Professional Documents
Culture Documents
RESEARCH
METHODOLOGY
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Unit 1 Notes
__________________
__________________
Introduction __________________
__________________
__________________
__________________
__________________
__________________
Objectives __________________
Introduction
Research may be defined as a documented prose work.
Documented prose work means organized analysis of the
subject based on borrowed materials with suitable
acknowledgment and consultation in the main body of the
paper. Research in management is particularly important
to find out different phenomena. At the outset we should
distinguish between research in different areas. Management
research comes within the purview of social science research
and there are other different types of research which broadly
fall into the category of physical science research. Carrying
out research in social science subjects, i.e., commerce,
management, economics, sociology, etc., is basically different
from physical science because, here we need to study the
society based on certain trends and for this the laboratory is
the society.
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UNIT 1 Introduction 3
number or to that particular age-group of people. Even on Notes
that particular group it of people having those religious. __________________
Similarly even then we find that carrying out research on __________________
the universe, i.e., on the entire population of that particular __________________
group may not be always possible because of the time factor __________________
and the money involved. In that case, what we usually do is
__________________
to take out samples selected from the entire population. In
__________________
selecting samples, we use the available sampling techniques
__________________
to draw from the total population. Apart from these, we need
to clarify certain other concepts. For example, what does __________________
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UNIT 1 Introduction 5
fulfilled, the workers strive for fulfillment of higher level Notes
needs. To contradict Maslow’s need hierarchy theory, __________________
Alderfer Clayton with his existence, relatedness and growth __________________
approach to motivation, substantiated that there may be __________________
certain need factors important for workers, which may even
__________________
arise before the needs of the lower level had actually been
__________________
fulfilled. For example, we know that there are physiological
needs related to shelter, clothing and food, etc. Unless these __________________
primary needs are fulfilled one cannot have the needs of __________________
higher level like social needs, etc. But today if we just try to __________________
find out from our society, we can get examples of different __________________
workers who get motivated simply by fulfilling certain social
__________________
needs. So in that case, these social needs or the fulfillment
of social needs is primarily important for that group of
workers, even though for them the physiological or other
needs have not been met to the required level. To give a
practical example, let us assume the case of journalists
employed by different newspaper houses. If we follow the
Maslow’s hierarchy of needs theory for their motivation, it
would obviously fail because journalists value their job
environment most. So obviously fulfillment of physiological
needs is not relatively more important for the journalists.
We have tried to analyze the difference between the
fundamental research, which help us to build a new theory
or a new approach to management and other types of
research which merely help us to contradict, alter, or modify
the existing research findings. We have focussed on the
example of Maslow deliberately, as his findings have been
altered, contradicted, or modified, in the context of new
findings or new research. Subsequent approaches to
motivation have been developed after contradicting Maslow.
Such approaches tried to define motivation from a more
scientific perspective.
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1. Marketing
3. Production
5. Information technology
7. Purchasing function
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UNIT 1 Introduction 7
So even beyond these functional areas, we have scope to do Notes
research. __________________
__________________
Let us try to understand what happens exactly in India. If
__________________
we try to understand the Indian economy as a whole, we get
a clear picture that we are lagging behind many other __________________
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UNIT 1 Introduction 9
machines and equipments are made available right in time Notes
or unless the available machines are replaced with the __________________
modern available technology right in time, the production __________________
process itself will suffer. Product development and product __________________
design research is also equally important. The changing __________________
demands of the consumers heavily influence the product
__________________
design and product innovation. A good number of companies
__________________
gradually find themselves out of market simply because they
__________________
are not able to produce the right quantity or the right product
for the consumers as per their changing requirements. Free __________________
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UNIT 1 Introduction 11
2. Are all cross-sections of people involved in decision Notes
making? __________________
__________________
3. How can human resource strategies and practices be
__________________
developed to meet perceived threats and to reap
opportunities in a changed business environment? __________________
__________________
Strategic Human Resource Management (SHRM) requires
__________________
formation of HR objectives, strategies and policies. SHRM
__________________
also requires the provision of the skills and abilities matching
__________________
organizational overall objectives. In other words, SHRM
provides the framework, which ensures that an __________________
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UNIT 1 Introduction 13
The next task, after selection of the research topic and Notes
defining the problem, is to mention the objective of the __________________
present research. By the term, ‘objective’, we mean to what __________________
extent the present research differs from earlier ones by duly __________________
pointing out the deficiencies in the past research work __________________
related to this field. In simplistic terms the objective means,
__________________
what the researcher aims to achieve.
__________________
The third step involves survey of existing literature. In our __________________
earlier discussion we have mentioned, that research is a __________________
documented prose work resulting from an organized analysis __________________
of a subject. In all social science researches we need to
__________________
proceed through some pre-assumption which helps to
develop our premises for research. To understand the
premises for research, what is important is to review the
existing literatures from an interdisciplinary perspective.
Whatever literature is available, related to the topic of our
research we should focus on the basic principles, duly
summing them up. Literature review has two basic elements
in it: (a) to survey the existing books available in the field,
(b) to review all other published form of works like articles,
seminars, other research findings published in the form of
papers, etc. What is important in this case is to draw out a
suitable abstract of published works related to our research
topic. In drawing an abstract, we can take the help of
available published social science bibliographies for books
and various indices on social sciences for articles. In India
we have the problem of non-availability of an abstract
particularly for carrying out research on management. The
researcher here should prepare his own index duly going
through the related journals, etc., for a period in
chronological order in addition to his consultation of various
indices.
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2. Sampling methods.
3. Survey outline.
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UNIT 1 Introduction 15
in view the research area. The most pragmatic approach to Notes
chapter planning first involves analyzing the research matter __________________
from a historical perspective. It should not be forgotten __________________
that no present is possible without a past and unless we __________________
analyze the past by maintaining due sequences, we cannot __________________
understand the process of development of the subject in its
__________________
present.
__________________
The next task in chapter outline is discussing the definitional __________________
aspects. After this, the research should mention the present __________________
trends from an international perspective. To relate the
__________________
present theories with the subject for research in chapter
__________________
planning, the researcher should duly focus on the extent to
which the present theory suffers from its own limitation and
in what way the researcher can contradict and rebuild the
theory/theories.
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Meaning of Research
Research has been defined by various authors in different
ways. It always begins with a question or a problem. It's
purpose is to find answers to questions through the
application of systematic and scientific methods. Thus,
research is the systematic approach towards purposeful
investigation. This needs formulating a hypothesis,
collection of data on relevant variables, analyzing and
interpreting the results and reaching conclusions either in
the form of a solution or certain generalizations.
Objectives of Research
The objective of research is to find out answers to questions
through the application of systematic and scientific way.
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UNIT 1 Introduction 17
u To determine the characteristics of an individual or a Notes
group of activities and the frequency of its (or their) __________________
occurrence. __________________
__________________
Features of A Good Research Study __________________
i. Objectivity: A good research is objective in the sense __________________
that it must answer the research questions. This __________________
necessitates the formulation of a proper hypothesis, __________________
otherwise there may be lack of congruence between the __________________
research questions and the hypothesis.
__________________
ii. Control: A good research must be able to control all __________________
the variables. This requires randomization at all stages,
e.g., while selecting the subjects, the sample size and
the experimental treatments. This shall ensure an
adequate control over the independent variables.
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1. Fundamental research
2. Applied research
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UNIT 1 Introduction 19
Without going into the rigours of technical jargon, in social Notes
science research, we are more concerned with application __________________
of basic scientific principles in different functional areas of __________________
management on the one way and testing of all existing __________________
theories of management on the other. Social science research __________________
may be categorized under the following major heads:
__________________
1. Fundamental or basic research: Fundamental or __________________
basic research is primarily intended to find out certain __________________
basic principles, viz; John Robinson's imperfect __________________
competition theory in economics, Maslow's hierarchy of __________________
needs theory in motivation, Elton Mayo's hawthrone
__________________
experiment relating productivity with work
environment, etc.
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UNIT 1 Introduction 21
population or sample based on some questionnaire to find Notes
out intended characteristics. When it is not possible to study __________________
the population because of obvious time constraint and cost __________________
factor, sampling method is applied, which ensures the __________________
probability of inclusion of each and every part of the __________________
population. Apart from research on management and in
__________________
business, survey research is widely used in different other
__________________
areas of social sciences like economics, sociology, psychology,
__________________
etc.
__________________
Some other types of research like evaluation research, etc. __________________
are directed to study or evaluate the performance of any
__________________
programmes/projects that have already been implemented.
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UNIT 1 Introduction 23
principles. This ensures better and more objectivity as Notes
compared to subjectiveness in decision making by non- __________________
scientific methods. __________________
__________________
ii. Degree of accuracy: The scientific method is more
precise than non-scientific methods. Though __________________
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UNIT 1 Introduction 25
recording and analyzing of the facts about business problems Notes
with a view to investigate the structure and development of __________________
a market for the purpose of formulating efficient policies for __________________
purchasing, production and sales. Research with regard to __________________
demand and market factors has great utility in business. __________________
Market analysis has become an integral tool of business
__________________
policy. Once sales forecasting is done, the Master Production
__________________
Schedule (MPS) and Material Requirement Planning (MRP)
__________________
can be efficiently done within the limits of the projected
capacity based on the MPS. Budgetary control can be made __________________
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1. Marketing research:
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UNIT 1 Introduction 27
iv. Competitive position and trends research Notes
__________________
v. Sales research: Analysis of sales records.
__________________
vi. Distribution research: Channels of distribution, __________________
distribution costs. __________________
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UNIT 1 Introduction 29
increases the efficiency of marketing efforts, reduces wastage Notes
and thereby pays. __________________
__________________
Limitations of Research __________________
Review Questions
1. What is “research”? What are the two broad categories
in which it can be divided?
2. Distinguish between:
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i. Marketing research
v. Social sciences.
31
Unit 2 Notes
__________________
__________________
Defining Problem __________________
__________________
__________________
__________________
__________________
__________________
Objectives __________________
__________________
After reading this unit you will be able to:
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Formulation of Hypothesis
Concept of Hypothesis
A hypothesis is a proposition – a tentative assumption which
a researcher wants to test for its logical or empirical
consequences. Hypotheses are more useful when stated in
precise and clearly defined terms. It may be mentioned that
though a hypothesis is useful it is not always necessary,
specially in case of exploratory researches. However, in a
problem-oriented research, it is necessary to formulate a
hypothesis or hypotheses. In such researches, hypotheses
are generally concerned with the causes of a certain
phenomenon or a relationship between two or more variables
under investigation.
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UNIT 2 Defining Problem 33
Hypothesis Testing Notes
__________________
A number of steps are involved in testing a hypothesis:
__________________
i. Formulate a hypothesis. __________________
__________________
ii. Set up a suitable significance level.
__________________
iii. Choose a test criterion. __________________
__________________
iv. Compute the statistic.
__________________
v. Make decision. __________________
__________________
u Formulate a hypothesis: Let us discuss about
introduction of a new drug. The drug is tested on a few
patients and based on the response from patients, a
decision has to be made whether the drug should be
introduced or not. We make certain assumptions about
the parameter to be tested – these assumptions are
known as hypotheses.
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UNIT 2 Defining Problem 35
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Figure 2.1
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Notes
How To Prepare A Synopsis
__________________
Synopsis is an abstract form of research which underlines the research
__________________ procedure followed and is presented before the guide for evaluating its
__________________ potentiality. In one sentence it may be described as a condensation of
__________________ the final report. The structure of synopsis varies and also depends on the
guides’ choice. However, for our understanding a common structure may
__________________ be framed as under:
__________________
1. Defining the problem: In defining the problem of the research
__________________ objective, definition of key terms, general background information,
__________________ limitations of the study and order of presentation should be
mentioned in brief.
__________________
__________________ 2. Review of existing literature: In this head, researcher should
study the summary of different points of view on the subject matter
as found in books, periodicals and approach to be followed at the
time of writing.
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UNIT 2 Defining Problem 37
2. Objective of the study: It defines the research purpose and its Notes
speciality from the existing available research in the related field. __________________
Any chapter outline follows a logical sequence right from reviewing the
research problem from a historical perspective to the conclusions and
suggestions part. In the chapter outline, we also need to review research
problem duly drawing it in several supporting chapters with inter-
disciplinary connotation.
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Introduction
Decision in any aspect refers to the selection of the best or
favourable alternative out of several alternatives. In earlier
days decisions were made mainly on personal judgement.
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UNIT 2 Defining Problem 39
information under conditions of uncertainty. In this case the Notes
probability theory has a vital role. As such, this probability __________________
theory will be used more frequently in the decision-making __________________
theory under uncertainty and risk. __________________
Course of Action
Decision-making problems deal with the selection of a single
act from a set of alternative acts. If two or more alternative
courses of action occur in a problem, then making a decision
is necessary to select only one course of action. In the above
example of advertising goods produced, there are so many
alternative courses of actions. The final choice of any one
will depend on the payoff (or money value) of each strategy
under the circumstances.
Let the acts or actions be symbolised by a1, a2, a3, a4, ...........;
then the totality of all these actions is known as action space
denoted by A. For four actions a 1, a 2, a 3 , a 4; A = action
space = {a1, a2, a3} or A = {A1, A2, A3}. In a tree diagram the
acts or actions are given after the initial fork as shown in
Figure 2.2. Acts may be also be represented in the following
matrix form, i.e., either in row or column way.
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Notes
Acts
__________________
A1
__________________ Start A2
A3
__________________ Acts A1 A2 A3 A4 ...... An
Acts Æ
A1
__________________ A2
A3
__________________ OR
A4
........
__________________
An
__________________
__________________
Figure 2.2
__________________
States of Nature (Events)
__________________
If the outcome of some action (or act) is not known in
advance, then that outcome is uncertain, but is vital for the
choice of any act. When there are many possible outcomes
(or states of nature) of an event, one cannot predict what
will happen–it is only in terms of probability that one may
forecast. The various states of nature are outside a firm and,
as such, not under their control, e.g., consumer demand,
change of taste, improvement of technology, etc. These affect
the payoff and, hence, the choice of an act. A set of states of
nature may be represented in any one of the following ways:
A3 E2
Figure 2.3
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UNIT 2 Defining Problem 41
In matrix form they may be represented in either of the Notes
following two ways: __________________
Figure 2.4
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Example 2.1
In case of supply of goods and demand in a market, the
outcome may be unsold goods (+), shortage of goods (-) or no
stock (0). In the following matrix form, outcomes of supply
and demand are shown in Table 2.2.
Table 2.2
States of
nature Demand
®
Acts 100 101 102 103
¯
100 0 -1 -2 -3
101 +1 0 -1 -2
Supply
102 +2 +1 0 -1
103 +3 +2 +1 0
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UNIT 2 Defining Problem 43
Utility: Utility of each outcome is also a quantitative Notes
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 __________________
States of
nature
®
Acts S1 S2 ... Sn
¯
A1 P11 P12 ... P1n
A2 P21 P22 ... P2n
... ... ... ...
... ... ... ...
Am Pm1 Sm2 ... Pmn
States of
nature
®
Acts S1 S2 ... Sn
¯
A1 M1P11 M2P12 ... MnP1n
A2 M1P21 M2P22 ... MnP2n
Example 2.2
A restaurant prepares a food item at a total average cost of
Rs 3 per plate and sells it at a price of Rs 5. The food is
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Notes prepared in the morning and is sold during the same day.
__________________ Unsold foods at the end of the day are spoiled and must be
__________________ thrown away. According to past sales number of plates is
__________________ not less than 20 or greater than 23. You are to formulate the
__________________ (i) action space, (ii) state of nature space, (iii) payoff table,
(iv) loss table.
__________________
__________________ Solution
__________________
The shopkeeper will not prepare less than 20 plates or more
__________________
than 23 plates. Thus, the acts or courses of action open to
__________________
him are:
__________________
a1 = prepare 20 plates Thus, action space or
a3 = " 22 "
a4 = " 23 "
The state of nature is the daily demand for food plates. There
are four possible states of nature, i.e.
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UNIT 2 Defining Problem 45
i.e., n > m, net payoff = 2 × 21 - 0 = 42 Notes
__________________
Again, for a4 = 23, S2 = 21 i.e. m = 23, n = 21, m > n
__________________
net payoff = 2 × 21 - 4 × 2 = 42 – 8 = 34 and so on. __________________
__________________
Table 2.5: Payoff Table
__________________
Demand __________________
(n)
® (S1) (S2) (S3) (S4) __________________
Supply 20 21 22 23 __________________
(m) ¯
__________________
(a1) 40 40 40 40
20 40 __________________
(a2) 36 42 42 42
21
(a3) 32 38 44 44
22
(a4) 28 34 40 46
23
Demand
n
®
Supply 20 21 22 23
m¯
20 40 40 = 0 42 40 = 2 44 40 = 4 46 40 = 6
21 40 36 = 4 42 42 = 0 44 42 = 2 46 42 = 4
22 40 32 = 8 42 38 = 4 44 44 = 0 46 44 = 2
23 40 28 = 12 42 34 = 8 44 40 = 4 46 46 = 0
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UNIT 2 Defining Problem 47
2. List the payoffs thus obtained with the corresponding Notes
probability of each state of nature. __________________
__________________
3. Multiply the payoffs with the associated probabilities
__________________
and add up these values for each course of action which
gives the expected value. __________________
__________________
4. On the basis of these expected values, determine the
__________________
best course of action or strategy.
__________________
Events E1 E2 E3
(P) .3 .4 .3
Acts
A1 2.5 2 -1
A2 4 2.6 0
A3 3 1.8 1
Solution
Let us calculate the expected value of each act:
Example 2.4
You are given the following payoffs of three acts A1, A2, A3
and the events E1, E2, E3.
Acts
States of nature A1 A2 A3
E1 25 -10 -125
E2 400 440 400
E3 650 740 750
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Example 2.5
The management is facing the problem of selecting one of
the following two products for manufacturing. After market
research and survey, the probability matrix is as follows:
States of
nature Good Fair Poor
Acts
Table fan .3 .5 .2
Ceiling fan .4 .45 .15
Solution
Let us put the above information in a payoff table with
associated probabilities and the states of nature, i.e., market
conditions.
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UNIT 2 Defining Problem 49
Notes
Market
conditions® Good Fair Poor __________________
Strategy¯
__________________
Table fan Probability .3 .5 .2 __________________
profits (Rs) 10,000 15,000 3000
__________________
Ceiling fan Probability .4 .45 .15
profits (Rs) 14,000 16,000 -4000 __________________
__________________
Expected value for: __________________
__________________
Table fan = .3 × 10000 + .5 × 15000 + .2 × 3000 = Rs 11, 000
__________________
Ceiling fan = .4 × 14000 + .45 × 16000 + .15 × (-4000) = Rs 12,200 __________________
Example 2.6
Management is faced with the problem of choosing one of
the three products for manufacturing. The potential demand
for each product may turn out to be good, moderate or poor.
The probabilities for each of the states of nature were
estimated as follows:
Nature of Demand
Rs Rs Rs
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Notes Solution
__________________
Demand Expected
__________________ Æ Good Moderate Poor value
__________________ ProductØ (in ’000 Rs)
Example 2.7
If you make a unit product and it is sold, you gain Rs 5; if you
make a unit and it is not sold you lose Rs 3. Suppose the
probability distribution of the number of units demanded is
as follows:
No. of units
Demanded 0 1 2 3 4 5 or above
Solution
Let m = no. of units produced or stocked.
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UNIT 2 Defining Problem 51
Payoff Table Notes
__________________
Demand (n)
0 1 2 3 4 5 __________________
Supply (m) __________________
0 0 0 0 0 0 0
1 -3 5 5 5 5 5 __________________
2 -6 2 -10 10 10 10 __________________
3 -9 -1 7 15 15 15
4 -12 -4 4 12 20 20 __________________
5 -15 -7 1 9 17 25 __________________
Example 2.8
A retailer has to decide as to the optimum number of units
to be stocked of a certain item under the following conditions:
Units demand: 7 8 9 10 11
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Notes Solution
__________________
Let m = no. of stock.
__________________
__________________ n = no. of demand.
__________________
For n ≥ m, total profit= 6m, as profit per unit = 18 – 12 = Rs 6
__________________
__________________
For m ≥ n, total profit= 18n – 12m + (m–n) (9 – 1)
= 10n – 4m
__________________
__________________ As the bargain price is Rs 9 and cost of holding is Re 1, so
__________________ net receipt = 9 - 1. Now, according to number of stock and
__________________ demand, the payoff Table is as follows:
Payoff Table
Demand
(n)
Stock 7 8 9 10 11
(m)
7 42 42 42 42 42
8 38 48 48 48 48
9 34 44 54 54 54
10 30 40 50 60 60
11 26 36 46 56 66
Demand 7 8 9 10 11
Probability
.20 .20 .25 .15 .20
Stock
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UNIT 2 Defining Problem 53
Decision-making under Uncertainty Notes
__________________
In this case the probabilities associated with the different
__________________
states of nature are unknown. Moreover, there is no previous
__________________
data or information available which could allot the
__________________
probability of the occurrence of states of nature. As such,
the decision-maker cannot calculate the expected payoff for __________________
a4 : 28
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(20)a1 40 – 40 = 2 42 – 40 = 2 44 – 40 = 4 46 – 40 = 6 6
(21)a2 40 – 36 = 4 42 – 42 = 0 44 – 42 = 2 46 – 42 = 4 4
(22)a3 40 – 32 = 8 42 – 38 = 4 44 – 44 = 0 46 – 44 = 2 8
(23)a4 40 – 28 = 12 44 – 34 = 8 44 – 40 = 4 46 – 46 = 0 12
Example 2.9
Choose the list product applying the Hurwitz method with
the coefficient of optimism a=.60 to the following data.
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UNIT 2 Defining Problem 55
Notes
States of Profit (in Rs) if the market is
nature __________________
Acts Good Fair Poor __________________
Product A 10,000 8,000 2,000 __________________
Maximum and minimum payoff are tabulated for each act. __________________
Solution
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A1 -6 Now maximum of
minimum is 1, so A2
A2 1 is acceptable.
A3 -4
A1 2 Maximum of the
maximum is 7 for
A2 4 Act A3.
A3 7
S1 S2 Maximum
regrets
A1 7(6) = 13 22 = 0 13
A2 74 = 3 21 = 0 3
A3 77 = 0 2(4) = 6 6
Example 2.12
A pig breeder can either produce 20 or 30 pigs. The total
production of his competitors can be either 5,000 or 10,000
pigs. If they produce 5,000 pigs, his profit per pig is Rs 60; if
they produce 10,000 pigs, his profit per pig is only Rs 45.
Construct a payoff Table and also state what the pig breeder
should decide.
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UNIT 2 Defining Problem 57
Solution Notes
__________________
With the given data let us construct the payoff Table:
__________________
Payoff Table
__________________
State of 5,000 10,000
nature __________________
Acts __________________
A1 (20) 20 × 60 = 120 20 × 45 = 900
__________________
A2 (30) 30 × 60 = 1,800 30 × 45 = 1,350
__________________
Assuming the pig breeder to be conservative, we use maximin __________________
approach. As such, the minimums of act A1 is 900 and that of __________________
A2 is 1350, which is, of course, maximum. So the pig breeder
__________________
should accept the course of action A1.
Example 2.13
Given is the following payoff matrix:
Course of action
Do not Expand Expand
States of nature Probability expand 200 units 400 units
Rs Rs Rs Rs
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 1000
Solution
Let us form the payoff Table as follows:
Payoff Table
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A3 : 1,000
A3 : 5,000
(iv) Let us find the regret matrix from the payoff matrix by
subtracting each of the values in a column from the
largest payoff value in the same column.
State of
nature High Medium Low Maximum
demand demand demand regrets
Course
of action
Do not expand (A1) 5,000 2,500 = 2,500 3,500 2,500 = 1,000 2,500 2,500 = 0 2,500
Expand 200 units (A2) 5,000 3,500 = 1,500 3,500 3,500 = 0 2,500 1,500 = 1,000 1,500
Expand 400 units (A3) 5,000 5,000 = 0 3,500 2,500 = 1,000 2,500 1,000 = 1,500 1,500
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UNIT 2 Defining Problem 59
Expected Opportunity Loss (EOL) Notes
__________________
If P(S 1 ), P(S 2 ), ......., P(S n ) be the prior probabilities
__________________
corresponding to the respective states of nature S1, S2, ......,
__________________
Sn, then expected opportunity loss (EOL) of acts:
__________________
A1 = (M1 – P11)P(S1) +(M2 – P12)P(S2)+.............+(Mn – P1n)P(Sn) __________________
A2 = (M1 – P21)P(S1) +(M2 – P22)P(S2)+.............+(Mn – P2n)P(Sn) __________________
__________________
Example 2.14
__________________
Refer the Example 2.13. If 0.3, 0.4, 0.3 be the respective __________________
probabilities of three states of nature (i.e., high demand,
__________________
medium demand and low demand) then EOL of acts:
Calculation
Expected payoff with perfect information (EPPI) = (max. payoff
in 1st state of nature) × (prob. of 1st state of nature) + (max.
payoff in 2nd state) × (prob. of that state) × ..... up to last state.
Example 2.15
Payoffs of three acts A, B and C and states of nature X, Y
and Z are given below:
Payoff (in Rs)
Acts
A B C
States of nature
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Notes The probabilities of the states of nature are 0.3, 0.4 and 0.3
__________________
Calculate the EMV for the above data and select the best
__________________
act. Also find the EVPI.
__________________
__________________ Solution
__________________
Let us find the expected monetary value (EMV) of each act.
__________________
__________________ Act A = –20 × .3 + 200 × .4 + 400 × .3 = Rs 194
__________________ Act B = –50 × .3 – 100 × .4 + 600 × .3 = Rs 125
__________________
Act C = 200 × .3 – 50 × .4 + 300 × .3 = Rs 130
__________________
EMV of Act A is highest as seen in the table, so it should be
selected.
Payoff (Rs)
Max. for
States of Prob. A B C state of Max. payoff
nature nature × prob.
Total 320
Example 2.16
Mohan Products Ltd. produces a drums which must be sold
within a month of it being produced, if the normal price of
Rs 100 per drum is to be obtained. Anything unsold in that
month is sold in a different market for Rs 20 per drum. The
variable cost is Rs 55 per drum.
Frequency 24 12 24
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UNIT 2 Defining Problem 61
(i) Prepare an appropriate Payoff Table. Notes
__________________
(ii) Advise the production management on the number of
__________________
drums that should be produced next month.
__________________
Solution __________________
__________________
Gain (on sale) = 100 – 55 = 45, Loss (for unsold) = 55 – 20 = 35
__________________
(in Rs)
__________________
Payoff Table
__________________
Demand 2000 3000 6000 Expected value __________________
Prob. 24 12 24 __________________
= 0.4 = 0.2 = 0.4
Stock 60 60 60
90,00 × .4 = 90,000
Standard Symbol
Nodes: There are two types of nodes (i) decision node
(symbolized as square) and (ii) chance node (marked as circle).
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Notes node, chance nodes exist from where chance nodes emanate
__________________ as sub-branches. Probability and outcomes are shown along
__________________ these sub-branches. Each sub-branch can form a branch again
__________________ so that we can build a tree-like structure representing all
__________________ possible outcomes.
__________________ Types of decision trees: (i) deterministic (ii) probabilistic.
__________________ These again can be divided into single stage and multi-stage
__________________ trees.
__________________
In a single stage decision tree we can find only one decision
__________________ (i.e., no chance event).
__________________
In a multi-stage decision tree, a chain of decisions is to be
made.
E1
O1
decision
A1 E2 node
O2
E1
O1
A2 chance
E2 node
O2
Example 2.17
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.
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UNIT 2 Defining Problem 63
Solution Notes
__________________
Construct an appropriate decision tree. What decision should
__________________
the doctor take?
__________________
The decision tree has been constructed as follows: __________________
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 operation should not be done for recovery.
__________________
Example 2.18
A manufacturing company has to select one of the two
products, A or B, for manufacturing. Product A requires
an investment of Rs 20,000 and product B Rs 40,000.
Market research survey shows high, medium and
low demands with corresponding probabilities and returns
from sales, in Rs 1000 for the two products, in the following
Table:
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Example 2.19
Y.K. Sachdeva has two independent investments A and B
available to him; but he can undertake only one at a time
due to certain constraints. He can choose A first and then
stop, or if A is successful then take B or vice versa. The
probability of success of A is 0.6 while for B it is 0.4. Both
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UNIT 2 Defining Problem 65
investments require an initial capital outlay of Rs 10,000 and Notes
both return nothing if the venture is unsuccessful. Successful __________________
completion of A will return Rs 20,000 (over cost) and __________________
successful completion of B will return Rs 24,000 (over cost). __________________
Draw decision tree and determine the best strategy. __________________
__________________
Solution
__________________
The appropriate decision tree is as follows: __________________
(Outcome Rs)
(10,000) __________________
)
.4
Fail (.6)
il (
(10,000) __________________
Fa
Suc B __________________
cess ACC
Success (.4)
A
D2 (24,000)
t
(.6)
ep
cc
A
Stop
Do Nothing (0)
D1
(0)
Stop
D3
A
cess (10,000)
cc
Suc
ep
A
B
(.4)
(20,000)
Fa
Success (.6)
il (
.6
(10,000)
)
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Notes From the column of expected values see Table 2.7, we find
__________________ the best strategy is to accept A and, if it is successful, then
__________________ accept B.
__________________
__________________
Summary
__________________ This unit presented the fundamentals of the Bayesian
__________________ approach to decision-making under uncertainty and
__________________ certainty.
__________________ The unit first emphasized the need for information in
__________________ decision-making. The unit also discussed the concept
__________________ of probability and indicated the basic sources of
assigning probabilities. In the present days, the
probability theory has a vital role, as such, this
probability theory will be used more frequently in the
decision-making theory under uncertainty and risk. The
management of an industry or any concern is to take
decisions about the development or expansion of the
concern. No doubt the concern has to face many problems
from time to time. The management has to overcome or
solve the problems. This unit concluded with brief
descriptions of industry applications of Bayesian
decision analysis and related methods.
Review Questions
1. What is the ‘expected value’ approach to decision-
making?
4. Carry out a full decision analysis for M/s Excel Ltd, using
the following information:
Events Actions Expert Delay Delay
Now (Rs) 1 Year (Rs) 2 Years (Rs)
Economic conditions remain good (A) 7,00,000 5,60,000 4,10,000
Moderate downturn in economy (B) 5,20,000 4,00,000 3,00,000
Economic recession (C) 2,96,000 26,000 29,000
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UNIT 2 Defining Problem 67
Prior probabilities for the various events for the next Notes
twelve months are: __________________
__________________
(A) = 0.3
__________________
(B) = 0.4 __________________
S1 S2
A1 10 4
A2 2 5
Unit 3 Notes
__________________
__________________
Relationship between __________________
Objectives
After reading this unit you will be able to:
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u Rising cost
u Sales decline
u Increasing LTO
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UNIT 3 Relationship between Management and Research Problem 71
management dilemma. Among them the most plausible Notes
action, or the one that offers the greatest gain using the fewest __________________
resources should be researched first. __________________
__________________
Figure 3.1
Respective Roles
The Management's Role
The manager must move from the management dilemma to
management question to proceed with the research process.
Management problems are too numerous to list, but they can
be categorized in:
Researchers Role
Once the researcher has a clear statement of the management
question, they with the help of the manager must translate
them into research question. The research question should
be a fact - oriented, information - gathering question. Only
relevant alternatives should be considered. To have an idea
of relevant alternatives the insight of manager must be
taken. This will also help the researcher having idea of
manager's decision making environment.
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Management Dilemma
Management Question
Research Question(s)
Investigative Question
Measurement Question
Management Decision
Figure 3.2
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UNIT 3 Relationship between Management and Research Problem 73
Summary Notes
__________________
This unit presented the classification of problems and
__________________
detailed the need of converting management's problem
__________________
into researchers problem.
__________________
The unit first stated and cleared what is a problem and __________________
than has gradually proceeded in explaining the role of __________________
management and researcher to convert managements
__________________
problem into precise detail on which further study can
__________________
be made feasible.
__________________
__________________
Review Questions
1. Define the role of management in the formulation of
research problem.
Unit 4 Notes
__________________
__________________
Research Design __________________
__________________
__________________
__________________
Objectives __________________
__________________
After reading this unit you will be able to:
__________________
y Define research design, classify various research design, and
explain the differences between exploratory and conclusive. __________________
Introduction
The purpose of marketing research is to provide information
which will aid in management decision-making. A marketing
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UNIT 4 Research Design 77
research is the technique most commonly used in marketing Notes
research. A standard questionnaire can be administered to __________________
large samples and systematically analyzed using __________________
computerised techniques. __________________
as coding scheme, recording sheets and other tests may need __________________
to be designed. The most common instrument used is a __________________
questionnaire. For unstructured interviews and focus __________________
groups, only an interview guide indicating the topics to be __________________
covered may be required. A crucial aspect of survey research __________________
is, however, the design of a carefully worded questionnaire
__________________
to elicit desired information from respondents. Attention to
question form and sequencing is also essential in order to
avoid biased responses.
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(c) The form in which the results will be obtained and how
they may be used.
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UNIT 4 Research Design 79
(d) The methods to be used in attaining each of the Notes
objectives of the research. __________________
__________________
(e) A time schedule for the entire research, including
__________________
speculations, deadlines for specific phases of the
research. __________________
__________________
(f) Personnel and administrative set-up, with duties
__________________
specified for each person working on the research
__________________
project.
__________________
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UNIT 4 Research Design 81
trade journals, general books, etc. Computerization of Notes
database and quick search systems have made this type of __________________
research more organized, exhaustive and quick. At the same __________________
time there comes the problem of information overload and __________________
market research is the only way of shifting the relevant __________________
information by use of creative solutions to get insights on
__________________
which management can act.
__________________
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UNIT 4 Research Design 83
marketing mix variables, a market researcher can Notes
convert a focus group with him/her acting as a __________________
moderator. The discussion is guided from the generic __________________
product category to the product specific category to the __________________
specific brand under consideration. The interviews are __________________
usually recorded so that the market researcher may not
__________________
lose information while keeping the discussion on the
__________________
track. Reports based on focus groups typically may
__________________
contain direct quotations from the interview session.
These can be highly useful and stimulating to marketing __________________
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UNIT 4 Research Design 85
on the entire picture and not some of its parts; all the Notes
people actually concerned with the problem are __________________
contacted and data is obtained informally as well. __________________
__________________
The disadvantages are mainly owing to its time
consuming procedure; heavy reliance on investigators __________________
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UNIT 4 Research Design 87
research for the sole reason that he knows what data to Notes
collect from his respondents in the survey. Descriptive __________________
research designs can also use one or more of the following __________________
sources of data: __________________
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UNIT 4 Research Design 89
marketing managers. Because in doing so they would want Notes
to be able to make causal statements about the effects of their __________________
actions. “The new advertising campaign we developed has __________________
resulted in p% increase in sales” or the “sales discount __________________
strategy we followed has resulted in p% increase in sales”,
__________________
etc. In both of these examples, marketing managers are
__________________
making a causal statement.
__________________
However, the scientific concept of causality is complex and __________________
differs substantially from the one held by the common person
__________________
on the street. The common sense view holds that a single
__________________
event (the ‘cause’) always results in another event (the
‘effect’) occurring. In science, we recognize that an event has __________________
a number of determining conditions or causes which act
together to make the effect probable. Note that in the
common sense notion of causality, the effect always follows
the cause. This is deterministic causation in contrast to
scientific notion which specifies the effect only as being
probable. This is termed as probabilistic causation. The
scientific notion holds that we can only infer causality and
never really prove it. That is, the chance of an incorrect
inference is always thought to exist. The world of marketing
fits the scientific view of causality. Marketing effects are
probabilistically caused by multiple factors and we can only
infer a causal relationship. The conditions under which we
can make causal inferences are:
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UNIT 4 Research Design 91
extraneous variables as competitive hypotheses to the Notes
treatment: __________________
__________________
(1) The Pre-test—Post-test control group design:
__________________
Experimental group R 01 X1 02 __________________
Control group 2 R 06
Experimental group R X 01
Control group R 02
Symbols used:
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2. "Before after" design The experimental group's reaction is first A consumer entering a departmental store,
measured before and after the experimental having various brands of shirts, may be asked
variable is introduced to them to check out the his brand preference. The salesman at the store
difference in behaviour. The disadvantage is would be instructed to influence the choice
that some uncontrollable variable might be towards a particular brand. The brand purchased
responsible for the change in opinion or by the consumer finally would indicate whether
behaviour. the sales people have been successful in
influencing the brand choices of the consumer.
A consumer's intention to purchase earlier is
compared with any changes at the time of final
purchase on account of external stimuli like an
advertisement or influence of the dealer, etc.
3. Before after with control The design consists of having a control group In the experiment described earlier, there could
group which is not subjected to the variable, versus be consumers to whom the salesman does not
the experimental group which is subjected to deliberately push a particular brand. This would
the variable. The difference of their differences constitute the control group. The differences
would give an idea of the extent of uncontrollable between the purchase behaviour of the control
variablespresent. group and that of the experimental group would
indicate whether uncontrollable variables had
caused the change in behaviour.
4. Four group six study To remove the bias which exists on account of The experiments of four groups six study design
design the 'before' measurement four groups are made, are difficult to set up and difficult to interpret and
two as in the before after with control group when have little practical application although they
the before measurement is not made – one are ideal.
control group and the other experimental.
Theoretically, it will be the solution of four
unknown quantities to find their differences.
5. After only with control In this case, no 'before' measurement The experimental group may be sent certain
group is made but only the after measurement is made privileged discount coupons for a sale, whereas
on the experimental group. The difference the control group is not, the results of the sale
between the two would indicate the effect of the would indicate whether the discount coupons
experimental variable. are indeed useful in increasing the sales of the
product.
6. The latin square design If the effect of a single variable is to be studied Suppose the owner of franchised outlets, say
over different time periods and different Bata, would like to know whether there is a
geographic regions a design which takes into difference in sales occurring on account of
account possible combinations is made and differences in three types of display used by
the differences arising on account of either the three similar Bata stores, situated at different
geographic region or the time period are studied. locations in Mumbai, for a period of three months.
The design would be:
Month ® 1 2 3
Crawford market A C B
Linking road C B A
Andheri B A C
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UNIT 4 Research Design 93
major conditions being capacity to manipulate the Notes
independent variable the effect of which is decided to __________________
be studied. __________________
__________________
2. Proper description of the selected problem: After
selecting the problem, it must be put in proper language, __________________
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Notes For instance, to find out the most appropriate price for a
__________________ new product, three different price levels–high, medium and
__________________ low can be tested. The different price levels can be tested in
__________________ three different stores. The analysis would reveal the average
__________________ amount of the product sold at each price level and disclose
whether there is any significant difference in sales between
__________________
the three price levels.
__________________
__________________ The main disadvantage of this design is that it does not take
__________________ into consideration the influence of possible extraneous
__________________
factors. However, this design has the advantages of
simplicity and inexpensiveness.
__________________
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UNIT 4 Research Design 95
4 × 4 design. This is a complex and expensive design, but it Notes
is more efficient than the previous designs. __________________
__________________
Factorial Design
__________________
In the Latin square design, only one variable is tested, __________________
whereas in the Factorial design two or more variables can __________________
be determined. For instance, a marketer wants to test the __________________
effect of TV advertising and price reduction on the sales of a __________________
product. Suppose, he considers three price reduction and
__________________
four levels of TV advertising, then it would be 3 × 4 design.
__________________
Hence, 12 markets have to be chosen to test the combinations
__________________
keeping the time period of the test constant. Factorial
designs can be constructed for more than two variables also.
Limitations of Experimentation
The manager should recognize the following limitations of
experimentation:
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UNIT 4 Research Design 97
Designing Consumer Research Notes
__________________
The purpose of the consumer study is determined by research
__________________
design. When descriptive information is required, a
__________________
quantitative study is useful. If new ideas, e.g., positioning of
a new brand is needed, a qualitative study is likely to be __________________
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UNIT 4 Research Design 99
as possible. These errors and the researcher strategies for Notes
dealing with them are discussed in the following section: __________________
__________________
1. Planning errors: Planning errors are those which deal
__________________
with the setup of the design to collect information.
Researcher can think of planning errors as being all __________________
Summary
A research design serves as a bridge between what has
been established (the research objective) and what is to
be done, in the conduct of the study, to realize those
objectives. It anticipates what the client will need in
terms of results and the analytical work on the gathered
data that will convert it to useful findings.
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Notes
at the analytical stage. A design also is appreciated when
__________________
analyzing the data and interpreting and thinking on the
__________________
path to solutions and recommendations.
__________________
__________________
Although, research designs may be classified by many
criteria, the most useful one concerns the major purpose
__________________
of the investigation. On this basis, we may identify the
__________________
broad classes of designs as exploratory, descriptive and
__________________
causal.
__________________
__________________
Review Questions
__________________
1. Discuss the application of exploratory research design
in marketing.
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UNIT 4 Research Design 101
(b) In your view is the researcher using a sampling Notes
method? Is this technique appropriate in this __________________
situation? Given the choice, what method would __________________
you use and why? __________________
8. You are the product manager for brand ‘Youth’ shaving __________________
cream, a nationally distributed brand. Brand ‘Youth’ has __________________
been declining in absolute level of sales for the last four __________________
consecutive months. You ask the marketing research __________________
department to do a study to determine why sales have
__________________
declined.
__________________
(a) Indicate whether this is an exploratory, __________________
descriptive or causal study.
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UNIT 4 Research Design 103
19. Explain what research design would you use if you want Notes
to conduct a study regarding the demographic profile __________________
of the users of a particular brand of a product. __________________
__________________
20. List out the uses of consumer research in the field of:
__________________
(a) F.M.C.G. __________________
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Notes APPENDIX-1
__________________
STRATEGY FOR DESIGNING MARKETING RESEARCH
__________________ PROGRAMME
__________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
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UNIT 4 Research Design 105
APPENDIX-2 Notes
__________________
A method of education should rest on some satisfactory theoretical basis.
It should also provide the learner with the knowledge and background __________________
he needs in order to make positive contributions to thought and to society.
__________________
In this context there are three major levels of knowledge concerning __________________
marketing that a student must attain. The first is the acquisition of certain
information, that, in the aggregate, constitutes a description of marketing __________________
institutions and an explanation of marketing processes. This knowledge __________________
may be interesting, but it is arid and purposeless.
__________________
The second level is the development of the principles and theoretical
concepts that are key to understanding the dynamics of the marketing __________________
system. __________________
The third level is the use of the information, principles and theories in the __________________
analysis of marketing problems.
Importance of Data
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Notes generally search out the information from secondary sources, e.g. trade
association publications, trade publications, texts, industry studies,
__________________
published corporation reports, government data, and primary efforts such
__________________ as interviews with business people and “spot surveys”.
__________________ The marketing student can also rapidly build up a large fund of technical
and trade information by observation and by asking questions in his
__________________
normal contracts with merchants. For instance, many supermarkets and
__________________ many larger drug stores carry hardware store items. In what way does
hardware merchandise in food and drug stores differ from the same
__________________
general type of merchandise carried in hardware stores? This kind of
__________________ knowledge is important in some marketing problems and may be learned
better by observation than any other method.
__________________
__________________ Source: Management Accountant, April, 1998.
__________________
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UNIT 4 Research Design 107
CASE STUDY 4.1 Notes
__________________
Shri Ram Consultants
__________________
Shri Ram consultants have been appointed by a leading to prepare a
feasibility report for opening a five-star hotel in Pune. The group had __________________
been the most successful one in the hotel industry and had always kept __________________
its eyes open for new opportunities.
__________________
In view of the very fast industrial growth in the city of Pune, the city had
attracted the attention of the group. Pune, apart from being a modern city, __________________
has the added advantage of pleasant weather and several places of __________________
tourist attraction in the neighbourhood. Moreover, the closeness to
Mumbai, a city of international stature, made it very easily accessible to __________________
international tourists. __________________
For Shri Ram consultants this was the first time that an assignment __________________
concerning the hotel industry had been received. They, however, soon
realized that the assignment was not as simple as it appeared to be in
the first place. The feasibility of such a hotel would depend essentially on
two factors. Businessmen visiting the city for work would constitute one
segment of the market, while tourists would constitute the other. Further,
the tourists could be Indians or foreigners. The success of such a hotel
would also depend upon the relative attraction of other tourist centres in
the vicinity.
The problem appeared well defined and they were concerned as the
preliminary report explaining methodology of the research and the
questionnaires to be used had to be submitted to the client along with
the estimate of expenses within one month.
Questions
(a) How would you define the problem of assessing the feasibility of
the hotel so as to help design the survey?
(b) How would you plan a survey for actually collecting information on
expected demand for hotel space? How would you estimate the
cost of such a survey?
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Questions
Unit 5 Notes
__________________
__________________
Hypothesis Design __________________
__________________
__________________
__________________
__________________
Objectives __________________
__________________
After reading this unit you will be able to understand:
__________________
y Various steps involved while testing the hypothesis.
y Apply and interpret the results of the ANOVA and n-way ANOVA
statistical methods.
Definition
The distribution of all possible values which can be assumed
by same statistics computed from samples of the same size
randomly drawn from the same population is called the
sampling distribution of the statistic.
Example 5.1
Let the population size =N
Let the sample size =n
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__________________
__________________
Population
__________________ Size S2
Size n Mean m2
N
__________________
Sn
Size n Mean mn
Figure 5.1
6
S.E =
n
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UNIT 5 Hypothesis Design 111
Notes
__________________
__________________
Problem definition
__________________
__________________
Clearly state the
null and alternate __________________
hypothesis
__________________
Choose the relevant __________________
test and the
appropriate probability __________________
distribution
__________________
Determine the Select the critical Determine the degree __________________
significance level value of freedom
Figure 5.2
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Notes do t If r is unknown
__________________
Means One Comparing sample Z If r is known
__________________ and population
mean
__________________
__________________ do t If r is unknown
2
Variance One Comparing sample X
and population
variance
Standard Error
The standard deviation of a sampling distribution is called
standard error of that statistic. For example,
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UNIT 5 Hypothesis Design 113
deals with original values and S.E. deals with statistics Notes
computed from the samples of original values. __________________
__________________
Importance of the Concept of Standard Error
__________________
1. It can be used in testing hypothesis. For example, let __________________
the level of significance for testing a particular __________________
hypothesis be 5%. We know that corresponding to this __________________
level the value of standard error is 1.96 S.E. Now if the __________________
difference between the observed and expected means
__________________
comes out to be more than 1.96 S.E. then the result of
__________________
the experiment does not support the hypothesis which
__________________
it supports otherwise.
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__________________ Solution
__________________ σ
S.E. X =
__________________ n
__________________ Table
Mid-value m 69/10
m f d fd fd2
39 2 -3 -6 18
49 3 -2 -6 12
59 11 -1 -11 11
69 20 0 0 0
79 32 +1 + 32 32
89 25 +2 + 50 100
99 7 +3 + 21 63
N = 100 ∑ fd = 80 ∑ fd 2= 236
2
∑ fd 2 ∑ fd
s= − ×i
N N
2
236 80
= − × 10
100 100
= 13.11
13.11
S.E. = X = = 1.311
100
Σ (x1 − x )
2
δ=
n
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UNIT 5 Hypothesis Design 115
This value of d is used as an estimate of s (provided that n ³ Notes
30). In this case, the values are given by: __________________
__________________
x − µο
= __________________
s n
__________________
Here, __________________
__________________
Critical values:
__________________
δ __________________
X L = µo − α when H1 : µ < µ ο
n __________________
__________________
δ
X U = µυ + α when H1: µ > µ ο
n
Example 5.3
A sample of 64 farm labourers engaged in paddy harvesting
operations shows an average monthly wage rate of Rs 200
with a standard deviation of Rs 9. Using 0.05 level
of significance, verify if the sample result indicates that
their current average monthly wage rate is higher than
Rs 198.
Solution
1. H0 : µ = Rs 198.
H1 : µ > Rs 198.
2. a = 0.05.
4. Computations:
x − µ0 200 − 198
z= = = 1.78
s n 98
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Σ (xi − x )
∧ 2
S=
n −1
Σ (x i − x )
2
S=
n
Example 5.4
15 workers are selected at random from a large no. of workers
in a factory. The number of items produced by them on a
certain day are found to be:
53 52 54 53 51 53 59 58 56 56 57 54 50 59 60
Solution
Let us first calculate sample mean and standard deviation
X X-55 (X-55)2
53 -2 4
52 -3 9
54 -1 1
53 -2 4
Contd...
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UNIT 5 Hypothesis Design 117
51 -4 16 Notes
53 -2 4 __________________
59 4 16 __________________
58 3 9 __________________
56 1 1 __________________
56 1 1 __________________
57 2 4 __________________
54 -1 1 __________________
50 -5 25 __________________
59 24 16 __________________
60 5 25 __________________
------ ------- -------
825 136
Σx 825
X= = = 55
n 15
Σ (x − x ) 136
δ= = = 9.71
n −1 14
Example 5.5
1. A doctor may be interested in knowing whether a new
medicine A is better than new medicine B in curing a
particular disease.
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2. σ1 2 = σ2 2
3. n 1 , n 2 < 30
t=
(x1 − x2 ) − do
1 1
S p +
n1 n 2
Here,
n1s12 + n2 s22
SP =
n1 + n2 − 2
d f = n1 + n 2 − 2
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UNIT 5 Hypothesis Design 119
Example 5.6 Notes
__________________
Consider two groups A and B of 10 and 15 students each
__________________
respectively, Group A is being taught with traditional
__________________
method and group B with some new method. After the
completion of the course a test was conducted with the same __________________
question paper for the two groups. It was found that on an __________________
average group A obtained 65 marks with a standard deviation __________________
of 7 marks and group B obtained 68 marks with a standard __________________
deviation of 4 marks. Assuming the populations to be normal __________________
and having the same variance, test the hypothesis at 0.01
__________________
level of significance that the two methods are equally
__________________
effective.
Solution
Here we have to examine for the two methods to be equally
effective. Let m1 and m2 be the average marks obtained by
the two groups respectively, then
= µ1 = µ 2
2. Alternative hypothesis H1 = µ1 ≠ µ 2
3. α = 0.01
4. d.f = n 1 + n 2 − 2 = 10 + 15 − 2 = 23
Now,
α = 0.01
Apply t-test
t=
(x −x2 )
1
1 1
SP +
n1 n2
Here, x 1 = 65 , x 2 = 68
n 1 = 10 , n 2 = 15
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Notes
n 1s12 + n 2 s22
__________________ SP =
n1 + n2 − 2
__________________
__________________
10 × 72 + 15 × 42
__________________ =
10 + 15 − 2
__________________
__________________ = 31.7
__________________
So,
__________________
165 − 681
__________________ t=
__________________ 31.7 1 10 + 1 15
− 516
=
5.63 × ( 0.1 + 0.06 )
− 516
=
5.63× 0.16
− 516
=
5.63× 0.4
− 516
=
2.252
= − 229.129
Ho is accepted.
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UNIT 5 Hypothesis Design 121
H 1 : µ1 − µ 2 ≠ d 0 , µ1 − µ 2 > d 0 , or µ1 − µ 2 < d 0 Notes
__________________
is based on the test statistic T whose distribution is
__________________
approximately like a t distribution with degrees of freedom
__________________
2 __________________
∧ 2 ∧ 2
s 1 s 2 __________________
n + n __________________
1 2
v= __________________
∧ 2
2
∧ 2
2
s 1 n 1 (n 1 − 1) + s 2 n 2 (n 2 − 1) __________________
__________________
__________________
t=
(x1 − x2 ) − d 0
∧2 ∧2
s1 s 2
+
n1 n 2
Example 5.7
A random sample of 10 acres wheat crop selected from
Region I showed an average yield of 20 qtls per acre with a
∧
standard deviation S1 = 5 qtls. Another random sample of 15
acres of wheat crop selected from Region II offered an average
∧
yield of 18 qtls per acre with a standard deviations S2 = 3
qtls. Assuming that the per acre wheat yield in the two states
is normally distributed with different variances, test the
hypothesis at 0.05 level of significance that the average per
acre wheat yield is the same in the two regions against the
alternative that it is higher in Region I than II.
Solution
Let m1 be the average per acre wheat yield in Region I and
m2 in Region II.
1. H0 : m1 = m2
H1: m1 > m2
2. a = 0.05.
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= 13,
t=
(x1 − x2 ) =
20 − 18
= 1.136
∧2 ∧2 25 9
S1 S2 +
+ 10 15
n1 n 2
Σ
(O − E )2
X2 =
E
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UNIT 5 Hypothesis Design 123
Where O is observed frequency, E is expected frequency. Notes
__________________
In general expected frequency is given by:
__________________
RT × CT __________________
E=
N __________________
__________________
Here, RT= Row Total containing the cell.
__________________
CT= Column Total containing the cell. __________________
__________________
N = Total No. of observations.
__________________
Degree of Freedom (V) __________________
v = (r-1) (c -1)
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Notes Chi square analysis can be used when the data satisfy four
__________________ conditions:
__________________
1. There must be two observed sets of data or one observed
__________________
set of data and one expected set of data.
__________________
__________________ 2. The two sets of data must be based on the same sample
size.
__________________
__________________ 3. Each cell in the data contains an observed or expected
__________________ count of five or larger.
__________________
4. The different cells in a row or column must represent
__________________ categorical variables.
Example 5.8
On the basis of the information given below about the
treatment of 200 patients suffering from a disease, state
whether the new treatment is better or not? (Check at 5%
level of significance).
No. of Patients
Favourable Not Favourable Total
New 60 30 90
Conventional 40 70 110
Solution
1. Null hypothesis (Ho): There is no difference between
new and conventional method.
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UNIT 5 Hypothesis Design 125
Notes
RT × CT
3. Expected frequency for each cell = i.e., __________________
N
expected frequencies are: __________________
__________________
100 × 90 100 × 90 __________________
200 200 __________________
60 45 3600 80.09
40 55 1600 29.00
30 45 900 20.00
70 55 4900 89.09
218.18
O2
X 2 = Σ − N = 218.18 − 200 = 18.18
E
(O − E )2
or we can calculate Σ
E
Example 5.9
Following is the information about the number of clerk
committing errors and not committing errors among trained
and untrained clerks.
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70 90 -20 4.444
530 510 20 0.7843
155 135 20 0.29630
745 765 -20 0.5230
2
X = 8.7147
∴ X 2col = 8.7147
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UNIT 5 Hypothesis Design 127
Use X2 test to test if the digits were distributed in equal nos. Notes
__________________
Solution __________________
1 19 20 -1 0.05
2 23 20 3 0.45
3 21 20 1 0.05
4 16 20 -4 0.8
5 25 20 5 1.25
6 22 20 2 0.2
7 20 20 0 0
8 21 20 1 0.05
9 15 20 -5 1.25
X2 = 4.30
Analysis of Variance
It is an useful technique concerning researches in the fields
of economics, education, business and in other disciplines.
This technique is used when multiple samples cases are
involved. The significance of the difference between the
means of two samples can be found out through Z test or t
test, but the problem arises when we happen to examine the
significance of difference amongst more than two sample
means at the same time.
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Notes random effects, i.e., there are influences (X ij) which are
__________________ unexplainable, whereas in examining differences between
__________________ populations we assume that the difference between the mean
__________________ of the jth population and the grand mean is attributable to
__________________ what is called a ‘specific factor’ or what is technically
described as treatment effect. Thus, while using ANOVA we
__________________
assume that each of the samples is drawn from a normal
__________________
population and that each of these populations has the same
__________________
variance. We also assume that all factors other than the one
__________________ or more being tested are effectively controlled.
__________________
__________________ The F Test (Variance Ratio Test)
The F-test is named in honour of the great statistician R A
Fisher. It is used to find out whether the two independent
estimates of population variance differ significantly. For
carrying out the test of significance, we calculate the ratio
F. F is defined as:
S12
F=
S22
(X − X1
1 )
2
Where, S12 =
n2 −1
(
Σ X2 − X2 )
2
and S22 =
n2 −1
Therefore,
V1 = n1 1
V2 = n 2
V1 = degrees of freedom for sample having larger variance.
V2 = degrees of freedom for sample having smaller variance.
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UNIT 5 Hypothesis Design 129
The calculated value of F is compared with the table value Notes
(given at 5% or 1% level of significance). If the calculated __________________
value of F is larger than the table value of F, the null __________________
hypothesis is rejected otherwise it is accepted. __________________
__________________
Example 5.11
__________________
Two samples are drawn from two normal populations. From __________________
the following data test whether the two samples have the __________________
same variance at 5% level.
__________________
Sample 1: 60 65 71 74 76 82 85 87 __________________
__________________
Sample 2: 61 66 67 85 78 63 85 86 88 91
Solution
Null hypothesis Ho : σ12 = σ22 , i.e., samples have been drawn
from two normal populations with the same variance.
636 1200
600 770
X= = 75 Y= = 77
8 10
S12 =
1
n1 − 1
Ó X−X ( )
2
=
636
7
= 90.8
S22 =
1
n2 −1
Σ Y−Y ( ) 2
=
1200
9
= 133.33
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m2 : 26 30 40 31 34 19 27
Solution
Null hypothesis Ho : σ12 = σ22 ,
M1 M2
2
X X-X (X-X) Y Y-Y (Y-Y)2
30 4 16 26 -5 25
15 -11 121 30 -1 1
29 3 9 40 9 81
26 0 0 31 0 0
31 5 25 34 3 9
25 -1 1 29 -2 4
27 -4 16
156 217
X= = 26 Y= = 31
6 7
S12 =
1
n1 − 1
(
Σ X−X )
2
=
172
5
= 34.4
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UNIT 5 Hypothesis Design 131
Notes
S22 =
1
n2 −1
Σ Y−Y ( )
2
=
136
6
= 22.66 __________________
__________________
Since, S12 > S22 __________________
Example 5.13
Perform a two way ANOVA on the following data:
T1
I II III
i 30 26 38
ii 24 29 28
T2 iii 33 24 35
iv 26 31 30
v 27 35 33
Solution
Since 30 is the code value. So, subtracting 30 from all cells
we have,
T1
Total
I II III
i 0 -4 8 4
ii -6 -1 2 -9
T2 iii 3 -6 5 2
iv 6 1 0 7
v -3 5 3 5
Total 0 -5 18 T=9
T 2 92
Correction Factor (C.F) = = = 5.40
N 15
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[ ]
__________________
__________________ SSR = 42 + (− 9 )2 + (7)2 + (5)2 3 − 5.4
__________________ = 52.93
__________________
The error sum of squares (SSE)
__________________
SSE = SST - SSR - SSC
= 265.6 - 52.93 - 38.8
= 173.87
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UNIT 5 Hypothesis Design 133
Analysis of Co-variance (ANOCOVA) Notes
__________________
The object of experimental design in general happens to be
__________________
to ensure that the result observed may be attributed to the
__________________
treatment variable and to no other casual circumstances. For
__________________
instance, the researcher studying one independent variable
X, may wish to control the influence of some uncontrolled __________________
ANOCOVA Technique
While using ANOCOVA technique, the influence of
uncontrolled variable is usually removed by simple linear
regression method and the residual sums of square are used
to provide variance estimate which in turn are used to make
test of significance. In other words, covariance analysis
consists in subtracting from each individual score (Yi) that
portion of it Y: that is predictable from uncontrolled variable
(Zi) and then computing the usual analysis of variance on
the resulting (Y-Y)s, of course making the due adjustment
to the degree of freedom because of the fact that estimation
using regression method requires loss of degree of freedom.
Example 5.14
The following are paired observations for three experimental
groups.
Group I Group II Group III
x y x y x y
7 2 15 8 30 15
6 5 24 12 35 16
9 7 25 15 32 20
15 9 19 18 38 24
12 10 31 19 40 30
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x y x y x y
7 2 15 8 30 15
6 5 24 12 35 16
9 7 25 15 32 20
15 9 19 18 38 24
12 10 31 19 40 30
SX = 49+114+175 = 338
SY = 33+72+105=210
ΣX.ΣY
Correction factor for XY = = 4732
N
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UNIT 5 Hypothesis Design 135
Hence total SS for X= SX2-correction factor for X Notes
__________________
= 9476-7616.27=18 59.73
__________________
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Total 13 319.13
198
= .7216
274.40
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UNIT 5 Hypothesis Design 137
Deviation of initial group means from Notes
__________________
general mean (=14) in case of Y
__________________
Final means of group in X (unadjusted) __________________
__________________
Group I –7.40 9.8
__________________
Group II .40 22.8 __________________
Summary
This chapter presents the fundamental underpinnings
of hypothesis testing methodology. In this chapter
parametric and non-parametric tests are available for
testing the hypothesis related to differences. In the
parametric case T test is used to examine hypothesis
related to the population mean. Different forms of T test
are suitable for testing the hypothesis based on one
sample, two independent samples, or paired samples,
in the non-parametric case popular one-sample test
include chi-square (X2) test. In ANOVA and ANOCOVA,
the dependent variable is metric and independent
variables are all categorical 02 combinations of
categorical and metric variables. One way ANOVA
involves a single independent categorical variables.
Interest lies in testing the null hypothesis that the
category means are equal in the population. The total
variation in the dependent variable is decomposed into
two components – variation related to the independent
variable and variation related to error. The null
hypothesis of equal means is tested by an F statistic,
Contd...
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Notes
__________________
which is the ratio of the mean square related to the
independent variables to the mean square related to
__________________
error. ANOCOVA includes at least one categorical
__________________
independent variable and at least one interval or metric
__________________
independent variable. The metric independent
__________________ variables, or covariate, is commonly used to remove
__________________ extraneous variation from the dependent variable.
__________________
__________________ Review Questions
__________________
1. Why do we use hypothesis testing?
__________________
2. Why and how would you use t and z test in hypothesis
testing?
4. What will ANOVA test not tell you, and how can you
overcome this problem?
12. Under what conditions should the t test for the mean
difference in two related populations be selected.
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UNIT 5 Hypothesis Design 139
two related populations? Notes
__________________
14. Under what conditions should the F test be selected to
__________________
examine possible differences in the variances of two
__________________
independent populations?
__________________
15. What are some of the criteria used in the selection of a __________________
particular hypothesis-testing procedure?
__________________
16. Under what conditions should the two tests be used to __________________
examine possible differences in the proportions of two __________________
independent populations? __________________
Unit 6 Notes
__________________
__________________
Sampling Procedures __________________
__________________
__________________
__________________
__________________
__________________
Objectives __________________
After reading this unit you will be able to understand: __________________
y Meaning of sampling.
y Need of sampling.
y Methods of sampling.
y Features of sampling.
y Uses of sampling.
Introduction
In carrying out a survey relating to the research, we should
first select the problem and study its implications in different
areas. Selection of the research problem, as has already been
stated, should be in line with the researcher’s interest, chain
of thinking and existing research in the same area and should
have some direct utility. What is most important in selecting
a research problem is that the research topic should be within
manageable limits.
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u Lottery method
u Tippett’s number
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UNIT 6 Sampling Procedures 143
Selection of sample from sequential list requires Notes
arrangement of names under the intended plan according to __________________
some order which may be alphabetical, geographical or __________________
simply serial. Thereafter, out of the list, every 10 th or __________________
any other number of cases may be taken up. If every 10th __________________
unit is to be selected, the selection might begin from 7th,
__________________
17th, 27th, 37th, 47th, 57th, etc., or from 5th, 15th, 35th, 45th, 55th,
__________________
etc.
__________________
Grid system is applied for selection of sample from a __________________
particular area. Under this method a map of the entire area __________________
is prepared, then a screen of squares is placed on the map.
__________________
The areas falling within selected squares are taken as
samples.
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iii. Extent
iv. Time
u Element—Our product.
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UNIT 6 Sampling Procedures 145
Step 4: Specify the sampling method: The sampling Notes
method indicates, how the sample units are selected. The __________________
most important decision in this regard is to determine which __________________
of the two-probability or non-probability samples is to be __________________
chosen. __________________
Step 5: Determine the sample size (n): The decision about __________________
the number of elements to be chosen, i.e., number of __________________
observations in each sample (n) of the target population. __________________
__________________
Step 6: Specify the sampling plan: This means that one
should indicate, how decisions made so far are to be __________________
Why Sampling?
There are various advantages of sampling, as given below:
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Types of Sampling
There are basically two types of sampling methods:
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UNIT 6 Sampling Procedures 147
possible in this case and moreover, the degree of Notes
accuracy is not known. __________________
__________________
iv. Although probability sampling is scientific and accurate,
__________________
however, because of convenience and economy, the non-
probability samples are preferred. __________________
__________________
v. Many times, samples are selected by interviewers
__________________
“at random” meaning that the actual sample selection
__________________
is left to the choice of the researcher, such sample
__________________
are non-probability samples and not probability
samples. __________________
__________________
Probability Sampling Methods
The major sampling methods under probability sampling
are:
u Systematic sampling
u Stratified sampling
u Cluster sampling
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369ü 476ü
387ü 761û
507û 837û
457ü 116ü
077ü 232û
977û 505û
999û 636û
421ü
077, 116, 135, 232, 283, 369, 387, 421, 457, and 476 (10 Nos.)
0 77
1 16, 35
2 32, 83
3 69, 87
4 21, 57, 76
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UNIT 6 Sampling Procedures 149
Simple Random Sample in Practice Notes
__________________
The use of random sampling is made by researchers for the
__________________
following situations:
__________________
u When a small sample is needed from the list of sample __________________
frame (list of universe items). __________________
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500
= 10 in this case
50
Limitations
If the sample frame has any periodicity that parallels the
sampling rates, then the possibility of a strong bias is there.
For example, in banking transactions if you choose 1/7, 1/14,
etc., then you will be having same day of the week for your
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UNIT 6 Sampling Procedures 151
study and hence your study will be a biased study. Be it, Notes
Monday or Wednesday or Friday etc. __________________
__________________
Similarly, if the frame is arranged in a way-ascending or
__________________
descending order of some attribute, then the location of the
first sample element may affect the result of the study. In __________________
such cases, one should devise ways to qualify the effect of __________________
bias. __________________
__________________
On the other hand, if the frame is so arranged that similar
__________________
elements are grouped together, then systematic sampling
produces almost a proportional stratified sample. __________________
1 N1 n1
2 N2 n2
3 N3 n3
4 N4 n4
5 N5 n5
6 N6 n6
7 N7 n7
k Nk nk
Total N n
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Example 6.1
Suppose, the population consists of 45,000 households,
divided into five (5) strata on the basis of monthly income.
This can be illustrating as below:
0 – 1000
1001 – 5000
5001 – 7500
7501 – 10,000
Above 10,000
Then,
a. Find out the number of units from each strata if the
sample constitutes 1% of the population.
b. If selection is for 150 items selecting equally from each
strata, find out the number of sample units from each
strata.
Solution
a. Proportional stratified sampling
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UNIT 6 Sampling Procedures 153
Stratum No. Population (No of Sample Sampling Notes
(i) households) (proportionate) ratio __________________
(ii) (iii) 1%=.01
__________________
0-1000 15,000 150 .01 __________________
1000-5000 12,000 120 .01 __________________
5001-7500 9,000 90 0.01
__________________
7501-10,000 6,000 60 .01
__________________
> 10,000 3,000 30 .01
__________________
45,000 450 .01
__________________
__________________
b. Equal from each strata:
__________________
Total No. of sample units = 150
No. of sample units from each stratum = 150/5
= 30
Sampling ratio = Sample size / Population size
Major Issues
There are three major issues involved in stratified sampling:
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above
45,000 225
Disproportional Allocation
There are circumstances where some form of disproportional
allocation should be considered, i.e., sampling different
strata at different rates. As a general principle, when the
variability among observations within a stratum is high,
‘higher rate for higher internal variation strata and lower
rate for less internal variation strata’ is adopted.
n1 n2 np
= =
N1s1 N 2s 2 N ps p
Example 6.2
Let us consider a case of 3 strata, of income group with given
stratum variance.
Stratum No. of Households Stratum Variance
0 - 5000 300 4.00
5001-10,000 450 9.00
> 10,000 750 2.25
Total 1500
Find out the nos. from each stratum for a given sample size
of 50?
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UNIT 6 Sampling Procedures 155
Solution Notes
__________________
Disproportional stratified sampling
__________________
Stratum No No of Strata Stratum Sample Sampling
__________________
(i) elements/ variance standard size ratio
households deviation (n i ) (n i /N) __________________
0 - 5000 300 4.00 2.0 10 0.033 __________________
5001-10000 450 9.00 3.0 22 0.049
__________________
> 10,000 750 2.25 1.5 18 0.024
__________________
Total 1500 50
__________________
n1s1 + n2s2+ n3s3 = (300´2.0) + (450´3.0) + (750´1.5) __________________
__________________
= 600 + 1350 + 1125 = 3075
50
\ n1 = × 600
3075
50
n2 = × 1350 = 22
3075
50
n3 = × 1125 = 18
3075
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u Unbiasedness
u Consistency
u Efficiency
u Sufficiency
Example 6.3
Suppose, we have the following data on consumption of
sample households.
Income strata (pm) Sample mean No of observation
purchase per in each stratum
households (Rs)
1 – 5,000 1000 5000
5001 – 10,000 2500 1500
>10,000 3500 500
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UNIT 6 Sampling Procedures 157
Estimated Population Mean (Mean Monthly Expenditure) Notes
5000 __________________
‘X = Â Wi x i [I= 1, = 0.714] __________________
7000
__________________
1500 __________________
= .714(1000)+.214(2500)+.072(3500) [I= 2, ]= 0.214
7000 __________________
__________________
= 714 + 535 + 252
__________________
5000 __________________
= Rs 1501 [I= 3, ]= 0.072
7000 __________________
__________________
Estimation of Confidence Interval with Stratified Random Sampling
For finding the confidence interval, we need the following
data on sample: variance, sample size and weight for each
stratum.
2 2
Wi Si
S.E. = ∑ ni
= 8.9 = 2.98
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Cluster Sampling
In the probability sampling methods, we have seen that each
item in the sample is chosen one at a time from the complete
list of universe elements. However, it would be more
expedient to select entire groups or clusters at random. Let
us take, for example, a residential colony comprising 15
Blocks : A to O.
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UNIT 6 Sampling Procedures 159
cost of developing a frame as compared for simple random Notes
sampling or stratified random sampling. __________________
__________________
Use of Cluster Sampling in a National Survey
__________________
In a national survey, first we’ll select a few districts in the __________________
whole country, (these districts would act as cluster and then __________________
we would take stratified sampling/simple random sampling __________________
so that the survey can be completed with less cost and more __________________
accuracy.
__________________
Area sampling is a special case of cluster sampling. __________________
The question now is how to select a sample in cluster __________________
sampling?
1 40 40 15 One sample
2 22 62 55 One sample
3 15 77 Nil
4 33 110 95 One
7 21 236 – Nil
15
600 ¸ 15 = 40
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IV stage Households
Example 6.4
Suppose, we want to have 7500 households from all over
the country. In such a case:
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UNIT 6 Sampling Procedures 161
Stratified Sampling : Districts as a sampling unit, average Notes
rainfall in the districts as a criterion for stratification, 20 __________________
districts). __________________
__________________
Cluster Sampling: It may be used to select 10 villages in each
of the selected districts. __________________
__________________
Simple Random Sampling: It can be used for selection of 50
__________________
samples from each village, criterion of stratification being
__________________
the holding of land.
__________________
Non-probability Sampling Methods __________________
__________________
Though the probability samples give an unbiased sample and
the parameters used for the study can be tested for a given
confidence internally, still non-probability sampling
finds frequent use in many situations because of difficult
conditions such as frame (list of all sampling units), time
and cost involved. Major non-probability sampling methods
are discussed below:
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Example 6.5
We have population made up of rich, medium and poor
people in the ratio of 10% , 40%, 50%, respectively. Using
quota sampling, determine the number of representatives
from each category in a sample size of 100.
u It is easy to administer.
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UNIT 6 Sampling Procedures 163
However, since the method is not based on random selection, Notes
it is not possible to ascertain the accuracy being achieved. __________________
Moreover, the sample may not be a representative sample. __________________
Also, the quality may suffer if skilled interviewers are not __________________
employed. __________________
Thus one has to weigh the pros and cons of various sample
designs before selecting the best possible one.
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Problem 6.1
From a random sample of 49 colleges of Delhi, the average
expenditure and its standard deviation were found to be Rs
2000 and 450 respectively Construct at 95 percent confidence
interval average expenditure of a student in Delhi.
Solution
Here, we have n = 49
x = 2000
Sx = 450
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UNIT 6 Sampling Procedures 165
value of ‘z’ at 95% confidence level = 1.96 (from normal table) Notes
__________________
Sx
Now z = __________________
SE __________________
__________________
Sx 450
SE = = __________________
n 49
__________________
__________________
450
= __________________
7
__________________
ì = x ± Z.(SE) __________________
(450)
= 2000 ± 1.96
7
= 2000 ± 126
= Rs 1874 and 2126
Problem 6.2
What should be the sample size for the following case :
Solution
Here, e = / 40 /
200
So, 40 = 1.96
n
n =1.96 × 5 = 9.80
n = 96
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Solution
ó N −n
Standard error of Mean= .
n N −1
When s = std deviation of population = sx = 0.9
n = sample size
0.9 2500 − 81
óx =
81 2500 −1
0.9 2419
=
9 2499
0.9
= × .9679
9
= 0.1 ´ 0.9839
= .09839
Problem 6.4
For problem 6.3, find the value of mean number of accidents
for a 90% confidence interest.
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UNIT 6 Sampling Procedures 167
Find the standard error of mean if the population size is Notes
“not finite.” __________________
__________________
Solution
__________________
1. x + z (l x ) __________________
__________________
ó
= x +1.645 (z again 90% confidence interval = 1.645) __________________
n
__________________
0.9 __________________
= 4.1 + 1.645 .
81 __________________
.9 __________________
= 4.1 +1.645 ×
9
= 4.1 + 1.645 (0.1)
= 4.1 + .1645
= 4.264 & 3.9355
2. Standard error of mean, when population is “not finite”
ó 0.9 0.9 0.1
lx = = = =
n 81 9 3
Problems 6.5
The average production of Alloy Steel Plant, Durgapur, for
10 shifts taken at random is found to be 100 tones per shift
with sample standard deviation of 3.2 tones per shift.
Construct a 90% confidence interval around the estimate.
Solution
Here, x = 100 tones per shift
sx ¯ = 3.2 tones per shift
n = 10
As, n < 30, we shall apply ‘t’ test (and not z test),
with degrees of freedom = n – 1 = 10 – 1 = 9
Confidence interval for 90%
óx
= x ± t,
n
3.2∂
= 100 ± (2.353)
10
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Notes
3.2
__________________ = 100 ± (2.353).
3.16
__________________
= 100 + 2.383
__________________
= 97.617 & 102.383
__________________
__________________ Review Questions
__________________
1. Why is sampling used in marketing research?
__________________
__________________ 2. Define the following terms: population, sampling unit,
__________________ sampling procedure in a particular marketing research
__________________ study.
Unit 7 Notes
__________________
__________________
Data Collection Methods __________________
__________________
__________________
__________________
__________________
__________________
__________________
Objectives
__________________
After reading this unit you will be able to understand:
y Types of data.
Types of Data
Once the researcher has decided the ‘research design’, the
next job is of data collection. For data to be useful, our
observations need to be organised so that we can get some
patterns and come to logical conclusions.
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Notes Depending upon the sources utilised, whether the data has
__________________ come from actual observations or from records that are kept
for normal purposes, statistical data can be classified into
__________________
two categories. primary and secondary:
__________________
__________________ Primary Data
__________________
Primary data is one which is collected by the investigator
__________________
himself for the purpose of a specific inquiry or study. Such
__________________ data is original in character and is generated by surveys
__________________ conducted by individuals or research institutions.
__________________
__________________
Secondary Data
When an investigator uses the data which has already been
collected by others, such data is called secondary data. This
data is primary data for the agency that collects it and
becomes secondary data for someone else who uses this data
for his own purposes. The secondary data can be obtained
from journals, reports, government publications, publication
of professional and research organizations and so on. For
example, if a researcher desires to analyze the weather
conditions of different regions, he can get the required
information or data from the records of the meteorology
department.
Contd...
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UNIT 7 Data Collection Methods 171
8. Methods of data collection Given Not given Notes
__________________
9. Description of sample selection Given Not given
__________________
10. Time More Less
__________________
11. Cost Expensive Cheaper
__________________
12. Efforts More Less
__________________
13. Accuracy More accurate Less accurate __________________
u Observation
u Experimentation
u Questionnaire
u Interviewing
Observation Process
Information is collected by observing the process at work.
The following are a few examples:
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Experimentation Method
Many of the important decisions facing the marketing
executive cannot be settled by secondary research,
observation or by surveying the opinions of customers or
experts. Experimental method may be used in the following
situations:
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UNIT 7 Data Collection Methods 173
In a marketing experiment, the experimental units may be Notes
consumers, stores, sales territories, etc. __________________
__________________
Factors or marketing variables under the control of the
__________________
researcher which can be studied are price, packaging,
display, sales incentive plan, flavour, colour, shape, etc. __________________
__________________
Competitor’s actions, weather changes, in cooperative
__________________
dealers, etc. are environmental factors.
__________________
To study the effect of the marketing variables in the presence __________________
of environmental factors, a sufficiently large sample __________________
should be used. Or sometimes a control group is set up. __________________
A control group is a group equivalent to the experimental
group and differing only in not receiving any
treatment.
Questionnaire Technique
The survey method is the technique of gathering data by
asking questions from people who are thought to have the
desired information.
Advantages
One cannot know by observation, why a buyer makes
particular purchases or what is his opinion about a product.
Compared with either direct observation or experimentation,
surveys yield a broader range of information and are effective
for producing information on socio-economic characteristics,
attitudes, opinions, motives, etc., and to gather information
for planning product features, advertising copy, advertising
media, sales promotions, channels of distribution and other
marketing variables. Questioning is usually faster and
cheaper than observation.
Limitations
a. Unwillingness of respondents to provide information:
This requires salesmanship on the part of the
interviewer. The interviewer may assure that the
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UNIT 7 Data Collection Methods 175
group families, a more meaningful and significant Notes
interpretation can be made, even though the __________________
individual figure for each group may be slightly __________________
inflated. __________________
__________________
Interviewing
__________________
Interview on samples may be carried out either with a __________________
structured framework or with an undirected approach. The __________________
structured framework involves use of some pre-
__________________
determined questions. Such pre-determination enables the
__________________
researcher to standardize the responses with some fixed
__________________
alternatives. The samples here are merely directed to
choose answers/responses from different pre-determined
alternatives. Thus the researcher can or may quantify the
responses in line with his research object. Standardizing the
responses with pre-determination involves great amount of
risk unless the researcher acquaints himself with the
intricacies of the research matter in much greater details.
However, this approach is more scientific in nature for its
feasibility of quantifications with least trouble and
application of scientific techniques with more rationality.
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Structured Study
If a radio manufacturer wanted to find out how many people
own a radio, what type it is, when they bought it, the
respondents could be asked a set of questions in the following
given sequence.
Does your family own a radio? Yes/No
(If yes, ask)
What brand is it? Number____________
How many valves? Number____________
When did you purchase this radio? Date________________
This is an example of structured and non disguised study.
Non-structured Studies
More than anything else marketing men want to know why
people buy or don’t buy their products.
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UNIT 7 Data Collection Methods 177
Reasons for why can be classified as: Notes
__________________
1. Those reasons which are a part of the individual own
__________________
purposes or attitudes.
__________________
2. Those reasons which are the result of outside influences __________________
such as advertising. __________________
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UNIT 7 Data Collection Methods 179
Each of this method has its own advantages and Notes
disadvantages. Telephone interviewing stands out as the best __________________
method for gathering quickly needed information. It has the __________________
advantage over a mailed questionnaire as it permits the __________________
interviewer to talk to one or more persons and to clarify his __________________
questions, if they are not understood. The response rate for
__________________
telephone interviewing seems to be a little better than for
__________________
mailing questionnaires. The two main drawbacks of
__________________
telephone interviewing are that only people with telephones
can be interviewed and only short, not too personal __________________
Construction of a Questionnaire
When information is to be collected by asking questions to
people who may have the desired data, a standardized form
called questionnaire is prepared. The questionnaire has a
list of questions to be asked and spaces in which the
respondents record the answers. Each question is worded
exactly as it is to be asked. Also, the questions are listed in a
established sequence.
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UNIT 7 Data Collection Methods 181
Table 7.2 Notes
__________________
Age Sex Income Geographical Area City Size
__________________
Under 20 Male Under $3,000 North-east Over 1,000,00 __________________
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UNIT 7 Data Collection Methods 183
census data by checking the average rental level of the blocks Notes
in which respondents live. In other cases respondents can __________________
be asked how much rent should be for “houses in this block”. __________________
Such a question relates less directly to the respondent and, __________________
hence, is more apt to obtain an unbiased reply. __________________
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UNIT 7 Data Collection Methods 185
respondents on such bases as age, sex, income, education Notes
and nationality. Questions on these points form the __________________
classification section. The identification section __________________
identifies all parties involved. This includes the name __________________
and address of the respondent, and the names of such
__________________
individuals as the interviewer, editor, and card puncher.
These are used to permit checking for cheating among __________________
interviewers and to assign responsibility for the tasks __________________
done. __________________
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UNIT 7 Data Collection Methods 187
Before using secondary data, the researcher must ensure Notes
the reliability, suitability and adequacy of data. __________________
__________________
Secondary Data Internal
__________________
Internal records or published records are often capable of __________________
giving remarkably useful information. Sometimes, the __________________
information may be sufficient enough to give the desired __________________
result. However, this preliminary information shall most of __________________
the time help in developing the overall research strategy
__________________
and hence must be undertaken before any further research
__________________
is contemplated. For a manufacturing industry, for example,
__________________
the internal production and sales records, if designed and
maintained properly, can help in a big way even for
formulating the companies strategies.
Schedule Method
Schedule Defined
Schedule may be defined as a proforma that contains a set
of questions which are asked and filled by an interviewer
in a face to face situation with another. It is a standardized
device or tool of observation to collect the data in an
objective manner. In this method of data collection the
interviewer puts certain questions and the respondent
furnishes certain answers.
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Types of Schedules
These are as follows:
Observation Schedule
The schedules which are used for observation are known as
observation schedules. Using this schedule, observer records
the activities and responses of an individual respondent or
a group of respondents under specific conditions. The
main purpose of the observation schedule is to verify
information.
Rating Schedule
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UNIT 7 Data Collection Methods 189
term rating in these, schedules the value and the trend of Notes
Interview Schedule
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UNIT 7 Data Collection Methods 191
u Organizational difficulties: If the field of research Notes
is dispersed, it becomes difficult to organize it. __________________
Getting trained manpower, assigning them duties __________________
and then administrating the research is a very difficult __________________
task. __________________
__________________
Characteristics of a Good Schedule
__________________
The following are the essentials or characteristics of a good __________________
schedule:
__________________
u Accurate communication: It means that the questions __________________
given in the schedule should enable the respondent to __________________
understand the context in which they are asked.
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__________________ 2. Contact with Direct contact exists in this Direct contact may not exist
respondent method between respondent in this method. Response may be
__________________ and researcher. through post only.
__________________ 3. Coverage of area Limited geographical area. Useful for very largely dispersed
__________________ geographical area.
__________________ 4. Reliability of data High degree of reliability Less reliable as personal contact
collection. may not be there.
__________________
5. Types of questions Short and to the point answers Lengthy and elaborative
__________________ type questions which are of questions: answers required may
yes or no nature. be are detailed and lengthy.
10. Use in sampling Very successful method May cannot be used in sampling
method of research in sampling method of method of research.
research.
11. Instrument design Questionnaire are framed The questions are framed
keeping in view the difficulties keeping in view the educational
of tabulators and field workers. and economic standard of the
respondents.
12. Bias in the data There is great degree of bias in Probability of biasness in data
the collection of data. collection does not exist.
13. Cost and time Very large cost and time Less costly and less time
requirement is required. consuming.
14. Trained staff Trained and qualified staff. Not so trained staff is required.
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UNIT 7 Data Collection Methods 193
u The information collected through schedule should be Notes
amendable to statistical manipulation and tabulation. __________________
__________________
u The questions must be interrelated and such that cross
__________________
checking is feasible.
__________________
u Questions should be free from personal bias and should __________________
not hurt the feelings of the respondents.
__________________
u Questions should be standardized. __________________
__________________
u Precise terms should be used in framing the questions.
__________________
u They should be subject to pretesting. __________________
Organization of Schedule
1. Selection of respondents: Generally sampling method
is used for selection of respondents. The sample must
be representative and should contain the biographical
details and other relevant information about the
respondents.
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UNIT 7 Data Collection Methods 195
Why HLL is successful in repositioning their 'Lifebouy' Notes
brand and why Colgate not again is embedded in their __________________
marketing strategy? __________________
__________________
ii. Case study method research is done very intensively
focussing on some limited identified areas rather than __________________
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UNIT 7 Data Collection Methods 197
APPENDIX-1 Notes
__________________
INTRODUCTION AND GUIDELINES TO CASE STUDY
(with a sample Case Study and its solution) __________________
1. Read the case carefully and note down all the material facts and
identify the problem(s).
6. Select the best alternative and state the same as your decision.
Important Guidelines
– Questions which are given at the end of each case study suggest
the line of enquiry, hence study the questions carefully.
– Mere restating the facts of a case report without giving any meaning
should be avoided.
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The differing attitudes of the works manager and the finance manager
had led to conflicts on past occasion and Vinod had warned Rahul on
two occasions that if Rahul could not carry out his instructions he was
free to search for a job elsewhere. Rahul had argued his case with a
measure of success stating that his approach was proper and that in
financial matters policy guidelines had to be observed.
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UNIT 7 Data Collection Methods 199
“if you can’t work with me and obey my instructions, you are free to leave Notes
your job and go elsewhere.”
__________________
A few moments later Rahul was back in his office, tired and sullen. He __________________
called his secretary and said, “now, I have no option, please write down”.
He dictated his letter of resignation. __________________
Questions __________________
__________________
1. Discuss the leadership style used by Vinod. How effective is his
style? What changes would you advise? __________________
2. To what extent were Rahul’s needs being considered? What kind __________________
of organizational climate was being created? __________________
Read the case carefully and analyze the content, i.e., the situation and __________________
the personalities involved before answering the questions. The analysis
could be done mentally after jotting down the salient points arising in the __________________
case:
ii. Rahul expects a role whereby he can state his differences with his
superior. He is also capable of convincing his superior by
expressing his point of view successfully.
iv. The situation as revealed by the facts of the case is one of conflict
between the subordinate and superior mainly due to the leadership
style adopted by the superior.
vi. There is no effort on the part of Vinod to answer the doubts raised
by Rahul on the demerits of the proposed incentive scheme clearly
and cogently.
vii. When Rahul explains his reasons for the need to give some more
thought before introducing the change in the incentive scheme,
the reaction of Vinod is one of anger. Anger and admonition are
expressed by the superior openly in front of others, thus leaving
the subordinate humiliated and frustrated.
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Notes viii. The conflict leads to a decision by the subordinate to quit the
organization.
__________________
__________________ Leadership Style Used by Vinod
__________________ An autocratic leader believes that his leadership is based on the authority
conferred on him by his position and that his subordinates should follow
__________________
instructions unquestioningly.
__________________
Autocratic leadership leads to lack of confidence and insecurity in the
__________________ subordinate and stifles creativity and innovative ability of the subordinate.
The autocratic style stifles subordinate development and organizational
__________________
effectiveness.
Vinod’s style is not effective, viewed from the point of view of the
leadership that a works manager should provide. In fact it is Vinod’s style
that has led to a major conflicting situation within the organization between
him and the finance manager which has also attracted the attention of
other persons in the organization. This is bound to lead to a sense of fear
among all the persons in the organization and also frustration due to
lack of opportunity and fear on the part of subordinates to express a view
different from that of their superior.
The facts of the case reveal that Rahul was always cognizant of the
company’s policies and procedures. He had the ability to argue his view
point with a measure of success and where he differs from his superior,
he was willing to state the reasons about his differences. In this situation
Vinod should have adopted a participative style of leadership with trust
and confidence in Rahul so that communication with him is open and
teamwork is built up.
The facts of the case show that Rahul is willing to explain to his superior
his points of view on matters where he differs from his superior. He seeks
the freedom to discuss matters. His objective is to interact with his superior
without fear bearing in mind organizational goals.
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UNIT 7 Data Collection Methods 201
adverse impact on the feeling of pride that Rahul has. Pride is a powerful Notes
and valuable motivator and when this is stifled, the subordinate feels
__________________
frustrated.
__________________
Rahul expects a measure of involvement in decision making. Involvement
satisfies one’s ego and self-esteem. But in the present situation Rahul is __________________
denied the opportunity for involvement in decision-making.
__________________
Rahul's needs for motivation are not satisfied to any extent. This is the __________________
reason why he decides to leave the organization.
__________________
Vinod’s style will lead to a climate where the subordinate refuses to
__________________
participate in the decision-making process. Subordinates will in this
situation become ‘yes men’ and refuse to confidently accept authority __________________
delegated to them. In this environment, group effectiveness will be lost. In
the final analysis this adverse climate will not provide a conducive __________________
atmosphere for Vinod to be an effective leader who can function __________________
comfortably and achieve results competently. Vinod’s claim that he is a
‘result-oriented’ manager will be self-defeating if he does not direct the
organization to a participative style of leadership.
203
Unit 8 Notes
__________________
__________________
Data Analysis-Methods __________________
__________________
__________________
__________________
__________________
__________________
__________________
__________________
Objectives
After reading this unit you will be able to understand:
Presentation of Data
All business decisions are based upon evaluation of some
data. Availability of right information is very important for
making right decisions. Once the data begins to flow in,
attention turns to data analysis.
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Oral Presentation
Many companies require oral presentation of research
reports. Prior to the presentation follow this checklist:
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UNIT 8 Data Analysis-Methods 205
6. Face the audience directly at all times. Notes
__________________
7. Talk to the audience or decision makers, rather than
__________________
read from a script or a projection screen.
__________________
8. Use visual aids effectively – charts and tables should be __________________
simple and easy to read. __________________
Purpose of Editing
u To ensure accuracy,
u It is complete, and
Classification of Data
When the raw data has been collected and edited it should
be put into an ordered form (ascending or descending order)
so that it can be looked at more objectively. The next
important step towards processing the data is classification.
Classification means separating items according to similar
characteristics and grouping them into various classes. The
items in different classes will differ from each other on the
basis of some characteristics or attributes.
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u Mutually exclusive
Data Entry
Data entry convert information gathered by a researcher
through primary and secondary method to a medium for
viewing and manipulation.
Tabulation
Tabulation consists of counting the number of cases which
fall into the established categories. Before tabulation can
take place the plan of analysis must be thought through. A
tabulation plan which specifies the precise counts to be
obtained needs to be prepared. Tabulation may be
accomplished using manual or machine methods. Both
processes have unique advantages and disadvantages.
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UNIT 8 Data Analysis-Methods 207
of those summary statistical measures which typify the group Notes
such as arithmetic mean and percentages, and the use of __________________
those measures which indicate dispersion such as standard __________________
deviation. All these measures have their advantages and __________________
disadvantages and the analyst must be competent in __________________
selecting the most appropriate measure to use.
__________________
Further, since most marketing data are collected using a __________________
sample, the reliability of the summary estimates must be __________________
determined. Standard error and confidence limits are two __________________
terms and concepts which are fundamental to the general __________________
subject of reliability.
__________________
To determine the significance of any difference existing
between a sample estimate and a similar estimate from
another sample requires the use of tests of significance. Such
tests indicate the probability of the difference having a cure
due to random sampling variations. All these tests make use
of the standard error and confidence limit concepts.
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UNIT 8 Data Analysis-Methods 209
researcher, with some amount of inquisitiveness, goes into Notes
the depth of problem and tries to compare the per capita __________________
share of wages as percentage to the per capita share of NDP, __________________
the picture will be totally different. In fact, Indian workers, __________________
in this respect, are more privileged to gain a higher stake __________________
than workers in UK, USA and Japan. Readers here are
__________________
requested to refer the world development reports published
__________________
by the world bank.
__________________
Again, while using data from secondary sources, the __________________
researcher should thoroughly check the background of such __________________
data collection, its methodology and limitations, etc. The
__________________
methodology of data collection varies even for same data
provided by different governmental agencies in India. For
example, data related to labour matters as made available
in Indian labour year books and annual survey of industries
widely varies for obvious differences in methodology
followed in collection and compilation. Even the same source
may use different methodologies in different years of
publications. The census data is a glaring example in this
respect.
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UNIT 8 Data Analysis-Methods 211
With the help of frequency distribution, variables are Notes
facts. __________________
__________________
The frequency distributions may also be presented in the
__________________
form of graphs. Histogram, frequency polygon, smoothed
frequency curve are the commonly used curves.
Hypothesis Testing
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i. z – test
ii. t – test
iv. f – test
Null hypothesis, Ho : m = 50
Alternative H1 : m ≠ 50
hypothesis
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UNIT 8 Data Analysis-Methods 213
2. Establish a level of significance (prior to sampling): Notes
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1234567890
1234567890 12345678
1234567890
1234567890 12345678
1234567890 12345678
12345678
1234567890 12345678
1234567890
1234567890 12345678
1234567890 12345678
Figure 8.1
z = Observed value of the statistic (x) – Expected value (u)
Standard error of the estimate
Calculated value of z as given by the formula above,
= |Absolute value|
Now find out the critical (or tabulated) value of the statistic
(z or t or f, etc).
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UNIT 8 Data Analysis-Methods 215
ii. It is used to compare the mean of a sample with some Notes
hypothesized mean of the population. __________________
__________________
iii. It is also used to judge the significance of difference
__________________
between means of two independent samples.
__________________
iv. It can also be used for judging the significance of __________________
different between sample and population proportion or
__________________
proportions of two independent samples.
__________________
v. Finally this test can also be used for measuring the __________________
significance of medium, mode coefficient of correlation __________________
and other measures. __________________
Let us explain the usage of z-test and t-test within flow chart,
as Figure 8.2 given below:
Start
No
No
Use t-test in
computations
Stop
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Notes Questions
__________________
1. A company manufacturing automobile tyres finds that
__________________
tyre life is normally distributed with a mean of 40,000
__________________
kms and standard deviation of 3,000 kms. It is believed
__________________ that a change in the production process will result in a
__________________ better product and the company has developed a new
__________________ tyre. A sample of 64 new tyres has been selected. The
__________________ company has found that the mean life of these new tyres
__________________ is 41,200 kms. Can it be concluded that the new tyre is
significantly better than the old one?
__________________
__________________ In a problem of this type, we are interested in testing
whether or not there has been an increase in the mean
life of the tyre. In other words, we would like to test
whether the mean life of new tyres has increased beyond
40,000 kms.
H0 : m = 40,000 kms
H1 : m ≠ 40,000 kms
= 375
x−µ
z=
σx
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UNIT 8 Data Analysis-Methods 217
375 __________________
__________________
= 3.2 __________________
Solution
Z Calculated
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Second Method
What are the limits within which the average salary lies?
m = 18750
z = ± 1.96 at a = 0.05
x−µ
z=
σ/ n
x−µ
±1.96 =
2610 / 100
FG 2610 IJ
x = µ ± 1.96
H 10 K
Hence x1 = 18238
x2=19261
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UNIT 8 Data Analysis-Methods 219
Notes
__________________
__________________
__________________
__________________
__________________
__________________
__________________
18750 19240 19261 __________________
__________________
__________________
One Tailed Test
3. A manufacturer of light bulbs claims that a light bulb
lasts on an average 1600 hrs. We want to test his claim.
Here, we can reject the hypotheses if the average life of
bulb is much less but we cannot reject it if it is greater
than 1600 hrs. (Whatever big value it may be). A sample
of 100 light bulbs was taken at random and the average
life was computed to be 1570 hrs with a standard
deviation of 120 hrs. At a = 1%, test the validity of the
claim of the manufacturer.
Solution
As no of observations per sample is very large , we can take
s=s
Rejected
1570 1600
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Notes
s 120
__________________ z=- 2.33 and SE = =12
n 100
__________________
__________________ ' x -m 1570 - 1600 -30
__________________ z= = = =- 2.5|Z|= 2.5
σ/ n 12 12
__________________
__________________ As calculated value of |z| > Tabulated value of |z|
__________________ Hence, Ho stands rejected, i.e., management claim is not
__________________ valid.
__________________
4. The supporters of a party claim that their party has 60%
__________________
following in Delhi. To test this claim a city paper
undertakes a test sample of 400 persons on the Internet,
220 people support this claim. Test at 1% level of
significance whether the supporters claim is correct or
not.
Solution
It is a one tailed test
Rejected Region
z = 2.33
SE =
b
p1− p
=
g
pq
n n
0.6( 0.4)
= = 0.0245
400
Px - P 0.55 - 0.6
z= = =- 2.04
σ/ n .0245
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UNIT 8 Data Analysis-Methods 221
|z| tabulated = -2.33 at 1% level of significance. Notes
__________________
As, calculated < tabulated, hence null hypothesis is
accepted. __________________
__________________
\ Claim of the party is valid.
__________________
5. An educator claims that the average IQ of city college __________________
students is no more than 110. To test his claim, a sample __________________
of 150 students is taken and their average IQ was found
__________________
to be 111.2 with a standard deviation of 7.2 at a = 0.01.
__________________
Test his claim.
__________________
Solution __________________
s = 7.2
Rejected Region
m = 110
x -µ σ s 7.2
z= SE = = = = 0.59
SE n n 150
111.2 - 110
Z calculated = = 2.03
0.59
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22
Px = 0.11 (Sample proportion)
200
pq 0.08².92
SE = =
n 200
= 0.019
px - p 011
. - 0.08
z= = = 158
.
SE 0.019
Z calculated = 1.58
Ho stands accepted.
Examples of t-test
Tensile strength of carbon steel samples in kg weight as
recorded by a operator using UTS matrix is given below:
15, 20, 18, 16, 17, 21, 20, 19, 17, 15
At 5% level of significance find out whether the mean
breaking strength of the lot can be considered 18 kg weight.
Solution
Null hypothesis that the population mean is equal to
hypothesized mean of 18 kg.
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UNIT 8 Data Analysis-Methods 223
Weight can be written as under: Notes
__________________
Ho:m=mHo=18 kg.
__________________
H1:m#mHo __________________
__________________
Here sample size being small, we can use t-test assuming
normal distribution, population standard deviation being not __________________
. x=
∑x i
=
178
= 17.8kg
n 10
∑ dx i − xi
2
41.6
ii. σs = = = 2.15 kg
n−1 10 − 1
17.8 − 18
iii. t=
2.15 / 10
= –0.294
=(10–1)=9
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Solution
Considering null hypothesis that means of two populations
are not different, we can write as under:
Ho: m1=m2
Ho: m1#m2
x − x2 1 1
t= × +
b n − 1g σ s21 b
+ n2 − 1 g σ s22 n1 n 2
= 89–82
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UNIT 8 Data Analysis-Methods 225
a f a f×
Notes
7 6.5 + 4 5.6 1 1
+ __________________
7+4−2 7 4 __________________
=1.5973559 __________________
__________________
observed 't' value, i.e. 1.5973559 is less than table value of 't'
__________________
at 5 per cent level of significance with d.f. 9, which is 2.262.
__________________
Therefore difference in sales of two towns is significant at
5% level, hence our null hypothesis is rejected. __________________
__________________
Chi-square Test __________________
A chi square (x2) test can be used when the date satisfies __________________
four conditions:
ii. The two sets of data must be based on the same sample
size.
Application Areas
When tests are undertaken to examine whether the sample
data supports the hypothetical distribution, such problems
are called “test of goodness of fit.”, i.e.,
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X 2
=∑
dO − E i
i j
2
Ej
Where
Oi = Observed frequency
Ej = Expected frequency in the category.
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UNIT 8 Data Analysis-Methods 227
The company has been thinking of introducing a Notes
different flavour and has conducted a test market for __________________
two weeks in a certain territory. The results of the test __________________
market show that it has sold 250 large packs, 400 normal __________________
packs and 350 small packs of the newly developed ice __________________
cream.
__________________
The company is now interested in knowing whether the __________________
consumption pattern of new ice-cream is different from __________________
that of the earlier one. If so, it may have to change the __________________
percentage of three different packs for the new __________________
ice-cream.
__________________
Solution
Ho : Null hypothesis, “consumption is not different from
earlier one”.
Packing size Obs freq Expected freq O-E (O-E) 2 (O-E)2
E
1000 x2 140.83
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__________________
Solution
__________________
__________________
Ho: Distribution of daily reservation is uniform in winter
season.
__________________
__________________ Test the validity of the assumption.
__________________ Ho : p1 = p2 = p3 = .................. = p10
__________________
H1 : p1 # p2 # p3 #.................... # p10
800
= = 80
10
x 2
=∑
do − E i = a65 − 80f + a80 − 80f
i j
2
2 2
+−−−−−
a90 − 80f 2
Ej 80 80 80
= 19.72
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UNIT 8 Data Analysis-Methods 229
Calculation of c2 : Notes
__________________
Row Column Frequency O-E (O -E) 2 (O - E)2
__________________
O E E
__________________
1 1 50 40 10 100 2.50
__________________
1 2 50 60 -10 100 1.62
__________________
2 1 30 40 -10 100 2.50
2 2 70 60 10 100 1.67 __________________
Total 8.34 __________________
__________________
c2 = 8.34, calculated;
__________________
2´2 table D f = (2-1) (2-1) = 1 ´ 1 = 1 __________________
[ ac b
d ] R1
R2
®
®
C1 C2
X 2
=Σ
bobserved frequency − Expected frequencyg 2
Expected frequency
b
with deg rees of freedom = R − 1 C − 1 gb g
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b gb g
with d. f . = 2 − 1 2 − 1 = 1
__________________ R1 R2 C1 C2
__________________
__________________
The application of this formula is illustrated by an example
given below.
__________________
__________________ Example 8.1
In testing for any relationship between the opinion on
nuclear disarmament and the sex of the person, let us assume
that 100 persons including 60 males were asked about their
opinion and their responses were classified into two
categories, yes and no, as follows:
Male Female Total
Favour 35 25 60
Against 25 15 40
Total 60 40 100
Solution
i. Let null hypothesis, H0: there ‘s no difference of opinion
between male and female.
ii. Calculate c = 2
a f
N ad − bc − n / 2
2
R 1 R 2 C1 C 2
Here, N=100
a=35 R1= a+b=60
b=25 R2= c+d=40
c=25 C1= a+c=60
d=15 C2= b+d=40
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UNIT 8 Data Analysis-Methods 231
X2 =
100 n b35 × 15 − 25 × 25g − 100 2s2 Notes
__________________
60 × 40 × 60 × 40
l q2
__________________
100 525 − 625 − 50
= __________________
60 × 40 × 60 × 40
__________________
100 × 22500
= __________________
60 × 40 × 60 × 40
225 __________________
=
576 __________________
= 0.390 __________________
__________________
iii. Tabulated X2 at 5% level of significance __________________
= 30841
df = (r-1) (c-1)
= (2-1) (2-1)
=1
Method II
∑=
b fo − f e g2
fe
R t × Ct
i. Calculate frequencies by this formula; Gt
Ct = Total of column
Gt = Grand total
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__________________ Favour 35 25 60
Against 25 15 40
__________________
Total 60 40 100
__________________
__________________ 60 × 60
Expected frequency for cell (1,1) = = 36
__________________ 100
__________________
60 × 60
__________________ Expected frequency for cell (1,2)= = 24
100
__________________
__________________ 40 × 60
Expected frequency for cell (2,1) = = 24
__________________ 100
40 × 40
Expected frequency for cell (2,2) = = 16
100
iii. Calculate
X2 = ∑
bfo − fe g 2
fe
=
a35 − 36f + a25 − 24f + a25 − 24f + a15 − 16f
2 2 2 2
36 24 24 16
= 0.172
= 30841
df = (r-1) (c-1)
= (2-1) (2-1)
=1
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UNIT 8 Data Analysis-Methods 233
iv. As, X2 cal < X2 tabulated Notes
__________________
Null hypothesis stands accepted.
__________________
i.e., there is no difference of opinion between male and __________________
female. __________________
__________________
Measures of Associations
__________________
Research questions in business frequently revolve around __________________
the study of relationship between two or more variables. __________________
Various objectives may be served by such an analysis. The
__________________
strength, direction, shape and other features of the
__________________
relationship may be discovered. Or tactical and strategic
questions may be answered by predicting the values of one
variable from those of another.
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Notes The best line would be the one which passes through all the
__________________ points. But this is not possible in most situations. The next
__________________ step is to find the line which is closest to all the points, i.e.,
__________________ the distance between the line and points is minimum. As
__________________ some points shall be above the line and some below the line,
the distance above line ‘time’ and below ‘we’, therefore, we
__________________
take the square of donations (which will be time both cases)
__________________
and hence the line of best fit would be one which gives the
__________________
minimum differences
__________________
Y=a+bx
__________________
__________________ where Y = Dependent variables
X = Independent variables
Example 8.2
A researcher wants to find if there is a relationship between
the heights of sons and fathers. In other words, do tall father
have tall sons?
Solution
We can solve the problems under:
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UNIT 8 Data Analysis-Methods 235
b=
b g b gb g
n Σxy − Σx Σy
Notes
n e Σx j − b Σx g
__________________
2 2
__________________
= Y − bX __________________
__________________
__________________
X Y X2 XY Y2
__________________
63 66 3969 4158 4356
__________________
65 68 4225 4420 4629
__________________
66 65 4356 4290 4225
__________________
67 67 4489 4489 4489
__________________
67 69 4489 4623 4761
b g
6 26740 − 396 405 b g = 160440 − 16038
b=
b g
6 26740 − 396 396 b g 156912 − 156816
60
= = 0.625
96
`
a=
405
6
− 0.625 396 6 b g
= 67.5 − 41.25 = 26.25
Y =a+bx
= 26.25 + 0.625 x
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∑ b yg c∑ yh − bc∑ xyh
__________________ 2
−a
__________________ Syx =
n−2
__________________
__________________
__________________
a f
27355 − 26.25 405 − 0.625 26740 a f
4
__________________
__________________ 11.25
= 2.8125 = 1.678
4
=
a ∑ Y + b ∑ XY − b∑ Y g / n 2
∑ aY f − b ∑ Y g / n
2 2
2
r =
a f a f a f
26.25 405 + 625 26340 − 405 / 6
2
27355 − a 405f / 6
2
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UNIT 8 Data Analysis-Methods 237
= 0.357 ( 35.7% of Variation in y) Notes
__________________
and
__________________
2
r = r = 0.357 __________________
__________________
= 0.597
__________________
Rank Correlation __________________
__________________
For the two variables x and y whose distribution is unknown,
the degree of association between x and y is ascertained by __________________
6∑ d2
rs = 1 −
d
n n2 − 1 i
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These values are rather quick and easy to use and can be
applied to ordinal or nominal scale data.
Example 8.3
Suppose 10 salesman employed by a company were given a
month’s training. At the end of the specified training they
took a 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. The data are given in the table
below:
Salesman Rank obtd Rank on the Difference Difference
in training basis of sales squared
performance
# X Y d d2
1 4 5 -1 1
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UNIT 8 Data Analysis-Methods 239
2 6 8 -2 4 Notes
__________________
3 1 3 -2 4
__________________
4 3 1 +2 4
__________________
5 9 7 +2 4
__________________
6 7 6 +1 1
__________________
7 10 9 +1 1
__________________
8 2 2 0 0 __________________
9 8 10 -2 4 __________________
10 5 4 +1 1 __________________
__________________
rs = 1 −
6∑ d2
=
a f 1 − 144
1 − 6 24
nd n − 1i 10d10 − 1i
2 2
990
= 1–.145
= 0.855
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Notes To test the equality of variances in such cases too,we use ‘F’
__________________ test, the formula for which is:
__________________ σ 2si
F= =with d.f. (n1–1) for sample 1.
__________________ σ 2s 2
__________________ (n2 – 1) for sample 2.
__________________
__________________
σ 2s 1 = variance of sample 1
b g
__________________ 2
∑ X li − X 1
bn − 1g
__________________
calculated as
__________________ 1
__________________
We can also use n1 when sample size is 30 or more.
σ 2x 2 =variance of sample 2
b g
∑ X 2i − X 2
2
calculated as =
bn − 1g
2
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UNIT 8 Data Analysis-Methods 241
factors, i.e. which one of the factors is more effective in raising Notes
productivity (by studying their respective differences at __________________
various level of significances)or he may be interested in __________________
investigating the differences amongst various categories of __________________
same factor (for example various methods on incentive and __________________
gain sharing) which influence productivity. When we
__________________
investigate various categories of one factor only, we carry
__________________
out one-way ANOVA.
__________________
But when we are interested in investigating two factors at a __________________
time, we carry out two-way ANOVA. Likewise with the help __________________
of ANOVA, we can investigate, in general any number of
__________________
factors and also various categories within each factor to
study their respective influences. Thus we find following
steps are usually involved in analysis of variance:
The formula for computing ‘F’ value takes the following shape
MS between
F=
MS within
Now unless the above steps are explained with a practical
example, it would be difficult for readers without knowledge
of statistics to understand F test in its true spirit. Let us
first have an example of one-way ANOVA.
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Notes
Shop floor Productivity rate data for three methods of
__________________ incentives and gain sharing
__________________ X1 X2 X3
__________________ 1 5 4 4
__________________ 2 6 4 3
3 2 2 2
__________________
4 7 6 3
__________________
__________________
Solution
__________________
__________________ Step 1: Calculate mean of each of the three samples (i.e., x1,
__________________
x2 and x3, i.e. different methods of incentive gain sharing).
5+6+2+7
X1 = =5
4
4+3+2+3
X2 = =3
4
4+3+2+3
X3 = =3
4
X1 + X 2 + X 3
Step 2: Calculate mean of sample means i.e., X =
K
=
5+3+3
3
b
= 4 approximated g
Step 3: Calculate sum of squares (s.s.) for variance between
and within the samples.
ss between = n1 x 2 − x b g 2
b
+ n2 x2 − x g 2
d
+ n3 x − x i 2
b
ss within = ∑ x1i − x1 g 2
b
+ ∑ x 2i − x 2 g 2
b
+ ∑ x 3i − x 3 g 2
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UNIT 8 Data Analysis-Methods 243
is obtained by taking deviations of the values of all sample Notes
items from corresponding sample means and by squaring __________________
such deviations and then totalling the. For our illustration __________________
then __________________
{1b54444444
− 5g + b6 − 5g + b2 − 5g + b7 − 5g }
2 2
4244444444 3
2 2 __________________
b g 2
__________________
∑ x1 i − x1
__________________
{b g b
2
+ 4−4 + 4−4 + 2−4 + 6−4
1444444442444444443
g b
2
g b
2
g}
2
ss within = b
∑ x 2 i − x2 g 2
{b g2 b
+ 4−3 + 3−3 + 2−3 + 3−3
1444444442444444443
g2 b g2 b g2 }
b
∑ x 3 i − x3 g 2
= (0 + 1 + 9 + 4) + (0 + 0 + 4 + 4) + (1 + 0 + 1 + 0)
= 14 + 8 + 2
= 24
e
∑ X ij − X j 2
where
i = 1.23
j = 1.23
{b5 − 4g + b6 − 4 g + b2 − 4g + b7 − 4g } 2 2 2 2
+ {b 4 − 4 g + b 4 − 4 g + (2 − 4) + (6 − 4) }
2 2 2 2
+ {b 4 − 4 g + b 3 − 4 g + b 2 − 4 g + b 3 − 4 g }OP
2 2 2 2
Q
= nb1 + 4 + 4 + 9g + b0 + 0 + 4 + 4 g + (0 + 1 + 4 + 1s
= 18 + 8 + 6 = 32
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ss between
i. MS between =
(K − 1)
8
=4
2
ss within 24
ii. MS within = =
(n − k) 9
= 2.67
4.00
= = 1.5
2.67
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UNIT 8 Data Analysis-Methods 245
Step 7: Now we will have to analyze whether various Notes
methods of incentives and gain sharing differ significantly __________________
at 5% and 1% ‘F’ limits. For this, we need to compare __________________
observed ‘F’ ratio with ‘F’ table values. When observed ‘F’ __________________
value at given degrees of freedom is either equal to or less __________________
than the table value, difference is considered insignificant.
__________________
In reverse cases, i.e., when calculated 'F' value is higher than
__________________
table-F value, the difference is considered significant and
__________________
accordingly we draw our conclusion.
__________________
For example, our observed ‘F’ ratio at degrees of freedom __________________
(V1* & V2**, i.e., and 9) is 1.5. The table value of F at 5% level
__________________
with df 2 and 9 (v1 = 2, v2 = 9) is 4.26. Since the table value is
higher than the observed value, difference in rate of
productivity due to various methods of incentives and gain
sharing is considered insignificant. At 1% level with df 2
and 9, we get the table value of F as 8.02 and we draw the
same conclusion.
5% 1%
Within
(12–3) (n–k)
=9 = 24/9
= 2.67
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T2
where n denotes number of samples.
n
T2
∑χ 2
ij
−
n
Step 4: Compute total ss between columns and subtract the
result from the correction factor. Total ss is computed by
obtaining the square of each column total and subsequently
dividing such squared values by number of items and totalling
the result. Thus we denote step 4 by following formula
F Tj I
∑
H K−T 2
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UNIT 8 Data Analysis-Methods 247
Step 5: Compute total ss between rows and subtract the Notes
result from correction factor to obtain sum of squares of __________________
deviation for variance between rows. Total ss between rows __________________
is calculated by squaring each row total by dividing squared __________________
values by respective number of items in the row and finally __________________
by taking the total of the results. Thus we can denote step-5
__________________
by the following formula:
F Tj I
__________________
∑
H K−T , where i = 1,2,3 (individual row values) n j
2 __________________
__________________
nj n
__________________
denotes total number of items in the row.
__________________
Step 6: Compute sum of squares of deviations for residual
or error variance by subtracting the sum of ss between
columns and ss rows variance from total variance (s.s total).
ss between columns
=
(c − 1)
where (c–1)is the df
ss between rows
=
(r − 1)
where (r–1) is the d.f.
ssresidual
=
(c − 1)(r − 1)
where (c–1) (r–1) is the df.
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MS between rows
=
MS residual
Incentives and
gain sharing A B C
Level of
technology
W 4 3 3
X 5 3 2
Y 1 1 1
Z 6 5 2
Solution
1. Total values (T) of individual item = 36, n = 12
(T) 2 36 × 36
2. Correction factor = =
n 12
= 108
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UNIT 8 Data Analysis-Methods 249
3. Total ss = (16+9+9+25+9+4+1+1+1+36+25+4) Notes
__________________
= 140 – 108 =32
__________________
4. ss between columns: __________________
L 16 × 16 + 12 × 12 + 8 × 8 OP − 108
__________________
=M
N 4 4 Q
__________________
4 __________________
LM 10 × 10 + 10 × 10 + 3 × 3 + 13 × 13 OP − 108 __________________
=
N 3 3 3 3 Q __________________
LM + + + OP − 108
100 100 9 169
=
N3 3 3 3Q
= [33.33 + 33.33 + 3 + 56.33] – 108
= 126 – 108
6. ss residual:
= 32 – (8+18) = 6.
8 4
Between columns 8 (c–1) =4 =4 F (2, 6) F (2, 6)
2 1
=2 = 5.14 = 10.92
18 6
Between rows 18 (r–1) =6 =6 F (3, 6) F (3, 6)
3 1
=3 = 4.76 = 9.78
6
Residual 6 (c–1) x =1
6
(r–1)
=6
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UNIT 8 Data Analysis-Methods 251
iii. MS for interaction variation Notes
__________________
ss interaction variation
= __________________
(c - 1)(r - 1)
__________________
where (c–1) and (r–1) are the degrees of freedom.
__________________
iv. MS for within samples variation __________________
group. __________________
MS between rows
=
MS within samples
MS between rows
=
MS within samples
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A multivariate method
Yes No
Dependence Interdependence
methods methods
Several Yes No
One
Yes No Yes No
Multiple discriminant
analysis Canonical analysis
Figure 8.3
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UNIT 8 Data Analysis-Methods 253
Objectives of Multivariate Analysis Notes
__________________
The basic objectives of multivariate analysis are:
__________________
(i) To represent the collection of large set of data in a __________________
simplified way, by transforming large number of __________________
observations into smaller composite scores. __________________
__________________
(ii) To predict the variability of the dependent variable
__________________
based on its covariance with all the independent
__________________
variables.
__________________
(iii) 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.
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Factor Analysis
It is one of the more popular "analysis of interdependence"
techniques. In studies of interdependence, all the variables
are on an equal footing, and the analysis is concerned with
the whole set of relationships among the variables that
characterize the objects.
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UNIT 8 Data Analysis-Methods 255
Factor analysis is a procedure that takes a large number of Notes
variables or objects and searches out factors in common which __________________
account for their inter-correlation. For example, we can __________________
attribute the high association between grades in computer __________________
courses to the factor of intelligence or the association __________________
between certain attributes of coffee and factor of acidity.
__________________
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Note: Ten blank boxes separated each set of opposing statements. Subjects checked
the position that came closest to describing how they felt towards the product.
1 2 3 4 5 6 7 8 9 10 11 12 13 14
1. Pleasant flavor 1.00 .76 .81 .79 .83 .81 .74 .66 .65 .71 .76 .65 .71 .75
2. Sparkling taste 1.00 .78 .85 .77 .87 .83 .65 .70 .78 .85 .69 .74 .83
3. Mellow taste 1.00 .77 .85 .81 .77 .60 .65 .64 .75 .69 .69 .74
4. Expensive 1.00 .78 .87 .83 .76 .69 .81 .81 .64 .71 .87
taste
5. Comforting 1.00 .82 .77 .66 .60 .69 .82 .69 .69 .74
taste
6. Alive taste 1.00 .88 .70 .74 .80 .81 .65 .77 .87
7. Tastes like real 1.00 .67 .76 .75 .79 .62 .76 .87
coffee
Mean rating* 4.5 4.3 4.4 4.6 4.4 4.2 4.2 4.3 4.3 4.2 4.3 4.4 4.6 6.9
Standard deviation 1.6 1.3 1.4 1.4 1.3 1.4 1.6 1.5 1.5 1.5 1.4 1.2 1.4 2.7
* The 10 scale categories were assigned successive integers, beginning with 1 at the favourable side of the scale. Thus,
ratings could vary from 1 (very good) to 10 (very bad) on an attribute.
Source: Updated to 1995 from Bishwa Nath Mukherjee “A Factor Analysis of Some Qualitative Attributes of Coffee”,
Journal of Advertising Research, Vol. 5, p. 36, March ’95. Used with permission.
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UNIT 8 Data Analysis-Methods 257
Four factors underlying the 14 attributes. The elements in Notes
this matrix listed under the factors are called unrotated __________________
factor loadings. The loadings measure which variables are __________________
involved in which factor pattern, to what degree and in what __________________
direction. They can be interpreted as correlation coefficients. __________________
The square of the loading equals the proportion of the
__________________
variation that a variable has in common with an unrotated
__________________
factor.
__________________
Another way to conceptualize this relationship is to __________________
remember that a loading is a correlation coefficient between __________________
a variable and a factor. In essence, when we square a loading
__________________
we are calculating a coefficient of determination, h2, between
a variable and a factor. Thus, the squared loading represents
the amount of shared variation between a variable and a
factor.
sum of all h 2s
H= × 100
number of variables
11.61
= × 100
14
=83%
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I II III IV h2 A B C D A B C D
1 .86 -.01 -.20 .04 .78 .63 .38 .36 .34 .34 .01 .07 -.03
2 .91 -.01 -.01 -.09 .83 .48 .43 .53 .38 .14 .04 .23 .04
3 .86 .11 .28 .002 .83 .70 .26 .38 .36 .36 .13 -.003 -.01
4 .91 .15 -.001 -.10 .87 .46 .53 .54 .29 .16 -.05 .34 -.07
5 .87 .002 -.31 .10 .87 .74 .38 .30 .32 .47 .01 -.004 -.08
6 .93 .03 -.02 -.16 .90 .49 .43 .59 .35 .12 .07 .30 -.01
7 .90 -.02 .04 -.21 .86 .42 .38 .64 .37 .03 .11 .33 .04
8 .77 .36 .11 .16 .77 .31 .74 .27 .22 .24 -.40 .32 -.10
9 .79 -.28 .24 -.09 .76 .23 .24 .52 .62 .15 .11 .14 .37
10 .87 .25 .22 .17 .89 .28 .75 .33 .39 .14 .38 .31 .07
11 .89 .11 .05 .10 .82 .51 .55 .36 .36 .28 -.15 .17 -.01
12 .76 -.29 .04 .27 .74 .43 .28 .16 .67 .18 -.08 .18 .38
13 .84 -.27 .19 .12 .83 .33 .32 .36 .70 .01 -.03 -.001 .41
14 .90 .04 .08 -.23 .86 .38 .43 .65 .34 .002 .08 .39 .01
Percent common variance 90.0 4.1 3.3 2.6
Percent total variance 74.4 3.4 2.7 2.6
Source: Adapted and updated to 1995 from Bishwa Nath Mukherjee. “A Factor Analysis of Some Qualitative Attributes
of Coffee”, Journal of Advertising Research, Vol. 5, p. 37, March 1965. Used with permission.
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UNIT 8 Data Analysis-Methods 259
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I
C M
Number of vacation days
H
II
F L
N
O
G K D
III
I B A
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UNIT 8 Data Analysis-Methods 261
second cluster comprising six individuals D, G, I, K, N and Notes
O shows that they take vacations moderately and also spend __________________
moderately. Finally, the third cluster comprising three __________________
individuals A.B. and J shows that they have relatively few __________________
vacation days but spend substantially more on their __________________
vacations.
__________________
DF = V1 X1 + V2 X2 + ... Vm Xm
SS between
F= is maximised
SS within
Satisfied 400 20
Unsatisfied 30 50
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I II III IV V VI VII
Pain Relievers
Characteristics
Moov Iodex Zandu Amrutanjan Medicream Relaxyl Spray
11. Non Greasiness 4.0 1.0 1.5 1.5 4.0 5.0 5.0
12. Ease of Application 4.5 2.0 2.0 2.5 4.0 4.5 5.0
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UNIT 8 Data Analysis-Methods 263
Discriminant analysis technique can be used by the Notes
marketing manager who wants to have an idea about the __________________
market in terms of certain profile of pain relievers from a __________________
data about particular types of pain relievers. The method __________________
derives the relative weights to the different types of pain __________________
relievers needs. Thus, the discriminant functions show the
__________________
common patterns of pain relievers for various types of pain
__________________
relievers. In this example, the market is initially segmented
__________________
on the basis of product types and then we attempt to
discriminate each of the products on the basis of the specific __________________
4.0
3.0
2.0
1.0
0.0
J MP BA S H C R A G S NG EA C/W
4.0
3.0
2.0
1.0
0.0
J MP BA S H C R A G S NG EA C/W
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Notes 5.0
__________________
__________________ 4.0
__________________
__________________ 3.0
__________________
__________________ 2.0
__________________
__________________ 1.0
__________________
__________________ 0.0
J MP BA S H C R A G S NG EA C/W
5.0
4.0
3.0
2.0
1.0
0.0
J MP BA S H C R A G S NG EA C/W
J=Joint Pains MP=Muscular Pain BA=Backache S=Sciatica (Nerve)
C/W=Cooling/Warming
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UNIT 8 Data Analysis-Methods 265
Notes
5.0
__________________
__________________
4.0
__________________
__________________
3.0
__________________
__________________
2.0 __________________
__________________
1.0 __________________
__________________
0.0
J MP BA S H C R A G S NG EA C/W
6.0
5.0
4.0
3.0
2.0
1.0
0.0
J MP BA S H C R A G S NG EA C/W
J=Joint Pains MP=Muscular Pain BA=Backache S=Sciatica (Nerve)
C/W=Cooling/Warming
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Notes
__________________
__________________ 6.0
__________________ 5.0 ❤
__________________
4.0
__________________
__________________ 3.0
__________________ 2.0
__________________
1.0
__________________
__________________ 0.0
J MP BA S H C R A G S NG EA C/W
C/W=Cooling/Warming
5 MOOV
IODEX
4
ZANDU
AMRUTANJAN
3
MEDICREAM
2 RELAXYL
SPRAY
0
J MP BA S H C R A G S NG EA C/W
C/W=Cooling/Warming
Figure 8.13
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UNIT 8 Data Analysis-Methods 267
Conjoint Analysis Notes
__________________
Conjoint analysis is concerned with the measurement
__________________
a combination of two or more attributes that are important
__________________
in marketing decisions from customers point of view. In
__________________
this analysis, marketing research suggests a new combination
on the basis of existing attributes. For example: A bank __________________
Numerical Example
Consider a situation in which a manufacturer different
colours of paints is interested in measuring consumers’ trade
offs among the following attributes:
*Brand *Price
Alpha 50 per litre
Gamma 60 per lire
Beta 70 per litre
*Life *Colours
3 Years Pink
4 Years Green
5 Years
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Value of 3 years = 0
= 55.2
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UNIT 8 Data Analysis-Methods 269
of respondents (e.g. high versus low income respondents) Notes
differ in their separate attribute evaluations. __________________
__________________
In short, while the respondent evaluates complete bundles
__________________
of attributes, the technique solves for a set of part-worths–
one for each attribute level that are computed from the __________________
Contd...
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Notes
Card 10 Card 11 Card 12
__________________
Brand Alpha Brand Alpha Brand Alpha
__________________
Life 3 Years Life 4 Years Life 5 Years
__________________
__________________ Price Rs 70 Price Rs 50 Price Rs 60
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UNIT 8 Data Analysis-Methods 271
Notes
__________________
4 4 (3.5)
(3.3)
__________________
3 3
__________________
(2.4) (2.7) __________________
2 2
__________________
1 1
__________________
__________________
0 0
Alpha Gamma Beta 3 4 5
__________________
Brand Life __________________
4 4 __________________
3 3
2 2
(1.5) (1.2)
(1.7)
1 1
0 0
50 60 70 Pink Green
Price Colours
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UNIT 8 Data Analysis-Methods 273
heuristics. To guard oneself against this error, it may Notes
be advisable to use at least two different techniques. __________________
__________________
7. Finally, he should exploit the complementary
__________________
relationship inherent in the structural and functional
multivariate methods. In other words, he should __________________
Summary __________________
Review Questions
1. What do you mean by multivariate techniques? Explain
their significance in the context of research studies.
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Unit 9 Notes
__________________
__________________
Report Writing __________________
__________________
__________________
__________________
__________________
__________________
Objectives __________________
__________________
After reading this unit you will be able to:
Introduction
The formal marketing research proposal can be viewed as a
series of steps called the research process. To effectively
conduct a research process it is essential to anticipate all
the steps and recognize their interdependence. In research
proposal, the researcher should get the details of sponsor.
The research proposal could be framed up for one’s own
company as an aid to marketing decisions, for a client for
commercial purpose or by a student of marketing as an
academic exercise. In all the three cases, a researcher has to
obtain certain details, which would facilitate the researcher
to design the market research proposal. The researcher can
collect the following information from the sponsor:
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Example 9.1
Details from M/s Hero-Honda Ltd. for the market survey of
Hero-Honda splendor owners:
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UNIT 9 Report Writing 277
7. Who are the major known _________________ Notes
competitors at present in _________________ __________________
the market? _________________ __________________
__________________
8. What is main objective of _________________
this market survey? _________________ __________________
__________________
9. What coverage is desired _________________
__________________
for this market survey? _________________
__________________
10. What assistance will be provided _________________ __________________
by your company? _________________ __________________
Research Proposal
The research organization will require a team depending on
the scope of the research project. An organization set-up as
given below could normally be used.
Research Organization
Research Officers
Research Assistants
Field Staff
Figure 9.1
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Notes The following Table shows job description at each level could
__________________ be as under:
__________________
Table 9.1
__________________
Research Research Officer Research Assistants Field Staff
__________________ Project Incharge
Costing
The following headings are to be covered in market research
proposal:
6. Admn–charges
(Normally taken as 7.5% of 1-5) ___________________
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UNIT 9 Report Writing 279
meeting with the research firm and after a few changes, the Notes
proposal is approved. The following is the summary of the __________________
finalized proposal submitted to M/s Electrolux by Admar on __________________
“market mapping study of washing machine”. __________________
__________________
Rationale for the Study
__________________
The rationale is to have an in-depth understanding of the __________________
overall durable market as well as that of the washing machine __________________
market. This will aid in identifying opportunity segments
__________________
and the need gaps present in the market.
__________________
Based on this, they will be able to develop appropriate __________________
positioning strategy for Electrolux. Moreover, it will help in
providing specific inputs for development of an effective
communication strategy and plan.
Research Objectives
(a) To understand consumer psychographics with respect
to ownership and purchase of durables in general and
washing machines in specific.
Research Methodology
u The research design will be an exploratory-cum-
diagnostic qualitative research study.
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Research Centres
The centres, we have chosen by contrasting weather and
buying habits are two of the largest cosmopolitan cities and
the most potential markets in India.
Recent Buyers 15 15 30
Potential Buyers 15 15 30
Total 30 30 60
Sampling Procedures
u The procedure adopted for this project is purposive
sample method.
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UNIT 9 Report Writing 281
u The listing of respondents from both households and Notes
dealers outlets is spread across 6-8 areas within each __________________
city. __________________
Research Units
u Most of the houses surveyed were nuclear families living
in flats with 4-6 members.
Samples
u Life revolves around the house and family.
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Example 9.2
Research Project Synopsis
Consumer Behaviour of Titan Quartz Watch
1. Introduction
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UNIT 9 Report Writing 283
buyer or consumer but also users, i.e., customers. There are Notes
(b) To find out why do these consumers buy this brand and
not the competitors’ brands.
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(ii) Price
(iii) Distribution
(iv) Promotion
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UNIT 9 Report Writing 285
(a) Product: The marketer has the product that Notes
satisfies hitherto unfulfilled consumer __________________
needs, but he must decide the size, shape __________________
and attributes of the products. Titan __________________
must figure out conspicuously to have __________________
predominant quality over other products to
__________________
choose from. Does the product require any
__________________
special kind of packaging? Does it need any
__________________
guarantee or after sales services? The study
of consumer behaviour also guides the __________________
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UNIT 9 Report Writing 287
Types of Research Reports Notes
__________________
Depending on its intended audience, the research report may
__________________
by either technical or popular in orientation. While both
__________________
approaches describe the research study, its methodology,
findings, conclusions and recommendations, they can differ __________________
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Notes (charts, graphs, pictures, etc.) wherever they help clarify the
__________________ presentation of data.
__________________
Address the Information Needs: Remember the research
__________________
report is designed to communicate information to decision
__________________ makers. Make sure it clearly relates the research findings
__________________ to the objectives of management.
__________________
Be Concise, Yet Complete: Most managers will not
__________________
want to read about the details of a research report.
__________________
Knowing what to include and what to leave out is a
__________________ confusion.
__________________
Steps in Report Writing Process
Two main attitudes must be cultivated while preparing to
write a project report:
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Kiss Approach (Keep it Short and Simple) Notes
__________________
Your project work is going to be read and evaluated by
__________________
someone who:
__________________
u Maybe outside your organization. __________________
3. Use logic.
Tips to be followed.
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Notes
Check list
__________________
1. Check whether all essential information is included.
__________________
2. Check for proper structure. __________________
1. Preparation
5. Recording inferences
6. Writing recommendations
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Notes Preparation
__________________
Ready yourself mentally for the task of project writing as
__________________
explained in Fresh Mental Approach (FMA).
__________________
__________________
Be sure you accurately understand the purpose of your
report and its objectives as defined in the project synopsis
__________________
or terms of reference.
__________________
__________________
Put yourself in the position of the evaluator and ask yourself
these questions:
__________________
__________________ 1. What information, i.e., evidence and justification, would
__________________
I require to arrive at a logical inference and make the
right decision?
u Method of study.
By Observation
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By Reading Notes
__________________
Published work of other researchers on similar issues, factual
__________________
documentation produced within the organization (if the study
__________________
is about an organization), documentation of professional
bodies will often provide enough information relative to your __________________
u Focus on substance
u Be accurate.
By Discussion
By Surveys
By Enquiries
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Notes Explain
__________________
u Who you are?
__________________
__________________ u Purpose of your enquiry.
__________________
Be polite while asking for their help. Generally you will
__________________ receive a favourable response and these sources of
__________________ information can be most valuable. Give credit to such
__________________ informants and always thank them for their help.
__________________ Acknowledge their support in your report. Use your
__________________ knowledge and experience
__________________ By experiment
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The questionnaires, surveys and any other similar document Notes
should be explained properly. To ensure clarity to the __________________
readers adequate notations should be used for visuals, i.e., __________________
diagrams, maps, charts, photographs, statistical tables. __________________
text and are not going to be referred to several times, insert __________________
them in the appropriate position in the text. __________________
__________________
If the evaluator needs to refer to these illustrations several
__________________
times or if they form a supportive material it should be put
in the appendices section at the end of the report. __________________
__________________
At this stage, clear your mind and go through what you have
written. Put following questions to yourself:
1. Is it clear?
Recording Inferences
The conclusions or findings should flow from the outcome of
the investigations. These findings should lead to concrete
recommendations. While writing conclusions, the objectives
of the study should be kept in mind. This will facilitate in
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1.
2.
3.
4.
5.
6.
7.
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Report Presentation Notes
__________________
Stitch together all the different threads of information into
__________________
a coherent whole. Present the data in the form as suggested
__________________
in the chapter plan. Write the first draft. Discuss with your
guide and incorporate the suggested modifications. Revise __________________
u To add interest.
u To save time.
u To increase credibility.
u To add variety.
u To create impact.
u Charts
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Notes u Graphs
__________________
u Photographs
__________________
__________________ u Maps
__________________
How many graphics are to be used
__________________
__________________ Each graphic should be selected such that it serves to
__________________ communicate a specific point of the report. Random use of
__________________
graphics should be avoided. There is no set rule to determine
the number of graphics. However, plan what is required to
__________________
be communicated effectively through graphics and include
__________________
these graphics only.
1. Bar charts
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2. Line or area charts Notes
__________________
3. Pictogram
__________________
4. Pie charts __________________
__________________
5. Pictorial diagrams
__________________
General Points about Charts
__________________
Your illustrations should include
__________________
u Appropriate title and units __________________
u Scales or labels on axes __________________
u Key __________________
Bar charts
Bar charts are:
u Easy to draw
u Familiar to all
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u Using colours
u Adding depth
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UNIT 9 Report Writing 301
They also illustrate the total number people of in each Notes
category clearly. __________________
__________________
It is more logical to have ‘sexes’ on the horizontal axis for
__________________
a percentage stacked bar chart where the response of
sexes are being compared. Illustrates a percentage __________________
Make sure:
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Important Note
The sample reports given in the book, the main reports with
appended parts. These are only typical reports to support
the report writers in understanding the principles of report
writing. Each report will be unique depending upon the topic
of research.
Ensure the prefatory parts are enclosed in the following sequence after
the tittle page:
2. Synopsis
4. Letter of authorization
5. Letter of transmittal
6. Acknowledgements
Contd...
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Ensure the main report contains: Notes
__________________
1. Table of contents
__________________
2. Table of illustrations, glossary of terms, abbreviations, executive
__________________
summary, introduction, main report with chapter plan
recommendations and limitations. __________________
__________________
Ensure appended parts contains:
__________________
1. Bibliography
__________________
2. Appendix
__________________
3. Any other source of information. __________________
__________________
Final Remarks
As soon as your project has been typed, read it carefully and
correct any errors. Consider following questions about your
report.
1. Does it look a presentable document?
A Bit of Advice
Your guide is the person who is supposed to be with you
throughout the preparation of the report. Don’t hesitate to
bring your problems to his notice. Seek his advice. Be guided
by him. Respect him. Involve him.
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Source
Publisher;
Author; and
Current data
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Follow these guidelines when taking notes: Notes
Preparing Footnotes
Footnotes are single spaced and indented five spaces with
footnote typed slightly above the line. The names of authors
are given in normal order. Commas are used to separate main
items. Each footnote ends with a period.
Books
(One author)
1. Robert Cameron, Statistics for Business (New York:
Oxford Press, 1971), p. 35.
(Two authors)
2. M.K. Rampal and S.L. Gupta, Cases and Simulation in
Marketing (New Delhi: Galgotia Publishing Company,
1999), p. 101.
(Three authors)
3. Ruth Goldhammer, Arthur McGille, and Clyda Bailey,
Marketing Ideas for Today (Columbus: University
Printers, 1973), p. 44.
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Encyclopedias
(An article in reference work with author given)
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Bulletins and Pamphlets Notes
__________________
Guidelines for managers (Washington, D.C.: Associated
__________________
Managers of the United States, 1977), p. 17.
__________________
Highlights of the Annual Meeting of the Personnel __________________
Management Association, Personnel Management __________________
Association Publication No. A-22 (Washington, D.C.:
__________________
Washington University Press, 1970), p. 35.
__________________
Footnote Pointers __________________
__________________
Acknowledgments
__________________
u Footnotes are used to acknowledge and document
material taken from sources. Failure to give credit for
borrowed material is plagiarism.
Placement
Numbering
Printing
u Use ibid., (in the same place), to indicate that the source
is exactly the same one as in the immediately preceding
footnote.
Example 9.3
(First reference)
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Referencing Guidelines
Reference is required whenever you:
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The Reference Form Notes
__________________
Once again there are no common rules that all researchers
__________________
follow, but there are two key principles which every effective
__________________
form of citation follows:
__________________
1. Whatever system of citation you employ in a particular __________________
piece of work, it is crucial that you are consistent. Thus,
__________________
once you have decided on the set of conventions you are
__________________
going to follow, make sure that you follow it rigorously
__________________
and consistently throughout the piece of writing.
__________________
2. References should always be full enough to enable the __________________
reader to follow them up with a minimum of difficulty.
Thus, it is essential that every reference identifies the
particular page number(s). A reference that leaves the
reader to find his or her own way to the appropriate
part of the book is of very little value, unless of course
it is in fact the whole book to which you want to refer.
Books
(One author)
(Two authors)
(Three authors)
(An editor)
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Encyclopedias
(An article in 8 reference work with author given)
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Citing Electronic References Notes
__________________
This is a relatively new area and stilt in a state of flux
__________________
however, the basic components of the reference citation are:
__________________
u Author [surname comma first initials]. __________________
Abbreviations
cf. Compare. Also abbreviated cp.
ff. following
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Notes
management summary (d) the body of the report
__________________
(e) the conclusions and recommendations and (f) the
__________________
appendix.
__________________
4. The research data can be presented in tabular or __________________
graphic form. The three types of graphic forms are
__________________
(a) the pie chart (b) the bar chart and (c) the line
__________________
chart.
__________________
__________________
__________________
__________________