Chapter 1Chapter 1The Role of The Role of

Business ResearchBusiness Research

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BUSINESS MARKET RESEARCH

ZIKMUND BABIN

CARR GRIFFIN

EIGHTH EDITION

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LEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMESLEARNING OUTCOMES

1.1. Understand how research contributes to business Understand how research contributes to business successsuccess

2.2. Know how to define business researchKnow how to define business research

3.3. Understand the difference between basic and applied Understand the difference between basic and applied business researchbusiness research

4.4. Understand how research activities can be used to Understand how research activities can be used to address business decisionsaddress business decisions

5.5. Know when business research should and should not Know when business research should and should not be conductedbe conducted

6.6. Appreciate the way technology and internationalization Appreciate the way technology and internationalization are changing business researchare changing business research

After studying this chapter, you should

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Business Research DefinedBusiness Research Defined

• Business research is the application of the Business research is the application of the scientific method in searching for the truth about scientific method in searching for the truth about business phenomena.business phenomena.

• The process includes:The process includes: idea and theory developmentidea and theory development problem definitionproblem definition searching for and collecting informationsearching for and collecting information analyzing dataanalyzing data communicating the findings and their implicationscommunicating the findings and their implications

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Business Research DefinedBusiness Research Defined

• This definition suggests that business research This definition suggests that business research information is:information is: not intuitive or haphazardly gatherednot intuitive or haphazardly gathered accurate and objectiveaccurate and objective relevant to all aspects of the businessrelevant to all aspects of the business limited by one’s definition of businesslimited by one’s definition of business

• Not-for-profit organizations and governmental Not-for-profit organizations and governmental agencies can use research in much the same agencies can use research in much the same was as managers in for-profit organizations.was as managers in for-profit organizations.

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Applied and Basic Business ResearchApplied and Basic Business Research

• Applied business researchApplied business research conducted to address a specific business decision for conducted to address a specific business decision for

a specific firm or organization. a specific firm or organization. Example: Example:

Should McDonald’s add Italian pasta dinners to its menu?Should McDonald’s add Italian pasta dinners to its menu? Which health insurance plan should a business provide for its Which health insurance plan should a business provide for its

employees?employees?

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Applied and Basic Business ResearchApplied and Basic Business Research

• Basic business research (also called pure Basic business research (also called pure research)research) conducted without a specific decision in mind that conducted without a specific decision in mind that

usually does not address the needs of a specific usually does not address the needs of a specific organization.organization. Attempts to expand the limits of knowledge in general.Attempts to expand the limits of knowledge in general. Not aimed at solving a pragmatic problem.Not aimed at solving a pragmatic problem.

Example:Example: Do consumers experience cognitive dissonance in low-Do consumers experience cognitive dissonance in low-

involvement situations?involvement situations? Does employee tenure with a company influence Does employee tenure with a company influence

productivity?productivity?

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The Scientific MethodThe Scientific Method

• Scientific MethodScientific Method The way researchers go about using knowledge and The way researchers go about using knowledge and

evidence to reach objective conclusions about the evidence to reach objective conclusions about the real world.real world.

The analysis and interpretation of empirical evidence The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm (facts from observation or experimentation) to confirm or disprove prior conceptionsor disprove prior conceptions

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EXHIBIT 1.EXHIBIT 1.11 A Summary of the Scientific MethodA Summary of the Scientific Method

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Managerial Value of Business Managerial Value of Business ResearchResearch• There are only a few business orientations:There are only a few business orientations:

Product-orientedProduct-oriented Production-orientedProduction-oriented Marketing-orientedMarketing-oriented

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EXHIBIT 1.2EXHIBIT 1.2 Business OrientationsBusiness Orientations

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Managerial Value of Business Managerial Value of Business ResearchResearch

• The decision-making process associated with The decision-making process associated with the development and implementation of a the development and implementation of a business strategy involves four interrelated business strategy involves four interrelated stages:stages:

1.1. Identifying problems and opportunitiesIdentifying problems and opportunities

2.2. Diagnosing and assessing problems or Diagnosing and assessing problems or opportunitiesopportunities

3.3. Selecting and implementing a course of actionSelecting and implementing a course of action

4.4. Evaluating the course of actionEvaluating the course of action

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Evaluating the Course of ActionsEvaluating the Course of Actions

• Evaluation ResearchEvaluation Research The formal, objective measurement and appraisal of The formal, objective measurement and appraisal of

the extent a given activity, project, or program has the extent a given activity, project, or program has achieved its objectives.achieved its objectives.

• Performance Monitoring ResearchPerformance Monitoring Research Research that regularly, sometimes routinely, Research that regularly, sometimes routinely,

provides feedback for evaluation and control of provides feedback for evaluation and control of business activity.business activity.

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When is Business Research Needed?When is Business Research Needed?

• The determination of the need for research The determination of the need for research centers on:centers on:

1.1. Time constraintsTime constraints

2.2. The availability of dataThe availability of data

3.3. The nature of the decision to be madeThe nature of the decision to be made

4.4. Benefits versus costs (the value of the research Benefits versus costs (the value of the research information in relation to costs)information in relation to costs) Will the payoff or rate of return be worth the investment?Will the payoff or rate of return be worth the investment?

Will the information improve the quality of the Will the information improve the quality of the managerial decision enough to warrant the managerial decision enough to warrant the expenditure?expenditure?

Is the expenditure the best use of the available funds?Is the expenditure the best use of the available funds?

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EXHIBIT 1.3EXHIBIT 1.3 Determining When to Conduct Business ResearchDetermining When to Conduct Business Research

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Business Research in the 21st CenturyBusiness Research in the 21st Century

• Communication TechnologiesCommunication Technologies Always “connected”Always “connected”—time, place, and distance are —time, place, and distance are

irrelevant.irrelevant. Decreases in information acquisition, storage, access, Decreases in information acquisition, storage, access,

and transmission costs.and transmission costs.

• Global Business ResearchGlobal Business Research Business research is increasingly global.Business research is increasingly global. Must understand the nature of particular markets.Must understand the nature of particular markets. Cross-validationCross-validation

Verify that the empirical findings from one culture also exist Verify that the empirical findings from one culture also exist and behave similarly in another culture.and behave similarly in another culture.