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Business Research

Introduction and Overview
Businesses in today’s economy often face challenges that are not readily apparent until,
more often than not, the costs of those challenges become critical. A businesses ability to
identify the fundamentals of these challenges and act accordingly to squelch the damage that has
been done while bouncing back is paramount to the businesses success. This paper will identify
three key areas in identifying and repairing the critical problems that can occur. More
importantly, this paper will also identify several fundamentals within the three areas. The paper
will examine some sub levels of (1) analysis, (2) cost, and (3) research. Additionally, this paper
will discuss the measures that several companies took in these areas to show special examples of
these principles in use.

Within the scope of needs assessment and analysis there are many building blocks that
complete the full picture. One such block is comprised of the levels of analysis. And within the
levels of analysis there are three main points. These points as reported by Goldstien (1993);
McGehee and Thayer (1961); Moore and Dutton (1978); and Sleezer (1991) are (1) organization,
(2) job or task, and (3) individual or person (as cited by Holton). The following paragraphs will
discuss each of these three points by defining and demonstrating their context within analysis.
Holton (1996) suggests that the three-level approach to needs assessment suggests that
assessors should start by analyzing the organization to determine what results are not occurring
and should be, and what organizational factors are contributing to that condition. This could
easily be interpreted as examining the issue on a macro level to determine if the organization is
meeting its goals and objectives or not.
A good example of this level of analysis put to good use is demonstrated by Kmart in the
late 1950’s. In a case study by Hartley (1997) Kmart and the two year analysis of their market
performed by Harry B. Cunningham (later President of Kmart). In this instance Cunningham
studied the overall market and competitors while analyzing the Krieger (Kmart) organization.
This needs assessment eventually led Krieger to change its approach to that of the discount genre
and the first Kmart was opened in 1962.

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Though the company had experienced a 34 percent decrease in profits between 1958 and
1962, the new venture called Kmart was an immediate success (Hartley 1997). Kmart would
grow from 216 stores in 1968 to 1,366 stores in 1978.

Task analysis, as stated by Dessler (1997), is a detailed study of a job to identify the skills
required so that an appropriate training program may be instituted. By analyzing the task, a
company can determine a variety of methodologies for hiring, training, and forecasted outcome
for the task being analyzed. Additionally, effective task analysis enables a company to
determine what tasks need to be performed, and gives it the ability to gauge whether or not the
necessary tasks are indeed being performed.
A classic example of this is demonstrated by a needs analysis performed for General
Motors (GM) and the United Auto Workers (UAW) on the task analysis level. According to
Finison and Szedlak (1997), GM and the UAW formed a needs analysis team to identify and
correct several challenges in a production facility. The focus in this case was in the blanker
area of a metal fabrication plant and served as a pilot to other programs which would follow.
After examining the issues through a needs analysis, the team determined that the focus of the
needs analysis would be on training (Finison 1997).
By focusing in this area, new training was provided for the production operators. Finison
and Szidlak (1997) also noted that costs were minimal because the course was already offered in-
house. The results were improved quality and a 30 percent reduction in scrap rate. The overall
value was a savings of over $500,000 in the first year alone among other ancillary benefits.

At the individual level of analysis, a firm is essentially taking the other side of the task
analysis. By this, as written by Holton (1996), the firm or assessor should study individuals to
determine who needs learning to accomplish those jobs tasks. According to Dessler (1997),
verifying that there is a performance deficiency and determining whether that deficiency should
be rectified through training or through some other means is the basis of performance analysis.

Again, a good example of the individual level of analysis is demonstrated in the
GM/UAW case. In this instance, not only was a training program instituted for the task level,
there was a significant amount of energy placed on assessing the needs of the individuals already
in place within this area. Finison and Szidlak (1997) demonstrate that GM and the UAW
immediately involved personnel from the blanker area to determine what skills were needed to
effectively promote increased production and decreased waste in this area. As stated earlier in
this paper, those objectives were met early on in the overall process.

Cost Analysis is a type of analysis many businesses use to determine what costs are
associated in a particular project in conjunction with the benefits that will be derived from it. As
put by Marrelli (1996), cost analysis consists of two approaches: cost-benefit analysis (CBA), for
evaluating benefits; and cost-effectiveness analysis, for evaluating results. A third point covered
will be Return on Investment Analysis (ROI). Additionally, this paper will demonstrate several
uses of these fundamental principles of Cost Analysis.
Cost-Benefit Analysis
What is Cost-Benefit Analysis, or CBA? As stated by Erekson, Shaha and Swenson
(1996), CBA’s purpose is to weigh expected costs in relation to anticipated benefits,
opportunities, or improvements in effectiveness. Essentially this means that if an organization
were to initiate a project, it would first investigate the costs associated with it, then would
proceed if the benefits actually outweighed the costs associated with it.

A good example of the use of CBA is demonstrated in a case within the Environmental
Protection Agency (EPA). This is a case where the EPA uses benefit-cost analysis to aid in
setting policy for acts pertaining to environmental protection. According to Farrow and Toman
(1999), the EPA has developed a strategic plan as a part of its GPRA (Government Performance
and Results Act) program, in which benefit-cost analysis has its own chapter. In this case, the
EPA examines a reduction in the risk of premature death as one of the principal benefits of many
of their environmental measures (Farrow ; Toman 1999).

Cost Effective Analysis
Another part of cost analysis is cost-effective analysis (CEA). CEA, as defined by
Goldston (1998), provides a means for identifying the most effective use of limited resources to
assist decision-makers about whether a specific program or an alternative one is worth the
investment of resources when compared to other uses to which the same resources could be
Often the medical and biotech industry utilizes the methods of CEA to determine the
feasibility of certain programs or prevention methods. The National Center for Environmental
Health, Centers for Disease Control and Prevention, utilized a CEA to find the cost effectiveness
of general and targeted strategies for residential radon testing and mitigation in the United States
(Ford et al 1999). In this case, the study modeled a decision tree of five possible alternatives.
After careful analysis, it was concluded that other means should be explored. As stated by Ford,
these data suggest possible alternatives to current recommendations. The study concluded that
the costs were too great to mount an effective campaign.

Return on Investment (ROI)
The final factor being examined is the Return on Investment (ROI). This is where the
accountable returns are gauged to determine if the proposed program is worthwhile. According
to Du? (1996), the ROI method is simple to use, but it does not take into account the time value
of money or the risk of not receiving the benefits required from the system. Because of this,
many organizations are attempting to utilize new technologies to give businesses the tools
necessary to better forecast ROI.
For instance, according to Blankenhorn (1999), DoubleClick, Inc., a web based
marketing network has put forth a program that enables a company to forecast its online
marketing ROI. It is their focus in this area to develop a suite of products that are driven on the
premise of ROI. This enables an advertiser to use the Internet medium to build a stronger
advertising base while enhancing their ROI.

The final category is research; research is paramount to the success of any program,
campaign or organizational change process. It has even been said that a problem well-defined
is a problem half-solved (Erekson et al). Three key elements within research techniques are (1)
personal interviews, (2) focus groups, and (3) test marketing. And again, as shown in the past
two sections, there will be company examples showing where these practices have been used
effectively in an organizational setting.
Personal Interviews
Phillip Kotler states that personal interviewing can take two forms, arranged interviews
and intercept interviews. Arranged interviews are just that, interviews that are arranged with a
person or groups of people fitting a certain profile. Intercept interviews are generally interviews
held at random where people are stopped, perhaps in a mall or workplace and asked questions.
Overall, though, the internal workings of the process remain the same.

Interviews are generally conducted with a specific audience, and the questions are
generally open-ended. However, Newsom, Turk, and Kruckeberg state that this type of research
required highly trained interviewers and skilled analysis. By asking open-ended questions, the
interviewer has an opportunity to follow up each answer with a more probing question while not
contributing bias to the answers. Newsom sites an example of an organization trying to
determine where employer bias might play in the event of employment discrimination by asking
a the following question: If you had two applicants absolutely equal in terms of educational
background and experience, and one was a woman or a member of a minority race, or both,
which would you hire? The answer is then interpreted and depending on the employers
response, the interviewer is open to several lines of questioning.

Adversely, personal interviews can also lead a company down the wrong path. Kotler
states that intercept interviews have the drawback of being non-probability samples, and the
interviews must be quite short. Such is the case with Coca-Cola in their initial introduction of
the New Coke product. Under Project Kansas in 1982, Coke conducted around 2000 interviews
in ten major markets. These interviews were conducted on a one-on-one basis to determine if
people would be receptive to a new Coke. The results, according to Hartley, showed a
willingness to try a new Coke, however other tests disclosed the opposite. Hartley goes on to
demonstrate that small consumer panels or focus groups revealed strong favorable and
unfavorable sentiments.
Focus Groups
Focus groups are a panel of people selected and interviewed as a group. Each member of
the group is selected because he or she may be representative of a particular group, market
segment, or target. In this way, each individual is likely to have opinions and reactions
representative of the group he or she was selected to represent. According to Newsom,
generally, a focus group consists of 12 to 15 interviewees representing a specific public.

Newsom goes on to state that the key to the session’s success is the moderator, who must
be a skillful interviewer, adept at keeping the conversation moving and tactful when acting as
referee or devil’s advocate. These sessions can last for several hours and are generally video
taped while being monitored by a live viewer. This enables the live viewer to interject questions
via the interviewer by passing a note or conversing during a break. Five steps generally followed
in focus groups are: (1) Define the problem to be solved; (2) choose the part of the problem to
be looked at by the participants; (3) decide how many focus groups are needed and choose the
participants; (4) work out all the details of the session; and (5) prepare all material that the group
will need.
An example of focus groups being used by a company is a case involving FSI. FSI was
experiencing a large turnover rate in the position of Branch Manager Trainee. According to
Schoeppel, that rate ranged from 48% to 63% annually between 1981 and 1990. This was,
however considered an industry standard, but it did create a strong financial burden and inhibited
the growth of FSI. There were several measures taken to build a new program for training,
management, and retention.
One such element was the use of focus groups comprised of district sales managers to
analyze the program. Schoeppel shows that these focus groups were held to enlist support for
and ideas about the new program, and to identify and discuss in detain the characteristics they
thought were needed to be a successful branch manager. The end result was a questionnaire that
was given to branch managers to help assess what characteristics were needed for success in the
position of Branch Manager Trainee.

Test Marketing
Test marketing is one phase of this process that is closer to the end of the research cycle.
This is where an organization launches a program or product into a particular segment, or
geographical region to see how well the program or product is received. According to Schultz,
Martin, and Brown, there are three major reasons for test marketing. These reasons are (1) a trial
of the campaign, (2) an opportunity to try variations, and (3) a way to reduce financial risk.
By using a test market as a preliminary trial to a campaign, a company can attempt to
gage, according to Kotler, a more reliable forecast of future sales. Also, by using the test market
as an opportunity to try variations, an organization can better determine what campaigns will be
most effective on a larger scale. Finally, as a means of reducing financial risk, test marketing
enables the company to fix challenges that are inherent in a product or discover flaws in the
marketing of the product long before they have spent potentially millions of dollars on a much
larger segment.
A case of effective test marketing is demonstrated by the National Cattlemen’s Beef
Association when they introduced lines of branded beef products that were already cooked or
seasoned. The objective was to test a new line of beef products to grow a diminishing market.
Michael Rose stated that fewer consumers are cooking from scratch, and the heat-and-serve beef
products have filled an increasing amount of space in the grocery store.
The initial test market took place in Portland, Oregon. Portland was selected because it
fit many of the pre-selected criteria for the entry market. (1) Portland had little prepared beef
products on the shelves of its many supermarkets (consequently, there is a tremendous amount of
space taken on the shelves and refrigerated sections of Portland supermarkets now). (2)
According to Rose, Portland area’s demographics also fit the beef industry’s target market of
convenience-oriented, focused people who work full-time outside of the home. (3) Many
grocers emphasized prepared food and quick-serve products.

As demonstrated in this paper, there are many factors to take into consideration when
identifying and solving problems on a large scale. First there are needs on many levels which
must be assessed. This assessment should focus on organizational, task, and individual levels to
capture a full understanding of where the challenges lie on a three dimensional scheme.

Second, a cost analysis must be done. This, among other things, focuses on CBA, to gain
a better understanding on where potential benefits and pitfalls lie. Also, to evaluate the results of
a particular program, there is cost effectiveness analysis. The third point within cost analysis is
ROI. ROI was demonstrated in the case of DoubleClick, and Erekson et al (1996) suggests that
cost analysis has many methods, and that the right method in any given situation might involve
drawing from each and every approach.

The third and final consideration addressed was research techniques. These techniques,
personal interviews, focus groups, and test marketing, demonstrate the needs for an organization
to examine their subsequent research techniques and implement programs to gather as much
information as possible before attacking a larger market segment. Kolter states that most
companies know market testing can yield valuable information about buyers, dealers, marketing
program effectiveness, market potential, and other matters. The main issues really are, how
much market testing and what kind.
Overall, these points are a general guideline to effectively creating change and foreword inertia.
By following these fundamentals and utilizing the principles within, an organization can create a
climate conducive not only to change, but to growth as well. Time and again, these factors have
been proven to be a formula to success.

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