Research approaches and research methods ? SeminarOrder DescriptionResearch approaches and research methods ? Seminar Seminar ? Case 9.1 Don?s Auto Detailing reference :Title: Marketing research Personal Author: Parasuraman, A. Edition: 2nd ed. Publication Information: Boston, MA : Houghton Mifflin, 2007 ISBN: 9780618660636 Subject Term: Marketing research Added Author: Grewal, Dhruv Krishnan, R., 1952- Research approaches and research methodsLearning outcomes: Student to know and able to choose and justify the choice of research approaches and research methodsCore reading Case 9.1 Don?s Auto DetailingActivities: Specify with full justification the most appropriate for the study based on MDP, MRQ, MRQs and components you identified$f,rnilcliloil rxr R(r]5r$ i 1. Suppose a restaurant in your city wants to ascertain the image it has among its patrons. Construct a fiveitem scale to measure the perceived image of the restaurant, using each of the three multiple-item scale formats we discussed. Make sure that the five items in each format correspond to the same five dimensions. 2. From a survey of users and nonusers of its products, a local telephone firm came up with the following inferences: a. On the average, users are only half as old as nonusers. b. The image that users have of our company is twice as positive as that of nonusers. Critically evaluate the meaningfulness and legitimacy of these inferences. prrnrrnurri rxrRCisE Kraft introduced Easy Mac, a single-serving microwave version of its classic macaroni and cheese brand, in 0ctober 1998. The company was hoping to leverage the consumer?s desire for speed and convenience. However, the product captured only a 2.5 percent share of the market in the first year, far less than the expected 5 percent. A tracking study by Millward Broum, a marketing research company, showed that users? perceptions were very different from those of nonusers. Fifty percent of r,rl.i Case 9.1 Don?s Auto Detailing 273 the users said the product tasted good, compared with only 20 percent of the nonusers. Kraft brand managers concluded that the problem was with communication, not with the product, and the company decided to modiff its advertising campaign. A series of focus groups was conducted to understand the usage. Mothers preferred the product because it allowed older children to prepare a meal for themselves. Kraft and its advertising agency, Foote Cone & Belding Worldwide (FCB), decided to move away from the traditional consumer benefit of convenience to a more specific benefit: Older kids can make it themselves. FCB created several slice-of-life vignettes and tested them in a series of focus groups consisting of mothers. Kraft launched its new advertising campaign in January 2000. Sales climbed 30 percent, making it the most successful line extension ever.2e 1. Given these issues, develop a questionnaire to better understand current consumer perceptions of Easy Mac and attitudes toward Kraft, using online software (see www. survel?time. com o r wrruw.infopoll .com). 2. Do you think it would be important to get information from both users and nonusers? Explain your answer. 3. After developing the questionnaire, justifu your choice of scales (Likert, semantic-differential, balanced versus unbalanced, and so on) for measuring the constructs of interest (for instance, quality, convenience, usage). Y,:ir; $r;; Cnse 9.1 Dotrt?s Auro Dernluruc flMww |ons Auto Detailing is a full-service car wash and I-ldetailing center in the Boston area. The only other major car wash and detailing center in the immediate area is located about 6 miles from Don?s. Don Johnson, ov,ner and manager, founded the company four years ago with an initial investment of $ I million, consisting of $200,000 in personal funds and $800,000 in borrowed capital. After barely breaking even in the first tvvo years of operation, the business made a net profit of $60,000 in the third year. It incurred a loss of $15,000, however, in the fourth year. Don noticed that the loss was primarily the result of a 20 percent drop in the number of cars serviced by Don?s Auto Detailing during the past year. The Car Wash lndustry According to the most recent U.S. Census information, car washes are a lucrative business; according to that census, there were nearly 14,000 car wash facilities in the United States, with total revenues of over $6 billion.l The number of facilities has remained the same since the last census in 1997, while the total revenues have decreased more than 5 percent. In the Massachusetts area, there arc279 establishments.2 Industry growth is stagnant as a result of the current trends of franchising and larger companies? buyng out smaller establishments.3 Within the car wash service market, consumers are able to choose from several service options. Among these are coin-operated self-service facilities, automatic facilities, full-service conveyor facilities, and automobile detailers. The different types are all substitutes for one another, which causes competition among different types of providers within the same area. Because any ordinary individual can perform the act of cleaning a car, full-service washing and detailing services are at the luxury end of the industry. Therefore, these operations are dependent on consumers? discretionary income, which varies depending on economic conditions. For example, an economic slowdown, when discretionary Other consumer behavior issues were of interest. For example, the majority of car wash customers base their loyalty to a particular car wash on convenience, price, and effectiveness of the wash. Furthermore, cat wash users are usually turned off by long lines and waiting times, although some customers have a highet tolerance for waits than others. In general, car wash users would like their cars to be serviced as quickly as possible. Full-service auto detailers also face several uncon? trollable factors that can significantly affect their prof- | itability. One primary factor is the weather. Auto I detailers typically shut dourn when it rains or snows, yet I they are expected to be fully operational as soon as the I weather improves. Such variability can adversely affect I labor productivity, cash floW and profits. Another criti- | cal factor affecting the industry is the highly seasonal I nature of its business. Peak times are between Novem. I ber and March, when temperatures are low. Warm I wyeoauthresr berilnfgesr isnc.r easing competition from do-it? I I Customer Survey I To address the company-specific issues that Don raised, I Burgess Consulting decided to survey a sample of Donb I Auto Detailing?s customers. A two-page questionnaire I (shor,rm in Exhibit 1) was designed. The actual question. I naire was printed on tvvo sides of a single sheet of legal? I size paper, with questions I through 8 appearing on the I front side of the questionnaire and questions 9 throu$ | 18 on the back side. I Customers had to wait at least t0 minutes beforc | their car would be ready. Therefore, Burgess Consulting I asked the cashier, who was stationed in the customu I waiting area, to distribute the questionnaire to cus?l tomers, to fill out while they waited. Specifically, the I cashier was instructed to hand out a questionnaire to I every tenth customer during the first two weeks of April I A total of 280 questionnaires were handed out during I operating hours over a period of 14 days. Each customu I receiving a questionnaire was asked to complete and I drop it off in a box next to the cashier?s window At the I end of the survey period, the box contaiged a total 0f256 | completed questionnaires. The remairiing 24 question? I naires were presumably discarded by the customers who I received them. Burgess Consulting has coded the data I from the 256 questionnaires and is getting ready to ana. I lyze them to address the specific issues that Don raised I cAsE QUESfloNS I 1. Critically evaluate the questionnaire designed by I Burgess Consulting. Atrat changes, if any, would you I recommend, andwhy? I 2. For each question in Exhibit 1, indicate the level of I ffi:ifi,ffi::,TJli corrected data (nominar ?.tl 274 Chapter 9 Measurement and Scaling income decreases, negatively affects full-service operations. Similarly, during economic booms, discretionary income increases, and operations are favorably affected. Don?s Research Needs Alarmed by this sharp decline in business, Don hired a small local firm, Burgess Consulting, to conduct some marketing research to help him assess the situation. Although he believed that increased competition was the primary reason for the decline in revenues, Don was concerned about whether or not his advertising strategy was partly responsible. All television advertising was aired on a local channel affiliated with CBS. Radio spots were divided equally among the top stations in the area in three formats: country and western, top 40, and easy listening. Discount coupons were also distributed, primarily through coupon books that contained similar offers from a number of area retailers. Don asked that Burgess analyze the following issues and make recommendations for improving Don?s Auto Detailing?s performance: 1. The nature of and recent trends in the car detailing industry. 2. The demographic and other relevant characteristics of Don?s Auto Detailing?s customers. 3. Customers? perceptions and evaluation of the services provided by Don?s Auto Detailing. 4. The effectiveness of Don?s Auto Detailing?s current promotional expenditures of $25,000 per year, which amount to approximately 3 percent of sales. These expenditures are split among television (50 percent), radio (30 percent), and discount coupons (20 percent). Secondary Marketing Research Findings After examining a variety of publications and articles pertaining to the auto detailing industry, Burgess Consulting uncovered several key insights. A significant trend in the industry is a major shift in the tlpe of car wash operation frequented by customers. Car wash users prefer the addition of gasoline and accessibility to a convenience store. Large gas stations are installing automatic facilities in many retail outlets and offering free or discounted washes with the purchase of gasoline. As a result, convenience stores and gas stations are the fastest-growing sectors of the car wash industry.a Therefore, full-service outlets like Don?s Auto Detailing are under increasing competitive pressure. The customers?wants and needs have also changed. Over the years, most car washes have been full service? which means that they perform interior as well as exterior cleaning at the same time. Full-service car washes, however, do not give customers the option to choose only one cleaning service of the two. As a result, the number of self-service and automatic facilities has increased steadily to address this market need.:
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