an
trustworthiness of the original rather
source. than an acquired
source.
__________________________________________________________________
 Types of Market Research: By Methodology

Qualitative Quantitative
Type of Question Probing Simple
Sample Size Small Large
Information per respondent High Low(ish)
Questioner’s skill High Low(ish)
Analyst’s skill High High
Type of analysis Subjective, Objective,
Interpretative Statistical
Ability to replicate Low High
Areas probed Attitudes Choices
Feelings Frequency
Motivations Demographics
Types of Market Research: By Objective
• Exploratory Preliminary data needed to develop an idea
further. Eg outline concepts, gather insights,
formulate hypothesis

• Descriptive Describe an element of an ideas precisely. Eg

who is the target market, how large is it, how
will it develop
• Causal Test a cause and effect relationship, Eg. price
elasticity. Done through experiment
 The Market Research Process
1. Defining the 2. Developing 3. Collecting 4. Analysing 5. Presenting
problem and the research the the the findings
objectives plan information information

Steps
Distinguish between Decide on Information is Statistical Overall conclusions
the research type - budget collected manipulation of to be presented
needed e.g. according to the data collected rather than
- data sources
the plan (It is (e.g. regression) overwhelming
- exploratory - research or subjective
approaches often done by statistical
- descriptive analysis of focus methodologies
- research external firms)
- causal groups
instruments
- sampling plan
- contact methods

Comments
If a problem is The plan needs This phase is Significant Can take various
vaguely defined, to be decided the most costly difference in forms:
the results can upfront but and the most type of analysis - oral presentation
have little flexible enough liable to error according to
- written conclusions
bearing on the to incorporate whether market supported by analysis
key issues changes/ research is
iterations quantitative or - data tables
qualitative
 The Management Problem
versus
the Marketing Research Problem
A distinction must be made between the management
problem or opportunity and the marketing research
problem.

Management Problem Marketing Research

Problems
•Focus on symptoms • Focus on causes
• Action oriented • Data oriented
In 2002, Westjet added service to two new Ontario
destinations, London and Toronto. As Westjet expanded
into Eastern Canada it began to run into competition from
Montreal-based discount carrier Jetsgo, which started in
2002.
In 2003 Jetsgo expanded into Western Canada to compete
directly on flights between Calgary and Toronto and
Montreal. In the first six months of 2004, Westjet’s net
earnings were $8.0 million compared to $15.5 million
during the first six months of 2003. Both Jetsgo and
Westjet modeled themselves on the highly successful US
Carrier Southwest Airlines. Both airlines offered the same
schedules, the same service, and the same fares. With
little to differentiate the two airlines Westjet began to
look at a way to increase passenger loyalty especially on
the longer haul domestic flights.
 Management Decision Problem
How to attract more loyal customers
Marketing Research Problem
Identify the factors that influence loyalty of airline
passengers
Marketing Research Objective
How to differentiate Westjet from the competition.
Exploratory research revealed that the consumer’s choice
of an airline is influenced by safety, ticket price, frequent
flyer program, convenience of scheduling and brand
name.
Westjet had to find a way to differentiate itself.
Secondary data, like the J. D. Power and Associates survey on “current
and future trends in the airline food industry” indicated that “food
service is a major contributor to customer loyalty”. This survey also
emphasized the importance of food brands.
The following research questions and hypothesis may be posed
RQ1 How important is food for the airline customers?
H1 Food is an important factor for airline travelers
H2 Travelers value branded food
H3 Travelers prefer larger food portions, but with consistent quality
H4. Travelers prefer exotic food.

This kind of research helped Westjet to define their marketing research

problem and approach. Focus groups and surveys were conducted to
check customers perceptions of food in Westjet aircraft. The results
provided support for all the hypothesis.
Westjet Airlines then made a few changes: new “culinary menus” larger
portions of food, new coffee and branded products, eg. Bernard
Callebaut chocolates.. This has resulted in better service increasing
customer satisfaction fostering loyalty
Research Design: Definition

 A research design is a framework or

blueprint for conducting the marketing
research project. It details the procedures
necessary for obtaining the information
needed to structure or solve marketing
research problems.
 A Classification of Market Research Designs

Research Design

Exploratory Research
Design Conclusive Research
Design

Descriptive
Causal Research
Research

Cross-Sectional Longitudinal
Design Design
Tasks Involved In a Research Design

Define the Information Needed

Design the Exploratory, Descriptive, and/or Causal

Phases of the Research

Specify the Measurement and Scaling Procedures

Construct a Questionnaire

Specify the Sampling Process and the Sample Size

Develop a Plan of Data Analysis

THE CONCEPT OF MEASUREMENT AND
SCALING

MEASUREMENT CAN BE DEFINED AS A

STANDARDIZED PROCESS OF ASSIGNING
NUMBERS OR OTHER SYMBOLS TO CERTAIN
CHARACTERISTICS OF THE OBJECTS OF
INTEREST
MEASUREMENT PROCESS
CONSISTS OF

 CONSTRUCT DEVELOPMENT
 SCALE MEASUREMENT
TO UNDERSTAND CONSTRUCT DEVELOPMENT
AND SCALE DEVELOPMENT

WE MUST UNDERSTAND THE TERM OBJECT

WHAT IS AN OBJECT ?
IT REFERS
TO ANY TANGIBLE ITEM IN A PERSON’S
ENVIRONMENT
THAT CAN BE
CLEARLY AND EASILY
IDENTIFIED THROUGH THE SENSES -
 IT HAS TWO PROPERTIES:

 OBJECTIVE PROPERTIES
 SUBJECTIVE PROPERTIES
OBJECTIVE PROPERTIES
RESEARCHERS DO NOT MEASURE THE OBJECTS
PER SE BUT RATHER THE ELEMENTS THAT
MAKES UP THE OBJECT

OBJECTIVE PROPERTIES ARE USED TO IDENTIFY

AND DISTINGUISH AN OBJECT FROM ANOTHER
SUBJECTIVE PROPERTIES
SUBJECTIVE PROPERTIES ARE ABSTRACT,
INTANGIBLE CHARACTERISTICS
THAT
CAN NOT BE
DIRECTLY OBSERVED OR MEASURED
CONSTRUCT DEVELOPMENT CAN BE
VIEWED AS AN INTEGRATIVE PROCESS IN
WHICH RESEARCHERS FOCUS THEIR EFFORTS
ON IDENTIFYING

THE SUBJECTIVE PROPERTIES FOR WHICH DATA

SHOULD BE COLLECTED FOR SOLVING
THE DEFINED RESEARCH PROBLEM
OBJECTIVE PROPERTIES-
AIR PLANE

 NO. OF ENGINES
 HEIGHTS
 WEIGHT
 LENGTH
 SEATING CAPACITY
 PHYSICAL CHARACTERISTICS OF SEATS

 TYPE OF AIRPLANE
AIR PLANE
SUBJECTIVE PROPERTIES

 QUALITY OF IN FLIGHT SERVICE

 COMFORT ABILITY OF SEATS
 SMOOTHNESS OF TAKE-OFF
AND LANDING ETC.
CONSUMER

OBJECTIVE PROPERTIES :
 AGE, SEX,
 MARITAL STATUS,
 INCOME,
 BRAND LAST PURCHASED,
 RUPEE AMOUNT OF PURCHASES
 TYPES OF PRODUCTS PURCHASED
 COLOR OF EYES AND HAIR
CONSUMER
SUBJECTIVE PROPERTIES

 ATTITUDES TOWARDS A PRODUCT

 BRAND LOYALTY
 HIGH INVOLVEMENT PURCHASES
EMOTIONS (LOVE, FEAR, ANXIETY ETC)
 INTELLIGENCE, PERSONALITY, RISK TAKER
SCALE MEASUREMENT
SCALING IS THE PROCESS OF CREATING A
CONTINUUM
ON WHICH
OBJECTS ARE LOCATED
ACCORDING TO THE AMOUNT OF THE
MEASURED CHARACTERISTIC THEY POSSESS
SCALE DEVELOPMENT IS
DESIGNING QUESTIONS
TO MEASURE
THE SUBJECTIVE PROPERTIES
OF
AN OBJECT
NOMINAL SCALE

NOMINAL SCALES ARE DEFINED AS THOSE THAT

USE ONLY LABEL;
THAT IS, THEY POSSESS ONLY THE
CHARACTERISTIC OF DESCRIPTION

THE RESPONSE DOES NOT INCLUDE ANY LEVEL

OF INTENSITY
IF ONE DESCRIBES RESPONDENTS IN A SURVEY
ACCORDING TO THEIR OCCUPATION—
BANKER, DOCTOR, COMPUTER
PROGRAMMER—
ONE HAS USED A NOMINAL SCALE
ORDINAL SCALE
AN ORDINAL SCALE IS OBTAINED BY RANKING
OBJECTS
OR ARRANGING THEM
IN ORDER
WITH REGARD TO SOME
COMMON VARIABLE
ORDINAL- SCALED QUESTIONS
PLEASE RANK EACH BRAND IN TERMS OF YOUR
PREFERENCE
PLEASE PLACE “1”
BY YOUR FIRST CHOICE,
“2”
BY YOUR SECOND CHOICE, AND SO ON
I. SONY
II. VIDEOCON
III. SAMSUNG
IV. LG
V. BPL
VI. PHILLIPS
INTERVAL SCALE
INTERVAL SCALES ARE THOSE IN WHICH THE
DISTANCE
BETWEEN EACH DESCRIPTOR IS KNOWN
IT DEMONSTRATES ABSOLUTE DIFFERENCES
BETWEEN EACH SCALE POINT
 THAT IS:
IF YOU WERE ASKED TO EVALUATE A STORE’S SALES
PEOPLE BY SELECTING A SINGLE DESIGNATION
FROM THE LIST OF

 EXTREMELY FRIENDLY
 VERY FRIENDLY
 SOME WHAT FRIENDLY
 SOME WHAT UNFRIENDLY
 VERY UNFRIENDLY
 EXTREMELY UNFRIENDLY
THE RESEARCHER WOULD PROBABLY ASSUME
THAT EACH DESIGNATION WAS ONE UNIT AWAY
FROM THE PRECEDING ONE

IN THESE CASES WE SAY THAT THE SCALE IS

“ASSUMED INTERVAL”
 INDICATE YOUR DEGREE OF AGREEMENT WITH FOLLOWING
STATEMENTS BY CIRCLING THE APPROPRIATE NUMBER

 STATEMENT STRONGLY STRONGLY

 AGREE DISAGREE
 I ALWAYS LOOK FOR BARGAINS 1 2 3 4 5
 I ENJOY BEING OUT DOORS 1 2 3 4 5
 I LOVE TO COOK 1 2 3 4 5
RATIO SCALE
RATIO SCALES ARE THE ONES IN WHICH
TRUE ZERO ORIGIN EXISTS—
SUCH AS
-ACTUAL NUMBER OF PURCHASES IN A
CERTAIN TIME PERIOD,
-RUPEES SPENT, MILES TRAVELED ETC.
A RATIO SCALE TENDS TO BE MOST
SOPHISTICATED SCALE
IN THE SENSE THAT IT ALLOWS THE
RESEARCHER
NOT ONLY TO IDENTIFY THE ABSOLUTE
DIFFERENCES BETWEEN EACH SCALE POINT
BUT ALSO TO MAKE
ABSOLUTE COMPARISONS BETWEEN THE
RESPONSES
APPROXIMATELY HOW MANY TIMES IN THE
LAST MONTH HAVE YOU PURCHASED ANY
THING OVER Rs.1000 IN VALUE AT NANZ
STORE?

0 1 2 3 4 5 MORE ( SPECIFY_ )
WHAT IS THE PROBABILITY THAT YOU WILL
USE A LAWYER’S SERVICES WHEN YOU ARE
READY TO MAKE A WILL?

______PERCENT
ASSESSING A RESPONDENT’S LIKING OF SOFTDRINKS WITH
NOMINAL ORDINAL, INTERVAL AND RATIO SCALES
NOMINAL SCALE

WHICH OF THE FOLLOWING SOFT DRINKS ON THE

FOLLOWING LIST DO YOU LIKE? CHECK ALL THAT APPLY

 COKE
 THUMS UP
 MOUNTAIN DEW
 PEPSI
 SEVEN UP
 SPRTIE
ORDINAL SCALE

PLEASE RANK THE SOFT DRINKS ON THE FOLLOWING LIST

ACCORDING TO YOUR DEGREE OF LIKING FOR EACH,
ASSIGNINIG MOST PREFERRED DRINK RANK=1 AND YOUR
LEAST PREFERRED DRINK RANK=6

 COKE
 THUMS UP
 MOUNTAIN DEW
 PEPSI
 SEVEN UP
 SPRTIE
INTERVAL SCALE

PLEASE INDICATE YOUR DEGREE OF LIKING OF EACH OF THE

SOFTDRINKS ON THE FOLLOWING LIST BY CHECKING THE
APPROPRIATE POSITION ON THE SCALE

DISLIKE DISLIKE LIKE LIKE A LOT

A LOT

COKE
THUMS UP
MOUNTAIN DEW
PEPSI
SEVEN UP
SPRTIE
RATIO SCALE

PLEASE DIVIDE 100 POINTS AMONG EACH OF THE FOLLOWING

SOFT DRINKS ACCORDING TO YOUR DEGREE OF LIKING FOR
EACH

 COKE
 THUMS UP
 MOUNTAIN DEW
 PEPSI
 SEVEN UP
 SPRTIE
THE SCALING TECHNIQUES

 THE COMPARATIVE SCALES

 THE NON – COMPARATIVE SCALES

THE COMPARATIVE SCALES

COMPARATIVE SCALES INVOLVE THE DIRECT

COMPARISON OF STIMULUS OBJECT
 IT IS A SCALE FORMAT THAT REQUIRES A
JUDGEMENT
COMPARING ONE OBJECT, PERSON, OR CONCEPT
AGAINST ANOTHER ON THE SCALE
COMPARATIVE SCALE DATA MUST BE
INTERPRETED IN
RELATIVE TERMS
AND HAVE ONLY
ORDINAL OR RANK ORDER PROPERTIES
NON COMPARATIVE SCALES
NON-COMPARATIVE SCALES REFER TO A SCALE
FORMAT THAT REQUIRES A
JUDGEMENT
WITHOUT REFERENCE TO
ANOTHER
OBJECT, PERSON, OR CONCEPT
THE RESULTING DATA ARE GENERALLY
ASSUMED
TO BE INTERVAL OR RATIO SCALED
 A Classification of Scaling Techniques
SCALING TECHNIQUES

Comparative NonComparative
Scales Scales

Paired Rank Constant Continuous Itemised

Comparison Order Sum Rating Rating
Scales Scales

Semantic
Likert Stapel
Differential
COMPARATIVE SCALES
PAIRED COMPARISON RATING SCALE:

THIS FORMAT CREATES

 A PRE-SELECTED GROUP OF
TRAITS
 PRODUCT CHARACTERISTICS
 OR FEATURES
THAT ARE PAIRED AGAINST ONE ANOTHER INTO
TWO GROUPS
RESPONDENTS ARE ASKED TO SELECT WHICH
IN EACH PAIR IS MORE IMPORTANT TO THEM
A RESPONDENT IS PRESENTED WITH TWO
OBJECTS AND ASKED TO SELECT ONE
ACCORDING TO SOME CRITERION

THE DATA OBTAINED ARE ORDINAL IN NATURE

PAIRED COMPARISON SCALES ARE FREQUENTLY
USED WHEN STIMULUS OBJECTS ARE
PHYSICAL PRODUCTS
Obtaining Shampoo Preferences Using Paired Comparisons
Instructions: We are going to present you with ten pairs of shampoo
brands. For each pair, please indicate which one of the two brands of shampoo
you would prefer for personal use.
Recording Form:
Jhirmack Finesse Vidal Head & Pert
Sassoon Shoulders
Jhirmack 0 0 1 0
Finesse 1a 0 1 0
Vidal Sassoon 1 1 1 1
Head & Shoulders 0 0 0 0
Pert 1 1 0 1
Number of Times 3 2 0 4 1
Preferredb
aA 1 in a particular box means that the brand in that column was preferred over
the brand in the corresponding row. A 0 means that the row brand was preferred
over the column brand. bThe number of times a brand was preferred is obtained
by summing the 1s in each column.
CONSTANT SUM SCALE:
THIS SCALE TECHNIQUE INVOLVES THE
ASSIGNMENT OF A FIXED NUMBER OF UNITS TO
EACH ATTRIBUTE OF THE OBJECT, REFLECTING
THE IMPORTANCE A RESPONDENT ATTACHES TO
IT.
WITH THIS TYPE OF SCALE, THE RESPONDENT
IS ASKED TO
DIVIDE OR ALLOCATE
A NUMBER OF POINTS,
PERCENTAGES,
OR RUPEES,
USUALLY A TOTAL SUM OF 100,
TO INDICATE THE RELATIVE IMPORTANCE OF
THE ATTITUDE BEING STUDIED
THE AMOUNTS THAT ARE ALLOCATED TO EACH
ALTERNATIVE INDICATES THE
RANKS
ASSIGNED TO THEM BY THE RESPONDENTS,
BUT IT ALSO INDICATES THE AMOUNT OF
DIFFERENCE
THE RESPONDENTS SET BETWEEN EACH
ALTERNATIVE
IMPORTANCE OF BATHING SOAP ATTRIBUTES USING A CONSTANT SUM

SCALE
INSTRUCTIONS

BELOW ARE THE EIGHT ATTRIBUTES OF BATHING SOAPS

PLEASE ALLOCATE 100 POINTS AMONG THE ATTRIBUTES SO

THAT YOUR ALLOCATION REFLECTS THE RELATIVE
IMPORTANCE YOU ATTACH TO EACH ATTRIBUTE

THE MORE POINTS AN ATTRIBUTES RECEIVES, THE MORE

IMPORTANT IT IS

IF AN ATTRIBUTE IS NOT AT ALL IMPORTANT, ASSIGN IT ZERO

POINTS

IF AN ATTRIBUTE IS TWICE AS IMPORTANT AS SOME OTHER

ATTRIBUTE, IT SHALL RECEIVE TWICE AS MANY POINTS
 AVERAGE RESPONSES OF THREE SEGMENTS
 ATTRIBUTE SEGMENT I SEGMENT II SEGMENT III
 MILDNESS 8 2 4
 LATHER 2 4 17
 SHRINKAGE 3 9 7
 PRICE 53 17 9
 FRAGRANCE 9 0 19
 PACKAGING 7 5 9
 MOISTURIZING 5 3 20
 CLEANING POWDER 13 60 15
 SUM 100 100 100
RANK ORDER SCALE:
IN THIS SCALE OF MEASUREMENT THE
RESEARCHER

USES RANKING QUESTIONS

AS THESE ARE CONSTRUED TO BE A FORM OF
OPINION QUESTIONS IN WHICH RESPONDENT IS
ASKED TO RANK
COMPARATIVELY
THE ITEMS LISTED
 BRAND RANK ORDER
COLGATE ________
CREST ________
AIM ________
CLOSE-UP ________
PEPSODENT ________
ULTRA BRITE ________
PLUS WHITE ________
STRIPE ________
GLEEM ________
MACLEANS ________
NON-COMPARATIVE SCALING TECHNIQUES

ONE OF THE TWO TYPES OF SCALING

TECHNIQUES IN WHICH EACH STIMULUS
OBJECT IS SCALED INDEPENDENTLY OF THE
OTHER OBJECT IN THE STIMULUS SET
 THESE CONSIST OF

 CONTINUOUS RATING SCALES

 ITEMIZED RATING SCALES
CONTINUOUS RATING SCALE:

A SCALE MEASURE THAT USES A SCALE POINT

FORMAT THAT PRESENTS THE RESPONDENT
WITH SOME TYPE OF
GRAPHIC CONTINUUM
AS THE SET OF POSSIBLE RESPONSES TO A
GIVEN QUESTION
IT IS ALSO REFERRED TO AS GRAPHIC RATING
SCALES
RESPONDENTS RATE THE OBJECTS BY PLACING
A MARK AT THE APPROPRIATE POSITION ON A
LINE THAT RUNS FROM ONE EXTREME OF THE
CRITERION VARIABLE TO THE OTHER
THE RESPONDENTS ARE NOT RESTRICTED TO
SELECTING FROM MARKS PREVIOUSLY SET BY
THE RESEARCHER
 THE FORM OF THE CONTINUOUS SCALE
MAY VARY CONSIDERABLY:
 THE LINES MAY BE VERTICAL OR
HORIZONTAL
 SCALE POINTS IN THE FORM OF NUMBERS
OR BRIEF DESCRIPTIONS MAY BE PROVIDED
 AND IF PROVIDED, SCALE POINTS MAY BE
FEW OR MANY
ONCE THE RESPONDENT HAS PROVIDED THE
RATINGS, THE RESEARCHER DIVIDES THE LINE
INTO AS MANY CATEGORIES AS DESIRED AND
ASSIGNS SCORES BASED ON CATEGORIES INTO
WHICH THE RATINGS FALL
THESE SCORES ARE TREATED AS INTERVAL DATA
EXAMPLE:
HOW WOULD YOU RATE RELIANCE RETAIL AS A
DEPARTMENT STORE?

VERSION 1

PROBABLY THE WORST---------------I---------------------------------------PROBABLY THE BEST

VERSION 2

PROBABLY THE WORST---------------I---------------------------------------PROBABLY THE BEST

0 10 20 30 40 50 60 70 80 90 100
 VERSION 3

VERY BAD NEITHER VERY GOOD

GOOD NOR
BAD
PROBABLY THE WORST---------------I---------------------------------------PROBABLY THE BEST
0 10 20 30 40 50 60 70 80 90 100
ITEMIZED RATING SCALE:
THE ITEMIZED RATING SCALE IS, PERHAPS, THE
MOST FREQUENTLY USED IN MARKETING
RESEARCH

BECAUSE OF ITS
SIMPLICITY AND
ADAPTABILITY
TO MOST MEASUREMENT SITUATIONS
THIS FORM OF RATING SCALE REQUIRES A
RESPONDENT
TO INDICATE HIS OR HER ATTITUDE BY
SELECTING A POSITION ON A
CONTINUUM
THAT REFLECTS A RANGE OF POSSIBLE VIEWS
REGARDING AN OBJECT
THE VARIOUS POSITIONS ON THE CONTINUUM
ARE SET UP IN A SEQUENTIAL ORDER
IN TERMS
OF THE SCALE POSITIONS
(IN OTHER WORDS, REPRESENTING THE
DEGREE OF ATTITUDE HELD)
THE SCALE POSITIONS ARE CLEARLY MARKED
WITH A
DESCRIPTIVE STATEMENT
OF SOME KIND
The Likert scale
 Semantic Differential Scale
• Here are a number of statements that could be used to describe
Sears. For each statement tick ( ) the box that best
describes your feelings about Sears.

Modern Store Old- fashioned store

Low prices High prices

Unfriendly staff Friendly staff

Narrow product Wide product range

range
Sophisticated Unsophisticated
customers customers
EXAMPLE Contd…
INDICATE YOUR IMPRESSION OF BUKHARA
RESTAURANT BY CHECKING THE LINE
CORRESPONDING TO YOUR OPINION FOR EACH
PAIR OF DESCRIPTORS
Convenient location inconvenient location
High prices low prices
For me not for me
Warm atmosphere cold atmosphere
Wide menu limited menu
Fast service slow service
High quality food low quality food
A special place an every day place
STAPEL SCALE:
THE STAPEL SCALE IS A SIMPLIFICATION OF THE
SEMANTIC DIFFERENTIAL

DEVELOPED BY JAN STAPEL

UNIPOLAR SCALE WITH 10 CATEGORIES
NUMBERED FROM - 5 TO +5, WITHOUT A
NEUTRAL POINT (ZERO),

WITH VALUES PROGRESSIONS RANGING

FROM POSITIVE TO NEGATIVE WHICH
MEASURE DIRECTION AND INTENSITY
SIMULTANEOUSLY
USUALLY PRESENTED VERTICALLY

RESPONDENTS ARE ASKED TO INDICATE THE

OBJECT BY SELECTING A NUMERICAL RESPONSE
CATEGORY
THE HIGHER THE POSITIVE SCORE, THE
BETTER THE ADJECTIVE
DESCRIBES THE OBJECT
THE MAIN VIRTUE OF THIS SCALE IS THAT IT IS
EASY TO ADMINISTER AND CONSTRUCT
BECAUSE THERE IS NO NEED TO PROVIDE
ADJECTIVES OR PHRASES TO ASSURE BI-
POLARITY
 A Stapel Scale for Measuring a Store’s Image

Source: Dennis Menezes and Norbert F. Elbert, “Alternative Semantic Scaling Formats
for Measuring Store Image: An Evaluation,” Journal of Marketing Research, February
1979, pp. 80–87. Reprinted by permission of the American Marketing Association.
EXAMPLE:

APPLICATION OF STAPEL SCALE FOR THE RETAIL STORE IMAGE STUDY

+5 +5 +5
+4 +4 +4
+3 +3 +3
+2 +2 +2
+1 +1 +1
WIDE LESSER HIGH
SELECTION KNOWN QUALITY
BRAND
-1 -1 -1
-2 -2 -2
-3 -3 -3
-4 -4 -4
-5 -5 -5
_____________________________________________
EXAMPLE : BANK STUDY
-5 -4 -3 -2 -1 +1 +2 +3 +4 +5

SERVICE IS COURTEOUS

LOCATION IS CONVENIENT

HOURS ARE CONVENIENT

LOAN INTERSET RATES ARE HIGH

Summary of Advantages and Disadvantages of Rating Scales
TYPICAL RESEARCH REPORT STRUCTURE
1. Title Page
2. Abstract
3. Acknowledgements (optional)
4. Contents
 List of Tables
 List of Figures
5. Introduction
6. Literature Review
7. Methodology
8. Data Analysis and Interpretation
9. Conclusions
10. Reference List
11. Appendices
Defining the Target Population
 It is critical to the success of the research project to
clearly define the target population.

 Rely on logic and judgment.

 The population should be defined in connection with

the objectives of the study.
Technical Terminology
 An element is an object on which a measurement is
taken.

 A population is a collection of elements about which we

wish to make an inference.

 Sampling units refers to the entities on which

measurements are made during a survey.
Technical Terms
 A sampling frame is a list of sampling units.

 A sample is a collection of sampling units drawn from a

sampling frame.

 Parameter: numerical characteristic of a population

 Statistic: numerical characteristic of a sample

Errors of nonobservation
 The deviation between an estimate from an ideal
sample and the true population value is the
sampling error.

 Almost always, the sampling frame does not match

up perfectly with the target population, leading to
errors of coverage.
Errors of nonobservation
 Nonresponse is probably the most serious of these
errors.
 Arises in three ways:

 Inability of the person responding to come up with

the answer
 Refusal to answer
 Inability to contact the sampled elements
Errors of observation
 These errors can be classified as due to the interviewer,
respondent, instrument, or method of data collection.
Census Sample
 A census study occurs if the entire population is very
small or it is reasonable to include the entire
population (for other reasons).

 It is called a census sample because data is gathered on

every member of the population.
Probability versus Nonprobability
 Probability Samples: each member of the
population has a known non-zero probability of
being selected
 Methods include random sampling, systematic sampling,
stratified sampling and cluster sampling.

 Nonprobability Samples: members are selected

from the population in some nonrandom manner
 Methods include convenience sampling, judgment
sampling, quota sampling and snowball sampling
Random Sampling
Random sampling is the purest form of probability
sampling.
 Each member of the population has an equal and known chance of
being selected.
 When there are very large populations, it is often ‘difficult’ to
identify every member of the population, so the pool of available
subjects becomes biased.
 You can use software, such as minitab to generate random numbers or
to draw directly from the columns
Systematic Sampling
 Systematic sampling is often used instead of random
sampling. It is also called an Nth name selection
technique.
 After the required sample size has been calculated,
every Nth record is selected from a list of population
members.
 As long as the list does not contain any hidden order,
this sampling method is as good as the random
sampling method.
 Its only advantage over the random sampling technique
is simplicity (and possibly cost effectiveness).
Stratified Sampling
 Stratified sampling is commonly used probability
method that is superior to random sampling because it
reduces sampling error.

 A stratum is a subset of the population that share at least

one common characteristic; such as males and females.
 Identify relevant stratums and their actual representation in
the population.

 Random sampling is then used to select a sufficient number

of subjects from each stratum.
Cluster Sampling
 Cluster Sample: a probability sample in which each
sampling unit is a collection of elements.
 Effective under the following conditions:
 A good sampling frame is not available or costly, while a frame
listing clusters is easily obtained
 The cost of obtaining observations increases as the distance
separating the elements increases

 Examples of clusters:
 City blocks – political or geographical
 Housing units – college students
 Hospitals – illnesses
 Automobile – set of four tires
Convenience Sampling
 Convenience sampling is used in exploratory research
where the researcher is interested in getting an
inexpensive approximation.

 The sample is selected because they are convenient.

 It is a nonprobability method.
 Often used during preliminary research efforts to get an estimate
without incurring the cost or time required to select a random
sample
Judgment Sampling
 Judgment sampling is a common
nonprobability method.

 The sample is selected based upon judgment.

 an extension of convenience sampling

 When using this method, the researcher must

be confident that the chosen sample is truly
representative of the entire population.
Quota Sampling
 Quota sampling is the nonprobability equivalent of
stratified sampling.

 First identify the stratums and their proportions as they

are represented in the population

 Then convenience or judgment sampling is used to

select the required number of subjects from each
stratum.
Snowball Sampling
 Snowball sampling is a special nonprobability method
used when the desired sample characteristic is rare.
 It may be extremely difficult or cost prohibitive to locate
respondents in these situations.
 This technique relies on referrals from initial subjects to
generate additional subjects.
 It lowers search costs; however, it introduces bias
because the technique itself reduces the likelihood that
the sample will represent a good cross section from the
population.
First of all there is the margin of error (or confidence intervals). In short, this
is the positive and negative deviation you allow on your survey results for the
sample. Or, in other words, the deviation between the opinions of your
respondents and the opinion of the entire population. Suppose you set your
margin of error on 5%. If – let’s hope so! – 90% of your survey respondents like
‘Sholay, a 5% margin of error means that you can be ‘sure’ that between 85%
(90%-5) and 95% (90%+5) of the entire population actually likes ‘Sholay’ .

Second there is the confidence level. This tells you how often the percentage of
the population that likes ‘Sholay’ actually lies within the boundaries of the
margin of error. Or, following on our previous example, it tells you how sure you
can be that between 85% and 95% of the population likes ‘Sholay’ . Suppose you
chose the 95% confidence level – which is pretty much the standard in
quantitative research1 – then in 95% of the time between 85% and 95% of the
population likes ‘Sholay’.
Sample Size?
 The more heterogeneous a population is, the larger the
sample needs to be.

 Depends on topic – frequently it occurs?

 For probability sampling, the larger the sample size, the

better.

 With nonprobability samples, not generalizable

regardless – still consider stability of results
 Problem 1
A study is to be performed to determine a certain
parameter in a community. From a previous study a sd
of 46 was obtained.
If a sample error of up to 4 is to be accepted. How many
subjects should be included in this study at 99% level
of confidence?

Desired Confidence Level z-score

80% 1.28
85% 1.44
90% 1.65
95% 1.96
99% 2.58
 2
Z σ 2
n
D 2
Inferences about Population Means
t-test
 For the univariate and bivariate analysis of metric
data (interval scale or ratio scale) we use ‘t’ test of
different types or the ‘z’ test.
HYPOTHESIS TESTING
 Marketer of a brand of jeans wants to find out whether set
of customers in Delhi and Mumbai thought of our brand
based on interval scale (1-7). We want to know that the two
sets of rating are “significantly different” from each other.
 Null Hypothesis: “There is no significant difference in the
ratings given by customers in Delhi and Mumbai”
 We desire the confidence level be 95 percent then (100-
95)/100 or .05 becomes the significance level.
 If the ‘p’ value is less than the significance level then we
reject the null hypothesis.
 These two are independent samples and a Independent
Sample ‘t’ test can be used.
 If the attitude is to be measured before and after the
ad campaign is shown on a 10 point scale on “Brand is
highly disliked” to “Brand is highly liked”.
 Null Hypothesis: “There is no difference in the ratings
given by respondents before and after they saw the ad
campaign”
 Assume that the significance level at .05
 If the ‘p’ value is less than .05 then reject
 In this case it is a set of dependent samples and is
called paired sample ‘t’ test.
Chi-Square test for cross tabulation
 To test if the two variables are statistically associated
with each other significantly
Is there a significant association between
income and person washing clothes
 Income per month  Person washing clothes
 < than 5000 1  Yourself 1
 5001-10000 2  Maid 2
 10001-15000 3  Any Other 3
 > 15000 4
Nonparametric Test of Chi2
 Again, the basic question is what you are observing in
some given data created by chance or through some
systematic process?

(O  E ) 2
 
2

E
O  observedfrequency
E  exp ectedfrequency
ANOVA (Analysis of Variance)
 This is an extension of the two independent samples
t-test
 Set of techniques for studying the cause and effect
of one or more factors on a single dependent
variable.
 The ANOVA is used when the independent variables
are of nominal scale (categorical) and the dependent
variable is metric (continuous) or at least interval
scaled.
There are 4 major types
 Completely Randomised Design in a One-way ANOVA
(single factor)
 Randomised Block Design (single blocking factor)
 Latin Square Design (two blocking factor)
 Factorial Design with 2 or more factors.
Completely Randomised Design
 This particular design is used when there is only one
categorical independent variable and one dependent
(metric) variable. Each category of an independent
variable is called level. The independent variable can
be different levels of prices, different sizes, different
colours and the effect (dependent variable) could be
sales.
 Shelf space and its impact on sales
 Shelf space categorised in 3 types
POP SHELF 1
WINDOWS 2
SHELF RACKS 3

Null Hypothesis: “The category of shelf space has no

significant impact on sales”
Randomised Block Design
 Is used if there is an additional variable (called the block)
which has an impact on the relationship between the
independent variable and dependent variables.
 Merchandising Activities

Full Set (Danglers, Stickers, Posters, POP) 1

Retail Pack (Danglers, Stickers, Posters) 2
No Display Pack (Posters, Stickers) 3

Null Hypothesis: Merchandising has no effect on the

relationship between Shelf Space and Sales
Factor Analysis
 Multivariate –Interdependence-Focus on Variables-Factor
Analysis

 It is a very useful method of reducing data complexity by

reducing the number of variables being studied

 The first set of weights (factor score coefficients) are chosen so

that the first factor explains the largest portion of the total
variance.

 Then a second set of weights can be selected, so that the second

factor explains most of the residual variance, subject to being
uncorrelated with the first factor.

 This same principle applies for selecting additional weights for

the additional factors.
Statistics Associated with Factor Analysis
 Communality. Amount of variance a variable shares
with all the other variables. This is the proportion of
variance explained by the common factors.
 Eigenvalue. Represents the total variance explained
by each factor.
 Factor loadings. Correlations between the variables
and the factors.
 Factor matrix. A factor matrix contains the factor
loadings of all the variables on all the factors
A 2 wheeler company is interested in determining which
variables his potential customers think about when they
consider his product (1=Completely Agree to 7=Completely
Disagree)
 I use a 2 wheeler because it is affordable
 It gives me sense of freedom to own 2 wheeler
 Low maintenance cost makes a 2 wheeler economical
 A 2 wheeler is essentially a man’s vehicle
 I feel powerful when I am on my 2 wheeler
 Some of my friends who don’t have are jealous of me
 I feel good when I see the ad on TV
 My vehicle gives me a comfortable ride
 I think 2 wheelers are a safe way to travel
 Three people should be allowed to travel on 2 wheeler
 Factor 1:- v4, v5, v6, v7
(Machismo) (Pride of ownership)
 Factor 2:- v8, v9
(Functional features)
 Factor 3:- v1, v10
(Economy)
 Factor 4:- v3
(Value)
Discriminant Analysis
 Multivariate-Dependence-One Dependent Variable-
Discriminant Analysis
 This technique is used where it is able to distinguish
between two or three set of objects or people based on
the knowledge of some of their characteristics
 i.e to predict a categorical dependent variable (called a
grouping variable) by one or more continuous or
binary independent variables (called predictor
variables).
Similar to Regression, except that criterion (or dependent
variable) is categorical rather than continuous.

-used to identify boundaries between groups of objects

For example: (a) does a person have the disease or

not
(b) Is someone a good credit risk or not?
(c) Should a student be admitted to college?
 Example: Consumer perception regarding 3 brand of
lipsticks namely Revlon (1), Maybelline (2) and Lakme
(3). The variables measured using 5 point rating scale
with a higher value indicating a favourable variable.
 Colour
 Price
 Long Lasting
 Packaging
 Finish