Marketing Research (MR)

BASIC CONCEPTS IN MARKETING RESEARCH ( MR )
Marketing Research does not qualify as Basic Research. Reason being it ( MR ) does not address itself to basic or fundamental questions in marketing, but tackles problems which seem to have immediate commercial potential.
Hence, Marketing Research regarded as Applied Research.

Problem Solving
Two types of Marketing Research Problem oriented
Marketing Research is a systematic and objective study of problems pertaining to the marketing of goods and services. Marketing Research is not restricted to any particular areas of Marketing but is applicable to all its phases and aspects. Marketing Research is the function which links the consumer, customer, and public to the marketer through information the information used to identify and define marketing opportunities and problems, generate, refine, and evaluate marketing actions, monitor marketing performance, and improve understanding of market as a process American Marketing Association
MARKETING RESEARCH
Books for Reference :
1. Marketing Research An Applied Orientation By
Naresh
K.Malhotra.
2. Marketing Research By G
C Beri.
J.Luck & Donald S.
3. Marketing Research By David
Rubin
BASIC CONCEPTS IN MARKETING RESEARCH

Marketing Research is a systematic design , collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. MR is a $100 billion industry globally.
Most large companies have their own MR depts. Which often play crucial roles within the organization. For Ex. Boeing ( www.boeing.com ) entrusted Harris Interactive, Toyota hired ATTIK market research firms, P & Gs CMK ( Consumer & Market Knowledge ), Fuji Photo film relies on its NDP market research firm.
Marketing Research is the systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing. Promising Careers in MR with worlds leading marketing research firms. Equally appealing are careers in business and non-business firms and agencies with in house marketing departments ( P & G , Coca-Cola , GM , and all leading FMCG companies in India and world )
MARKETING RESEARCH - CAREERS

Marketing Research Jobs & Hierarchy VP ( Marketing Research ) Research Director Assistant Director Research Senior Project Manager
Statistician / Data Processing Specialist

Senior Analyst Analyst Junior Analyst Fieldwork Director Operational Supervisor
MARKETING RESEARCH AS CAREER

To prepare for a career in Marketing Research, you should do the following. A. Take all the marketing courses you can. B. Take courses in statistics and quantitative methods C. Acquire Internet & Computer skills. Knowledge of programming languages is an added asset D. Take courses in psychology and consumer behavior E. Acquire effective written & verbal communication skills. F. Think Creatively. Creativity research
and common sense command a premium in marketing
MARKETING RESEARCH
Factors contributed to the growth of Marketing Research As a result of large scale production, producers do not have direct contact with the consumers. This leads to problems in marketing goods. Hence the manufacturer to know thru the marketing research, the potential areas where his goods could be marketed, a probable demand for the same and the extent of profitability and competition. To understand the buyer behavior as there has been a shift from a sellers to a buyers market. The emergence of specialists such as statisticians, psychologists and behavior scientists in a fairly large number has also enhanced the importance of marketing research in no small measure. Increasing use of computers , has contributed to the growth of marketing research. Changes in the composition of population, particularly the shift from the rural to the urban areas, has widened the scope for the marketing of various types of goods and services in the urban areas.
MARKETING RESEARCH- THREATS & LIMITATIONS

Marketing Research tends to be fragmentary in its approach due to which it becomes difficult to have an overall perspective in which a marketing problem is to be viewed and studied. Marketing Research becomes superficial and faulty in industry as the research is being used by people who have had no formal training in the subject. Absence of meaningful dialogue between marketing management team and market research team reduces the utility of research to the management.
MR is not an exact science

Threats of Marketing Research Excessive Interviewing
Lack of consideration and abuse of respondents.

Use of marketing research as sales ploy
MARKETING INFORMATION SYSTEM ( MIS )

Marketing Research is a structured , interacting complex of persons, machines, and procedures designed to generate an orderly flow of pertinent information, collected from both intra- and extra firm sources, for use as the basis for decision making in specified areas of marketing management. Marketing information is a formalized set of procedures for generating, analyzing, storing and distributing information to marketing decision makers on an ongoing basis.
MIS consists of people , equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to marketing decision makers.
MARKETING RESEARCH Vs MARKETING INFORMATION SYSTEM

Marketing Information System MIS provides information continuously Marketing Research * MR provides information provides information on the basis of ad hoc research studies.
More information can be obtained from MIS. * Limited info based on ad hoc MR projects. MIS concentrates on the storage and flow of * MR generates information, to be used information to the marketing managers. By marketing managers. MIS is a much wider concept. * MR is a narrow concept.
NARKETING INFORMATION SYSTEM ( MIS )

Marketing information system provides three types of information to marketing managers. 1. Recurrent Information 2. Monitoring Information 3. Requested Information
Recurrent Information
The Information which is provided on a periodic basis. Ex. Information on sales, market share, customer satisfaction and perceptions, Ad expenditure, etc., These information may be supplied on weekly or monthly basis.
MARKETING INFORMATION SYSTEM ( MIS )

Monitoring Information The information obtained from regular scanning of certain sources. Ex. Official publications, journals, annual reports of companies constitute common sources of monitoring information. Monitoring information can be helpful in identifying new market segments , new uses of the existing product as also possibilities of improving a product by introducing new features. Requested Information The information sought by a marketing manager , which involve a wide range activities such as cost and price analysis of competitive products, cash flow position of competitive companies, quality testing of competitive products etc., Once a request is made for specific information, then a series can be built up over time provided such information is useful and marketing managers need it frequently.
COMPONENTS OF MARKETING INFORMATION SYSTEM

Internal Records & Marketing Intelligence The internal reports on orders, sales, prices, costs, inventory levels, receivables, payables, etc., by analyzing this information, the Marketing managers can spot important opportunities and problems. The Order to Payment Cycle The heart of the internal records system is the order payment cycle. The speed, accuracy, and efficiency of the order to payment cycle can be achieved by using internet and extranets facilities. Sales Information Systems Databases customer databases, sales person data bases, etc., Data Warehousing accessibility of data to decision makers. Data Mining by using sophisticated statistical methods, customers trends, neglected customer segments and other useful information can be added upon in the data bases.
COMPONENTS OF MARKETING INFORMATION SYSTEM

Marketing Intelligence System Marketing Intelligence system is a set of procedures and sources , marketing managers use to obtain every day information about developments in the marketing environment. Marketing Intelligence can be collected from Books,& Newspapers, trade publications, & talking to customers Suppliers Distributors Meeting with other company managers Marketing intelligence can be improved by Training and motivating sales force to spot and report the new development in market place Motivating distributors, retailers, other intermediaries to pass important intelligence By networking externally By setting up a customer advisory panel By taking advantage of the Govt. data resources By purchasing information from outside suppliers By using on-line customer feedback systems to collect positive intelligence.
MARKETING INFORMATION SYSTEM ( MIS

Advantages of MIS In identifying significant market place changes. In analyzing the market trends and market opportunities. The system consists of disciplined methods for collecting information and helps to observe the customers and competition much better way. Companies with superior MIS enjoy competitive advantage. With an accurate MIS in place, a company can choose its markets better, develop better offerings and execute better marketing planning. Limitation of MIS MIS is limited in the amount and nature of information it provides and the way this information can be used by the decision maker. In MIS, the information is rigidly structured and cannot be easily manipulated. Tools of MIS Internal reports on orders, sales, prices, costs, inventory levels, payables, receivables etc., Sales Information Systems accurate reports on sales. Information in data-bases customer data bases, product data bases, salesperson data bases. Marketing Intelligence System set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
MARKETING DECISION SUPPORT SYSTEM

Decision support systems are integrated systems including hardware, communications network, data base, model base, software base, and the Decision Support user ( decision maker ) that collect and interpret information for decision making. Developed to overcome the limitations of an MIS, marketing decision support systems ( MDSS ) enables decision makers to interact directly with data bases and analysis models. Components of Marketing Decision Support System ( i ) Data sources both internal ( companys accounting system ) & external ( library sources ). Internal data provides data pertaining to orders, sales, inventory levels, receivables and payables. External data contains wide range of information such as governmental publications, reports, periodicals, provides information relate to consumer sales, buyer profiles, sales of retail outlets, evaluation of ad campaigns, major economic, social and demographic trends, etc., ( ii ) Data management identifying relevant data from a variety of sources, deciding on the extent of data and keeping the data in an easily available form.
COMPONENTS OF MARKETING DECISION SUPPORT SYSTEM
( iii ) Display Formats The display formats could range from simple ad hoc retrieval to more formal displays. A company may have a graphic display package consisting of such options as time series plots, bar and pie charts, scatter diagrams where comparison of two measures is involved.
(iv ) statistical analysis performance of different statistical operations such as calculation of averages, standard deviation and regression, to understand the relationship among the marketing variables.
( v ) modeling - mathematical formulations, which tests the marketing decisions & to ascertain what could be the possible outcome in a given situation.
Marketing Information System Vs Marketing Decision Support System MIS MDSS

Centralized information , rigidly structured * Decentralized and allows marketing managers to interact directly with the database * unstructured problems * use of models * user-friendly interaction * adaptability
Structured Problems Use of reports Rigid structure Information displaying restricted
Can improve decision making by clarifying raw data.
* can improve the decision making by using Expert systems and artificial intelligence procedures.
MARKETING RESEARCH DESIGN

Research design is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions and to control variance. - Kerlinger A Research design is the specification of methods and procedures for acquiring the information needed. It is the over-all operational pattern or framework of the project that stipulates what information is to be collected from which sources by what procedures. - Green &Tull A research design is a heart and soul of a marketing research project. It outlines how the marketing research project will be conducted and guides data collection , analysis, and report preparation. - Seth Ginsburg A research design is a framework or blueprint for conducting the marketing research project . Research design specifies the details of the procedures necessary for obtaining the information needed to structure and or solve marketing research problems.
COMPONENTS OF A RESEARCH DESIGN

Components of a research design A. design the exploratory, descriptive and or casual phases of the research. B. define the information needed C. specify the measurement and scaling procedures. D. Construct and pre-test the questionnaire or an appropriate form for data collection. E. specify the sampling process and sample size F. develop a plan of data analysis.
CRITERIA OF RESEARCH DESIGN

A good research design should have the following criteria.
1. The main criterion of a research design is that it must answer the research questions.
To do this, it is necessary that proper hypotheses be formulated otherwise there may be a lack of congruence between the research questions and hypotheses.
2. The second criterion relates to control of independent variables to do this, it is necessary to follow the random procedure of selection wherever possible.
3. The third criterion is generalisability. To what extent we can generalise the results of the study.
PRIMARY VERSUS SECONDARY DATA
Primary Data
Primary data pertains to firsthand information collected for a specific purpose.
Secondary Data
* Secondary data collected originally for a more general purpose, usually by a third party. * Data collected for some purpose other than the problem at hand. * provides wealth of information to the Market researcher.
Data originated by the researcher for the specific purpose of addressing the research problem.
Primary research is specially commissioned since it is unlikely that related data is available already.
Collection cost is very high & collection time is long.

Ex. The potential of sale for an innovative new product can only be found through the primary research.
* Collection cost relatively low & collection time is short.

* Govt. statistics, popular media Technical / specialist publications third party data services, casual research, online services, competitive market intelligence, company accounts, patent application job advertisements.
ADVANTAGES & DISADVANTAGES OF SECONDARY DATA

Easily accessible The collection cost is relatively low. The secondary data can be quickly obtained
Functions of Secondary Data To identify the problem Better define the problem Develop an approach to the problem Formulate an appropriate research design To answer some research questions & to test some hypotheses Interpret primary data more insightfully.
Disadvantages of Secondary Data Usefulness of secondary data for the current problem may be limited in relevance and accuracy. The objectives, nature and methods used to collect the secondary data may not be appropriate to the present situation. Lack of accuracy and may not be dependable.
RESEARCH DESIGN - CLASSIFICATION

Research design broadly classified as Exploratory research & conclusive research.
Research Design
Exploratory Research Design
Conclusive Research
Design
Descriptive Research
Causal Research
Cross-sectional design
Longitudinal design
Single cross-sectional design
Multiple cross Sectional design
RESEARCH DESIGN CONCLUSIVE RESEARCH

Conclusive Research is a research designed to assist the decision maker in determining, evaluating, and selecting the best course of action to take in a given situation. Conclusive research is typically more formal and structured than exploratory research. Conclusive research is based on large, representative samples, and the data obtained are subjected to quantitative analysis. The findings from conclusive research are considered to be conclusive in nature in that they are used as input in to managerial decision making.
Classification of marketing research data

Marketing Research Data Secondary Data Primary Data
Qualitative Data
Quantitative Data
Descriptive Survey Data Observation & other data
Casual
Experimental data
RESEARCH DESIGN EXPLORATORY RESEARCH

Exploratory Research is one type of research design , which has as its primary objective the provision of insights in to and comprehension of the problem situation confronting the researcher. The focus is on the discovery of ideas. Ex. To ascertain the reasons for declining sales. Exploratory study is generally based on the secondary data that are readily available. Functions of Exploratory Research To formulate a problem or define a problem more precisely Identify alternative courses of action Develop hypotheses Isolate key variables and relationships for further examination Gain insights for developing an approach to the problem Establish priorities for further research.
EXPLORATORY RESEARCH DESIGN

Exploratory research is meaningful in any situation where the researcher does not have enough understanding to proceed with the research project. Exploratory research is characterized by flexibility and versatility with respect to the methods because formal research protocols and procedures are not employed. The creativity and ingenuity of the researcher plays a major role in exploratory research. Tools & Methods used in Exploratory Research Survey of Experts individuals knowledgeable about the firm and the industry , may help formulate the marketing research problem. Its is done without a formal questionnaire and in an unstructured personal interviews. Pilot Surveys the surveys that tend to be less structured than large scale surveys in that they generally contain more open ended questions and the sample size is much smaller. Secondary data analyzed in a qualitative way information made available by business and governmental sources, commercial marketing research firms and computerized data bases. Qualitative Research an unstructured exploratory research methodology based on small samples that provides insights and understanding of the problem setting.
DIFFERENCES BETWEEN EXPLORATORY & CONCLUSIVE RESEARCH

EXPLORATORY RESEARCH
Objective
Characteristics
CONCLUSIVE RESEARCH
To test specific hypotheses and examine relationships
Information needed is clearly defined. Research process is formal and structured. Sample is large & representative data analysis is quantitative. Conclusive findings used as input in to decision making.
To provide insights and understanding

* Information needed is defined only loosely. Research process is flexible and unstructured. sample is small and non-representative. analysis of primary data is qualitative.
Findings / Results
Tentative Generally followed by further exploratory or conclusive research.
Outcome
DESCRIPTIVE RESEARCH
Descriptive Research is a type of conclusive research that has as its major objective the description of something usually market characteristics or functions. Major functions of Descriptive Research To describe the characteristics of relevant groups such as consumers, sales people, organizations, or market areas. To estimate the percentage of units in a specified population exhibiting a certain behavior. To determine the perceptions of product characteristics. To determine the degree to which marketing variables are associated. To make specific predictions. Examples of descriptive studies Market studies to describe the size of the market, buying power of consumers, availability of distributors & consumers profiles. Market share studies proportion of total sales received by a company & its competitors. Sales analysis studies sales by geographic region, product line, type and size of the account. Image studies, product usage studies, distribution studies, pricing studies & advertising studies.
Descriptive Research can be divided in to two broad categories. 1. Cross sectional studies 2. Longitudinal Studies Cross Sectional Studies
* A cross sectional study is concerned with a sample of elements from a given population. Cross sectional studies may deal with households, dealers, retail stores or other entities. Field Studies Cross Sectional Studies
Surveys
Field Studies Field Studies are ex-post facto scientific enquiries that aim at finding the relations and inter-relations among variables in a real setting. Field studies are done in life situations like communities, schools, factories, organizations and institutions.
Strengths of Field Studies Field studies are close to real life, and hence they cannot be criticized that they are remote or artificial Field studies are more socially significant than other types of study. Field studies are also strong in their heuristic quality. Weaknesses
Field studies are scientifically inferior to laboratory and field experiments. The inter-relations among variables investigated thru field studies are weaker than they are in laboratory experiments.
Lack of precision in the measurement of variables, as the field situations are more complex. Field studies have practical problems in respect of feasibility , cost , sampling, and time. Field studies take more time and involve greater cost.
DESCRIPTIVE STUDIES
Survey Research Survey research has wide scope.
Detailed information can be obtained from a sample of a large population.

Survey research is more economical as more information can be collected per unit of cost. Survey research needs less time than a census inquiry. Disadvantages Survey research does not penetrate below the surface as more emphasis is given to the extent of information sought rather than to an in-depth analysis.
Survey research demands more money and time especially when conducted on a large scale.
The interview in survey research makes the respondent alert and cautious and the respondent may not answer the questions in a natural manner, which will make the survey research invalid.
DESCRIPTIVE RESEARCH STUDIES

Longitudinal Studies - Longitudinal studies are based on Panel data & Panel methods.
Panel is a sample of respondents who are interviewed and then re-interviewed from time to time.
Panel data relate to the repeated measurements of the same variables. Each family included in the panel, records its purchase of number of products at regular intervals, say , weekly, monthly, or quarterly. Over a period of time, such data will reflect changes in the buying behavior of families. Advantages of Panel Data Panel data enable the researcher to undertake a detailed analysis. ( changes in characteristics of individuals who changes brands frequently, will help the marketing firm to focus the particular segment of market where promotional effort should be focused ) More comprehensive data could be obtained as the individuals, families give periodical info. More accurate data than survey research data. Cost of data collection is relatively lower than personal interviews.
DESCRIPTIVE RESEARCH STUDIES

Disadvantages of Panel Data Panel data may not be representative samples some person may refuse serve on panel which will distort the representative nature of original sample. Many organizations pay money to the panel members to avoid this situation. Panel members may report a wrong data. if the panels are not well maintained, panel will not act with the sense of responsibility and will not supply accurate information. If the initial attraction of membership of panel is faded, members may lose interest in the task of giving accurate data, and may not fully co-operate with the research organization. This will affect the quality of information. Sometimes, panel members may deliberately give wrong information to show off their status, annoyance over periodical reporting or repeated interviews.
QUALITATIVE RESEARCH PROCEDURES

Qualitative Research Procedures
Direct ( No disguised )
Indirect ( Disguised )
Focus Groups
Depth Interviews
Projective Techniques
Association Techniques
Completion Techniques
Construction Techniques
Expressive Techniques
PROJECTIVE TECHNIQUES
Projective Techniques Projective Techniques is an unstructured and indirect form of questioning encourages the respondents to project their underlying motivations, beliefs, attitudes, or feelings regarding the issues of concern. Respondents attitudes are uncovered by analyzing their responses to scenarios that are deliberately unstructured, vague, and ambiguous. Association Techniques It is projective technique in which the respondent is presented with a stimulus and asked to respond with the first thing that comes to mind. Ex. In dept. stores study, some of the test words could be Location , Parking , Shopping Quality etc. subjects response recorded to each word is recorded verbatim, and the responses are timed. The responses reveal the respondents inner feelings, about the topic of interest. Completion Techniques In completion technique the respondent is asked to complete an incomplete stimulus situation. Two types. Sentence Completion & Story Completion ( to check the respondents feelings, emotions etc ) Ex. A person who shops at Reliancefresh is When I think of shopping in a dept. store, I
PROJECTIVE TECHNIQUES
Construction Techniques It is a projective technique in which the respondent is required to construct a response in the form of a story, dialogue or description. Two main types are ( 1 ) Picture Responses ( 2 ) Cartoons Picture Response ; Respondents are shown a picture and asked to tell a story de3scribing it. The responses are used to evaluate attitudes towards the topic and describe the respondents. Cartoon Tests Cartoon characters are shown in a specific situation related to the problem. The respondents are asked to indicate what one cartoon character might say in response to the comments of another character. The responses indicate the respondents feelings, beliefs, attitudes towards the situation. Expressive Techniques In expressive techniques, the respondents are presented with a verbal or visual situation and asked to relate the feelings and attitudes of other people to the situation. The two main expressive techniques are role playing and third person technique. Advantages of Projective Techniques Elicit responses that subjects would be un-willing or unable to give. Can increase the Validity of responses. Disadvantages : ( 1 ) Expensive ( 2 ) serious risk of interpretation bias. ( 3 ) some projective techniques such as role playing etc., may not be representative of population of interest.
QUALITATIVE RESEARCH TOOLS

Depth Interviews The aim of depth interview is to secure the maximum amount of useful information from the respondent on a particular topic with the minimum intervention from the interviewer. A depth interview is an unstructured discussion between the interviewer and the respondent. Depth interview is generally lengthy ( anything up to 1 Hr. ) and is best carried out by trained and experienced interviewer. The role of the interviewer is to obtain detailed information on the topic needed within the time available, balance the need for open ended discussion with the need to address certain topics. Depth interviews are particularly useful during the early stages of a product / brand development when new ideas are required and little leads been decided.

Methods used in Exploratory Research - Focus Group Interview Focus groups generally bring together in a casual setting eight to ten people with similar backgrounds to apply the principles of group dynamics and free association to a marketing problem. A moderator guides the discussions but allows consumers to interact with each other. The session which lasts about two hours , are usually videotaped. Advantages in Focus Group Interview Generate hypotheses about consumers and market situations. Suggest fresh & revitalized ideas. Check an advertisement, package, or product concept to determine if anything about it confusing, misleading, or negative. Understands consumers language and motivations. Understands consumers lifestyles and personalities. Explores new areas as a prelude to a quantitative study. Do a postmortem on a failed product.

Metaphor Analysis Metaphor is the expression of consumers thought processes in the form of series of images, or pictures in their mind, a non-verbal form, through the use, say, of sounds, music, drawings or pictures to describe or represent feelings about another. Consumer theorists believe that people use metaphors as the most basic method of thought and communication. Metaphor analysis relies on visual images to assess consumers deep and subconscious thoughts about products, services, and marketing strategies. In metaphor analysis, consumer perceptions on advertising, pre-screened respondents were asked to bring in to a depth interview pictures that illustrated their perceptions of the value of advertising.
QUALITATIVE RESEARCH Vs QUANTITATIVE RESEARCH

Quantitative Research Quantitative research mostly deals with numerical information. Consists of experiments , survey techniques and observation etc. Qualitative Research * Qualitative research deals with less tangible Data such as consumer opinions. * methods mainly consists of depth interviews Focus group, metaphor analysis, collage research, projective techniques etc., * to obtain new ideas for promotional campaign and products that can be tested more Thoroughly in larger, & more comprehensive studies.
Primarily to understand effects of various promotional inputs on the consumer & to predict the consumer behavior.
This research approach is known as Positivism. * the research approach is termed as inter- pretivism. The findings are descriptive, empirical and can be generalized to a larger populations. * the findings cannot be generalized to a large populations.
CAUSAL RESEARCH DESIGN

Causal Research investigates the cause and effect relationship between two or more marketing variables. Causal research seeks to determine whether there is a causal connection between an action that the decision maker is considering and the objective being sought.
Appropriateness of Causal Research

To understand which variables are the causes and which variables are the effect of a phenomenon. To determine the nature of the relationship between the causal variables and the effect to be predicted.
The design of causal research is based on reasoning along well tested lines.
Principles of Causal Research 1. Method of agreement when two or more cases of a given phenomenon have one and only one condition in common, then that condition may be regarded as the cause ( or effect ) of the phenomenon. 2. method of concomitant variation if a change in the amount of one variable is accompanied by a comparable change in the amount of another variable in two or more cases, and the later change does not occur in the absence of the first change, one change is the cause ( or effect ) of the other.
RELATIONSHIPS AMONG EXPLORATORY, DESCRIPTIVE & CASUAL RESEARCH

Exploratory research is appropriate when the problem needs to be defined more precisely, alternative courses of action identified, research questions or hypotheses developed etc., Exploratory research is the initial step in the overall research design framework. It should be followed by descriptive or casual research. For Exp. The hypotheses developed via exploratory research should be statistically tested using descriptive or casual research.
Exploratory Research
Descriptive Research
The objective is to describe the market characteristics of functions. the characteristics are marked by the prior formulation of specific hypotheses , preplanned and structured design.
Causal Research ( Experimental Designs )

The objective is to determine the cause and effect relationships. manipulation of one or more independent variables , control of other mediating variables are the characteristics.
The objective is to discover ideas and insights. The characteristics of Exploratory research are flexible, versatile, & often this is the front end of total research design.
The methods used are expert surveys, Pilot surveys, secondary data ( analyzed qualitatively ) and qualitative research.
the methods sued are Secondary data ( analyzed quantitatively ) , surveys, panels observational and other data.
the methods used in causal research are Experiments.
EXPERIMENTAL DESIGN
Experiment is the process of manipulating one or more independent variables and measuring their effect on one or more dependent variables, while controlling for the extraneous variables. Experimentation is commonly used to infer casual relationships. Marketing effects are caused by multiple variables and the relationship between cause and effect tends to be probabilistic. Causal inference studies can be divided in to two broad categories Natural Experiments & Controlled Experiments. Natural experiment will involve hardly any intervention of the investigator except to the extent required for measurement. A controlled experiment will involve the investigators intervention to control and manipulate variables. Experimental design is a set of experimental procedures specifying the test units and sampling procedures , the independent variables , dependent variables and how to control the extraneous variables. Independent variables are variables that are manipulated by the researcher and whose effects are measured and compared. Test units are individuals, organizations, or other entities whose response to independent variables or treatments is being studied. Dependent variables are variables that measure the effect of independent variables on the test units. Extraneous variables are variables other than the independent variables, that influence the response of the test units.
CLASSIFICATION OF EXPERIMENTAL DESIGNS

Experimental Designs
Pre-experimental Design
True Experimental Design
Quasi-Experimental Design
Statistical Design
One- Shot case study
Pretest-Posttest control group
Time Series
Randomized Blocks
One- Group Pretest-Posttest

Static Group
Posttest-only control group

Solomon Four Group
Multiple
Latin Square
Factorial
EXPERIMENTAL DESIGNS
Pre-experimental design do not employ randomization procedures to control for extraneous factors. In True experimental designs, the researcher can randomly assign test units and treatments to experimental groups. Quasi experimental designs result when the researcher is unable to achieve full manipulation of scheduling or allocation of treatments to test units but can still apply part of the apparatus of true experimentations. A statistical design is a series of basic experiments that allows for statistical control and analysis of external variables. Pre-Experimental Designs One Shot case study Also known as after-only design . Represented as X O1
X represents the exposure of a test group to an experimental treatment ( independent variable ) O refers to the observation of measurement of dependent variable on the test units ( individual , group or object )
One-shot case study is a pre-experimental design in which a single group of test units is exposed to a treatment X and then a single measurement on the dependent variable ( O1) is taken. No random assignment of test units and the test units are self selected.
One-Group Pretest-Posttest Design It is a pre-experimental design in which a group of test units is measured twice. Represented as O1 X O2 In this design, a group of test units is measured twice. First a pre-treatment measure is taken ( O1 ), then the group is exposed to the treatment X. Finally post treatment measure is taken O2, the treatment effect is computed as O2-01. The validity of this conclusion is questionable because extraneous variables are largely uncontrolled. Static Group Design The static group is a two-group experimental design. One group called Experimental Group ( EG ) , is exposed to the treatment and the other called the control group ( CG ) is not exposed. Control group is defined as the group that receives the current level of marketing activity , rather than a group that receives no treatment at all. Measurements on both groups are made only after the treatment, and the test units are not assigned at random. The design symbolically represented as EG: X O1 CG: O2 The treatment effect would be measured as O1-O2.
Static Group Design Because test units are not randomly assigned , the two groups ( EG & CG ) may differ before then treatment., and selection bias may be present. There may also be mortality effects, because more test units may with draw from the experimental group than from the control group. This would happen particularly if the treatment was unpleasant. True Experimental Designs In true experimental designs the researcher randomly assigns test units to experimental groups and treatments to experimental groups. True Experimental Designs include the pretest-posttest control group design, posttest only control group design, solomon four group design ( four group six study design )
Pretest-Posttest control design ( Before After with One Control Group ) The test units are randomly assigned to either the experimental or the control group, and a pretreatment measure is taken on each group. Only the experimental group is exposed to the treatment, but posttest measures are taken on both groups. This design symbolically represented as EG: R O1 X O2 CG: R O3 O4 The treatment effect ( TE ) is measured as ( O2 O1 ) - ( O4 O3 ). This design controls for most extraneous variables. Selection bias is eliminated by randomization. Posttest only control group design ( After only with Control Group ) It is a true experimental design in which the experimental group is exposed to the treatment but the control group is not and no pretest measure is taken. Symbolically represented as EG: R X O1 CG: R O2 The treatment effect ( TE ) is obtained by TE = O1- O2.
TRUE EXPERIMENTAL DESIGNS
Posttest-only control group design ( After only with control group )
TRUE EXPERIMENTAL DESIGNS
This design is fairly simple to implement. Because there is no premeasurement the testing effects are eliminated, but this design is sensitive to selection bias and mortality. It is assumed that the two groups are similar in terms of pre-treatment measures on the dependent variable, because of the random assignment of test units to groups. This design is also sensitive to mortality. Four Group Six Study design Otherwise called as solomon four group design This design is used in situations where it is suspected that exposure to the pretest measurements and resulting interactions may bias the subjects sufficiently to distort the posttest observations. Symbolically represented as EG1: CG1: EG2: CG2
R R R R
O1 O3
X X
O2 O4 O5 O6
TRUE EXPERIMENTAL DESIGNS FOUR GROUP SIX STUDY DESIGN

Four Group Six Study design This design is suitable in all cases, where some sort of interaction between the respondent and the questioning process takes place. The treatment effect ( TE ) can be measured as O2-O1, O4-O2, O6-O5,O4-O3 & ( O2-O1) ( O4-O3) The added Groups EG2, CG2 are not given a pretest measurement. Interpretation is similar to the pretest-posttest control design. This design allows the researcher to isolate and estimate the magnitude of the interaction testing effect. This design has been referred as Ideal controlled experiment. Because it explicitly controls all sources of internal in validity.
QUASI-EXPERIMENTAL DESIGNS
A Quasi- Experimental design results under the following conditions. 1. the researcher can control when measurements are taken and on who they are taken. 2. the researcher lacks the control over the scheduling of the treatments and also is unable to expose test units to the treatments randomly. Advantages of Quasi-Experimental designs Quasi-Experimental designs can be used in cases where true experimentation cannot be used and Quasi Experimental designs are quicker and less expensive. Popular forms of quasi experimental designs are Time Series designs Multiple Time Series Designs.
The time series design involves a series of periodic measurements on the dependent variable for a group of test units. The treatment is then administered by the researcher or occurs naturally. After the treatment, periodic measurements are continued to determine the treatment effect. Symbolically represented as O1 O2 O3 O4 O5 X O6 O7 O8 O9 O10 There is no randomization of test units to treatments, and the timing of treatment presentation , as well as which test units are exposed to the treatment , may not be within the researchers control. Taking a series of measurements before and after the treatment provides at least partial control of several extraneous variables. If the test units are selected randomly or by matching, selection bias can be reduced. Mortality can be controlled by paying a premium or offering other incentives to respondents. Major weakness of time series design Failure to control history. The experiment may be affected by the interactive testing effect, because multiple measurements are being made on the test units.
TIME SERIES DESIGN
MULTIPLE TIME SERIES DESIGN

Multiple time series design is similar to the time series design except that another group of test units is added to serve as a control group. Symbolically represented as EG : O1 O2 O3 O4 O5 CG : O11 O12 O13 O14 O15
X X
O6 O7 O8 O9 O10 O16 O17 O18 O19 O20
If the control group is carefully selected, this design can be an improvement over the simple time series experiment.
The improvement lies in the ability to test the treatment effect twice, against the pretreatment measurements in the experimental group and against the control group.
This design is useful to assess the effectiveness of a commercial. Panel members in the test cities would comprise the experimental group. Panel members in cities where the commercial was not shown would constitute the control group.
STATISTICAL DESIGNS
Statistical design consists of a series of basic experiments that allow for statistical control and analysis of external variables. Several basic experiments are conducted simultaneously in statistical designs.
Statistical designs are influenced by the sources of in validity that affect the basic designs being used.
Advantages The effects of more than one independent variable can be measured. Specific extraneous variables can be statistically controlled. Economical designs can be formulated when each test unit is measured more than once. The most common statistical designs are Randomized Bloc designs The Latin Square Design Factorial Design
STATISTICAL DESIGNS RANDOMIZED BLOCK DESIGN

Randomized block design is a statistical design in which the test units are blocked on the basis of an external variables to ensure that the various experimental and control groups are matched closely on that variable. Randomized block design is useful when there is only one major external variable, such as sales, store size, or income of the respondent, that might influence the dependent variable. The test units are blocked, or grouped on the basis of the external variable. The researcher must be able to identify and measure the blocking variable. By blocking the researcher ensures that the various experimental and control groups are matched closely on the external variable. Randomized blocks are more useful than the completely random designs. The limitation of Randomized block designs is that the researcher can control for only one external variable. When more than one variable must be controlled, the researcher must use Latin Square or factorial designs.
STATISTICAL DESIGNS LATIN SQUARE DESIGN

Latin square design is a statistical design that allows for the statistical control of two non-interacting external variables in addition to the manipulation of the independent variable. Each external or blocking variable is divided in to an equal number of blocks or levels.
The independent variable is also divided in to the same number of levels.

Latin square is a balanced arrangement of data and it has the same number of columns and rows. Factorial Designs
Factorial design is a statistical experimental design that is used to measure the effects of two or more independent variables at various levels and to allow for interactions between variables.
Unlike Latin square designs, factorial designs allow for interactions between variables. An interaction is set to take place when the simultaneous effect of two or more variables is different from the sum of their separate effects. The disadvantage of factorial designs is that the number of treatment combinations increases multiplicatively with an increase in the number of variables or levels.
LABORATORY VERSUS FIELD EXPERIMENTS

Laboratory Experiments
Artificial setting for experiments, the researcher constructs desired conditions Offers high degree of control Tends to produce the same results if repeated
Field Experiments
* experimental location is actual market conditions. * low degree of control * low internal validity, as the results vary, if experiments repeated. * large number of test units * lasts for a longer period of time * not restricted geographically * Field experiments more expensive * higher external validity.
tend to use a small number of test units Lasts for a shorter time More restricted geographically Generally less expensive lack of realism, lowers external validity
Limitations Experiments can be time consuming particularly if the researcher is interested in measuring the long term effects of the treatment, such as effectiveness of an advertising campaign. Experiments are often expensive. The requirement of experimental group, control group and multiple measurements significantly add to the cost of research. Experiments can be difficult to administer. It may be impossible to control for the effects of extraneous variables , particularly in a field experiment. Field experiments often interfere with companys ongoing operations and obtaining co-operation from the retailers, wholesalers, and others involved may be difficult. Test Marketing Test marketing is an application of controlled experiment done in limited , but carefully selected, test markets. Test marketing involves a replication of the planned national marketing program for a product in the test markets. Test markets are a carefully selected part of the market place that is particularly suitable for test marketing.
Validity of Data
Validity is a measure of accuracy of an experiment.

It measures whether the manipulation of the independent variables , or treatments, actually caused the effects on the dependent variables. Internal validity examines whether the observed effects on the test units could have been caused by variables other than treatment. If an experiment lacks internal validity, it may not be meaningful to generalize the results. External validity refers to whether the cause and effect relationships found in the experiment can be generalized .
Simulation
Simulation is a process or procedure in a quasi- test market in which respondents are preselected , then interviewed and observed on their purchases and attitudes towards the product.
The respondents are intercepted in high traffic locations such as shopping malls and prescreened for product usage. The selected individuals are exposed to the proposed new product concept and given an opportunity to buy the new products in a real life or laboratory environment. Those who purchase the new product are interviewed about their evaluation of the product and repeat purchase intentions. The trial and repeat purchase estimates so generated are combined with data on proposed promotion and distribution levels to project a share of the market.
MARKETING RESEARCH PROCESS

Marketing Research Process is a set of Six steps that defines the tasks to be accomplished in conducting a marketing research study. Step 1 : Problem Definition
Step 2
Step 3
:
:
Development of an Approach to the Problem

Research Design Formulation
Determining sources of data
Step 4
Field work or Data Collection
Designing Data collection forms Determining Sampling Design & Sampling Size
Step 5
Step 6
:
:
Data Preparation & Analysis

Report Preparation & Analysis
Problem Definition
Marketing Research Process
In defining the problem , the researcher should take in to account the purpose of study, the relevant background information, the information needed, and how it will be used in the decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and qualitative research such as focus groups. The
Six Ws.
Who the person / group on whom should be considered for the research / study.
What what information should be obtained from the respondents?

When when should the information be obtained from the respondents ? Where where should the respondents be contacted to obtain the required information. Why why are we obtaining the information from the respondents possible reasons. Way way to obtain the information from the respondents methods.
Problem Definition
A complete problem definition must specify each of the following.
( i ) Unit of analysis the individuals or objects whose characteristics are to be measured. ( ii ) Time and Space Boundaries ( iii ) Characteristics of Interest ( iv ) Specific environment conditions Hypothesis
Hypothesis is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher.
The important role of hypotheses in marketing research is to suggest variables to be included in the research design.

Development of an Approach to the Problem Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, and hypotheses and identifying the information needed. Research Design Formulation Research designs can be grouped into three categories Exploratory Research , Descriptive Research, Casual Research. Steps Involved in Formulating Research Design 1. Definition of the information needed 2. Secondary Data Analysis 3. Qualitative Research 4. Methods of collecting quantitative data ( survey, observation and experimentation ) 5. Measurement and Scaling Procedures 6. Questionnaire Design 7. Sampling Process and Sample Size 8. Plan of Data Analysis.

Fieldwork or Data Collection Data collection involves a field force or staff that operates either in the field , as in the case of personal interviewing ( in home , mall concept , or computer assisted personal interviewing ) , from an office by telephone, through mail, or electronically ( e-mail, or internet ). Proper selection, training, supervision and evaluation of the field force help minimizing data collection errors. Data Preparation and Analysis Data preparation includes the editing, coding, transcription, and verification of data. Each Questionnaire or observation form is inspected or edited and if necessary corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data are analyzed to derive information related to the components of the marketing research problem and thus, to provide input in to the management decision problem.

Report Preparation and Presentation Once the data have been tabulated, interpreted, and analyzed, the entire project should be documented in a written report that addresses the specific research questions identified, describes the approach, the research design, data collection and data analysis procedures adopted and presents the results and the major findings. The findings in comprehensible format to help in decision making process. Oral presentation should be made using tables, figures, and graphs to enhance clarity & impact. Using Internet, results & findings can be posted on Web, for the benefit of managers on a worldwide basis.
IMPORTANT REVIEW QUESTIONS CHAPTER I

Part-A Marketing Information System ( 2005 ) Research Proposal ( 2005 ) Focus Group Interviews ( 2005 , 2007, 2008 ) Projective Techniques ( 2006 ) Factorial Design ( 2006 ) Validity ( 2006 ) Test Marketing ( 2006 ) Simulation ( 2006 ) Hypothesis ( 2006 ) Sampling Unit ( 2007 ) Disguised Questioning ( 2007 ) Questionnaire ( 2008 ) Primary Data ( 2008 ) Research Design ( 2008 ) Extraneous variables ( 2005 )
IMPORTANT REVIEW QUESTIONS IN CHAPTER

-I
Part B ( 12 Marks Questions ) What decisions are made by marketing managers ? How does marketing research help in making these decisions ? ( 2005 ) What are the advantages of Secondary Data ? Why is it desirable to use multiple sources of secondary data ? ( 2005 ) What are the sources and methods of gathering marketing information ? ( 2006 , 2008) What is Marketing Information System ? What are its components ? ( 2006 ) How does Exploratory, Descriptive and casual research studies differ from each other ? ( 2007 ) Describe the following experimental designs. (a ) Four Group Six Study Design. ( 2007 ) ( b ) Before-After with One Control Group ( c ) After only with control group What are Secondary Data ? What are their advantages and limitations ? What are their sources? How do you evaluate Secondary Data ? ( 2007 ) Distinguish Exploratory and Experimental Designs. ( 2008 ) Examine the role of Marketing Information Systems. ( 2008 ) Examine the Marketing research Process ( 2008 )
POTENTIAL SOURCES ERRORS IN MARKETING RESEARCH DESIGN

Total Error
Random Sampling Error
Non Sampling Error
Response Error
Non-Response Error
Researcher Errors
Interviewer Errors
Respondent Errors
Surrogate Information Error Measurement Error Population Definition Error Sampling Frame Error * Data Analysis Error
Respondent Selection Error Questioning Error Recording Error Cheating Error
Inability Error
Unwillingness Error
POTENTIAL SOURCES OF ERROR IN MARKETING RESEARCH DESIGN

A good research design attempts to control the various sources of error. Total Error The total error is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project. Ex : the average annual income of the target population is 35 Lakhs as determined by the latest census records, but the marketing research project estimates it as 30 Lakhs based on a sample survey. Total error is composed of random sampling error and non-sampling error. Random Sampling Error The error due to the particular sample selected being an imperfect representation of the population of interest. Random sampling may be defined as the variation between the true mean value for the sample and the true mean value of the population. Ex. The average annual income of the target population is 35 Lakhs, but it is only 33 Lakhs for the original sample, as determined from the original and accurate records.
POTENTIAL SOURCES OF ERROR IN MARKETING RESEARCH DESIGN

Non-Sampling Error Non-sampling errors can be attributed to sources other than sampling and they be random or non-random. Non-sampling errors from a variety of reasons including errors in problem definition, scales, questionnaire design, approach, interviewing methods, data preparation and analysis. Ex : If a researcher designs a poor questionnaire, which contains several questions that lead the respondents to give biased answers. Non-sampling errors consist of non-response errors & response errors.
Response Errors If the respondents give inaccurate answers or if their answers are misrecorded or misanalysed. Response error is defined as the variation between the true mean value of the variable in the net sample and the observed mean value obtained in the marketing research project. Surrogate information error is the variation between the information needed for the marketing project and the information sought by the researcher. Ex. Instead of obtaining information on consumer choice of a brand, the researcher obtains information on consumer preferences, since the choice process cannot be easily observed.
EVALUATION OF SECONDARY DATA

Secondary Data any data which have been gathered earlier for some other purpose. Evaluation of Secondary Data ( Robert W. Joselyns approach ) The evaluation of secondary data consists of three stages and eight steps.
data answers questions set in the problem definition ? data apply to the population of interest ?
I : APPLICABILITY to the project objectives
data apply to the time period of interest ? can the units and classifications presented apply ?
II : COST OF ACQUISITION
If possible go to the original sources of data Is the cost of data acquisition worth it ? Is there a possibility of bias ? Can the accuracy of data collection be verified ?
III : ACCURACY OF THE DATA
Note : In the downward flow, if YES for a particular step, then go to Next step if NO , then stop. If all YES, use the Data.
Sources of Secondary Data

Secondary Data can be obtained internally ( within the firm ) or externally ( from one or more outside agencies ) Sales Force Reports Accounting Records Internal Secondary Data Miscellaneous Reports Internal Experts Accounting Records Sales Invoice ( name of customer, address, items ordered, quantities shipped, price , discounts) Data on advertising expenditure Sales Force Reports ( prospects report, daily call , route planning, target versus achievement ) Miscellaneous Reports any studies done earlier on marketing problem of the company Internal Experts Executives working in the company have specialized knowledge relevant to the marketing problem such as Product Managers, Marketing Managers, PR , Ad dept. personnel, provide useful information or ideas on a given marketing problem.
Sources of Secondary Data

External Secondary Data cab be collected from the originating sources or from secondary sources. Ex. The Office of the Economic Advisor , GOI is the originating source for the data on wholesale prices. RBI Bulletin contains some parts of the series of wholesale prices is a Secondary Source. Advantages of Originating Sources of External Secondary Data Originating source is more likely to explain the object and procedures of data collection. Originating source is more likely to present all the data Data from originating source is more accurate than the secondary source. Advantages of Secondary Source Data Data readily available. Convenient usage if the data is sufficiently reliable. Secondary sources sometimes provide secondary data on floppy, CD, etc., can be used as input for the computer.
EXTERNAL SOURCES OF SECONDARY DATA

Government Publications
population by gender, rural, urban
Registrar General of India population census every ten years.
Education & occupation, age, demographics
Central Statistical Organization ( CSO ) statistics of national income, Annual survey of Inds. DGCI ( Dir. General of Commercial Intelligence ) GOI monthly statistics of foreign trade ( EXIM ) The Economic Survey of India DOE, Ministry of Finance, GOI. ( Annual ) Agricultural Situation in India Min. of Agriculture, GOI. ( Annual ) The India Labour Journal Labor Bureau Monthly NSS ( National Sample Survey ) GOI economic, social , industrial , demographic statistics. Non-Governmental Publications FICCI Federation of Indian Chambers of Commerce and Industry. CII Confederation of Indian Industry. Indian Cotton Mills Federation Indo American Chamber of Commerce
Collection of Primary Data

Primary Data first hand information on any happening or event is called primary data. Questionnaire
Primary data can be collected by Observation & Communication

Survey Observation Method Observation method is used to get both past and current information.
Methods.
Ex : 1. manufacturer send observers to a sample stores to find out how frequently product is out 2. what sort of display the products of a company gets in a big retail stores. 3. what sort of price charged by competitors , observers to go around market / stores. 4. using eye-camera, motion picture camera, hidden camera , audiometer attached with radio. 5. TRP ratings of a TV programmes.
Collection of Primary Data Observation Method

The different types Observation are 1. Structured or Unstructured Methods 2. Disguised or Undisguised Methods 3. Observations made in natural setting or laboratory setting 4. Direct Indirect observation 5. Human Mechanical Observation methods. Structured Unstructured Observation Structured observation is used when the research problem has been formulated precisely, and observers have been told specifically what is to be observed. The observers will be given simple form to record their observations. Unstructured Observation implies that observers are free to observe whatever they think is relevant and important. Disguised Undisguised observation In disguised observation, the subjects do not know that they are being observed. Disguised observation may be made by the observer by posing as one of the shoppers who are being observed. Disguised observation preferred because it is feared that people may behave differently when they know they are being observed.

Observation under natural setting laboratory setting Observations in field studies are in their natural setting and are undertaken in extremely realistic conditions. Observation in a laboratory setting, enables the observer to control extraneous variables which influence the behavior of people. Observation in a laboratory setting enable the collection of data promptly and economically and permit the use of more objective measurements. Direct Indirect Observation Direct observation is the most common form. In direct observation, the event or behavior of the person is observed as it occurs. In in-direct observation, the physical traces of behavior or occurrence of an event is observed. Ex- a researcher, who wants to know the liquor consumption of a household, may would like to see for the empty liquor bottles in the garbage. Ex. Home Makers permission sought for Pantry audit to ascertain the consumption of certain products.
Human Mechanical Observation Human observation is done wherein trained observers are required to observe and faithfully record their observations. In Human observation the observers power of integration can lead to more valid evaluation of the observation. In mechanical observations, mechanical devices such as eye cameras, audiometers are used for observation. Mechanical observation method is preferred as the findings are free from subjective bias, but less valid than human observations. Advantages of Observation Methods Researcher records the behavior as its occurs more realistic than the retrospective reporting. Observation can be used regardless of whether the respondent is willing to report or not. Observation can be conducted on those who are unable to respond such as infants, animals. Limitations of Observation Methods Unable to observe the past & future behaviors because observation takes place in the present. Observation does not help in gauging a persons attitude or opinion on a certain subject. Observation method is very slow and becomes unsuitable when a large number of persons are to be contacted, as it takes a long time.

Difficulties in Observation The data from observation methods get distorted due to the following difficulties. 1. In-adequacies in our sense organs our sense organs operate in a highly variable, erratic , and selective manner. 2. Inter-Dependence of Observation and Inference Interpreting the data based on the observers past experience, leading to wrong inferences. 3. Effects of interaction between the observer and the observed. Persons being observed become self-conscious of the observation and this may influence their normal behavior. Observation may get distorted merely because of the presence of the observer.
Collection of Primary Data Questionnaire Method

Questionnaire to collect the requisite information. Structured - Non-Disguised Questionnaire Structured Disguised Questionnaire Non-Structured Non-Disguised Questionnaire Non-Structured Disguised Questionnaire
Questionnaire
Structured Questionnaire It is a formal list of questions framed so as to get the facts. Interviewer asks questions strictly in accordance with a pre-arranged order. Structured Non Disguised Questionnaire is one where the listing of questions is in a prearranged order and where the object of enquiry is revealed to the respondent. Structured Non Disguised Questionnaire is one in which the respondent is clearly been told the objective , relevance of the survey so that the respondent gives the desired information more accurately. Structured Disguised Questionnaire the researcher does not disclose the object of the survey.
Non-Structured Questionnaire The questions are not structured and the order in which they are to be asked from the respondent is left entirely to the researcher. The researcher asks the questions in the manner in which he deems fit in particular situation. Non-structured questionnaires are used in exploratory research. Non Structured Non Disguised Questionnaire purpose of enquiry is disclosed to the respondents. Non Structured Disguised questionnaires will not reveal the purpose of enquiry to the respondent. Advantages of Structured Non Disguised Questionnaires 1. collection of information in an orderly and systematic manner. 2. Questions asked by each interviewer is identical, hence the information is not vitiated on account of varying characteristics of difft. Interviewers. 3. Straightforward & simple approach even a less qualified interviewer can be deployed. 4. This type of questionnaire is easy to edit, tabulate and interpret the data it contains. 5. can be conveniently pre-tested so that suitable modifications can be made in the phrase , sequence of questions.
Questionnaire Method
Questionnaire Method
Limitations of Structured Questionnaire Does not address properly when personal or motivational questions asked to the respondents.. Advantages of Non- Structured Questionnaire Most suitable when motivational or personal factors are involved. Normally used in depth interviews facilitate conducting of interviews in an informal manner. Limitations of Non-Structured Questionnaire The role interviewer becomes more important due to which the cost of survey is high.
More time per interview.

Problems in editing, tabulating, and interpreting the unstructured questionnaires.
Designing a Questionnaire
The following are to be considered while designing a Questionnaire. 1. Type of Information to be collected. 2. Number and types of Questions to be formulated. 3. Wording and Phrasing of Each Questions.
4. order of questions
5. Layout of the questionnaire. Type of Information to be collected ( 1 ) facts ( 2 ) quasi-facts ( 3 ) awareness, or penetration of information ( 4 ) opinions ( 5 ) attitudes ( 6 ) future action plans ( 7 ) reasons
Number & Types of Questions to be formulated The numbers to chosen to ensure the interest of the respondent is sustained until the last moment so that the interview can be completed successfully with requisite information. Open - ended questions free answer questions. Close ended ( dichotomous ) questions Yes or No type Multiple Choice Questions.
3 types of questions
Phrasing & Wording the Questionnaire Difficult words , technical or special terms should be avoided. Vague words such as many often generally on the whole etc., should not be used. Lengthy questions should be avoided. Combining two questions in to one should be avoided. Questions lacking specificity should be avoided or modified suitably so that they become more precise.
Order of Questions Simple questions at the beginning and difficult questions at the end should be followed. Questions of a general type should be asked in the beginning, specialized questions which require in-depth information should be left to the end. Layout of the Questionnaire The questionnaire document should be set in such a way that it leaves a favorable impression in the mind of the respondent. Neatly printed and individual pages should not have too many questions so as to appear crowded. Important wordings ( to draw attention of the respondent ) should be set in bold letters or underlined. Proper spacing between the questions and within a question should be provided. For a lengthy question paper, reduce its size and provide two columns in page & use finer types. Questionnaire should be short, printed on a superior quality of paper so that the writing with pen or pencil is smooth.
Depending upon the survey, the questionnaires can be classified in to three types. 1. Personal Questionnaire 2. Mail Questionnaire 3. Telephone Questionnaire Not commonly used in India. Mail Questionnaire Greater care & more thought necessary as the interviewer is not available for any explanations. Mail Questionnaires should be shorter than the personal questionnaires. Extremely simple wording to avoid any misunderstanding. For a lengthy questionnaires to be used, advance letter seeking the co-operation of the respondent. Wherever necessary, suitable explanations should be provided so that respondents understand the questions in the proper perspective. Covering letter ( explaining the purpose & importance of survey & emphasis that the information provided by the respondent will be kept confidential )must be enclosed with the mail questionnaire. Mail questionnaire should also be accompanied by a pre-addressed and stamped envelope to facilitate the respondent to return as soon as it filled without incurring any expenditure.
Collection of Primary Data Types of Questionnaire
Collection of Primary Data Survey Method

Comparison of Survey Methods ( Personal Survey , Mail Survey, Telephone Survey )
Criteria 1. Probable Response Rate
Personal Survey Fair
Mail Survey Poor
Telephone Survey Good
2. Time Required
3. Cost 4. Control of Sample 5. Supervision of field work 6. Quantity of Information 7. Quality of Information 8. Versatility
Slow
High Good Fair Good Good
Slow
Low Poor None Limited Fair
Fast
Low Excellent Excellent Limited Excellent Good
Excellent Fair
MEASUREMENT AND SCALING

Once the research design has been determined and the information to be obtained specified, the researcher move on to the next phase of the research design : Deciding on the measurement and Scaling Procedures.
In marketing research , the measurement process involves using quantification of data ( Numbers ) to represent the marketing phenomena under study.
Measurement means assignment of numbers or other symbols to characteristics of objects, which portray the object, according to certain pre-specified rules. Qualitative information only unsatisfactory & leading to frustration. light blue Quantitative information only unsatisfactory & meaningless. 250 hectares Qualitative & Quantitative information should be provided for better understanding.
Reasons for Assigning Numbers to the Characteristics. 1. Numbers permit statistical analysis of the resulting data. 2. Numbers facilitate the communication of measurement rules and results.
MEASUREMENT AND SCALING

Scaling
Scaling considered an extension of measurement. Scaling involves creating a continuum upon which measured objects are located. Ex. Consider a scale from 1 to 100 for locating consumers according to the characteristic attitudes towards dept. stores . Each respondent is assigned a number from 1 to 100 indicating the degree of favorableness, with 1 = extremely unfavorable and 100 = extremely favorable. Measurement is the actual assignment of a number from 1 to 100 to each respondent. Scaling is the process of placing the respondents on a continuum with respect to their attitude towards department stores.
CLASSIFICATION OF SCALES OF MEASUREMENT

There are
four primary scales of measurement. They are

2. Ordinal Scale 3. Interval scale 4. Ratio Scale
1. Nominal Scale
Nominal Scale
More widely used than any other scales for research. Nominal scale is one level of scale where numbers are used only as labels to classify objects, identify persons, objects or events. Ex. Roll Numbers assigned to students in a class or patients in hospital or PIN , numbering of players etc., Nominal scale is simplest of the four scales also the least powerful. When a nominal scale is used for the purpose of identification, there is a strict one-one correspondence between the numbers and the objects.
Types of Scales of Measurement

Each number is assigned to only one object and each object has only one number assigned to it.
Advantages of Nominal Scale

Very useful in preliminary or exploratory research. Used to know the broad dimensions of a certain phenomenon in the preliminary or exploratory research areas. Limitations of Nominal Scale Nominal scale does not show any order or distance relationship nor does it have any arithmetical origin. Unsuitable in determining relationships between marketing variables.
Types of Scales Ordinal Scale

In Ordinal scale the numbers are assigned to objects to indicate the relative extent to which some characteristic is possessed. Thus it is possible to determine whether an object has more or less of a characteristic than some other object. Ordinal scales are ranking scales. Ordinal scale provides information about the ordered relationship among objects. Ex. Quality Rankings, rankings of teams in tournament, socioeconomic class, occupational status, IITs All India Rank, Civil Services Ranking etc., In marketing research , ordinal scales are used to measure relative attitudes, opinions, perceptions and preferences.
The common arithmetical operations-additions, subtraction, multiplication, and division cannot be legitimately used with ordinal scales but statistical procedures based on interpretations are permissible.
Types of Scales Interval Scale

Interval Scale is a scale in which the numbers are used to rate objects such that numerically equal distances on the scale represent equal distances in the characteristic being measured. The difference between any two adjacent scale values is identical to the difference between any other two adjacent scale values of an interval scale. Interval scale possesses the power of nominal and ordinary scales and also has additional strength of determination of equality of differences. Ex. Measurement of Temperature .Both Fahrenheit and Centigrade Temperature scales are of this type. The diff. between 1 & 2 is the same as the difference between 2 & 3, and also the same between 5 & 6. In marketing research, the attitudinal data collected from rating scales are often treated as interval data. Statistical techniques that may be used on interval scale include all those that can be applied to nominal and ordinal data. In Interval scale data , statistical techniques such as arithmetic mean standard deviation , product moment correlations which are used in the marketing research, can be applied. In Interval scale certain specialized statistics such as geometric mean, harmonic mean, coefficient variation etc., cannot be applied.
Types of Scales Ratio Scale

Ratio scale is the highest scale. Ratio scale allows the researcher to identify or classify objects, rank order the objects, and compare the intervals or differences. Ratio scales are meaningful to compute ratios of scale values. Ratio scale possesses all the properties of the nominal , ordinal, and interval scales and in addition, an absolute zero point. Common Examples of Ratio scales are commonly used physical dimensions scales of height, weight, age and money value and population counts. In ratio scales only , one can change over from one unit to another by using the relevant conversion factors. In marketing , sales, costs, market share, and number of customers are variables measured on a ratio scale. All statistical techniques including specialized statistical techniques such as geometric mean, harmonic mean, coefficient variation etc., can be applied to ration data.
CRITERIA FOR A GOOD MEASUREMENT SCALE

To identify and ascertain if the measurements and scales used are of acceptable quality, the following attributes of scales could be verified. 1. Reliability property of producing consistent results when certain research methods are repeated, assuming no change in the basic characteristics when measured. In practice, this becomes difficult as the respondents might not be inclined to answer the same questions again, or the same respondents may remember their previous answers to the questions to give the same answers. 2. Validity an instrument is valid when it measures what it sets out to measure, so that the differences between individuals scores can be taken as representing true differences in the characteristic under study. 3. Sensitivity is the ability of a measurement to indicate changes or differences. 4. Relevance the factor relevance is the decision that is to be made ( problem to be solved ) is an obvious practical consideration. 5. Versatility or robustness of the measurements for various statistical interpretations is a desired goal, especially for assessing the results validity and for drawing maximum meaning from them. 6. Ease of Response on the part of persons who supply the data.
SCALING TECHNIQUES USED IN MARKETING RESEARCH

Scaling Techniques
Comparative Scales
Non-Comparative Scales
Paired Rank Constant Comparison Order Sum
Q-sort & other procedures
Continuous Rating Scales
Itemized Rating Scales
Thurstones Scale
Likert Scale
Gutttmans Scale
Semantic Differential
Scaling Techniques
Comparative Scale Comparative scale involves the direct comparison of stimulus objects. Comparative scale data must be interpreted in relative terms and have only ordinal or rank order properties. Comparative scaling is also referred as Non-Metric Scaling. Ex. Respondents asked to prefer Coke or Pepsi. Advantages of Comparative Scale Small differences between stimulus objects can be detected. Involve fewer theoretical assumptions.
Comparative scale tend to reduce the halo or carryover effects from one judgment to another.
Disadvantages Ordinal nature of the data and inability to generalize beyond the stimulus objects scaled.
Non-Comparative Scales
Also referred as Metric Scales. Ex. Respondents are asked to evaluate Coke on a 1 6 preference scale also for Pepsi. Each object is scaled independently of the others in the stimulus set. The resulting data are generally assumed to be interval or ratio scaled.
Comparative Scaling Techniques

Paired Comparison Scaling A paired comparison scaling is a comparative scaling technique in which a respondent is presented with two objects at a time and asked to select one object in the pair according to some criterion. most widely used comparative scaling technique. Rank Order Scaling Most popular comparative scaling technique after paired comparison scaling. Rank order scaling technique is a comparative scaling technique in which respondents are presented with several objects simultaneously and asked to order or rank them according to some criterion. Most commonly used to measure preferences for brands as well as attributes. Ex. Respondents may be asked to rank brands of tooth paste according to overall preference. Constant Sum Scaling In this technique respondents are required to allocate a constant sum of units such as points, chits, stickers, or chips among a set of stimulus objects with respect to some criterion. Ex. Respondents asked to allocate 100 points to each attributes of a soap in a way that reflects the importance they attach to each attribute.
Comparative Scaling Techniques

Q sort and other Procedures Q-sort scaling technique uses a rank order procedure to sort objects based on similarity with respect to some criterion. Ex. Respondents are given 100 attitude statements on individual cards and asked to place them in to 11 piles, ranging from most highly agreed with to least highly agreed with. Magnitude estimation In this technique, numbers are assigned to objects such that ratios between the assigned numbers reflect ratios on the specified criterion. Ex. Respondents asked to indicate whether they agree or disagree with each of a series of statements measuring attitude towards department stores. Then they assign numbers 1 to 100 to each statement to indicate the intensity of their agreement or disagreement.
NON-COMPARATIVE SCALING TECHNIQUES

In Non-Comparative scale each stimulus object is scaled independently of the other objects in the stimulus set. Non-Comparative techniques consist of continuous and itemized rating scales. Continuous Rating Scale Also referred as Graphic Rating Scale. 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. Ex. Reaction to TV commercials. Advantages Easy to construct. With computer assisted personal interviewing and other technologies, this scale becomes popular. Can be effectively implemented on the Internet. Disadvantages Scoring can be cumbersome and unreliable. Continuous rating scales provide little new information , hence their use in marketing research has been limited.
SPECIFIC ATTITUDE SCALES ITEMIZED RATING SCALES

Itemized Rating Scales are having numbers and / or brief descriptions associated with each category. The categories are ordered in terms of scale position, and the respondents are required to select the specified category that best describes the object being rated. Itemized scales are widely used in marketing research. Thurstone Scale One of the best known techniques in attitude measurement. First of all , A large number of statements pertaining to the subject of enquiry are collected. The statements should range from one extreme of favorable attitude to the other extreme of unfavorable attitude. According to Thurstone there are 5 criteria for selecting the statements. 1. the statements should be brief so that they may not cause fatigue to the subjects who are to read the whole list. 2. the statements should be such that they can be accepted or rejected in accordance with the attitude of the respondent. 3. the acceptance or rejection of the statement should indicate something regarding the attitude of the respondents attitude regarding the issue in question. 4. the double barreled statements tend to be highly ambiguous, these should be avoided. 5. the researcher must ensure that a large number of statements included in the list belong to the attitude variable that is to be measured.
Thurstonesubjects are asked to sort these statements in Scale Each statement is written on a separate card and
to a number of intervals. In addition to the cards containing the statements, each subject was given 11 cards, each one of these bearing a letter the first card having letter A, the second B and so on. The first card with letter A represent the most unfavorable attitude and the last card with letter K reflect the most favorable attitude and the middle card with letter F described as neutral card representing neither a favorable nor an unfavorable attitude about the subject. Cards between A & F represent the varying degrees of unfavorable attitude Cards between F & C represent the varying degrees of favorable attitude. A B C Unfavorable D E F Neutral G H I J K Favorable
Only the middle and the two extreme cards were to be defined for the respondents. The remaining cards were not to be defined so that the intervals between two successive piles would represent equal appearing intervals for each respondent. The piles bearing letters A to K could be considered as 1 11 point rating scale. The 11 point rating scale becomes the psychological continuum on which the statements have been judged. It becomes necessary to calculate the typical or average value in respect of each statement.
Thurstone used the median of the distribution for each statement as the average value. For each statement , there are three rows, the first row shows the frequency, i.e the No. of respondents placing the statement in respective categories. Second Row shows these frequencies as proportions to the total frequency which happens to be 200. Third row gives the cumulative proportions. The scale value is the median value. The formula for calculating median in a class-interval series is Median or Scale Value S = l + [0.50-sum of pb] x I Pw l = the lower limit of the interval in which the median lies. Pb = sum of proportions below the interval in which the median lies Pw = the proportion within the interval in which the median lies i = width of the interval. Applying the formula S = 6.5 + [ 0.50 0.40] 1.0 = 6.8 approx. 0.32 The other scale values 6.9 & 8.7 for statements 2 & 3 respectively.
Thurstone Scale
Thurstone Scale of variation of the distribution Q value is the interquartile range which was used by Thurstone, as a measure
of judgments in respect of the particular statement. Quartile range consists of the middle 50% of the judgments, it can be found out by finding the upper quartile Q3, and the lower quartile Q1 and then subtracting Q1 from that of Q3. Since Q3 is the size of the 3/4n th item, the earlier formula can be used instead of 0.50 , 0.75 should be used. Q3 = l + [ 0.75 sum of Pb] x i Pw Q1 = l + [ 0.25 0.09/ 0.31 ] x 1.0 = 7.5 + [ 0.75 0.72 / 0.13 ] x 1.0 = 7.7
= 5.5 + ( 0.25 0.09 / 0.31 ) x 1.0 = 6.0
Q = Q3 Q1 = 7.7 6.0 = 1.7.

If the Q value is small, there is agreement among the respondents in judging the degree of favorableness of a statement or unfvorableness of a statement. Large Q value indicates disagreement among the judges and therefore the statement is not appropriate. Second Method of calculating Q If the respondent chooses randomly 1,2 ,3 statements and endorses, then Q = median values of 1+2+3/3 = 7.5 , which shows favorable attitude .
Thurstone Scale
Limitations of Thurstone Scale The large number of persons whose co-operation required to develop the scale, may not be available. The scale can be developed only after some considerable effort, which is difficult. Needs good deal of time to construct.
Respondents may not like to attempt this scale as it requires considerable reading on their part.
Scale values assigned to statements are likely to be influenced by attitudes of the judges themselves.
Intensity of respondents feelings not accounted in this scale.
LIKERTS SCALE
Also termed as The summating ratings scale. First large number of statements are collected.
Ambiguous , irrelevant, deficient statements are eliminated.

The remaining statements are given to a few respondents who are asked to indicate their reactions to using a five point rating system. Strongly approve, approve, undecided, disapprove & strongly disapprove.
These categories are assigned values of 5,4,3,2,1 respectively.

For negatively worded statements , this scoring is reversed. The total scores of all the statements are ascertained. Those statements which have high correlation with the total score are then selected for the final scale, which consists of twenty to twenty five statements.
LIKERTS SCALE
The statements should be worded in such a way that one-half of them have one end of the attitude continuum corresponding to the left or upper part of the reaction alternatives and the other half have the same end of the attitudes continuum corresponding to the right or lower part of the reaction alternative. This is to avoid stereotyped response. Also statements which get same response from all respondents should be excluded. Advantages of Likerts Scale Easy to construct and administer. Respondents readily understand how to use the scale, making it suitable for mail, telephone, or personal interviews. Disadvantages It takes longer to complete than other itemized rating scales, because the respondents have to read each statement.
Thurstone Scale Vs Likerts Scale

Thurstones Scale Respondent is expected to endorse statements that are close to his true position on the attitude on the attitude continuum. Likerts Scale Respondent makes some response to every item and a high favorable score Of a respondent indicates that he has made more responses to strongly favourable than the respondent with less favorable reactions. * Less time consuming and less laborious than the Thurstone scale. * summated rating scale is relatively simple. * yields higher reliability co-efficient * The attitudes of judging group will be of highest importance in to the ascertaining of scale values.
Needs good deal of time to construct. time required is twice that of Likerts Scale. Equal appearing interval scale is complex.
Thurstone scale yields fewer reliability co-efficient. Attitude of the judging group does not have any importance in ascertaining the scale values.
Guttman proposed that attitude items can be arranged in such an order that a respondent who positively answers to a particular item also responds positively to all other items having a lower rank. This technique is known as Guttman Scalogram technique based on the assumption that the ordering of certain stimuli is possible. According to Guttman , if an individual dominates a particular stimulus , he will also dominate all the stimuli ordered below that stimulus., also if he fails to dominate a particular stimulus, he will fail to dominate any of the stimuli above the stimulus in the order. One who fails to obtain a correct answer to a certain item can be expected to fail in all the problems that are more difficult than it. Ex. ( 1 ) 6 + 4 = ( 3 ) 59 21 + 87 = ( 5 ) ( 25x12)+(10-4+29)= (2 ) 80+33 = ( 4 ) 15 ( 28 13 ) + 5 = In the above example containing five graded problems, we might anticipate only six patterns of answers as follows.
GUTTMANS SCALE
Scalogram (1) + + + + + (2) + + + + -
GUTTMANS SCALE
(3) + + + (4) + + (5) + Score 5 4 3 2 1 0
A table containing the individuals response as above is called Scalogram. Individuals with a more favourable attitude score than another individual must also be just as favourable or more favourable in his response to every statement in the set than the other individual. A set of attitude statements for which responses meet this requirement constitutes a unidimensional scale.
GUTTMANS SCALE
Generally , The researcher would not know in advance whether a given set of attitude statements falls along a uni-dimensional continuum from the least to the most favourable.
The objective of Scalogram analysis is to ascertain whether this hypothesis holds good.
Limitations This technique is methodically weak as it does not have any objective and quantified criteria for determining cutting points, which enable the researcher to divide his population into favorable and unfavorable groups. Selection of original sample attitude statements or items from the population for testing the hypothesis of scalability is of an extremely subjective nature.
Osgood has developed a scaling procedure known as Semantic Differential Scale that has been receiving increasing attention by marketing researchers. The Semantic differential scale has three dominant factors. They are 1. An evaluation factor ( represented by scales like good-bad, kind-cruel, honest-dishonest ) 2. potency factor ( represented by scales like strong-weak, hard-soft and heavy light )
Semantic Differential Scale ( SDS )
3.activity factor ( represented by scales like active-passive, fast-slow, hot-cold )

Uses of Semantic Differential scale in Marketing Comparison of brands, determining the effectiveness of advertising on attitude change, comparison of companies images etc., In marketing research, the semantic differential scale is a bi-polar one, conforming to the basic concept of motivation, that of attraction to or repulsion from an object.
The Semantic Differential Scale ( SDS )

In order to construct a suitable semantic differential scale, several factors should be considered. They are 1. whether the cues should be balanced or un-balanced. A scale is balanced when either side of the indifferent cue has an equal number of cues. Ex. How would you describe the quality of service of the XYZ Bank? -------------------- Very efficient -------------------- Efficient ------------------- Moderately Efficient ------------------- Neither efficient nor inefficient ------------------- Moderately inefficient ------------------ Inefficient ------------------ Very inefficient In the above example, there are 3 cues on either side of the neutral category. This is balanced Scale.
2. Which type of cue numerical, graphic, verbal or some combination of these should be used.
3. How many cues should be used in the scale.
The number of cues depends on such factors as the type of respondent, the research environment and the nature of the analysis.
The Semantic Differential Scale ( SDS )
If the respondents are educated, they will be able to scale more cues without any difficulty. 4. Whether the scale should be of the forced or non-forced variety. Better approach would be to use a non-forced variety scale. 5. the researcher has to select the antonyms. Since only one antonym pair is used , the method is more like a graded check list than a semantic differential scale. Limitations of Attitude Scale Techniques Inability to predict behavior. Attitude scales tend to overlook the immediate environment of the consumers. The relationships between attitudes and buying behavior still continues to be indistinct.
MULTI-DIMENSIONAL SCALING ( MDS )

MDS can be characterized as a set of procedures for portraying perceptual or effective dimensions of substantive interest. MDS is a complicated scaling device. MDS can scale objects, individuals or both with minimum information. MDS is used when all the variables ( metric or non-metric ) in a study are to be analyzed simultaneously and all such variables happen to be independent. Sporty *1 *4 Non-Luxurious *3 *5 *6 Non-Sporty ( Consumer perceptions of similarities of selected cars on two dimensions ) * 10 Luxurious *7
MULTI-DIMENSIONAL SCALING ( MDS )

Assumptions in MDS People perceive a set of objects as being more or less similar to one another on a number of dimensions instead of one. MDS techniques attempt to locate the points, given the information about a set of inter-point distances, in space of one or more dimensions such as to best summarize the information contained in the inter-point distances. Uses of MDS 1. Market segmentation, PLC , Vendor evaluations 2. Advertising media selection Limitations 1. conceptual problems 2. empirical problems 3. computational problems.
Reliability of a Scale
Reliability is the extent to which a scale produces consistent results if repeated measurements are made on the characteristic. Reliability is the extent to which measures are free from random error . If the measure is perfectly reliable.
XR
= 0, then
Reliability is assessed by determining the proportion of systematic variations in a scale. Approaches for assessing reliability include the 1. test-retest , 2. alternative forms, 3. internal consistency methods.
Test-Retest Reliability Respondents are administered identical sets of scale items at two different times under as nearly equivalent conditions as possible. The degree of similarity between the two measurements is determined by computing a correlation coefficient . The higher the correlation co-efficient, the greater the reliability. problems associated with test-retest approach. 1. sensitive to the time interval between testing. 2. initial measurement may alter the characteristic being measured. 3. impossible to make repeated measurements. 4. first experiment may have a carryover effect to the second measurement. 5. characteristics being measured may change between measurements.
Alternative Forms Reliability
In this approach, Two equivalent forms of the scale to be constructed.
The content of the forms are to be equivalent.

The same respondents are measured at two different times, usually two to four weeks apart, with the different scale form being administered each time.
The scores from the administration of the alternative-scale forms are correlated to assess reliability.
Problems with Alternative Forms Reliability test 1. time consuming 2. difficult to construct two equivalent forms of a scale.
Internal consistency Reliability Used to assess the reliability of a summated scale where several items are summed to form a total score. In this type of scale, each item measures some aspect of the construct measured by the entire scale, and the items should be consistent about the characteristic. The simplest measure of internal consistency is split-half reliability the items on the scale are divided into two halves and the resulting half scores are correlated. High correlations between the halves high internal consistency.
Validity of a scale is defined as the extent to which differences in observed scale scores reflect true differences among objects on the characteristic being measured , rather than systematic or random errors. Perfect validity requires that there be no measurement error ( There are four approaches in validity. There are 1. Content Validity or face validity 2. Criterion Validity 3. Construct validity 4. predictive validity 5. concurrent validity Content validity Systematic evaluation of how well the content of a scale represents the measurement task at hand. The scale items adequately cover the entire domain of the construct being measured.
Validity of a Scale
XO = XT, XR = 0, XS = 0 )
Criterion Validity Criterion validity examines whether the measurement scale performs as expected in relation to other variables selected as meaningful criteria. Criterion variables may include demographic and psychological characteristics, attitudinal and behavioral measures or scores obtained from other scales. Two forms of criterion validity 1. Concurrent validity 2. Predictive validity Concurrent Validity Concurrent validity is assessed when the data on the scale being evaluated and on the criterion variables are collected at the same time. To assess concurrent validity, the researcher has to develop short forms of standard personality instruments.
Validity of a Scale
Validity of a Scale
To assess Predictive validity , the researcher collects data on the scale at one point in time and data on the criterion variables at a future time. Ex. Attitudes toward cereal brands could be used to predict future purchases of cereals by members of a scanner panel. The predicted data and actual purchases are compared to assess the predictive validity of the attitudinal scale. Construct validity Addresses the question of what construct or characteristic the scale is measuring. Construct validity requires sound theory of nature of the construct being measured and how it relates to other constructs. Most sophisticated and difficult type of validity to establish. Types of construct validity are 1. convergent validity 2. discriminant validity 3. nomological validity
Validity of a Scale
Convergent Validity - Extent to which the scale correlates positively with other measures of the same construct.
Discriminant validity is the extent to which a measure does not correlate with other constructs from which it is supposed to differ.
Nomological validity is the extent to which the scale correlates in theoretically predicted ways with measures of different but related constructs.
Important Review Questions Unit-II

PART A ( 2 Marks )
1. Research Proposal ( 2005 ) 2.Non-Response Error ( 2005 ) 3.Simulation ( 2006 ) 4.Response Bias ( 2006 ) 5.Surrogate Information Error ( 2006 ) 6.Interval Scale ( 2006 ) 7.Validity ( 2006 ) 8. Nominal Scale (2007 ) 9. Sampling Unit ( 2007 ) 10. Disguised Questioning ( 2007 ) 11. Rank correlation ( 2007 ) 12. Attitude Scales ( 2007 ) 13. MDS ( 2005 )
Important Review Questions Unit - II

Part B ( 12 Marks Questions ) 1. What are the common types of errors encountered in defining a marketing research problem? What can be done to reduce the incidence of such errors ? ( 2005 ) 2. How does formulating research design differ from developing an approach to a problem?(05 ) 3.What is measurement ? What are the primary scales of measurement ? ( 2005 ) 4. Explain the major differences between Rating and Ranking scales. Which is a better scale measurement technique for collecting attitudinal data on sales force performance of people who sell vacuum cleaners. 5.What are the sources and methods of gathering marketing information ? ( 2006 ) 6.Why is a sample survey preferred to a census enquiry and what are the steps involved in the sampling process? ( 2006 ) 7. What are secondary data ? What are their advantages and limitations? What are their sources? How do you evaluate secondary data ? ( 2006 )
8.How does Thurstones Scale differ from SDS ? ( 2006 )

9. What are the criteria for a good scale? Explain ( 2006 ) 10.Examine the marketing research process. ( 2007 ) 11. How do you code and tabulate the responses of a respondent ? ( 2007 ) 12. Explain Reliability and Validity of a scale. ( 2007 ) 13. Distinguish between Quantitative and Qualitative Analysis. ( 2007 ) 14. What is Multi-Dimensional scaling? Discuss the purpose and limitations of multi-dimensional scaling methods. ( 2005 )
TEN STEPS TO IMPROVE SELF-CONFIDENCE

Begin to find out where you think feelings of inferiority Train your weakness
Improve your talents and abilities further

Be pleased about your accomplishments Free yourself from opinion of others
Develop your talents through your hobby

Approach difficult tasks with optimism Do not be ambitious Excessive ambition is harmful
Do not compare yourself with others

Let your motto not be I must do as well as others.
DECISION THEORY Decision theory decides whether a proposed research project is justified.
The basic decision whether or not the decision-maker should take a particular action, results in whether a proposed study would reduce the basic decisions risks.
Decision theory involves the following three stages.

1. Situation Analysis 2. Prior Analysis 3. Posterior Analysis 4. Preposterior Analysis Situation Analysis Problems arise in some situations in which the decision-maker has to evaluate whether to take a proper decision. The decision maker decides whether a proposed course of action should be adopted in a particular situation or not.
The decisions have been preceded by identification of problems, optional solutions and reduction to a few decision. They require predictions of actions. Prediction involves uncertainty or risk because the present situations or environments may not have been properly assessed, and the future environment may change considerably from the present one. Hence, the prediction made considering the present environment may not be constant in the future. Therefore, when the risks or uncertainties are large, there is need for a more systematic decision method. The decision maker uses his intuition based on the state of his knowledge to predict certain phenomena and course of action. If the decision maker takes the decision in a logical and systematic manner along with by gut feeling his decision will be very useful. In the given situation, the decision maker must know the best course of action to take, bearing in mind certainty, risk, and outcome of the course of action.
DECISION THEORY
2.Prior Analysis The decision whether a research project should be conducted requires comparison of the value of the decision without research, to the anticipated value of the decision assuming research were to be conducted. If the anticipated value of the research is higher, the research project is expected. If the cost of the research is higher than its potential contribution to the management decisions, then the research project is rejected. Expected value is a weighted average of the various consequences in the pay off table.
DECISION THEORY
The weights are the probabilities assigned to each state of nature.

Expected value is calculated for each alternative course of action and the expected values are compared. The alternative offering the highest expected value would be the most suitable choice. The expected value is also known as Probability Value. The probable value without research is stipulated on the basis of the probability theory in several states of nature.
Posterior Analysis Posterior analysis deals with which act should be chosen after the receipt of new information.
DECISION THEORY
The benefits of information are precisely evaluated, which provides the maximum background for the decision-making process.
The posterior analysis, after analyzing the available data, may decide whether to accept the said research project or reject the project. The decision maker can adopt a critical value below which the results will not be accepted. It may be profit or sale of a fixed amount. But it is not zero profit at break even point. If the decision results in a fall in sales or a profit below the critical value , the decision is rejected. So, in a research project, if the value of the research project falls below the minimum or critical value , the research project is rejected. But if the research project gives the higher value than that of the critical value , the research project is accepted.
DECISION THEORY PRE-POSTERIOR ANALYSIS

This analysis deals with the strategic question of whether new information should be obtained and if so, how much before deciding the course of action.
Pre-posterior analysis is helpful in evaluating the worth of research before it is undertaken.

EMVII ( Expected monetary value of imperfect information ) If the decision maker is willing to make certain probability assignments, pre-posterior analysis will enable him to ascertain the value of alternative research studies prior to undertaking the research. This value is known as EMVII. From this if cost of information is subtracted ( CI ), the expected monetary gain of imperfect information ( EMGII ) can be obtained. EMGII = EMVII - CI
Some important terms in Decision Theory

Pay-off : The result of combinations of an act with each of the states of nature is the outcome and monetary gain or loss of each such outcome is the pay-off. Pay-off should be in quantitative form.
Pay off may also in terms of cost saving or time saving.

Utility Utility of each outcome is also quantitative expression , but takes the preference of the individual decision-maker.
Regret ( or Opportunity Loss )

The difference between the highest possible profit for a state of nature and the actual profit obtained for the particular action taken is known as Opportunity Loss.
Opportunity loss is the loss incurred due to failure of not adopting the best possible course of action.
Concept of Probability & Expected Value

The concept of probability is the basis of decision making under conditions of uncertainty. The more we think a particular event is expected to occur, the greater will be its probability and vice versa. Ex. If the probability of certain event is 0.8, this means that the likelihood of its occurrence is 8 times out of 10 or 80%. The Expected value criterion requires the decision maker to calculate the expected value for each alternative decision. Expected Value is calculated by 1. multiplying each decision alternative by the probability value assigned to the state of nature that can occur. 2. aggregating the values thus arrived at. Ex.1. ABC Co. is a leading firm of dry cleaners with branches in Delhi and the large towns in western U.P. The company has been thinking of setting up a new shop in Agra, which already has four dry cleaning shops, one of which is a branch of a national company at par with the ABC. ABC Co., is concerned about the reaction of customers and potential customers to the opening of its branch in Agra, and is of the opinion that one of the three probabilities can take place. 1. increased market share 2. no change in the present operations 3. a reduced market share. The company assigns a value to each of these outcomes as Outcome Increased share No change Reduced share Value in Rs.Lakhs. 3 1 -2
After discussions and consultation amongst several managers , the company assigns the probabilities. Outcome Increased share No change Reduced share Probability 0.2 0.5 0.3
EMV & EMVPI

The Expected Monetary Value can be calculated as
EMV = ( Rs.3,00,000 X 0.2 ) + ( Rs.1,00,000 X 0.5 ) + ( Rs. -2,00,000 X 0.3 )

= Rs.60,000 + Rs.50,000 Rs.60,000 = Rs.50,000 The expected monetary value of the decision to open the branch is Rs.50,000. Expected Monetary Value of Perfect Information ( EMVPI ) * Also termed as EVPI Sometimes management needs additional information so that it can make the right decisions. In such cases, the firm has to first decide how much it can pay for this information to an outside consultancy firm. There always is a maximum limit beyond which management is not prepared to spend for information. This brings the concept of Expected Monetary Value of Perfect Information ( EMVPI ).
Sample Question for calculation of EMVPI

Example ABC Co., whose major competitor is XYZ Co., has to decide whether or not to introduce a new product . Although completely reliable information regarding XYZ s plans is not available, the marketing manager of ABC has assumed certain probabilities on the basis of past experience. He has prepared the following conditional pay-off table.
C1
Probability Strategy S1 Strategy S2 0.6 6 Million 4 Million
C2
0.4 10 Million 15 Million
C1 indicates that XYZ Co., introduces the new product. C2 XYZ does not introduce the new product S1 ABC Co. decides to introduce the new product. S2 ABC Co. decides not to introduce new product .
What is the expected value of perfect information ? Assumption : ABC Co., is considering approaching a consultancy firm to provide additional information relating to XYZ s plans. It should be noted that ABC Company cannot pay any arbitrary amount demanded by this consultancy firm. It should, therefore, fix up an upper limit beyond which it would not like to pay. How is this limit determined ?
First step To calculate EMV of the two strategies. EMV of S1 = ( 6 X 0.6 ) + ( 10 X 0.4 ) = 3.6 + 4 = Rs.7.6 Million EMV of S2 = ( 4 X 0.6 ) + ( 15 X 0.4 ) = 2.4 + 6 = Rs.8.4 Million As the EMV is high in S2, ABC Co., should choose the strategy S2, which is optimal strategy.
Assume ABC Co., is fully acquainted with the plans of its competitor XYZ Co. In such a case , ABC will choose S1 and gain a pay off of Rs.6 Million when XYZ introduces a new product. This is because S2 will yield only Rs.4 Million. Likewise ABC will choose S2 and gain a pay-off of Rs.15 million when it is certain that XYZ will not introduce the new product. This is because S1 will yield only Rs.10 Million. From the information given above, it is known that XYZ will choose C1 during 60% of the time and C2 during 40% of the time. Expected monetary value under certainty EMV( C ) = ( 6 X 0.6 ) + ( 15 X 0.4 ) = 3.6 + 6 = Rs.9.6 Million. Expected monetary value under uncertainty EMV(UC) = ( 4 X 0.6 ) + ( 15 X 0.4 ) = 2.4 + 6 = Rs.8.4 Million EMVPI = EMV ( C ) EMV ( UC ) = Rs. ( 9.6 8.4 ) = Rs.1.2 Million. Example 2
States of Nature S2 100 90 120
EMVPI Calculation
Courses of Action A1 A2 A3
S1 125 70 150
S3 70 100 60
S4 20 50 - 10
The Probabilities are S1 : 0.4 , S2 : 0.25 , S3 : 0.2 , S4 : 0.15 1. What course of action recommended in this situation ? 2. What is the expected monetary value of perfect information ?
EMVPIx Calculation EMV : A1 = ( 125 x 0.4 ) + ( 100 x 0.25 ) + ( 70 0.2 ) + ( 20 x 0.15 )

= 50 + 25 + 14 + 3 = Rs.92 Million. EMV : A2 = ( 70 X0.4 ) + ( 90 X 0.25 ) + ( 100 X 0.25 ) + ( 50 X 0.15 ) = 28 + 22.5 + 20 + 7.5 = Rs.78 Million. EMV : A3 = ( 150 X 0.4 ) + ( 120 X 0.25 ) + ( 60 X .2 ) + ( - 10 X 0.15 ) = 60 + 30 + 12 15 = Rs. 100.5 Million.
Since EMV of A3 is the highest, A3 should be recommended in this case, as an optimal strategy. Calculation of EVPI EMV ( C ) = ( 150 X 0.4 ) + ( 120 X 0.25 ) + ( 100 X 0.2 ) + ( 50 X 0.15 ) = 60 + 30 + 20 + 7.5 = Rs.117.5 Million. EMV ( UC ) is calculated based on the Optimal Strategy A3, EMV ( UC ) = ( 150 X 0.4 ) + ( 120 X 0.25 ) + ( 60 X 0.2 ) + ( - 10 X 0.15 ) = ( 60 + 30 + 12 1.5 ) = Rs.100.5 Million EVPI = EMV ( C ) EMV ( UC ) = 117.5 100.5 = Rs. 17 Million.
Example 3 Suppose a marketing manager of a soft drink manufacturing company is seriously considering whether to undertake a special promotion or not. The two options before him are : ( 1 ) run a special promotion, ( 2 ) do not run a special promotion. The following table gives the probabilities assigned by the marketing manager to the three possible outcomes, viz. very favorable consumers reaction, favorable consumers reaction and unfavorable consumers reaction and unfavorable consumers reaction. Alternative courses probabilities of Possible consumer of action consumer reactions reactions A1 A2 ( Rs. ) ( Rs. ) Very favorable Favorable Unfavorable 1,00,00,000 10,00,000 50,00,000 0 0 0 0.7 0.1 0.2
EMV & EMVPI Calculations
On the basis of this information prior analysis will give Expected Monetary Value ( EMV ). EMV ( A1 ) = ( Rs.1,00,00,000 x 0.7 ) + ( Rs.10,00,000 x 0.1 ) + ( - 50,00,000 x 0.2 ) = ( Rs.70,00,000 + Rs.1,00,000 Rs.10,00,000 = Rs.61,00,000 EMV ( A2 ) = 0 Optimal Strategy : A1 Hence EMVPI = EMV ( C ) EMV ( UC ) EMV ( C ) = 1,00,00,000 X 0.7 = 71,00,000. EMVPI = Rs.71,00,000 Rs. 61,00,000 = Rs.10,00,000 This indicates that the marketing manager should decide to run the special promotion.
Sample Questions for Expected Monetary Value ( EMV )

1. You are given the following pay-offs of three acts A1, A2,A3 and the events E1,E2, E3. The probabilities of the states of nature are, respectively 0.1 , 0.7 , 0.2 . Calculate and tabulate EMV and calculate which of the act can be chosen as the best.
States of nature
E1 E2 E3
Acts A1
25 400 650
Act A2
- 10 440 740
Act A3
- 125 400 750
2. The management is facing the problem of selecting one of the following two products for Mfg. After market research and survey, the probability matrix is as follows. Calculate EMV & choice of alternative. States of nature Acts Table Fan Ceiling Fan States of nature Acts Table Fan Good Fair Poor
0.3 0.4
0.5 0.45
0.2 0.15 Profit in Rs. If the market is Fair 15,000 Profit in Rs. If the market is poor 3,000
Profit in Rs. If the market is Good 10,000
Ceiling Fan
14,000
16,000
Loss 4,000
Advantages & Limitations of Decision Theory

Advantages Decision theory has been applied in many marketing decisions. Decision theory is beneficial in a sharper decision-making situation that reveals more starkly the structure of the problem and the nature of the variables. Decision theory reveals the extent of expected downside risks and upside opportunities. It may increase the decision makers expectations as the decision is likely to be enhanced by the more explicit recognition of the variable, and the probable effects of number of forces concerned with them. Decision theory helps in judging which projects ought to be undertaken and which to be refused. Decision theory also helpful in the formulation of the decision and in making predictions. Decision theory helps the decision maker to decide the size of the potential market, income potentials, amount of time taken for the investment, fixed costs, and total costs. Limitations There is no ready made solution for all the problems in decision theory. A lot of precaution required before applying Decision theory. Decision theory is subjective in nature Decision theory cannot precisely describe the set of outcomes or pay-offs. Decision theory cannot be used in opportunity oriented and alternative oriented researches.
TYPESguide the decision maker in choosing the best course of action. OF DECISION MODELS The aim of decision theory is to
Depending upon the available information about the occurrence of various states of nature and environment, the decision models may be classified in to the following types.
1. Decision making under certainty

2. Decision making under risk 3. Decision making under un-certainty
Decision criteria
1. Maximin decision criterion course of action that maximizes the minimum possible pay-off is selected. The decision maker lists down the minimum outcome within each course of action ( for act ) and then selects the strategy with the maximum number. This decision criteria is known as Pessimistic Decision Criterion as it locates the strategy having the least loss.
DECISION CRITERIA
Maximax decision criterion In this case the course of action that maximizes the maximum pay-off is taken.
The decision-maker lists down the maximum pay-off associated with each course of action, then selects that alternative having maximum number.
This criterion approach called as Optimistic Decision Criterion as the decision maker selects the alternative of highest possible gain. Minimax regret The regrets ( opportunity loss ) for each course of action are to be calculated with reference to the pay-off list of various alternative acts. Now, obtain the maximum regret and hence select the course of action with minimum of the maximum regret values.
DECISION CRITERIA
Hurwitz criterion ( criterion of realism ) This criterion makes compromise between maximax and maximin i.e optimistic & pessimistic decision criterion. At first , co-efficient of optimism a is selected. Now, select that alternative which maximizes. a ( maximum pay-off ) + ( 1 alpha ) ( minimum pay-off ) Criterion of rationality This criterion is based on the principle of equal n likelihood. The decision maker first calculate the average outcome for each course of action and then selects the maximum number. Average outcome is 1/n ( 01+02+03+0n)
Sample Question on Decision Criterion

Example Apply ( 1 ) Maximin ( 2 ) Maximax ( 3 ) Minimax regret to the following pay-off matrix. -------------------------------------------------------------------------------------------------------------------------------------------------Acts States of Nature S1 S2 ------------------------------------------------------------------------------------------------------------------------------------------------A1 -6 2 A2 4 1 A3 7 -4 -----------------------------------------------------------------------------------------------------------------------------------------------Answer ( 1 ) Maximin : Minimum course of action. A1 = -6 A2= 1 & A3 = - 4. Now maximum of minimums is 1. Hence A2 acceptable. ( 2 ) Maximax : Maximum of strategies. A1 = 2, A2 = 4 & A3 = 7 . Now maximum of maximum is 7 and hence A3 is acceptable. ( 3 ) Minimax regret -------------------------------------------------------------------------------------------------------------------------------------------------S1 S2 Maximum Regrets A1 7-(-6)=13 2-2 = 0 13 A2 7-4 = 3 2-1 = 1 3 A3 7-7 = 0 2-(-4) = 6 6 ------------------------------------------------------------------------------------------------------------------------------------------------Minimum of the Maximum Regrets = 3 and Hence, A2 preferred.
Given is the following pay-off matrix. Probability
Sample Question
Expand 400 Units Rs.
States of nature
courses of action Do not expand Expand 200 Rs. Units Rs.
High Demand Medium Demand Low demand
0.4 0.4 0.2
2,500 2,500 2,500
3,500 3,500 1,500
5,000 2,500 1000
What should the decision be if we use ( 1 ) Expected Monetary value criterion ( 2 ) the maximax criterion ( 3 ) maximax regret criterion. Ans. First form the pay-off table as follows.
States of nature Probability A1 Do not expand 2,500 A2 Expand 200 units A3 Expand 400 units
High Demand 0.4 2,500 3,500 5,000
Medium Demand 0.4 2,500 3,500 2,500
Low Demand 0.2 2,500 1,500 1,000
( 1 ) EMV for A1 = 2,500X0.4 + 2,500X0.4 + 2,500X0.2 = Rs.2,500/EMV for A2 = 3,500X0.4 + 3,500X0.4 + 1,500X0.2 = Rs.3,100/EMV for A3 = 5,000X0.4 + 2,500X0.4 + 1,000X0.2 = Rs.3,200/-
( ii ) Row minimum of the different courses of action are :
Sample Question
A1 = 2,500, A2 = 1,500 & A3 = 1,000 . Maximum of these minimums is 2,500 & the choice is A1 Hence, the decision maker under this criterion would decide Not to expand. ( iii ) Row maximums of the different courses of actions are : A1 = 2,500 , A2 = 3,500 & A3 = 5,000 . The maximums of these maximums is 5,000/-& the choice is A3. Hence, the decision maker under this criterion decides to expand 400 units. II step is to make Regret Table
High Demand States of Nature course of action Do not expand ( A1) Expand 200 Units ( A2 ) Expand 400 units ( A3 ) 5,000-2500=2500 5,000-2500=1500 5,000-5000=0
Medium Demand
Low Demand
Maximum Regrets
3500-2500=1000 3500-3500=0 3,500-2500=1000
2500-2500=0 2500-1500=1000 2500-1000=1500
2,500 1,500 1,500
Hence, the minimum of maximum regrets is 1,500 that occurs in A2, A3 so the decision maker must choose to expand 200 units or expand 400 units. If the probabilities are 0.3, 0.4 , 0.3 be the respective probabilities of three states of nature, then the EOL is A1 = 2500X0.3 + 1000X0.4 + 0X3 = 1150, A2 = 1500X0.3 + 0X0.4 + 1000X0.3 = 750, A3 = 0X0.3 + 1000X0.4 + 1500X0.3=850 In case of Act A2, EOL is minimum.
DECISION TREE DIAGRAM

A decision problem may also be represented with the help of a diagram in the form of tree, for a clear and systematic idea. In this case, alternative courses of action, states of nature, likely outcomes, etc., are diagrammatically or graphically depicted as if they are the branches, sub branches of a horizontal tree. Hence, it is known as a decision-tree diagram. Decision Tree is a graphical device depicting the sequences of action-event combinations. All possible sequences of action-event combinations are shown in a systematic manner in a decision tree. Decision tree is simply a decision flow diagram in which the problem is structured in chronological order. Decision tree analysis method used when there are problems with multiple stages wherein a sequence of decisions in involved.
Each decision in the decision tree leads to a chance event which in turn influences the next decision.
The decision tree consists ( I ) decision forks ( ii ) outcome forks
( iii ) probabilities associated with each outcome
( iv ) rewards or penalties associated with each outcome.
Decision Tree Analysis

Typical method of constructing a decision tree 1. identify all the possible courses of action 2. list the possible results, i.e. states of nature of each course of action specified in (1 ).
3.calculate the pay-off of each possible combination of courses of action and results. The pay-off is normally in monetary terms.
4. assign probabilities to the different possible results for each given course of action. The probability indicates the likelihood of occurrence of a particular result or event. 5.Finally, select the course of action that gives the maximum pay off. Components of Decision Tree The tree consists of network of nodes, probability estimates , pay-offs. Nodes : There are two types of nodes ( 1 ) decision node ( symbolized as square ) and ( ii ) chance node ( marked as circle ) Types of Decision Trees 1. Deterministic 2. Probabilistic Single stage decision tree only one decision ( no chance event ) Multi- stage decision tree chain of decisions is to be made.
Decision Tree : I ( For Promotion of Decision ) Competitor reacts
DECISION TREE ANALYSIS
use newspaper ad
comp. does not react comp. reacts
Use direct mail coupons
comp. does not react
Decision fork
outcome fork
outcome probabilities
outcome reward or penalty
DECISION need for research ) TREE ANALYSIS Decision Tree No.2 ( for evaluating the
A decision tree analysis can be helpful in determining the need and the time of research. It can successfully test an alternative decision. For Exp. Before the introduction of a new product, there can be three alternatives. 1. introduce the product normally 2. test the product in one market and 3. do not introduce the product.
commercialize the product
introduce the product nationally
test in other markets
Introduce
test in one market
good
marginal
continue the test market
do not introduce the product
drop the product
poor
drop the product modify the test

A decision problem may also be represented with the help of a diagram in the form of a tree, for a clear and systematic idea.
In this case, alternative courses of action, states of nature, likely outcomes, etc., are diagrammatically or graphically depicted as if they are the branches, sub-branches of a horizontal tree. Hence, it is known as tree diagram.
Example : There is 40% chance that a patient admitted to the hospital is suffering from cancer. A doctor has to decide whether a serious operation should be performed or not. If the patient is suffering from cancer and the serious operation is performed , the chance that he will recover is 70% otherwise it is 35%. On the other hand, if the patient is not suffering from cancer and the serious operation is performed, the chance that he will recover is 20%, otherwise it is 100%. Assume that recovery and death are the only possible results.
Construct an appropriate decision tree. What decision should the doctor take ?
Construction of a decision tree diagram

Probability of recovery on operation = 0.28 + 0.12 = 0.40 Probability of recovery for no operation = 0.14 + 0.60 = 0.74 As 0.74 > 0.40, so the operation should not be done for recovery. recovery 0.7 operate cancer 0.4 not operate death 0.3 recovery 0.35 death operate recovery 0.2 ( 0.28 )
( 0.12 ) ( 0.14 ) ( 0.26 ) ( 0.12 )
no cancer 0.6
not operate
death 0.8
recovery 1.0
( 0.48 )
( 0.60 )
Advantages of Decision Tree Approach 1. helps in decision making in a systematic manner. 2. No possible outcome is likely to be left out, as this approach necessitates decision maker to consider all possible outcomes. 3. helpful in communicating the decision making process to others in a very clear manner, indicating the assumptions used. 4. attention can be focused on each individual financial figure, probability, as also the underlying assumption, one at a time. 5. different sets of assumptions can be used to ascertain their influence on the final outcome. Limitations Decision trees need time and money to complete. Unsuitable for minor decisions as the cost may exceed the benefit to be derived from them. The information in decision tree analysis is presented in a quantitative form, there is a risk that it may be taken as exact. Information required for decision tree analysis may not be available because a particular decision was not taken before and hence there is no evidence on which the probability can be assumed. Non-quantifiable factors such as peoples attitudes, government policy, etc., may be more important but these factors do not enter in to a decision tree.
SAMPLING
Sample is a part of a population , or a subset from a set of units, or sub-group of the elements of the population selected for participation in the study. Sample is the representative of the universe or population of interest.
Sampling may be defined as the selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made.
Sampling is simply the process of learning about the population on the basis of a sample drawn from it. In the sampling technique instead of every unit of the universe only a part of the universe is studied and the conclusions are drawn on that basis for the entire universe. Ex. 1. every home maker tastes a spoonful ( sample ) and form the opinion on the soup flavor. 2.swimming pools temperature tested by dipping your toe (sample is the water around the toe ) 3.many people scan a few pages ( sample ) before buying a new book, to see if it is of interest. 4.prospective car buyer test drives an automobile ( sample ) to judge the performance.
Four major reasons, especially to marketing situations.
Reasons for Sampling
1. For time framed decision making - acquiring an entire census for study and decision making will be difficult. 2. cost of gathering information is a compelling consideration in favor of sampling. 3. accuracy of the information may not be justifiably enhanced by taking a complete enumeration. 4. Use of sampling techniques is also warranted in situations in which the measuring of a particular element from a group would destroy the elements or render them useless after examination. 5. Impossibility of finding all of a population particularly in biological research studies ( fish or plants etc., ) 6.sampling is qualitative.
Advantages of Sampling Lower cost is the major advantage. Sampling saves time. Possible to devote more attention to each member to check the members accuracy and depth. Sampling is used in those cases where a census is impossible. Quality of interviewing , supervision of samples will be of highest quality than census survey. Disadvantages of Sampling Need for specialized Knowledge : Sampling demands an exercise of great care for correct and representative results. Sampling requires proper training and supervision of the field force. Hence, may involve additional cost and time. Probability and non-probability samples are used in marketing. The researcher should know the applicabilities and utilities of those samples, otherwise may select wrong samples. Fails to provide information on individual front. Sampling gives rise to certain errors. If the errors are too large, the results will be of extremely limited use.
SAMPLING
CHARATERISTICS OF IDEAL SAMPLE

A good sample has following qualities. 1. 2. Representative ness ideal sample must represent adequately the whole populations. Independence interchangeability of units. Every unit should be available to be included in the sample. Adequacy the number of units included in a sample should be sufficient to enable derivation of conclusions applicable to the whole population. Sample having 10% of the whole population is generally adequate. Homogeneity - units in the sample bear likeness with order units.
3.
4.
Sampling Unit : A Sampling unit is that element or elements considered available for selection in some stages of the sampling process.
Sampling Process is the procedure required right from defining a population to the actual selection of sample elements. Step : I
SAMPLING PROCESS
Define the population
Step : II
Identify the sampling frame Specify the sampling unit.
Step : III
Step : IV Step : V Step : VI
Specify the sampling method
Determine the sample size
Specify the sampling plan

Step : VII
Select the sample
THE SAMPLING PROCESS Step : I Define the Population

Its the aggregate of all the elements defined prior to selection of the sample. Population should be defined in terms of ( 1 ) elements ( 2 ) sampling units ( 3 ) extent ( 4 ) time All the above four specifications must be contained in the designated population. Omission of any of them would render the definition of population incomplete. Ex : if a co. monitors the sale of a product recently introduced , the population might be ( 1 ) elements the product ( 2 ) sampling units retail outlets, super markets ( 3 ) extent Delhi ( 4 ) time Jan 7 14 2009. Ex : If we were to conduct survey on consumption of tea in Gujarat state. Specifications will be ( 1 ) elements Home-makers ( 2 ) sampling units households, then home makers. ( 3 ) extent Gujarat state ( 4 ) time - Jan 1 10 2009
SAMPLING PROCESS Step : II Identify the sampling frame

Sampling frame is the representation of the elements of the target population. Sampling frame could be a telephone directory, a list of blocks, and localities of a city, a map or any other list containing of all the sampling units. The sampling frame should satisfy the following criteria. 1. sampling frame should adequately cover the population to be surveyed. 2. accuracy information about each individual units correct. 3. No duplication unit should not enter the sample more than once. 4. the frame should be up-to-date. 5. the frame should be readily accessible and convenient to use. In MR, most of the frames are from census reports, electoral registers, lists of member units of trade and industry associations. Step : III Specify the sampling unit Sampling Unit is the basic unit containing the elements of the target population. Sampling units can be selected through a random process.
SAMPLING PROCESS Step : IV Specify the sampling method

Sampling method indicates how the sample units are selected. To determine if probability sample ( random samples ) or non-probability sample ( non-random samples ) is to be chosen. In case of probability sample , the probability or chance of every unit in the population being included in the sample is known, the selection of specific units in the sample entirely on chance, and the sampling error and the degree of precision in the estimates can be determined. In case of Non-Probability sample, the probability or chance of every unit being included in the sample is unknown, and the estimation of degree of precision in the estimates cannot be determined. The selection of units within a sample involves human judgment rather than pure chance. Step : V Determine the sample size One has to decide how many elements of the target population are to be chosen.
THE SAMPLING PROCESS

Determining the sample size is complex, and involves several qualitative and quantitative considerations. The important qualitative factors that should be considered in determining the sample size include 1. the importance of the decision 2. the nature of the research 3. the number of variables 4. the nature of the analysis 5. sample sizes used in similar studies 6. incidence rates, completion rates & resource constraints. Step : VI Specify the sampling plan Sampling plan should indicate how decisions made so far are to be implemented. For Exp. If a survey of households is to be conducted, a sampling plan should define a household, what to be done if no respondent available etc., Sampling plan should provide answers to all the pertinent issues in a sampling survey.
THE SAMPLING PROCESS

Step : VII Select the sample This is the final step in the sampling process. A good deal of office and field work is involved in the actual selection of the sampling elements. Most of the problems in this stage of the sampling process are faced by the interviewer while contacting the sample respondents.
SIZE OF SAMPLE
Sample should be of proper size. Sample size refers to the number of elements to be included in the study. If the sample is either too small or too big , it shall make the study difficult.
An in survey is one, which fulfills the requirements of efficiency, representativeness , reliability and flexibility. The sample should be small enough to avoid unnecessary expenses and large enough to avoid intolerable sampling error - Parten
optimum sample
Factors to be considered in Sample Size

1. the size of the universe the large the size of the universe, the bigger should be the sample size. 2. the resource available if the resources available are vast, a large sample size could be taken. 3. the degree of accuracy or precision desired the greatest the degree of accuracy desired the larger should be the sample size.
SAMPLE SIZE
4. homogeneity or heterogeneity of the universe if the universe consists of homogeneous units, a small sample may serve the purpose, but if the universe consists of heterogeneous units, a large sample may be required. 5. Nature of study For an intensive and continuous study , a small sample may be suitable. But for studies which are not likely to be repeated and are quite extensive in nature., it may be necessary to take a large sample size. 6. method of sampling adopted the size of samples is also influenced by the type of sampling plan adopted. For Exp. If the sample is simple random sample , it may necessitate a bigger sample size. However, in a properly drawn stratified sampling plan, even a small sample may give better results.
SAMPLE DESIGNS
Classification of Sampling Techniques Sampling Techniques
Non-Probability
Probability
Convenience Sampling
Judgmental sampling
Quota sampling
Snowball sampling
Simple Random sampling
Systematic sampling
Stratified sampling
cluster sampling
other sampling techniques
Proportionate
Disproportionate
TYPES OF SAMPLE DESIGNS

Non-Probability Sampling Relies on the personal judgment of the researcher rather than chance to select sample elements. Non-Probability samples may yield good estimates of the population characteristics.
1. convenience sampling
Convenience sampling attempts to obtain a sample of convenient elements. The selection of sampling units is left primarily to the interviewer. Ex. Mall intercept interviews without qualifying the respondents. Tear-out questionnaires included in a magazine , people on the street interviews etc., Convenience sampling is the least expensive and least time consuming of all sampling techniques. The sampling units are accessible, easy to measure, and co-operative. The limitations are the convenience samples are not representative of any definable population. Convenience samples are used for focus groups, pre-testing questionnaires , and cannot be used for descriptive causative research, but can be used for exploratory research.
SAMPLE DESIGNS
Judgmental sampling is a form of convenience sampling in which the population elements are selected based on the judgment of the researcher. Ex. Test market selected to determine the potential for a new product, Purchase engineers selected in industrial marketing research etc., Quota Sampling considered as two stage restricted judgmental sampling. The first stage consists of developing control categories or quotas of population elements. In the second stage , sample elements are selected based on convenience or judgment. Snowball Sampling In this sampling an initial group of respondents is selected randomly. Subsequent respondents are selected based on the referrals or information provided by the initial respondents. Probability Sampling designs
Probability sampling procedure in which each element of the population has a fixed probabilistic chance of being selected for the sample.
SAMPLE DESIGNS
Simple random sampling is a probability sampling design in which each element in the population has a known and equal probability of selection. Every element is selected independently of every other element and the sample is drawn by a random procedure from a sampling frame. Systematic sampling the sample is chosen by selecting a random starting point and then picking every i th element in succession from the sampling frame. The sampling interval , i is determined by dividing the population size N by the sample size n and rounding to the nearest integer. Stratified Sampling is a two step process in which the population is partitioned in to sub-populations, strata. Elements are selected from each stratum by a random procedure. Cluster sampling In cluster sampling the target population is first divided in to mutually exclusive and collectively exhaustive sub-populations or clusters. Then a random sample of clusters is selected, based on probability sampling technique simple random sampling.
Other sampling designs two more types namely sequential sampling & double sampling.
In Sequential sampling the population elements are sampled sequentially , data collection and analysis are done at each stage and a decision is made as to whether additional population elements should be sampled. In double sampling certain population elements are sampled twice.
Procedure for Determining Sampling Size

Determine the tolerable error you are willing to Accept between sample estimate and population Parameter. parameter is the true value to be obtained in a sample.
Determine the level of confidence you desire in the Sample estimate being within the population Parameter.
confidence level is the probability that a confidence interval will include the population parameter.
Determine the Z value associated with desired Confidence level stipulated.
Estimate the standard deviation of the population
Use the appropriate formula
Draw the appropriate formula
Determining the sample size

There are two basic approaches to the problem of sample size. They are 1. the ad hoc or practical approach 2. the statistical approach widely used in marketing research. 1. Practical Method According to this approach, a sample size of less than a few hundred units is not chosen. Reasonable size of the sample would reduce the cost per interview and enables the researcher to test several hypothesis. Testing of hypothesis with a high degree of statistical significance when the sample size is reasonably large. A common practice to determine the sample size is calculating the sample size for each stratum first and then add up the samples of all strata to obtain the overall sample size.
Statistical Approach The problem of sample size involves several aspects such as the type of sample design , the homogeneity in the population from which the sample is to be chosen and the availability of finance , personnel, time for the conduct of the field survey.
Errors in Sampling
Errors in statistics are classified in two categories. 1. Sampling Errors Difference between sample statistic , say, sample mean and population mean . Biased Errors ( due to personal bias ) Sampling Errors are of two types. Unbiased Errors Sampling Errors are the differences between the actual figure and the estimated figure. Sampling Errors are due to the following. 1. improper selection ( due to judgment or due to any non-probability techniques ) of the sample. 2. due to variability of population and wrong method of estimation. 3. faulty demarcation of statistical units. 2. Non-Sampling Errors. These Errors arise when data are not properly observed, approximated and processed.
Errors in Sampling
Non-Sampling Errors are due to the following factors. 1. Incomplete Questionnaire and defective method of interviewing. 2. Errors in compilation and tabulation. Compilation Errors include calculation mistakes. 3. Personal bias of the investigator. 4. If the various terms used are not properly defined. Measurement of Errors Statistical measures can be measured 1. Absolutely or 2. Relatively
Absolute Errors Absolute Error is the difference between true value and the estimated value. Relative Errors is the ratio of absolute error to the estimated figure. Let U U Actual Value Estimated Value = U U U
Ue
Multiple Choice Questions on Decision Theory

1. Decision theory deals with ( a ) Decisions that are exclusively quantity oriented ( b ) Making decisions under conditions of uncertainty ( c ) the worth of additional information to the decision maker ( d ) both ( b ) and ( c ). 2. Decision making is done under the conditions of ( a ) certainty ( b ) uncertainty ( c ) risk ( d ) a, b & c. 3. which of the following criteria is not used for decision making under certainty ? ( a ) maximax ( b ) minimize expected loss ( c ) minimax ( d ) maximin. 4. A person who is reluctant to take risk, prefers ( a ) those situations which have high expected values ( b ) to take large risks to get large gains. ( c ) to act any time when the expected value is positive ( d ) none of these * 5. For a particular decision , the total Profit of a new plant is Rs.25,350,000/- . If the expected net profit is Rs.18,280,000/- what is the cost of the plant ? ( a ) Rs.70,00,000/( b ) Rs.75,00,000/- ( c ) Rs. 70, 70,000/- ( d ) cannot be found from the info given.
Multiple Choice Questions in Decision Theory

6 . EVPI is equal to ( a ) EMV ( C ) EMV ( UC ) ( b ) EOL ( c ) EPPI EMV(UC ) ( d ) All the above. 7. The decision tree is useful in decision making because ( a ) it guides the analyst to approach the problem in an orderly manner ( b ) it can be used with the computer ( c ) it is a graphical device that facilitates the understanding of the problem. ( d ) all the above. 8. which quality of the decision maker leads to good decision ? ( a ) High intelligence ( b ) long experience ( c ) sound quantitative understanding ( d ) strong intuition ( e ) all the above. 9. For decision making , a coefficient or an index of optimism ( ) is used as criterion in ( a ) Maximax ( b ) Maximin ( c ) Minimax ( d ) Realism ( e ) none of the above 10. which of the following samples is not a probability sample design ? ( a ) stratified sample ( b ) multi-stage sample ( c ) cluster sample ( d ) quota sample 11 . Why is a census survey not popular ? ( a ) it is very costly ( b ) it takes more time ( c ) it requires large number of investigators ( d ) all the above. 12. when the sample size increases, which of the following is incorrect ? ( a ) the standard error remains unchanged ( b ) the standard error increases ( c ) the standard error declines ( d ) none of the above.
Part A ( 2 Marks )
Important Review Questions Unit III
1.MDS ( 2005 ) 2. EVPI ( 2006 ) 3. Sampling Unit ( 2007 ) 4. Quota Sampling ( 2007, 2008) 5. Mall intercept ( 2007 ) Part B ( 12 Marks ) 1.Dscuss the cost and value of information and explain how EVPI is arrived at. ( 2006 ) 2.What are the different choice criterion models? Explain with examples. ( 2006 )
Hypothesis Testing
Steps involved in Hypothesis testing. 1. Formulate the Null Hypothesis
H0 and the alternative hypothesis H1. .
2. Select an appropriate statistical technique and the corresponding test statistic.
3. choose the level of significance
4.Determine the sample size and collect the data. Calculate the value of the test statistic. 5. Determine the probability associated with the test statistic under the null hypothesis using the sampling distribution. 6.Compare the probability associated with the test statistic with the level of significance specified. 7.Make the statistical decision to reject or not to reject the null hypothesis. 8. Express the statistical decision in terms of the marketing research problem.
Hypothesis Testing Procedures

Hypothesis Tests
Parametric Tests ( Metric Data ) Non-Parametric Tests ( Non-Metric Data )
One sample * t test * z test
Two samples
One sample * Chi-Square *KS * Runs & Binomial Independent samples * Chi-Square * Mann-Whitney * Median * Kolmogorov -Smirnov
Two samples
* Two group Samples t test z test
Independent
Paired Samples * paired t test
Paired Samples * Sign * Wilcoxon * McNemar * Chi-Square
Important terms
Non-Parametric statistics in Research
Ex. A sales manager states that the average number of units sold by his sales force per month is 200. this statement is an assumption on his part, and there should be some way of testing his claim. If a random sample of his sales personnel had an average sales units of 105 sold for the month, it would be easy to reject the assumption that the true average is 200 units per month. Similarly, if a sample mean were 199, it would be reasonable to accept the sales managers statement .
Objectives of Non-Parametric statistics in Research is for Testing an assumption ( or a hypothesis ) about some population parameter, & using the sample data to check the tenability of assumption ( hypothesis ) The assumption to be tested is known as Null Hypothesis.
Null Hypothesis is designated as
H 0.
, age of the MBA class is
In formulating the null hypothesis, usually the words no , not or same will be part of the stated hypothesis. Ex. We might wish to see whether the mean age of MBA class was 21 years. The Null hypothesis would be written as The
mean age of the MBA class is not different from 21 years. This is the same as saying that the mean, equal to 21 years. The Null hypothesis would be written as
H0 : = 21
Important terms
Non-Parametric statistics in Research
Z and t tests techniques for measuring differences among data when the following
qualifications are met:
1. measurement scales are at least interval.

2.The data are non-parametric. 3. the observations are independent. 4. two or fewer groups are involved. The level of significance The level of risk the researcher is willing ( toleration ) to take in rejecting the null hypothesis when it is true. Designated as , and if an alpha level of 0.05 means that only 5% chance that the conclusion ( the decision to accept or reject the hypothesis ) was a mistake.
Nonparametric statistical tests in Research

Statistical techniques that do not make restrictive assumptions about the sample of a population distribution when performing test of a hypothesis is known as Nonparametric tests. Nonparametric tests do not depend on the shape of the distribution , hence these tests are called as Distribution free tests. Advantages of Non-parametric tests 1. these tests are distribution free they do not require any assumption to be made about the population following normal or any other distribution and they are directly calculated.
2. simple to understand and easily applicable when the sample sizes are small. In large sized samples, these tests are not applied.
3. most non-parametric tests do not require lengthy and more complex computations and hence are less time consuming. 4. these tests are applicable to all types of data ( ordinal , nominal scaled, interval or ratio scaled data ). 5. most non-parametric tests are possible to work with very samples, hence it is helpful for a market researcher collecting pilot study data or medical researcher working with a rare disease.
Non-Parametric statistical tests

Limitations of non-parametric tests 1. these techniques are less powerful or efficient than corresponding standard techniques. 2. for larger sample sizes , more computations are involved, which will be time consuming. 3. these tests ignore certain amount of information.
Non-Parametric Statistical Methods

The following are some of the important non-parametric methods commonly used in marketing research investigations. 1. McNemar Test for analyzing research designs of those of a before and after situation and the data are measure nominally 2. Sign Test for paired data where positive or negative signs are substituted for quantitative values. 3. A Rank Sum test ( Wilcoxon Mann Whiteney U Test ) - which is used to determine whether two independent samples have been drawn from the same population. 4. One sample Run test a method used for determining the randomness with which sampled items have been selected. 5. The Kruskal Wallis or H Test which generalizes the analysis of variance to enable us to dispense with the assumption that the population are normally distributed. 6. Komogorov Smirnove test ( K-S Test ) for testing whether there is a significant difference between an observed frequency distribution and a theoretical frequency distribution. 7. Rank Correlation when data are not available but data can be ranked in relation to each other is used for doing correlation analysis.
McNemar test
Applicable for pre-test and post-test research design, when the data are measured in a nominal scale and a 2x2 contingency table( the frequency table that contains the data, and the table which determines whether or not there is any association, statistically between the data or standard with which they are compared ) involved. In this case, the samples are related, in which the individual is used as his or her own control. McNemar test is used to test the effectiveness of a particular treatment. Ex. Effectiveness of mailed coupons, and the individuals purchase rate for the particular product. The null hypothesis is developed to test the change in variable after treatment. If the data are nominally scaled, the goodness of fit technique is used in which the researcher tests whether a significant difference exists between the observed number of responses in each category and the expected number for each category. Ex. Suppose the treatment of the advertisement is to be examined on brand x and y of a particular product . No. of families After advertisement total brand x brand y Brand x 200 (A) 100 (C) 300 50 (B) 650 (D) 700 250
Before Advertisement
Brand y
750
Total
1000
The data in each cell is put after observation. The change between first and second observation appear in cells B and C . The family purchasing brand y before the advertisement relating to brand x and after the advertisement of brand y is placed under the cell B.
McNemar Test
Similarly families purchasing after advertisement of brand x and before advertisement of brand y in cell C . After advertisement of brand x and before advertisement of brand x , the number of families are the same i.e A. They are not influenced by advertisement because they purchase the same brand after the advertisement as well as before the advertisement. Similarly after the advertisement of brand y and before advertisement of brand y , the number of families are the same. i.e D . This means that they are not affected by the advertisement. The advertisement does not influence cell A and D. The number of families within these cells are the same before and after the treatment of the advertisement. B and C have shown changes in the purchasing behaviour. Step : I The Null Hypothesis that there is no change in behaviour after the advertisement. In other words, the change in behaviour after the advertisement has been proportionate to the behaviour before the advertisement.
H0 : P ( C ) = P ( B )
Alternative hypothesis equation would be
H1 : ( PC) P(B)
Therefore to test the null hypothesis , it is necessary to examine the cases of change in cells A and D. Step : II The level of significance : The level of significance is assumed as
= 0.05. this is the same as stating that the probability of a Type I error is 0.05.
Step : III
McNemar Test
= [ ( C B ) 1] C+B
The statistical Test : The Mcnemar test is appropriate because the data are nominal, and the study involves a before and after measure of two related variables. According to McNemar test formula,
( C B ) = The absolute value of the difference between C and B frequencies.

1 = correction for continuity is subtracted from the difference to compensate for the use of the continuous Chi-square distribution. C + B = The summation of frequencies put in cell C and B.
= [ ( 100 50 ) 1] 100 + 50
= ( 50 1 )
150 = 49 = 2401 / 150 = 16.00 150 Step : IV The critical value of standard table will be 3.84, at the level of significance = 0.05. Hence the statistical conclusion is the null hypothesis is rejected for the calculated test statistic value exceeds the critical value of ( 3.84 ) from the table. Conclusion : the test indicates that the advertisement has no impact on the scale of brand x and y and has been rejected. This shows that the advertisement has been successful in turning the purchase of y brand to brand x.
McNemar test
Advantages of McNemar test McNemar test has been useful for analysing the pre-test and post-test experiments. Useful for analysing samples of matched pairs, with the assumption that both the variables are dependent. Limitation of McNemar test When an analysis involves more than two related samples, the McNemar test can no longer be used. Sample Problem : XYZ company has taken a survey of 260 consumers to test the effectiveness of a promotional campaign mailed coupons and the individuals who changed their purchase rate for the companys product. The researcher took a random sample of consumers before the mail coupon campaign, asking them to complete the questionnaire on their purchase rate for the cos product. On the basis of their responses they were divided in to groups as to their purchase rate . After the mail campaign , the 260 consumers were asked again to complete the questionnaire. They were again classified as to their purchase rate. The following table indicates the results after the campaign appear in cells A & D. An individual is placed in cell A if he changed from a low purchase to a high purchase rate. The individual is placed in cell D if he changed from high to a low purchase rate. If no change is observed, he is placed in either cell B or C. The researcher wishes to know if the mailed coupon campaign was a success.
After Mail Campaign Low Purchase Rate 180 (B) 30 (D) -------------250
Before Mail Campaign Low purchase rate High Purchase Rate
High Purchase Rate 70 (A) 80 (C) -----------110
Total 210 150 ------260
Total
THE SIGN TEST

The sign test is the simplest of the non-parametric tests. The sign test is based on the sign ( pluses or minuses ) of a pair of observations and not on their numerical magnitude. In sign test, the differences in the location of two populations, based on paired observations, that compares only the signs of differences between pairs of variables without taking in to account the magnitude of the differences. In any problem in which sign test used, we count the number of + ve signs and number of ve signs and the number of 0s ( as 0s cannot be included either as positive or negative ). The One sample sign test Types of Sign tests The paired sample sign test The One Sample Sign Test The null hypothesis = H0 is tested against an appropriate alternative, on the basis of a random sample of size n. We replace each sample value greater than H0 with the plus sign and each sample value less than H0 with the minus sign and discard sample value exactly equal to H0 ( put 0 ) . The null hypothesis is tested that these plus and minus signs are values of a random variable having binomial distribution with P - 1 . 2
Sign Test One Sample Sign Test

Let us consider the Null Hypothesis H0 : p = 0.5 . If the difference is due to chance effects, the probability of a + ve sign for any particular pair is , and the probability of a ve sign for any particular pair is also . If S is the number of times the less frequent sign occurs, then S has the binomial distribution with p = . The critical value for a two sided alternative at = 0.05 ( the level of significance ) can be calculated by K = ( n 1 ) 0.98n 2 The Null hypothesis H0 is rejected if S < K for the sign test. The paired sample sign test In this paired sample sign test, each pair of sample values can be replaced with a plus sign if the first value is greater than the second. Each pair of sample values can be replaced with a minus sign if the first value is less than the second value in the sample pair. If both the values in the sample pair are equal, then the values can be discarded. Applications of Paired sample Sign Test Data relating to the collection of account receivable before and after the new collection policy. Responses of father and son towards ideal family size etc., Advantages of Paired sample sign test 1. simple to use and understand 2. easy to calculate and less time consuming 3. Most powerful tool when no value of data is available excepting to greater than or less than values.
One Sample Run Test

The basic objective of one sample run test is to make a judgment about the randomness of sample on the basis of the order in which the experimental observations are made. In many applications, it is difficult to judge whether the sample used is random or not, especially when the researcher has no control over the selection of data. Therefore a concept of run developed to help the researcher to make such a judgment. A run is a succession of identical letters ( or other kinds of symbols ) which is followed or preceded by different letters or no letters at all. Ex. XXX YYYY XXXX YYYYY XX YYY arrangement of occurrence of X or Y chromosomes. In the above example, first there is a run of 3Xs , then a run of 4Ys, then a run of 4 Xs, then a run of 5Ys, and then a run of 2 Xs followed by 3Ys. In all there are Six runs of varying lengths. The total number of runs appearing in an agreement is often a good indication of a possible lack of randomness. If there are too few runs, a definite grouping , clustering or trend may be suspected. If there are too many runs, some sort of repeated alternating pattern may be suspected.
One Sample Run Test

Thus too many or too few runs in a sample indicate something other than chance when the items were selected. The number of runs, or r is a statistic with its own special sampling distribution and its own test. To derive the mean of the sampling distribution of r statistic , the following formula is used.
r = 2n1n2 + 1
r = mean of the r statistic.
n1 + n2
The standard error of the
n1, n2 are the size of the samples. r statistic is calculated by the formula
n1n2 - n1- n2 )
n n

r
=
2 1 2(2
nn
( 1- 2 ) ( 1 + 2 1 ) The sampling distribution of r can be closely approximated by the normal distribution if either n1 or n2 is larger than 20.
n n
= r - r
Mann Whitney U test

The Mann Whitney U test is a powerful test for treating the ordinal data which can be ranked. The test helps us to determine whether two samples have come from identical population. If the samples have come from the same populations it is reasonable to assume that the means of the ranks assigned to the value of the two samples are more or less the same. The alternative hypothesis is that the means of the population are not equal and if this is the case, most of the smaller ranks will go to the value of one sample , while most of the higher ranks will go to those of the other sample. The test of the null hypothesis that the two samples come from identical population may either be based on R1, the sum of the ranks of the values of the first sample, or on R2 the sum of the ranks of the values of the second sample. If the sample sizes are n1 and n2, the sum of R1 and R2 is simply the sum of first n1 + n2 , positive integers , which is known to be vice versa. ( n1 + n2 ) ( n1 + n2 + 1 ) ( this formula is used to find R2, if we know R1 and 2
Mann Whitney U test

The Mann-Whitney U statistics is defined as
smaller of
U1 = n1n2 + n1(n1+1) R1
2
U2 = n1n2 + n2(n1+1) R2 or U2 = n1n2- U1

2
n1 = number of items in first variable n2 = number of items in second variable

R1 = Total of Rank magnitude of first variable R2 = Total of Rank magnitude of second variable
U
= Mann Whitney U value.
If
U is smaller than the critical value , the Null Hypothesis is rejected where U is smaller than U1 & U2.
For large samples U follows a normal distribution
Z = U n1n2/ 2 n1n2 ( n1+n2 ) / 12
Mann Whitney U test

Sample Question : A researcher has mailed a questionnaire to customers who have availed the after-sales services of the manufacturer & dealers service. The information has been arranged in the following table. Raw scores After Sales Service 75 63 67 54 35 85 52 80 28 38 n1 = 10 Dealer service 82 53 76 79 84 65 68 70 36 60 n2 = 10 Combined Rank arranged in descending order After Sale Service 85 80 75 67 63 54 52 38 35 28 R1 = 120 Dealers service 85 82 79 76 70 68 65 60 53 36 R2 = 90
Mann Whitney U test

Solution * Step : I - Formulation of Null Hypothesis. The Null hypothesis H0 is that there is no difference in attitudes of the customers on the after sales services from the manufacturer & dealer. And the alternative hypothesis H1 is that there is a significant difference in the attitudes of the two after sales services from the manufacturers & dealers. * Step : II The level of significance . It was decided that = 0.05. Step : III The statistical test The Mann- Whitney test is appropriate because the measurement level is at least ordinal and converted in to ranks. Also, the samples are independent which is a pre-requisite for using the test. According to the Mann Whitney formula for U value
U1 = n1n2 + n1(n1+1) R1
2
= 10 x 10 + 10 ( 10 + 1 ) - 120
= 100 + 110 120 = 35.
2 2
U2 = n1n2 + n2(n1+1) R2
2
= 10 X10 + 10 ( 10+1) - 90 = 100 + 110/2 90 = 65
Thus the smaller of these U values is 35. The Mann Whitney U value is 35.
Mann Whitney U test

It is revealed that the smaller the value of R , the larger will be the value of U. Thus larger the difference between two variables, the smaller will be the U. If the two items are totally identical, the value of U will be the lowest one. Step : IV Statistical conclusion The calculated value of U is compared with the critical value of U given in a standard table. In the standard table against the level of significance of 64 for a two tabled test.
= 0.05, and against n1 = 10 & n2 = 10 , the critical value of U is
Since the calculated U value 35 is below the table value of U ( 64 ) , the Null hypothesis i.e there is no difference in the two variables ( attitude of after sales services & dealer services ) is rejected. If the calculated U value is more than the table U value , the null hypothesis is accepted.
If the U test value is compared at 0.01 level of significance in the standard table, the Null Hypothesis will be accepted, as the calculated U value will be greater than the table U value.
WILCOXON MATCHED PAIRS SIGNED RANKS TEST

This test is used when ordinal data on two samples are involved and the samples are related. This test suited to the pretest and posttest conditions. Objective of the test is to examine differences in the location of two populations based on paired observations. Wilcoxon test analyzes the differences between paired observations, taking in to account the magnitude of the differences. This test computes the differences between the pairs of variables and ranks the absolute differences. The next step is to sum the positive and negative ranks. The test statistic Z, is computed from the positive and negative rank sums. Example : A manufacturer may be interested to know the impact of advertisements on the services rendered by the dealers to the consumers. A questionnaire is framed to ask for satisfaction on the ordinal scale, i.e., whether the customers are satisfied with the dealers services. The answers are ranked. The ranks for all the dealers are counted and placed as raw scores for each dealer. After an advertisement, the same questionnaire is administered to the customers and the customers are required to rank their satisfaction. The scores of rank obtained buy each dealer are recorded in their respective names. The difference of the pretest and posttest scores without regarding the algebraic sign, are noted and ranked. Then the differences are ranked in order and the magnitude of rank assigned. The differences of plus sign and of minus sign are noted. The smaller of the two differences are taken as the value of T which is compared with the critical value to compare its significance.
WILCOXON MATCHED PAIRS SIGNED RANKS TEST

Step : I The Null Hypothesis The null hypothesis to be tested is that there is no difference in awareness of services offered after the advertisements. The alternative hypothesis is that there was an awareness on the services provided by the dealers after the advertisement. Step : II The level of significance was decided that = 0.05.
Step : III The statistical test Wilcoxon T test value Wilcoxon test analyzes the differences between paired observations, taking in to account the magnitude of the differences. This test computes the differences between the pairs of variables and ranks the absolute differences. The next step is to sum the positive and negative ranks.
Step : IV The Decision Rule the critical value of the Wilcoxon T test is found using the standard table. For Exp. For n = 10, at the level of significance and a one railed test is 10. This indicates that a computed T value of less than 10, the critical value, rejects the Null hypothesis.
Step : V Calculate the Test Statistic. The signed difference between each pair of observations is found. Then these differences are ranked ordered without regard to their algebraic sign.
Finally the sign of difference is attached to the rank for that difference. The test statistic T , is the smaller of the two sums of the ranks. If the Null hypothesis is true, the sums of positive and negative ranks should be approximately equal. Step : VI Draw a statistical conclusion If the computed T value is less than the critical T Value derived from the table, the Null Hypothesis is rejected. And the alternative hypothesis is accepted.
KOLMOGOROV SMIRNOV D TEST

The objective of this test method is testing whether there is a significant difference between an observed frequency distribution and a theoretical frequency distribution. The K S test is another measure of goodness of fit of a theoretical frequency distribution. This test compares the distribution on an ordinal scale. This test is applied to test the preference hypothesis and under cumulative frequency distribution. It will test whether the distribution is due to chance or as a result of preference. It represents a natural ordering and tests them under preference hypothesis and cumulative distribution function. The maximum deviation is determined and involves a test statistic. For Example A manufacturer may be interested to know the effect of a coloured package. The researcher may inquire from 200 buyers and was shown different coloured packages i.e red, green, blue and white. Colour Observed Number 80 Observed Proportion 0.40 Observed Cumulative proportion 0.40 Theoretical proportion 0.25 Theoretical cumulative proportion 0.25
Red
Green Blue White
60 40 20
0.30 0.20 0.10
0.70 0.90 1.00
0.25 0.25 0.25
0.50 0.75 1.00

The researcher may be interested to know whether such a divergence between the observed frequencies is due to chance or really occurred on account of preference. The Kolmogorov Smirnov test known as D test focuses on the largest absolute value of the deviations among observed and theoretical proportions.
D = Maximum [ F0 ( X ) S n ( x )]
Where D = Kolmogorov Smirnov Test F0 ( X ) = Cumulative frequency distribution under null hypothesis ( to have scores equal to or less than x.
H0 ) for any value x and is the proportion of cases expected
S n ( X ) = observed cumulative frequency distribution of a random sample of N observations where X is any possible
score. Step I . The Null Hypothesis The Null Hypothesis
H0 is that there would not be a preference for the various colours.
Step II The level of significance it was decided that = 0.05. Step III The statistical Test the ideal test is K S test as the data measured are ordinal, and we are interested in comparing an observed frequency distribution with a theoretical distribution.
Thus it is expected that 0.25 of the sample size would prefer any colour because there are only four colours. The difference in the observed frequency and expected frequency will be F0 ( X ) Red Green Blue White 0.25 0.50 0.75 1.00 Sn(X) 0.40 0.70 0.90 1.00 Difference in going sign 0.15 0.20 0.15 0.00
If the level of significance is 0.05, the critical value of D for a larger sample is given by is the sample size. Thus in the above example, the critical value will be 1.36 / 200 = 0.096
1.36 / n where n
The calculated D value of D is 0.20 at the maximum which is higher than the critical value 0.096. Thus, the Null Hypothesis i.e., the colour that does not impact the sale preference is rejected. It reveals that the colour of the packaging influences the preferences of the buyers.
KRUSKAL WALLIS TEST or H TEST

This is another test belonging to family of rank sum tests. The Kruskal Wallis test or H test may be used for more than two independent samples. This test could be used if the customers were divided in to three or more groups based on some criterion , such as regular accounts, commercial accounts, and charge accounts. In Kruskal Wallis test, there is a k sample from each of the k population. The Null hypothesis will be that the samples are identical or the samples are drawn from the identical populations. This test combines the scores from the k samples in to one large distribution, ranking them, and obtaining the sums of the ranks for each of the k samples. The Kruskal Wallis H test value is given by
H=
12 [ R] 3 ( n + 1 ) n (n +1) n

Sample question on Kruskal Wallis H test A publicity agent is interested to know whether there is some significant difference between television, radio and newspaper publications. He has collected information from ten customers from each on a ranking scale of effective criteria. The raw score of each media is obtained and is given in the following table. Use Kruskal Wallis test and prove the Null Hypothesis. Raw scores Combined Ranks in Rank Magnitude in descending order each media. TV Radio Newspaper TV Radio News TV Radio News paper paper 35 30 25 58 60 59 21 25 27 40 51 27 55 56 57 15 10 26 20 53 31 52 54 49 30 8 24 58 54 33 50 53 33 3 7 22 38 56 32 45 51 32 18 5 23 39 60 49 40 44 30 17 1 12 50 37 57 39 41 27 11 19 4 45 36 59 38 37 25 13 20 2 55 41 22 35 36 24 6 16 29 52 44 24 20 30 22 9 14 28 n1=10 n2=10 n3 = 10 Total observation n=30 R1=143 R2 = 125 R3 = 197

If the null hypothesis is true , there will be an equal number of evaluation of each media, i.e the sum of ranks would be equal. Substituting the values in the Kruskal Wallis H test Equation.
H=
12 [ R] 3 ( n + 1 ) n (n +1) n
12
143 + 125 + 197

10 10
] 3 ( 30 + 1 )
30 ( 30 + 1 ) 10
= 12 X 7488.3 93 = 9662 93 = 3.62. 930 The computed value of X at 0.05 level of significance and 2 degrees of freedom ( V = k -1 = 3 -1 = 2 ) is 5.99. This reveals that the Null Hypothesis ( There is no difference among the advertisement media.) is accepted as computed value 3.62 falls within the range of table value 5.99. Thus there is no significant difference between the effectiveness of advertisement media.
Rank Correlation
Rank correlation is a measure to ascertain the degree of association between two variables X and Y when their distribution is un-known. Rank correlation is based on the ranks ( or order ) of observations rather than on a specific distribution of X and Y. Rank correlation is very handy, involving simple computations. There are two types of numerical problems in rank correlation. 1. when actual ranks are given the difference of the two ranks ( R1 R2 ) are taken and these are denoted by d . The differences are squared and their total ( d ) obtained. Then the formula is Rank Correlation
rs = 1 6 d
rs = Spearmans correlation correlation )
N ( N - 1 ) ( N = the number of pairs of ranks ) ( d = the difference between the two ranks ) 2. when ranks are not given. we have to assign ranks. When the two observations are the same, then the normal practice is to assign an average rank to the two observations.
Rank Correlation
Example Suppose that 10 sales men employed by a company were given a months training. At the end of the specific training, they took the test and were ranked on the basis of their performance. They were then posted to their respective areas. At the end of six months, they were rated in respect of their sales performance. These ranks are given below. Salesmen Ranks obtained in the training Ranks based on the sales performance
1 4 5
2 6 8
3 1 3
4 3 1
5 9 7
6 7 6
7 10 9
8 2 2
9 8 10
10 5 4
Step : To calculate d = 24.
The coefficient of Rank Correlation
rs = 1 6 d
= 1 (6 ) ( 24 )
= 1 144
= 0.855
N ( N - 1 ) ( 10 ) ( 10-1 ) 10 x 99 The co-efficient of 0.855 shows that there is a very high degree of correlation between the performance in training and the sales performance of the salesmen.
salesmen 1 2 3 4 5 6 7 8 9 10
Ranks obtained in training ( X ) 4 6 1 3 9 7 10 2 8 5
Ranks on the basis of sales performance ( Y ) 5 8 3 1 7 6 9 2 10 4
Difference ( X-Y ) = d -1 -2 -2 2 2 1 1 0 -2 1
Difference Squared ( d ) 1 4 4 4 4 1 1 0 4 1
d = 24
Rank Correlation
To test the significance of coefficient of rank correlation, when the number of paired observations is not less than 10, a t statistic can be computed to test the null hypothesis.
t = r N-2 1 - rs
s
= 0.855x
10 2
1 0.855
= 4.662
The critical value of t for = 0.05 and 8 degrees of freedom ( n-2 , 8df )is 2.306. As the calculated value of t is more than the critical value of t , the null hypothesis is rejected . In other words , the performance in training and the sales performance of a sample of ten salesmen are associated. Limitations of Spearmans method of Correlation Result may not be as dependable as in the case of ordinary correlation where the distribution is known. Spearmans distribution cannot be applied to a grouped frequency distribution.
RANK CORRELATION
Sample Question 1 on Rank Correlation Find out Spearmans coefficient of correlation between the two kinds of assessment of Postgraduate students performance in a college.
Name of students Internal assessment ( out of 100 marks )
A 51
B 63
C 73
D 46
E 50
F 60
G 47
H 36
I 60
External assessment ( out of 100 marks )
49
72
74
44
58
66
50
30
35
Answer : d = 30.50 , s = 0.75 , level of significance = 0.05, the critical value of s for n = 9, from table is 0.6833. Null hypothesis is rejected ( there is no relationship between the ranked variables i.e , there is high degree of positive relationship between the internal assessment and external assessment.
Rank correlation
Sample Question : 2 The coefficient of rank correlation of the marks obtained by 10 students in Statistics and Accountancy was found to be 0.2. It was later discovered that the difference in ranks in two subjects obtained by one of the students was wrongly taken as 9 instead of 7. Find the correct value of the co-efficient of rank correlation. Answer : d = 100, and
rs = 0.39.
Sample Question : 3 The director of a management training programme is interested to know whether there is a positive association between a trainees score prior to his / her joining the programme and the same trainees score after the completion of the training . The director has obtained the scores of 10 trainees as follows.
Trainee Rank Score 1 Rank Score 2

Answer : d = 18
1 1 2
2 4 3
3 10 9
4 8 10
5 5 3
6 7 6
7 3 1
8 2 6
9 6 7
10 9 8
s = 0.89 , from the table the critical value of
s , at the 5% level of significance is 0.6364. Null Hypothesis is rejected.
In any Hypothesis testing, there is a risk of committing Type I ( Alpha Error ) and Type II ( error ). Alpha Error To reduce the risk of error , we should reduce the size of rejection region or level of significance. For if = 0.10, the Null hypothesis will be accepted in 90 out of 100 occasions. Thus there is a risk of rejecting a true Hypothesis in 10 out of every 100 occasions. To reduce this risk, we may choose = 0.01indicating the probability of rejecting a true Hypothesis is merely 1 % instead of 10% in the previous case.
Errors in Hypothesis Testing
Type II Error ( error )

A reduction in the probability of committing an Alpha Error ( Type I ) increases the risk of committing Type II error, i.e., the probability of accepting a null Hypothesis when it is false, increases. Thus, if we choose a significance level of ( = 0.05 ) 5% , it would reduce the risk of committing Type II Error. An increase in the sample size is the only way to reduce the risk of committing both the type of errors.
Multiple Choice Questions on Unit - IV

1. Non-Parametric methods in comparison with parametric methods ( a ) are easier to compute ( b ) are less efficient ( c ) are less accurate ( d ) need less information ( e ) a, b , d 2. In the Kruskal Wallis test having k samples, the appropriate number of degrees of freedom is ( a ) k-1 ( b ) k ( c ) n-k ( d ) n k 1. *
3. For a perfect correlation, the coefficient of rank correlation ( a ) 1 ( b ) 1 ( c ) zero ( d ) none of the above.
s would be
4. which of the following is a signed rank test ? ( a ) the Mann- Whitney test ( b ) two samples sign test ( c ) one sample sign test ( d ) Wilcoxon matched pair test 5. The formula for Spearmans rank correlation is ( a ) 6 d / N - 1 ( b ) 6 d/ ( N -1 ) ( c ) 1 - [ 6 d/N ( N - 1 )]
( d ) 1 + 6 d/N ( N - 1 )]
6. Which of the following is most appropriate in a non-comparative test ? ( a ) F test ( b ) t test ( c ) U test ( d ) Z test 7. If the durations of stay are ranked in an ascending order, what is the value of ( R1-R2 ) ? (a)4 (b)2 (c)9 (d)0
Part A 1. Non-Parametric test. ( 2006 ) 2. Rank correlation ( 2008 ) 3. Markov Analysis ( 2008 ) 4.Alpha Error ( 2007, 2008 ) 5. Rank Correlation ( 2008 ) Part B ( 12 Marks Questions ) 4. Use a rank correlation at the 1% significance level and determine if there is significant positive correlation between two samples on the basis of the following.
Blender Model Sample - 1 Sample - 2
A1 A2 11 12 A3 12 11 B 2 2 C1 13 13 C2 10 10 D1 3 1 D2 4 3 E 14 14 F1 5 8 F2 6 6 G1 9 5 G2 7 9 H 8 7
Important Review Questions Unit IV
1 4
Markov Analysis Markov analysis is a statistical technique used in forecasting the future behaviour of a variable or system whose current state or behaviour does not depend on its state or behaviour at any time in the past or random. Markov analysis is a sequence of events and it analyses the tendency of one event to be followed by another. Using Markov analysis , we can generate a new sequence of random but related events , which will look similar to the original.
Markov Analysis Over view
- Markov analysis is a probabilistic technique.

- It provides information about a decision situation. - It is a descriptive, not an optimizing technique.
- Specifically applicable to systems that exhibit probabilistic movements from one state (or condition) to another.
The Characteristics of Markov Analysis

- The brand-switching problem used for discussion.
- The brand-switching problem analyses the probability of customers changing brands of a product over time.
The state of a system is where the system is at a point in time. A transition probability is the probability of moving from one state to another during one period of time.
Properties of Markov Process Analysis
1. The transition probabilities for a given beginning state of the system sum to one. 2. The probabilities apply to all participants in the system. 3. The transition probabilities are constant over time. 4. The states are independent over time.
Markov Analysis Information (1 of 3)

- Information available from Markov analysis is the probability of being in a state at some future time. - In example, the manager wants to know the probability that a customer would trade with them in month 3 given that the customer trades with them in month 1. - Probability of a customers trading with Petroco in month 3 given that the customer initially traded with Petroco in month 1 is the sum of two branch probabilities associated with Petroco: .36 + .08 = .44. - For probability of a customers purchsasing gasoline from National in month 3, add probabilities associated with National: .24 + .32 = .56.
Figure F-1 Probabilities of future states given that a customer trades with Petroco this month
Markov Analysis Information
(2 of 3)
- Given that a customer initially purchased gasoline from National, the probability of purchasing gasoline from National in month 3 is .08 + .64 = .72. - The probability of the customer trading with Petroco in month 3 is .12 + .16 = .28.
Figure F-2 Probabilities of future states given that a customer trades with National this month
Markov Analysis Information (3 of 3)

For each starting state, the probabilities of ending up in either state in month 3 sum to one.
Probability of Trade in Month 3 Starting State Petroco National Petroco .44 .28 National .56 .72 Sum 1.00 1.00
The Transition Matrix
- The probabilities of being in a particular state in the future can be determined by using matrix algebra. - A transition matrix includes the transition probabilities for each state of nature.
First month
Next month Petroco National
T = Petroco
National
.60 .40 .20 .80
Symbology and Matrix Notation

- Symbology Probability of trading with Petroco in period i, given customer started with Petroco: Pp (i); Probability of trading with National in period i, given customer started with Petroco: Np (i). - Probability of a customers trading at National in month 2, given that customer initially traded at Petroco is Np(2) - Probability of a customers trading with Petroco and National in a future period i, given that customer traded initially with national is Pn(i) and Nn (i) - If a customer is presently trading with Petroco, the following probabilities exist Pp (1) = 1.0 and Np (1) = 0
- These probabilities in matrix form:

[Pp (1) Np (1)] = [1.0 0.0]
Matrix Multiplication
- Computing probabilities of a customer trading at either station in future months using matrix multiplication. In future time periods, the state probabilities become constant.
Month 2: [Pp(2) Np (2)] = [1.0 0.0] .60 .40 = [.60 .40]
.20 .80
Month 3: [Pp (3) Np (3)] = [.60 .40] .60 .40 .20 .80 = [.44 .56]
Month 4: [Pp (4) Np (4)] = [..44 .56] .60 .40 = [.38 .62] Month 5: [Pp (5) Np (5)] = [.35 .65] Month 6: [Pp (6) Np (6)] = [.34 .66] Month 7: [Pp (7) Np (7)] = [.34 .66] Month 8: [Pp (8) Np (8)] = [.33 .67] Month 9: [Pp (9) Np (9)] = [.33 .67]
.20 .80
Future State Probabilities

- State probabilities in future time periods: [Pp(i) Np (i)] = [.33 .67]
Figure F-3 The probability Pp(i) for future values of i
Computing Future State Probabilities

- The probability of ending up in a state in the future is independent of the starting state. - Computing future state probabilities when initial starting state is National: Month 1: [Pn(1) Month 2: [Pn (2) Nn (1)] = [0.0 1.0]
.60 .40
Nn (2)] = [0.0 1.0] .20 .80 = [.20 .80]
Month 3: [Pn (3) Nn (3)] = [.20 .80] .60 .40 = [.28 .72] .20 .80 Month 4: [Pn (4) Nn (4)] = [.31 .69] Month 5: [Pn (5) Nn (5)] = [.32 .68] Month 6: [Pn (6) Nn (6)] = [.33 .67] Month 7: [Pn (7) Nn (7)] = [.33 .67]
Month 8: [Pn (8) Nn (8)] = [.33 .67]

Month 9: [Pn (9) Nn (9)] = [.33 .67]
Steady-State Probabilities
- Steady-state probabilities are average, constant probabilities that the system will be in a state in the future.
- For service station example: .33 = probability of a customers trading at Petroco after a number of months regrdless of where customer traded in month one. .67 = probability of a customers trading at National after a number of months regardless of where customer traded in month one.
Steady-State Probabilities (continued)

- Combining operations into one matrix:
Pp(2) Pn(2)
Month 2 :
Np(2) Nn(2)
1 .20 .80 .60 .40

.20
1 0
0 .60 .40
Month 3 : Month 4 :
Pp(3) Pn(3)
Nn(3) Pp(4) Np(4)

Pn(4)
Np(3)
.80 .60 .40 .60 .40

.20
Nn(4)
.72 .20 .80 .38 .62

.31 .33 .33
.80 .20 .80 .44 .56 .60 .40

.28
.69
Month 9 :
Pp(9) Pn(9)
Np(9) Nn(9)
.67 .67
Direct Algebraic Determination of Steady-State Probabilities

- At some point in the future the state probabilities remain constant from period to period. - After steady state is reached it is not necessary to designate the time period. -Steady state probabilities can be computed by developing a set of equations using matrix operations and solving them simultaneously:
[Pp
.60 .40 Np] = [Pp Np] .20 .80 Pp = .6Pp + .2Np

Np = .4Pp + .8Np
Pp + Np = 1.0 Np = 1.0 - Pp Pp = .6Pp + .2(1.0 - Pp) = .6Pp+ .2 - .2Pp = .2 + .4Pp

..6Pp
= .2
Pp = .2/.6 = .33 Np = 1.0 - Pp = 1.0 -.33 = .67 [Pp Np] = [.33 .67]
Application of the Steady-State Probabilities (1 of 2)
- Steady-state probabilities can be multiplied by the total system participants to determine the expected number in each state in the future.
- Example: percentage of customers who will trade at a service station during any given month in the long run given that there are 3,000 customers in the community who purchase gasoline: Petroco: Pp(3,000) = .33(3,000) = 990 customers National: Np(3,000) = .67(3,000) = 2,010 customers
Application of the Steady-State Probabilities
(2 of 2)
- Re-evalution with modified transition probabilities resulting from Petroco improving its service. - Re-evalution indicates Petroco will get 1,200 customers in any given month in the long run, increasing its customer base by 210 customers (1,200 - 990). - Management must evaluate trade-off of cost of improved service and increase of 210. customers. - Analysis with new transition probabilities:
.70 .20
.30
.80
[Pp Np] = [Pp Np]
solving,
and thus,
Pp = .2/.5 = .4
Np = 1- Pp = 1 - .4 = .6
Additional Examples of Markov Analysis Machine Breakdowns - Machine with daily transition matrix:
Day 1 Day 2
T = Operate Breakdown
Operate Breakdown .90 .10 .70 .30
.88 = steady-state probability of the machines operating .12 = steady-state probability of the machines breaking down - Management must decide if it should decrease breakdown probability and if cost of doing so is covered by profit achieved by resulting increased production.
Additional Examples of Markov Analysis Truck Rental Firm

- Rents in three states; trucks are rented on a daily basis and can be rented and returned in any of the three states. - Transition matrix: Virginia Maryland V M
.60 .30 .40
NC
North Carolina
.20 .20 .50 .20 .10 .50
- Steady-state probabilities:
Virginia [.471
Maryland .244
North Carolina .285]
- Given total fleet of 200 trucks, long run expectation of number of trucks in each state: [ 94 49 57 ]
Multivariate Analysis
In marketing research problems normally involve several variables. For Example the demand for TV sets may depend not only on their price but also on income of households, advertising expenditure incurred by TV manufacturing companies and other similar factors. Such problems require the use of multivariate techniques. In Univariate analysis the focus is on the level ( average ) and distribution ( variance ) of the phenomenon. In bivariate analysis the focus shifts to the degree of relationships ( correlations or covariance's ) between phenomena. In multivariate analysis the focus shifts from paired relationships to the more complex simultaneous relationships among phenomena. Definition of Multivariate Analysis or Multivariate Techniques. Multivariate analysis is the analysis of the simultaneous relationships among three or more phenomena. Multivariate analysis is defined as the collection of methods for analyzing the data in which a dependent variable is represented in terms of several independent number of observations which are available to define such relationship. In other words, Multivariate analysis are the techniques that take account of the various relationships among variables.
Objectives of Multivariate Analysis

Objectives of Multivariate Analysis 1. To represent the collection of large set of data in a simplified way, by transforming large number of observations in to smaller composite scores.
2. To predict the variability of the dependent variable based on its covariance with all the independent variables.
3. To classify individuals or objects into one of the two or more mutually exclusive and exhaustive groups on the basis of a set of independent variables.
Advantages of Multivariate Analysis

1. the conclusions drawn are more accurate. 2. the conclusions are more realistic and nearer to the real life situation. Disadvantages of Multivariate Analysis 1. Requires rather complex computations to arrive at a satisfactory conclusions. 2. Large number of variables are to be collected, Hence time consuming process & cost is expensive. 3. Specialized trained staff required to process and analyze the complex data using Multivariate techniques.
Applications of Multivariate Analysis

These techniques are successfully employed in the following areas. 1. Econometrics ( impact of inflation, money circulation, price rise etc., or Decision making in Economics. 2. Sociological Decision Making such as Divorce rates and their cause and effect relationships with marriage, social demographics and income levels. 3. Agrarian Predictions Such as impacts of rain, fertilisers and mechanization on agricultural yields per acre. 4. Drug Testing impact of new drugs on the main disease and other side effects. 5. State Fiscal Decision Making impact of tax structure, duties , penalty rates, etc., on the government revenues. 6. Industrial Decision Making Plant location which depends on infrastructure, availability of raw materials, distribution channel etc.,
Multiple Regression
Multiple regression is a statistical technique that simultaneously develops a mathematical relationship between two or more independent variables and an interval scaled dependent variable. Dependent variables are the variables that are predicted and the variables that form the basis for predicting the dependent variable are called independent variables. Ex. Statistical study shows that the height of children born to tall parents tends to regress towards the mean height of population. ( Francis Galton 1877 ). In this study, the term regression used as a technique to predict one variable ( height of children ) from another variable ( the height of parents ) . The height of parents independent variable & height of children was a dependent variable. Ex: 2 To predict the demand for TV sets , on the basis of population, we are using the demand for TV sets as a dependent variable and the population as the independent variable. The multiple
linear regression equation is
( based on the equation for a straight line Y = a+bx )
Y = a + b1X1 + b2 X2 + b3 X3 + .+ b k X k
Y dependent variable , which is to be predicted.
X1, X2,X3.X k are the k known variables on which the predictions are to be based a , b1, b2 , b3,..bk are parameters, the values of which are to be determined by method of least squares.
Multiple Regression
To overcome the problem of tedious calculations involved in multiple regression analysis, computers are generally used. The use of computers facilitates us enormously as several independent variables can be handled. Limitations of Multiple Regression Multiple Regression assumes that the relationship between the two variables has not changed since the regression equation was obtained.
Sometimes the relationship indicated by the scatter diagram may not remain the same if the regression equation is extended and applied to values beyond those covered in obtaining it.
Its become extremely difficult to determine which variable is dependent on the other and indicates a causal relationship. There is a problem of measurement error.
Cluster Analysis
Cluster analysis is used to classify persons or objects in to a small number of mutually exclusive and exhaustive groups. Cluster analysis is used by the researcher to place variables or objects in to subgroups or clusters. There should be high internal ( within cluster ) homogeneity and high external ( between cluster ) heterogeneity. In marketing research , cluster analysis has been increasingly used because of its utility in resolving the problem of classifying consumers, products, etc.,. Segmenting the market consumers may be clustered on the basis of benefits sought from the purchase of a product. Each cluster would consist of consumers who are relatively homogeneous in terms of the benefits they seek. Also 1. Understanding the buyer behaviours. 2. Identifying new product opportunities Selecting test markets The following factors are considered for cluster analysis. 1. they form sub-groupings and assign variables or objects to these groups. 2. they take as input a matrix of association between variables or objects. 3. they assume that natural clusters exist within the data.
Conducting Cluster Analysis

The steps involved in conducting cluster analysis 1 Formulating the problem ( selecting the variables on which the clustering is based. )
2.Select a distance measure (measuring similarity between pair of objects in terms of distance between pair of objects 3.Selecting a clustering procedure ( clusters are formed by grouping objects in to bigger and bigger clusters
& clustering procedures can be hierarchical, non-hierarchical or other procedures)
4.Decide on the number of clusters ( theoretical, conceptual, or practical considerations may suggest a
certain number of clusters )
5.Interpret and profile clusters 6.Assess the Reliability & validity clustering by using the same data at different distance measures.
- by using different methods of clusterings
Example of Cluster Analysis

X axis Number of vacation days. Y axis - Expenditures on vacations ( Rupees ) I C F M H L II N O G K D I III B J A E
Ex : A two dimensional perceptual exhibit has been drawn on the basis of data relating to 15 individuals A to O, on the basis of ( I ) Number of vacation days ( ii ) expenditure on vacations during a given year.
Example of Cluster Analysis

There are three distinct clusters. The first cluster comprising five individuals C, F , H , L and M shows that although these individuals take too many vacations they do not spend much on their vacations. The second cluster comprising six individuals D, G , I , K , N and O shows that they take vacations moderately and also spend moderately neither too much nor too less. The third cluster comprising four individuals A, B, E and J shows that they have relatively few vacation days, but spend substantially more on their vacations. On the basis of this perceptual map, the utility of classifying individuals into clusters becomes apparent. The points included in a cluster are close to each other and the points falling in two or more clusters are at a good distance from each other. Distance is an inverse measure of similarity., i.e. The shorter the distance , the greater is similarity and vice versa.
Cluster Analysis
Number of clusters the following alternatives are available. 1. the number of clusters may be fixed by the researcher in advance. 2. specifying the level of clustering with regard to cluster criterion. This would enable deciding certain level which will indicate the number of clusters. 3. the number of clusters can be decided from the cluster pattern generated by programme. Marketing Applications of Cluster Analysis 1. In marketing research , cluster analysis has been increasingly used because of its utility in resolving the problem of classifying consumers, products, etc.,. 2. Segmenting the market consumers may be clustered on the basis of benefits sought from the purchase of a product. Each cluster would consist of consumers who are relatively homogeneous in terms of the benefits they seek. Also A. Understanding the buyer behaviours. B. Identifying new product opportunities C. Selecting homogeneous test markets.
Limitations of Cluster Analysis 1. lack of specificity 2. lacks standard statistical tests. 3. requires good deal of computational time.
Factor Analysis
Concept of Factor Analysis Factor analysis is a procedure that takes a large number of variables or objects and searches out factors in common which account for their inter-correlation. Factor analysis would focus on the whole set of inter-relationships displayed by the variables. A factor is a qualitative dimension of the data that attempts to depict the way in which the entities differ, much as the length of an object, or the flavour of a product defines a qualitative dimension on which objects may or may not differ. It is one of the more popular analysis of interdependence techniques. In factor analysis, all the variables are on the equal footing, and the analysis is concerned with the whole set of relationships among the variables that characterize the objects. Ex. High association between grades of computer course with the factor of intelligence. certain attributes of coffee to the factor of acidity.
Objectives of Factor Analysis

To identify underlying dimensions or factors that explains the correlations among a set of variables. To identify a new, smaller set of uncorrelated variables to replace the original set of correlated variables in subsequent multivariate analysis. To identify a smaller set of salient variables from a larger set for use in subsequent multivariate analysis. Factor Analysis Model The mathematical equation for factor analysis is almost similar to multiple regression analysis, in that each variable is expressed as a linear combination of underlying factors. The factor model may be represented as
Xi = Ai1F1 + Ai2F2 + Ai3 F3 + ..+ Aim Fm + Vi Ui Xi i th standardized variable. Aij standardized multiple regression coefficient of variable i on common factor. F1 common factor Vi standardized regression coefficient of variable i on unique factor i Ui the unique factor for variable i
m number of common factors.
Conducting Factor Analysis

The steps involved in conducting factor analysis explained below. 1. Formulate the Problem defining the factor analysis problem and identify the variables to be factor analyzed. 2. Constructing the correlation matrix analytical process is based on a matrix of correlations between the variables. A priori determination determination based on Eigenvlues determination based on scree plot determination based on percentage of variance determination based on split-Half reliability 3. Determining the method of Factor Analysis determination based on significance tests 4. Determine the number of factors. 5. Rotate the factors orthogonal rotation, varimax procedure, and oblique rotation Calculate the factor stores 6. Interpret the factors select the surrogate variables determine the model fit.
Applications of Factor Analysis in Marketing Research

The applications include data reduction, structure identification , and scaling. 1. Data Reduction Factor analysis is used for reducing a mass of data to a manageable level. The large mass of data is to be simplified and condensed.
2. Factor analysis can bring out the hidden or latent dimensions relevant in the relationships among product preferences.
3. Factor analysis can also be used to find out certain relationships among observed values. 4. Factor analysis can be used in clustering of products or people. Limitations of Factor Analysis 1. Factor analysis is a complicated tool and should be used by the Researcher only. 2. the reliability of results is sometimes questionable. 3. the utility of the factor analysis largely depends on the judgment of the researcher. 4. the factor analysis is not strongly supported by statistical methods. 5. A large number of attributes are required to study factor analysis.
Discriminant Analysis
Discriminant analysis is used to determine the quantitative relationships between variables for a non-metric data ( data which is not measurable on quantitative scales of numbers ). Discriminant analysis is a technique for analyzing data when the criterion or dependent variable is categorical and the predictor or independent variables are interval in nature. Objectives of Discriminant Analysis 1. development of discriminant functions or linear combinations of the predictor or independent variables, which will best discriminate between the categories of the criterion or dependent variables. 2. Examination of whether significant differences exist among the groups, in terms of the predictor variables. 3. Determination of which predictor variables contribute to most of the inter-group differences. 4. classification of cases to one of the groups based on the values of the predictor variables.
5. Evaluation of the accuracy of classification. Two-Group Discriminant Analysis ( criterion variable has 2 categories)
Types of Discriminant Analysis Multiple Discriminant Analysis ( three or more categories involved )
Discriminant Analysis Model

The discriminant analysis model involves linear combinations of the following form.
D = b0 + b1X1 + b2X2 + b3X3 + .+ bkXk.
D Discriminant score
bs discriminant coefficient or weight

Xs predictor or independent variables.
*
The discriminant analysis is a statistical model on which discriminant analysis is based.

A discriminant analysis enables the researcher to classify persons or objects in to two or more categories. For Exp. Consumers may be classified as heavy and light users. The scoring in discriminant analysis is used on the basis of which an individual or object is assigned a score.
Conducting Discriminant Analysis

The steps involved in conducting discriminant analysis consists of the following stages. 1. Formulate the problem
2.
3. 4. 5.
Estimate the discriminant function coefficients

Determine the significance of the discriminant function Interpret the results Assess the validity of Discriminant analysis.
Marketing Applications of Discriminant Analysis 1. Customers Demographic characteristics 2. Identification of new buyer group. 3. Consumer behaviour toward a new product 4. Brand loyalty study 5. relationship between variables. 6. checklist of properties of new products.
Conjoint Analysis
Conjoint analysis is a technique that attempts to determine the relative importance consumers attach to salient attributes and the utilities they attach to the levels of attributes.
This information of attributes is derived from consumers evaluations of brands, or brand profiles composed of these attributes and their levels.
For Exp. A bank would like to know which is the most desirable combination of attributes to frequent borrowers rate of interest, instalment amount, data of payment of instalment. Conjoint analysis relies on respondents subjective evaluations. In conjoint analysis, the stimuli are combinations of attribute levels determined by the researcher. Conjoint analysis, seeks to develop the part-worth , or utility functions describing the utility consumers attach to the levels of each attribute.
Marketing Applications of Conjoint Analysis

In determining the elative importance of attributes in the consumer choice process. Estimating the market share of brands that differ in attribute levels. Determining the composition of the most preferred brand. Segmenting the market based on similarity of preferences for attribute levels. Conducting conjoint Analysis 1. Formulate the problem ( identify attributes and attribute levels to be used in constructing the stimuli ) 2. construct the stimuli ( pair wise approach & full-profile procedure used for constructing attributes ) 3. decide on the form of input data ( either non-metric or metric , for non-metric data respondents required to provide rank order evaluations ) 4. select a conjoint analysis procedure ( 5. interpret the results. 6. assess reliability and validity.
U ( X )=
i = 1 to m
xij
ij
j = 1 to
ki
Conjoint Analysis Model U ( X )=

i = 1 to m
xij
ij
j = 1 to
ki
U ( X ) = overall utility of an alternative
ij
= the part-worth contribution or utility associated with the j th level.
ki
= number of levels of attribute i
= number of attributes.
= 1 if the j th level of the i the attribute is present. = 0 otherwise.
xij
Assessing the Reliability & Validity of Conjoint Analysis

1. The goodness of fit of the estimated model should be evaluated. 2. test retest reliability can be assessed by obtaining a few replicated judgments later in data collection. In other words, at a later stage in the interview , the respondents are asked to evaluate certain selected stimuli again. The two values of these stimuli are then correlated to assess test retest reliability. 3. the evaluations for the validation stimuli can be predicted by the estimated part-worth functions. 4. if an aggregate level analysis has been conducted, the estimation sample can be split in several ways and conjoint analysis conducted on each sub-sample. The results can be compared across sub-samples to assess the stability of the conjoint analysis solutions.
Limitations of Conjoint Analysis 1. predictions of conjoint analysis on sales & market share not perfect & convincing. 2. sometimes the models of conjoint analysis fail to capture utility functions and decision rules.
Multidimensional Scaling
Multidimensional scaling is a class of procedures for representing perceptions and preferences of respondents spatially by means of a visual display. MDS is a set of procedures for portraying perceptual or effective dimensions of substantive interest.
MDS enables us to represent the proximities between objects spatially as in a map.

The term proximities means any set of numbers that express the amount of similarity or difference between pairs of objects. ( objects things or events ) The main objective of MDS is to map the objects in a multidimensional space such that their relative positions in the space show the degree of perceived proximity or similarity amongst them. Major aspects of MDS 1. MDS helps in the identification of attributes on the basis of which consumers perceive or evaluate products or brands.
2. MDS enables the positioning of different products or brands on the basis of these attributes.
3. MDS helps generate a perceptual map , indicating the location of the brands on the basis of attributes.
The following steps in MDS.
Conducting Multidimensional Scaling
1. Formulate the problem specify the purpose of which the MDS results would be used and select the brands or other stimuli to be included in the analysis. 2. Obtain input data. data can be obtained by direct approaches , derived approaches and preference data. 3. Select an MDS procedure selection of MDS procedure depends upon whether perception or preference data are being scaled , whether the analysis requires both kinds of data. Non-Metric MDS assumes that the input data are ordinal, but they result in metric output. Metric MDS input data are metric. 4. Decide on the number of dimensions based on ( a ) priori knowledge ( b ) interpretability of the spatial map. ( c ) Elbow criterion ( d ) ease of use ( e) statistical approaches 5. Label the Dimensions and interpret the configuration 6. Assess reliability and validity
MDS ( Perceptual Map of selected Business Schools )

More Quantitative
*C *I *A *F Less prestigious *H *J More prestigious
*E *G *D
Less Quantitative
MDS ( Perceptual Map of selected Business Schools )

Let us assume that only two dimensions or attributes are involved in this example which pertains to the preference of students of the MBA courses offered by some universities. The Points indicated by letters A to J a students comparison in MBA offered in 10 Universities. Vertical dimension indicates relative quantitative content of the MBA. Horizontal dimension indicates relative prestige of the course. Points which are close to each other show similarity in the students perception. Points which are wide apart from each other show that the student has perceived that the MBA course of the concerned universities is different on the basis of the two dimension under reference. In order to use MDS , two requirements must be met. 1. a set of numbers called proximities. 2. computer based algorithm must be available.
1. Image Measurement : comparing the customers and non-customers perception on the company image and to identify perceptual map. 2. Market Segmentation positioning brands and consumers in the same space and identifying consumers with homogeneous perceptions. 3. New Product Development to look for potential opportunities for positioning new products. 4. Assessing Advertising Effectiveness
Marketing Applications of MDS
5. Pricing Analysis maps with and without pricing information can be compared to find impact of pricing.
6. Channel Decisions judgments on the compatibility of brands with different retail outlets. 7. Attitude Scale construction to develop the appropriate dimensionality and configuration of the attitude space. 8.Vendor Evaluation
Limitations of MDS
1. The concepts of similarity and perceptions are not clear. 2. There are empirical limitations. ( Attributes are subjective ) 3. Extremely difficult to interpret the results of MDS. 4. Different computer programmes often produce different results. This makes the interpretation more difficult and confusing.
Research Report Format
Report Preparation & Presentation
Three formats are generally used.1. Logical Pattern Findings are presented in inductive order.
2. Psychological Pattern conclusion is provided first, after which follow the findings supporting the conclusion.
3. Chronological Format Information is given along the time dimension, i.e., things which happened earlier precede those which happened later. Chronological format is the least popular though in respect of problems of a historical nature, it is the most appropriate. Research outline The outline will not only guide the writer as to the order of presentation of ideas but will also enable him to think before writing. This will lead to clarity in his presentation. Research outline should not be restrictive and rigid. Flexibility for a change is needed, should be built into the Research outline.
Report Preparation and Presentation Process

Problem Definition, Approach, Research Design, and Field Work
Data Analysis
Interpretation , Conclusions, and Recommendations
Report Preparation
Oral Presentation
Reading of the Report by the Client
Research Follow-Up.
Report Format
1. Title Page 2. Letters of transmittal and authorization 3. Table of contents, statistical tables, charts and illustrations 4.Introduction 5.Methodolgy 6.Findings 7.Limitations 8.Summary and Conclusions 9.Recommendations 10. Appendices 11.Bibliography 12.Index.
Report Writing
Report writing is a job that needs some skill which can be developed with practice. The Broad principles of writing a report may be followed. 1. Reports must be written objectively absolute words such as always and never should be avoided. The researcher should not impose his view point on the reader, and narration of facts with inferences to be part of the Report. 2. The Report must be written in a concrete style necessary statistics to support the thesis and vague words should be avoided. 3. The Report must be organized and coherent, which can be ensured by formulating a research outline prior to writing the report. 4. The research report should be written in the impersonal style, avoiding the use of the first-person . This would help the writer to remain more objective. 5. There must be absolute clarity in the presentation of ideas. The writer may have to revise the draft once , twice or even several times to make it lucid and understandable. 6. The Report should be neat and tidy. wherever possible charts and diagrams should be given.
Oral Presentation
The key to an effective presentation is preparation. The researcher should bear in mind a few major considerations. 1. The researcher should know the audience to whom he is to report. 2. The presentation should be properly planned. objectives, results , persuasion of listeners to a view point, any recommendations on certain course of action based on the study etc., be specified. 3. The Researcher should gather necessary information. 4. The researcher has to organize the information collected in a logical manner. The subject matter should be divided into meaningful and comparable parts. Simple ideas should precede complex and difficult ones. 5. There should be logical and coherent approach in presenting the subject matter before an audience. 6. The reporting should be done in a simple and convincing manner use of visual aids such as charts, diagrams, tables, pictures, posters, blackboards, slides and movies. Excessive use of visual aids may sometimes spoil the overall quality of presentation, therefore judiciously used.
Oral Presentation
7. Distribution of Handout containing statistical data or charts to the audience. 8. The researcher should exercise great care in the preparation of summary. All the major points must be covered and excessive details avoided otherwise the focus will be lost. Here the useful guideline is KISS principle ( Keep It Simple and Straightforward ). 9. Body language should be employed and Descriptive gestures are used to clarify or enhance verbal communication. 10. The researcher should ensure that within the time allotted to him or her, he covers all major points including his or her recommendations.
Important Review Questions Unit V

Part A 1. Standard Error ( 2005 ) 2. Linear Discriminating Equation ( 2006 ) 3. Multivariate Analysis ( 2008 ) Part B 1. What is Conjoint Analysis ? Explain the various steps to be followed in its usage in Marketing Research with an Example. ( 2005 ) 2. What is Factor Analysis ? Demonstrate its usage for a practical problem that can be most effectively studied with factor analysis. ( 2005 ) 3. What is Multi-Dimensional Scaling? Discuss the purpose of and limitations of Multi Dimensional Scaling methods. ( 2006 ) 4. What is the purpose of Discriminant Analysis? How might it be used to solve a marketing problem or identify a marketing opportunity? ( 2006 ) 5.What is Rotation in the context of factor analysis? Explain. ( 2007 ) 6.Name the important multivariate techniques and explain the important characteristics of each one of such techniques. ( 2007 ) 7.How do you prepare a Research Report ? ( 2008 ) 8. Discuss the role of correlation and regression analysis in Marketing Research. ( 2008 ).

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BASIC CONCEPTS IN MARKETING RESEARCH ( MR )

Hence, Marketing Research regarded as Applied Research.

Two types of Marketing Research Problem oriented

1. Marketing Research An Applied Orientation By

3. Marketing Research By David

BASIC CONCEPTS IN MARKETING RESEARCH

MARKETING RESEARCH - CAREERS

Statistician / Data Processing Specialist

MARKETING RESEARCH AS CAREER

and common sense command a premium in marketing

MARKETING RESEARCH- THREATS & LIMITATIONS

MR is not an exact science

Lack of consideration and abuse of respondents.

MARKETING INFORMATION SYSTEM ( MIS )

MARKETING RESEARCH Vs MARKETING INFORMATION SYSTEM

NARKETING INFORMATION SYSTEM ( MIS )

MARKETING INFORMATION SYSTEM ( MIS )

COMPONENTS OF MARKETING INFORMATION SYSTEM

COMPONENTS OF MARKETING INFORMATION SYSTEM

MARKETING INFORMATION SYSTEM ( MIS

MARKETING DECISION SUPPORT SYSTEM

COMPONENTS OF MARKETING DECISION SUPPORT SYSTEM

Marketing Information System Vs Marketing Decision Support System MIS MDSS

Structured Problems Use of reports Rigid structure Information displaying restricted

Can improve decision making by clarifying raw data.

MARKETING RESEARCH DESIGN

COMPONENTS OF A RESEARCH DESIGN

CRITERIA OF RESEARCH DESIGN

PRIMARY VERSUS SECONDARY DATA

Collection cost is very high & collection time is long.

* Collection cost relatively low & collection time is short.

ADVANTAGES & DISADVANTAGES OF SECONDARY DATA

RESEARCH DESIGN - CLASSIFICATION

Exploratory Research Design

Single cross-sectional design

Multiple cross Sectional design

RESEARCH DESIGN CONCLUSIVE RESEARCH

Classification of marketing research data

Descriptive Survey Data Observation & other data

RESEARCH DESIGN EXPLORATORY RESEARCH

EXPLORATORY RESEARCH DESIGN

DIFFERENCES BETWEEN EXPLORATORY & CONCLUSIVE RESEARCH

To provide insights and understanding

Tentative Generally followed by further exploratory or conclusive research.

Detailed information can be obtained from a sample of a large population.

DESCRIPTIVE RESEARCH STUDIES

DESCRIPTIVE RESEARCH STUDIES

QUALITATIVE RESEARCH PROCEDURES

QUALITATIVE RESEARCH TOOLS

QUALITATIVE RESEARCH TOOLS

QUALITATIVE RESEARCH TOOLS

QUALITATIVE RESEARCH Vs QUANTITATIVE RESEARCH

CAUSAL RESEARCH DESIGN

Appropriateness of Causal Research

RELATIONSHIPS AMONG EXPLORATORY, DESCRIPTIVE & CASUAL RESEARCH

Causal Research ( Experimental Designs )

the methods used in causal research are Experiments.

CLASSIFICATION OF EXPERIMENTAL DESIGNS

True Experimental Design

One- Shot case study

Pretest-Posttest control group

One- Group Pretest-Posttest