Understanding Customer Loyalty and Marketing of the Sporting Goods Company - Research Paper Example

Understanding Loyalty College: Table of Contents 0. Introduction 3 2.0. Research questions 3 3.0. Hypothesis 3 4.0. Hypothesis 2 5 5.0. Discussion 8 6.0. Competitive Advantage 9 7.0. Area for improvement and Recommendations 9 8.0. Growth Strategy 9 9.0. Corporate Forecast 10 10. Selection of Competitive Advantage 11 11. Marketing Mix Program 12 12. Controlling and Monitoring 13 13. Conclusion 13 References 14 1.0. Introduction The main objective of the study was to address the marketing research questions and make justified, actionable and insightful recommendations of the Sporting Goods Company. The Avery Sporting Goods company for several years has been one of the leading sporting equipment sellers in the country. It is well known for its colorful print displays and wide assortment, the catalogues of the company is seen to be very popular with employees and customers, and workers do pride themselves on the orders filled correctly which is of high number. 2.0. Research questions Does gender have an effect on the catalogue shopping? Does occupation have an effect on the catalogue shopping? Null hypotheses Men and women have the same attitude to catalogue shopping Customers with different occupation types have the same attitude to catalogue shopping The alpha level The two null hypotheses were tested at an alpha level of 0.05. 3.0. Hypothesis 1 Men and women have the same attitude to catalogue shopping. In regards to the first hypothesis to be tested, the 2 samples have been used; the sample came from different people who are not matched. In this case, the samples are independent from each other. Therefore, the appropriate test for testing this hypothesis is independent sample t-test, which is used to find out if there is a difference in the attitude to catalogue shopping between men and women. The null hypothesis: H0: µmen = µSwomen Alternative hypothesis: µmen≠ µwomen In this case, µ is the mean number of the individuals/participants who have not been matched 2) This hypothesis is tow tailed because it involves the phrase difference. 3) The α level: α = .05 4) Because the standard deviation is not known, we opt for t-test instead of z-score test. The t value is calculated using SPSS as in the next section: Table 1.Descriptive statistics of each group (men and women) Group Statistics v26 N Mean Std. Deviation Std. Error Mean v01 1 64 45.22 30.159 3.770 2 44 68.00 28.175 4.247 Table 1 provides a descriptive statistics for each of the two given groups .we have 64 people in the 1 (v26) (N) and on average, they have 45.22 V01 with standard deviation of 30.159 v01. we also have 44 people in the 2 (v26) (N) and on average, they have 68 V01 with standard deviation of 28.175 v01.the last column shows the two groups Std error mean. Table 2.Output of inferential statistics Independent Samples Test Levenes Test for Equality of Variances t-test for Equality of Means F Sig. t df Sig. (2-tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper v01 Equal variances assumed 1.779 .185 -3.961 106 .000 -22.781 5.752 -34.185 -11.378 Equal variances not assumed -4.011 96.540 .000 -22.781 5.679 -34.053 -11.509 Basing on table 2, the p value of Levenes test is .185.In this case, this p value is greater than 0.05 the alpha. Therefore, we will have to use the middle row of the output (‘labeled Equal variances assumed.’).So we will have to assume that the variances are equal and we need to use the middle row of the output. The labeled column ‘‘t’’, provides a calculated t value. In this case the t value is -3.961 assuming equal variance (the sign is ignored for two tailed t test). The labeled column df provides the degree of freedom related with the test. In this case we have 106 degrees of freedom. The labeled column sig (2 –tailed) provides p value related to the t test. In this case, the p value 0.185. The sixth step is to decide if we have to reject the null hypothesis. In this case: If p ≤ α , then reject H0.Therefore,0.185 is not equal or less than 0.05.so we fail to reject the null hypothesis. This means that we failed to observe a difference in the attitude to catalogue shopping between men and women. In conclusion, the t test failed to reveal a difference that is statistically reliable mean attitude to catalogue shopping between men and women. 4.0. Hypothesis 2 Customers with different occupation types have the same attitude to catalogue shopping The one way ANOVA test if any of the several means differ from each other. In this case, the there are 3 occupation types that include blue collar, white collar and gold collar. 1) The null hypothesis: H0: µblue collar = µwhite collar = µgold collar Whereby µ represents mean attitude. 2) Alternative hypothesis: H1: not H0 3) The α level: α = .05 4) Determination of the statistical test, the attitude is the approx ratio scaled as well as there are 3 multiple groups. In this case the between subject ANOVA is the one appropriate. The appropriate statistics is calculated using SPSS as in the next section: Table 3.Descriptive statistics Descriptive v01 N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Minimum Maximum Lower Bound Upper Bound 1 44 58.11 29.651 4.470 49.10 67.13 3 103 2 33 54.61 32.817 5.713 42.97 66.24 7 107 3 31 49.26 32.287 5.799 37.42 61.10 1 108 Total 108 54.50 31.321 3.014 48.53 60.47 1 108 As shown in table 3, for each dependent variable, the output shows the sample size, minimum, maximum standard deviation, standard error and confidence interval for every independent variable level (quasi) Table 3.Test of Homogeneity of Variances v01 Levene Statistic df1 df2 Sig. .659 2 105 .520 The homogeneity test of variances output tests the H0: σ2Blue collar = σ2White collar = σ2Art = σ2golden collar In this case, the p value of 0.520 is greater than the 0.05; we fail to reject the null hypothesis. This means that there is limited evidence that the variances aren’t equal as well as the variance assumption homogeneity may fit. Table 4.ANOVA v01 Sum of Squares df Mean Square F Sig. Between Groups 1426.754 2 713.377 .723 .487 Within Groups 103540.246 105 986.098 Total 104967.000 107 The 2 is the between groups degrees of freedom, 105 is within groups degrees of freedom,0.723 is the F ratio from the F column,0.487 is the p value and 986.098 is within groups mean square estimate of variance. In this case, the p value of 0.487, is seen to be greater than 0.05.Therefore we fail to reject the null hypothesis (If p ≤ α, then the null hypothesis should be rejected).Therefore it can be concluded that there is no enough evidence to show that the Customers with different occupation types have different attitude to catalogue shopping at 0.05 level of significant. Table 5.Multiple comparisons Dependent Variable: v01 Tukey HSD (I) v24 (J) v24 Mean Difference (I-J) Std. Error Sig. 95% Confidence Interval Lower Bound Upper Bound 1 2 3.508 7.231 .879 -13.68 20.70 3 8.856 7.363 .454 -8.65 26.36 2 1 -3.508 7.231 .879 -20.70 13.68 3 5.348 7.854 .775 -13.33 24.02 3 1 -8.856 7.363 .454 -26.36 8.65 2 -5.348 7.854 .775 -24.02 13.33 In regard to post hoc test, the F ratio is not statistically significant; hence basically it is not necessary to check for the multiple comparison outputs. Table 6. Homogeneous Subsets v01 Tukey HSD v24 N Subset for alpha = 0.05 1 3 31 49.26 2 33 54.61 1 44 58.11 Sig. .466 Means for groups in homogeneous subsets are displayed. a. Uses Harmonic Mean Sample Size = 35.175. b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error levels are not guaranteed. The output above is a summary of the multiple comparisons procedure. The means shown are not statistically significant. This is in line with failing to reject the null hypothesis of the ANOVA. 5.0. Discussion As mentioned before, one of the main purposes of the study was to give the manager an appropriate idea on the perceptions of people of buying sporting goods as well as other basic merchandise through catalogues. According to the findings, it is clearly evident that gender and occupation has no influence on the catalogue shopping. Therefore, the manager of the company should put more focus on the integrated marketing strategy. 6.0. Competitive Advantage Advantages The market is observed not to be new as well as dilute.This enables the comapny to learn from each other in order to gain the relevant experience Competition is seen not to be significant since the number of competitors around is so minimal 7.0. Area for improvement and Recommendations Consumer controlled landscape is seen to emerge with a faster process that is dynamic in terms of consumer teaching (Thompson, 2002, p.23). Consequently, it is observed that there is a decline in efficiency rate and increase in the costs from traditional direct marketing activity (Brodie et al., 1997). Thus, the company is needed to have an integrated marketing communication strategy that combines traditional media, online channels, affiliate partnerships, social network, products and people in order to achieve the plans of surviving and entering the competitive market (Griffin and Pustay, 2010). The company is needed to coordinate their value added information and marketing resources for their customers in order to create engagement and create long term relationship. This could be met through applying brand (service/product) delivery, content and audience (Tradingeconomics.com 2010). (Porter, 1998).The key ingredient of applying extensive data and analytics is to understand the target segment (Grant, 2008).This can be by creating a pen portrait of the valued customers including lifestyle as well as demographic information that could help in optimizing the media targeting strategy (Robinson et al., 1978).The products and services of the company is required to possess a unique selling proposition in order to offer a competitive advantage. It is a mandatory for the services or product delivered to be of value for the target customers and be clearly differentiated on features or services (Johnson et al., 2011). 8.0. Growth Strategy The company is required to look towards the new products and new markets .Therefore, to meet this, the Company needs to put more focus on the following objectives Entering sporting goods industry, this is a market that has not been represented by the company. Gain Market share to maintain its leader. The new product could be pushed into the new market with aggressive advertisement on several media; the product awareness of the consumer could be enhanced through strong concepts and images linking the product to fitness, health as well as sense of status. A major ingredient is to apply analytics and extensive data in order to understand the target segment. This will be through Creation of pen-portraits of the core customers that include lifestyle and demographic information which will help to optimize the media targeting strategy. The company’s service and product will need to have a unique selling proposition so that to provide a competitive advantage. It will be mandatory for the product to deliver superior value for the target audience as well as be differentiated clearly on service, features or price (Hill and Jones 2010).With the majority of the competitors employing the same linear marketing strategies to target the same consumer segments, content will be considered to be a point of competitive differentiation. When the company supplies value-added content, it will provide a reason to consumers to engage with the brand as well as connect the company’s services or products (Hill and Jones 2010). The company will then be required to connect digital media channels that are new with traditional channels for the creation of a push-pull system. Consumers will be required to engage with the media employed or else the company’s content delivery might be unsuccessful. To achieve this, the company the will ensure the content is appropriately linked to the company brand positioning so that to create the emotional connection with the services or product (Hill and Jones 2010). However if the new product doesn’t meet the expected outcome, then there will be a necessity of adjusting the marketing plan, particularly the marketing mix as well as the manner of planning on how to reach the target market. 9.0. Corporate Forecast In projecting trends in sales, expenses, earnings, overall capacity, future cash flow and significant balance sheet changes for the next five years, the following assumptions need to be made (Janssens et al., 2008): Since sales are the single most important element in making projections for all the other variables, historical sales figures for the last 5 years will be the major source of the input. Analysts’ opinions are considered although the main opinions revolve around past performance of the Company. Market trends and industry trends are also considered in the projections Variables proportional to sales are calculated as an average of the last 5 years performance. Items which are not proportional to sales are taken as an average of past performance. Additional growth rates are projected including taking into account the housing markets projections based on the recovery witnessed in the world economy and based on trends of the company and its competitors. 10. Selection of Competitive Advantage Proper preparation failure for marketing communications requirements might be a big mistake that is costly. Misdirection or confusion in the strategic planning stage might make other efforts irrelevant. The company will be required to follow simple, approval processes and basic project initiation to save money, time and careers. The responsible parties involved in approving and developing communications will be required to sign off (literally) on the strategies and objectives up front (Brodie, et al, 1997). These will be prepared for every complete marketing communications program facet: promotion, advertising, Internet, public relations among others. Some of the critical building blocks for creative strategy that is effective include: What is the competition doing? What are the buying incentives of the consumers? How does the consumer use the product? How will the communication to be applied make the benefit Believable? What is the brand Personality? What will be the main points the consumer will take away from the communication? How long will it take to establish the message? What will be the best media mix to reach the target consumer with persuasive message? The Company can diversify its products to cover many other innovative products produced by its competitors. Due to its dominant market share in the existing market, any other products that the Company produces will achieve the same high level of demand like its dominant products (Kozinets et al 2002). There is sufficient evidence to suggest that the company has greatly advanced in recent years. In this case, the Company has an opportunity for rapid growth in revenues and profits in the coming years (Kozinets et al 2002). 11. Marketing Mix Program   In regards to the product strategy, The Company is required to device a mixture of customization as well as standardization in designing of the new company’s product (Hair et al., 2000). For the company’s products, they will be included on the menu of the new market, similarly, it will be required to keep on standardizing the comment of the company in order to provide unique taste as well as the quality of the product on an international scale; Furthermore the company is required to as well customize the product mix in order to satisfy the given specific requirements related to the new consumers (Sweeney and Soutar, 2001) In relation to the Strategies related to pricing, the company might require to Stage the prices in relation to the approach of ethnocentric marketing by employing a policy of two-tiered pricing in order to set the products’ price that is different from the domestic market (Vignali 2001). Definitely, the products prices might be higher when compared to that of the home country market because the new prices at least it is necessary to be in a way that will see the revenue covering the marginal cost related to the foreign sales (Vignali 2001). In terms of decisions, great effort related to promotional activities is required by the company in order to improve the exposure and presence of the company in the new markets. To significantly raise the attractiveness, the personal selling, the products, promotional mix such as advertising, public relations and sales promotion might be employed in order to encourage the consumers to purchase the products (Walsh et al., 2012). Within this context component of promotion, the critical component includes advertising and because of the existence of the cultural differences in corporate culture between the companies that are distinguished, it is recommended to device a local advertising rather than an international one. This will allow an excellent focus on the local markets. In conclusion, the best way for the company to meet the customer needs is through watching what they do and listening to what they say. The same applies to effective communication (Hassan and Shiu, 2007). Listening to customers gives an insight into allocation of resources against several target market segments. It will permit the company to be able to treat the customers as individuals as well as build an excellent relationship with them. It will give the learning required to adjust different strategies, tactics and communications messages. Accurate feedback from customers will enable the company to profile its best customers and sought others that will match the same profile. Listening to customers will make communications to be more cost efficient (Aaker and McLoughlin, 2010). 12. Controlling and Monitoring In order to monitor this new marketing program, it is recommended to use market and sales shares analyses. This is on the basis that the marketing objectives are to increase the market business shares (Aaker and McLoughlin, 2010). Sales analysis could evaluate the degree of sales from various outlets. In this case, the selling channels of the company could be assessed. The market share could measure closely the market share gains or loss through time. When these tools are applied it will allow the company to make a decision on whether the program is achieving or if it may require some adjustments (Walsh et al., 2014). 13. Conclusion According to the analysis as indicated before, the company is required to enter the new market in order to grow. In this case, it will face increasing challenges due to tough competition. Even with extensive research and development, the firms in the industry are too big and too close to snatch away the shares of the company. Therefore constant innovation is needed by the company. This can be expensive as well and the costs might not be recovered as easily as it was possible before. This proposed marketing programme could help the company to enter the new market with the new product. To expand into a foreign market could probably be attained through direct investment, licensing, joint venture and exporting. It is highly advisable to begin its business through staging up a joint venture that is with any potential partner in the market (Malhotra and Birks, 2000, 2007). The key reasons why it is critical to adopt a joint venture could be the risk might be shared through partner introduction in the business with the development of a market that is new. Also partnership that can exist between two businesses might be helpful in fighting bigger competitors (Malhotra and Birks, 2000, 2007). The limitation of the study was that it only focused on the people’s perception on the catalogue shopping. It could have also identified and included other factors which have a big impact to the company’s performance. Hence, this can give a clear picture on the progress of the company so that the management will be able to device appropriate mechanisms to address the underlying problems. References Hassan, L.M. and Shiu, E. 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Strategic market management: Global perspectives. UK: John Wiley & Sons Ltd. Read More