Marketing Research - Term Paper Example

?Marketing Research on ‘Round the clock food supply with a fleet of pick-up vans and centralized cooking facilities' Contents Page 2 Introduction 3 Background 3 Research questions 4 Research aim 4 Research objectives 4 Hypothesis 5 Literature review 5 The scope and organization of Survey 7 Design of questionnaire 7 Methodology 8 Analysis 9 Findings 10 Potential problems or pitfalls 10 Conclusion 11 Appendices 12 References 14 Abstract This report discusses about marketing research through questionnaire survey for a comprehensive study and qualitative analysis in respect of the business ‘Round the clock food supply with a fleet of pick-up vans and centralized cooking facilities'. Consequent upon liberalization and globalization, the pattern of working and the working hours in the businesses have changed drastically over the period of time with activities in various establishments such as BPO centers, software companies and other service organizations in the cities and towns. People are working in different shifts round the clock and the companies usually provide pick-up and drop facilities to their employees. However, food is a source of concern because, availability of quality food at odd times in hygienic condition at a convenient place is a problem faced by the people working in these companies. This situation presents an opportunity to a growing business in this area for round the clock food supply through a fleet of pick-up vans at different locations at different times where these people can come and collect food on their way to the working places or homes after work or during their lunch breaks. The idea is to avoid setting up of a permanent shop with all the facilities for a business of few hours in a day, and thereby saving costs. In this manner, more number of customers could be serviced at different places by a ‘food van’ and fleet consists of about 6 vans could cover an entire region. This will result into economies of scale in the business, and cost-efficient and latest technology could be adopted in the production processes. The food vans can also sell bottled drinking water and outsourced snacks as an additional business. Introduction The niche areas in food business offer immense scope for specialization, growth and development to the small and medium sized businesses. The competition in the niche areas is very limited due to localized demand, personalized service required and small investment outlay in project which is not compatible with the growth strategy of big corporate companies. In the current business proposal, the insignificant level of competition, requirement of limited investment and labor, scope for personalized service, specialist experience in the food supply and favorable policies prevailing in respect of financing to SMEs are the attractive features. The profile of the restaurant industry in general and its growth in the recent years could be inferred from the Appendix – I: Restaurant Performance Index. Background The small and medium enterprises’ role in the economic development of a country on account of its employment generation is very significant. For an economic growth to be sustainable in the long run, it is very important to evaluate the pros and cons of the business opportunity by making marketing survey to ensure sure footing into the business. In the present proposal, three important criteria are involved, apart from identifying the cluster of organizations which are operating in a particular region so that the delivery point for supply of food could be finalized. Firstly, it is important to fix up an appropriate time which coincides with the increased peoples’ movement in the area due to timing of the shifts, shopping malls, market places and the government offices. The second important criteria is to fix up the length of time, the food van has to be stationed in the location to service the maximum number of clients. The third and the most important aspect is the information directly related to the business, such as the age group of the employees, their preferences, tastes and fashions of the target customers for assessing the requirements, cultural background which influence their food habits and income level. Having finalized the retail points, the centralized ideal location for facilities to prepare food, number of vans required, the storage facilities for the input materials and cooked food and other support services needed have to be planned. The marketing research would be very useful in providing information in connection with planning and decision making as the business strategy hinges on evaluation of these important aspects with reasonable accuracy. Research Questions 1. Whether the business can leverage the timings related to the work places in a location for the supply of food through food vans? 2. Are the food habits, preferences, income level and spending pattern of the majority of the people in each location is compatible with the overall strategy of establishing facilities for centralized cooking of common food items? 3. Is the overall cost of the project justifiable in relation to the returns expected? Research aim The research aims to assess the proposal which is founded on the differential timing and the food habits, preferences, income level and spending pattern of the target customers and the justifiability of the projected returns in relation to the proposed capital investment. Research Objectives To study the business proposal in relation to the potential of the market, with regard to: 1. Feasibility of the project, 2. Sustainability of the operations in the long run, 3. Finalization of the production and distribution planning based on the survey, and 4. Identify the strengths and weaknesses of the proposal based on the survey results for firming up the business strategies. Hypothesis The analysis of the survey results would be useful in evaluating the hypothesis: The liberalization and globalization process has opened up new opportunities for growth in the food industry consequent upon the shift in the pattern of working which has been necessitated by the integration of the business operations in line with the changes in the operations of the businesses, which are increasingly aligned to the industry profile of the overseas customers or suppliers under the global environment and a ‘Round the clock food supply with a fleet of pick-up vans and centralized cooking facilities' as solution to the social issue of food supply holds great promise for growth. Literature review Unlike other industries, the demand for food cannot come down drastically and the food industry will not be affected greatly by slowdown in the economy. Kuhn (2009) states “The UK’s fast food industry has benefited from the recession, with the sector increasing its presence by more than 8% in the last year, research has found”. The future of the industry is promising for the entrepreneurs with innovative ideas in their businesses. Hensley & Stensson (2008) reports “Restaurant industry sales are projected to reach $558 billion this year - an increase of 4.4 percent over 2007 - and overall, the industry is expected to have an overall economic impact of $1.5 trillion” - The National Restaurant Association's Senior Vice President of Research and Information Services Hudson Riehle. This view is also strengthened by the opinions of the leaders in the industries associated with the food supply. Powell (2010) states “If the recent economic downturn seems to be stifling the willingness of operators or owners in committing to more aggressive service and maintenance by HVACR [Heating Ventilation Air Conditioning and Refrigeration] personnel, some consolation can be taken in the forecast statement that restaurateurs seem “cautiously optimistic about 2010” and predicting they “will see a gradually improving operating environment.” The industry is also viewed favorably by the governments due to its role in the employment generation in the country. According to the National Restaurants Association (2010), restaurants are expected to add 428,000 jobs this summer season, a 4.6 percent increase over the March 2010 employment level. Not only the food industry, which is predominantly made up of SMEs, but also the whole SME sector plays an important role in the employment generation. Hussain, Milman & Matlay (2006 p. 586) states “In recent years, policy makers in the UK have attempted to address the apparent market failure to supply adequate and specific finance for SMEs”. This augurs well for the financial support needed by the SMEs for the development of the business. Brouthers, Andriessen & Nicolaes (1998, p. 136) found “When it comes to making strategic decisions, the small firm managers in this study tended to ignore the information gathered and the analyses performed, relying instead on their intuition”. However, in order to compete efficiently in the market, strategic decisions need to be based on proper marketing research through collection of market information. Resistance to change and fear of unknown could be the major obstacle in embarking on an innovative business model. However, when the proposal is pursued further and supported by the marketing research, the strategies could be firmed with conviction for long term growth. The scope and organization of Survey Saris & Gallhofer (2007, p.4) state “Survey research is often used for descriptive research… studies can also be done to determine the reasons…such research is called explanatory research”. The determination of sample size, active participation of the people in the survey and experience and communication skills of the data collector is crucial for reliability and validity of the survey results. The complexity of the variables involved the study needs to be defined. Vogt (2005, p. 377) states that a variable is “loosely, anything studied by a researcher”. The independent variables involved in the study include age, gender, ethnic group and the cultural background of the participants. The data collected would lend a perspective to the future business and enable the company to formulate the business plan considering the implications of the survey results and its impact on profitability, rate of returns and potential for growth prospects. This research will also help the management to evaluate the food habits, food preferences, spending level and expectations of the target customers and its relationship with their ethnic background. This information would be very valuable in finalizing the food portfolio, transfer of food packages to the retail points with similar consumption pattern, change of menu and so on. Design of the Questionnaire For collecting information with regard to the various aspects discussed, an objective type questionnaire needs to be designed for use in the survey. This will avoid misinterpretation of the answers at the time of analysis. Brace (2008, p. 9) states that “Clearly there are a number of different stakeholders in the questionnaire, on each of whom it is written and laid out will have an effect”. Apart from the data related to the participants such as name of the participant, age, marital status, income level, ethnic background, the name of the company and the shift timings, the questionnaire carries about 20 to 25 questions under four broad criteria, food habits, quality and hygiene, food preference and spending pattern with the questions ranked according the degree using Likert Scale. Scale: 1. Strongly Disagree, 2. Disagree, 3. Neutral, 4. Agree and 5. Strongly Agree (or) 1. Always, 2. Mostly, 3. Sometimes, 4. Rarely and 5. Never 1 2 3 4 5 (to be ticked in a box) There would be five to six questions under each category, totaling about 20 to 25 questions. Methodology The population consists of people from different organizations in various areas which are selected based on the floating population at various points of time during the day and night. The population would be representative of various companies and divisions and ethnic groups to have a balanced background to the study. The purpose of the research project, the relevance of questions to the research and the confidentiality aspect of the study would be explained to the participants, so that they could fill up the questionnaire without bias or being influenced. The internet facilities could be used extensively for the purpose of further interaction or clarifications. Sampling: After identifying the target population, simple random sampling method is proposed to be adopted with probability sampling scheme and a balanced mix of people in different income and ethnic groups from various companies in various localities. Reliability and validity: Proper sampling procedure and a well designed questionnaire would ensure reliability and validity of the research. For a population of 3000, at confidence interval and confidence level of 5%, sample size needed would be 350 (Survey System) which lends reliability and validity to the analysis. Ethical issues: The survey would be conducted after obtaining informed consent of the participants by assuring that confidentiality and trust would be maintained, and the information would be used only for the stated purpose and not for any other purpose. Analysis The analysis of the survey results would be made with a view to assess the scope for the business, ’Round the clock food supply with a fleet of pick-up vans’. In respect of the locations identified as delivery points, we need to make assessment with regard to the potential for sale in each location, the time required for the vehicle to be stationed in various locations, preferences of the target customers in each location and quality and hygiene level expected. Based on the survey results, various locations with similar features could be grouped so that transfer of food from place to place would be possible. Also, finalization of production plan, broad structure of menu and decision regarding supply of bottled drinking water or other outsourced snacks hinges on survey results. The total demand in terms of quantity and volume need to be estimated for capital budgeting. De Vaus (2002, p. 86) states that in many cases “data collected by other people or agencies can often be appropriately used to address the research question”, and this could be attempted after survey for cross verification purposes by way of analysis of secondary sources. Also, reliability analysis would be conducted as suggested by De Vaus (p. 197) “You will need to use a statistical package such as SPSS or SIMSTAT that includes reliability analysis.” Findings Hyman, et al (2003, p. 217) in their paper on ‘Work-life imbalance in Call Centres and Software development’ state that there is an evidence of changing pattern of working hours and a survey shows employees in work places have been operating 24 hours a day. Further liberalization and globalization have only accentuated the trend over the period of time. The women employees may find it difficult to cope up with the domestic work which mainly consists of cooking. Eating out has become the way of life. The people, in the absence of availability of quality food, are forced to carry-on with junk food. In this background, there is good scope for delivering quality food at the time and place where it is needed. This would reduce the inconvenience of the people and is good from their health angle also. The fast food sector is already growing by more than 8%. Since, the business of round the clock quality food supply is expected to emerge in a big way in the cities, establishing reputation as a pioneer in this business would be an advantage for the company in the long run. Potential problems or pitfalls Clark (2010) stated that according to Shaw, “engagement can be challenged by suspicion, bashfulness, shame and fear, not to mention the practical problems of time, money and lack of interest. Similarly, people who engage with research may also risk misrepresentation and un-wanted intrusion.” The skill and the experience of the data collector involved in the survey are very essential, and we are established in the field of marketing research with proven knowhow and expertise. On the business side, inflation in food prices is a major threat to the growth as it squeezes the margins significantly. This is mainly due to relentless increase in oil price, decreasing area under cultivation of food crops due to promotion of bio-fuels and increased demand for food from populous countries like China and India in the backdrop of economic developments in these countries. The chart given in Appendix -II showing the prices of wheat over the period of time confirms this trend. On the operational side, statutory compliance with regard to health and hygiene should be accorded great priority to avoid stringent actions by the authorities. Logistics is very crucial in this business, because non-delivery or delayed delivery would affect the business and its reputation paving way for competition into the business. Also, in such situations disposal of waste may lead to environmental problems since the goods are perishable in nature. Conclusion The business proposal in the backdrop of liberalization and globalization of the economies makes tremendous economic sense, considering the importance of industry in rendering service to the society. The innovations in the business operations are necessary for long term growth and sustainable development. However, in order to be effective in the planning process, marketing research is necessary to identify the opportunities available in the market and challenges in the external environment for formulating suitable strategies to exploit the opportunities and overcome the challenges. Appendices Appendix – I Restaurant Performance Index Source: National Restaurants Association, Restaurant Performance Index, http://www.restaurant.org/research/ Appendix – II Price movement in Wheat Source: United States Department of Agriculture, National Agriculture Statistics Service, http://www.nass.usda.gov/Charts_and_Maps/Agricultural_Prices/pricewh.asp References Brace, I., 2008. Questionnaire Design: How to Plan, Structure and Write Survey Material for Effective Market Research, 2nd Edition. Market Research in Practice. Brouthers, K. D., Andriessen, F. & Nicolaes, I. (1998), Driving Blind: Strategic Decision- Making in Small Companies, Long Range Planning, Vol. 31, Number, 1, pp. 130-138, Elsevier. Clark, T., 2010. 'On being researched': why do people engage with qualitative research? Qualitative Research, 10(2), pp. 399-419 De Vaus, D. A., 2002. Surveys in social research, 5th Ed. Social Research Today. Routledge Hensley, S. & Stensson, A. (2008), Media Statement: How Spiking Food Prices Impact Restaurants, http://www.restaurant.org/pressroom/pressrelease/?id=1600 Hyman, J. et al (2003), Work-life Imbalance in Call Centres and Software Development, British Journal of Industrial Relations, June 2003, 41:2, pp. 215-239 Kuhn, K. (2009), Recession fuels 8% growth in fast-food industry, Reed Business Information, 23 November 2009, http://www.caterersearch.com/Articles/2009/11/23/331036/recession-fuels-8-growth-in-uk-fast-food-industry.htm National Restaurants Association, Restaurants to Add 428,000 Summer Jobs in 2010 According to National Restaurant Association Projections, PR Newswire Association, 14 June 2010. National Restaurants Association, Restaurant Performance Index, http://www.restaurant.org/research/ Powell, P. (2010), Restaurant Opportunities to be better in Second Half, Air Conditioning, Heating & Refrigeration News, Volume 240, Issue 10, BNP Media. Saris, W. E. & Gallhofer, I. N., 2007. Design, Evaluation and Analysis of Questionnaires for Survey Research, John Wiley & Sons, Inc. Survey System, Sample Size Calculator, http://www.gifted.uconn.edu/siegle/research/Samples/samplecalculator.htm United States Department of Agriculture, National Agriculture Statistics Service, (2011) Prices Received: Wheat by Year, US, http://www.nass.usda.gov/Charts_and_Maps/Agricultural_Prices/pricewh.asp Vogt, W.P., 2005.  Dictionary of statistics and methodology.  Thousand Oaks, CA: Sage. Read More