bachelor of management project contains information about brand product research n data analysis

1. ACKNOWLEDGEMENTS
As long journey of B.M.S.course draws to an end we are over whelmed with
feelings of gratitude for all those who have made it possible for us to reach this
stage. Some have helped us directly and some indirectly but one and all of them we
are of our success in completing this course.
There have been many speed breakers in route but all these people have helped
to make the road sooth, helped us to speed on towards the goal. It is faith that gives
us strength, it is faith that leads us onwards, it is faith that brings us success, and
we bow to the GOD who is the inner self and seek his blessings for completing this
course.
First and foremost our heartfelt thanks go to our guide Prof. R.R.shah, Shri
M.D. shah Mahila College, T.S. Bafna road, Malad west, Mumbai400064. For his
guidance in the subject and technical knowledge this task would have remained
incomplete.
For inspiration, constant motivation and unceasing support, positive thinking,
encouragement at all times, our special thanks goes to Smt.Bharati Akshay Naik,
director of Janseva Samiti, c/o Shri M. D. Shah Mahila college, Malad West
Mumbai 400064, who has been a pillar of strength through the ups and downs
throughout our life also who have been a source of inspiration to me my team and
to move further to meet my academic aims.
Our further thank to the following staff of Shri.M.D.Shah Mahila College, The
management of janseva samiti. Dr.Deepa Sharma, Principal the teaching, library,
administrative staff, support staff and students.
Similarly, we express our gratitude to the Management, coordinator Professor
R.R.SHAH SIR Smt. Bharti A Naik and all the staff of Shri m.d. shah mahila
college, malad west Mumbai 400064.
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2. INTRODUCTION
It is the emotional and psychological relationship you have with your customers. Strong brands
elicit thoughts, emotions, and sometimes physiological responses from customers. Examine the
following logos:
Simply looking at these logos elicits an emotional response. You had thoughts and feelings about
each company. In fact, when you looked at the A flac logo, you probably heard the duck in your
mind saying "Ah Flack." When starting your own business, one of your most important concerns
is to develop your company's face to the world. This is your brand. It is the company's name,
how that name is visually expressed through a logo, and how that name and logo extend
throughout an organization's communications. A brand is also how the company is perceived by
its customers — the associations and inherent value they place on your business.
A brand is also a kind of promise. It is a set of fundamental principles as understood by anyone
who comes into contact with a company. A brand is an organization's "reason for being"; it is
how that reason is expressed through the various communications to its key audiences, including
customers, shareholders, employees, and analysts. A brand should also represent the desired
attributes of a company's products, services, and initiatives. Apple's brand is a great example.
The Apple logo is clean, elegant, and easily implemented. Notice that the company has altered
the use of the apple logo from rainbow-striped to monochromatic. In this way they keep their
brand and signal in a new era for their expansive enterprise. Think about how you've seen the
brand in advertising, trade shows, packaging, product design, and so on. It's distinctive and it all
adds up to a particular promise. The Apple brand stands for quality of design and ease of use.
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3. Products and services have become so alike that they fail to distinguish themselves by their
quality, efficacy, reliability, assurance and care. Brands add emotion and trust to these products
and services, thus providing clues that simplify consumers’ choice.
(2) These added emotions and trust help create a relationship between brands and consumers,
which ensures consumers’ loyalty to the brands.
(3) Brands create aspiration lifestyles based on these consumer relationships. Associating oneself
with a brand transfers these lifestyles onto consumers.
(4) The branded lifestyles extol values over and above the brands’ product or service category
that allow the brands to be extended into other product and service categories. Thus, saving
companies, the trouble and costs of developing new brands while entering new lucrative markets.
(5) The combination of emotions, relationships, lifestyles and values allows brand owners to
charge a price premium for their products and services, which otherwise are barely
distinguishable from generics.
A brand is a product, service, or concept that is publicly distinguished from other products,
services, or concepts so that it can be easily communicated and usually marketed. A brand name
is the name of the distinctive product, service, or concept. Branding is the process of creating and
disseminating the brand name. Branding can be applied to the entire corporate identity as well as
to individual product and service names.
Brands are usually protected from use by others by securing a trademark or service mark from an
authorized agency, usually a government agency. Before applying for a trademark or service
mark, you need to establish that someone else hasn't already obtained one for your name. Brands
are often expressed in the form of logos, graphic representations of the brand. In computers, a
recent example of widespread brand application was the "Intel Inside" label provided to
manufacturers that use Intel's microchips .A company's brands and the public's awareness of
them is often used as a factor in evaluating a company. Corporations sometimes hire market
research firms to study public recognition of brand names as well as attitudes toward the brands.
Brand management is the application of marketing techniques to a specific product, product line,
or brand. It seeks to increase the product's perceived value to the customer and thereby increase
brand franchise and brand equity. Marketers see a brand as an implied promise that the level of
quality people have come to expect from a brand will continue with future purchases of the same
product. This may increase sales by making a comparison with competing products more
favorable. It may also enable the manufacturer to charge more for the product. The value of the
brand is determined by the amount of profit it generates for the manufacturer. This can result
from a combination of increased sales and increased price, and/or reduced COGS (cost of goods
sold), and/or reduced or more efficient marketing investment. All of these enhancements may
improve the profitability of a brand, and thus, "Brand Managers" often carry line-management
accountability for a brand's P&L (Profit and Loss) profitability, in contrast to marketing staff
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4. manager roles, which are allocated budgets from above, to manage and execute. In this regard,
Brand Management is often viewed in organizations as a broader and more strategic role than
Marketing alone.
Brand evaluation in the process of building and sustaining brands
A new role for brands—at the core of business
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5. The time has come to recognize a new role for brands—and the brand team—at the core of
business. As shown in the Brand Core Model below, brand building is moving to a crucial
position at the strategic center of business operations. At this vital confluence of company,
product and customer, the brand team provides the vision and the platforms to create new forms
of value, and to create and grow the customers that will drive the business forward.
Brand Core Model
Creating value at the core
The Brand Core Model illustrates how brands have moved from symbols and slogans at the
periphery of business to a value-creating activity at the heart of the enterprise. Brand practice
belongs at the company core because the brand logic of creating customers shapes the allied
fields of marketing, product development and customer development. From this central position,
the brand team emerges as a key player in determining how customers are created, and how
customers can be grown into new market opportunities.
Brand as the hub of a value network
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6. Within the brand-centric enterprise, the brand is the core of a value creation process and the hub
of a value network, feeding the innovation pipeline within the company, and between the
company and its customers. This new brand environment differs radically from that of traditional
brands. The brands produced are action-based. They’ve moved beyond the symbols, gestures and
identities of conventional brand campaigns. These new brands are digitally enabled platforms
and programs of value innovation. They pump value through the company, into the customer,
and back again, gaining power and reach via network effects. While old brands beg for attention,
these new brands join their customers as allies, directly adding pop and pulse to their lives.
Brands move from periphery to core
For most companies, this will be a dramatic new role for brands and the brand team. It marks the
progress of brands from a communication layer on the periphery of business to a value
innovation engine at the core.
In this process, brands are finally emerging as a strategic business practice in their own right.
They’re no longer a subset of marketing, advertising, design, packaging or communications.
Brand strategy can drive the business. Brand practice brings its own vision, platform logic,
customer creation process, methodology, tools and resources.
Brands reinvented
From their new locus, brands are situated to reinvent themselves, sloughing off antiquated, top-
down approaches for a new fusion of culture, technology and social software. They’re free to
morph to customer needs, large or small, from a panorama of the possible to pocket-size, a pin,
or a pixel. As we’ve said before: “Brands are tools that enable customers to interoperate with the
universe. The genius of brands is that they have no limits. The value of brands is that through
them, customers have no limits.”
A new role for the brand team
The Brand Core Model illustrates the central importance of the brand team. Through a
collaborative process, the brand team brings together company vision, business priorities,
platform logic and freewheeling creativity, all focused on creating and growing customers. The
role of the team is to guide and augment value innovation through the company, and then
through the customer, insuring that resulting customer growth can return new forms of value
back to the business.
Brand central: how it works
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7. The Brand Core Model illustrates how innovation and value are co-created by groups inside and
outside the company, mediated by the brand. The brand provides a collaborative framework for
value innovation, cutting across internal divisions and other boundaries, and speeding innovation
to market.
At the intersection of Company and Product, the brand shapes Marketing by defining the
platforms and programs that will create and grow the customers to grow the business. Brand
platforms and programs become the structure for marketing imagination.
At the intersection of Product and Customer, the brand shapes Innovation in three ways: 1) by
providing clear brand platform and customer platform direction to R&D, product development
and engineering; 2) by helping develop cost-effective, high-value prototypes, and 3) by enlisting
customer initiative and intelligence to augment the innovation process.
At the intersection of Customer And Company, the brand shapes Value by using collaborative
methods and value networks to establish an exclusive context of mutual (company/customer)
value. This helps synchronize brand platform deliverables with customer platform needs.
Because the brand is committed to creating customer freedoms, it does not lead to backwater
pools where innovation stagnates in an attempt to contain customers.
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8. Product
The most common brand is that associated with a tangible product, such as a car or drink. This
can be very specific or may indicate a range of products. In any case, there is always a unifying
element that is the 'brand' being referred to in the given case.
Individual product
Product brands can be very specific, indicating a single product, such as classic Coca-Cola. It can
also include particular physical forms, such as Coca-cola in a traditional bottle or a can.
Product range
Product brands can also be associated with a range, such as the Mercedes S-class cars or all
varieties of Colgate toothpaste.
Service
As companies move from manufacturing products to delivering complete solutions and
intangible services, the brand is about the 'service'.
Service brands are about what is done, when it is done, who does it, etc. It is much more variable
than products brands, where variation can be eliminated on the production line. Even in
companies such as McDonald's where the service has been standardized down to the eye contact
and smile, variation still occurs.
Consistency can be a problem in service: we expect some variation, and the same smile every
time can turn into an annoyance as we feel we are being manipulated. Service brands need a lot
more understanding than product brands.
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9. Organization
Organizations are brands, whether it is a company that delivers products and services or some
other group. Thus Greenpeace, Mercedes and the US Senate are all defined organizations and
each has qualities associated with them that constitute the brand.
In once sense, the brand of the organization is created as the sum of its products and services.
After all, this is all we can see and experience of the organization. Looking at it another way, the
flow also goes the other way: the intent of the managers of the organization permeates
downwards into the products and the services which project a common element of that intent.
Person
The person brand is focused on one or a few individuals, where the branding is associated with
personality.
Individual
A pure individual brand is based on one person, such as celebrity actor or singer. The brand can
be their natural person or a carefully crafted projection.
Politicians work had to project a brand that is attractive to their electorate (and also work hard to
keep their skeletons firmly in the cupboard). In a similar way, rock stars who want to appear cool
also are playing to a stereotype.
Group
Not much higher in detail than an individual is the brand of a group. In particular when this is a
small group and the individuals are known, the group brand and the individual brand overlap, for
example in the way that the brand of a pop group and the brand of its known members are
strongly connected.
Organizations can also be linked closely with the brand of an individual, for example Virgin is
closely linked with Richard Branson.
Event
Events have brands too, whether they are rock concerts, the Olympics, a space-rocket launch or a
town-hall dance.
Event brands are strongly connected with the experience of the people attending, for example
with musical pleasure or amazement at human feats.
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10. Product, service and other brands realize the power of event brands and seek to have their brands
associated with the event brands. Thus sponsorship of events is now big business as one brand
tries to get leverage from the essence of the event, such as excitement and danger of car racing.
Geography
Areas of the world also have essential qualities that are seen as characterizations, and hence also
have brand. These areas can range from countries to state to cities to streets and buildings.
Those who govern or represent these geographies will work hard to develop the brand. Cities, for
example, may have de-facto brands of being dangerous or safe, cultural or bland, which will be
used by potential tourists in their decisions to visit and by companies in their decisions on where
to set up places of employment.
Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand
name compared with those that would accrue if the same product did not have the brand name.
And, at the root of these marketing effects is consumers' knowledge. In other words, consumers'
knowledge about a brand makes manufacturers/advertisers respond differently or adopt
appropriately adept measures for the marketing of the brand The study of brand equity is
increasingly popular as some marketing researchers have concluded that brands are one of the
most valuable assets that a company has Brand equity is one of the factors which can increase
the financial value of a brand to the brand owner, although not the only one
Measurement
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11. There are many ways to measure a brand. Some measurements approaches are at the firm level,
some at the product level and still others are at the consumer level.
Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculation
is made regarding how much the brand is worth as an intangible asset. For example, if you were
to take the value of the firm, as derived by its market capitalization - and then subtract tangible
assets and "measurable" intangible assets- the residual would be the brand equity. One high
profile firm level approach is by the consulting firm Inter brand. To do its calculation, Inter
brand estimates brand value on the basis of projected profits discounted to a present value. The
discount rate is a subjective rate determined by Inter brand and Wall Street equity specialists and
reflects the risk profile, market leadership, stability and global reach of the brand
Product Level: The classic product level brand measurement example is to compare the price of
a no-name or private label product to an "equivalent" branded product. The difference in price,
assuming all things equal, is due to the brand. More recently a revenue premium approach has
been advocated
Consumer Level: This approach seeks to map the mind of the consumer to find out what
associations with the brand that the consumer has. This approach seeks to measure the awareness
(recall and recognition) and brand image (the overall associations that the brand has). Free
association tests and projective techniques are commonly used to uncover the tangible and
intangible attributes, attitudes, and intentions about a brand. Brands with high levels of awareness
and strong, favorable and unique associations are high equity brands
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12. Define the vision. Before moving ahead with the web site, create a brand positioning statement.
“This isn’t just, ‘What kind of web site do we want to be?’ This is ‘Who are we?’” says Harley
Manning, vice president at Forrester Research in Cambridge, Mass., a technology and market
research firm that advises on the effects technology has on consumers and businesses. Good
brand statements typically include the company’s mission, vision and values. “It’s succinct. It’s
typically something that will fit on a page easily,” he says.
Build a brand worth believing in. “Do you so believe in what you’re creating that you would
trademark it?” says Andrea Fitch, president and CEO of Red Carpet Creations, Inc., and national
president of the Society for Marketing Professional Services, both based out of Alexandria, Va.
Really consider what kind of brand could represent the business through the next decade. “Don’t
have a logo that in five years you’re going to be tired of and discard for another,” she says.
Remember, the web site is the brand. “A web site is not just a communication medium,”
Manning says. “It is actually a channel that must deliver on the promise.” Essentially, a web site
should embody the promise that it makes to customers. If, for instance, a business claims to be
innovative, the web site should look fresh and modern.
Create a cohesive experience between all mediums. Before she launched her company’s new
web site, Fitch made sure it would be an event that her potential clients would never forget. Red
Carpet Creations mailed 4,000 silver tubes containing scrolls that looked like rolled-up carpet.
Inside the scrolls was an announcement about the web site’s launch. Once online, the web site
was an extension of the invitations because it followed through on the themes of red carpet
imagery and references to visitors being treated like a VIP. Customers should easily be able to
recognize the company’s brand, whether it is print, online or some other form of media, Manning
says.
Don’t sacrifice creativity. Once the brand’s guidelines are established, creative choices must
bring those attributes to life, Manning says. Don’t let the company’s brand become so
dominating that there is no room for new thoughts and ideas. Brand should be the jumping-off
point for interesting ideas, not the place where every new idea dead-ends. Fitch stresses that a
sense of fun and whimsy will only enhance the likelihood that people will take an interest in the
web site.
Don’t communicate brand at the expense of delivering. While a web site can be a significant
tool for building brand awareness, clarity and functionality are paramount. “Just be careful not to
let the communication about your brand get in the way of delivering your message,” Manning
says. People should be able to understand how to navigate the site without knowing a thing about
the company’s catch phrases. “You can’t frustrate and annoy people into liking your brand,” he
says.
Listen to the customers: They determine a brand’s true value. Pay attention to customer
feedback about the site because, ultimately, it’s the customers’ opinion that counts. When it
comes to building a brand, a company can incorporate everything from signature colors to catch
phrases, but at the end of the day, it’s the consumer who decides what a brand is really worth.
“It’s not what you say [about] yourself, it’s what others say of you,” Fitch says.
IMPORTANCE OF BRAND
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13. Branding is a very powerful component in business. The brand must have a logo to make
branding easier and more possible. The consumers decide if they will buy a product or use a
service based on how they view the brand. The brand itself tells us or let us imagine how good or
bad the product is even if we never tasted it before! All that brand promotion and advertising
really do tell us how great a brand can be (like Nike). Once a customer likes your brand he/she
will definitely come back for repeated services or products. The qualities of the product or
services are ensured through the customers minds from the brand image. Brand is not only
convenient for businesses for repeated customer purchase but also easier for customers to filter
out the countless generic items. Brand gives consumers the reason to buy it and wastes less time
for consumer to choose. There are ways to improve a brand from advertising such as viral
campaign (more trustworthy), online ads, print ads and commercials. Another way is to improve
your product or services that will reinforce the brand. This is a good way to promote your brand
by always being in the cutting edge or “customer’s first image”. The qualities of your products
and services will reinforce the brand. Advertise as much as possible to spread that message and
make it into a cult brand. Branding doesn’t only benefit the business but you as well (yes I mean
it). The brand you choose reflects who you are and expresses yourself on what you like to do and
be able to join the community of like minded people. Branding is a win: win situation for both
the businesses and the loyal customers.
Advantages of Brands
A strong brand offers many advantages for marketers including:
• Brands provide multiple sensory stimuli to enhance customer recognition. For example, a
brand can be visually recognizable from its packaging, logo, shape, etc. It can also be
recognizable via sound, such as hearing the name on a radio advertisement or talking
with someone who mentions the product.
• Customers who are frequent and enthusiastic purchasers of a particular brand are likely to
become Brand Loyal. Cultivating brand loyalty among customers is the ultimate reward
for successful marketers since these customers are far less likely to be enticed to switch
to other brands compared to non-loyal customers.
• Well-developed and promoted brands make product positioning efforts more effective.
The result is that upon exposure to a brand (e.g., hearing it, seeing it) customers conjure
up mental images or feelings of the benefits they receive from using that brand. The
reverse is even better.
• This “benefit = brand” association provides a significant advantage for the brand that the
customer associates with the benefit sought.
• Firms that establish a successful brand can extend the brand by adding new products
under the same “family” brand. Such branding may allow companies to introduce new
products more easily since the brand is already recognized within the market.
Brand Limitations
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14. Ideally, a good brand serves to enhance a sound infrastructure with a solid reputation. Branding
is not a magic wand; it cannot provide a quick fix to a company’s problems or compensate for
any shortcomings. Branding will help very little if your internal operations and cultural
personality are opposite what you are trying to convey to the outside audience. Your internal
brand personality is just as important as the external message. The average customer is not going
to purchase a product or service without feeling comfortable with the company offering it.
Consumers have become alert to the “fluff” in advertising. They are also on the lookout for
companies that outright lie. When-not if – the public finds out it has been deceived, the company
in question will have to deal with a backlash-and the damage may very well be permanent. The
best way to maintain good public relations during the brand building process is to run an ethical
business. Public relations involve sharing information with the public, and that creates problems
when you have something to hide. So…make sure you’re not running your brand in a way that
requires you to keep secrets from any of your publics-customers, employees, shareholders, and
so on.
No matter how persuasive your ad campaign or how hard-working your sales staff may be,
neither can move an inferior product, coupled by a poor image, off the shelves. If a company
does not does not live up to consumer expectations, negative word-of-mouth will eventually be
its undoing. An eye-catching logo that represents an uninspired company or a substandard
product will be quickly sniffed out by savvy buyers. In this case, branding can work to drive
customers away.
Consumer brand preference
The essence of being in business by any business outfits is to produce for sales and profits. In
order to remain in business an organization must generate enough sales from its products to
cover operating costs and post reasonable profits. For many organizations, sales estimate is the
starting point in budgeting or profit planning. It is so because it must be determined, in most
cases, before production units could be arrived at while production units will in turn affect
material purchases. However, taking decision on sales is the most difficult tasks facing many
business executives. This is because it is difficult to predict, estimate or determine with accuracy,
potential customers’ demands as they are uncontrollable factors external to an organization.
Considering, therefore, the importance of sales on business survival and the connection between
customers and sales, it is expedient for organizations to engage in programmes that can influence
consumers’ decision to purchase its products. This is where advertising and brand management
are relevant. Advertising is a subset of promotion mix which is one of the 4ps in the marketing
mix i.e. product, price, place and promotion. As a promotional strategy, advertising serve as a
major tool in creating product awareness and condition the mind of a potential consumer to take
eventual purchase decision. Advertiser’s primary mission is to reach prospective customers and
influence their awareness, attitudes and buying behaviour. They spend a lot of money to keep
individuals (markets) interested in their products. To succeed, they need to understand what
makes potential customers behave the way they do. The advertisers goals is to get enough
relevant market data to develop accurate profiles of buyers-to-find the common group (and
symbols) for communications this involves the study of consumers behaviour: the mental and
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15. emotional processes and the physical activities of people who purchase and use goods and
services to satisfy particular needs and wants (Arens, 1996). Proctor et al. (1982) noted that the
principal aim of consumer behaviour analysis is to explain why consumers act in particular ways
under certain circumstances. It tries to determine the factors that influence consumer behaviour,
especially the economic, social and psychological aspects which can indicate the most favoured
marketing mix that management should select. Consumer behaviour analysis helps to determine
the direction that consumer behaviour is likely to make and to give preferred trends in product
development, attributes of the alternative communication method etc. consumer behaviours
analysis views the consumer as another variable in the marketing sequence, a variable that
cannot be controlled and that will interpreted the product or service not only in terms of the
physical characteristics, but in the context of this image according to the social and
psychological makeup of that individual consumer (or group of consumers). Economic theory
has sought to establish relationships between selling prices, sales achieved and consumer’s
income; similarly, advertising expenditure is frequently compared with sales. On other
occasion’s financial accounting principles maybe applied to analyses profit and losses.
Management ratios, net profit before tax, liquidity and solvency ratios can all be investigated.
Under the situations the importance of the consumer’s motivations, perceptions, attitudes and
beliefs are largely ignored. The consumer is assumed to be “rational” that is, to react in the
direction that would be suggested by economic theory and financial principles. However, it is
often apparent that consumer behaviours does not fall neatly into these expected patterns. It is for
these reasons that consumer behaviour analysis is conducted as yet another tool to assess the
complexities of marketing operations. The proliferation of assorted brands of food drinks in the
country has led to the cut-throat competition for increased market share being witnessed
currently among the operations in the food drink industry. Today, in Nigeria, there exists more
than twenty brands of food drink both local and foreign, out of which two, namely Cadbury
Nigeria Plc’s Bournvita and Nestle Nigeria Plc’sMilo keenly compete for market leadership.
There are quite a host of up-coming and low-price localized brands in small sachets with “Vita
“suffixes springing up in every nook and cranny of the country. Existing and popular brands,
therefore, face intense competition with the “affordable” localized” “Vitas” with high sugar
content targeted at the low-income groups. It is, therefore, imperative for the more established
brands like Bournvita to employ brilliant advertising and branding strategies to influence
consumers’ behaviours in order to continue to enjoy and maintain market leadership. Given the
competitive environment in the food and beverages sub sector of the economy and the high
potential of advertising in helping companies realize and retain their position this paper examine
the influence of advertising on a leading company in the food and beverages subsector as a case
study.
RURAL BRAND PREFERENCE DETERMINANTS IN
INDIA
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16. This study was done in two Indian states with the objective of exploring the dynamics of
branding in rural India. The study was done through sample survey using structured
questionnaire. The sample size for the study was 354. The measurement was done on brand
preference at overall level for three product families namely FMCG (Fast moving consumer
goods), consumer durables and agro inputs. Preference for various aspects of brands was also
measured. The objective was to establish the determinants of brand preference in rural India for
FMCG, durables and agro inputs and to find out whether any differential exists across product
families. The collected data was analyzed using regression analysis. Findings indicated that good
quality, value for money and sense of identity with brand were likely to act as key determinants
of a FMCG brand in rural India. Better finish and good looks, recommendations from retailers
were found be key determinants of a consumer durable brand in rural India. Only value for
money emerged as significant determinant for an agro input brand in rural India. The paper
discusses why a brand preference in rural India is limited to these attributes only and what rural
branding means in the current context.
Brand loyalty
Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise
continue using the brand and can be demonstrated by repeated buying of a product or service or
other positive behaviors such as word of mouth advocacy.
Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand
due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of
convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when
customers have a high relative attitude toward the brand which is then exhibited through
repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing
to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For
example, if Joe has brand loyalty to Company A he will purchase Company A's products even if
Company B's are cheaper and/or of a higher quality.
An example of a major brand loyalty program that extended for several years and spread
worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is
the dedication that many Mac users show to the Apple Company and its products.
From the point of view of many marketers, loyalty to the brand — in terms of consumer usage
— is a key factor:
Factors influencing brand loyalty
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17. It has been suggested that loyalty includes some degree of pre-dispositional commitment toward
a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several
distinct psychological processes and it entails multivariate measurements. Customers' perceived
value, brand trust, customers' satisfaction, repeat purchase behaviour, and commitment are found
to be the key influencing factors of brand loyalty. Commitment and repeated purchase behaviour
are considered as necessary conditions for brand loyalty followed by perceived value,
satisfaction, and brand trust. Fred Reichheld, one of the most influential writers on brand loyalty,
claimed that enhancing customer loyalty could have dramatic effects on profitability. Among the
benefits from brand loyalty — specifically, longer tenure or staying as a customer for longer —
was said to be lower sensitivity to price. This claim had not been empirically tested until
recently. Recent research found evidence that longer-term customers were indeed less sensitive
to price increases.
Industrial markets
In industrial markets, organizations regard the 'heavy users' as 'major accounts' to be handled by
senior sales personnel and even managers; whereas the 'light users' may be handled by the
general sales force or by a dealer.
Portfolios of brands
Andrew Ehrenberg, then of the London Business School said that consumers buy 'portfolios of
brands'. They switch regularly between brands, often because they simply want a change. Thus,
'brand penetration' or 'brand share' reflects only a statistical chance that the majority of customers
will buy that brand next time as part of a portfolio of brands they favour. It does not guarantee
that they will stay loyal.
Market inertia
One of the most prominent features of many markets is their overall stability — or inertia. Thus,
in their essential characteristics they change very slowly, often over decades — sometimes
centuries — rather than over months. This stability has two very important implications. The first
is that those who are clear brand leaders are especially well placed in relation to their competitors
and should want to further the inertia which lies behind that stable position. This, however, still
demands a continuing pattern of minor changes to keep up with the marginal changes in
consumer taste (which may be minor to the theorist but will still be crucial in terms of those
consumers' purchasing patterns as markets do not favour the over-complacent). These minor
investments are a small price to pay for the long term profits which brand leaders usually enjoy.
The second, and more important, is that someone who wishes to overturn this stability and
change the market (or significantly change one's position in it), massive investments must be
expected to be made in order to succeed. Even though stability is the natural state of markets,
sudden changes can still occur, and the environment must be constantly scanned for signs of
these.
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18. WHAT IS PRODUCT
In marketing, a product is anything that can be offered to a market that might satisfy a want or
need In retailing, products are called merchandise. In manufacturing, products are purchased as
raw materials and sold as finished goods. Commodities are usually raw materials such as metals
and agricultural products, but a commodity can also be anything widely available in the open
market. In project management, products are the formal definition of the project deliverables that
make up or contribute to delivering the objectives of the project. In general usage, product may
refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or
an industrial classification for the goods or services. A related concept is sub product, a
secondary but useful result of a production process.
Tangible and Intangible Products
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19. Products can be classified as tangible or intangible. A tangible product is any physical product
that can be touched like a computer, automobile, etc. An intangible product is a non-physical
product like an insurance policy.
In its online product catalog, retailer Sears, Roebuck and Company divides its products into
departments, and then presents products to shoppers according to (1) function or (2) brand. Each
product has a Sears’s item number and a manufacturer's model number. The departments and
product groupings that Sears’s uses are intended to help customers browse products by function
or brand within a traditional department store structure.
Sizes and colors
A catalog number, especially for clothing, may group sizes and colors. When ordering the
product, the customer specifies size, color and other variables. Example: you walk into a store
and see a group of shoes and in that group are sections of different colors of that type of shoe and
sizes for that shoe to satisfy your need.
Product line
A product line is "a group of products that are closely related, either because they function in a
similar manner, are sold to the same customer groups, are marketed through the same types of
outlets, or fall within given price ranges."
Many businesses offer a range of product lines which may be unique to a single organization or
may be common across the business's industry. In 2002 the US Census compiled revenue figures
for the finance and insurance industry by various product lines such as "accident, health and
medical insurance premiums" and "income from secured consumer loans". Within the insurance
industry, product lines are indicated by the type of risk coverage, such as auto insurance,
commercial insurance and life insurance.
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20. The Product Life Cycle
A new product progresses through a sequence of stages from introduction to growth, maturity,
and decline. This sequence is known as the product life cycle and is associated with changes in
the marketing situation, thus impacting the marketing strategy and the marketing mix.
The product revenue and profits can be plotted as a function of the life-cycle stages as shown in
the graph below:
Product Life Cycle Diagram
Introduction Stage
In the introduction stage, the firm seeks to build product awareness and develop a market for the
product. The impact on the marketing mix is as follows:
• Product branding and quality level is established and intellectual property protection
such as patents and trademarks are obtained.
• Pricing may be low penetration pricing to build market share rapidly, or high skim
pricing to recover development costs.
• Distribution is selective until consumers show acceptance of the product.
• Promotion is aimed at innovators and early adopters. Marketing communications seeks
to build product awareness and to educate potential consumers about the product.
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21. Growth Stage
In the growth stage, the firm seeks to build brand preference and increase market share.
• Product quality is maintained and additional features and support services may be added.
• Pricing is maintained as the firm enjoys increasing demand with little competition.
• Distribution channels are added as demand increases and customers accept the product.
• Promotion is aimed at a broader audience.
Maturity Stage
At maturity, the strong growth in sales diminishes. Competition may appear with similar
products. The primary objective at this point is to defend market share while maximizing profit.
• Product features may be enhanced to differentiate the product from that of competitors.
• Pricing may be lower because of the new competition.
• Distribution becomes more intensive and incentives may be offered to encourage
preference over competing products.
• Promotion emphasizes product differentiation.
Decline Stage
As sales decline, the firm has several options:
• Maintain the product, possibly rejuvenating it by adding new features and finding new
uses.
• Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche
segment.
• Discontinue the product, liquidating remaining inventory or selling it to another firm that
is willing to continue the product.
Product Positioning Strategies
Positioning is what the customer believes about your product’s value, features, and benefits; it is
a comparison to the other available alternatives offered by the competition. These beliefs tend to
based on customer experiences and evidence, rather than awareness created by advertising or
promotion.
21

22. Marketers manage product positioning by focusing their marketing activities on a positioning
strategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximize
the chosen positioning strategy.
Generally, there are six basic strategies for product positioning:
1. By attribute or benefit- This is the most frequently used positioning strategy. For a light beer,
it might be that it tastes great or that it is less filling. For toothpaste, it might be the mint taste or
tartar control.
2. By use or application- The users of Apple computers can design and use graphics more easily
than with Windows or UNIX. Apple positions its computers based on how the computer will be
used.
3. By user- Face book is a social networking site used exclusively by college students. Face book
is too cool for MySpace and serves a smaller, more sophisticated cohort. Only college students
may participate with their campus e-mail IDs.
4. By product or service class- Margarine competes as an alternative to butter. Margarine is
positioned as a lower cost and healthier alternative to butter, while butter provides better taste
and wholesome ingredients.
5. By competitor- BMW and Mercedes often compare themselves to each other segmenting the
market to just the crème de la crème of the automobile market. Ford and Chevy need not apply.
6. By price or quality- Tiffany and Costco both sell diamonds. Tiffany wants us to believe that
their diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and
that only a chump will pay Tiffany prices.
Positioning is what the customer believes and not what the provider wants them to believe.
Positioning can change due the counter measures taken at the competition. Managing your
product positioning requires that you know your customer and that you understand your
competition; generally, this is the job of market research not just what the entrepreneur thinks is
true.
PRODUCT DESIGN
Changes in design are largely dictated by whether they would improve the prospects of greater
sales, and this, over the accompanying costs. Changes in design are also subject to cultural
pressures. The more culture-bound the product is, for example food, the more adaptation is
necessary. Most products fall in between the spectrum of "standardization" to "adaptation"
extremes. The application the product is put to also affect the design. In the UK, railway engines
were designed from the outset to be sophisticated because of the degree of competition, but in
the US this was not the case. In order to burn the abundant wood and move the prairie debris,
large smoke stacks and cowcatchers were necessary. In agricultural implements a mechanized
cultivator may be a convenience item in a UK garden, but in India and Africa it may be essential
22

23. equipment. As stated earlier "perceptions" of the product's benefits may also dictate the design.
A refrigerator in Africa is a very necessary and functional item, kept in the kitchen or the bar. In
Mexico, the same item is a status symbol and, therefore, kept in the living room.
Factors encouraging standardization are:
i) economies of scale in production and marketing
ii) consumer mobility - the more consumers travel the more is the demand
iii) technology
iv) image, for example "Japanese", "made in".
The latter can be a factor both to aid or to hinder global marketing development. Nagashima1
(1977) found the "made in USA" image has lost ground to the "made in Japan" image. In some
cases "foreign made" gives advantage over domestic products. In Zimbabwe one sees many
advertisements for "imported", which gives the product, advertised a perceived advantage over
domestic products. Often a price premium is charged to reinforce the "imported means quality"
image. If the foreign source is negative in effect, attempts are made to disguise or hide the fact
through, say, packaging or labelling. Mexicans are loathing taking products from Brazil. By
putting a "made in elsewhere" label on the product this can be overcome, provided the products
are manufactured elsewhere even though its company maybe Brazilian.
Factors encouraging adaptation are:
i) Differing usage conditions. These may be due to climate, skills, level of literacy, culture or
physical conditions. Maize, for example, would never sell in Europe rolled and milled as in
Africa. It is only eaten whole, on or off the cob. In Zimbabwe, kapenta fish can be used as a
relish, but wilt always be eaten as a "starter" to a meal in the developed countries.
ii) General market factors - incomes, tastes etc. Canned asparagus may be very affordable in the
developed world, but may not sell well in the developing world.
iii) Government - taxation, import quotas, non tariff barriers, labelling, health requirements. Non
tariff barriers are an attempt, despite their supposed impartiality, at restricting or eliminating
competition. A good example of this is the Florida tomato growers, cited earlier, who
successfully got the US Department of Agriculture to issue regulations establishing a minimum
size of tomatoes marketed in the United States. The effect of this was to eliminate the Mexican
tomato industry which grew a tomato that fell under the minimum size specified. Some non-tariff
barriers may be legitimate attempts to protect the consumer, for example the ever stricter
restrictions on horticultural produce insecticides and pesticides use may cause African growers a
headache, but they are deemed to be for the public good.
iv) History. Sometimes, as a result of colonialism, production facilities have been established
overseas. Eastern and Southern Africa is littered with examples. In Kenya, the tea industry is a
colonial legacy, as is the sugar industry of Zimbabwe and the coffee industry of Malawi. These
facilities have long been adapted to local conditions.
23

24. v) Financial considerations. In order to maximize sales or profits the organization may have no
choice but to adapt its products to local conditions.
vi) Pressure. Sometimes, as in the case of the EU, suppliers are forced to adapt to the rules and
regulations imposed on them if they wish to enter into the market.
PRODUCT DECSION
In decisions on producing or providing products and services in the international market it is
essential that the production of the product or service is well planned and coordinated, both
within and with other functional area of the firm, particularly marketing. For example, in
horticulture, it is essential that any supplier or any of his "out grower" (sub-contractor) can
supply what he says he can. This is especially vital when contracts for supply are finalized, as
failure to supply could incur large penalties. The main elements to consider are the production
process itself, specifications, culture, the physical product, packaging, labelling, branding,
warranty and service.
Production process
The key question is, can we ensure continuity of supply? In manufactured products this may
include decisions on the type of manufacturing process - artisanal, job, batch, and flow line or
24

25. group technology. However in many agricultural commodities factors like seasonality,
perishability and supply and demand have to be taken into consideration. A checklist of
questions on product requirements for horticultural products as an example Quantity and quality
of horticultural crops are affected by a number of things. These include input supplies (or lack of
them), finance and credit availability, variety (choice), sowing dates, product range and
investment advice. Many of these items will be catered for in the contract of supply.
Specification
Specification is very important in agricultural products. Some markets will not take produce
unless it is within their specification. Specifications are often set by the customer, but agents,
standard authorities (like the EU or ITC Geneva) and trade associations can be useful sources.
Quality requirements often vary considerably. In the Middle East, red apples are preferred over
green apples. In one example French red apples, well boxed, are sold at 55 dinars per box, whilst
not so attractive Iranian greens are sold for 28 dinars per box. In export the quality standards are
set by the importer. In Africa, Maritim (1991), found, generally, that there are no consistent
standards for product quality and grading, making it difficult to do international trade regionally.
Culture
Product packaging, labeling, physical characteristics and marketing have to adapt to the cultural
requirements when necessary. Religion, values, aesthetics, language and material culture all
affect production decisions. Effects of culture on production decisions have been dealt with
already in chapter three.
Physical product
The physical product is made up of a variety of elements. These elements include the physical
product and the subjective image of the product. Consumers are looking for benefits and these
must be conveyed in the total product package. Physical characteristics include range, shape,
size, color, quality, quantity and compatibility. Subjective attributes are determined by
advertising, self image, labelling and packaging. In manufacturing or selling produce,
cognizance has to be taken of cost and country legal requirements.
Again a number of these characteristics is governed by the customer or agent. For example, in
beef products sold to the EU there are very strict quality requirements to be observed. In fish
products, the Japanese demand more "exotic" types than, say, would be sold in the UK. None of
the dried fish products produced by the Zambians on Lake Kariba, and sold into the Lusaka
market, would ever pass the hygiene laws if sold internationally. In sophisticated markets like
seeds, the variety and range is so large that constant watch has to be kept on the new strains and
varieties in order to be competitive.
Packaging
Packaging serves many purposes. It protects the product from damage which could be incurred
in handling and transportation and also has a promotional aspect. It can be very expensive. Size,
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26. unit type, weight and volume are very important in packaging. For aircraft cargo the package
needs to be light but strong, for sea cargo containers are often the best form. The customer may
also decide the best form of packaging. In horticultural produce, the developed countries often
demand blister packs for mange touts, beans, strawberries and so on, whilst for products like
pineapples a sea container may suffice. Costs of packaging have always to be weighed against
the advantage gained by it.
Increasingly, environmental aspects are coming into play. Packaging which is non-degradable -
plastic, for example - is less in demanded. Bio-degradable, recyclable, reusable packaging is now
the order of the day. This can be both expensive and demanding for many developing countries.
Labelling
Labelling not only serves to express the contents of the product, but may be promotional
(symbols for example Cashel Valley Zimbabwe; HJ Heinz, Africafe, Tanzania). The EU is now
putting very stringent regulations in force on labelling, even to the degree that the pesticides and
insecticides used on horticultural produce have to be listed. This could be very demanding for
producers, especially small scale, ones where production techniques may not be standardized.
Government labelling regulations vary from country to country. Bar codes are not widespread in
Africa, but do assist in stock control. Labels may have to be multilingual, especially if the
product is a world brand. Translation could be a problem with many words being translated with
difficulty. Again labelling is expensive, and in promotion terms non-standard labels are more
expensive than standard ones. Requirements for crate labelling, etc. for international
transportation will be dealt with later under documentation.
Product Strategy
Product Strategy is perhaps the most important function of a company. It must take in account
the capabilities in terms of engineering, of production, of distribution (sales) existing in the
company or of time to acquire them (by hiring or by mergers). It must evaluate the customer’s
expectations at the time of delivery. It must guest mate the competition (including new entrants)
probable moves to enter the same market.
Product strategy by Bull appeared sometimes erratic and not coordinated, especially during the
periods where product lines run independently. However, it has been dominated by very old
trends rooted in the Sales Network during the 1950s defining Bull's market around the business
applications, and fighting against the sole IBM as competitor.
So, the company adopted its version of IBM's business model, following IBM with a variable
delay, in the domain of products, price and market following. Sometimes new opportunities
appeared and some innovative products were developed, (e.g. time-sharing in GE time, smart
card applications) but they faded as marginalized by the Sales Network. In fact, the Sales
Network was not conscious of the pressure it exerted on Planning and Engineering. Often, it
focalized on IBM's short term moves, ignoring the reasons for those moves (sometimes due to
legal constraints, sometimes by internal fighting inside IBM, other times because other
competitors move).
26

27. While IBM's influence on Bull was extremely important, the reverse existed sometimes (1).
Dispute between IBM World Trade and IBM US domestic may have been fueled by some worry
of IBM European salesmen about some Bull's (and GE's or Honeywell's) products.
The capability of Bull to match IBM's offer on the market never existed. Before the GE's merger,
Bull did not address the US market directly and by consequence excluded itself from the market
segments needing the quantities only addressed by a worldwide market (such as large scientific
computers). Another market that was ignored (knowledgeably) early was the small scientific
market; its margins did not match the corporate model.
Bull never did a comparable investment to IBM's in the technology area. Each time it (or its
American associates) tries a significant move, the success did not reward it. The reasons of the
failure were multiple: overestimation of the return on investment, lack of a long term perspective
(that existed in architecture and software), size of market. Some more specific problems were
due to the lack of experience in fundamental physics, themselves related to the isolation of the
engineers.
For historical reasons related to the acquisition of a park of customers and for "political" reasons,
Bull did not succeed to shut down a product line before the 1990s. Its resource limitations did not
allow to embark in the simultaneous developments of more than one or a couple of compatible
processors at the same time. Product Planning had to prepare several product line plans and to
invent models within each product line to match the competition prices and performances.
Models were developed from a single engineering design with the same manufacturing cost by
slowing down the processor clock or adding dummy cycles and/or by reducing the
"connectivity" of the system.
When the performances exceeded IBM's target, the system was not sold at full speed to avoid the
risk of undercutting IBM future announcements' price and keeping some reserve power to react
against a competition "mid-life kicker".
New higher models were also created by unleashing the design constraints after one year. New
lower models were created by slowing down a bit already shipped processors.
This strategy worked well as far as the manufacturer controlled completely the customer
configuration by leasing the systems. The first evolution of the model was the advent of clone’s
manufacturers. They obviously attacked IBM's market but GE, Honeywell and Bull strategists
ordered to take all measures, sometimes detrimental to product and service costs, to
escape cloners. The architecture or the assembler of the machines remained confidential, source
and object code of programs was secrete, network architecture was not available even to
peripheral suppliers, peripheral interfaces were modified and the differences kept in vaults... Bull
argued to the persons objecting the strategy (suppliers, other manufacturers, customers ) that it
would respect the "de jure" standards (such as ISO's or ANSI's) but that it did not have to follow
the "de facto" standards (such as IBM's). That changed in the 1980s when "Open Systems"
became Bull's religion.
Another IBM decision impacted the business model, it was unbundling. While the IBM pricing
was more or less related to development and manufacturing costs, adopting the same price for
Bull's items where software, for instance, was reproduced in far smaller number of copies, lead
27

28. to a disconnect between decisions to produce and customers acceptation. Especially in the late
1970s and the 1980s, Bull embarked in many developments with a very low production rate, but
they were asked to match the IBM's catalog. Later, in the late 1980s, the competition with open
systems, lead to some re-bundling of the offer (the word was "packaging") where for instance
associate a purchased data base system with a memory bank and even an additional processor.
Research can be defined as the search for knowledge or any systematic investigation to establish
facts. The primary purpose for applied research (as opposed to basic research)
is discovering, interpreting, and the development of methods and systems for the advancement of
human knowledge on a wide variety of scientific matters of our world and the universe. Research
can use the scientific method, but need not do so.
Scientific research relies on the application of the scientific method, a harnessing of curiosity.
This research provides scientific information and theories for the explanation of the nature and
the properties of the world around us. It makes practical applications possible. Scientific research
is funded by public authorities, by charitable organizations and by private groups, including
many companies. Scientific research can be subdivided into different classifications according to
their academic and application disciplines.
28

29. WHAT IS RESEARCH?
Research is an often-misused term, its usage in everyday language very different from the strict
scientific meaning. In the field of science, it is important to move away from the looser meaning
and use it only in its proper context. Scientific research adheres to a set of strict protocols and
long established structures. Often, we will talk about conducting internet research or say that we
are researching in the library. In everyday language, it is perfectly correct grammatically, but
in science, it gives a misleading impression. The correct and most common term used in science
is that we are conducting a literature review.
Research must be systematic and follow a series of steps and a rigid standard protocol. These
rules are broadly similar but may vary slightly between the different fields of science.
Scientific research must be organized and undergo planning, including performing literature
reviews of past research and evaluating what questions need to be answered.
29

30. Any type of ‘real’ research, whether scientific, economic or historical, requires some kind of
interpretation and an opinion from the researcher. This opinion is the underlying principle, or
question, that establishes the nature and type of experiment.
The scientific definition of research generally states that a variable must be manipulated,
although case studies and purely observational science do not always comply with this norm.
Types of Research
There are many different types of research methods, also called research designs that are used by
psychologists in trying to find things out about behavior. This is just a quick aid to the
identification of research designs. In real life, some studies may combine the features of several
research designs or may contain elements not included below.
Experiment: Participants randomly assigned to different groups being studied. Groups are
treated differently in one or a few very specific ways--the independent variable. Behavior
resulting from this treatment difference is measured--the dependent variable. If one group gets a
specific treatment and ones does not, usually the treated group is called the experimental group
and other groups are called control groups. Conditions other than the independent variable are
held as constant as possible for all groups. These constant conditions are called controls. If
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31. participants are their own control group, that is, they receive both research treatments; the design
is called a within-subjects experiment. Conclusions can be taken to indicate a cause and effect
relationship between the independent and dependent variables. Because of this, the experiment
is in a class by itself and it is a very special type of research procedure.
Quasi-experiment: Participants achieve membership in different groups as a result of
characteristics other than random assignment, for example: gender, age, socioeconomic status,
athletic ability, or ethnic identification. A link may be found between one or more of these
characteristics and some outcome variables, but cause and effect relationships are not clearly
identified. Without random assignment to groups, a researcher cannot clearly demonstrate cause.
Correlation study: In the most general sense, a correlation study investigates the relationship
between two variables. Usually the data are reported as correlation coefficients. Strength and
direction (positive or negative) of relationships can be demonstrated by correlation studies but
causal links remain an open question.
Longitudinal study: A longitudinal study follows a group composed of the same people across
a period of the life span. The behavior of these individuals is observed and/or measured at
several intervals over time in an attempt to study the changes in their behavior. Longitudinal
studies may cover a short time, such as a few weeks, or a long time, such as the entire life span.
Longitudinal studies may additionally employ other methods, such as quasi-experimental or co
relational approaches, but the defining characteristic is that the same people are studied
repeatedly across time.
Cross sectional study: A cross sectional study usually examines groups of different people who
belong to different age groups as a means of studying behavior development across part or all of
the life span. These studies can usually be done more easily and quickly than longitudinal studies
but the resulting data may be of lower quality. More rarely, the term cross sectional may be used
to describe studies which divide and examine segments of society based on variables other than
age, such as income, educational level or family size.
Survey: A survey is a structured list of questions presented to people. Surveys may be written
or oral, face to face or over the phone. It is possible to cheaply survey large numbers of people,
but the data quality may be lower than some other methods because people do not always answer
questions accurately.
Interview: An interview may be highly structured or it may involve less structured narrative. It
may include survey methodology. It usually involves people responding orally to questions or
talking about their thoughts on a topic.
Case study: A case study involves extensive observations of a few individuals. Data collection
may include watching behavior, interviews and record searching. Case studies may be
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32. retrospective and/or prospective. Usually case studies are employed where the behavior or
situation is so rare that other methods, involving larger groups of participants, are not possible.
Naturalistic observation: Naturalistic observations can range from unstructured observations
of humans or other animals to situations involving hypothesis testing or some manipulations of a
natural setting. If you wanted to know if males are likely to hold doors open for females, you
could watch until you had seen a number of natural occurrences of this, or you could get a
female helper to follow males into buildings and watch to see what happens. It can be difficult to
precisely define the natural setting, particularly when the participants are humans. Placing an
actual research procedure into this category or others can involve a judgment call which might be
debatable.
Demonstration: An unsystematically engineered observation of behavior, sometimes involving
only one participant. The demonstration is remarkably common in the history of psychology,
even though it provides only very weak evidence. It is not a recognized research method but it is
a term which can be quite useful as a descriptor for studies that seem to employ no established
method.
RESEARCH METHODS
The goal of the research process is to produce new knowledge, which takes three main forms
(although, as previously discussed, the boundaries between them may be fuzzy):
 Exploratory research, which structures and identifies new problems
 Constructive research, which develops solutions to a problem
 Empirical research, which tests the feasibility of a solution using empirical evidence
Research can also fall into two distinct types:
 Primary research
 Secondary research
In social sciences and later in other disciplines, the following two research methods can be
applied, depending on the properties of the subject matter and on the objective of the research:
 Qualitative research
 Quantitative research
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33. Research is often conducted using the hourglass model Structure of Research The hourglass
model starts with a broad spectrum for research, focusing in on the required information through
the methodology of the project (like the neck of the hourglass), then expands the research in the
form of discussion and results.
1) QUALITATIVE RESEARCH
Qualitative research is a method of inquiry appropriated in many different academic disciplines,
traditionally in the social sciences, but also in market research and further contexts. Qualitative
researchers aim to gather an in-depth understanding of human behavior and the reasons that
govern such behavior. The qualitative method investigates the why and how of decision making,
not just what, where, when. Hence, smaller but focused samples are more often needed, rather
than large samples.
Data Collection
qualitative researchers may use different approaches in collecting data, such as the grounded
theory practice, narratology, storytelling, classical ethnography, or shadowing. Qualitative
methods are also loosely present in other methodological approaches, such as action research or
actor-network theory. Forms of the data collected can include interviews and group discussions,
observation and reflection field notes, various texts, pictures, and other materials.
Qualitative research often categorizes data into patterns as the primary basis for organizing and
reporting results. Qualitative researchers typically rely on the following methods for gathering
information: Participant Observation, Non-participant Observation, Field Notes, Reflexive
Journals, Structured Interview, Unstructured Interview, Analysis of documents and materials
In the academic social sciences the most frequently used qualitative research approaches include
the following:
1. Ethnographic Research, used for investigating cultures by collecting and describing data that
is intended to help in the development of a theory. This method is also called “ethno
methodology” or "methodology of the people". An example of applied ethnographic research is
the study of a particular culture and their understanding of the role of a particular disease in their
cultural framework.
2. Critical Social Research, used by a researcher to understand how people communicate and
develop symbolic meanings.
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34. 3. Ethical Inquiry, an intellectual analysis of ethical problems. It includes the study of ethics as
related to obligation, rights, duty, right and wrong, choice etc.
4. Foundational Research, examines the foundations for a science, analyses the beliefs and
develops ways to specify how a knowledge base should change in light of new information.
5. Historical Research, allows one to discuss past and present events in the context of the
present condition, and allows one to reflect and provide possible answers to current issues and
problems. Historical research helps us in answering questions such as: Where have we come
from, where are we, who are we now and where are we going?
6. Grounded Theory is an inductive type of research, based or “grounded” in the observations
or data from which it was developed; it uses a variety of data sources, including quantitative
data, review of records, interviews, observation and surveys.
7. Phenomenological Research, describes the “subjective reality” of an event, as perceived by
the study population; it is the study of a phenomenon.
8. Philosophical Research, is conducted by field experts within the boundaries of a specific
field of study or profession, the best qualified individual in any field of study to use an
intellectual analyses, in order to clarify definitions, identify ethics, or make a value judgment
concerning an issue in their field of study.
2) Quantitative marketing research
Quantitative marketing research is the application of quantitative research techniques to the
field of marketing. It has roots in both the positivist view of the world, and the modern marketing
viewpoint that marketing is an interactive process in which both the buyer and seller reach a
satisfying agreement on the "four Ps" of marketing: Product, Price, Place (location) and
Promotion.
As a social research method, it typically involves the construction of questionnaires and scales
People who respond (respondents) are asked to complete the survey. Marketers use the
information so obtained to understand the needs of individuals in the marketplace, and to create
strategies and marketing plans.
Typical general procedure
Simply, there are five major and important steps involved in the research process:
1. Defining the Problem.
2. Research Design.
3. Data Collection.
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35. 4. Analysis.
5. Report Writing & presentation.
A brief discussion on these steps is:
1. Problem audit and problem definition - What is the problem? What are the various
aspects of the problem? What information is needed?
2. Conceptualization and operationalization - How exactly do we define the concepts
involved? How do we translate these concepts into observable and measurable
behaviours?
3. Hypothesis specification - What claim(s) do we want to test?
4. Research design specification - What type of methodology to use? - examples:
questionnaire, survey
5. Question specification - What questions to ask? In what order?
6. Scale specification - How will preferences be rated?
7. Sampling design specification - What is the total population? What sample size is
necessary for this population? What sampling method to use?- examples: Probability
Sampling:- (cluster sampling, stratified sampling, simple random sampling, multistage
sampling, systematic sampling) & Non probability sampling:- (Convenience Sampling,
Judgment Sampling, Purposive Sampling, Quota Sampling, Snowball Sampling, etc. )
8. Data collection - Use mail, telephone, internet, mall intercepts
9. Codification and re-specification - Make adjustments to the raw data so it is compatible
with statistical techniques and with the objectives of the research - examples: assigning
numbers, consistency checks, substitutions, deletions, weighting, dummy variables, scale
transformations, scale standardization
10. Statistical analysis - Perform various descriptive and inferential techniques (see below)
on the raw data. Make inferences from the sample to the whole population. Test the
results for statistical significance.
11. Interpret and integrate findings - What do the results mean? What conclusions can be
drawn? How do these findings relate to similar research?
12. Write the research report - Report usually has headings such as: 1) executive summary; 2)
objectives; 3) methodology; 4) main findings; 5) detailed charts and diagrams. Present
the report to the client in a 10 minute presentation. Be prepared for questions.
Research methods
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36. 1. Causal Research
When most people think of scientific experimentation, research on cause and effect is most often
brought to mind. Experiments on causal relationships investigate the effect of one or more
variables on one or more outcome variables. This type of research also determines if one variable
causes another variable to occur or change. An example of this type of research would be
altering the amount of a treatment and measuring the effect on study participants.
2. Descriptive Research
Descriptive research seeks to depict what already exists in a group or population. An example
of this type of research would be an opinion poll to determine which Presidential candidate
people plan to vote for in the next election. Descriptive studies do not seek to measure the effect
of a variable; they seek only to describe.
3. Relational Research
A study that investigates the connection between two or more variables is considered relational
research. The variables that are compared are generally already present in the group or
population. For example, a study that looked at the proportion of males and females that would
purchase either a classical CD or a jazz CD would be studying the relationship between gender
and music preference.
SCOPE OF RESEARCH
1. National innovative capacity: modeling, measuring and comparing national capacities
2. Designing efficient incentive systems for invention and innovation: intellectual property
rights, prizes, public subsidies
3. Research in EPFL labs: new economics of science
4. New R&D methods and the production of reliable knowledge in sectors which lagged
behind
5. New models of innovation: open, distributed systems and the role of users
6. Other issues to be developed
36

37. 1 - National innovative capacity: modeling, measuring and comparing
national capacities
National innovative capacity is the ability of a country to produce and commercialize a flow of
innovative technology over the long term. It depends on:
• The strength of a nation's common infrastructure (basic research, education and training,
intellectual property protection, R&D tax policies, venture capital, and so forth);
• The cluster-specific innovation environment (one or many clusters involving particular
factor (input) conditions; a local context that encourages investment in innovation-related
activity; vigourous competition among locally based rivals; sophisticated local
customers; presence of capable local suppliers and related companies).
• The quality of linkages (relationship between the common innovation infrastructure and
industrial clusters).
This research strand aims at building innovation indexes and measuring various dimensions
of national innovation capacities. For instance:
• Strategic capacity: it deals with the ability to mobilize and concentrate resources under
some centralized decision making processes to achieve a critical scientific or
technological objective.
• Revolutionary capacities: it deals with the ability to shift resources out of areas of lower
and into areas of higher productivity and greater yield. This is a capacity to manage
transitions. The difficulty is that such a capacity involves various dimensions which can
be conflicting (see Mowery and Simoe, 2001).
2 - Designing efficient incentive systems for invention and innovation:
intellectual property rights, prizes, public subsidies
One central problem in the economics of knowledge is the design of incentive systems that both
reward inventors/knowledge producers and encourage dissemination of their output. Several
scholars have described the two regimes that allocate resources for the creation of new
knowledge: one is the system of granting intellectual property rights, as exemplified by modern
patent and copyright systems, the other is the open science regime, as often found in the realm of
pure scientific research and sometimes in the realm of commercial technological innovation,
often in infant industries
A large range of issues have to be addressed to elucidate the problem of designing efficient
incentive systems:
• What is the best solution in case of particular kind of new technologies (genomics,
software, data bases)?
37

38. • What is the nature of the tension that arises when the two systems come up against each
other?
• How designing proper incentive systems to encourage research and innovation in areas of
high social return and low private profitability (orphan drugs, malaria and other tropical
diseases)?
• In what condition a prize-based reward system provides a more efficient solution than
granting intellectual property rights?
• Is there an economic case for granting intellectual property rights in the domain of
research tools, instruments, basic knowledge?
3 – Research in EPFL labs: new economics of science
CEMI will be at the forefront of the College to develop and undertake research in the field of
"economics of science" with EPFL as the main case. In this perspective, several topics are
obvious:
• Assessing the impact of organizational practice on the productivity of university
technology transfer offices
• Measuring the social value of basic research and the local spillovers (regional impact).
Accounting for the effects associated with mobility
• Scale, scope and spillovers: the determinants of research productivity in several fields
• Exploring the role of patents in knowledge transfer from EPFL
• Exploring the effect of the patenting of research tools and biomedical innovation: transfer
opportunities and social costs
• Access policy for large scale research instrument, data bases.
All these topic should give rise to research design (research question, data collection, analysis) in
close collaboration with the other EPFL Schools (life science, basic science, computer science,
engineering science) in order to benefit from the great opportunity to be located in an Institute of
Technology. These projects will be designed in close collaboration with Jan-Anders Manson,
vice-president for Innovation and Knowledge Transfer.
4 - New R&D methods and the production of reliable knowledge in
sectors which lagged behind
Unequal access to pertinent knowledge bases may well constitute an important condition
underlying perceptible differences in the success with which different areas of Endeavour are
pursued within the same society and the pace at which productivity advances in different sectors
38

39. of the economy during a given historical epoch. Today, it remains astonishing to observe the
contrast between fields of economic activity where improvements in practice are closely
reflecting rapid advances in human knowledge - such as is the case for information technologies,
transportation, and certain areas of medical care (surgery and drug therapy) - and other areas
where the state of knowledge appears to be far more constraining. The fact is that knowledge is
not being developed to the same degree in every sector. A major policy concern is to understand
the factors at the origin of such uneven development, and to implement a proper strategy in order
to fill the gap between sectors with fast knowledge accumulation processes and those in which
these processes remain weak.
To summarize, rapid and effective creation of know-how is most likely to occur when the
following conditions converge (Nelson, Seminar at CREA, Paris, 2004):
• Practice in the field needs to be well specified, sustainable, replicable, imitable;
• There needs to be ability to learn from experience and experiment;
• The ability to experiment offline, with less expense than that would be involved in online
experimentation, and to gain reliable information relevant to online use, greatly facilitates
progress.
• A strong body of "scientific" knowledge greatly facilitates effective offline
experimentation, and also quick and reliable evaluation of varying practice online.
Part of the problem in sectors which are lagging behind deals with the limited ability to conduct
experiments. The main research issue here is to analyze the impact of new experimental methods
and design (essentially based on random assignment), which have the potential to profoundly
transform the way reliable knowledge is produced in these sectors. For instance, one of the most
significant developments in modern medicine has been the randomized controlled trial (RCT),
the significance and use of which grew rapidly after its application to tuberculosis in the 1940s.
Today the RCT is widely treated as the evidential 'gold standard' for demonstrating 'what works'
and what is medical 'best practice'. Education might be the next sector to be profoundly
transformed through the application of RCTs. The growth of RCTs as an approach in educational
research has been pushed forward by three important factors: computers, statistical techniques
(effect sizes and meta-analyses) and demand for accountability in both practice and research.
There is, therefore, a favorable context. The question is whether this new feature can change and
transform the way knowledge is produced and distributed in a sector like education.
5 – New models of innovation: open, distributed systems and the role of
users
This project involves the contribution of users in the innovation process not only in terms of
sending market signals (which is normally what users are supposed to do to help producer-
innovators), but also in terms of actively contributing to the modification of the product.
39

40. This project emphasizes, therefore, the functional source of innovation: while an innovation is
considered a manufacturer's innovation when the developer expects to benefit by selling it, an
innovation is a user innovation when the user expects to benefit by using it.
This research aims at understanding the capabilities and limitations of user innovation processes,
which involve quite often an open and distributed system (in which innovations may be freely
revealed to other users). Its advocates claim that user innovation, involving freely revealing, is an
efficient means of producing socially desirable innovation and maximizing "spillovers," or
knowledge transfer / leakage. The generation of innovation by users may be a complement or it
may compete with innovations produced by manufacturers. In its role as a complement, user
innovation may extend the diversity of products without endangering market positions of
manufacturers and may help manufacturing firms to mitigate information asymmetry problems
vis-à-vis future market needs. As a competitor, user innovation may offer products that better
meet user needs.
The model involves two major deviations from the private investment model of innovation,
which assumes that manufacturers innovate in products and processes to improve their
competitive position and that returns to innovation result from excluding other manufacturers
from adopting it. First, users of technologies, rather than manufacturers, are often the innovators.
Second, user-innovators often freely reveal the proprietary knowledge they have developed at
their private expense.
A host of empirical studies, mainly conducted by Eric von Hippel, his research group at MIT and
his colleagues, show that user innovation is an important economic phenomenon. It constitutes
the main source of knowledge in some sectors or an important contributor in others.
Deepening our understanding of the conditions leading to user innovation and of its economic
impact is, therefore, a relevant issue: (i) for a better assessment both of intangibles and
intellectual capital at the firm level and of innovation capacities at the national level; and (ii) for
a better understanding of some new organizational forms, such as user communities, which
appear to be becoming more relevant in a knowledge society. Thus our main research questions
are the following:
• What are the different channels through which user innovations influence the economy
and how should manufacturers adapt and respond to user innovations?
• What kinds of learning processes / dynamic capabilities do user innovations enable across
product / technological generations?
• What kind of policy issues and challenges pertain to user innovation? Given the fact that
user innovations contribute significantly to productivity growth and national
competitiveness, what kinds of policy should be devised to promote them.
40

41. 6 - Other issues to be developed
The economics of knowledge policy:
While it is relatively easy to provide a long list of policy recommendations which are of some
relevance in the context of the knowledge economy (on patent, ICT, education), it is far more
difficult to develop the welfare economics of knowledge investment in order to build a
framework for addressing policy issues.
Methodology for the optimal allocation of R&D funds to new technologies:
How does the R&D manager maximize the probability of developing a commercial able
technology over a specific period.
Tea is the most popular non-intoxicating beverage in the world enjoyed by the rich and poor
alike. Tea drinking was quite common in China as early as the 6th century B.C. Over a period of
time this habit was picked up by neighboring countries in South East Asia, such as Japan.
Western nations started importing tea from China only in the 17th century. The British
developed India as a sourcing base in the 19th century to reduce their dependence on China.
During the late 19th century and early 20th century, tea cultivation became popular in other
colonies like Sri Lanka, Tanzania, Malawi, Kenya, etc. In the last four decades, world production
had a growth of 3% pa, which decelerated to 1.5% pa in the last decade. Tea is a caffeinated hot
beverage, an infusion made by steeping the dried leaves or buds of the shrub Camellia sinensis in
hot water. In addition, tea may also include other herbs, spices, or fruit flavors.
The word "tea" is also used, by extension, for any fruit or herb infusion; for example, "rosehip
tea" or "camomile tea". In cases where
they contain no tea leaves, some people
prefer to call these beverages "tisanes"
or "herbal teas" to avoid confusion.
This article is concerned with the "true"
tea, Camellia sinensis. The tea plant is
one of the Camellia family (Camellia
Sinensis) which is indigenous to China
and India. The leaves are stiff, shiny
and pointed, and the flowers, which
resemble the buttercup in shape, are
white with golden stems. The plant
requires a warm, wet climate with at
least 50 inches (135mm) of rain a year
and well-drained soil. It grows at
varying altitudes up to 7,000 feet. The
41

42. quality of tea depends on climatic conditions. At higher altitudes the growth of the plants is
slower and the crops smaller, but the quality will generally be better. Only the bud and two top
leaves from each stalk are picked for processing.
Like wine, each crop reflects the character of the region in which it is grown. Soil, climate, the
amount of rain and time of the year the tea is plucked influences its character. China is credited
with originating tea cultivation, and tea plants now grow in about30countries. However the best
quality teas come from India.
Tea is the agricultural product of the leaves, leaf buds, and internodes of the Camellia
sinensis plant, prepared and cured by various methods. "Tea" also refers to the
aromatic beverage prepared from the cured leaves by
combination with hot or boiling water, and is the
common name for the Camellia sinensis plant itself.
After water, tea is the most widely-consumed
beverage in the world. The four types of tea most
commonly found on the market are black tea, oolong
tea, green tea and white tea, all of which can be made
from the same bushes, processed differently, and, in
42

43. the case of fine white tea, grown differently. Pu-erh tea, a post- fermented tea, is also often used
medicinally. The term "herbal tea" usually refers to an infusion or tisane o leaves , flowers,
fruit, herbs or other plant material that contains no Camellia sinensis. The term "red tea" either
refers to an infusion made from the South African rooibos plant; there are over 3000 varieties of
tea, not including botanicals and fruit infusions. To be a tea, it must come from the camellia
sinensis plant. There are several varieties of this plant, producing many types of teas. Types
depend on the manufacturing and crafting of the leaf. The flavor profiles and quality change year
to year, like wine, and is influenced by soil, temperature, rainfall, elevation and other elements in
nature. Even the botanicals growing nearby can affect the flavors of the tea.
First introduced to India, by the silk caravans travelling from the Orient to Europe, tea has
become an intrinsic part of daily life. As it turned out, Camellia sinensis also grew wild in India,
and natives had long cultivated and consumed it as a nourishing part of their daily diet, both in
pickled form as a vegetable, and as a sort of soup. Eventually they combined the leaves with
buffalo or yak's milk, and added ginger and spices such as cardamom.
In the seventeenth century, the native's use of the plant
was reported by a European traveler who wrote of his
refreshments while in India: "we took only tea which
is commonly used all over the Indies, not only among
those of the country, but also among the Dutch and the
English who take it as a drug".
Discovery of the Indian tea bush was regarded by the
British as exciting news. Envious of China's monopoly
on tea, and resentful of the money they had to spend on their habit, the British had long wished
43