Application of scientific methods in the field of business
Introduction
In business studies, there is need of application of scientific methods because entrepreneurship is an art and science too. There are few entrepreneurs in the economy due to lack of factors which helps to induce successfulness. It always takes a hard work and usage of resources for one to be successful. In this field of study, we shall examine various forms of scientific methods which help most of the businesses to achieve their objectives which is to minimize the costs and maximize the profit. This paper seeks to identify experimental ways which can be applied in the field of business and further proposes the hypothesis which can help to solve problems in this area. Don't use plagiarised sources.Get your custom essay just from $11/page
1.0 Scientific methods
Some of the scientific techniques which would apply in this area include; observation, exploration of the products in the market, differentiation of the brands, costs evaluation among others. Observation phenomenon is significant and a scientific method which can be applied in the field of business. The entrepreneurs should be able to observe the surrounding and the climatic condition to know the time to open the store (Allan, 2012). This also includes observation of the targeted customers based on the number of buyers he/she received in the industry. This can be applied in the essence that for a business person to be lucky, he/she has to allocate the market in a strategic position to win more customers which could lead to more sales.
Exploration of the products in the market method consists of the way in which the business owner can identify a variety of products which can be sold in the market. The entrepreneur should be a risk taker who is willing to improve on a range of the commodities being offered. This is a good thing to the customers as variety will lead to more purchases due to differences in tastes and preferences.
Differentiation of the products is also a scientific method in which the entrepreneur should apply to attract more customers. This means creating a different brand and packing commodities for the clients. This is supposed to be different from other competing firms which would help to build a good reputation and also winning more clients.
Costs evaluation method is a scientific approach which can be applied in business sector whet by the entrepreneur play with customer’s psychology based on prices.He/she should set fair prices for the products in which most of the customers can afford. This method is scientific since it involves calculation of total costs and revenue which is meant to increase the overall sale thus increasing the rate of stock turnovers.
2.0 Proposition of hypothesis
Hypothesis is essential as they help to summaries the usage of variables in a scientific field which can also be applied in business. This is based on the assumptions one makes from a given statistical data evaluation. Proposition of the hypothesis can either be positive or negative based on whether it will be null or alternative; Ho/H1. This leads to efficiency in the determination of 3rrors made when analyzing a problem affecting entrepreneurs in the market.
There are various questions which many business people ask themselves. There are also factors which affect the performance of the businesses which are taken as variables while other factors remain constant in the market. The following are different hypothesis testing criteria which can be used in this field.
- The use of KOF index technique which helps to incorporate all the economic, Social and political dimension. This method will measure the flow of the actual revenue and direct business investment
- Using regression analysis. In this method, a study of dummy variables which affect the business and its impact is analyzed. The technique helps to investigate the error term and help to test the hypothesis and make a conclusion whether to take H0/H1.
- The use of OLS criteria which is more comfortable and does not require too many steps to examine statistical data. This approach has been found to be effective depending on researchers conducted before.
3.0 Discussion of strategic plans on hypothesis testing
This is an example of a business person who sells vanilla and wants to evaluate the variables which affect the sales of the ice-vanilla such as the age group of the buyers or the targeted group, the price of the vanilla, population-level among others. The hypothesis steps would include;
4.0 Testing the hypothesis
The correlation analysis will help us to determine the amount of money spend on vanilla which will be compared with variables like the price of the vanilla, age of the consumers as well as the level of the population surrounding the company selling the vanilla. The difference between the amount of money spent on the ice-vanilla and the level of the population involved will help in the calculation of the correlation of the firm.
Graph 1. A diagram showing the amount spent on vanilla and marital status of the consumers
The analysis will indicate what type of hypothesis involved in the correlation, such that the final results will be able to have a null and an alternative explanation. When the correlation is negative, we take the null hypothesis and reject the alternative hypothesis and conclude that there is no relationship between the number of population and the amount spent on the vanilla. The age of the customers will also be analyzed in the data which will be able to tell whether there is any relationship in the amount of money spent on the ice-vanilla and the age of the customers.
Table 1: The correlation between the gender, marital status and the amount spent on vanilla
gender marital status amount spent
male married $67.00
female married $80.90
male single $50
female married $98.80
male single $89
female married $30
female married $30
male single $600
female married $20
male single $65
female married $56
male single $70
female married $20
male single $63
male single $20
The marital status of the consumers are affecting the amount of the money spent on the ice –vanilla, the single people seem to be buying more vanilla and spending more money on vanilla while the married people are paying little amount. Those people who are married may be having another spending thus decreasing their chances of consuming the vanilla. The female also seems to be having a higher liking for vanilla as compared to the male customers.
Graph 2. A diagram showing the level of population and amount spent on vanilla
The level of demand for the ice-vanilla hike when the people who are consuming are single as compared to when they are married. The analysis will give the management of the ice-vanilla company an overview of the customers they should mostly target. This provides the company with a challenge as it is not easy to tell those customers who are married and single or divorced by just looking at them( Carson, 2013). The company should also pay more targets to those schools which have got girls as compared to boy’s schools. Young people seem to like ice-cream and consume it more often as compared to the old people.
In conclusion, Scientific methods can be used in the various field depending on the objective of the study or the act. In the business study, scientific techniques can help to make a straight decision which can help the business to be successful. Various hypothesis testing methods can be applied in industry to test errors on a hypothesis which can help to draw a conclusion and take the appropriate mitigations.
References
Allan H. Young, C. (March 4, 2012). The eight great challenges every Business Faces: Mastering business challenge.
Carol Carson (2013). Statistical tools for nonlinear regression in econometrics: Practical guidelines. New York.
George Jazsi (2014). The Criterion for Evaluating the Predictive Ability correlation analysis.ppg556