Research approaches and research methods – Seminar

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Research 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 methods

Learning outcomes:
Student to know and able to choose and justify the choice of research approaches and research methods

Core reading
Case 9.1 Don’s Auto Detailing

Activities:
Specify with full justification the most appropriate for the study based on MDP, MRQ, MRQs and components you identified

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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.
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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
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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).
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$r;; Cnse 9.1 Dotrt’s Auro Dernluruc
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|\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.