Case 5.1
When The Going Gets Tough, the Tough Get Going For Upscale Gyms
1.
Marketing research will provide in-depth understanding of the market for upscale gyms
and unmet consumer needs and help managers develop a better marketing plan/mix to attract
new members. For example, marketing research helps management understand what drives
people to join upscale gyms and the importance and priority of those key drivers. Marketing
research also tells how much new members are willing to pay for the value they will get.
2.
Marketing research will also provide existing members’ ratings of key attributes and
their unmet needs and help managers identify and deliver what existing members want to feel
satisfied. For example, marketing research helps management understand why people maintain
the membership and the importance of those key contributing factors. Marketing research also
reveals any improvement areas that enhance satisfaction level of current members.
3.
Management Decision Problem: What should the management of East Bank Club do to
attract new members and increase the revenues during the challenging economic environment of
the early 2000’s?
4.
The marketing research problem is to determine the key driving factors for new members
and existing members. More specifically, the marketing research problem should address the
following:
a.
What is the demographic and pyschographic profile of existing customers of East
Bank Club?
b.
What is the potential target market size based on the demographic and
psychographic profile of existing customers?
c.
What are the important driving factors for new membership?
d.
What are the important driving factors for retaining existing membership?
e.
What is the satisfaction level of existing customers and how can it be enhanced?
5.
Research Question: Are status and socializing the key reason for being a member?
H1: Members view their membership as a direct representation of their status.
H2: Working out and being healthy is not the number one priority for a majority of the
members.
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Case 5.2
Telephia: Telescoping the Wireless Industry
1.
Telephia would be classified as a syndicated service using the framework of Figure 1.7
because it supplies marketing information to multiple clients in the wireless industry on a
subscription basis. It is the “Nielsen Rating” of the wireless industry.
2.
Using the information provided by Telephia, Nokia can address various types of problem
identification research including market potential, market share, image, market characteristics,
forecasting, and business trends research.
3.
Using the information provided by Telephia, Nokia can address various types of problem
solving research including market segmentation and target market selection, product, pricing,
promotion, and distribution research.
4.
Marketing research can play an important role in helping Nokia increase its market share
in the US. It can provide Nokia with an understanding of how businesses and consumers select
wireless products (e.g., cellular handsets) and services. It can also provide information on
competitors and their marketing strategies.
5.
The management decision problem is: What can Nokia do to increase its share of the US
cellular handsets market?
6.
The marketing research problem is to determine how consumers select wireless products
such as cellular handsets. Specifically,
a.
What criteria do consumers use for evaluating wireless handset manufacturers?
b.
How do customers in the target market evaluate various wireless handset
manufacturers?
c.
What is the demographic and psychographic profile of customers loyal to Nokia?
d.
What characteristics differentiate Nokia loyalists form other target customers?
7.
A graphical model explaining how consumers select a cellular handset (cell phone).
Need to buy/replace cellular hand set
Information search
Choice criteria
Evaluation of alternative brands/models
Selection of a cellular hand set
8.
RQ1
H1
H2
RQ2
Are consumers price sensitive when it comes to the purchase of cellular hand sets?
The light users of handsets are more price sensitive than the heavy users.
Those who are less technology savvy are more price sensitive than the technology savvy
users.
Do consumers desire advanced features in handsets?
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H1
H2
Consumers desire advanced features in handsets even though they may not use them.
The heavy users desire advanced features to a greater extent as compared to the light
users of cellular handsets.
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Case 5.3
Eastman Kodak: From High Touch to High Tech
1.
Marketing research will help Kodak better penetrate the photography market by
identifying unmet consumer needs and determining key benefits of the new services. For
example, marketing research can help management measure consumer confidence in a new
service concept and consumer acceptance of its benefits and value.
2.
The marketing research problem is to determine consumer preference and purchase
intentions for the proposed new service. More specifically:

Is the new service concept appealing to the consumers?

Do consumers think the new service will deliver new benefits not available
otherwise?

Does the new service increase or decrease their purchase intention about other
Kodak products among current Kodak users and non-users?

What is the demographic and psychographic profile of consumers who express a
strong preference for Kodak’s new service?
3.
Research Question 1: Do consumers like this new service that will make picture sharing
as easy to use as the TV set?
H1: Consumers like the new picture sharing service because of its ease of use.
H2: Consumers like the new service because it is innovative.
Research Question 2: Do consumers continue to place the trust in the Kodak brand for the
new service?
H2: Consumers place the same trust in the Kodak brand for the new service.
H2: Older consumers (age greater than 45 years) place greater trust in the Kodak brand
than younger consumers (age 15 to 45 years).
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Case 5.4
United States Postal Service: Does Its Service Measure Up?
1.
In order to obtain the required information, three types of online searches can be utilized.
First, key words should be entered in standard search engines like www.google.com and
www.yahoo.com. The keywords should be descriptive of the type of the information and
attempt to restrict the number of responses. Some of the keywords that could be used are:
“ground parcel shipments”, and “expedited package shipments”. The second type of search that
can be used is a database search. Through the library Web site, students can search for articles in
magazines, papers and periodicals like The New York Times and The Wall Street Journal
concerning market share in the package/parcel delivery industry. In addition, Lexis-Nexis
Academic Universe business and industry news database can be used to search for market share
statistics. Finally, the web sites of USPS, Fed EX, UPS, etc. should be visited looking for press
releases that may contain the information needed. It may also be useful to visit the web site of
the department of commerce.
2.
I would use projective techniques to overcome limitations of unstructured direct
techniques (focus groups and depth interviews). Projective techniques may elicit responses that
subjects would be unwilling or unable to give if they knew the purpose of the study. In the
USPS focus groups, the respondents knew that the focus groups were being conducted for the
USPS and were therefore blunt in their criticism. At times, in direct questioning, the respondent
may intentionally or unintentionally misunderstand, misinterpret, or mislead the researcher. In
these cases, projective techniques can increase the validity of responses by disguising the
purpose. This is particularly true when the issues to be addressed are personal, sensitive, or
subject to strong social norms. Projective techniques are also helpful when underlying
motivations, beliefs, and attitudes are operating at a subconscious level. Among projective
techniques, I would use association technique (more specifically word association). The test
words will be the names of the different package delivery companies (USPS, Fed Ex, UPS,
DHL, Airborne Express, etc.) The underlying assumption of this technique is that association
allows respondents to reveal their inner feelings about the topic of interest. It is often possible to
classify the associations as favorable, unfavorable, or neutral. An individual’s pattern of
responses and the details of the response are used to determine the person’s underlying attitudes
or feelings on the topic of interest. Picture response techniques could also be used. For example,
respondents could be shown a picture of a USPS mail carrier delivering mail and asked to
describe what is going on.
3.
a.
Mail survey method could be used considering the nature of the questionnaire and
the similarity with the catalog marketing. Response rate could be improved via
precontact, follow-up, and by offering respondents a summary of the results as an
incentive. Alternatively, the survey could be posted to a web site and respondents
recruited via mail, telephone, or e-mail.
b.
Semantic differential scaling would be the most appropriate to measure the image
of major parcel delivery companies.
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USPS QUESTIONNAIRE
Q1.
PART A
Which of the following carriers have you used in the past three months to deliver parcels
in fulfillment of your catalog orders? Please check all that apply.
a. ____ United States Postal Service (USPS)
b. ____ Fed Ex
c. ____ United Parcel Service (UPS)
d. ____ Other (Please specify) ____________________________
Q2.
Please rate the following factors in terms of how important they are in influencing your
choice of a parcel delivery carrier such USPS, Fed Ex or UPS. Please use the following
seven-point scale where 1 = Not at all Important, and 7 = Extremely Important.
Not at all
Extremely
Important
Important
1. Price
1
2
3
4
5
6
7
2. Speed
1
2
3
4
5
6
7
3. Reliability
1
2
3
4
5
6
7
4. Convenience
1
2
3
4
5
6
7
5. Customer Service
1
2
3
4
5
6
7
6. Accuracy
1
2
3
4
5
6
7
Q3.
Please rate USPS on the following factors using a seven-point scale where 1 = Very
Poor, and 7 = Very Good.
Very Poor
Very Good
1. Price
1
2
3
4
5
6
7
2. Speed
1
2
3
4
5
6
7
3. Reliability
1
2
3
4
5
6
7
4. Convenience
1
2
3
4
5
6
7
5. Customer Service
1
2
3
4
5
6
7
6. Accuracy
1
2
3
4
5
6
7
Q4.
Please rate Fed Ex on the following factors using a seven-point scale where 1 = Very
Poor, and 7 = Very Good.
1.
2.
3.
4.
5.
6.
Price
Speed
Reliability
Convenience
Customer Service
Accuracy
Very Poor
1
1
1
1
1
1
2
2
2
2
2
2
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3
3
3
3
3
3
4
4
4
4
4
4
5
5
5
5
5
5
6
6
6
6
6
6
Very Good
7
7
7
7
7
7
Q5.
Please rate UPS on the following factors using a seven-point scale where 1 = Very
Poor, and 7 = Very Good.
Very Poor
Very Good
1. Price
1
2
3
4
5
6
7
2. Speed
1
2
3
4
5
6
7
3. Reliability
1
2
3
4
5
6
7
4. Convenience
1
2
3
4
5
6
7
5. Customer Service
1
2
3
4
5
6
7
6. Accuracy
1
2
3
4
5
6
7
Q6.
Please rate your preference to do business with the following parcel delivery carriers
using a seven-point scale where 1 = Not at all Preferred, and 7 = Greatly Preferred.
1. USPS
2. Fed Ex
3. UPS
Not at all
Preferred
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
6
6
6
Greatly
Preferred
7
7
7
PART B
In this part, we would like to ask you a few questions for classification purposes.
Q7.
What is the total number of full-time employees who are employed by your company?
a.
Less than 5
_____
b.
8 – 19
_____
c.
20-50
_____
d.
51-100
_____
e.
101-250
_____
f.
251-1000
_____
g.
More than 1000
_____
Q8.
Your Name:
Your Company’s Name:
Your Position or Title:
Number of Years with the Company:
Your Telephone Number:
______________________
_______________________
_______________________
_______________________
_______________________
Thank you for your participation.
____________________________________________________________
C5 - 7
c.
Stratified sampling (probability sampling technique) could be used. Catalog
marketers could be stratified by size (sales or number of employees) and type of
business.
C5 - 8
Case 5.5
Is Amtrak on Track?
1.
The management decision problem is: How should Amtrak change the Acela service to
regain lost passengers particularly in Northeast area?
2.
The marketing research problem is to determine consumer preferences for alternative
means of transportation and to determine how consumers evaluate Acela as compared to major
airlines. Specifically,
a.
What criteria do consumers use to select a means of transportation when traveling
long distances in the Northeast corridor?
b.
How do consumers evaluate Acela on the criteria identified in question a?
c.
How do consumers evaluate the major airlines on the criteria identified in
question a?
d.
What is the demographic and psychographic profile of customers who like to
travel by Acela? How does it differ from the profile of customers who do not like
to travel by Acela?
3.
Exploratory research should be conducted first to identify the factors that influence the
satisfaction toward Acela. This research should include an analysis of secondary data as well as
focus groups. The exploratory phase should be followed by descriptive research in the form of a
single cross-sectional survey to determine customer satisfaction with Acela.
4.
Travel industry journals and statistics will help Amtrak better assess the market trends,
customer preference, and competitive environment. General syndicated surveys should be useful
as well. Specifically, travel and dining habits and practices as a part of Psychographic and
Lifestyle surveys should provide relevant information. Nielsen Television Index (NTI) provides
information on who was watching which program, so that audience size and demographic
characteristics can be calculated.
5.
In this case, focus groups seem to be sufficient even though depth interviews can uncover
greater depth of emotions than can focus groups.
6.
Personal on-train interviews and satisfaction feedback forms for the passengers could be
used to determine customer satisfaction toward Acela considering the relevance and convenience
of the respondents.
7.
A Likert scale could be used to measure customer satisfaction toward Acela as follows:
8.
Strongly
Strongly
Disagree
Agree
I am satisfied with the Acela Service
1
2
3
4
5
9.
10.
See “Acela” questionnaire in the following.
ACELA QUESTIONNAIRE
PART A
Q1. How often do you use Acela transportation?
a. _____ Once a year or less often
b. _____ Once every six months
C5 - 9
c.
d.
e.
f.
_____ Once a month
_____ 2 to 5 times a month
_____ 6 to 10 times a month
_____ More than 10 times a month
Q2. Why do you use Acela and for what occasions?
a. _____ Business/work travel
b. _____ Pleasure/vacation travel
c. _____ Other (please specify) ______________________________
Q3. How often do you fly a major airline?
a. _____ Once a year or less often
b. _____ Once every six months
c. _____ Once a month
d. _____ 2 to 5 times a month
e. _____ 6 to 10 times a month
f. _____ More than 10 times a month
Q4. Do you have other alternatives besides Acela?
a. _____ Yes
b. _____ No
c. _____ Don’t know
Q5. Please indicate the importance of the following factors in your selection of a means of
transportation, such as an airline or a train. Please use a five-point scale, where 1 = Not at
all Important, and 5 = Very Important.
Not at all
Very
Important
Important
a. Timely Service
1
2
3
4
5
b. Cleanliness
1
2
3
4
5
c. Comfortable
1
2
3
4
5
d. Friendly Atmosphere 1
2
3
4
5
e. Roomy Space
1
2
3
4
5
f. Good Food
1
2
3
4
5
g. Reasonable Price
1
2
3
4
5
h. Travel Convenience 1
2
3
4
5
Q6. Please evaluate Acela on the following factors using a five-point scale, where 1 = Very
Poor, and 5 = Very Good.
Very Poor
Very Good
a. Timely Service
1
2
3
4
5
b. Cleanliness
1
2
3
4
5
c. Comfortable
1
2
3
4
5
d. Friendly Atmosphere 1
2
3
4
5
e. Roomy Space
1
2
3
4
5
f. Good Food
1
2
3
4
5
C5 - 10
g. Reasonable Price
h. Travel Convenience
1
1
2
2
3
3
4
4
5
5
Q7. Please evaluate the major airlines on the following factors using a five-point scale, where 1
= Very Poor, and 5 = Very Good.
Very Poor
Very Good
a. Timely Service
1
2
3
4
5
b. Cleanliness
1
2
3
4
5
c. Comfortable
1
2
3
4
5
d. Friendly Atmosphere 1
2
3
4
5
e. Roomy Space
1
2
3
4
5
f. Good Food
1
2
3
4
5
g. Reasonable Price
1
2
3
4
5
h. Travel Convenience 1
2
3
4
5
Q8. What would be the best way for Acela to compete with alternative transportation,
particularly airlines?
a. _____ Lower prices
b. _____ Offer new services and routes
c. _____ Increase advertising
d. _____ Offer specials and promotions
e. _____ Other (Please specify)
Q9. How much do you like Acela?
a. _____ Very much like
b. _____ Somewhat like
c. _____ Neutral
d. _____ Somewhat dislike
e. _____ Very much dislike
PART B
In this part we would like to ask you some questions for classification purposes.
Q10.
Q11.
Your Gender:
1. Male
2. Female
_____
_____
Marital Status:
1. Married
_____
2. Never Married
_____
3. Divorced/Separated/Widowed _____
C5 - 11
Q12.
Family Size:
1. One
2. Two
3. Three
4. Four
5. Five or more
Q13. Your Age:
1. 18-24
2. 25-40
3. 41-60
4. 60+
Q14. Your Formal Education
1. Less than High School
2. High School Graduate
3. Some College
4. College Graduate
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
Q15. What is Your Occupation?
____________________
Q16. What is the approximate combined annual income of your household before taxes?
1. $30,000 or less
_____
2. $30,001 to 50,000
_____
3. $50,001 to 75,000
_____
4. $75,001 to 100,000
_____
5. $100,001 to 150,000
_____
6. $150,001 and over
_____
Thank you for your participation.
_________________________________________________________________________
9.
Convenience sampling could be used to conduct the customer satisfaction survey.
Convenience sampling attempts to obtain a sample of convenient elements. The selection of
sampling units is left primarily to the interviewer. Often, respondents are selected because they
happen to be in the right place at the right time. Convenience sampling is the least expensive
and least time consuming of all sampling techniques. The sampling units are accessible, easy to
measure, and cooperative.
Target population: Travelers on Acela in the current year.
Sampling frame: Acela routes and schedules
Sampling unit: Acela routes and schedules and then travelers
Sampling technique: Convenience sampling
Sample size: 500
Execution: Conveniently select Acela travelers on chosen routes and schedules while they
are traveling.
C5 - 12
10.
The difference in the environments of countries, cultural units, or foreign markets should
be considered while conducting international marketing research. These differences may arise in
the marketing environment, government environment, legal environment, economic
environment, structural environment, informational and technological environment, and
sociocultural environment.
11.
With regard to the general public, ethical concerns revolve primarily around the methods
of generating and reporting research results. It is the joint responsibility of the researcher and the
client to ensure that the research findings are being disseminated accurately. Incomplete
reporting, misleading reporting, and biased research should not take place.
It is to the marketing researcher’s advantage to protect the respondents from unethical
research practices. Two of these deserve special attention: conducting a survey as a guise to sell
products, and the invasion of the privacy of the respondent.
The ethical issues surrounding the researcher-client relationship are: abuse of position
arising from specialized knowledge, unnecessary research, an unqualified researcher, disclosure
of identity, treating data as nonconfidential, and misleading presentation of data.
The researcher (or the research firm) has the right to be treated ethically as well. Ethical
treatment by clients involves several issues: improper solicitation of proposals, disclosure of
proprietary techniques, and misrepresentation of findings.
C5 - 13
Case 5.6
Satmetrix: Measuring Customer Satisfaction, Retention and Loyalty
1.
A research design that begins with an exploratory phase that is followed by descriptive
research is appropriate for measuring customer satisfaction. The exploratory phase consisting of
an analysis of secondary data and qualitative research will provide an understanding of the
customer satisfaction process and identify the dimensions of customer satisfaction. A
descriptive, cross-sectional survey can measure customer satisfaction and test specific
hypotheses.
2.
A research design that begins with an exploratory phase that is followed by descriptive
research is recommend for measuring customer loyalty. The exploratory phase consisting of an
analysis of secondary data and qualitative research will provide an understanding of the customer
loyalty process and identify the dimensions of customer satisfaction. A descriptive, longitudinal
survey can measure customer loyalty and test specific hypotheses. Note that a longitudinal
design is needed to track customer purchases over time in order to determine and measure
customer loyalty.
3.
If Kellogg’s wanted to determine loyalty toward its cereals, scanner panel data, such as
those provided by ACNielsen Homescan, would be very useful. Purchases of Kellogg’s cereals
by panel members can be tracked over time to determine the extent of repeat purchases and,
hence, customer loyalty.
4.
If Expedia.com wanted to measure customer satisfaction, an Internet based survey posted
at a Web site would be most appropriate. In this case, all elements of the target population use
the Internet. Other advantages are no field force problems, no interviewer bias, low cost, low
social desirability, and high speed.
5.
Design Likert, semantic differential, and Stapel scales for measuring customer
satisfaction.
6.
Likert scale:
Strongly Disagree Neutral Agree Strongly
Disagree
Agree
I am satisfied with Expedia.com
1
2
3
4
5
Semantic differential scale: My satisfaction with Expedia.com is:
High -- -- -- -- -- -- -Low
Stapel scale:
My satisfaction with Expedia.com is:
+5
+4
+3
+2
+1
Satisfaction
-1
-2
-3
-4
-5
C5 - 14
7.
SatMetrix’s Web-based system immediately alerts Expedia.com if it is in jeopardy of
losing a client based on the information provided by the survey. The system can provide
Expedia.com executives with a real-time scorecard of customer satisfaction and detailed data for
employees. Satmetrix trigger alerts can automatically notify the client by email of any responses
or defined group of aggregate responses that score below a pre-determined level. With trigger
alert notification, Expedia.com can call such ”at risk“ customers immediately, turning a potential
lost customer (or segment of customers) into an advocate for its products and services.
C5 - 15
Case 5.7
High Price of Cereal Getting You Down? General Mills Thinks So.
1.
The management decision problem is: Should General Mills introduce new brands of
cereals to increase the market share from 32.2% in 2000 to 37%?
2.
The marketing research problem is to determine consumer preferences for new brands of
cereals. Specifically, researchers must address the following questions.
a.
Do consumers like premium or low tier new brands or line extensions?
b.
Do consumers prefer healthy cereals such as high fiber or less sugar and salt
cereals?
c.
Would consumers be willing to consume cereals at occasions other than
breakfast? If so, what kinds of occasions?
d.
What is the demographic and psychographic profile of consumers who prefer new
cereal brands?
3.
General Mills can update demographic profiles by segment and realign their marketing
and product development plans based on the target consumer profiles in terms of age, income,
etc. Analysis of Census data may also suggest broad demographic trends with implications for
cereal consumption.
4.
Scanner volume tracking data giving monthly/quarterly market share by company, brand,
cereal product segment, store category, etc. will be very helpful. Also psychographic and
lifestyle surveys by syndicated firms can identify broad trends that have an impact on cereal
consumption. Nielsen Television Index (NTI) provides information on who was watching which
program, so that audience size and demographic characteristics can be calculated for advertising
placement.
5.
Focus groups can help General Mills understand consumer’s likes/dislikes about their
brands and other competitive cereal brands and develop new product ideas by either reinforcing
consumer likes or addressing consumer dislikes.
6.
Traditional telephone survey method could be used because ready-to-eat cereals are
widely used products among general population. This will provide good sample control and a
representative sample can be selected. School-Intercept could also be used if you want to
understand student’s cereal preference more specifically. If new brands of cereals are to be
tested (use of physical stimuli) then mall intercept surveys would be a good choice.
7.
Personal observation method can provide useful information to General Mills. For
example, an observer might record how guests choose cereals at a business cafeteria breakfast
meeting during free continental breakfast. The observer merely records what takes place in a
natural environment. This information could aid in developing new cereal brands.
8.
Choose 3 representative test markets and run a 3 month test market with 5%, 10%, and
15% on price reduction, respectively. Control for other elements of the marketing mix and other
mediating variables (city size, etc.). Compare the 3 month results with the national data and
decide whether to the price should be decreased by 5%, 10%, 15%, or whether it should remain
unchanged.
9.
Likert scale:
Strongly Disagree Neutral Agree Strongly
Disagree
Agree
I like Wheaties, overall
Wheaties offers good value
1
1
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2
2
3
3
4
4
5
5
Wheaties tastes good
Wheaties is healthy
1
1
2
2
3
3
4
4
Semantic differential scale: Wheaties is:
Good overall -- -- -- -- -- -- -Good value
-- -- -- -- -- -- -Good tasting -- -- -- -- -- -- -Healthy
-- -- -- -- -- -- -Stapel scale:
Wheaties is:
+5
+5
+5
+4
+4
+4
+3
+3
+3
+2
+2
+2
+1
+1
+1
Good overall
Good value
Good Tasting
-1
-1
-1
-2
-2
-2
-3
-3
-3
-4
-4
-4
-5
-5
-5
10.
5
5
Not good overall
Not good value
Not good tasting
Not healthy
+5
+4
+3
+2
+1
Healthy
-1
-2
-3
-4
-5
Target population: age 10-65 who bought and tried cereal brands (households) in the
United States in the current year.
Sampling frame: computer program for generating random telephone numbers
Sampling unit: working telephone numbers
Sampling technique: Simple random sampling with modification to exclude nonworking
telephone numbers.
Sample size: 1500
Execution: Use one of the computer programs available in the marketplace for randomly
generating a list of working telephone numbers.
11.
The difference in the environments of countries, cultural units, or foreign markets
should be considered while conducting international marketing research. These differences may
arise in the marketing environment, government environment, legal environment, economic
environment, structural environment, informational and technological environment, and
sociocultural environment.
12.
With regard to the general public, ethical concerns revolve primarily around the
methods of generating and reporting research results. It is the joint responsibility of the
researcher and the client to ensure that the research findings are being disseminated accurately.
Incomplete reporting, misleading reporting, and biased research should not take place.
It is to the marketing researcher’s advantage to protect the respondents from unethical research
practices. Two of these deserve special attention: conducting a survey as a guise to sell products,
and the invasion of the privacy of the respondent.
The ethical issues surrounding the researcher-client relationship are: abuse of position
arising from specialized knowledge, unnecessary research, an unqualified researcher, disclosure
C5 - 17
of identity, treating data as nonconfidential, and misleading presentation of data. The researcher
(or the research firm) has the right to be treated ethically as well. Ethical treatment by clients
involves several issues: improper solicitation of proposals, disclosure of proprietary techniques,
and misrepresentation of findings.
C5 - 18
Case 5.8
Citibank Banks On Database Marketing
1.
The management decision problem is: What should Citibank do to increase its share of
the credit card market?
2.
The marketing research problem is to understand the credit card acquisition behavior of
households. Specifically, research must address the following questions:
a.
What criteria do households use in evaluating alternative credit card offers?
b.
How do households evaluate Citibank and its major competitors in terms of the
choice criteria identified in question a?
c.
What is the demographic and psychographic profile of the heavy users of credit
cards?
d.
What is the Internet usage behavior of the heavy users of credit cards?
3.
In order to obtain the required information, three types of online searches can be utilized.
First, key words should be entered in standard search engines like www.google.com and
www.yahoo.com. The keywords should be descriptive of the type of the information and
attempt to restrict the number of responses. Some of the keywords that could be used are: “credit
cards,” “credit usage,” and “credit cards and bank marketing”.
The second type of search that can be used is a database search. Through the library Web site,
students can search for articles in magazines, papers and periodicals like New York Times and
Business Week concerning market share in the credit card industry. In addition, Lexis-Nexis
Academic Universe business and industry news database can be used to search for market share
statistics.
Finally, the Web sites of Citibank, First Union, MBNA and other major banks should be
visited looking for press releases that may contain the information needed.
4.
It is very likely that the CAM database contains information on Citibank customers’
banking history, credit card transactions, demographic and psychographic variables. Such
variables can help Citibank to formulate marketing strategies targeted at specific segments.
5.
Qualitative research can help Citibank understand the underlying motivations, beliefs and
attitudes of households towards credit usage and credit cards. It can also help in identifying the
choice criteria that households use in selecting a credit card. Focus groups should be used to
identify innovative ideas. Since credit usage can be a sensitive topic, however, focus groups
should be supplemented by depth interviews and projective techniques like the third person
technique.
6.
Given the nature of the topic, factors such as perceived anonymity, ability to obtain
sensitive information, and social desirability become important in selecting a survey method. In
addition, we need to have a good response rate and collect a fairly large quantity of data.
Therefore, the use of a mail panel would be appropriate.
7.
See the Citibank questionnaire that follows.
CREDIT CARD QUESTIONNAIRE
Please note that this survey pertains to credit cards issued by banks such as Visa and MasterCard.
It does not pertain to store charge cards and other credit cards that are not issued by banks.
Please answer all questions with respect to credit cards issued by banks.
C5 - 19
Q1.
Do you have one or more credit cards issued by a bank?
____ Yes
____ No
(IF NO, PLEASE THANK THE RESPONDENT AND TERMINATE THE INTERVIEW)
Q2.
a.
b.
c.
d.
How often do you use your credit cards?
_____ Less than once a month
_____ 1 -3 times per month
_____ 1- 3 times a week
_____ 4 or more times a week
a.
b.
c.
d.
e.
How much money did you charge to your bank cards during the past year? Please
include the entire amount even though you may have paid-off all or part of it in a timely
way.
_____ $0-$500
_____ $500-$1000
_____ $1000-$2000
_____ $2000-$3000
_____ More than $3000
a.
b.
c.
d.
e.
f.
g.
Please rate the importance of the following factors in your selection of a credit card
offered by a bank.
Not at all
Very
Important
Important
Reputation of the Bank
1
2
3
4
5
Annual Fee
1
2
3
4
5
Interest Rate Charged
1
2
3
4
5
Grace Period
1
2
3
4
5
Convenience of Making Payments
1
2
3
4
5
Customer Service
1
2
3
4
5
Rewards Program
1
2
3
4
5
Q3.
Q4.
Q5.
a.
b.
c.
d.
e.
Q6.
Do you have credit cards issued by any of these banks? Please check all that apply.
_____ Citibank
_____ First Union
_____ BankAmerica
_____ JP Morgan Chase
_____ MBNA
Please indicate your preference for the credit cards issued by the following banks using a
five-point scale, where 1 = Not at all Preferred, and 5 = Greatly Preferred.
C5 - 20
a.
b.
c.
d.
e.
Q7.
Citibank
First Union
BankAmerica
JP Morgan Chase
MBNA
Not at all
Preferred
1
1
1
1
1
2
2
2
2
2
3
3
3
3
3
4
4
4
4
4
Greatly
Preferred
5
5
5
5
5
Please indicate your evaluation of the credit cards issued by Citibank on the following
factors using a five-point scale where 1 = Very Poor, and 5 = Very Good.
a.
b.
c.
d.
e.
f.
g.
Very Poor
Reputation of the Bank
1
Annual Fee
1
Interest Rate Charged
1
Grace Period
1
Convenience of Making Payments
1
Customer Service
1
Rewards Program
1
a.
b.
c.
d.
e.
f.
g.
Please indicate your evaluation of the credit cards issued by First Union on the following
factors using a five-point scale where 1 = Very Poor, and 5 = Very Good.
Very Poor
Very Good
Reputation of the Bank
1
2
3
4
5
Annual Fee
1
2
3
4
5
Interest Rate Charged
1
2
3
4
5
Grace Period
1
2
3
4
5
Convenience of Making Payments
1
2
3
4
5
Customer Service
1
2
3
4
5
Rewards Program
1
2
3
4
5
Q8.
2
2
2
2
2
2
2
3
3
3
3
3
3
3
4
4
4
4
4
4
4
Very Good
5
5
5
5
5
5
5
Q9. Please indicate your evaluation of the credit cards issued by BankAmerica on the following
factors using a five-point scale where 1 = Very Poor, and 5 = Very Good.
Very Poor
Very Good
a. Reputation of the Bank
1
2
3
4
5
b. Annual Fee
1
2
3
4
5
c. Interest Rate Charged
1
2
3
4
5
d. Grace Period
1
2
3
4
5
e. Convenience of Making Payments
1
2
3
4
5
f. Customer Service
1
2
3
4
5
g. Rewards Program
1
2
3
4
5
Q10. Please indicate your evaluation of the credit cards issued by JP Morgan Chase on the
following factors using a five-point scale where 1 = Very Poor, and 5 = Very Good.
Very Poor
Very Good
a. Reputation of the Bank
1
2
3
4
5
C5 - 21
b.
c.
d.
e.
f.
g.
Annual Fee
Interest Rate Charged
Grace Period
Convenience of Making Payments
Customer Service
Rewards Program
1
1
1
1
1
1
2
2
2
2
2
2
3
3
3
3
3
3
4
4
4
4
4
4
5
5
5
5
5
5
Q11. Please indicate your evaluation of the credit cards issued by MBNA on the following
factors using a five-point scale where 1 = Very Poor, and 5 = Very Good.
Very Poor
Very Good
a. Reputation of the Bank
1
2
3
4
5
b. Annual Fee
1
2
3
4
5
c. Interest Rate Charged
1
2
3
4
5
d. Grace Period
1
2
3
4
5
e. Convenience of Making Payments
1
2
3
4
5
f. Customer Service
1
2
3
4
5
g. Rewards Program
1
2
3
4
5
PART B
In this part we would like to ask you some questions for classification purposes.
Q12.
Your Gender:
1. Male
2. Female
_____
_____
Q13.
Marital Status:
1. Married
_____
2. Never Married
_____
3. Divorced/Separated/Widowed _____
Q14.
Family Size:
1. One
2. Two
3. Three
4. Four
5. Five or more
Q15. Your Age:
1. 18-24
2. 25-40
3. 41-60
4. 60+
Q16. Your Formal Education
1. Less than High School
2. High School Graduate
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
_____
C5 - 22
3. Some College
4. College Graduate
_____
_____
Q17. What is Your Occupation?
____________________
Q18. What is the approximate combined annual income of your household before taxes?
1. $30,000 or less
_____
2. $30,001 to 50,000
_____
3. $50,001 to 75,000
_____
4. $75,001 to 100,000
_____
5. $100,001 to 150,000
_____
6. $150,001 and over
_____
Thank you for your participation.
___________________________________________________________________
8.
Demographic variables are typically measured as categorical variables. If credit card
usage can be measured as heavy, medium, and low, then cross-tabulation can be used to identify
the demographic variables that are individually significant in explaining credit card usage. If,
however, credit card usage is measured on an interval scale, then ANOVA is the appropriate
technique for analysis. In ANOVA the dependent variable will be credit card usage and the
independent variable with be each demographic variable, in turn.
9.
In this two independent samples t-tests can be used. The users and nonusers of Citibank
credit cards will be the two samples and each lifestyle statement will be the dependent variable.
C5 - 23
Case 5.9
The Birth Of Gatorade: From Jordan To The Unknown
1.
The management decision problem is: What should Gatorade do to increase its market
share and expand its presence in other markets?
2.
The marketing research problem is to determine consumer preferences for sports drinks.
Specifically, researchers must address the following questions:
a.
What criteria do consumers use in evaluating sports drinks?
b.
How do consumers evaluate Gatorade and competing brands in terms of the
criteria identified in question a?
c.
What is the demographic and psychographic profile of the heavy users of sports
drinks?
d.
What is the demographic and psychographic profile of the loyal users of Gatorade
and how does it differ from the profile of the loyal users of competing sports
drinks?
3.
Even if the internal marketing research department of the company is conducting the
marketing research project, the field work is generally contracted to an external marketing
research or data collection firm. The field work process consists of the selection, training, and
supervision of field workers, the validation of field work, and the evaluation of field workers.
All these tasks will have to be performed to conduct the mall intercept survey.
4.
Supervision of field workers means making sure that they are following the procedures
and techniques in which they were trained. Supervision involves quality control and editing,
sampling control, control of cheating, and central office control. In this case, supervision can be
easily carried out since all the interviews are conducted in central locations, i.e., the selected
malls.
The evaluation of field workers should be based on the criteria of quantity (cost and time,
response rates), and quality (quality of interviewing, quality of data).
5.
In order to obtain the required information, three types of online searches can be utilized.
First, key words should be entered in standard search engines like www.google.com and
www.yahoo.com. The keywords should be descriptive of the type of the information and
attempt to restrict the number of responses. Some of the keywords that could be used are:
“sports drinks”, “Gatorade” and “PowerAde”.
The second type of search that can be used is a database search. Through the library Web
site, students can search for articles in magazines, papers and periodicals like New York Times
and US News concerning market share in the sports drink industry. In addition, Lexis-Nexis
Academic Universe business and industry news database can be used to search for market share
statistics.
Finally, the Web sites of Pepsi (which now owns Gatorade) and Coca-Cola should be
visited looking for press releases that may contain the information needed.
The format of the report can vary somewhat from that in Chapter 19, since primary data
are not collected and analyzed.
C5 - 24
Case 5.10
DuPont Has Designs On Fashion
CHAPTER 1
1.
Marketing research involves the identification, collection, analysis and dissemination of
information. Explain how each of these phases of marketing research applies to
DuPont’s problem.
Identification involves defining the marketing research problem (or opportunity) and
determining the information that is needed to address it. As such, DuPont has already identified
an opportunity—producing designer carpets. However, they need to specify the information that
is needed to determine if this opportunity is a good one.
Once specified, the information needed must be obtained from relevant sources. A
variety of data collection methods varying in sophistication and complexity are used. DuPont
will have to determine which of the methods is best suited for the information, which is needed.
Once collected, the data are analyzed, interpreted, and inferences are drawn. Many different
statistical techniques can be used to describe populations of interest or to infer causal
relationships between variables. The type of data to be collected will determine the choice of
statistical methods.
Finally, the findings, implications and recommendations are provided in a format that
allows the information to be acted upon and to be directly used as input into decision making.
DuPont managers will want the information explained to them in business terms, not research
terms, so that they can act on it. Researchers will have to prepare a report for management that
will describe their findings, include the statistical analysis and make recommendations.
2.
Is the problem facing DuPont a case of problem identification research or problem
solution research? Explain.
This is a case of problem solution research since the research is being conducted to solve
one specific problem: Are Designer Carpets a viable business in the residential segment?
Specific issues DuPont can consider are concept testing, brand name evaluation, test marketing
and optimal product design.
3.
How can DuPont use limited service external marketing research suppliers to assist them
in their study?
Limited-service suppliers specialize in one or a few phases of the marketing research
project and offer services only in the area of their specialization. They allow large corporations
like DuPont to concentrate on the management of the research project while they handle much of
the actual work typically associated with marketing research. Services offered by these suppliers
could be classified as field services, coding and data entry, data analysis, analytical services, and
branded products.
Field services are used for data collection via mail, personal or telephone interviewing. It
is likely DuPont will enlist a field service firm because the task of data collection is very time
consuming. It is likely not worthwhile for DuPont to collect the data themselves since there are
so many other marketing and managerial responsibilities they have.
Coding and data entry services are provided by several firms who have specialized in this
aspect of marketing research. These firms will take the administered questionnaires, edit them,
develop a coding scheme, and transcribe the data on to diskettes or magnetic tapes for input into
C5 - 25
the computer. Even large corporations, like DuPont, do not have their own internal coding and
data entry services. Hence, DuPont could utilize a supplier for this service.
Analytical services and branded product services may be useful to DuPont, depending on
the information they desire. Some marketing research projects are complex and might require
knowledge of sophisticated procedures. While DuPont is likely to have some statistically trained
researchers, it may be that the information desired requires the sophisticated analysis of a
specialist. If so, DuPont will have to contact a specialist to assist them in this analysis. Issues
related to questionnaire design and pretesting, determining the best means of collecting data,
sampling plans, and other aspects of the research design apply to analytical services.
CHAPTER 2
1. Identify two items that relate to each of the following factors to be considered in the
environmental context of the problem.
Past Information and Forecasts
Sales of residential carpet by style
Forecast of trends in carpet styles and design
Resources and Constraints
What has DuPont budgeted for the research?
What research personnel and skills are internal to DuPont?
Objectives
What are the long term objectives of the DM?
What are the short term objectives of the DM?
Buyer Behavior
What are the psychological characteristics of residential
carpet buyers?
How price sensitive are residential carpet consumers?
Legal Environment
What designs and fashions have patents?
What names for carpet styles are currently in use by
other firms?
Economic Environment
Is the economy expanding or in recession?
What areas of the country have the highest purchasing
power?
Marketing and Technological Skills
Which carpet mills have the technical ability to produce
high quality designer carpets?
How can DuPont build on its brand name recognition with
C5 - 26
consumers?
2.
3.
4.
5.
What is the management decision problem facing DuPont?
Should the designer collection line of carpets be introduced into the residential market?
What is the marketing research problem facing DuPont?
Determine the consumer preferences and purchase intentions for the Designer Collection.
Break down the general marketing research problem statement into component parts.
a.
What criteria are used by households in selecting carpets?
b.
How do households evaluate carpet brands in terms of the choice criteria identified in a?
c.
What styles of carpets are most preferred by households?
d.
What is the demographic and psychographic profile of households that purchase
fashionable carpets?
e.
What is the size of the market segment interested in designer carpets?
What theoretical findings can assist in developing an approach to the problem?
Research suggests five characteristics of success for a new product: Relative advantage,
compatibility with existing consumption patterns, the opportunity for buyer testing, the chance
for the buyer to see the newness and minimizing complexity. Some of these can be incorporated
into the research design. For example, research should accomplish the following: 1) determine
whether consumers notice a relative advantage in designer carpets, 2) discern whether designer
carpets are compatible with the current attributes sought in residential carpet, 3) allow the
consumer to see and touch the actual designer carpets in order to elicit their reactions, and 4)
uncover misunderstandings or misperceptions consumers may have about the designer
collection.
Consumer behavior theory suggests that consumers may have both private reasons for
desiring to be fashionable as well as public or social reasons. Different motives are thus
operating which produce different choice criteria from which the actual choice will be made.
Hence, it is important to know if consumers will largely purchase designer carpets from internal
or external motives.
Finally, as noted in the case, price and durability (including stain resistance) are
important factors consumers use to evaluate residential carpets.
6.
Develop a graphical model of residential carpet purchasing.
Based on the theoretical and industry relevant issues discussed, a model can be
developed. The first element recognizes the fact that consumers must first perceive the need for
new carpet in order to begin the process of information search about residential carpets (Stage 2).
Since DuPont is interested in selling designer residential carpets, we separate fashion-oriented
search from non-fashion oriented search. Some consumers will have no interest in fashion
oriented carpets, so they will not represent the target market for DuPont. The consumer behavior
literature suggests that consumers may have private, internal reasons for being fashion-conscious
as well as social, external reasons. Thus, these two domains are distinguished so we can assess
the relative impact of each on fashion-oriented purchasing. The consumer then combines these
attributes of carpets to form an overall purchase intention and then acts on that intention when
she buys the carpet.
C5 - 27
NEED AROUSAL FOR NEW CARPET
INFORMATION SEARCH
FASHION ORIENTED
NOT FASHION ORIENTED
INTERNAL MOTIVATION EXTERNAL MOTIVATION
PRICE
DURABILITY
PREFERENCE
INTENTION
PURCHASE
7.
Develop three suitable research questions and hypotheses from the marketing research problem.
A possible research question and hypothesis related to the first component of the problem is:
RQ: On what dimensions do consumers evaluate residential carpets?
H:
Consumers evaluate carpets along price, style, and durability dimensions.
A possible research question and hypothesis related to the third component of the problem is:
RQ: Do consumers desire designer fashion in residential carpeting?
H:
The residential market is willing to accept designer carpets.
A possible research question and hypothesis related to the fifth component of the problem is:
RQ: On what variables can this segment be identified?
H:
The designer conscious segment can be identified by lifestyle and demographic variables.
A possible research question and hypothesis related to the sixth component of the problem is:
RQ: Is there a sufficiently large segment, defined as at least 25% of the market, interested in
designer residential carpeting?
H:
A significant segment of the residential market is designer conscious.
C5 - 28
CHAPTER 3
1.
Can exploratory research be used in this case? How?
2.
Exploratory research is needed to define the problem more precisely.
a.
To assist in precisely formulating the problem for subsequent descriptive or causal
research, a review of secondary data and interviews with company officials, designers
and industry experts will be useful.
b
To identify previously unknown alternatives, focus groups are a popular technique. They
allow researchers to communicate directly with a group of consumers in a question and
answer format.
c.
To identify the key variables to concentrate on in further analysis, all of the procedures
discussed above may be helpful here.
Can descriptive research be used in this case? How?
3.
Surveys can be designed to learn the following:
a.
To develop a profile of the characteristics of carpet consumers, especially those interested
in designer carpets.
b.
To estimate the size of the residential segment interested in designer carpets.
c.
To determine the perceptions of different styles of designer carpets for residential use.
Can causal research be used in this case? How?
Causal research can be used as well. Based on statistical analysis of experimental data, we can
discern relationships in the data like:
a.
Does fashion affect purchase intention?
b.
Do higher levels of income lead to more fashion-oriented purchases?
CHAPTERS 4 AND 5
1.
What internal sources of secondary data can you identify that would be helpful?
Secondary data may be gathered from a variety of sources. First and foremost, internal
DuPont records should be reviewed to get an idea of the colors, styles, weights and end-uses for
which carpets are being bought. These sources may include sales records of both fibers and
carpets, new orders from retailers, reports on trends from company designers and economic
forecasts. Each of these can be analyzed by geographic region or retail outlet.
2.
What published sources of secondary data can you identify which would be helpful?
Published external sources of data can be located in guides; for example, Business
Information Sources or Data Sources for Business and Market Analysis. By looking up carpet
and/or floor covering industry in the guide, trade journals, directories, and trade associations can
be located.
Trade journals to consult for the carpet industry include Carpet & Rug, Floorcovering
Weekly, Floorcovering News, Western Floors, Interiors, Interior Design, Designers West,
Sunbelt Flooring and the Carpet and Rug Institute Newsletter. Additional information on fiber
trends may be obtained in the Carpet and Rug Institute Annual Trade Statistics.
Government sources can provide some indication of general economic and industry trends, but
will not be as specific as the trade information. Sources to consider include the Census of Retail Trade,
Census of Population and the Census of Manufacturers. In addition, information may be obtained from
C5 - 29
County Business Patterns, Business Statistics, Economic Indicators and the Handbook of Cyclical
Indicators.
3.
Which computerized databases can be used? What is their biggest disadvantage?
Some specialized computerized data bases for the carpet industry exist, e.g., The Carpet
Directory. This is a computer database of all the current styles of carpets with detailed information on
carpet specifications. Bibliographic information can be obtained from ABI/Inform or full text
information from VU/TEXT Information Services and statistical information can be obtained from
CACI Inc. It should be noted that these sources will be relatively expensive compared to other sources.
4.
Assess the possible bias in the following sources of secondary data.
a.
An article interviewing designers on the new fashion trends in Floorcovering News.
Methodology: Were the data collected from a representative sample of designers?
Objective: Why did Floorcovering News collect the data? Is the overall purpose of the
article objective?
Dependability: Is the article part of one company's public relations program?
b.
A DuPont sales history for 1997-2001 broken out by market regions.
Methodology: How were the data collected? How were sales defined? Did it include
returns and rebates?
Error: Were the data collected from stores audited by DuPont?
Nature: Data should have been collected with respect to styles of carpets? If not,
additional analysis may be needed.
c.
A chart of sales of residential carpet by region from the Census of Retail Trade.
Currency: Census data is typically not the most current data available.
Nature: Census data is often recorded in units that are not applicable to the
researcher. It is unlikely that data would be recorded according to style segments,
so it may be limited in applicability.
d.
A list of bibliographic titles related to carpet fashion.
Methodology: What sources were consulted to form the database?
Currency: How current are the titles included?
Nature: What criteria were used in including titles? How was carpet fashion
defined?
Dependability: Is the source of the bibliographic titles reliable based on past
experience or the reputation of the supplier?
CHAPTER 6
3.
Which exploratory research techniques would you recommend and why?
The most common and appropriate technique would be a focus group. Focus groups allow
researchers to discover unexpected findings due to the free-flowing group discussion that it engenders.
It can help us to understand consumer perceptions, preferences and behavior concerning residential
carpeting, obtain impressions of the Designer Collection, and obtain specific reactions to the Designer
Collection marketing program.
Depth interviews are not as likely to be useful as focus groups. Though they can be useful in
product consumption experiences that are sensory in nature, such as the appeal of designer carpets, they
are very expensive, require expert interviewers and are limited in external validity. Since carpeting is a
product often purchased for social motives, it is unlikely that these motives would be uncovered in a
focus group.
C5 - 30
Projective techniques can be used to uncover underlying motivations, attitudes and beliefs that
may not be available to the respondent’s conscious awareness. While any of the techniques are
potentially helpful, association and sentence completion techniques are the most likely to gather the
needed data within the time constraints of the study.
2.
Develop a moderator’s outline for a focus group to assess consumer desires in residential carpets
with respect to the Designer Collection.
A typical moderator’s outline is listed below. Other outlines are possible, but should cover the
same basic content areas.
Welcome respondents
Explanation of focus group procedures
Current carpeting in their homes
Likes
Dislikes
Fashion styles preferred
Colors preferred
Attitudes towards designer carpets
Likes
Dislikes
Fashion styles preferred
Colors preferred
Concerns raised
Summary of the discussion
Thank and dismiss
2. Devise word association techniques to measure consumer associations that may affect
attitudes towards designer carpets.
Word association techniques should reflect the key adjectives or attributes that relate to
designer carpets. Some of those are listed here.
4.
carpet
_____________
fashionable
_____________
beautiful
_____________
quality
_____________
durability
_____________
stains
_____________
Design sentence completion techniques to uncover underlying motives.
C5 - 31
Some of the sentences that could be used are:
A person who owns a designer carpet is
When I think of buying carpets, I
___________________
________________________
Designer carpets are good for ____________________________
The designs that would go best in my house are
My favorite type of decorative style is
____________
___________________
CHAPTER 7
1.
Match the criteria for selecting survey methods with the survey method(s) offering the
best results in this case.
a. Telephone Interview
b. CATI
c. In-Home
d. Mall Intercept
e. CAPI
f. Mail Survey
g. Mail Panel
h. E-mail Survey
i. Internet Survey
Use of Physical Stimuli
Quantity of Data
Obtaining Sensitive Information
Speed
Diversity of Questions
Sample Control
Response Rate
Cost
Flexibility of Data Collection
Control of Field Force
Social Desirability
Potential for Interviewer Bias
Control of Data Collection Environment
Perceived Anonymity of Respondent
2.
d,e
c,g
a,b,f,g
h,i
c,d,e
c
c,d,e
f,h,i
c,d
f,g,h.i
f,g,h,i
f,g,h,i
d,e
f,g,i
Which survey method would you recommend to DuPont to conduct descriptive research?
Why? What are the limitations of this mode?
Mall intercept interviews would be most appropriate. First, mall intercepts allow for diverse
questions. This provides flexibility during survey design. Also, they allow us to use designer
C5 - 32
carpet samples in the interviews so that consumers can react to the Designer Collection, and the
social nature of the interview is conducive to data collection. They are good in all aspects of
control of the research so reliability and validity will be high. They allow for efficient data
collection with very good response rates, moderate to high speed. However, mall intercept
interviews require trained interviewers who encourage respondents to participate in the interview
and are moderate to high in cost.
3. Can observational methods be used to collect data? How? What are the limitations of
your method?
Observational methods can be used to collect data. By setting up a showroom with different
carpet styles, both designer and traditional, people can be allowed to browse and review the styles.
Observation of respondents in the room can then be used, with styles attracting the most attention being
most desirable to consumers. This is an unstructured, disguised, and contrived form of observation.
Either personal or mechanical forms, e.g., hidden cameras, may be used.
The data collected, while significant, cannot be considered to have high reliability. The
motivations for one's attention are not known, thus it cannot be discerned if respondents would actually
purchase the designer carpets or if they simply are interested in the novelty of the designs. The data
would give an indication of which styles are most attractive.
CHAPTER 8
1.
Based on the DuPont project, give an example of each of the conditions of causality for
the relationship between purchase of designer carpets and income level.
Concomitant Variation - Purchases of designer carpets increasing with increases in the income
level.
Time Order of Occurrence - Changes in the income level must precede changes in purchases of
designer carpets.
Absence of Other Possible Causal Factors - If we can ensure, by holding them constant in
experimental design, no other variables affect purchase of designer carpets.
4. Is causal research necessary in this case? If so, which experimental designs would you
recommend and why? If not, devise a scenario in which it would be.
Because DuPont is most interested in learning if the consumer is willing to accept
designer carpets, the current project is most interested in understanding consumer motives and
attitudes towards the new carpets and determining potential market size. Though the primary
thrust of the current project is descriptive, some causal results may prove useful in further
analysis. For example, does increased emphasis on fashion increase attitudes towards DuPont
carpets?
Under this scenario, the best research design would be the pretest-posttest control group
design. This design allows us to most precisely measure the effect of the increased emphasis on
fashion to attitudes. It can be conducted in a laboratory by first randomly selecting two groups
of respondents. One will be shown the Designer Collection; the other will serve as the control
group. A pre-test of attitudes towards DuPont carpets can be given to both the experimental and
control groups, and then the Designer Collection can be shown to the experimental group.
Afterwards, a second test of attitudes towards DuPont carpets can be given to the two groups and
conclusions drawn.
3.
Can a field experiment be used to conduct the test? Explain.
C5 - 33
A field experiment can be used under this scenario. The best research design would be
the pretest-posttest control group design. This design allows us to most precisely measure the
effect of the increased emphasis on fashion to attitudes. It can be conducted by first selecting
two similar markets to test the effect of the Designer Collection. One market can serve as the
experimental group; the other market can serve as the control group. A pre-test of attitudes
towards DuPont carpets in both the experimental and control groups is first given, and then the
Designer Collection is introduced into the experimental group’s market. After several months, a
second test measuring attitudes in the two markets can be conducted and conclusions drawn.
This design would suffer from the testing effect as above, however, because it is also a field
experiment, it will be low in experimental control, low in internal validity and low on ease of
implementation.
CHAPTERS 9 & 10
1.
What types of comparative scales can be used to gather the information needed on
motivation, intentions, and preferences? Design these scales.
Motivation
All of the motivational information can be obtained with any of the comparative scales. An
example of the paired comparison scale is given.
Please compare each of the following pairs of motivations for buying carpets. Indicate which
one of the two motives in a pair you believe best characterizes you.
Durability
Safety
Belonging
Self-esteem
It’s Me
Durability
Safety
Belonging
Self-esteem
It’s Me
Attitudes
Attitudinal information is better collected with noncomparative scales.
Intentions
Intentions are best measured with a noncomparative scale.
Preferences
Preferences can be measured with any of the comparative scales. An example using the
constant sum scale is given.
C5 - 34
Listed below are the attributes of carpeting. Please allocate 100 points among the
attributes so that your allocation reflects the relative importance you attach to each
attribute. The total of all scores you assign to the attributes should equal 100.
Attribute
Durability
Style
Color
Stain-resistance
Plush
Backing
TOTAL
2.
Score
____
100
What types of noncomparative scales can be used to gather the information needed on
psychographics, motivations, attitudes, and intentions?
Psychographic Information
Psychographics can be obtained from an activities-interests-opinions (AIO)
inventory. An AIO inventory can be constructed from a list of statements related
to lifestyles. Respondents express their degree of agreement or disagreement with
the statement. For example,
Strongly Disagree
Strongly Agree
I am a homebody
1
2
3
4
5
I read magazines like Cosmopolitan
1
2
3
4
5
It is important to stay up with fashion
1
2
3
4
5
Designer clothes are better than
1
2
3
4
5
generic clothes
Motivation
Motivation can be measured using a Likert scale (in addition to a comparative scale). For
example,
Strongly
Neither
Strongly
Disagree
Agree nor
Agree
Disagree
Stain resistance is very
important in a carpet
1
2
3
4
5
I like to be associated with
the fashionable
1
2
3
4
5
It is important to buy the
best quality
1
2
3
4
5
I am fashionable
1
2
3
4
5
Attitudes
Attitudes can be measured with any noncomparative technique. An example using the semantic
differential will be given.
C5 - 35
Please mark the scale below in relation to what the statement means to you.
Carpets are ...
Common
|___|___|___|___|___|___|___| Fashionable
Central
|___|___|___|___|___|___|___| Peripheral
Necessary
|___|___|___|___|___|___|___| Luxurious
The best style of carpeting for my home is ...
one color
|___|___|___|___|___|___|___| multiple colors
Plain Saxony
|___|___|___|___|___|___|___| Designer Saxony
Uniform Pile Height |___|___|___|___|___|___|___| Etched Pile Height
Intentions
Intentions can also be measured using noncomparative scales. An example using the Stapel
Scale is shown here.
Please evaluate how accurately the word or phrase describes each of the carpet styles.
Select a plus number for the words that you think describe the carpet accurately. The
more accurately you think the word describes it, the larger the plus number you should
choose. You should select a minus number for words you think do not describe it
accurately. The less accurately you think the word describes it, the larger the minus
number you should choose. Therefore, you can select any number from +5 for words that
you think are very accurate, all the way to -5, for words that you think are very
inaccurate.
Form
--------------------------Designer Styles
--------------------------+5
+5
+4
+4
+3
+3
+2
+2
+1
+1
Likely to Purchase Want to Purchase
-1
-1
-2
-2
-3
-3
-4
-4
C5 - 36
-5
3.
-5
In designing scales for the survey, which scales do you recommend?
Motives may be obtained with either comparative or noncomparative scales. Either may
be appropriate given that the level of information is equivalent across both scales and depending
on the type of information desired. In this case, all of the motivational information can be
obtained through comparative scales, like the one illustrated in the solution of the previous
question.
In the case of intentions and attitudes, only noncomparative scales are applicable and any
of the noncomparative scales may be used.
For preferences, comparative scales are most appropriate, since a preference inherently
compares two or more brands.
4.
How would you determine the reliability of the scales?
Test-retest reliability will be the most feasible since only one test needs to be constructed.
Yet, because of time constraints, test-retest and alternative forms reliability will be difficult to
conduct. If our survey has a significant amount of summated scales, we can use internal
consistency reliability. Applying split-half reliability, we can divide the multi-items into two
halves and the resulting half scores can be correlated. High correlations indicate high internal
consistency. Cronbach’s alpha can then be used to assess internal consistency. In many
marketing research studies, cost and time limitations prohibit a detailed study of reliability,
though efforts should be made at the beginning of the project to budget for these studies.
5.
How would you assess the validity of the scales?
Content validity should always be conducted since it requires only a subjective analysis
of the scales. It is not sufficient by itself, however, so criterion and construct validity should be
assessed. Criterion validity can be assessed with concurrent validity, which allows us to collect
the data on the scale and the criterion variables at the same time. Shorter forms of the
questionnaire may be given to some respondents and results of the long form and the short form
compared for validity. Construct validity may be difficult to measure given time limitations and
would require that we have information on other related variables. In many marketing research
studies, cost and time limitations prohibit a detailed study of validity, though efforts should be
made at the beginning of the project to budget for these studies.
CHAPTER 11
1.
Are each of the following questions well formulated? If not, what is the error?
a.
What is your favorite construction of carpet fibers?
Nylon BCF
Nylon Staple
Polypropylene BCF
Polypropylene Staple
Polyester
__________
__________
__________
__________
__________
The question is too technical for the average consumer.
C5 - 37
b.
What style of carpeting do you have in your office?
Uniform color; Conservative Style __________
Uniform color; Fashionable Style __________
Multicolor; Conservative Style
__________
Multicolor; Fashionable Style
__________
c.
This question is not necessary since it applies to commercial carpeting, not residential.
Do you intend to buy new carpet soon?
Yes __________
No __________
d.
This question is not specific since no time frame is referenced.
Do you believe, as most Americans do, that U.S. citizens should buy American made carpets?
Yes __________
No __________
This question is biased since it induces Americans to answer yes.
e.
Will you buy designer carpets given that they cost slightly more than traditional carpets?
Yes __________
No __________
2.
This question is well formulated since it makes explicit the assumptions of the question relating
to cost.
Design a questionnaire to be used in a survey.
Please answer ALL the questions whether or not your household currently has carpeting.
Q1.
Part A
Does your household currently own carpeting?
1._____Yes
2._____No
(IF YES GO TO QUESTION Q2; IF NO GO TO QUESTION Q7)
Q2. Which of the following styles of carpeting do you have in your home? Please check as many as
apply.
a. _____One Color; Traditional Style
b. _____Multicolor; Traditional Style
c. _____One Color; Fashion Style
d. _____Multicolor; Fashion Style
C5 - 38
Please indicate your agreement with each of the following statements (Q3 to Q6).
Q3.
Carpeting is an important part of my home.
Strongly Disagree
Neutral
1
2
3
4
5
Strongly Agree
6
7
Q4.
Carpeting is a fashion item for my home.
Strongly Disagree
Neutral
1
2
3
4
5
Strongly Agree
6
7
Q5.
Carpeting is a central item in the interior design for my home.
Strongly Disagree
Neutral
Strongly Agree
1
2
3
4
5
6
7
Q6.
It is more important for a carpet to last long than look pretty.
Strongly Disagree
Neutral
Strongly Agree
1
2
3
4
5
6
7
Q7.
Suppose your household were to purchase new carpeting. Please rate the relative
importance of the factors you would consider in selecting carpeting on a 1 to 7 scale
where 1 means ”Not so Important“ and 7 means ”Very Important”.
Not so Important
Very Important
a. Stain resistance
1
2
3
4
5
6
7
b. Long life
1
2
3
4
5
6
7
c. Fashionable
1
2
3
4
5
6
7
d. Matches my furniture
1
2
3
4
5
6
7
e. Price
1
2
3
4
5
6
7
f. Made by a well known
company
1
2
3
4
5
6
7
g. Warranty
1
2
3
4
5
6
7
Q8.
How likely is your household to buy carpeting in the next three months?
Not so Likely
Maybe/Maybe Not
Very Likely
1
2
3
4
5
6
7
Part B
(Show the respondent the samples of designer carpets).
Q9.
Please rate the attractiveness of the designer styles you have seen on a 1 to 7 scale where 1
means ”Definitely Not My Style“ and 7 means ”Definitely My Style”.
Definitely Not
Definitely
My Style
My Style
a. Style A
1
2
3
4
5
6
7
C5 - 39
b. Style B
c. Style C
d. Style D
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
6
6
6
7
7
7
Q9e.
Of the Designer Collection carpets you have just seen, which one would you most prefer
to have in your home? (Check only one)
a. Style A
_____________
b. Style B
_____________
c. Style C
_____________
d. Style D
_____________
Q10.
Please rate the Designer Collection carpets you have just seen on the following attributes.
Use a 1 to 7 scale where 1 means Very Poor and 7 means Excellent.
Very Poor
Excellent
a. Stain resistance
1
2
3
4
5
6
7
b. Long life
1
2
3
4
5
6
7
c. Fashionable
1
2
3
4
5
6
7
d. Matches my furniture
1
2
3
4
5
6
7
e. Price
1
2
3
4
5
6
7
f. Made by a well known
company
1
2
3
4
5
6
7
g. Warranty
1
2
3
4
5
6
7
Q11.
Do you think it is desirable to have a designer carpet ?
Yes
No
Please explain.
_____________________________________________________________
_____________________________________________________________
Q12.
After viewing Designer Carpets, do you think you would purchase them for your home?
Yes _________
No __________
Why or why not?
____________________________________________________________________________________
________________________________
Part C
Q13.
Listed below are statements that describe different opinions about carpeting. Please indicate
how strongly you agree or disagree with each statement by using the following scale:
1 = Strongly Disagree
2 = Generally Disagree
3 = Somewhat Disagree
C5 - 40
4 = Neither Agree nor Disagree
5 = Somewhat Agree
6 = Generally Agree
7 = Strongly Agree
Strongly
Disagree
a. Carpeting is primarily
a functional item
b. I like to be associated with
the latest styles
c. It is important to buy the
best quality
d. I am fashionable
Q14.
Strongly
Agree
1
1
2
2
3
3
4
4
5
5
6
6
7
7
1
2
3
4
5
6
7
1
2
3
4
5
6
7
Please rank the following colors of carpets in your order of preference when buying
a residential carpet.
Color
a. Beige
b. Gold
c. Blue
d. Crimson
e. Green
f. Brown
Q15.
Neither
Agree nor
Disagree
Rank Order
__________
__________
__________
__________
__________
__________
In this section, there are several statements about interests and opinions. For each statement,
indicate if you agree or disagree with the statement based on a 7 point scale where 1 means
Definitely Disagree and 7 means Definitely Agree.
a. Magazines are more interesting
than television
1
2
3
4
5
6
7
b. All men should be clean shaven
every day
1
2
3
4
5
6
7
c. When I must choose between the
two, I usually dress for fashion,
not comfort
1
2
3
4
5
6
7
d. I am a homebody
1
2
3
4
5
6
7
e. A subcompact car can meet
my needs
1
2
3
4
5
6
7
C5 - 41
f. My friends come to me more than
I go to them for advice on clothes
1
2
3
4
5
6
7
g. I like to buy new and
different things
1
2
3
4
5
6
7
h. I often wish for the good old days
1
2
3
4
5
6
7
i. It is important to me to feel
attractive to others
1
2
3
4
5
6
7
j. I don’t like to take chances
1
2
3
4
5
6
7
k. I get personal satisfaction from
using cosmetics
1
2
3
4
5
6
7
Q16.
Please answer the following questions as they relate to the way in which you have
answered this questionnaire.
a. How interested were you?
Not so
interested
1
2
3
4
Not so
committed
1
2
3
4
Not much
effort
1
2
3
4
Not so motivated
1
2
3
4
b. How committed were you?
c. How much effort did you use?
d. How motivated were you?
5
5
5
5
Very
interested
6
7
Very
committed
6
7
Much
effort
6
7
Very motivated
6
7
e. Did this questionnaire lead you to change your views about carpeting?
No change
1
2
3
Part D
Q17. Your Gender:
1._____Male
2._____Female
Q18. Marital Status:
1._____Married
2._____Never Married
C5 - 42
4
5
6
A lot
of change
7
3._____Divorced/Separated/Widowed
Q19. Your Age:
1._____18-24
2._____25-40
3._____41-60
4._____60+
Q20. Your Formal Education
1. Less than High School
2. High School Graduate
3. Some College
4. College Graduate
_____
_____
_____
_____
Q21. Which one of the following is your principal dwelling?
1. House
__________
2. Condominium
__________
3. Apartment
__________
4. Trailer
__________
Q22. What is your zip code?
____________________
Q23. What is the approximate combined annual income of your household before taxes?
1. $10,000 or less
_____
2. $10,001 to 30,000
_____
3. $30,001 to 50,000
_____
4. $50,001 to 90,000
_____
5. $90,001 to 150,000
_____
6. $150,001 and over
_____
Thank you for your participation.
__________________________________________________________
CHAPTER 12
Answer questions 1 through 4 assuming that a mall intercept is being conducted.
1.
2.
What is the target population for this study?
Element: Homeowners, especially women (since they purchase most carpeting)
Sampling Unit: Homeowners
Extent: USA
Time: Next 6 weeks
What sampling frame can you use?
For mall intercept interviews, it is difficult to identify a sampling frame more precisely than
women in the mall. For telephone interviews, a city telephone book may be used.
C5 - 43
3.
What sampling technique do you recommend for this study? Why?
Quota samples are most applicable for mall intercept interviews because they allow for more
precision than regular judgmental sampling and mall intercept interviews are inherently nonprobabilistic.
We can create control categories along age groups. For example,
Age
%
22-30
20
31-45
43
45-60
18
60+
19
which represents the percentage of the sample size that should be obtained from each category.
Respondents are approached in the mall with the goal of achieving this age distribution.
In this case, we also want to bias our selection in terms of women, since they purchase most
carpeting. Thus, we should purposely target women in these age groups at a 2 to 1 ratio to men.
4.
What nonresponse issues must be considered and how can they be overcome?
In mall intercept interviews, a major difficulty is refusals. In order to increase the
response rates, the foot-in-the-door technique can be used. By first screening respondents to see
if they own a home, we may be able to increase response rates. In addition, incentives can be
used such as free drinks and snacks or pens, pencils, etc.
5.
If a CATI were being conducted, which method of sampling would you recommend?
Using a computer makes probability sampling more feasible. The recommended
procedure is stratified sampling. Strata can be created around age and sex classifications. As in
Question 3, we can use the population distribution to form the proportional sizes of the strata and
then use simple random sampling to sample within strata.
Age
22-30
31-45
45-60
60+
%
20
43
18
19
CHAPTER 13
1.
Suppose DuPont conducts a preliminary market study of 30 respondents to determine the price
they are willing to pay for carpets in the Designer Collection. The mean response is calculated to
be $30.00. If DuPont wants to be 99% sure that the true value lies within $1.00 of this figure,
how large a sample do they need to survey given that the population standard deviation is $5.00?
This is the confidence interval method using means. The values of the parameters are
D=1
Level of Confidence: 99%
Z = 2.575
s=5
C5 - 44
2 2
n=s Z
D2
52 x 2.575 2
=
2.
a)
12
= 165.7656, or 166 respondents.
Suppose DuPont wants to know how many households are interested in the Designer
Collection. To do so, they conduct a pilot study and learn that 21 of 30 respondents
expressed an interest in designer carpets.
a.
How large of a sample does DuPont need to draw in order to be 99% sure that
this result is within 5% of the true value?
b.
What if they wanted it to be only within 20% of the true value at a 99% level of
confidence?
c.
What if DuPont only required a 80% level of confidence at a 20% level of
precision?
This problem is phrased in terms of the confidence interval approach for proportions. The
parameters are
p = .70
Confidence level: 99%
Z = 2.575
D = .05p = .05 x .7 = .035
p(1-p)Z2
n=
D2
0.7 1 - 0.7 x 2.575 2
=
.0352
= 1136.67, or 1137 respondents.
b)
p = .70
Confidence level: 99%
Z = 2.575
D = 0.2p = .2 x .7 = .14
p(1-p)Z2
n=
D2
0.7 1 - 0.7 x 2.575 2
=
.142
= 71.04, or 72 respondents.
c)
p = .70
Confidence level: 80%
Z = 1.285
C5 - 45
D = .20p = .20 x .7 = .14
p(1-p)Z2
n=
D2
0.7 1 - 0.7 x 1.285 2
=
.142
= 17.69, or 18 respondents.
CHAPTER 14
Answer the following questions assuming a mall intercept interview is being conducted.
1.
What characteristics would you look for when hiring field workers for this survey?
Because mall intercept interviews are personal interviews, physical appearance and manners are
important. The individuals should have a pleasant and professional appearance. They should have at
least a high school education. Experienced interviewers are always desirable since they are familiar
with the problems of mall intercept interviewing. Interviewers will need to be outgoing in order to
encourage shoppers to participate in the interview. They should be healthy enough to be on their feet
most of the day and finally have effective speaking, listening and writing skills to make the interview as
successful as possible in capturing and recording the information.
2.
What issues are most important in training your field workers for this survey?
Making the initial contact - Because field workers must encourage shoppers to participate in the
interview, the first impression is critical. Practice in approaching people should be a part of the training
including an opening line.
Asking Questions - Field workers must ask the questions exactly as worded in order to prevent
interviewer bias. Field workers should be instructed to abide the guidelines listed in the text.
1.
Be thoroughly familiar with the questionnaire.
2.
Ask the questions in the order in which they appear in the questionnaire.
3.
Use the exact wording for each question as given in the questionnaire.
4.
Read each question slowly.
5.
Repeat questions that are not understood or are misrepresented.
6.
Follow instructions related to asking questions (e.g., skip patterns, probing etc.) carefully.
7.
Ask every question in the questionnaire except those which should be skipped.
Probing - When respondents do not or can not sufficiently answer the question, it is necessary to
motivate them to respond or clarify their answers. Training should cover different techniques of probing
so that field workers are comfortable with at least one technique.
Recording answers - Field workers should be familiar with the survey form and how to mark
responses on the form. The entire form should be reviewed in detail. Recording answers to
unstructured questions should be reviewed as well. The guidelines listed in the text should be followed.
1.
Record responses during the interview.
2.
Use the respondent’s own words.
3.
Do not summarize or paraphrase the respondent’s answers.
4.
Include everything that pertains to the question objectives.
5.
Include all probes and comments.
C5 - 46
6.
Repeat the response as it is written down.
Terminating the interview - Field workers should be instructed to close each interview in a polite
and gracious manner after all the information has been obtained.
3.
What issues must you as the supervisor be most concerned with during the interviewing?
Because all interviews take place at a central location in a mall intercept interview, control of the
field workers is made easier. Quality control and editing is needed regardless of the mode of data
collection. Sampling control and control over interviewer cheating is increased since we can observe the
interviews taking place. Thus, in this case, the primary concern is to ensure the quality control of the
interviews and that the sampling requirements are being met.
4.
How would you validate the field work?
After the interview is completed, a proportion of the respondents can be asked about the
questions they were asked in the interview to ensure the entire interview was completed.
5.
How would you evaluate the success of your field workers?
The most effective means of evaluating field workers are response rate, quality of the
interview and quality of data. Time is an important consideration since we need the results in 6
weeks. Response rates indicate how good field workers were at persuading shoppers to
participate. The quality of the interview can be evaluated from behind the divider from which
respondents are interviewed. The quality of the data can be assessed on (1) the data are recorded
in a legible way, (2) all instructions including skip patterns were appropriately followed, (3) the
answers to unstructured questions were recorded verbatim rather than in a summary fashion, (4)
the answers to unstructured questions are meaningful and complete enough to be coded, and (5)
low incidence of item nonresponse.
CHAPTER 15
1.
Develop a codebook for the first 8 questions in the questionnaire constructed for
Question 2 of Chapter 11.
Coding involves the assignment of a code to represent a specific response to a specific question,
along with the data record and column position that code will occupy. It is the guidebook for translating
information from the questionnaire into the computer for data analysis. The general rules to follow as
outlined in the text are:
1.
The respondent code and the record number should appear on each record in the data.
The following additional codes should be included for each respondent: project code, interviewer
code, date and time codes, and validation code.
2.
Fixed field codes are highly desirable. This implies that the number of records for each
respondent should be the same and the same data should appear in the same column(s) for all
respondents.
3.
If possible, standard codes should be used for missing data. For example, a code of 9
could be used for a single column variable, 99 for a double column variable and so on. Note that
the missing value codes should be distinct from the codes assigned to the legitimate responses.
4.
Coding of structured questions requires assigning codes for specific responses to each
question and specifying the appropriate record and column(s) in which the response codes are to
appear.
C5 - 47
5.
In questions that permit multiple responses, each possible response option should be
assigned a separate column. Multipunches, where multiple responses are punched in the same
column, should be avoided.
6.
The coding of unstructured or open-ended questions requires that codes be
developed and assigned to the responses found in the verbatim answers on the
questionnaires. The development of the codes has to wait until the completed
questionnaires are received from the field. The following guidelines are suggested for
coding unstructured questions and questionnaires in general.
a.
Category codes should be mutually exclusive and collectively exhaustive.
b.
Category codes should be assigned for critical issues even if no one has
mentioned them.
c.
Data should be coded to retain as much level of detail as is feasible.
Note how these rules were followed in the codebook below.
Column Variable
Number Number
Variable
Name
Question
Number
Coding
Instructions
1-3
1
Respondent
ID
(001 to 890 add
leading zeros as
necessary)
4
2
Record Number
1 (Same for all
respondents)
5-6
3
Project Code
1 (Same for all
respondents)
7-8
4
Interview Code
as coded on the
questionnaire
9 - 14
5
Date Code
as coded on the
questionnaire
15 -20
6
Time Code
as coded on the
questionnaire
21 - 22
7
Validation Code
as coded on the
questionnaire
BLANK
leave these
columns blank
23 - 24
C5 - 48
25
8
Own carpeting
1
Yes
=1
No
=0
Missing =9
26
9
One color; traditional style
2a
1 if checked,
0 if otherwise
27
10
Multicolor; traditional style
2b
1 if checked,
0 if otherwise
28
11
One color; fashion style
2c
1 if checked,
0 if otherwise
29
12
Multicolor; fashion style
2d
1 if checked,
0 if otherwise
30
10
Important part of home
3
Punch the number
circled
31
11
Fashion item for home
4
Punch the number
circled
32
12
Central item
5
Punch the number
circled
33
13
Last long
6
Punch the number
circled
34
14
Factors: stain resist
7a
For items 7a thru
7g punch the
number circled
35
15
Factors: long life
7b
36
16
Factors: fashionable
7c
37
17
Factors: matches furniture
7d
38
18
Factors: price
7e
39
19
Factors: reputation
7f
40
20
Factors: warranty
7g
C5 - 49
41
2.
21
Likely to buy carpeting
8
Punch the number
circled
Based on the codebook above, code the questionnaire for items 1 - 8.
Please answer ALL the questions whether or not your household currently has carpeting.
Record #
(25)
Q1. Does your household currently own carpeting?
1._____Yes
2._____No
(IF YES GO TO QUESTION Q2; IF NO GO TO QUESTION Q7)
Q2. Which of the following styles of carpeting do you have in your home?
Please check as many as apply.
1._____One Color; Traditional Style
2._____Multicolor; Traditional Style
3._____One Color; Fashion Style
4._____Multicolor; Fashion Style
(26-29)
Please indicate your agreement with each of the following statements.
Q3. Carpeting is an important part of my home.
Strongly Disagree
Neutral
1
2
3
4
5
(30)
Strongly Agree
6
7
Q4. Carpeting is a fashion item for my home.
Strongly Disagree
Neutral
1
2
3
4
5
Strongly Agree
6
7
(31)
Q5. Carpeting is a central item in my interior design for my home.
Strongly Disagree
Neutral
Strongly Agree
1
2
3
4
5
6
7
(32)
Q6. It is more important for a carpet to last long than look pretty.
Strongly Disagree
Neutral
Strongly Agree
1
2
3
4
5
6
7
(33)
Q7. Suppose your household were to purchase new carpeting. Please rate the relative importance of
the factors you would consider in selecting carpeting on a 1 to 7 scale where 1 means ”Not so
Important“ and 7 means ”Very Important”.
Not so Important
Very Important
1. Stain resistance
1 2
3
4
5
6
7
(34)
2. Long life
1 2
3
4
5
6
7
(35)
3. Fashionable
1 2
3
4
5
6
7
(36)
4. Matches my furniture
1 2
3
4
5
6
7
(37)
5. Price
1 2
3
4
5
6
7
(38)
C5 - 50
6. Made by a well known
company
7. Warranty
7
7
(39)
(40)
Q8. How likely is your household to buy carpeting in the next three months?
Not so Likely
Maybe/Maybe Not
Very Likely
1
2
3
4
5
6
7
(41)
3.
#2
#3
2
2
3
3
4
4
5
5
6
6
Suppose after receiving completed questionnaires, the following results were obtained
from 3 different respondents: Respondent 1 consistently used the lower end of the scale,
respondent 2 consistently used the middle of the scale and respondent 3 consistently used
the upper end of the scale. Correct for the response style of the respondents in order to
ensure meaningful results on Q6. Assume the following means and standard deviations.
Mean Standard Deviation
5
1.2
2.5
1.5
3.8
1.8
5.75
0.5
Sample
Respondent 1
Respondent 2
Respondent 3
Q6.
#1
1
1
It is more important for a carpet to last long than look pretty.
Strongly
Neutral
Disagree
1
2x
3
4
5
6
Strongly
Disagree
1
Strongly
Disagree
1
Strongly
Agree
7
Neutral
2
3
4x
Strongly
Agree
5
6
7
Neutral
2
3
4
Strongly
Agree
5
6
7x
The most common way to correct for response bias in scale use is to use standardize the
data for each respondent based on his/her distribution of scores on all questions. Note
that the sample statistics are not used. First subtract the respondent mean from the score
on Q6 and divide by the respondent's standard deviation, i.e.,
Zi = (Xi - X)/ Sx.
Respondent 1’s standardized score is (2-2.5)/1.5 = -.33
Respondent 2’s standardized score is (4-3.8)/1.8 = .11
C5 - 51
Respondent 3’s standardized score is (7-5.75)/0.5 = 2.5
The standardized scores would then be used in the data analysis. Note that scores for all
respondents must be standardized in order to make the analysis meaningful.
CHAPTERS 16 AND 17
1.
Run descriptive statistics and obtain frequency distributions for all variables.
The descriptive statistics give us an indication of the underlying distributions of the
variables and give us an initial indication to the attitudes and impressions the respondents have
toward carpeting. Thus, they are useful for suggesting further more detailed analyses to be
conducted. It is noted that even where there are missing values, we have enough degrees of
freedom for our analyses (209 in this case). The following initial observations are noted (Case
5.10 Output Frequencies.spo).
Q1
Q2a
Q2b
Q2c
Q2d
Q3
Q4
Q5
Q6
Q7a
Q7b
Q7c
209 respondents owned carpet (87.1%).
63.2% of respondents own a one color traditional carpet.
47.4% of respondents own a multicolor traditional carpet.
41.6% of respondents own a one color designer carpet.
54.5% of respondents own a multicolor designer carpet.
35.4% of respondents consider carpet to be important (responses 5-7).
13.9% believe that carpet is a fashion item (responses 5-7).
28.7% believe that carpet is central to their home (responses 5-7).
51.7% believe that durability is more important than looks (responses 5-7).
Stain resistance is an important feature (41.2% agree) (responses 5-7).
Long life is not an important feature (41.2% agree) (responses 5-7).
Fashion distinguishes two groups - moderately fashionable (58.7%) (responses 4 & 5), and
not fashionable (41.3%) (responses 1 & 2).
Q7d It is important to have carpet match furniture (58.7%) (responses 5-7).
Q7e Price distinguishes two groups - Price sensitive (41.2%) (responses 6-7) and moderately price
sensitive (58.8%) (responses 3 & 4).
Q7f The brand name is important (57.5%) (responses 5-7).
Q7g Warranties distinguish two groups - warranty important (41.2%) (responses 5-7) and
warranty not so important (46.7%) (responses 2 & 3).
Q8
35% are likely to buy carpet in the next three months (responses 5-7).
Q9a Style A received 40.8% of its ratings as favorable (responses 5 - 7).
Q9b Style B received 27.9% of its ratings as favorable (responses 5 - 7).
Q9c Style C received 39.2% of its ratings as favorable (responses 5 - 7).
Q9d Style D received 58.7% of its ratings as favorable (responses 5 - 7).
Q9e Suggests that Style D is the most popular style (41.3% preferred D) in a forced choice task.
Q10a Designer Collection carpets are not rated highly on stain resistance (35% positive (responses 5-7)).
Q10b Long life in Designer Collection carpets exhibits a bimodal distribution (46.3% rate it low
(responses 1-3), while 42.9% rate it high (responses 5-7)).
Q10c The carpets are not perceived as being too fashionable.
(52.1% rate unfavorably) (responses 1-3).
C5 - 52
Q10d Designer Collection carpets are not perceived to match furniture very well (67.1% rate
unfavorably) (responses 1-3).
Q10e Price for Designer Collection carpets is insignificant for a large segment of the sample
(49.6%) (responses 1-3).
Q10f Brand name is not so important for Designer Collection carpets (58.3%) (responses 1-3).
Q10g Warranty for Designer Collection carpets is perceived as poor (58.7%) (responses 1-3).
Q11 The sample is split on the desirability of designer carpets (47.1% do not like).
Q12 43.3% of respondents say they will buy Designer Collection carpets, suggesting this is the
target segment.
Q13a Carpeting is not just a functional item (55% responses 1-3).
Q13b A stylish group and a non-stylish group emerge here (50.4% (responses 1-3), and 40.4%
(responses 5-7), respectively).
Q13c The majority do not believe it necessary to buy the best quality (52.1% responses 1-3).
Q13d The self-perception of being fashionable is approximately uniform across the sample (40.4 %
responses 1-3, 45% responses 5-7).
Q14a-e The green color appears to be ranked highest with 46.7% of respondents ranking it as number
one.
Q15 The AIO items are better analyzed jointly.
Q16a Very few respondents were interested in the survey (only 19.2% (responses 5-7)).
Q16b Few respondents were committed to the survey (only 31.7%) (responses 5-7).
Q16c Very few respondents put much effort into the survey (only 15.4% (responses 5-7)).
Q16d Very few respondents were motivated (only 21.2%) (responses 5-7).
Q16e Very few respondents changed their minds about carpets (only 16.22% (responses 5-7)).
Q17 More women than men completed the survey (70.8% women).
Q18 Most respondents were married (84.2%).
Q19 Most respondents were between 25-40 (57.9%).
Q20 Most respondents have a college education (60.0%).
Q21 Most respondents live in a house (41.7%)or condominium (32.5%.
Q22 Sampling was not uniform across ZIP codes - This may require resampling undersampled
ZIP codes.
Q23 Most respondents earn between $50,001 to $90,000 (48.3%).
2.
Cross-tab Q3 (Is carpeting important?), Q4 (Is carpeting fashionable?), Q5 (Is carpeting
central?) and Q6 (Is carpeting durable?) with the demographic variables in Q17 to Q21. If
results are poor, you may have to create dummy variables in order to obtain valid results.
In all of the initial cross tab results (Case 5.10 Output Cross-Tabulations 1.spo), we note
that many of the cells contain 5 or fewer entries, thus making the analysis suspect. As such, we
must combine variables though the use of dummy variables and rerun the analysis. The
recombination used is shown below. Recoding of values for variables merge two or more rows,
or merge two or more columns, so that the incidence of empty cells with less than five
observations is reduced. In this way, the degrees of freedom remain high enough to make
statistical inferences using significance tests of the chi-square distribution, as well as from using
the contingency coefficients and Cramer’s V.
Original
New
Variables
Variable
Interpretation
C5 - 53
Marital Status(MS)
MS = 1; MS = 10
MS = 1
Not married
Age
Age = 0; Age = 100
Age = 10, Age =1
Age = 0
Age = 1
Age less than or equal to 40
Age over 40
Education (ED)
ED = 0; ED = 10, Ed = 100
ED = 0
Not a college graduate
Primary Dwelling (PD)
PD = 1, PD = 10
PD = 1
Other dwelling
Income
Income=0; Income = 100;
Income=1000;Income=10000
Income=10; Income=1
Income=0
Income=1
$90K and less
$90001 or more
Var=1
Var=2
Var=3
Carpet Important =1 or 2
Carpet Important = 3, 4 or 5
Carpet Important = 6 or 7
Q3=1; Q3 =2
Q3=3; Q3=4; Q3=5
Q3=6; Q3 =7
Q4, Q5, and Q6 were recoded in a similar fashion, i.e., categories 1 and 2 were
combined, categories 3, 4 and 5 were combined, and categories 6 and 7 were combined.
This recombination makes the cross tab interpretable since the cells with expected
frequency less than 5 is < 20%, however, cells with expected frequencies of less than 5
should be interpreted with caution.
As can be seen from the cross-tabulation output (Case 5.10 Output Cross-Tabulations
2.spo), the cross-tabs of all the demographic variables examined, except income, are
significant at the 0.05 level. The results indicate that carpeting is more important to those
who are married, are over the age of 40, are college graduates, and dwell in houses. They
also tend to have incomes higher than $50,000, although this effect is not significant at
the 0.05 level.
For Q4 (carpeting is a fashion item), all the cross-tabs s should be treated cautiously because
only 6 of the 209 respondents with complete values agree that carpeting is a fashion item.
For Q5 (carpeting is a central item), the cross-tabs of all the demographic variables
examined, except income, are significant at the 0.05 level. The results indicate that
carpeting is a central item for those who are married, are less than the age of 41, are not
college graduates, and dwell in condominiums.
For Q6 (more important for a carpet to last long than look pretty), the cross-tabs of all the
demographic variables examined, except income, are significant at the 0.05 level. The
C5 - 54
results indicate that it is more important for a carpet to long last for those who are not
married, are over the age of 40, are college graduates, and dwell in houses.
3.
Conduct a t-test for each of the seven attributes listed in Q7 (Importance ratings of
attributes) by each of the four responses to Q2 (What carpet do you own?), i.e., there will
be twenty-eight t-tests run.
T-tests allow us to determine if there exists a difference between groups along some
specified variable. Here we will determine if respondents grouped by their ownership of styles
of carpets (Q2 - i.e., owning carpet style A group, and not owning carpet style A group) differ on
their ratings of carpets attributes (Q7).
As can be seen from these results, for single color traditional styles (Case 5.10 Output TTest 1.spo) and multi-color designer styles (Case 5.10 Output T-Test 4.spo), no significant
differences exist between owners and non-owners on ratings of the importance of carpet
attributes (none of these t-tests are significant at the 0.05 level). Significant differences do exist,
however, between owners of the multicolor traditional style, and the single color designer
carpets.
Considering multicolor traditional styles, we note differences between owners and nonowners on stain resistance, long life, matching furniture, company reputation, and warranty.
Specifically, owners tend to rate stain resistance, length of life, and warranty as less important
than non-owners, but matching furniture and brand name as more important. We see this by
noting the mean level for the two groups. The means for owners and non-owners on these
variables are given below (Case 5.10 Output T-Test 2.spo).
Stain Resist
Long Life
Matches Furniture
Well-known maker
Warranty
Owners
3.6
3.0
5.0
5.0
4.0
Non-owners
4.4
3.6
4.4
4.3
4.6
This suggests that owners of these carpets are more fashion/image conscious and less
function conscious. Note that fashionable importance and price importance are significant at the
0.055 level but not at the 0.05 level.
For single color designer styles, differences exists in stain resistance, long life, matches
furniture, and warranty importance. Specifically, owners tend to rate stain resistance, long life,
and warranty as more important, and matched furniture as less important than non-owners. The
means are given below (Case 5.10 Output T-Test 3.spo).
Stain Resist
Long Life
Matches Furniture
Warranty
Owners
4.4
3.6
4.4
4.6
Non-owners
3.8
3.1
4.9
4.1
This suggests that owners, in contrast to multicolor traditional styles, are more concerned about
functional aspects of a carpet than non-owners.
C5 - 55
4.
Conduct a t-test for each of the seven ratings listed in Q10 (Ratings of the Designer
Collection) by the response to Q12 (Would you purchase Designer Collection?), i.e.,
there will be seven t-tests run. Interpret the results
The results of the t-tests are given in Case 5.10 Output T-Test 5.spo. As can be see, all the t-tests
are significant at the 0.05 level. Those who purchase designer carpets rate them more favorably in terms
of stain resistance, fashionable rating, matches furniture, and reputation (well known) and less favorably
in terms of long life, price and warranty. The mean ratings are as follows:
Would Purchase Designer Carpets
Yes
No
Stain Resistance
4.9
2.3
Long Life
2.2
5.3
Fashionable
4.9
2.3
Matches Furniture
3.8
1.9
Price
1.8
5.0
Well-known maker
4.4
2.1
Warranty
1.4
4.5
5.
Do the respondents in the survey attach more importance to stain resistance (Q7a) than
they do to long life (Q7b)? Formulate the null and alternative hypotheses and prescribe
an appropriate statistical test.
A paired t-test should be conducted. The null and the alternative hypothesis are:
H 0 : I StainRe sis tan ce  I LongLife
H :I
1
6.
StainRe sis tan ce
 I LongLife
As can be seen from the output file (Case 5.10 Output Paired T-Test 1.spo), the
difference is significant even for a two-tailed test. Yes, the respondents attach more
importance to stain resistance (mean = 3.7) than they do to long life (mean = 3.1).
Do the respondents in the survey attach more importance to price (Q7e) than they do to
warranty (Q7g). Formulate the null and alternative hypotheses and prescribe an
appropriate statistical test.
A paired t-test should be conducted. The null and the alternative hypothesis are:
H 0 : I Pr ice  I W arranty
H :I
1
7.
Pr ice
 I W arranty
As can be seen from the output file (Case 5.10 Output Paired T-Test 2.spo), the
difference is significant even for a two-tailed test. Yes, the respondents attach more
importance to price (mean = 4.7) than they do to warranty (mean = 4.1).
Do those who prefer different styles of carpet (A, B, C or D in Q9e) differ in terms of the
eleven lifestyle statements of Q15? Conduct the appropriate analyses. Interpret the
results.
A one-way analysis of variance should be conducted for each statement of Q13. All the
four ANOVAs are significant at the 0.05 level (Case 5.10 Output ANOVA 1.spo). Thus, the
means of these variables in all the groups are not all equal.
C5 - 56
8.
“Carpeting is functional” is most agreed to by those who prefer Style A.
“Associated with latest styles” is most agreed to by those who prefer Style D.
“Important to buy best quality” is most agreed to by those who prefer Style A.
“I am fashionable” is most agreed to by those who prefer Style D.
Do the different age groups (Q19) differ in terms of their opinions about carpeting as
expressed in Q13? Conduct the appropriate analyses. Interpret the results.
A one-way analysis of variance should be conducted for each statement of Q13. Three of
four ANOVAs are significant at the 0.05 level (Case 5.10 Output ANOVA 2.spo). Thus, the
means of these variables in all the group are not all equal.
“Associated with latest styles” is most agreed to by those who are 18 – 24 years old
“Important to buy best quality” is most agreed to by those who are 41 – 60 years old
“I am fashionable” is most agreed to by those who are 18 – 24 years old
CHAPTER 18
1.
Regress each of the four styles of designer carpets in Q9a, b, c, and d (Rating for styles)
on the seven attributes of Q7. Thus, there will be four regressions. Interpret the results.
Regression analysis allows us to express a dependent variable in terms of a set of
independent variables, which we theoretically believe to be related to the dependent variable.
The resulting equation is not only useful for predictive purposes, but also allows us to infer the
relative importance of independent variables on the dependent variable.
In expressing ratings of Style A on the seven product attributes, our regression is highly
significant (p=.000) and the R2 is .96, indicating that virtually all of the variance in the data is
accounted for by the model (Case 5.10 Output Regression 1.spo). The equation is derived from the
b coefficients. Here the equation is:
Style A = -.61 Warranty + .35 Price - .04 Company Name + 1.16 Stain Resistance + .39
Although our results indicate that the model fits the data well, the high degree of
correlation between the independent variables indicates multicollinearity is present. As such, the
estimates (i.e., the partial regression coefficients) may not be reliable and thus the standard errors
are likely to be high; the magnitudes as well as the signs of the partial regression coefficients
may change from sample to sample; and it becomes difficult to assess the relative importance of
the independent variables in explaining the variation in the dependent variable. In order to deal
with multicollinearity, we can rerun the analysis with only one variable. Stain resistance is
selected for this purpose, since it is a significant variable and has the greatest beta value of all
predictors. In doing this we obtain the following result:
Style A = .956 Stain Resistance +.055
This equation is also highly significant (p=.000) and has a high R2= .91. As such, it
replaces the earlier equation. An examination of the residuals reveals nothing to disconfirm the
analysis: all scatterplots appear random and the normal probability plot is acceptable for a one
variable regression. Thus, the ratings of Style A are strongly influenced by the respondent’s
attitude towards the importance of Stain Resistance in carpeting. Consumers seeking this
attribute of carpets tend to prefer style A.
C5 - 57
Similar analyses have been run for Styles B, C and D. The regression equations are given
below. The high degree of correlations between the items on Q7 suggests that factor analysis of
the items is needed before regression is undertaken to ensure minimal correlation amongst the
independent variables.
Style B = 1.17 Warranty - .03 Price - .005 Company Name - .13 Stain Resistance - .97
R2= .97
Only Warranty is a significant variable (Case 5.10 Output Regression 2.spo)
Style C = .25 Warranty + .05 Company Name -.99 Price -.18 Stain Resistance +7.46
R2= .97
Stain Resistance and Price are significant (Case 5.10 Output Regression 3.spo)
Style D = -1.05 Warranty - .02 Price + .003 Company Name + .07 Stain Resistance + .9.02
R2= .98
Only Warranty is significant (Case 5.10 Output Regression 4.spo)
Hence, style B appeals to consumers who desire a strong warranty (it has a positive beta
value for Warranty), style C to those who are price sensitive, and style D to those who are not
concerned about the warranty (it has a negative beta value for warranty). Due to the
multicollinearity present in the predictors, this analysis is only tentative until further
confirmation is derived from factor analysis and other statistical techniques.
2.
Regress each of the styles in Q9 on all attributes in Q10 (Desirability of attributes), i.e.,
there will be four regressions.
This regression parallels the prior regression except that the predictors relate directly to
attitudes towards Designer Carpets rather than carpets in general.
Style A = .16 Stain Resistance -.34 Long Life + .14 Fashionable +.02
Matches Furniture -.25 Price -.01 Company Reputation -.07 Warranty + 5.16
R2= .95 and significance = .000.
Only Long Life and Price are significant (Case 5.10 Output Regression 5.spo).
Like the previous regression, the correlations of the predictors are high so that
multicollinearity may be a serious issue.
Style B = .15 Stain Resistance -.40 Long Life - .04 Fashionable - .05 Matches Furniture -.35
Price +.12 Company Reputation +.17 Warranty + 4.85
R2= .85 and significance = .000.
Only Long Life, Warranty and Price are significant (Case 5.10 Output Regression 6.spo).
Style C = -.14 Stain Resistance +.37 Long Life + .15 Fashionable -.09 Matches Furniture
+.61 Price -.06 Company Reputation -.36 Warranty + 1.15
R2= .83 and significance = .000.
Only Long Life, Warranty and Price are significant (Case 5.10 Output Regression 7.spo).
Style D = .-.18 Stain Resistance +.36 Long Life + .03 Fashionable +.06 Matches Furniture
+.32 Price -.16 Company Reputation -.15 Warranty + 3.62
C5 - 58
R2= .88 and significance = .000.
Only Long Life, Warranty and Price are significant (Case 5.10 Output Regression 8.spo).
An examination of the residuals in each regression reveals no patterns in the plots, which
would indicate that any of our assumptions pertaining to errors have been violated.
The interpretation of the above results is that when consumers are evaluating Designer
Carpets, preference for Style A is negatively influenced by attitudes towards Long Life and
Price; as judged by the magnitude of the beta coefficients, Long Life is most influential in
determining the rating of Style A. Style B is also negatively influenced by attitudes towards
Long Life and Price, but these are countered by a positive influence of attitude towards
Warranty. The negative effect of Long Life is most influential. Style C is similar to Style B,
except preference increases directly with attitude towards Long Life and Price and indirectly
with attitude toward Warranty; Price is most influential. Style D is similar to Style C, yet Long
Life is more important than Price in determining rating. Hence, three variables seem most
important in determining attitudes towards the Designer Carpet styles, Warranty, Long Life and
Price, but these three are ordered differently for different styles.
CHAPTER 19
1.
Prepare a report for management that explains your research results and provides an answer for
their management decision problem.
The report should basically contain all of the components given in the guidelines for
report writing in Chapter 19, however, as explained in Chapter 19, one of the best ways to
explain research results to management in a simple yet comprehensive way that can easily
illustrate the problem solution is through tables and graphs. Therefore, one way to present the
solution to management would be by preparing and presenting the following tables and graphs
for the report:
a.
A pie chart of preferred style
b.
A bar chart showing the responses to Q8 (Likely to Buy a Designer Carpet)
a)
C5 - 59
PREFERRED DESIGNER CARPET STYLE
4.60%
Style A
32.47%
41.26%
Style B
Style C
Style D
21.68%
b)
LIKELIHOOD OF PURCHASE SEGMENT SIZE
50
40
%
37.9
40.4
30
21.7
20
10
0
LOW
MID
Rating of Likelihood of Purchase
C5 - 60
HIGH