Marketing of Tespana - Assignment Example

ICON College of Technology and Management Faculty of Business and Management Studies BTEC HND in Business work Unit 6 Business Decision MakingTutor Mr. Dan Sookun Submitted by: Valentin Sergejev ID No: 10484 Table of Contents Table of Contents 1 1.0 Introduction: Company Description 4 2.0 Task 1: Collecting Primary and Secondary Data 5 2.1 Plan for Collection of Primary and Secondary Data 5 2.2 Survey Methodology and Sampling Frame Used 6 2.3 Questionnaire for the Given Business Problem 9 3.0 Task 2: Understanding and Analysing Data 10 3.1 Information for Decision Making 10 3.2 Results Analysis 11 3.3 Data Analysis Using Measures of Dispersions 14 3.4 How Quartiles and Percentiles as used to Draw Useful Conclusions 16 4.0 Task 3: Producing and Presenting Information/ Data 17 4.1 Graphs Using Spread sheet and Valid Conclusions 17 4.2 Trend Lines in Spread sheet Graphs 18 4.3 Business Presentation by use of Software 19 4.4 Formal Business Report 20 5.0 Task 4: Understanding Software- Generated Information 21 5.1 Using Appropriate Decision Making Tool 21 5.2 Project Plan for an Activity and Determine the Critical Path 22 5.3 Financial Tools for Decision Making 22 6.0 Conclusion 23 References 24 1.0 Introduction: Company Description Tespana is a UK based medium sized coffee parking company in London. The management of the company is interested in making a new coffee based product that will serve the customers to the coffee shop. According to Clark (2008), there are several large coffee companies in the UK and these have sufficiently modified their tastes and preferences for the good of the customers. In essence, companies like Costa, Starbucks, Café Nero and others have done exceptionally well. Tespana also produces a collection of tastes for the highly valued customers given that operating in london is not just like operating in nay other place. Value is vital for progress (Auzair, 2011, p. 41). The company has a total of 56 coffee outlets in major towns in the UK having been founded in 2005. The launching of the new taste will be a way of marking a ten year milestone in its operations. In its operation, the company has no intentions of breaking away from its culture of ensuring nothing more than quality service. In the move dubbed the coffee rennaisance, there will be need to define a different way of presenting coffee to the cutstomers with a strong base on its cultural casing. Market data collection and analysis will be done to effectively understand the market and subsequently make a successful launch of the new coffee product. This research will therefore consist of four tasks; first, primary and secondary data collection will be described that will help in effective decision making. Secondly, data analysis will bbe made based on the same understanding gained from the data. The same data will then be produced in order of the need to satisy the objectives. The last section will consider the use of software to generate decisions based on the same understanding. 2.0 Task 1: Collecting Primary and Secondary Data 2.1 Plan for Collection of Primary and Secondary Data According to Witten, Frank, & Hall (2011), data refers to facts as well as statistical representation of samples for analysis reasons. The data may be represented in the form of facts, figures and the overall information as per the required information. Data used may be in the form of primary or secondary. Primary data may be regarded as necessary when the secondary data is lacking in quality or totality. The information may be for the profits realized, problems faced in the market, competition amongst other forms of market information (Banfield & Kay, 2012, p. 108). The following plan will be used to collect primary and secondary data for the market information purposes. It is determined that the entire schedule will meet requirements as planned. Every primary data collection method will effectively be done within the objectives of the research question. Table 1 Required Task Sources Accomplishing steps Primary methods of data collection Interviews Face to face communication, telephone interviews, online communications. Done to customers, experts in consumer behaviour, and the company employees. Direct observations The researcher will presently collect information based on the observable characteristics especially in the competing stores. Focus groups The researcher collects a certain group of people together based on the required objective (6-8 people). Audio recording is done for future references. Applicable scales Is a quantitative data collection method in attitude research Questionnaires This may target a certain group of people and may be sent through any applicable method; emailing, posting or direct customer collection at the coffee joints. Collection of secondary data Use of previously researched information Can be done in the library or online. The internet Use of electronic sites such as Google search, the Emerald and relevant websites Books, magazines and periodicals Extensive search and research for relevant and related literature Research papers Dissertations of specified competing companies and research papers Case studies Cases regarding respective subject topics are important e.g. those of the top ten coffee firms in the UK (appendix 1). Source: Bhimani & Bromwich (2009) The above table has effectively indicated a plan that will be used in the implementation of both primary and secondary research. All the research methods are doe in conjunction with adherence to all principle concepts regarding each. 2.2 Survey Methodology and Sampling Frame Used NCES (2010) presented and approved survey method as a quantitative data collection method of collection of data. The survey method used in this case is the questionnaire approach. Quick & Choo (2013) determined that survey method presents itself as collection of information on characteristics or opinions or actions of groups that are large. It can be used to solve problems and determine given bases upon which the future decisions and deliberations will be based. Survey is further presented in its characteristics; To describe aspects of given populations quantitatively The data used is subjective because it is usually collected from people Sample populations are used and the traits discovered are assumed to be related to the rest of the populations. There is also the aspect of the independent and dependent variables and there have to be models designed to link the two variables. There are two designs involved in the implementation of the survey steps. First, there has to be the development of the sample plan. This is important because the plan determines the specified approach that will be used for sample selection, adequacy of the size and the media choice. Another issue is the determination of the procedures that will be used in the estimation of the data reliability as well as the population reliability. At this stage, the survey design is effectively determined in which the definition of all the terms to be used are determined. The design assures of the reliability and validity of the information. Survey questions will be categorised as open ended and closed ended. The open ended allows the respondents to respond in their own way, by use of their own words and understanding. The closed ended questions have a leading characteristic in which specific responses are required. The third phase is the execution of the survey in which there is a practical experience with the respondents on the ground. The most important factor is the observation of the ethical requirements as would kept the privacy of the respondents reserved. A pre-test is carried out at this point in which case the validity of the research questions is determined. The survey in this case may be carried out in two possible ways; Use of focus groups Use of cognitive interviews Through pilot tests Secondly, there can be analysis of the responses so that there is revelation of the displayed characteristics. When effective survey is carried out, data analysis will also be effective because he data will be credible. Therefore, by use of the introduction details of the Tespana Company in the UK, there can be application of the automated data collection methods that will facilitate tabling and effective manipulation. Therefore, Tespana will make use of a sampling frame that is indicative of the source materials required. The simple random frame will make use of a sample selected from a sample frame. Execution of the survey will consider the following information data as would be considered necessary. Table 2 Targeted Populations Size of the Sample Method of Sampling Used Existing clients 3% Stratified random sampling will be used for the stores Random sampling will be used on the customers Customers 60 customers that shop in the other listed competitors (check list in appendix 1) random sampling for the stores Consumer experts Ten top experts on consumer behaviour The experts would be taken from the academic, special analyst of retail trade, five marketing experts, two retired CEOs of any of the two competitor companies Employees 25 Five from the directors Ten middle line management staff 10 shop floor assistants 2.3 Questionnaire for the Given Business Problem In the case of a large population, a questionnaire is administered because it is not easy getting to them on personal basis to administer one-on-one interviews. The questions are supposed to be simple, precise and clear and the main objectives would be to maximize the subject proportion, have the questions answered and then collect information that is as accurate as possible. In this case of Tespana, the following questionnaire will suffice to search for the required data in the market. The questionnaire therefore seeks to respond to the objectives of developing an understanding of what the consumers feel about the current products in the market and their proposals for improvements. This is elaborated in appendix. The questionnaire has the objective of trying to search for information (Mard, 2011, p. 111) regarding the market quality of the current products, the proximity with gender, most preferable age bracket and the possibility that a new product will increase the market value of Tespana Coffee. 3.0 Task 2: Understanding and Analysing Data 3.1 Information for Decision Making Researched information can be effectively used to improve an organization in terms of its decision making mechanism (Lo, 2008, p. 102). Effective use of analytical tools is a sure way of determining that there is sufficient information obtained from the research. In the current situational analysis, it is worth noting that information technology is easing the rate at which information flow is being made (NCES, 2010, p. 121). According to Witten, Frank, & Hall (2011), tabulation can be effectively used to reduce data in a table form so that analysis can start. The case of a table refers to the fact that the table must have a title that is very clear and the columns effectively labelled. The table is also not supposed to have so much data as to be considered ineffective for analysis. On the basis of creation of representative values, it is worth noting that the table below will suffice as representative of a comparison between different aspects of market dominance between collections of different components. It compares production values between Tespana and Muffin Break. The table below shows the production costs both at Tespana and Muffin Break by use of representative values that will present a level of production in the two companies. Table 3 TESPANA Muffin Break Components Amount ‘000 % Amount ‘000 % Materials 140 35 100 20 Labour 60 15 250 50 Production Overhead Costs 180 45 100 20 Office Costs 20 5 50 10 Cumulative Totals 400 100 500 100 3.2 Results Analysis If the information for the two companies was to be represented in terms of a pie chart, there would be calculations to express the same in terms of degrees before the chart is drawn. Percentage Figures: The total percentage in every case is 100%. The same can be expressed in terms of degrees and therefore related to 360°. The other values will be as follows: 100%=360° To get the multiplication factor, the two numbers are divided as follows; 360/100=3.6 The multiplication factor is 3.6. Therefore, all the other percentages are multiplied by the same factor to change them to degrees that would help creation of pie charts. This is represented in the table below; Tespana Muffin Break Multiplication factor =3.6 New value in degrees Multiplication factor =3.6 New value in degrees Materials 35 126 20 72 Labour 15 54 50 180 Production overhead costs 45 162 20 72 Office costs 5 18 10 36 A summary of the percentages and degrees as representative of the two companies can be represented in the table below: TESPANA MUFFIN BREAK Degrees Percentages Degrees Percentages Materials 126 35 72 20 Labour 54 15 180 50 Production overhead costs 162 45 72 20 Office costs 18 5 36 10 Totals 360 100 360 100 Therefore, from the table, the graphs for the respective companies would appear as follows: Tespana Muffin break The two graphs can therefore be used to draw comparable decisions about the expenditure levels of the companies. 3.3 Data Analysis Using Measures of Dispersions According to Aleixandre-Benavent, Vidal-Infer, & Alonso-Arroyo (2015), raw data ia data that ia unprocessed and can only be represented as open data without much information attached. Raw data is obtained from a survey that has already been carried out according to the outlined principles. Consider the ages of shoppers to one of the Tespana shops on a weekend. The ages of the twenty shoppers were outlined and summarized in the table below: 6 20 4 58 20 20 44 4 46 60 50 48 66 74 36 46 52 50 50 54 Find the mean, median and mode of the raw data as presented. Mean: To calculate the mean, the entire information is added so that the sum is obtained. After that, the sum is divided by the number. Sum=808 Number =20 Mean=808/20 =40.4 Mode The mode refers to the number that is appearing more than the others. To obtain this, the data is arranged from the smallest value to the largest. 4 4 6 20 20 20 36 44 46 46 48 50 50 50 52 54 58 60 66 74 With this arrangement, it is easier to determine that there are two modal numbers; 20 and 60. They are both appearing three times. This means that people with that age bracket frequented the shops. Median The median refers to the central number if the data was to be arranged from the smallest to the largest. 4 4 6 20 20 20 36 44 46 46 48 50 50 50 52 54 58 60 66 74 The arrangement as noted from the figures. Given that the arrangement gives two middle numbers, 46 and 48. To get the mean, the two numbers will be added and then the mean value determined. (46+48)/2=47 The median therefore is 47. 3.4 How Quartiles and Percentiles as used to Draw Useful Conclusions Percentiles Percentiles are values that are used to express the position of a given value in which case the pth per cent of the value determines values less than that position (Horngren, 2013, p. 79). Percentiles are usually calculated either directly as per the arrangement of the values in the distribution or the same can reasonably be calculated if the values in the distribution are many. Consider the illustrated data in which a group of values are indicated; 14 5 9 1 3 7 9 The raw data is re-arranged as effectively as follows; 1 3 5 7 9 9 14 xi 1 2 3 4 5 6 7 I In this case, the data is said to be sorted from the smallest to the largest value. The pth percentile is then calculated using the formula; Pi=100((1-0.5)/n) The indication in this case is that the first value represents the first percentile and the last value represents the highest percentile of the values. With application of the formula, the final table values would read as follows; xi 1 3 5 7 9 9 14 pi 7.1 21.4 35.7 50.0 64.3 78.6 92.9 Quartile These are values that make numbers into quarterly divisions. Consider the values below; 18 10 16 8 8 12 9 16 Rearranging the values from the lowest to the highest, 8 8 9 10 12 16 16 18 The numbers are effectively arranged in quartiles. The first two numbers appearing in yellow are in the lower quartile and the last digits as appearing in the purple section (16 and 18) are in the upper quartile. 4.0 Task 3: Producing and Presenting Information/ Data 4.1 Graphs Using Spread sheet and Valid Conclusions Graphs can present data in a pictorial manner in which case there are different graphs used; bar charts, pie charts and line graphs amongst others. Graphs are supposed to be simple and also presented with as clear information as possible. Consider the revenues of a company presented in thousands of dollars over a collection of four years as presented below; 24,000 30,000 43,000 32,000 37,000 41,000 35,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 The same information can be presented in a graphical form as indicated below: With this, the company is able to determine that there was a progressive movement of the revenues up to the third year after which a drop was realised. The trend seemed to continue as year 5 and 6 also realised progress before the slump in year 7. 4.2 Trend Lines in Spread sheet Graphs If there were two companies, company A and company B being compared, it can be determined that the values as presented in this table would show differences in trends over the seven years. Years Revenue for Company A Revenue for Company B Year 1 24,000 27,000 Year 2 30,000 23,000 Year 3 43,000 31,000 Year 4 32,000 32,000 Year 5 37,000 34,000 Year 6 41,000 39,000 Year 7 35,000 43,000 From the graphs, it can be noted that the companies are on a progressive trend albeit there being differences in the revenues realised with time. Company B started off with a slump in the move to the second year. However, there was a stable increase in the revenues up to the seventh year. Company A on the other hand has an unstable revenue growth pattern with drastic increases and decreases. 4.3 Business Presentation by use of Software There is much computer software that is used in the preparation of different reports in business. Different software impacts the audience differently and determines the type of presentation made (Dechow, Sloan, & Sweeney, 1995, p. 501). One of the most prominent software is the PowerPoint presentation. The presentation has slides which has the speaker’s notes arranged systematically as per the requirements of the presentation. Most of these are applicable in business meetings. 4.4 Formal Business Report A formal report is used to present information for a specified audience (Ahrens & Chapman, 2007, p. 119). Two types of business reports exist; analytical and scientific. An example of a business report is presented below; Report on the Proposed Introduction of a new Coffee-Based Drink To: The Management Board, Tespana Coffee From: The Product Development and Production Department Status: Confidential Date: 28th April 2015 Introduction This report sets to enumerate on the progress of developing a new product in the market given the undoing condition of the present products. It follows the commissioning by the board on 5th March 2015. The board had asked that we conceive a way of improving the company performance through product improvement. Method The investigatory procedures in the following order were observed. i. Survey carried out in the market determined that there was a dropping company name compared to the improving competitors. ii. Practical practice was in each department was to be presented Findings The products in the market were launched twelve years ago and their life cycles were on the decline stage. Amendments were therefore needed. i. The company’s name in the market was on the decline due to lack of renewal of products due to changing customer tastes and preferences ii. There was a 30% drop in the customers visiting the company’s stores which also culminates in a 30% drop in revenues iii. Muffin Break Company was fast taking over the company’s strong places in the market Conclusion It was discovered in the survey that new products need to be launched and the existing ones improved for better company performance in the market. it was then recommended that the production department analyse the information and propose new coffee tastes for the customers. 5.0 Task 4: Understanding Software- Generated Information 5.1 Using Appropriate Decision Making Tool There are several tools of analysis in business decision making. In the management of a project, one of the most viable tools is the Critical Path Analysis (Ryan, 2004, p. 76). There are others like the Gantt chart which is very important in formulation of criteria for formulation of a time versus activity situation. 5.2 Project Plan for an Activity and Determine the Critical Path Consider a project plan in which case there is creation of making a teddy bear meant for the market. A critical path will be followed in creation of the product alongside all other supporting activities (Lewellen, 2004, p. 412). This is reflected in the critical path method as determined below: 5.3 Financial Tools for Decision Making Millions of dollars are used by firms in the acquisition of fixed assets and other recurrent expenditures (Jonathan, 2004, p. 97). Any expenditure on assets that are considered fixed is a capital expenditure. This therefore introduces the aspect of the Return on capital employed (ROCE). This is a financial tool that is expressed as per the following formula; ROCE = Average annual profit before interest and tax/ Initial capital cost It is a very important tool in that it determines the returns on the amounts of capital returns on any given investment (Garrett & James III, 2013, p. 321). 6.0 Conclusion Companies use research to gather valuable market information that would be used in improving service to customers. With the research information, it can be determined if the company will continue with the project of implementing the new strategy or it will be uneconomical for the cause. Tespana Company wants to introduce a new coffee taste in the market to comprehend the customer requirements. This research has therefore delved on a serious market research methods that would help such a company to find sufficient information for the cause. First, there was description of the company to define it and determine its value in the market as far competitive advantage is concerned. There were four tasks that were involved in the project. First, it entailed collection of data in task 1. In this case, the plan determined that it would be necessary to collect the information using survey method with focus on the questionnaire. A comprehensive sampling frame was important for the cause. Task 2 involved analysis and understanding of the data. The analysis involved use of a collection of methods for various reasons and the major method was the use of the measures if dispersion. In Task 3, there was a reference to the presentation of the data that was collected in task 2. In this case, graphs and trend lines were effectively used. In task 4, it was determined that a decision making tool had to be applied. The critical path method was effectively used as a tool followed by financial ratios as tools of analysis. 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