UNIT-III-BUSINESS RESEARCH

METHODS
FACULTY : Prof. MAYANK YADAV
SCHOOL OF MANAGEMENT
NIT Rourkela
Course book Source and Adoption: C R Kothari, Research Methodology,
New Age International
Measurement and Scaling
Measurement means assigning numbers or other symbols to characteristics of objects according to
certain prespecified rules.
The most important aspect of measurement is the specification of rules for assigning numbers to
the characteristics.
• One-to-one correspondence between the numbers and the characteristics being measured.
• The rules for assigning numbers should be standardized and applied uniformly.
• Rules must not change over objects or time.
Scaling
Scaling involves creating a continuum upon which measured objects
are located.

Consider an attitude scale from 1 to 100. Each respondent is assigned

a number from 1 to 100, with 1 = Extremely Unfavorable, and 100 =
Extremely Favorable. Measurement is the actual assignment of a
number from 1 to 100 to each respondent. Scaling is the process of
placing the respondents on a continuum with respect to their attitude
toward department stores.
Scale Characteristics and Levels of
Measurement
• All the scales that we use in research can be described in terms of
four basic characteristics.
• These characteristics are description, order, distance, and origin, and
together they define the level of measurement of a scale.
• The level of measurement denotes what properties of an object the
scale is measuring or not measuring. An understanding of the scale
characteristics is fundamental to understanding the primary type of
scales.
Scale Characteristics and Levels of
Measurement
• Description: By description, we mean the unique labels or descriptors
that are used to designate each value of the scale. Some examples of
descriptors are as follows:
• 1=Female, 2=Male
• 1=Strongly disagree, 2= Disagree, 3=Neither agree nor disagree,
4=Agree, and 5=Strongly agree
• To amplify, Female and Male are unique descriptors used to describe
values 1 and 2 of the gender scale
Scale Characteristics and Levels of
Measurement
• Order: By order, we mean the relative sizes or positions of the descriptors. There are no absolute
values associated with order, only relative values. Order is denoted by descriptors such as
“greater than,” “less than,” and “equal to.”
• For example, a respondent’s preference for three brands of athletic shoes is expressed by the
following order, with the most preferred brand being listed first and the least preferred brand last.
• Nike
• Reebok
• Adidas
• For this respondent, the preference for Nike is greater than the preference for Reebok. Likewise,
the preference for Adidas is less than the preference for Reebok.
Scale Characteristics and Levels of
Measurement
• Distance: The characteristic of distance means that absolute differences between the scale
descriptors are known and may be expressed in units. A five-person household has one person
more than a four person household, which in turn has one person more than a three-person
household. Thus, the following scale possesses the distance characteristic.
• Number of persons living in your household ___________________
• Notice, that a scale that has distance also has order. We know that a five-person household is
greater than the four-person household in terms of the number of persons living in the
household. Likewise, a three-person household is less than a four-person household. Thus,
distance implies order but the reverse may not be true.
Scale Characteristics and Levels of
Measurement
• Origin: The origin characteristic means that the scale has a unique or fixed beginning or true zero
point. Thus, an exact measurement of income by a scale such as: What is the annual income of
our household before taxes? $ ____________________ has a fixed origin or a true zero point. An
answer of zero would mean that the household has no income at all. A scale that has origin also
has distance (and order and description).
• Many scales used in marketing research do not have a fixed origin or true zero point, as in the
disagree-agree scale considered earlier under description. Notice that such a scale was defined as
1 Strongly disagree, 2 Disagree, 3 Neither agree nor disagree, 4 Agree, and 5 Strongly agree.
However, 1 is an arbitrary origin or starting point.
Primary Scales of Measurement
• There are four primary scales of measurement: nominal, ordinal, interval, and ratio.
• Nominal Scale: The numbers serve only as labels or tags for identifying and classifying
objects.
• When used for identification, there is a strict one-to-one correspondence between the
numbers and the objects.
• The numbers do not reflect the amount of the characteristic possessed by the objects.
• Each number is assigned to only one object and each object has only one number
assigned to it.
• The only permissible operation on the numbers in a nominal scale is counting.
• Common examples include Social Security numbers and numbers assigned to football
players. In marketing research, nominal scales are used for identifying respondents,
brands, attributes, stores, and other objects
Primary Scales of Measurement
• Ordinal Scale : An ordinal scale is a ranking scale in which numbers are assigned to objects to
indicate the relative extent to which the objects possess some characteristic. An ordinal scale
allows you to determine whether an object has more or less of a characteristic than some other
object, but not how much more or less. Thus, an ordinal scale indicates relative position, not the
magnitude of the differences between the objects. The object ranked first has more of the
characteristic as compared to the object ranked second, but whether the object ranked second is
a close second or a poor second is not known.
• The ordinal scales possess description and order characteristics but do not possess distance (or
origin). Common examples of ordinal scales include quality rankings, rankings of teams in a
tournament, socioeconomic class, and occupational status. In marketing research, ordinal scales
are used to measure relative attitudes, opinions, perceptions, and preferences.
Primary Scales of Measurement
• Interval Scale: In an interval scale, numerically equal distances on the scale represent equal
values in the characteristic being measured. An interval scale contains all the information of an
ordinal scale, but it also allows you to compare the differences between objects.
• The difference between any two scale values is identical to the difference between any other two
adjacent values of an interval scale. There is a constant or equal interval between scale values.
The difference between 1 and 2 is the same as the difference between 2 and 3, which is the same
as the difference between 5 and 6. The distance between descriptors is known.
• A common example in everyday life is a temperature scale.
• In an interval scale, the location of the zero point is not fixed, i.e., these scales do not possess the
origin characteristic. Both the zero point and the units of measurement are arbitrary.
Primary Scales of Measurement
• Ratio Scale: A ratio scale possesses all the properties of the nominal, ordinal, and interval scales
and, in addition, an absolute zero point. Thus, ratio scales possess the characteristic of origin (and
distance, order, and description). Thus, in ratio scales we can identify or classify objects, rank the
objects, and compare intervals or differences. It is also meaningful to compute ratios of scale
values.
• Not only is the difference between 2 and 5 the same as the difference between 14 and 17, but
also 14 is seven times as large as 2 in an absolute sense.
• Common examples of ratio scales include height, weight, age, and money. In marketing, sales,
costs, market share, and number of customers are variables measured on a ratio scale.
Primary Scales of Measurement

Source: (Malhotra & Dash, 2014)

Primary Scales of Measurement

Source: (Malhotra & Dash, 2014)

Primary Scales of Measurement

Source: (Malhotra & Dash, 2014)

A Comparison of Scaling Techniques

Source: (Malhotra & Dash, 2014)

A Comparison of Scaling Techniques
• Comparative scales involve the direct comparison of stimulus objects. For example, respondents
might be asked whether they prefer Coke or Pepsi. Comparative scale data must be interpreted in
relative terms and have only ordinal or rank order properties. For this reason, comparative scaling
is also referred to as nonmetric scaling. As shown in Figure 8.2, comparative scales include paired
comparisons, rank order, constant sum scales, Q-sort, and other procedures.
• Advantage: The major benefit of comparative scaling is that small differences between stimulus
objects can be detected. As they compare the stimulus objects, respondents are forced to choose
between them. In addition, respondents approach the rating task from the same known
reference points
• Disadvantage: The major disadvantages of comparative scales include the ordinal nature of the
data and the inability to generalize beyond the stimulus objects scaled. For instance, to compare
RC Cola to Coke and Pepsi, the researcher would have to do a new study. These disadvantages are
substantially overcome by the noncomparative scaling techniques.
A Comparison of Scaling Techniques
• Non-Comparative Scales: also referred to as monadic or metric scales, each object is scaled
independently of the others in the stimulus set. The resulting data are generally assumed to be
interval or ratio scaled.
• For example, respondents may be asked to evaluate Coke on a 1-to-6 preference scale (1 not at all
preferred, 6 greatly preferred). Similar evaluations would be obtained for Pepsi and RC Cola. As
can be seen in Figure 8.2, noncomparative scales can be continuous rating or itemized rating
scales. The itemized rating scales can be further classified as Likert, semantic differential, or Stapel
scales.
• Noncomparative scaling is the most widely used scaling technique in marketing research.
Comparative Scaling Techniques
• A) Paired Comparison Scaling: A comparative scaling technique in which a respondent is
presented with two objects at a time and asked to select one object in the pair according to some
criterion. The data obtained are ordinal in nature.

Source: (Malhotra & Dash, 2014)

Comparative Scaling Techniques
• B) Rank Order Scaling A comparative scaling technique in which respondents are presented with
several objects simultaneously and asked to order or rank them according to some criterion.

Source: (Malhotra & Dash, 2014)

Comparative Scaling Techniques
• C) Constant Sum Scaling: A comparative scaling technique in which respondents are required to
allocate a constant sum of units such as points, dollars, chits, stickers, or chips among a set of
stimulus objects with respect to some criterion.

Source: (Malhotra & Dash, 2014)

Comparative Scaling Techniques
• Q-sort scaling A comparative scaling technique that uses a rank order procedure to sort objects
based on similarity with respect to some criterion.
Non-Comparative Scaling Techniques
• A) Continuous Rating Scale:
In a continuous rating scale,
also referred to as a graphic
rating scale, respondents rate
the objects by placing a mark
at the appropriate position
on a line that runs from one
extreme of the criterion
variable to the other. Thus,
the respondents are not
restricted to selecting from
marks previously set by the
researcher.

Source: (Malhotra & Dash, 2014)

Non-Comparative Scaling Techniques
• B) Itemized Rating Scales In an itemized rating scale, the respondents
are provided with a scale that has a number or brief description
associated with each category. The categories are ordered in terms of
scale position, and the respondents are required to select the
specified category that best describes the object being rated
• B1) Likert Scale: Named after its developer, Rensis Likert, the Likert
scale is a widely used rating scale that requires the respondents to
indicate the degree of agreement or disagreement with each of a
series of statements about the stimulus objects
B1) Likert Scale:

Source: (Malhotra & Dash, 2014)

Non-Comparative Scaling
Techniques
• B2) The semantic
differential is a 7-point
rating scale with
endpoints associated
with bipolar labels that
have semantic
meaning. In a typical
application,
respondents rate
objects on a number of
itemized, 7-point rating
scales bounded at each
end by one of two
bipolar adjectives, such
as “cold” and “warm.”

Source: (Malhotra & Dash, 2014)

Non-Comparative Scaling Techniques
• B3) The Stapel scale,: named
after its developer, Jan Stapel, is a
unipolar rating scale with 10
categories numbered from 5 to 5,
without a neutral point (zero).11
This scale is usually presented
vertically. Respondents are asked
to indicate how accurately or
inaccurately each term describes
the object by selecting an
appropriate numerical response
category. The higher the number,
the more accurately the term
describes the object, as shown in
the department store project.

Source: (Malhotra & Dash, 2014)

A concept map for non—comparative scales

Source: (Malhotra & Dash, 2014)

Sources of Error in Measurement
• Measurement should be precise and
unambiguous in an ideal research study. Respondent
This objective, however, is often not met
with in entirety. As such the researcher
must be aware about the sources of error
in measurement.

Sources of
Instrument Error in Situation
Measurement

Measurer
Sources of Error in Measurement
• (a) Respondent: At times the respondent may be reluctant to express strong negative feelings or it is just
possible that he may have very little knowledge but may not admit his ignorance. All this reluctance is likely
to result in an interview of ‘guesses.’ Transient factors like fatigue, boredom, anxiety, etc. may limit the ability
of the respondent to respond accurately and fully.
• (b) Situation: Situational factors may also come in the way of correct measurement. Any condition which
places a strain on interview can have serious effects on the interviewer-respondent rapport. For instance, if
someone else is present, he can distort responses by joining in or merely by being present. If the respondent
feels that anonymity is not assured, he may be reluctant to express certain feelings
• (c) Measurer: The interviewer can distort responses by rewording or reordering questions. His behavior, style
and looks may encourage or discourage certain replies from respondents. Careless mechanical processing
may distort the findings. Errors may also creep in because of incorrect coding, faulty tabulation and/or
statistical calculations, particularly in the data-analysis stage
• (d) Instrument: Error may arise because of the defective measuring instrument. The use of complex words,
beyond the comprehension of the respondent, ambiguous meanings, poor printing, inadequate space for
replies, response choice omissions, etc. are a few things that make the measuring instrument defective and
may result in measurement errors. Another type of instrument deficiency is the poor sampling of the
universe of items of concern.
Tests of Sound Measurement
• Sound measurement must meet the tests of validity, reliability and
practicality. In fact, these are the three major considerations one
should use in evaluating a measurement tool.
• Validity refers to the extent to which a test measures what we
actually wish to measure.
• Reliability has to do with the accuracy and precision of a
measurement procedure .
• Practicality is concerned with a wide range of factors of economy,
convenience, and interpretability .
Tests of Sound Measurement

Source: (Malhotra & Dash, 2014)

Tests of Sound Measurement-Reliability
• 1-Reliability: Reliability refers to the extent to which a scale produces consistent results if
repeated measurements are made.
• 1a) TEST-RETEST RELIABILITY: In test-retest reliability, respondents are administered identical sets
of scale items at two different times under as nearly equivalent conditions as possible. The time
interval between tests or administrations is, typically, two to four weeks. The degree of similarity
between the two measurements is determined by computing a correlation coefficient. The higher
the correlation coefficient, the greater the reliability
• 1b) ALTERNATIVE-FORMS RELIABILITY: In alternative-forms reliability, two equivalent forms of the
scale are constructed. The same respondents are measured at two different times, usually two to
four weeks apart, with a different scale form being administered each time. The scores from the
administration of the alternative-scale forms are correlated to assess reliability
• 1c) INTERNAL CONSISTENCY RELIABILITY: Internal consistency reliability is used to assess the
reliability of a summated scale where several items are summed to form a total score. In a scale of
this type, each item measures some aspect of the construct measured by the entire scale, and the
items should be consistent in what they indicate about the characteristic. This measure of
reliability focuses on the internal consistency of the set of items forming the scale.
Tests of Sound Measurement-Reliability
• The simplest measure of internal consistency is split-half reliability. The items on the
scale are divided into two halves and the resulting half scores are correlated. High
correlations between the halves indicate high internal consistency. The scale items can be
split into halves based on odd- and even-numbered items or randomly.
• The coefficient alpha, or Cronbach’s alpha, is the average of all possible split-half
coefficients resulting from different ways of splitting the scale items. This coefficient
varies from 0 to 1, and a value of 0.6 or less generally indicates unsatisfactory internal
consistency reliability. An important property of coefficient alpha is that its value tends to
increase with an increase in the number of scale items. Therefore, coefficient alpha may
be artificially, and inappropriately, inflated by including several redundant scale items.
Tests of Sound Measurement-Validity
• 2. Test of Validity: Validity is the most critical criterion and indicates
the degree to which an instrument measures what it is supposed to
measure. Validity can also be thought of as utility. In other words,
validity is the extent to which differences found with a measuring
instrument reflect true differences among those being tested.
• one can certainly consider three types of validity in this connection: (i)
Content validity; (ii) Criterion-related validity and (iii) Construct
validity.
Tests of Sound Measurement-Validity
• 2a) CONTENT VALIDITY: Content validity, sometimes called face validity, is a subjective but
systematic evaluation of how well the content of a scale represents the measurement task at
hand.
• The researcher or someone else examines whether the scale items adequately cover the entire
domain of the construct being measured. Thus, a scale designed to measure store image would
be considered inadequate if it omitted any of the major dimensions (quality, variety and
assortment of merchandise, etc.).
• Given its subjective nature, content validity alone is not a sufficient measure of the validity of a
scale
• 2b) CRITERION VALIDITY: Criterion validity reflects whether a scale performs as expected in
relation to other variables selected as meaningful criteria (criterion variables). Criterion variables
may include demographic and psychographic characteristics, attitudinal and behavioral measures,
or scores obtained from other scales. Based on the time period involved, criterion validity can
take two forms: concurrent and predictive validity.
Tests of Sound Measurement-Validity
• 2b1) Concurrent validity is assessed when the data on the scale being evaluated
and on the criterion variables are collected at the same time. To assess concurrent
validity, a researcher may develop short forms of standard personality
instruments. The original instruments and the short versions would be
administered simultaneously to a group of respondents and the results compared.
• 2b2) To assess predictive validity, the researcher collects data on the scale at one
point in time and data on the criterion variables at a future time. For example,
attitudes toward cereal brands could be used to predict future purchases of
cereals by members of a scanner panel. Attitudinal data are obtained from the
panel members, and then their future purchases are tracked with scanner data.
The predicted and actual purchases are compared to assess the predictive validity
of the attitudinal scale
Tests of Sound Measurement-Validity
• 2c) CONSTRUCT VALIDITY: Construct validity addresses the question of what construct or
characteristic the scale is, in fact, measuring. When assessing construct validity, the researcher
attempts to answer theoretical questions about why the scale works and what deductions can be
made concerning the underlying theory. Thus, construct validity requires a sound theory of the
nature of the construct being measured and how it relates to other constructs. Construct validity
is the most sophisticated and difficult type of validity to establish.
• Construct validity includes convergent, discriminant, and nomological validity.
Tests of Sound Measurement-Validity
• 2C1) Convergent validity is the extent to which the scale correlates
positively with other measures of the same construct.
• 2C2) Discriminant validity is the extent to which a measure does not
correlate with other constructs from which it is supposed to differ. It
involves demonstrating a lack of correlation among differing constructs.
• 2C3) Nomological validity is the extent to which the scale correlates in
theoretically predicted ways with measures of different but related
constructs. A theoretical model is formulated that leads to further
deductions, tests, and inferences. Gradually, a nomological net is built in
which several constructs are systematically interrelated.
Tests of Sound Measurement-Validity
• 3-Generalizability Generalizability refers to the extent to which one can generalize from the
observations at hand to a universe of generalizations. The set of all conditions of measurement
over which the investigator wishes to generalize is the universe of generalization.
• These conditions may include items, interviewers, situations of observation, and so on. A
researcher may wish to generalize a scale developed for use in personal interviews to other
modes of data collection, such as mail and telephone interviews.
• Likewise, one may wish to generalize from a sample of items to the universe of items, from a
sample of times of measurement to the universe of times of measurement, from a sample of
observers to a universe of observers, and so on.