statistics & business research

Running Head: Statistics and Business Marketing Research

STATISTICS AND BUSINESS MARKETING RESEARCH METHODS

STUDENT’S NAME:

INSTITUTION:

DATE:

Statistics and Business Marketing Research

Contents

Executive Summary ........................................................................................................................ 3

Introduction ..................................................................................................................................... 3

Business Research Topic ............................................................................................................. 3

Literature Review of the Research Topic ....................................................................................... 5

Brief Background ........................................................................................................................ 5

Consumer Behavior and Company Strategies ............................................................................. 6

Research questions for the identified problem................................................................................ 7

Research Methodologies and Techniques to use ............................................................................ 7

Gantt chart Research Process Time Line ...................................................................................... 10

Description of the research process, data collection and analysis methods .................................. 11

Brief Analysis of Exhibit 3........................................................................................................ 12

Developing an Email Marketing Pilot ....................................................................................... 12

Results and Analysis of the Email Marketing Pilot ............................................................... 12

Conclusion .................................................................................................................................... 14

Recommendations ......................................................................................................................... 15


Executive Summary

Students are always involved in research during their academic life in college, mainly for the

purpose of passing exams and contributing to academic literature. However, in this particular

research paper, the student tries to himself/herself in the shoe of a manager or research

consultant. You will need to imagine yourself in the role of management, needing to answer

questions in real time and carry out research to answer vital business questions.

In this research paper, you are a research consultant for an online based retail business called

Marcadia. This business offers a wide range of goods to customers through mail order delivery.

This business has been existence for six years and has experienced exponential growth in sales in

the last three years as more and more new clients signed up to their online store. However, the

business has recently experienced slower sales and profit growth.

The paper tries to explain the reason for this decrease in sales and profit by using effective

research methodology, and also find possible solutions by using statistical techniques that will

help and engage the management of Marcadia in understanding the business problem (Quinlan,

2011). The main research topic will highlight the Purchasing power behavior of Marcadia and

hence help the business make smarter decision in targeting new consumers and marketing of

their products.

Introduction

Business Research Topic

The topic of research for this paper involves an online based business Marcadia. This business

mainly sells a wide array of goods to client’s online using mail order. Some the goods include


electronics and biotechnology lab equipment’s for corporate clients. As shortly explained above,

despite the good sales performance over the years, there has been a decrease in sales and slump

in profits.

Assuming you are a research consultant, the Managing Director of Marcadia has engaged you to

help her better comprehend the purchasing behavior and pattern of her consumers. The

Managing Director believes that getting a better understanding of customer purchasing can lead

to better consumer targeting and successful marketing.

An extract of the Directors view will help us in formulating the research topic and question. The

director tells you, “I’m sure that our most valuable customers have particular purchasing patterns

which we can identify to our advantage. If we can encourage more of our clients to adopt those

buying behaviors, we can then make them more valuable to us and this can inject a new source

of growth into our business.”

So as a researcher, you exactly want to investigate the purchasing patterns of the consumers of

Marcadia and also see how the patterns and client purchasing behavior will help Marcadia

increase sales and profit. The business research topic or question will be ‘How do we increase

business growth through target Marketing?’ This question is valid and fair and it is a common

question asked by many businesses across the world. The collection of data and information will

be collected in a fair and systematic manner in order to enhance the rigor of the analysis of the

research data.


Literature Review of the Research Topic

Brief Background

Many companies around the world have applied best methods of identifying target markets for

their products. The world is now a global market where there is competition and only the smart

businesses can win. It has closely become difficult for every competitor to survive in the market

for a prolonged time because business a competing aggressively more than ever. Smart

marketing strategies are helping companies achieve their objective of business growth and

customer retention.

For example, businesses periodically conduct survey in order to identify how to improve their

customer services and products. Competitive strategy has always been driven by constant

innovations. It usually means choosing to perform activities differently or to perform different

activities compared to business rivals in order to deliver a unique mix of value. Clients’

satisfaction and retention plays a major role and it is identifiable with the management’s goals

and objectives; the creation of value to customers (Samli, 2013).

Marcadia is trying to know their customers better in order to beat their competition. Reliable

marketing campaigns and strategies usually consist of a combination of various marketing

techniques that work and build synergy with the business in general. This include; improving

your business brand, decreasing sales resistance from new clients and creating desire and interest

and desire for your commodities (Quinlan, 2011).

.


Consumer Behavior and Company Strategies

By studying consumer purchasing patterns, a business will be in a better place to retain the

consumer and even offer additional products to these consumers. Consumer behavior involves

the feelings and thoughts people experience and the steps they take in the utility and

consumption process. The value that consumer behavior covers in the market and its importance

to sales people should be realized through innovations and consumer data analytics.

By identifying the concrete factors that influence actions, thoughts and feelings, it will be very

helpful in understanding how consumers behave in purchasing products. The main question for

marketer is: how do prospective and current clients react to various marketing stimuli that the

company might use? The business that clearly know how clients will respond to different product

characteristics, prices and advertising appeals will definitely experience more purchases from

their consumers and gain competitive advantages over their rivals (Quinlan, 2011).

Recently, businesses have started to research the relationship between consumer stimuli and

marketing stimuli. One example of effective model developed to interpret consumer behavior is

the stimulus response model. However, for the case of Marcadia a different research method and

data analysis will be used. The marketing stimulus is made up of the components called the

consumer black box. Just like an airplanes black box, this virtual consumer black box contains

vital information on how buyers make their purchasing decisions.

This ‘black box’ is divided into two sections; the consumers’ traits affect their own view and

response to the stimuli generated from the environment and from businesses marketing

approaches. And secondly, the decision making process affects the overall outcome on the


number of purchases made. Moreover, it is important to note that consumers purchasing patterns

and decision are affected by several factors, both internal and external, such as social class,

culture, age, occupation, personality, beliefs, attitudes and perceptions.

Research questions for the identified problem

The idea of business research will always involve some context of theory or concept as well as

purely practical questions like ‘how does targeting a specific market compare in terms of

contribution to profit?’ or ‘which particular method of research and result implementation has

produced more output?’ These two questions have the potential for theory application as well as

applying easy numerical surveys; however, particular research constraints are more obviously

dictated by theoretical ideas (Samli, 2013)

.For instance, researchers who seek to compare or generalize one business with another: ‘how

do marketing strategies differ in online based businesses in the industry?’ or ‘what are the most

effective ways of introducing new online platforms that encourage more interactive purchases

from consumer?’ Since we have identified our area of research, we come up with a good lead

research question apart from the one questions mentioned above. The questions asked help with

managerial decision making and improved target marketing. So our lead research question will

be,’ how do we improve target marketing and sales growth by studying consumers purchasing

behaviors?’

Research Methodologies and Techniques to use


Market research is usually essential in ensuring that a business provides what clients really want

and not what we think they want. Marcadia being an online based business, the most obvious

methods of research will primarily involve online surveys. Other approaches that might help in

marketing will include using secondary consumer data available at Marcadia. The online surveys

will be useful in getting a great deal of information.

By using open ended questions in the online survey, you as the research consultant will have the

advantage of unlimited number of responses from the current consumers. For example, asking,’

when was the last time you purchased a product at Marcadia’ or ‘how many purchases did you

make within the last two weeks?’ You will be able to create a simple model for studying

consumer behaviors at Marcadia.

By using online research methods, you as the researcher can send online surveys through clients

in order to get responses about their purchasing behavior. By using conditional branching based

on specific variables such as consumer income, family size and last transaction date, a computer

based survey will skip directly to relevant questions. In addition, the number of website page

visits can provide valuable ground for analysis.

Looking at the flow chart below, we see the essential variable that helps the researcher in

collecting data from their online surveys at Marcadia. Generally, consumers shopping record is

often joined with demographic information.


From the above it is possible to assess the relative impact of a number of issues on the client’s

choice, for example:

How income level or family size play a role in purchasing patterns.

What Marcadia’s brand was popular or was bought more often during the last or series of

past purchase occasions.

Whether a coupon was utilized for purchase and if it was used, what value did it have?

Whether, and if so, how many times a client as made purchase after an advert was clicked

online or watched on television.

These will help in coming up with an effective online marketing method that will create growth

opportunities for Marcadia.


Gantt chart Research Process Time Line

ID Activities Who is responsible? Time intervals

1. 2. 3. 4. 5. 6.

7.

1. Meeting with

Managing Director

Marcadia

(your Name)

2. Collecting of

Transaction Data

for New

Customers

(Your Name)

3. Brief Analysis of

Consumer

Transaction

Pattern

4. Designing an

Email Marketing

Pilot

5. Analyzing data

collected from

Email Marketing

Pilot

6. Finalizing on the

entire Research

Project.

7.


Description of the research process, data collection and analysis methods

As describe in the previous paragraphs, the research process for Marcadia will involve collecting

consumer’s data from the Marcadia website transaction in order to help us in predicting the

target market and consumer behaviors of the most valuable customers. Using an online based

survey, the research consultant(s) collects data from a sample of 500,000 Marcadia customers

who signed up in the last calendar year. The data majorly describes how often the clients

purchased during the year.

Looking at Exhibit 3, from data collected, facilitated by Marcadia’s marketing team, the

customers are split into quintiles according to their one year customer value, from the lowest to

the highest. The ‘one year customer value’ is described as the profit or growth made by Marcadia

on Purchases made by a client in their first year since they signed up in Marcadia website.

As you see also, presented is data regarding purchasing by customers in each quintile in their

first 90 days since signing up, notably the average number of purchase transactions and the total

revenue made by Marcadia from those particular transactions.


Brief Analysis of Exhibit 3

The Managing director of Marcadia believes that the company can become better at identifying

ways to encourage customers to spend more. A brief analysis if exhibit 3 can reveal that the

average customer makes between 2 and 3 transactions in the first 90 days since signing up.

Moreover, the average one year customer value is $7.90 and the purchasing by customers in their

first 90 days acted as an indicator of their worth to Marcadia in their first year.

Developing an Email Marketing Pilot

To help in further in depth analysis, you design an email marketing pilot for 100,000 new

customers who have made at least one purchase since joining. To help us is testing a relevant

hypothesis; the new customers are split into two equal groups: a ’pilot’ group and a ‘control’

group. The pilot group receives a specially designed email that encourages further purchasing,

while the control group does not receive the email.

Therefore, all emails are sent to the pilot group at the same time, and obviously to enrich results,

the emails are designed differently according to the demographics of the customer and his or her

previous purchasing behavior.

Results and Analysis of the Email Marketing Pilot


From the pilot outcomes, you come up with Exhibit 4. This exhibit highlights the ‘lift’ in the

purchasing pattern of the pilot group in comparison to the control group after the specially

designed emails were sent to the pilot group.

All data in Exhibit 4 are expressed as percentages

Vertically, the information is divided according to what kind of commodities was purchased in

the customer’s first transaction. While horizontally, the information is divided in accordance to

how long ago the customer made their Marcadia transaction, measured from the time when the

emails were sent to the pilot group. Inside each box, the lower right portion indicates the lift in

the number of customers who made transactions, while the upper left portion shows the lift in the

number of transactions.


For a customer purchasing electronics, there was a 3.8% lift in transactions and a 5% lift in

number of customers making transactions. Therefore the number of transactions per customer

compared to the control group was 103.8%

105%= 98.9%, 𝑡ℎ𝑎𝑡 𝑖𝑠 𝑎 𝑙𝑖𝑓𝑡 𝑜𝑓 − 1.1% If for instance

10% of customers in the control group made transactions, how do we know the impact that has

on the pilot group. We can use the following hypothesis;

Null hypothesis(𝐻𝑜): Specially designed marketing lift business growth.

Alternate Hypothesis(𝐻1): Specially designed marketing has negligible or no effect on business

growth.

There are 100,000 customers in total in the email pilot design, and the control and pilot groups

are split equally as mentioned before, so 50,000 in each. If for instance, 10% of the control group

made transactions, this equals 10% ∗ 50,000 = 5,000 cutomers. From the bottom right hand

corner of 𝐸𝑥ℎ𝑖𝑏𝑖𝑡 3, we can determine that the number of for the pilot was 1.7% higher, which

equates to 5000 ∗ 101.7% = 5,085. Since 5,085 is greater than 5,000 we conclude that the

specially designed email marketing lifts business, that is, we accept the null hypothesis Ho.

Conclusion

In conclusion, there always constraint that makes the research outcome validity questionable.

The pilot in the special email design had no overall impact on the likelihood of making further

transactions among customer whose first purchase was in ‘Clothing or Apparel’. We can also see

that the pilot had its greatest impact among customers whose first transaction was in Electronics.

Furthermore, among customers whose first transaction was in ‘Other’, the pilot had greatest


impact among those whose first transactions was more recent. The pilot implies that there can be

positive growth for the business through target marketing; however, all new customers may have

received emails from Marcadia which were not related to the pilot.

Recommendations

As the Managing director, the point of concern would be the fact that sometime clients receive to

many emails from them. Customers who receive too many emails from the same company

usually become less inclined to open and read them. This point of concern question whether a

significant proportion of the pilot group read the emails there were sent. It is therefore best if

Marcadia minimized emails and newsletters sent to new customers in order to gain the desired

lift and growth to the business.


References

1. Quinlan, C. (2011). Business research methods. Andover, Hampshire, UK: South-

Western Cengage Learning.

2. Zikmund, W. G. (2003). Business research methods. Mason, OH: Thomson/South-

Western.

3. Bryman, A., & Bell, E. (2011). Business research methods. Oxford: Oxford Univ. Press.

4. Peter, J. P., Olson, J. C., & Peter, J. P. (1990). Consumer behavior and marketing

strategy. Homewood, IL: Irwin.

5. Hawkins, D. I., Coney, K. A., & Best, R. J. (1980). Consumer behavior: Implications for

marketing strategy. Dallas, Tex: Business Publications.

6. Samli, A. C. (2013). International consumer behavior in the 21st Century: Impact on

marketing strategy development. New York, NY: Springer.

7. Waller, D. L. (2008). Statistics for business. Amsterdam: Butterworth-Heinemann.

8. Dul, J., & Hak, T. (2008). Case study methodology in business research. Oxford (UK:

Butterworth-Heinemann/Elsevier.

9. Lussier, R. N. (2011). Research methods and statistics for Business. Long Grove, IL:

Waveland Press.

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