1. SUMMER INTERNSHIP PROGRAM REPORT
on
Value added services in India
SUBMITTED TO
MIT PUNE‟s
MIT SCHOOL OF TELECOM MANAGEMENT
BY
ABHISHEK BHOJRAJ PAUNIKAR
PRN: 11009
Batch: 2011-2013
IN PARTIAL FULFILLMENT OF
POST GRADUATE DIPLOMA IN MANAGEMENT
(PGDM)
TELECOMSPECIALIZATION: SYSTEMS
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2. DECLARATION
I--------------------------------------------------------------Certified that this report is prepared based
on the summer internship project undertaken by me in Hungama.com. From 24.04.2012 to
23.06.2012, under able guidance of Mr. Badrinath Jha, Hungama.com and Prof. Archana
Deshpande, MIT School of Telecom Management Pune in partial fulfilment of the
requirement for award of degree of Post Graduate Diploma of Management from MITSOT Pune.
Signature
Abhishek Paunikar
Signature
Signature
Prof. Archana Deshpande
Dr.Milind Pande
Faculty Guide
Director MITSOT
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3. ACKNOWLEDGEMENT
I place on record and warmly acknowledge the continuous encouragement, invaluable
supervision, timely suggestions and inspired guidance offered by our guide Prof. Archana
Deshpande, Maharashtra Institute of Technology School of Telecom Management, Pune in
bringing this report to a successful completion.
This project would not have been a success without the guidance and motivation of all my
mentors. I am thankful to all the persons behind this project.
I would like to express my gratefulness to Prof.Archana Deshpande, who acted as a mentor
throughout my project for providing me valuable information and guidance.
Secondly, I would like to thank Mr.Badrinath Jha of Hungama.com who has been very helpful in
getting the required information related to this project..
And finally I extend our gratefulness to one and all who are directly or indirectly involved in the
successful completion of this project work.
Abhishek Paunikar
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4. TABLE OF CONTENTS
CHAPTER
PAGE
Executive Summary………………………………………………………………………........................................................04
Acknowledgement………………………………………………………………………………………………………………………………..05
List of Figures………………………………………………………………………………………………………………………………………..06
List of Tables…………………………………………………………………………………………………………………………………………07
CHAPTERS
CHAPTER 1
Nature and scope of the study
1.1 Introduction…………………………………………………………………………………………………………………………………….10
1.2Aim and Objectives………………………………………………………………………………………………………………………….10
1.3 Research Problem Statement…………………………………………………………………………………………………………11
1.4 Scope of the Study…………………………………………………………………………………………………………………………..11
1.5 Rational for the Study........................................................................................................................12
CHAPTER 2
Profile of the Company and Industry Overview
2.1Industry Overview…………………………………………………………………………………………………………………………….13
2.2 Company Overview…………………………………………………………………………………………………………………………17
2.3 Product Portfolio …………………………………………………………....................................................................19
2.4 Organization Structure ……………………………………………………………………………………………………………………21
2.4 Market Share/Financial Analysis........................................................................................................22
CHAPTER 3
Literature Review
3.1 Literature Overview………………………………………………………………………………………………………………………..24
3.2 MVAS size……………………………………………………………………………………………………………………………………….25
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5. 3.3 MVAS categories…………………………………………………………………………………………………………………………….25
3.4 Type of MVAS user………………………………………………………………………………………………………………………….27
3.5 MVAS Ecosystem…………………………………………………..……………………………………………………………………….28
3.6 Global scenario……………………………………………….………………………………………………………………………………29
3.7 Future of MVAS …………………………………………………………………………………….……………………………………....31
3.8 MVAS Chain…………………………………………………………………………………………………………………………………….32
3.9 Regulatory Framework of MVAS……………………………………………………………………………………………………..35
3.10 Revenue Sharing……………………………………………………………………………………………………………………………37
3.11 Barrier to growth of MVAS in India………………………………………………………………………………………………..40
3.12 Current trends in MVAS…………………………………………………………………………………………………………………42
3.13 Observation from literature review………………………………………………………………………………………………43
CHAPTER 4
Research Methodology
4.1 Overall Research Process…………………………………………………………………………………………………………………45
4.2 Research Design………………………………………………………………………………………………………………………………47
4.3 Research Methods………………………………………………………………………………………………………………………….48
4.4 Quantitative and Qualitative Research…………………………………………………………………………………………..49
4.5 Types of Data: Secondary Data & Primary Data……………………………...................................................50
4.6 Data Collection Instruments…………………………………………………………………………………………………………….51
4.6.1 Selected Data Collection Method………………………………………………………………………………………………….54
4.7 Survey Procedure…………………………………………………………………………………………………………………………….55
4.7.1 Sampling……………………………………………………………………………………………………………………………55
4.7.2 Sampling Techniques………………………………………………………………………………………………………….56
4.7.3 Probability Sampling…………………………………………………..........................................................58
4.7.4 Non-Probability Sampling……………………………………………………………………………………………….…..58
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6. 4.8 Sampling Elements……………………………………………………………..............................................................60
4.8.1 Population…………………………………………………………………………………………………………………………….60
4.8.2 Sampling Unit……………………………………………………………………………………………………………………..60
4.8.3 Sample Size………………………………………………………………………………………………………………………...60
4.9 Research Limitations……………………………………………………………………………………………………………………….60
CHAPTER 5
Data Analysis
5.1 Characteristics of the Sample…………………………....................................................................63
5.2 Market Share Analysis……………………………………………………………………………………………………………64
CHAPTER 6
Findings and Interpretations
6.1 Major Findings……………………………………………………………………………………………………………………….65
CHAPTER 7
Suggestions and conclusion
7.1 Suggestions…………………………………………………………………………………………………………………………..68
7.2 Conclusion……………………………………………………………………..........................................................68
References……………………………………………...................................................................................70
Exhibits
a) Questionnaire.............................................................................................................................71
b) Statistical
Outputs…………………………………………………………………………………………………………………………………….73
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7. LIST OF FIGURES
Figure 1- Per user spent on MVAS.....................................................................17
Figure 2 –SWOT analysis…………...................................................................12
Figure 3- Market size and growth rate……………............................................25
Figure 4- Categories of MVAS..........................................................................26
Figure 5 –Maturity and application usage market.............................................28
Figure 6 –Operation Model...............................................................................29
Figure 7- User centric Model............................................................................30
Figure 8-Application store model used globally .............................................30
Figure 9-MVAS Chain…….............................................................................32
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8. LIST OF TABLES
Table 1 – Total subscriber base..................................................................14
Table 2- Overall teledensity.......................................................................14
Table 3-Highlight of telecom subscription.................................................14
Table 4-Indian Telecom Industry...............................................................15
Table 5- Contribution of MVAS revenue by
Type of content ..........................................................................................27
Table 6-Range of MVAS.............................................................................34
Table 7-Revenue sharing MVAS................................................................38
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10. Executive Summary
MVAS - The second revolution through the mobile - It‘s a mobile phone boom in India. India is
the second largest mobile handset market in the world after China. The total number of mobile
subscribers has hit a high of 940 million in India and reaching it to 1000 million by the year
2014. At a steady pace the VAS market is growing & it still has potential to reach & touch new
heights. According to a research, the mobile handset market‘s revenue is expected to rise from
Rs 25,591 crore (Rs 255.91 billion) in 2010 to Rs 35,005 crore (Rs 350.05 billion) in 2016. The
VAS market in India, estimated Rs. 11,700 crore, is poised to reach Rs. 48,000 crore by 2013
(while some industry forecasts also peg the figure at Rs. 192,000 crore by 2015). With India
emerging as one of the largest players in the telecom space, there appears to be excellent growth
potential for Mobile related Value-added Services.
The era of VAS being limited to voicemail and SMS is over. We are now entering the age of
VAS 2.0 which is data driven and data intensive. Maps, desktop class web browsing, social
networking, multimedia sharing, and location-aware services are fast becoming the norm. The
entire ecosystem constituting VAS is about devices and connectivity. The devices with more
storage capabilities and faster networks will lead to the uptake of VAS. The market will be
driven by data revenue services - content and applications.
With the launch of 3G in the Indian market, a variety of data services, mobile internet, and
location-based services, m-commerce, app stores, and applications are expected to increase the
end-user experience, and created revenue of 13,026 cores by the end of the year 2011. The
increased bandwidth made available by the imminent 3G networks, would allow operators to
introduce richer content applications that could create greater stickiness and re-use amongst both
retail and enterprise customers.
Service Providers are not only being asked to deliver greater bandwidth to mobile devices, but
their customers are also looking for more innovative services, including video, voice, location
services, and commerce transactions. By making these value-added services available, service
providers gain the opportunity to create additional revenue streams while at the same time
making their customers happy, leading to better customer retention. The focus of operators is to
provide mobile VAS services in the areas of banking (for better banking facilities, penetration),
healthcare (for better infrastructure in rural areas), and education. It is estimated that over 200
million people will require access to Medicare, credit, and education facilities in the next five
years. The growth will be driven by increased operator focus on VAS due to continuous fall in
voice tariffs, increased penetration of feature rich handsets, availability of vernacular content and
increased user adoption of VAS applications. Online insurance, online shopping, banking,
payments, online tickets, online business models and many other forms of virtual transactions are
trending in India. A report from the Internet and Mobile Association of India pegged a growth of
47%, bringing the total value of e-commerce in India to an estimated Rs. 47,000 crores in 2011.
M-Commerce requires high involvement from users as well as the providers. It tops the VAS
hierarchy in terms of complexity and involvement of a mobile user.
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12. 1.1 Introduction
Topic: Value added services in India.
In this project I have analyzed the market potential of the Value added service in India. I
collected information from various source regarding the usage of VAS. And forecast the future
prospects. To accomplish the above tasks I have taken following steps:
Collection of basic information
Target market segmentation
Questionnaire preparation
Survey
Collection of data
Analyzing the data
Preparing the report
1.2Aim and Objectives
The mobile phone is coming of age as it becomes an integral part of our life, and its application
extends from basic voice calling to instant messaging, calculator, mini camera, music player to
an internet ready, application driven computing system. While the reach of the mobile phone is a
force to be reckoned with and its potential to deliver services is immense, the range of services
currently being offered in the Indian Market is certainly limited. However, the plethora of needs,
from health and education to financial inclusion and governance, that it can serve are unlimited.
In this context, this study seeks to understand the
current and future state of Mobile Value Added Services (MVAS) in India along with some of
the key drivers, challenges, and solutions which can spur the growth of the ecosystem. The study
further delves into the potential of MVAS to enhance the quality of life and standard of living for
major sections of the Indian populace, including the effective and efficient delivery of
government services.
Objective of study are:
To find out the market potential of Value added service in India.
To find out the factors influencing the VAS service.
To find the customer satisfaction level with VAS providers.
Their perception about VAS?
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13. 1.3 Research Problem Statement
Method of data collection was through personal interview and therefore biasing becomes
a major limitation.
The sample was restricted to 50 customers, which may restrict the scope of study.
Owing to their pre occupation some customers were unable to answer the complete
questionnaire.
If the interviewer or the interviewee misunderstood the question, it may lead to the failure
of the research
Since I have used judgemental sampling technique and major limitation of this technique
is that the Samples are not easily defensible as being representative of populations due to
potential subjectivity of researcher.
Budget Constraint.
1.4 Scope of the Study
This study includes direct interaction with the customers and this helps us to know the ‗Market
potential and customer satisfaction level ‗to great accuracy. This study is of great importance to
the company which will know about the customer preference to buy a particular VAS service.
The company will gain information about customer‘s preference depending on the following
factors:
Price factor
Quality of Service
User Group
Preference of service.
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15. 2.1 Industry Overview
I. Total Telephone Subscribers
The number of telephone subscribers in India increased to 960.90 Million at the end of
May, 2012 from 952.91 Million at the end of April 2012, thereby registering a growth
rate of 0.84%. The share of urban subscribers has declined to 64.65% from 64.95%
whereas share of Rural Subscribers has increased to 35.35% in the month of May 2012.
With this, the overall Tele-density in India reaches to 79.28 at the end of May, 2012
from 78.71 of the previous month.
million at the end of May, 2012. Subscription in Rural Areas increased from 334.00
million to 339.69 million during the same period. The growth rate of Urban and Rural
Subscription is -0.37% and 1.71% respectively. The overall Urban Teledensity has
increased from 168.83 to 169.17 and Rural Teledensity increased from 39.57 to 40.21.
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16.
The Indian MVAS Market size is INR 26,000 Crore and is estimated to touch INR
33,280 Crore by 2013.
The MVAS Market has seen a growth of 32% over 2011. It is estimated to see a growth
of 28% in the next year.
Even though the ARPU has declined over the years, the per user spent on MVAS has
gone up by 28% in the last one year. It is now 27% of the ARPU. The dependency on
Voice services is reducing and to increase the ARPU, the emphasis must be put on Data
services such as MVAS.
The MVAS Market can be divided into two major categories: Current MVAS (63%) and
Emerging MVAS (37%)
The Current MVAS consists mainly of CRBT (27%) and SMS Based application (17%)
The Emerging MVAS consist mostly of Mobile Apps (10%) and Games (8%). These
have enhanced content and require higher data usage.
As of March 2012, there were 48 Mn Mobile Internet users in India. It has been growing
at the rate of 17%. Affordable mobile devices and cheaper data subscription rates are the
main drivers for this rapid growth.
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17. The Indian MVAS Industry
Uptake in MVAS Spends:
Currently, the Indian mobile telecom market comprises of 96% of Pre-Paid consumers. As large
as 80% of their monthly mobile expenditure is spent on voice services. Of the rest, majority goes
for SMS and CRBT related MVAS services. Thus, the user is left with very little amount to
spend on other MVAS application. Hence, the need to raise the awareness and make the MVAS
affordable for the common mobile user to increase adoption is all the more imperative.
The per user spent of MVAS has increased by 28% over last year even though the ARPU has
shown a decline over the years. Currently it stands at INR 24 per month per user. The
percentage share of per user spend on MVAS in ARPU has been increasing gradually.
We can say that ARPU is directly proportional to the expenditure on Voice services (which
includes calls, sms etc.) and Data services (mainly MVAS). Thus, the increasing share of MVAS
spent per user in ARPU means that the dependency on Voice services is reducing. The ARPU
has been declining over the year, primarily because of the decreasing voice rates. In December
2011, the ARPU was INR 96 for GSM services and 73 for CDMA services. Although it has
shown some signs of growth, it has not been able to achieve the earlier figures. This growth has
been fuelled with the increased spends in MVAS. In the coming years, even though the ARPU
will increase by 5 - 8%, there will be reduced contribution from the Voice services while the
Data services will take a major portion of the ARPU. In this wake, the operators are increasingly
moving towards the alternative revenue streams such as non-voice based services.
We have already started witnessing this trend with most of the MVAS applications built in and
heavily promoted.
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18. 2.2 Company Overview
Hungama Digital Media Entertainment
Hungama Digital Media
South Asia's largest mobile & Internet based Entertainment Company,
[1] began its journey as an online promotions agency during the internet boom in 1999. 10
years hence, it is a complete Digital Entertainment, Mobile services and Promo Marketing
entity. Today, Hungama Mobile is the leader in the Mobile Entertainment and Value Added
Services (VAS) in India.
Hungama is the largest aggregator, developer, publisher and distributor of Bellwood & South
Asian entertainment content in the world, having worldwide exclusive rights to over half a
million music and video titles. It powers nearly 70% of all mobile digital entertainment
content in India, and provides the same entertainment to consumers in 33 countries, with
more than 145 partners across the world.
Headquartered in Mumbai, Hungama Digital Media employs over 500 employees in five
countries. Originally launched as a brand promotions website in 1999, Hungama.com is today
India's largest on-demand Digital Entertainment storefront, serving audio, video and imagery to
South Asians across the world. At Hungama.com, consumers can preview, buy and download
entertainment across all genres.
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20. RECENT AWARDS
2012
Online Game Of The Year- WAT Awards 2012 Hungama Game Studio has bagged
the award for 'Best Online Game of the year', at the WAT Awards 2012. Cricket Stock
Exchange (CSX), the award winning game sponsored by Maruti Suzuki
2010
Hungama.com wins big at the 2010 Creative Abby‟s, with silver for the
Hungama.com My Play Application for Face book and a bronze each for the
Hungama.com WAP site and the Hungama.com Mobile Application.
2009
Hungama bags a „Meffy‟ for Tata Sky Active Mall!! Hungama has bagged a Meffy in
the 'Mobile First Innovation' category for the 'Tata Sky Active Mall' service. Hungama
Digital Media is the first Indian company to have won an award in this category.
PMAA 2009 Hungama Digital Media wins a ‗Gold Dragon‘ at Promotion Marketing
Awards of Asia 2009
FICCI BAF Gaming Hungama bags the FICCI BAF 2009 for Bollympics
Hungama Digital Media shimmers in Silver and Bronze at the 2009 Abby‟s Wins
Silver for the ‗Viral and Email Marketing‘ for and one Bronze for the ‗Integrated Digital
Campaign‘ - both for 'Ghajini'
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22. 2.3 Organization Structure
TEAM MEMBERS
Neeraj Roy
Chief Operating Officer, Hungama Mobile
CEO
Albert Almeida
Managing Director &
Siddhartha Roy
Services Chief Operating Officer
Voice
Consumer Business & Allied
Anuj Bajpai Assistant
Vice President Mobile
Arindam Nag
Head of Product, Consumer Business. Hungama
Carlton D‘Silva
Chief Creative Officer
Hemant Jain
Senior Vice President, Hungama Mobile
Kunal Arora
Head of Digital
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23. Manan Chhatrapati
Chief Technology Officer
Managed Services Business
Niloufer Dundh
Head, Integrated Media
Strategic Business
Salil Koul
Senior Vice President, Hungama Promo Marketing
Finance
Suleman Mobhani
Director & Co-founder
theinternational
Bellwood Hungama
Hungama
Nilay Kumar
Assistant Vice President,
Reetu Khatau
General Manager,
Saumin Shah
Vice President, Accounts &
Sunny Virmani
Vice President of
mobile business
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25. 3.1 Literature Overview
INTRODUCTION
1. Telecommunications had traditionally been a voice communication service. The
services today have moved beyond their fundamental role of voice communications to a
variety of non-core services, which in telecommunication parlance is called Value
Added Services (VAS). Value Added Services are enhanced services, in the nature of
non-core services, which add value to the basic telecom services.
2. Value Added Services add value to service, enabling the subscriber to use the
telephone, particularly the mobile phone or any end user terminal device for a host of
purposes like sending short messages, pictures, play games, listen to music, read news
headlines, astrology, get flight information, surf Internet, mobile banking including
mobile payments etc.. In times to come people will buy mobile phones or any end user
terminal device not just to remain connected but to express themselves in a variety of
ways.
3. The last decade has seen a phenomenal growth in the telecom subscriber base. We
have crossed the 850 mn mark with respect to wireless telephone subscribers and adding
nearly 18 mn connections every month. In the developing nations like India, where
Personal Computer (PC) penetration is so low, mobile phone offers to be the best form
of a communication application. Managing and buying PCs and laptops is still too
expensive for our masses.
4. Till some time back use of mobile phones was limited to voice and text messaging
providing an effective media to citizens for interacting with each other anytime
anywhere. However, telecommunication has moved beyond providing just basic voice
calls. The mobile phone has evolved from a mere communication device to smart phone
with an ability to tap a plethora of information & services and as a result being referred
to as the =fourth screen‗, after Cinema halls, Television and PC.
5. Consumer expectations have also evolved to where the term wireless no longer
implies just voice service, but rather represents an effective medium through which one
connects—in real time, from any place—to be informed, entertained, engaged in visual
or audio communication, or to buy goods and services. The increasing young generation
of India is driving this phenomenon with their nomadic lifestyle.
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26. MOBILE VALUE ADDED SERVICES –GROWTH DRIVERS AND
PRESENT STATUS
MVAS Size
The MVAS market has seen significant growth in the past few years. The rate of adoption of
MVAS has been higher than the rate of growth of new mobile subscribers. The total market size
of the MVAS market was INR 19,700 Crores in 2011 and will growth at an average rate of 28%
to reach INR 26,000 Crores by 2012. This market size considers purely the MVAS services
MVAS Categories in India
With this immense growth of the MVAS market, 2 popular categories have emerged in the
market:
Current MVAS:
We can call these the ABC of MVAS.
Emerging MVAS:
These can be called the DEFG of MVAS.
The ABCs comprise Ringtones, Caller Ring Back Tunes, and SMS services like live cricket
updates, Horoscope updates, Voting, Contests, and Wallpapers etc. These categories of MVAS
have been going strong since the inception of MVAS and will continue to do so in the near
future. The Indian mobile user was introduced to MVAS through these ABCs and accepted by
the users. The primary reason for this is Convenience and Ease of Usage. One doesn‘t need to go
through a lot of processes but merely a few buttons to get these services on their phones.
Besides, most of these services are not dependent on the model of the mobile handset. Thus the
ABCs take the highest share of the MVAS market pie and will continue to grow strong.
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27. The DEFGs comprise applications (or in the colloquial parlance: apps) in the categories of
health, medication, applications which require higher bandwidth and mGovernance. With the
new innovations in technology, these emerging MVAS will gain momentum in the near future.
Most of these services are dependent on the telecom infrastructure and the type of mobile
handset. As the penetration of the featurephones and smart phones increases in the Indian market
we shall see higher penetration of the DEFGs. On a broader level, we can define the Current and
Emerging MVAS as:
Current MVAS:
The traditional MVAS comprising mostly of entertainment and SMS based services. These can
be accessed on basic phones and do not require higher bandwidth or high handset specifications.
Emerging MVAS:
The new age applications with enhanced content and higher data usage. These need phones with
an ability to download applications and process them i.e. the feature phones and the smart
phones.
Apart from these categories, mCommerce needs a special mention among the MVAS services.
More than being an application / service, it will act as an enabler for the user to make payments
from their mobile devices.
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28. Type of MVAS Users
As the Indian MVAS market moves towards maturity, we can see two major segments of
Individual MVAS users emerge:
O Mature User
O Novice User
The Mature Individual User:
This user segment has used the SMS and CRBT in the past and now has moved on to using
applications on feature phones and smart phones. Hailing usually from the urban areas, this user
is usually an innovator or early adaptor and tries out new developments before the entire market
adopts it. This group has moved on to Off-Deck MVAS applications and will download,
customize and share new applications. Although lesser in number, the per user contribution of
this segment is higher than the Novice Individual user.
The Novice Individual User:
This user segment has been using the mobile phone mostly for voice and SMS for
communication or recently started using the mobile phone. This segment is usually the late
majority in the adoption cycle and does not like to
try new
applications unless the need arises. This segment has not paid for the applications or downloaded
any on the handset and prefers to use the ones pre-loaded. This group will start using the OnDeck MVAS applications like pre-loaded games and then move on to SMS based applications.
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29. As the maturity grows, they will move on to use social networking applications on their
handsets.
Many of these users will commence their journey on the Internet not from the browser on a
computer but an application on a mobile handset and as they grow mature, will define how
internet usage evolves.
The Maturity and the Application Usage Matrix explains how users at various levels of maturity
start using MVAS applications depending on their usability. For instance, a novice user will start
using MVAS from the simplest applications like SMS and games which are embedded on his/her
mobile device before moving on to external applications. His/her maturity also keeps increasing
as the usability of the applications increase.
MVAS Ecosystem
There are various types of MVAS ecosystems existing today. The major ones are:
Operator Centric Model:
The predominant business model for MVAS in India is Operator Centric where the Mobile
Network Operator (MNO) is at the centre of the system. In this model, the MNO takes the sole
responsibility and thus, the risk of marketing the MVAS application. The price and promotions
are decided by the MNO and hence, a larger portion of the revenue from the application is taken
by the MNO. The Content Delivery Entities viz. the application owners and developers are paid
a smaller percentage of the revenue although they are assured of volume.
In the Indian market, this model has worked so far as most of the MVAS applications were either
SMS based or On-Deck MVAS types. There was very little penetration of Off-Deck MVAS
applications.
Non Operator Centric Model:
In this model, the MNO stays outside the system. The content aggregator or the content owner
may be at the centre of the system. Here, the terms are decided by the Content owner aggregator.
The MNO just provides the channel for the data transfer
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30. Each of these models has the risk of giving too much responsibility and power, hence revenue in
the bag of one of the stakeholders. This may lead to a case of abuse of power making the end
user suffer. Thus, to keep the user‘s benefit in mind, one must adopt a business model with the
user at the centre. With the increasing penetration of Mobile Internet, a User Centric Model is
indeed a possibility with more emphasis on Off-Deck type MVAS application which the user can
choose and select based on his needs. Hence the need for innovative content increases all the
more. Thus, with this, the need for a fair revenue share becomes all the more necessary.
User Centric Model:
A model where the user is at the centre of the ecosystem, the content owners / developers have
their separate identity with short codes. They supply the application to the end user. The MNO
provides the channel for download and billing. The device manufactures provide the necessary
technical platform support to the content owners / developers. And ultimately the product gets
delivered at the users‘ end. This whole ecosystem exists in an ad-supported ecosystem
encouraging digital commerce.
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31. Global Scenario
The global ecosystem is predominantly Platform Owner centric and closely mimics the Service
Aggregator Model. The distribution and delivery of the application is controlled by the platform
owner or the Application Stores viz. Apple AppStore, Google Play store, Blackberry AppWorld
etc. These Application Stores contain the applications in the form of a directory which make it
easier to discover and download application. The payment mechanism is centralized with the
Platform owner providing the payment gateway.
Although this is a convenient ecosystem that has existed for long as it is beneficial economically
and provides a single point of control, it may lead to abuse of power by the Platform owner.
This type of ecosystem also leads to the much feared „Walled Garden‟ situation where even
though pleasant, the sole controller wields supreme power over the contents of the app store
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32. hereby separating it from the other application it doesn‘t want on its platform. This puts a
restraint on the users from using any application of their choice.
The ‗Walled Garden‘ like situation can be avoided by allowing doors and windows in the ‗Wall‘
by allowing the users to access the application from outside sources other than the default service
provider. This will ensure no abuse of power by the service providers and empower the end user.
Thus, we see the need to have a user centric model where the application developer / owner
interacts directly with the end user and the operator and the handset manufacturer are providing
payment and technology support.
Future of MVAS
The MVAS industry has been one of the major drivers of growth of the Indian telecom industry
over the last few years. And it will continue to enable the end user to do more with their mobile
devices than mere make and receive calls. With focus from the stakeholders and support from the
regulating authority, we can expect aster development for MVAS. Some of the developments
that we can expect in the near future are:
Mobile Advertisement:
o Improved connectivity will allow richer and interactive advertisement than the
current SMS based advertisements. This will be less irritating and will have a higher conversion
ratio. We have already started seeing this phenomenon with the introduction of QR codes in
newspapers and magazines which lead the user to interactive advertisements.
Local language Content:
o With the linguistic diversity of India, one needs to have the content in local
languages to appeal to a larger group of users. Many websites have already started offering this
service to the consumers.
Rural MVAS:
o And last but not in any way the least, the key to the Indian market lies in the
huge and hitherto untapped rural market. And Location based services, Local Language and
Right Content will be the key to serve this market successfully. Thus understanding the Indian
mobile consumer and utilizing the full potential of the mobile device is the next step in the
Mobile Revolution.
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33. Mobile Value Added Services Value Chain
B- Mobile Value Added Services – Value Chain
A typical value chain in the MVAS industry encompasses content creators/providers,
mobile advertisers, aggregators, technology enablers, telecom service providers and
end users or subscribers. Content aggregation and provision of technology platform is
usually performed by a single entity known as Value Added Service Provider
(VASP). It is also to be noted here that in the value chain of MVAS, telecom service
providers are very big entity in comparison to the content providers/content
aggregators who are basically SMEs. Mobile handset manufacturers have also started
playing an important role in the VAS value chain. Advertisers are also looking for
higher delivery of marketing activities through mobile VAS platform.
(i) Content owner/ provider
The first stakeholder in the value added services value chain is the Content
Authors/Producers or copyright owners known as content owners. These entities provide
the core content which drives the VAS – which may be owned or sourced by them.
Examples include the music companies, movie production houses, media companies,
TV channels etc. Their offerings include copyright of songs, entertainment news,
movies, television listings, movie trailers, and promotional media content. Advertisers
are also producing content for promotion and delivery of marketing communication to
consumers through mobile VAS platform.
33
34. (ii) Content Aggregators
These are the companies that aggregate content obtained from various content
owners/providers, convert it into the digital or any other suitable format and make it
available to technology enablers (value added service providers) or telecom service
provider.
(iii) Technology Enablers
These entities also called as Value Added Service Provider (VASP) provide the
technology layer for the telecom networks, which in most of the cases also performs the
task of Content aggregator. The technology layer often includes a VAS platform, Mobile
Application development & hosting, MIS & reporting tools, operator billing, collection
& payment settlement engine. Technology enabler may or may not be dependent on
content developers, e.g. mobile phone back up facility does not require any content from
the developer but the solution is directly provided to the telecom operator.
(iv) Telecom Service Provider
Telecom service providers own the access network & end users and also provide enduser billing & collection for the provision of VAS. They have commercial agreements or
arrangements with the VASPs for providing the VAS.
(v) Handset manufacturers
In some cases the Mobile handset manufacturers have direct agreement with content
owners or VASPs for content which are embedded in the handset or terminal device. An
example of such content is games coming with the mobile handset. They also provide
features such as on-device portals which are accessible through embedded links
provided in the handsets.
34
36. Regulatory Framework for MVAS
Presently, Indian MVAS industry is young and evolving. MVAS providers are not
regulated or licensed and mainly they act as service partners of telecom service
providers. The telecom service providers are the core in the value chain as they own
network infrastructure and have a large customer base. VAS providers aggregate
different type of content and enable the content suitable to be transported on mobile
network. Both telecom service providers and VAS providers complete the value chain
for providing VAS to customers. Telecom service provider and VASPs enter
commercial agreements for provisioning of MVAS. There is no standard format of
agreement and, telecom service providers being the core of the MVAS value chain,
usually dominate in finalizing the terms and conditions of the agreement.
The framework for issue of licenses for some value added services already exists,
particularly in respect of Voice Mail/Audiotex, Unified Messaging etc. The Department
of Telecommunications had notified the revised terms and conditions for Other Service
Providers (OSP) category on 31st May, 2007. As per these terms and conditions, =Other
Service Provider‗means a company providing Application Services. Application
Services have been defined to mean services like tele-banking, tele-medicine, teleeducation, tele-trading, e-commerce, call centre, network operation centre by using
Telecom Resources provided by Authorized Telecom Service Providers.
In view of the growing significance of value added services, possibilities of various
new/enhanced value added services in 3G, BWA and Next Generation Networks (NGN)
environment, it may be appropriate to consider whether the licensing system is to be
resorted for licensing of mobile value added service providers. Migration to NGN could
change the existing service providers‗business models. The service independence from
core network in case of NGN could encourage Value Added Service Providers to launch
innovative services and sector specific solutions. A possible consequence of such new
developments may change service provisioning profile. A sizable number VASPs
providing many innovative applications & value added services could emerge and
traditional network service providers may become pure access providers. This could
change the business model of the existing telecom service providers to an extent, which
may require regulatory measures.
In view of the growing and likely unprecedented expansion in these services and their
contribution to the revenue stream of telecom service providers, the importance of
bringing a suitable framework cannot be over-emphasized. The framework could ensure
a level playing field and transparency between content providers/aggregators and
telecom service providers.
36
37. There are divided views on the issue of bringing independent MVAS provider under
licensing regime. One of the key arguments in favor of a licensing regime for value
added services is to ensure that consumer‗s interests as well as the interest of smaller
VASPs are safeguarded. The licensing will allow the independent MVAS providers to
seek interconnection with QoS from telecom service providers. As a licensee they can
also approach TRAI/TDSAT for resolving their issues. On the contrary it is argued that
looking at the large number of entities involved, some of them being very small, it may
be difficult to bring them under licensing regime. Further bringing these small entities
involved in MVAS value chain will unnecessarily burden them with the various
obligation attached to a license. At times this may be counterproductive and suppress
innovative entrepreneurship.
Separate licensing regime is available for value added services in Singapore, China,
Malaysia, Bahrain and some African countries. On the other hand in some countries
there is no need to obtain a license to provide value added services and a simple
intimation is sufficient. For example in Australia, all suppliers of Mobile Premium
Services are required to just submit company details to the Mobile Premium Services
Industry Register managed by Communications Alliance.
The Authority in its recommendations on .Spectrum Management and Licensing
Framework. issued in May 2010, recognized the need to develop a healthy ecosystem
for value added services and indicated to initiate a consultation process separately to
identify measures for the proper growth of the VAS industry, including bringing them
under the licensing regime. The Authority also recommended that all future licenses
should be unified licenses and that spectrum be delinked from the license.
Is there a need to bring the Value Added Service Providers (VASPs) providing Mobile
Value Added Services under the licensing regime?
If yes, do you agree that it should be in the category of the Unified License as
recommended by this Authority in May 2010? In case of disagreement, please indicate
the type of license along with the rationale thereof.
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38. Revenue sharing
Presently telecom service providers and VAS providers enter into mutual commercial
agreements for provisioning of value added services. These agreements contain various
terms and conditions including the conditions as to how the revenue generated through
provision of MVAS will be shared between VAS providers and telecom service
providers.
Content is an important ingredient for plethora of value added services being provided
by telecom service providers. For these services, the telecom service providers mainly
depend upon the VASPs but concerns have been raised by some of the stakeholders that
VAS providers do not get commensurate returns.
It is reported that Mobile service providers dominate the MVAS market to a significant
extent, by determining MVAS service fees, by selecting VASP according to their service
portfolio they want to offer, by excluding service providers who do not generate
sufficient revenues, by monitoring service contents and by controlling service access and
billing.
According to various reports, telecom service providers typically retain the bulk of the
revenue (around up to 60% to 65%) (Table 2.1) from MVAS depending on the type of
content that is being delivered to the users. The rest of the revenue is shared among
copyright owners, content developers, content aggregators, and technology enablers.
According to market reports, in case of content with copyright, the mobile service
provider is reported to get 60% revenue; a technology enabler gets 15% while content
developer and aggregator together gets 15% share in MVAS revenue. The copyright
owner gets balance 10% of MVAS revenue. In case of content without copyright,
mobile service provider is reported to receive 65% of the revenues, a technology enabler
gets 20% and balance 15% goes to content developer and aggregator. However, these
are not the standard percentage of revenue share and vary across the service providers
based on the mutual commercial agreements and type of content.
38
39. Source: IAMAI Report on Mobile VAS in India:
It is said that the telecom service providers justify their revenue share with 3 costs –
cost of building the market (i.e. entry & license fees, branding, customer acquisition
etc.); cost of usage of the infrastructure, interconnection and finally cost of billing and
collection.
On the contrary the content providers/content aggregators (VASPs) severely complain
and express their concerns that they do not get adequate share as telecom service
providers retain large share of revenue earned through mobile Value Added Services. As
per them it makes return on investment (ROI) of VASP unattractive, not enough to
encourage faster capital investments required to grow the VAS industry to the desired
level. In the absence of suitable revenue share for both VAS provider and service
provider the development of VAS, which is essential both for development of the
economy as well as the telecom sector, could suffer.
Adequate revenue share for VAS providers could make the market attractive for the
entry of many entrepreneurs in the VAS business. On the other hand, better margins
from MVAS for telecom service providers could meet the revenue gap from core
services and attract investment in the network expansion.
The revenue share may also be dependent upon a number of factors such as the nature
of technology, utility of content, demand from the customers and innovation involved.
There may be some VAS which may involve higher degree of innovation and utility
than some other applications which could be commoditized. In this scenario it may be
necessary that the innovative VAS solutions be rewarded suitably so as promote
39
40. innovation. Accordingly, revenue share could become a function of the innovation and
utility involved in the concerned VAS.
How do we ensure that the VAS providers get the due revenue share from the Telecom
Service providers, so that the development of VAS takes place to its full potential? Is
there a need to regulate revenue sharing model or should it be left to commercial
negotiations between VAS providers and telecom service providers?
At the same time, how do we also ensure that the revenue share is a function of the
innovation and utility involved in the concerned VAS? Should the revenue share be
different for different categories of MVAS?
The revenue earned through MVAS is decided based on the information recorded in
Management Information System (MIS). Both VAS providers and telecom service
providers maintain their respective MIS for arriving at the revenue accrued through
provisioning of MVAS.
As per the industry feedback, there are often differences in billing between the MIS of
telecom service providers and the MVAS providers. It is also reported that there is a lack
of transparency in statistics of content transactions, absence of credible systems to
address disagreements and grievance redressal mechanisms. In the absence of a system
validating the number of data downloads or transactions between MIS of telecom
service providers and the MVAS providers, the account provided by the service provider
may prevail due to higher bargaining power. This may lead to differences in the actual
revenues earned between telecom service providers and the MVAS providers. Sharing of
information between telecom service providers and the MVAS providers can lead to
reconciliation between MIS of telecom service providers and the MVAS providers in a
transparent and fair manner.
Do you agree that the differences come up between the MIS figures of the operator and
VAS provider? If yes, what measures are required to ensure reconciliation in MIS in a
transparent manner?
40
41. Barriers to Growth of MVAS in India
The challenges emanate from the fact that this segment of the Indian telecom industry is
still in a nascent stage and the rules of the game are still evolving. Further, apart from
the operators, there are a large number of small players operating across the value chain.
The challenges posed to the industry that are likely to hinder projected growth are as
follows:
Authentication standards: Presently, there are no authentication standards set out
for operators and aggregators that apply to the download of content (10). This needs to
be addressed by the institution of standards by an industry governing body such as the
Telecom Regulatory Authority of India (TRAI) to authenticate the flow of information.
This will help create trust among different stakeholders across the MVAS value chain.
Copyright protection: As stated earlier, the regulatory framework for copyright
protection continues to remain weak despite the extension of existing copyright laws to
content, with several instances of violations. In the wake of inadequate remedial action
on this front, the MVAS segment is likely to be disadvantaged. The industry requires a
stringent regulatory framework in place, to encourage the flow of branded content t o
consumers. This will instill trust and confidence among various stakeholders across the
value chain, leading to increased revenues from data services in the long run.
Low feature handsets: Despite considerable growth in mobile subscriber base, low
feature handsets continue to remain the order of the day. The purchase decision for
handsets continues to be driven by basic utility for voice (6). According to the India
Mobile Handset Usage Satisfaction Study 2006, an integrated digital camera, FM Radio,
and speaker phone features remain the most
likely upgrade drivers. Features such as Tri-band, Bluetooth, Infrared Port, etc., are
growing, but are far from developing mass appeal (26). The lack of widespread adoption
of feature-rich mobile
handsets are a barrier to the growth of MVAS in India. However, in the recent past,
prices of feature-rich handsets have declined sharply owing to increasing competition
among manufacturers and technological advances. There will be a move towards
advanced feature handsets in the future even if need and lifestyle do not justify it (26).
Low “General Packet Radio Services” (GPRS) connectivity:
GPRS connectivity in India continues to be low given limited handset capability and
operator constraints. There is a large population of users who are not familiar with
accessing GPRS.
Despite its limitation in terms of number of characters (160 characters) and being more
cumbersome, SMS continues to be the most popular delivery channel. In comparison,
GRPS will provide a rich as well as user-friendly online experience. This can only pick
up once the penetration of feature rich handsets grows, and operators provide free GPRS
connection.
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42. Transparency in revenue sharing arrangements: The current revenue
sharing arrangements favor the operators, and are in stark contrast to the business
models in established markets such as China, Japan, and Europe. The market is highly
unregulated and the absence of an apex body has led operators to pursue obfuscation
strategies.
The Indian MVAS industry needs to take a close look at best practices in developed
markets to design a fair revenue distribution system, whereby creators/owners are
adequately rewarded for creating higher quality content (10). There is a need to create a
transparent framework that clearly sets out balanced revenue sharing arrangements, with
a fair system of payouts to different
stakeholders across the value chain.
Excessive focus on entertainment-related VAS: The MVAS market in India
continues to be focused on entertainment (movies, music and sports) catering to the needs
of the younger consumer segment. Going forward, there is a need to focus on information
VAS and transactional VAS (M-commerce), ensuring even growth among all consumer
segments.
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43. Current Trends in MVAS
The mobile phone is one of the everyday life changing developments of the previous
decade. Today mobile phones can be addressed as a multitasking communication and
entertainment device for an increasing segment of the group market. The youth are tech
savvy and are comfortable trying a new medium. Mobile entertainment sector is very
vast and includes:
Online maps (Navigation) – This service helps you to find your location online
as well as plan a route using this online map feature.
Download media contents such as mobile phone ringtones, pictures, games,
and videos – All the latest mobile service contents are available to be
downloaded instantly for your mobile phone.
Remix your own mobile phone ringtones – This is an application wherein you
can remix your own mobile phone ringtones to be stored in your mobile phone.
The application is very simple and you can create an exclusive ringtone that no
one else has.
Join online competition – There are many competitions and contests available
online. You can win get great prizes including all luxury products or you can
also get a chance to meet your favorite stars.
Betting online and lottery – If you are interested into gambling, then with this
facility of online gambling, you can certainly try your luck.
Celebrity latest news and gossips - Want to know what‘s happening in your
favorite superstar‘s and celebrity‘s life? You can get your daily fix of your
favorite‘s stories.
Mobile TV – TV features a whole range of exceptional channels for your mobile
phone viewing pleasure. Turn in to any of your favorite sports, news, or comedy
and enjoy the service any time anywhere.
Online magazines – Get the latest news on your favorite magazine, glamour,
sports, automobile and all.
Dating – If you are still single and available and looking for true love, you can
look further with this special feature.
Food and drink – With this feature you can find nearby restaurants and bars.
You can also find some guidance from this service as to where you can go for
lunch or dinner.
Information on health and diet – Taking care of yourself is the first thing you
need to do before you start taking care of others. By enabling this service you
can get good health and diet tips, just by a click on your mobile phone.
Cinema ticket‟s booking – You can book your cinema ticket online using your
mobile phone. All you need to do is to carry your identity card along with your
mobile phone and collect your ticket from the window at cinema hall. You can
also look for information about the latest movies and book tickets...
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45. 4.1 Overall Research Process
Marketing research process is a set of six steps which defines the tasks to be accomplished in
conducting a marketing research study. These include problem definition, developing an
approach to problem research design formulation, field work, data preparation and analysis, and
report generation and presentation.
Stages of marketing research process
Step 1: Problem Definition
The first step in any marketing research project is to define the problem. In defining the problem,
the researcher should take into account the purpose of the study, the relevant background
information, what information is needed, and how it will be used in decision making. Problem
definition involves discussion with the decision makers, interviews with industry experts,
analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once
the problem has been precisely defined, the research can be designed and conducted properly.
Step 2: Development of an Approach to the Problem
Development of an approach to the problem includes formulating an objective or theoretical
framework, analytical models, research questions, hypotheses, and identifying characteristics or
factors that can influence the research design. This process is guided by discussions with
management and industry experts, case studies and simulations, analysis of secondary data,
qualitative research and pragmatic considerations.
Step 3: Research Design Formulation
A research design is a framework or blueprint for conducting the marketing research project. It
details the procedures necessary for obtaining the required information, and its purpose is to
design a study that will test the hypotheses of interest, determine possible answers to the research
questions, and provide the information needed for decision making. Conducting exploratory
research, precisely defining the variables, and designing appropriate scales to measure them are
also a part of the research design. The issue of how the data should be obtained from the
respondents (for example, by conducting a survey or an experiment) must be addressed. It is also
necessary to design a questionnaire and a sampling plan to select respondents for the study.
More formally, formulating the research design involves the following steps:
1.
2.
3.
4.
5.
6.
Secondary data analysis
Qualitative research
Methods of collecting quantitative data (survey, observation, and experimentation)
Definition of the information needed
Measurement and scaling procedures
Questionnaire design
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46. 7. Sampling process and sample size
8. Plan of data analysis
Step 4: Field Work or Data Collection
Data collection involves a field force or staff that operates either in the field, as in the case of
personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing),
from an office by telephone (telephone or computer-assisted telephone interviewing), or through
mail (traditional mail and mail panel surveys with prerecruited households). Proper selection,
training, supervision, and evaluation of the field force help minimize data-collection errors.
Step 5: Data Preparation and Analysis
Data preparation includes the editing, coding, transcription, and verification of data. Each
questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or
letter codes are assigned to represent each response to each question in the questionnaire. The
data from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or
input directly into the computer. Verification ensures that the data from the original
questionnaires have been accurately transcribed, while data analysis, guided by the plan of data
analysis, gives meaning to the data that have been collected. Univariate techniques are used for
analyzing data when there is a single measurement of each element or unit in the sample, or, if
there are several measurements of each element, each RCH variable is analyzed in isolation. On
the other hand, multivariate techniques are used for analyzing data when there are two or more
measurements on each element and the variables are analyzed simultaneously.
Step 6: Report Preparation and Presentation
The entire project should be documented in a written report which addresses the specific research
questions identified, describes the approach, the research design, data collection, and data
analysis procedures adopted, and present the results and the major findings. The findings should
be presented in a comprehensible format so that they can be readily used in the decision making
process. In addition, an oral presentation should be made to management using tables, figures,
and graphs to enhance clarity and impact.
For these reasons, interviews with experts are more useful in conducting marketing research for
industrial firms and for products of a technical nature, where it is relatively easy to identify and
approach the experts. This method is also helpful in situations where little information is
available from other sources, as in the case of radically new products
Source: Malhotra, Naresha K. (2002), Basic Marketing Research: A Decision-Making Approach,
Upper Saddle River, NJ: Prentice Hall
46
47. 4.2 Research Design
The research design is a comprehensive master plan of the research study to be undertaken,
giving a general statement of the methods to be used. The function of a research design is to
ensure that requisite data in accordance with the problem at hand is collected accurately and
economically. Simply stated, it is the framework, a blueprint for the research study which guides
the collection and analysis of data. The research design, depending upon the needs of the
researcher may be a very detailed statement or only furnish the minimum information required
for planning the research project. To be effective, a research design should furnish at least the
following details.
a) A statement of objectives of the study or the research output.
b) A statement of the data inputs required on the basis of which the research problem is to be
solved.
c) The methods of analysis which shall be used to treat and analyze the data inputs.
A Research model is a way of proceeding through the research process by breaking the process
into logical steps each action can be designed more efficiently.
Define Research Objectives: Decide very specifically the questions that need to be
answered.
Do preliminary research: Collect any information that will help define the objectives
more clearly, including existing statistics on the industry or the target constituency.
Design the formal research. Develop the data-collection instruments (such as
questionnaires or interview protocols). Decide on how the target group will be sampled
and choose the means of contact (mail. telephone, or in person).
Do fieldwork: Collect the data, making sure that the procedure is as free of bias as
possible.
Analyze the data. Analyze. Interpret and report the results.
(Source: Wolf 1990 Managing a nonprofit organization, Prentice Hall, p. 133)
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48. 4.3 Types of Research
There are basically two types of research approaches:
QUANTITATIVE APPROACH
Quantitative research refers to the systematic empirical investigation of social phenomena via
statistical, mathematical or computational techniques. The objective of quantitative research is to
develop and employ mathematical models, theories and/or hypotheses pertaining to phenomena.
The process of measurement is central to quantitative research because it provides the
fundamental connection between empirical observation and mathematical expression of
quantitative relationships. Quantitative data is any data that is in numerical form such as
statistics, percentages, etc. In layman's terms, this means that the quantitative researcher asks a
specific, narrow question and collects numerical data from participants to answer the question.
The researcher analyzes the data with the help of statistics. The researcher is hoping the numbers
will yield an unbiased result that can be generalized to some larger population. Qualitative
research, on the other hand, asks broad questions and collects word data from participants. The
researcher looks for themes and describes the information in themes and patterns exclusive to
that set of participants.
Quantitative research is used widely in social sciences such as psychology, economics,
sociology, and political science, and less frequently in anthropology and history. Research in
mathematical sciences such as physics is also 'quantitative' by definition, though this use of the
term differs in context. In the social sciences, the term relates to empirical methods, originating
in both philosophical positivism and the history of statistics, which contrast qualitative research
methods.
Qualitative methods produce information only on the particular cases studied, and any more
general conclusions are only hypotheses. Quantitative methods can be used to verify which of
such hypotheses are true.
Quantitative research is generally made using scientific methods, which can include:
The generation of models, theories and hypotheses
The development of instruments and methods for measurement
Experimental control and manipulation of variables
Collection of empirical data
Modeling and analysis of data
In the social sciences particularly, quantitative research is often contrasted with qualitative
research which is the examination, analysis and interpretation of observations for the purpose of
discovering underlying meanings and patterns of relationships, including classifications of types
of phenomena and entities, in a manner that does not involve mathematical models. Approaches
to quantitative psychology were first modelled on quantitative approaches in the physical
48
49. sciences by Gustav Fechner in his work on psychophysics, which built on the work of Ernst
Heinrich Weber. Although a distinction is commonly drawn between qualitative and quantitative
aspects of scientific investigation, it has been argued that the two go hand in hand. For example,
based on analysis of the history of science, Kuhn (1961, p. 162) concludes that ―large amounts of
qualitative work have usually been prerequisite to fruitful quantification in the physical sciences‖
QUALITATIVE APPROACH:
Qualitative research is a method of inquiry employed in many different academic disciplines,
traditionally in the social sciences, but also in market research and further contexts.[1]
Qualitative researchers aim to gather an in-depth understanding of human behaviour and the
reasons that govern such behaviour. 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 than large samples.
In the conventional view, qualitative methods produce information only on the particular cases
studied, and any more general conclusions are only propositions (informed assertions).
Quantitative methods can then be used to seek empirical support for such research hypotheses.
This view has been disputed by Oxford University professor Bent Flyvbjerg, who argues that
qualitative methods and case study research may be used both for hypotheses-testing and for
generalizing beyond the particular cases studied.
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.
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, analyzes 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?
49
50. 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. Phenomenology 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 analysis, in order to clarify definitions, identify ethics, or make a value
judgment concerning an issue in their field of study.
Source: http://www.newagepublishers.com/samplechapter/000896.pdf
http://en.wikipedia.org/wiki/Qualitative_research
In my case I have used Quantitative Approach.
4.4 Types of Data: Secondary Data & Primary Data
PRIMARY DATA:
It refers to the statistical material which the investigator originates for him for the purpose of the
enquiry in hand. In other words, it is one which is collected by the investigator for the first time
e.g. if the cost of living of workers in a city are to be computed, then the information regarding
the facts collected by the investigators or enumerators would be termed as Primary data. In India
there are various agencies which collect primary data e.g... National Sample Survey (NSS), State
Level Economic and Statistical Departments etc. When we use primary data, it is called raw
material. According to Wessel, "Data originally collected in the process of investigation are
known as primary data."
Merits
Degree of accuracy is quite high.
It does not require extra caution.
It depicts the data in great detail.
Primary source of data collection frequently includes definitions of various terms and
units used.
For some investigations, secondary data are not available.
Demerits
Collection of data requires a lot of time.
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51.
It requires lot of finance.
In some enquiries it is not possible to collect primary data.
It requires a lot of labor.
It requires a lot of skill.
In my case I‘m collecting data through questionnaire and personal interview of different IT
heads in and around Pune.
SECONDARY DATA:
Secondary data is the data that have been already collected by and readily available from other
sources. Such data are cheaper and more quickly obtainable than the primary data and also may
be available when primary data cannot be obtained at all.
Advantages of Secondary data
1. It is economical. It saves efforts and expenses.
2. It is time saving.
3. It helps to make primary data collection more specific since with the help of secondary
data, we are able to make out what are the gaps and deficiencies and what additional
information needs to be collected.
4. It helps to improve the understanding of the problem.
5. It provides a basis for comparison for the data that is collected by the researcher.
Disadvantages of Secondary Data
1. Secondary data is something that seldom fits in the framework of the marketing research
factors. Reasons for its non-fitting are:a. Unit of secondary data collection-Suppose you want information on disposable
income, but the data is available on gross income. The information may not be
same as we require.
4.6 Data Collection Instruments
Depending on the nature of the information to be gathered, different
instruments are used to conduct the assessment: forms for gathering data from
official sources such as police or school records; surveys/interviews to gather
information from youth, community residents, and others; and focus groups to
elicit free-flowing perspectives.
For purposes of the data-collection process, the following discussion provides
information on the types of data-collection tools most commonly used.
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52. Self-Administered Surveys
Self-administered surveys have special strengths and weaknesses. They are
useful in describing the characteristics of a large population and make large
samples feasible. In one sense, these surveys are flexible, making it possible to
ask many questions on a given topic. This also provides flexibility in the
analysis of the responses. On the other hand, standardized questionnaire items
often represent the least common denominator in assessing people’s attitudes,
orientations, circumstances, and experiences. By designing questions that will
be appropriate for all respondents, it is possible to miss what is most
appropriate to many of the respondents (Babbie, 1992).
Some advantages of the self-administered survey are:
Low cost. Extensive training is not required to administer the survey.
Processing and analysis are usually simpler and cheaper than for other
methods.
Reduction in biasing error. The questionnaire reduces the bias that
might result from personal characteristics of interviewers and/or their
interviewing skills.
Greater anonymity. Absence of an interviewer provides greater
anonymity for the respondent. This is especially helpful when the survey
deals with sensitive issues such as questions about involvement in a
gang, because respondents are more likely to respond to sensitive
questions when they are not face to face with an interviewer.
Some of the disadvantages are:
Requires simple questions. The questions must be straightforward
enough to be comprehended solely on the basis of printed instructions
and definitions.
No opportunity for probing. The answers must be accepted as final.
Researchers have no opportunity to clarify ambiguous answers.
Personal Interviews
The interview is an alternative method of collecting survey data. Rather than asking respondents
to fill out surveys, interviewers ask questions orally and record respondents‘ answers. This type
of survey generally decreases the number of ―do not know‖ and ―no answer‖ responses,
compared with self-administered surveys. Interviewers also provide a guard against confusing
items. If a respondent has misunderstood a question, the interviewer can clarify, thereby
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53. obtaining relevant responses (Babbie, 1992). As noted previously, personal interviews are a good
way to gather information from community leaders, particularly those who might be unwilling or
too busy to complete a written survey.
Some of the advantages of the personal interview are:
Flexibility. Allows flexibility in the questioning process and allows the
interviewer to clarify terms that are unclear.
Control of the interview situation. Can ensure that the interview is
conducted in private, and respondents do not have the opportunity to
consult one another before giving their answers.
High response rate. Respondents who would not normally respond to a
mail questionnaire will often respond to a request for a personal
interview.
Some of the disadvantages are:
Higher cost. Costs are involved in selecting, training, and supervising
interviewers; perhaps in paying them; and in the travel and time required
to conduct interviews.
Interviewer bias. The advantage of flexibility leaves room for the
interviewer’s personal influence and bias, making an interview subject to
interviewer bias.
Lack of anonymity. Often the interviewer knows all or many of the
respondents. Respondents may feel threatened or intimidated by the
interviewer, especially if a respondent is sensitive to the topic or to some
of the questions (Frankfort-Nachmias and Nachmias, 1996).
Focus Groups
Another method of collecting information is the focus group. Focus groups are
useful in obtaining a particular kind of information that would be difficult to
obtain using other methodologies. A focus group typically can be defined as a
group of people who possess certain characteristics and provide information of
a qualitative nature in a focused discussion.
Focus groups generally are composed of six to twelve people. Size is
conditioned by two factors: the group must be small enough for everyone to
participate, yet large enough to provide diversity. This group is special in terms
of purpose, size, composition, and procedures. Participants are selected
because they have certain characteristics in common that relate to the topic at
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54. hand, such as parents of gang members, and, generally, the participants are
unfamiliar with each other. Typically, more than one focus group should be
convened, since a group of seven to twelve people could be too atypical to offer
any general insights on the gang problem.
A trained moderator probes for different perceptions and points of view,
without pressure to reach consensus. Focus groups have been found helpful in
assessing needs, developing plans, testing new ideas, or improving existing
programs (Krueger, 1988; Babbie, 1992). Focus groups offer several
advantages:
Flexibility allows the moderator to probe for more in-depth analysis and
ask participants to elaborate on their responses.
Outcomes are quickly known.
They may cost less in terms of planning and conducting than large
surveys and personal interviews.
Limitations include:
A skilled moderator is essential.
Differences between groups can be troublesome to analyze because of the
qualitative nature of the data.
Groups are difficult to assemble. People must take the time to come to a
designated place at a particular time.
Participants may be less candid in their responses in front of peers.
4.6.1 SELECTED DATA COLLECTION METHOD
In my case I have gone with Questionnaires for collecting my primary data.
4.6.2 Questionnaire Design
Type of Question
Best Used for
Open-ended
Breaking the ice in an interview; when respondents'
own words are important; when the surveyor doesn't
know all the possible answers.
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55. Closed-ended
Collecting rank ordered data; when all response
choices are known; when quantitative statistical
results are desired.
Likert-scale
To assess a person's feelings about something.
Multiple-choice
When there are a finite number of options
(remember to instruct respondents as to the number
of answers to select).
Ordinal
To rate things in relation to other things.
Categorical
When the answers are categories and each
respondent must fall into exactly one of them.
Numerical
For real numbers, like age, number of months, etc.
4.7 Survey Procedure
4.7.1 Sampling
The terminology "sampling" indicates the selection of a part of a group or an aggregate with a
view to obtaining information about the whole. This aggregate or the totality of all members is
known as Population although they need not be human beings. The selected part, which is used
to ascertain the characteristics of the population, is called Sample. While choosing a sample, the
population is assumed to be composed of individual units or members, some of which are
included in the sample. The total number of members of the population and the number included
in the sample are called Population Size and Sample Size respectively.
While the definitions of a population and a sample have been introduced in a formal manner in
the previous paragraph, the idea of sampling is not really new. The process of generalizing on the
basis of information collected on a part is really a traditional practice. The annual production of a
certain crop in a region is computed on the basis of a sample. The quality of a product coming
out of a production process is ascertained on the basis of a sample. The government and its
various agencies conduct surveys from time to time to examine various economic and related
issues through samples.
Advantages of Sampling
Less Expensive
55
56. The first obvious advantage of sampling is that it is less expensive. If we want to study the
consumer reaction before launching a new product it will be much less expensive to carry out a
consumer survey based on a sample rather than studying the entire population which is the
potential group of customers. Although in decennial census every individual is enumerated,
certain aspects of the population are studied on a sample basis with a view to reduce cost.
Less Time Consuming
The smaller size of the sample enables us to collect the data more quickly than to survey all the
units of the population even if we are willing to spend money. This is particularly the case if the
decision is time bound. An accountant may be interested to know the total inventory value
quickly to prepare a periodical report like a monthly balance sheet and a profit and loss account.
A detailed study on the inventory is likely to take too long to enable him to prepare the report in
time. If we want to measure the consumer price index in a particular month we cannot collect
data of all the consumer prices even if the expenditure is not a hindrance. The collection of data
on all the consumer items and their processing in all probability are going to take more than a
month. Thus when ready, the price index will not serve any .meaningful purpose.
Greater Accuracy
It is possible to achieve greater accuracy by using appropriate sampling techniques than by a
complete enumeration of all the units of the population. Complete enumeration may result in
accuracies of the data. Consider an inspector who is visually inspecting the quality of finishing of
certain machinery. After observing a large number of such items he cannot just distinguish items
with defective finish from good ones. Once such inspection fatigue develops the accuracy of
examining the population completely is considerably decreased. On the other hand, if a small
number of items are observed the basic data will be much more accurate. It is of course true that
the conclusion about a population characteristic such as the proportion of defective items from a
sample will also introduce error in the system. However, such errors, known as sampling errors,
can be studied, controlled and probability statements can be made about their magnitude. The
accuracy which results due to fatigue of the inspector is known as non sampling error. It is
difficult to recognize the pattern of the non sampling error and it is not possible to make any
comment about its magnitude even probabilistically.
Destructive Enumeration
Sampling is indispensable if the enumeration is destructive. If you are interested in computing
the average life of fluorescent temps supplied in a batch the life of the entire batch cannot be
examined to compute the average since this means that the entire supply will be wasted. Thus, in
this case there is no other alternative than to examine the life of a sample of lamps-and draw an
inference about the entire batch.
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57. 4.7.2Sampling techniques: Advantages and disadvantages:
Technique
Descriptions
Advantages
Disadvantages
Simple
random
Random sample from
whole population
Highly representative if all
subjects participate; the ideal
Not possible without complete list
of population members;
potentially uneconomical to
achieve; can be disruptive to
isolate members from a group;
time-scale may be too long,
data/sample could change
Stratified
random
Random sample from
identifiable groups (strata),
subgroups, etc.
Can ensure that specific
groups are represented, even
proportionally, in the
sample(s) (e.g., by gender),
by selecting individuals from
strata list
More complex, requires greater
effort than simple random; strata
must be carefully defined
Cluster
Random samples of
successive clusters of
subjects (e.g., by
institution) until small
groups are chosen as units
Possible to select randomly
when no single list of
population members exists,
but local lists do; data
collected on groups may
avoid introduction of
confounding by isolating
members
Clusters in a level must be
equivalent and some natural ones
are not for essential
characteristics (e.g., geographic:
numbers equal, but
unemployment rates differ)
Stage
Combination of cluster
(randomly selecting
clusters) and random or
stratified random sampling
of individuals
Can make up probability
sample by random at stages
and within groups; possible
to select random sample
when population lists are
very localized
Complex, combines limitations of
cluster and stratified random
sampling
Purposive
Hand-pick subjects on the
basis of specific
characteristics
Ensures balance of group
sizes when multiple groups
are to be selected
Samples are not easily defensible
as being representative of
populations due to potential
subjectivity of researcher
Quota
Select individuals as they
come to fill a NonProbability by
characteristics proportional
to populations
Ensures selection of
adequate numbers of
subjects with appropriate
characteristics
Not possible to prove that the
sample is representative of
designated population
Snowball
Subjects with desired traits
or characteristics give
Possible to include members
of groups where no lists or
No way of knowing whether the
sample is representative of the
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58. names of further
appropriate subjects
Volunteer,
accidental,
convenience
identifiable clusters even
exist (e.g., drug abusers,
criminals)
population
Either asking for
volunteers, or the
consequence of not all
those selected finally
participating, or a set of
subjects who just happen
to be available
Inexpensive way of ensuring
sufficient numbers of a study
Can be highly unrepresentative
Source: Black, T. R. (1999). Doing quantitative research in the social sciences: An integrated approach to research
design, measurement, and statistics. Thousand Oaks, CA: SAGE Publications, Inc. (p. 118)
In my research work I’ll be using Judgmental Sampling Technique
4.7.3 Probability Sampling
A probability sampling scheme is one in which every unit in the population has a chance
(greater than zero) of being selected in the sample, and this probability can be accurately
determined. The combination of these traits makes it possible to produce unbiased estimates of
population totals, by weighting sampled units according to their probability of selection.
Probability sampling includes:
Simple Random Sampling
Systematic Sampling
Stratified Sampling
Probability Proportional to Size Sampling
Cluster or Multistage Sampling
4.7.3 NON PROBABILITY SAMPLING
Non probability sampling is any sampling method where some elements of the population
have no chance of selection (these are sometimes referred to as 'out of
coverage'/'undiscovered'), or where the probability of selection can't be accurately
determined. It involves the selection of elements based on assumptions regarding the
population of interest, which forms the criteria for selection. Hence, because the selection of
elements is non-random, non probability sampling does not allow the estimation of sampling
errors. These conditions give rise to exclusion bias, placing limits on how much information
a sample can provide about the population. Information about the relationship between
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59. sample and population is limited, making it difficult to extrapolate from the sample to the
population.
No probability sampling methods includes:
Accidental sampling
Non-Probability sampling
Purposive sampling
Source: http://en.wikipedia.org/wiki/Sampling_%28statistics%29
Comparing Probability-based and Non Probability Sampling
The main differences between probability-based and Non Probability sampling are the
following:
If probability-based sampling is properly carried out, there will be none of the bias which
can arise from subjective judgments in sample selection. There is the possibility of such
bias, however, in Non-Probability samples. For example, interviewers may consciously
or unconsciously choose Non-threatening or easy-to-approach respondents, or those who
are easy to contact.
As Deville says "... the Non-Probability method demands the formulation of a
hypothetical model to fit the data. On the other hand, a probabilistic survey does not, in
principle, depend upon any model.‖
The validity of the model underlying Non-Probability sampling may be open to question,
and difficult to verify.
With probability sampling, we use the randomization distribution to draw conclusions
from the sample, and to obtain sampling errors. In a Non-Probability sample, we cannot
get comparable estimates of precision.
In general, non-response in a Non-Probability sample is handled by selection of another
respondent fitting the quota. We can be more flexible in the way we handle non-response
in a probability-based sample (although this means the use of some form of modeling).
In general, the costs of a Non-Probability sample will be lower than a probability-based
sample of the same size. In this regard, it might be worth repeating the comment of
Deming who wrote sternly, "There is no way to compare the cost of a probability sample
with the cost of a judgment sample, because the two types of sample are used for
different purposes. Cost has no meaning without a measure of quality, and there is no
way to appraise objectively the quality of a judgment sample as there is with a probability
sample."
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60. 4.8 Sampling Elements
4.8.1 Target Population:
Target population includes, Software companies, Exporters, Colleges, Call Centre,
Manufacturers, and other companies
4.8.2 Sample size
A sample size of 50 will be taken.
4.8.3 Sampling Unit
A unit in a statistical analysis refers to one member of a set of entities being studied. It is the
material source for the mathematical abstraction of a "random variable". Common examples of a
unit would be a single person, animal, plant, or manufactured item that belongs to a larger
collection of such entities being studied.
In my research work sample unit is the single organization/SME.
4.9 Limitations of My Research:
Method of data collection was through personal interview and therefore biasing becomes
a major limitation.
The sample was restricted to 100 customers, which may restrict the scope of study.
Owing to their pre occupation some customers were unable to answer the complete
questionnaire.
If the interviewer or the interviewee misunderstood the question, it may lead to the failure
of the research
Since I have used judgemental sampling technique and major limitation of this technique
is that the Samples are not easily defensible as being representative of populations due to
potential subjectivity of researcher.
Budget Constraint.
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62. 5.1 Characteristics of the Sample
Data analysis is a body of methods that help to describe facts, detect patterns, develop
explanations, and test hypotheses. It is used in all of the sciences. It is used in business, in
administration, and in policy. The data obtained from a study may or may not be in numerical or
quantitative form, that is, in the form of numbers. If they are not in numerical form, then we can
still carry out qualitative analyses based on the experiences of the individual participants. If they
are in numerical form, then we typically start by working out some descriptive statistics to
summaries the pattern of findings. These descriptive statistics include measures of central
tendency within a sample (e.g. mean) and measures of the spread of scores within a sample (e.g.
range).
The main source for data collection was through Questionnaire and Personal Interview.
Interviews
Interviews vary considerably in terms of their degree of structure. In general terms, unstructured
interviews (e.g. non-directive or informal) lend themselves to qualitative analyses, whereas
structured interviews lend themselves to quantitative analysis. As Coolican (1994) pointed out,
there are various skills that interviewers need in order to obtain valuable data. These skills
involve establishing a good understanding with the person being interviewed, adopting a nonjudgmental approach, and developing effective listening skills.
There are various problems involved in interpreting interview information. First, there is
the problem of social desirability bias. Most people want to present themselves in the best
possible light, so they may provide socially desirable rather than honest answers to
personal questions. This problem can be handled by the interviewer asking additional
questions to establish the truth. Second, the data obtained from an interviewer may reveal
more about the social interaction processes between the interviewer and the person being
interviewed (the interviewee) than about the interviewee‘s thought processes and
attitudes. Third, account needs to be taken of the self-fulfilling prophecy. This is the
tendency for someone‘s expectations about another person to lead to the fulfillment of
those expectations.
Questionnaire
1. Questionnaire is relatively economical and inexpensive. It is possible to cover a large number
of people scattered over a wide area.
2. This method saves time. Instead of meeting people personally it is possible to approach them
in a larger number through the mailed questionnaire. Analysis and interpretation can be done
quickly.
3. Questionnaire ensures anonymity. The respondent is free to express his views and opinions.
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63. 4. Questionnaire is said to be more suitable for eliciting information regarding some personal and
private affairs such as sex habits, marital relations, etc., because of the anonymity that it maintains.
5. Questionnaire does not put much pressure on the respondent‘s emotionality. It provides sufficient leisure time to answer the questions in a relaxed mood.
6. In questionnaire, the collected answers can be processed and analysed in a simpler and a faster
manner. Uniformity of answers helps the standardisation of the recording procedure.
Disadvantages and Limitations:
1. Questionnaire method cannot be administered in the case of illiterate and uneducated persons.
2. Questionnaire is not suitable when a spontaneous answer is very much required.
3. There is no way of checking misinterpretations and unintelligible replies by the respondents.
4. Proportion of returns, especially of mailed questionnaire, can be very low, as low as 10%. This
does not give a comprehensive picture of the situation.
5. In spite of their advantage questionnaires lack the flexibility of interviews. Generally, they
have lower response rates, since it is easier for the respondents not to respond. They permit the
measurement of verbal behaviour only, without allowing the researcher to make observations.
Furthermore, mailed questionnaires enable the respondent to skip questions.
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