6.1. Field Research

Field research (also known as field work or field study) is the collection of raw data in natural settings. It helps to reveal the habits and habitats of various organisms present in their natural surroundings. The term is mainly used in the natural and social sciences studies, such as in anthropology, folkloristics, archaeology, biology, ecology, environmental science, ethnomusicology, geography, geology, geophysics, linguistics, paleontology, and sociology, although it is also used in other subjects, such as in auditing. The term "field research", is also used by many industries as a generic reference to collecting or creating new information outside of a laboratory or typical workplace.

Field research is less technically known as field work, a term originating in farm and plantation labor, and a term sometimes used to refer to the temporary fortifications constructed prior to battle. Field work, which is conducted in situ, can be contrasted with laboratory or experimental research which is conducted in a quasi-controlled environment. In survey research, field work refers to face-to-face or telephone interviewing. Field work can also include methods such as sociometry.

The interviewing or observation of people to learn their languages, folklore, and social structures constitutes field work. Especially when humans themselves are the subject of study, protocols must be devised to reduce the risk of observer bias and the acquisition of too theoretical or idealized explanations of the actual workings of a culture. Participant observation, data collection, and survey research are examples of field research, in contrast to what is often called experimental or lab research.

6.2.Desk Research

As depicted by name Desk Research is the research technique which is mainly acquired by sitting at a desk. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. However, it could also be a complete waste of time and money if the researcher does not have the proper knowledge of how the research in performed.

Desk research is very effective and can be conducted in starting phase of market research as it is quite quick and cheap and most of the basic information could be easily fetched which can be used as benchmark in the research process.

There are basically two types of desk research techniques:

Internal Desk Research - Internal desk research can be treated as the most reasonable starting point of research for any organization. Much Information could be generated internally within the organization as a course of normal process. Account related information which indicates what type of products are sold, in how much quantity and at what cost, sold to which type of customers including their geographical location and so on. The main advantage here in performing internal desk research is that it involves internal and existing organizational resources to organize the collected data in such a way that it is not only efficient but also usable. Internal desk research is comparatively very cheap and effective as internal recourses are deputed and the expenditure in getting data from outside is less.

External Desk Research

External Desk Research involves research done outside the organizational boundaries and collecting relevant information. These outside resources are described below:

Online Desk Research

There is incredible amount of data available online on internet. It’s important for organization to be information specific while fetching out this information as there are billions of pages available on internet. There could be two approaches for digging out the relevant information from internet, one is directly browsing the specific information from industrial, marketing or business sites and extracting the information out of these sites. Secondly, using the various search engines for modulated searching. The important aspect here is to refine the searching techniques in such a way that results are promising and relevant. For this it is necessary that the researcher should know the importance of the research and follow the guideline intellectually to reduce the efforts made and time consumed in searching.

Government published data

Government usually publishes a great extent of data online that can be used in the research process. This data is related to social, financial and economical aspects. The government websites are mostly free to access and contains most prominent information. Thus, this could be the cheapest medium of gathering the information.

Customer desk research

One of the best and most prominent ways of extracting information for research is directly communicating with existing or prospect customer. Customers are the one who are considered the most informed as they are actually using products and services and are aware of the current market trends more than any other. Hence the feedback and information provided by customers is the most accurate and useful data which can be used most effectively in the further process of research

Questions to UNIT 6

1. What is market research?

2. W hat approaches are there to define the types of market research?

3. What is field research?

4. What are the peculiarities of desk research?

5. What is on-line desk research?

6. What are the approaches for digging out the relevant information?

7. What is government published data?

8. Give the definition of customer desk research.

9. Why is market research important for the company development?

10. Give specific examples of making the research for finding out the customer requests and needs

Group work: you are the members of the team whose task is to find out the reasonability to set up coffee machines at university. Work out the questioner to find out the opinion of students of different groups, age, departments. Analyze the results and present your decision based on the results of field and desk researches. (alternative option for setting out at university can be candy and biscuits machine, soft ice-cream machine )

UNIT 7 COMPONETNS OF GDP

Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living

GDP (per capita) was first developed by Simon Kuznets for a US Congress report in 1934

GDP can be determined in three ways: the product (or output) approach, the income approach, and the expenditure approach.

Approaches of determining the GDP
Product approach	Expenditure approach	Income approach
sums the outputs of every class of enterprise to arrive at the total.	works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things.	works on the principle that the incomes of the productive factors must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.

Production approach

The production approach is also called as Net Product or Value added method. This method consists of three stages:

• Estimating the Gross Value of domestic Output in various economic activities;

• Determining the intermediate consumption, i.e., the cost of material, supplies and services used to produce final goods or services; and finally

• Deducting intermediate consumption from Gross Value to obtain the Net Value of Domestic Output.

Income approach

Another way of measuring GDP is to measure total income. If GDP is calculated this way it is sometimes called Gross Domestic Income. The US "National Income and Expenditure Accounts" divide incomes into five categories:

1. Wages, salaries, and supplementary labour income

2. Corporate profits

3. Interest and miscellaneous investment income

4. Farmers’ income

5. Income from non-farm unincorporated businesses

These five income components sum to net domestic income at factor cost.

Expenditure approach

In economics, most things produced are produced for sale, and sold. Therefore, measuring the total expenditure of money used to buy things is a way of measuring production.

Components of GDP under expenditure approach:

• Consumption consists of private (household final consumption expenditure) in the economy. These personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses but does not include the purchase of new housing

• Investment includes business investment in equipments (examples: construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory; spending by households (not government) on new houses is also included in Investment).

• Government spending is the sum of government expenditures on final goods and services.

• Exports represents gross exports. GDP captures the amount a country produces, including goods and services produced for other nations' consumption, therefore exports are added.

• Imports represents gross imports.

Questions to UNIT 7

1. What is GDP

2. W ho developed GDP? When?

3. How can GDP be determined?

4. What is production approach?

5. What are the stages in production approach?

6. What is income approach?

7. What are the 5 categories of income under the US National Income and Expenditure Accounts?

8. What is Expenditure approach?

9. What are the Components of GDP under expenditure approach?

UNIT 8 FUNCTION OF MONEY

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment

T he money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money usually forms by far the largest part of the money supply

Medium of exchange

When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the 'double coincidence of wants' problem. A medium of exchange should have stable purchasing power (Value) and therefore it should possess the following characteristics:

• value common assets

• constant utility

• low cost of preservation

• transportability

• divisibility

• high market value in relation to volume and weight

• recognizability

• resistance to counterfeiting

A unit of account

A unit of account is a standard numerical unit of measurement of the market value of goods, services, and other transactions.

To function as a 'unit of account', whatever is being used as money must be:

• Divisible into smaller units without loss of value; precious metals can be coined from bars, or melted down into bars again.

• Fungible: that is, one unit or piece must be perceived as equivalent to any other, which is why diamonds, works of art or real estate are not suitable as money.

• A specific weight, or measure, or size to be verifiably countable. For instance, coins are often milled with a reeded edge, so that any removal of material from the coin (lowering its commodity value) will be easy to detect.

Store of value

T o act as a store of value, a money must be able to be reliably saved, stored, and retrieved – and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time

Common alternatives that act as stores of value are:

• real estate - actual deeds in protectible land

• gold - once the basis of the gold standard

• silver - once the basis of the silver standard

• precious stones, and precious metals

Standard of deferred payment

A “standard of deferred payment” is an accepted way to settle a debt – a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation.

Measure of value

Money, essentially acts as a standard measure and common denomination of trade. It is a basis for quoting and bargaining of prices. It has significantly in developing efficient accounting systems.

Questions to UNIT 8

1. W hat is money?

2. What are the functions of money?

3. What characteristics should money have to function as unit account?

4. What alternatives are there as a store of value?

5. What characteristics does money have as a measure of value?

6. What is standard of deferred payment?

UNIT 9 BARTER

Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable (e.g., hyperinflation or deflationary spiral) or simply unavailable for conducting commerce.

Barter systems are often utilized between nations, and sometimes between a nation and a corporation. Barter also occurs between corporations or companies and other businesses, and sometimes between a business and an individual, or two individuals. In the United States, billions of dollars worth of goods and services are exchanged each year through bartering.

Barter, also known as counter-trade, is an accepted practice that makes trading more convenient for nations that have difficulty with currency conversion, as well as for nations with fewer financial resources but sufficient commodities. For example, if a country produces plenty of rice, that country may exchange it with another nation to acquire another type of grain, or fruits and vegetables. On the other hand, one country might trade foodstuffs for textiles or oil.

Business-to-business barter often includes merchandise or services in exchange for advertising. A company may supply promotional items or a service for a TV, radio station or newspaper, and in return receive a set amount of airtime or a certain number of print ads. Other examples include trading advice for goods, or trading merchandise or services for stock.

Q uestions to UNIT 9

1. What is barter?

2. What is counter trade?

3. What is the role of business-to-business barter?

4. What do you think is barter the alternative of direct payment? Why?

UNIT 10 MARKET ECONOMY

A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed economies, where the price system is under some state control or at least heavily regulated. In mixed economies, state-directed economic planning is not as extensive as in a planned economy.

In the real world, market economies do not exist in pure form, as societies and governments regulate them to varying degrees rather than allow full self-regulation by market forces. The term free-market economy is sometimes used synonymously with market economy, but, as Ludwig Erhard once pointed out, this does not preclude an economy from having social attributes opposed to a laissez-faire system.

The term used by itself can be somewhat misleading. For example, the United States constitutes a mixed economy (substantial market regulation, agricultural subsidies, extensive government-funded research and development, Medicare/Medicaid), yet at the same time it is foundationally rooted in a market economy. Different perspectives exist as to how strong a role the government should have in both guiding the market economy and addressing the inequalities the market produces. This is evidenced by the current lack of consensus on issues such as central banking, and welfare.

Although no country has ever had within its border an economy in which all markets were absolutely free, the term typically is not used in an absolute sense. Many states which are said to have a market economy have a high level of market freedom, even if it is less than some parts of the population would prefer. Thus, almost all economies in the world today are mixed economies with varying degrees of free market and planned economy traits. For example, in the United States there are more market economy traits than in the Western European countries (an exception being the UK, which is considered, even by Greenspan, to be a freer market than the US).

Milton Friedman and Friedrich Hayek stated that economic freedom is a necessary condition for the creation and sustainability of civil and political freedoms. They believed that this economic freedom can only be achieved in a market-oriented economy, specifically a free market economy.

Questions to UNIT 10

1. W hat is market economy?

2. What is economic freedom? Give your point of view.

3. What is a free market economy?

UNIT 11 Economic Equilibrium

A condition or state in which economic forces are balanced. These economic variables will be unchanged from their equilibrium values in the absence of external influences. Economic equilibrium may also be defined as the point where supply equals demand for a product – the equilibrium price is where the hypothetical supply and demand curves intersect.

The term “economic equilibrium” can also be applied to any number of variables, such as the interest rate that allows for the greatest growth of the banking and non-financial sector.

E conomic equilibrium can be static or dynamic and may exist in a single market or multiple markets. It can be disrupted by exogenous factors, such as a change in consumer preferences, which can lead to a drop in demand and consequently a condition of oversupply in the market. In this case, a temporary state of disequilibrium will prevail until a new equilibrium price or level is established, at which point the market will revert back to economic equilibrium.