Describe about the An Asessment of the Mall Intercept as a Data Collection Method?
Data and its analysis is an important process, which helps in understanding and analyzing several information trend (Hair, 2007). Data can be analyzed through various methods and tools, depending on the complexity of the data and urgency of the situation. Methods applied on data analysis also impact the quality of the output which might be derived from the data analysis process (Cooper et al, 2006).
Purpose of this assignment is to understand the concept of data analysis through a case study of a restaurant chain, which has opened its second restaurant in London. In order to ensure that opening a restaurant is a viable and logical move, shareholders of the restaurant wants to understand the existing market, for which data collection and its analysis needs to be done.
While working on research, there are two types of data which will be encountered by the researcher (Veal, 2005). These two types of data are: Primary data and Secondary data. Primary data can be defined as a data which is collected from firsthand experience and can be considered as most reliable and authentic form of data (Davis & Cosenza, 1996). Whereas, secondary data is the one which is already published, however it cannot be considered anywhere less relevant than the primary data (Dillman et al, 2002).
From perspective of restaurant data, it is important to understand that primary and secondary data can be collected from various methods (Reynolds et al, 2005). However, the basic plan for understanding of customer pricing preference has to be done through data analysis. Plan for this data collection is as follows:
Identify the need of data collection: Requirement related to data collection should be questioned first. Since in this case, stakeholders of restaurant wants to understand the customer pricing preference, hence it becomes important to conduct a data collection and based on that findings should be presented to the stakeholders, on the basis of which they can understand the market, and customer preferences (Cooper & Schindler, 2003).
Identify the sample size: hence for data collection methods such as surveys, interviews it is important to identify the sample size on which the data collection will be done. In this case, a sample size of 30 people can be assumed (Anderson et al, 2003).
Once the data is collected it needs to be analysed through appropriate methods, so that reliable and logical information can be extracted. In case of qualitative primary data or quantitative primary data following are the solicited ways of collecting data which can be used:
Figure 1: Primary data classification and methods to collect.
Survey methodology which will be used is internet survey. Through internet survey a set of questions related to pricing preferences can be sent to the potential customers located near the restaurant (Clayton & Werking, 1998). Digital survey form with questions and their options can be sent through the email. Once the customer completes the survey and submits it, responses will be automatically updated in the database. Sample frame for the survey will be of 30 people.
Your Age
Under 18
18-25
26-30
31-40
Above 40
Your gender
Male
Female
How often do you eat in a restaurant
Once a week
Twice a week
Daily
Once a month
How much do you normally spend on lunch/dinner in a restaurant?
€15 – €20
€21 – €25
€26 – €30
€31 – €40
more than €40
Above four questions will be asked in optional survey form. Reason for selecting this method is, that in this methods user has specific option to select form, which will enable accurate data analysis. Otherwise in case of qualitative data collection, at times data collected might be ambiguous in nature as well.
Based on the above questionnaire it can be said that following was the findings:
Among male and female, it was female gender which frequently visits the restaurants in the location where new restaurants is proposed.
Among people surveyed, majority of the patrons of restaurants are above 25 years age. This reflects that people who are either working professionals, or having some type of business visits restaurants in the location.
Among 30 people surveyed, 47% claimed that they visit restaurants daily, where as 33% visit once in a week.
More than 40% people who were surveyed, their spending on their restaurants bill is between 26-40 Euros.
Based on the results collected, on surface level, it can be said that there is tremendous potential for the proposed restaurants. Majority of people surveyed mentioned that they at least visit restaurants once a week, which is a good frequency from business point of view. In such case it becomes important to target the customer base which spends money in range of 26-40 Euros. In order to start initially, this price range is good to start, else pricing above this range might impact the perspective business, as too expensive food items might push the restaurant in league of highly premium category which will impact the customer footfall.
A statistics which conveys the information that how dispersed the values are in a range is a measure of dispersion (Taylor & Bogdan, 1984). In this case, range can be considered as the measure of dispersion. Range gives the difference between the greatest and the smallest value for a given value among the n observation (Benawa et al, 2009). In this case of restaurant, the idea is to select a range of 30 people of various age groups, gender and spending habit. Hence 30 is the observation sample for the survey. Based on this measure of dispersion, it is being found that what the pricing preferences of the customer are (De Leeuw, 2005). Which means, it will be analyzed that how much customer spend on food, what is their gender, age group and frequency of visit. Their spending habit will highlight their purchasing power. It is important to understand that a fine dine restaurant is an optional expense, which means it is more like a leisure activity, hence it is not necessary that people are always willing to spend money on expensive food. That is why it is important to understand their pricing preferences of the customer, as it will help in setting up the price of various food items on the menu.
Quartile: According to Dransfield (2003), Quartile represents the middle value between two quarters of a distribution. The low quartile is the value between the first and second quarter of the distribution. The upper quartile is the value between the third and fourth quarter of the distribution. The middle class is called median (Bush & Hair, 1985).
Percentile: Percentiles can be defined as values that divide a sample of data into one hundred groups containing equal number of observations. For example, 40% of data values lie below the 40th percentile (Comley, 1996).
Coefficient: the coefficient of variation measures the spread of a set of data as a proportion of its mean (Patton, 2005). It can also be defined as ratio of the sample standard deviation to the sample mean. Coefficient is also expressed as percentage.
Hence it can be said that, these three concepts of quartiles, deciles, and percentiles divide a frequency distribution into a number of parts containing equal frequencies. When quartiles are applied then it results into division of range of values into four parts, where each part contains one quarter of value. Deciles, divides the range into ten parts, where each part represents one tenth of the total frequency, and lastly percentiles divides into hundred parts, where each part contains one hundredth of the total frequency (Granello & Wheaton, 2004).
Based on above analysis it can be said that the proposed restaurant should have a competitive pricing in order to ensure that it is able to cater to customers, who want to have food at competitive pricing. In this regard, other aspects related to the proposed restaurants such as its ambience, location etc. will play a major role in the pricing strategy.
Representative result for above survey is as follows:
Your Age
Under 18
18-25
26-30
31-40
Above 40
Result:
Figure 2: Response to Question 1 of Survey
Your gender
Male
Female
Result:
Figure 3: Response to Question 2 of Survey
How often do you eat in a restaurant
Once a week
Twice a week
Daily
Once a month
Result:
Figure 4: Response to Question 3 of Survey
How much do you normally spend on lunch/dinner in a restaurant?
€15 – €20
€21 – €25
€26 – €30
€31 – €40
more than €40
Result:
Figure 5: Response to Question 4 of Survey
Analysis of the data and final recommendation: Based on the above survey conducted following aspects are revealed:
In terms of people age group who visits the restaurants in the proposed location, it can be said that majority of people are in range of 26-30 years, which forms the 40% of the total people surveyed. Second largest age group is of people in range of 31-40 years, which forms 33% of the total customer base. It means, that maximum people who visit the restaurant are working professionals or business man, and have decent buying capacity to buy premium or high quality food items.
Out of 30 people surveyed, 60% respondents are female and 40% male, this means that female have a major decision making role when they decide to visit the restaurant either alone, with their friends or their partners. Hence, it is important to include items on the menu which are popular among the women.
Out of 30 people surveyed, 47% people visit restaurant daily. However this cannot be true completely for a fine dining restaurant, since daily restaurants are mainly fast food outlets as well. In that case 33% people in this group visit the restaurant once a week. Such kind of customers have good buying power, because visiting restaurant every week is not a cheap dining habit. Also, such kind of frequent customer wants to experiment with the items on the menu. Hence, accordingly menu and the pricing can be decided.
Most important aspect of the survey was related to people spending. In this survey, out of 30 people, 33% people have responded that they spend money in range of 15-20 Euros, it means that there is a huge market for food items which are economically priced, it also represents the fact that a large number of people are inclined towards fast food items such as burgers, pizza etc. However, important aspect of the survey was that more than 40% of the total people surveyed, responded back that they spend more than 26-30 Euros. This is where the pricing for proposed restaurant starts. Hence, it is important to focus on these entry level customers, who might like to experiment with their food items, but still might shy away from more exquisite or special food items.
One major fraction of the people surveyed responded that they spend between 31-40 Euros every time they visit restaurant. Such kind of people were 27% of the total people surveyed. It means, that there is significant amount of buying power among people visiting other restaurant in that area.
Based on the above, survey and its analysis following is recommended:
Special attention should be given to customer who are capable of spending 26-40 Euros on each food item. This group of customer will be responsible for generation of the core revenue for the restaurant. Also, since combined strength of customer in these two price bracket is 67%, it means that people are ready to spend on food items which are priced towards high end. In such scenario, restaurant management can include high price items in the menu.
Focus should be more on the above mentioned 67% of the total people surveyed. Due to the fact, that these customers will be responsible for buying high priced food items, which will have more profit margin, resulting in more revenue per person. Whereas, other 33% of the total people surveyed, it can be said that there spending level is between 15-20 Euros. This customer segment will expect cheap or economically priced food items. Hence, in any case this customer base will not help in earning much profit. That is why it is important to focus on customer base which falls in segment of 67%.
Pricing preference of the customer based on the above analysis appears to be inclined toward competitive pricing (Collis & Hussey, 2003). Which means, that despite of the fact that majority of the people surveyed, maximum percentage of people are towards high spending group, but still it cannot be the only criteria for deciding the final pricing structure. It can be observed from the findings, that how there is a large group of customers who prefers to spend less than 30 Euros for their food. Proposed restaurant should focus on achieving volume as well profitability from margin on the price. This will ensure that pricing of the food items remains competitive in nature, and there is something for both types of customers, whether it is a customer looking for economically priced food item, or any other customer looking for slightly high priced food item, but with pleasurable experience.
It is also important to understand that in order make such business decisions; data has a critical role to play. Hence before making such critical decisions where pricing preference has to be determined, it is important to collect the data and accordingly analyze it through proper methods and techniques.
References
Anderson, E. C., & Fernandez, D. M. J. 2003. U.S. Patent No. 6,571,246. Washington, DC: U.S. Patent and Trademark Office.
Benawa, H., Dousti, R. A., Liu, T. P., Sieh, H. R., Singh, S., & Winfield, C. P. 2009. U.S. Patent No. 7,555,548. Washington, DC: U.S. Patent and Trademark Office.
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Collis, J., & Hussey, R. 2003. Business research. Basingstokee NH NH: Palgrave Macmillan.
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