Questions:
Scenario
A restaurant chain plans to open its second restaurant in London. To ensure this is a viable move, the shareholders are keen to understand the market. Therefore you are asked to carry out a planned data collection an data analysis to help the board of directors in understanding the customer preferences (e.g. income&price, age & price)
1. Required to use a variety of sources for the collection of data, use a range of techniques to analyse the data, produce information in appropriate formats for decision making and use appropriate software-generated information.
2. Produce a pack which includes presentation slides, spreadsheet and a business report. Your spreadsheet must include the data from your chosen sample size (max 50) together with the graphs and trend lines.
The business report deals with the business plan of a new restaurant business that is going to be expanding in the city of London. In order to view and interpret the perceptions of the customers, the organization needs to collect the data from secondary and primary sources. With the view to this, an adequate questionnaire has been prepared by the company to judge the preferences of the customers. This has been shown with charts, tables and trend line analysis. On the other hand, the major finding is that the company needs to set up its pricing strategies low and the customers want low priced restaurants.
For all the business organization, business plan is an important function for all the projects of the business organization. The current case deals with the restaurant business who is about to expand its second branch in the city of London. For this reason, the company needs to prepare a proper source of collection of data from different primary and secondary sources (Paynter, 2010). After the collection of data, the data has been analysed with the help of statistical tools and different pie charts, line graph and trend analysis.
The main purpose of collection of data is to identify the needs and requirements of customers in the restaurant segment of London.
The data will be collected in two different forms. These are primary data and secondary data collection. Both these types of data will help the restaurant group to identify the preferences of the customers in terms of age, price and income of the customers. All these types of question will further assist the business organization to identify the various segments of customers and how the organization is required to pursue the conducted research analysis (Legay, 2011). This data will further help the restaurant group to carry on its future operational activities in an effective way.
Secondary data collection can be obtained with the help of several sources. The five major sources of the collection of data from secondary sources are restaurant websites, marketing journals, social blogs, newspaper articles and social networking site reviews. The biggest advantage of collection of data from secondary sources is that these forms of data are easily available for the company and all these data are extremely cost effective and can be obtained within a particular time frame (Koskinen, 2012). On the contrary, the disadvantage of these forms of data collection is that these forms of data cannot be authenticated and can be easily manipulated and misinterpreted.
Once the secondary data is calculated, the restaurant group can go for primary data collection methods. In this case, the target audience of the restaurant group will be the customers of different London restaurants. The primary data collection method can be obtained from five major sources. These sources are face to face interviews, telephonic interviews, distributing questionnaires, pilot survey and online surveys (Hudson, 2014). All these sources will direct the organization to achieve their strategic business goals and objectives.
There are various advantages of primary data collection methods. One of the biggest disadvantages is that correct and accurate information can be obtained from the respective sources. All these data can be reliable for the organization for a longer period of time. The pivotal issues of the organization can be easily nullified with the help of primary data collection (Choo, 2013).
However, there are various disadvantages of primary data collection methods. The biggest disadvantage is that it is very time consuming and the process of the organization can be delayed by a large extent. Apart from this, it will incur high operational costs for the restaurant business organization. Moreover, the respondent customers may give inaccurate and invalid response towards the business organization.
On the other hand, the company will require many sales executives to carry on the process of primary data in an effective way. For this reason, the organization can go for recruiting process or head hunting process to build up a proper and efficient human resource management team (Doring, 2012).
After the efficient build up of human resource management team, the organization needs to carry on the primary data by preparing a survey methodology and a proper sampling frame for the research.
The overall process of survey methodology can be defined and developed by following an adequate process. The major elements are preparing the methods, collection of methods, analysis of the methods and the respective feedback. At the very first step, the organization needs to define and develop the population and then implement it in the sampling frame and sample size of the primary research (Koskinen, 2012).
Population in statistics can be defined as the group of elements under a particular focussed group that have one or two characteristics in common (Quagli, 2011). For the restaurant group, the population will be the restaurant customers in the city of London.
The sampling frame can be defined as the maximum number of customers that the sales executives of an organization is targeted to reach under a given time frame by the organization (Yadavalli, 2012).
The total sampling frame of the research can be around 90, as it will be the whole research work validated.
The sample size will be selected as 60. This will make the research more validated and accurate. On the other hand, it can be assumed as the responses of 30 customers will be considered invalid or incomplete or inaccurate. This will further help the organization to organize the research in an ethical manner and in a feasible way. Apart from this, the customers are segmented on the basis of their age, income and their price preferences. The organization needs to segment it properly to make the research more accurate and more effective.
There are various survey methodologies the company can use. The organization can undertake the research by following a descriptive approach of the sampling frame. This will further help the researcher to undertake the research in a more descriptive and accurate manner by considering all the various elements of the research (Paynter, 2010). On the other hand, deductive approach will help the organization to conduct the research in a more accurate way.
This error occurs when the researcher imposes several biased questions to the respondents of the research. Such kind of questions needs to be avoided by the researcher (Koskinen, 2012).
The error of sampling can occur when the respondents of the research fails to judge the questions of the research.
There are total 6 survey questions that the organization can prepare. These questions will be mixed in nature. These are dichotomous questions, open ended questions and close ended questions. All these questions have been assumed on the basis of quantitative sources of data to analyse the pricing preferences of the customers.
It can be justified that all these questions will help the organization to validate the questions and infer the questions on an accurate basis.
Question 1: In what age group do you fall in:-
a- Less than 25 b- 25-35 c- 35-45 d: – 45 and above
Question 2: What is your monthly income?
Question 3: What are perceptions in food prices?
Question 4: If the food is of high quality, then will you prefer high priced foods?
Question 5: Do you think your needs and demands are satisfied with the current restaurants of London?
Question 6: Is there is a space and opportunity for new restaurant?
The analysis of the data will help the company to analysis the future prospects of the organization. It will assist the company to build up their pricing strategies according to the demands of various segments of customers (Doring, 2012).
The data can be summarized and analyzed with the help of mean, median and mode.
Mean is the average of all the respondents of data in an effective way. On the other hand, median is the mid value of the respondents of the questionnaire. Apart from this, mode can be defined as the maximum value that occurs among the respondents of the customers (Yadavalli, 2012).
The average age or the mean of the respondents is coming as 47.8 (Refer to Excel Sheet). The mean average income of the product 34538.33 and almost 52 percent of the respondents preferred low range products price.
There are many merits and demerits of mean. One of the advantages is that it is very easily to calculate and it is a cost effective simple process. On the contrary, the process of mean ignores the time value of money for the organization.
Median- The statistical tool of the median helps to calculate the mid value of the statistical tool of data. On the advantages of using this data is that it can be easily calculated and it does not consider the extreme values of data. However, the biggest disadvantage of median is that the calculation of median is costlier than mean (Quagli, 2011).
Mode- The statistical tool that has been occurred the maximum times of frequencies is known as the mode of the dat. In case of calculation of data, the mode of the research is coming as 52 percent in case to interpreting the prices of the products.
Therefore, it can be analyzed that most of the customers in the city of London prefers low prices of the products irrespective of their income and ages. The responded customers’ preferred high products if the products are of high quality.
The measures of dispersion can be calculated with the help of the statistical tool of slandered deviation. Slandered deviation is a tool which helps to find out the variances of the statistical data. It is also useful to measure the normal distribution analysis for each question given by the respondent customers. It will further help the company to measure the risk of variances in the data in such a way the organization can implement its strategic plans and approaches (Koskinen, 2012). The standard deviation in the case of price preferences among the customers is coming as 15.13 (Refer to excel sheet). Therefore, the percentage is very low in the given data, therefore, it can be opined that the data is less risky for the restaurant chain organization.
The statistical tool of quartile is used to make and calculate the mid value and division of a given data. The quartile range of the data of the customers will help the organization will help the organization to measure the mid value range of the customers pricing strategies. In the given case, the quartile of the data can be calculated is 3 as it is the lowest value of the response of the customers in reference to the customer pricing strategies (Hudson, 2014).
Correlation can be used by the business organization in an effective way. Therefore, it can be defined as the link or interlink of the given variables or elements of the price. Correlation is of two types. These are positive correlation and negative correlation (Choo, 2013). It can be inferred that there is positive correlation between the income of the customers and their perception towards pricing strategies.
Percentiles will further help the company to find the percentage of customers while segmenting the pricing strategies of the products. Percentiles can be of various types. It may start from zero and end up to 100th. Therefore, percentiles can be very useful for the business organization to measure the dispersion of the perceptions of the customers (Hudson, 2014).
3.1 Conclusions from the given line graph and bar charts
The projected sales can be done after selecting an appropriate pricing strategy of the customers.
Fig 1: Projected sales of the company
(Source: Created By Author)
Fig 2: Choice of customers with high price products with quality
(Source: Created By Author)
Fig 3: Pricing preferences of the customers
(Source: Created by Author)
From the above analysis, it can be inferred that almost all the customers have preferred low price products. Apart from this, it can be inferred that all the customers almost all the customers will prefer high priced products if the quality of the products is good. According to this, the business organization may increase the sales of the organization if the company has predicted the exact demands of the customers to a certain extent in the city of London (Yadavalli, 2012).
On the basis of this, the company is required to plan its customer strategies, according to the needs, demands and preferences of the customers of London. The company may go for low pricing strategies initially; however, if the quality of the product is good, then the organization may select high pricing strategies according to the data given in Fig 2.
The following graph shows the responses of customers due to seasonal changes.
Fig 4: Trend line showing the changes of preferences due to seasonal changes
(Source: Created By Author)
The following trend line shows that the preferences of customers changes according to the seasonal changes of products. Therefore, the company needs to plan its strategies in such a way that it suits the needs and demands of the customers according to the changes of demand. On the other hand, it will further help the company to improve its position and grow a suitable market share in the city of London.
The overall presentation of the report has been shown in the attached PowerPoint slide.
There are several findings that can be interpreted to the business organization. One of the major findings is the there is a good scope for the company to gain the confidence of the customers. If the quality of the service of the customers is good, then the company can gain a good amount of market share in the market. Otherwise, the company can opt for low pricing strategies in order to cater a wide range of customers.
Management information system will help the organization to gather a large set of information tools. There are several levels and stages of the management of the organization. These stages are tactical, strategic and operational.
Information system is extremely useful for the process of data mining, data storage and data warehousing. Therefore, this is very useful to make all sorts of possible information to the company (Paynter, 2010). On the other hand, the organization can make and interpret several strategic business decisions by forecasting the future trend values of the organization. On the contrary, several tactical decisions can be done with the help of implementing data in an accurate time and schedule of data. Therefore, all sort of information can be obtained with the help of management information system.
The overall project management plan has several stages. These are preparing a critical path analysis, pert chart and a Gantt chart. The critical path analysis can be done with the help of scheduling of activities. This is as follows:-
Fig 5: Critical path analysis
(Created by author)
The critical path analysis is coming as 6 weeks. This further suggests that the overall activities will be undertaken by the organization within 6 weeks after its planning.
From the critical path analysis, the company can calculate the early time, early start, early finish, late time, late finish, etc. Early finish will help the organization to calculate the task that has been finished before time. On the other hand, the early start will help the organization to identify when the job is actually started. Similarly, the organization can collect late finish and late start time (Financeformulas.net, 2015).
On the other hand, the pert chart is directly linked with the critical path analysis of the project. It shows and reflects the tasks that can be performed on a sequential basis that is step by step.
The pert chart is as follows:-
Fig 6: Pert chart of the project
(Source: Created by Author)
On the other hand, Gantt chart or Time Table will help the business organization to undertake the project within the current possible time. The Gantt chart of the company is as follows:-
|
Planning
|
1 week |
|
Secondary collection |
1 week |
|
Primary collection |
3 weeks |
|
Analysis |
2 weeks |
|
Implementing and monitoring |
1 week |
|
Total |
7 weeks |
Table 1: Gantt chart for the business plan proposed
(Source: Created by Author)
There are various financial tools that can be used for the decision making purpose. These are cash flow, net present value, internal rate of return and discounted cash flow
The cash flow of a particular organization can be calculated as it will help to identify the cash inflows and cash outflows (Quagli, 2011).
|
Cash from financial activities |
250000 |
||
|
Cash from investing activities |
10000 |
||
|
Cash from operating activities |
90000 |
||
|
Opening cash |
55000 |
||
|
Closing cash |
70000 |
||
Table 2: Cash flow of the organization (Projected)
(Source: Created By Author)
Net present value can be defined as the financial tool that can be measured by the business organization. It will help the organization to identify the present cash position of the organization (Hudson, 2014).
On the other hand, internal rate of return will help the organization to identify the rate of return of the organization of the particular project. Both net present value and internal rate of return helps to make the project feasible for a particular period of time. Both the net present value and internal rate of return can be calculated with the help of the following table:-
|
Initial Investment |
-100000 |
|
Cash flows |
|
|
1st year |
85000 |
|
2nd |
55000 |
|
3rd |
55000 |
|
4th |
53000 |
|
$8,226.76 |
NPV |
|
56% |
IRR |
Table 3: Calculation of Projected Net present value and Internal Rate of Return
(Source: Created By Author)
The business organization that is the restaurant chain can also use the tool of discounted cash flow apart from net present value and internal rate of return (Financeformulas.net, 2015). This tool will help the organization to forecast both the present and future cash flows in a discounted cost of capital.
Conclusion
From the above analysis, it can be inferred that the restaurant business organization needs to set up their pricing strategies according to the demand and requirements of the customers. Most of the customers want low pricing products the company needs to implement low pricing strategies. Adding to this, the organization may adopt high pricing strategies with quality.
References List
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Koskinen, L. (2012). Statistical Tools for Finance and Insurance, Second Edition edited by Pavel ČÞek, Wolfgang Karl Härdle and RafaÅ‚ Weron. International Statistical Review, 80(2), pp.329-330.
Legay, A. (2011). Statistical abstraction and model-checking of large heterogeneous systems. International Journal on Software Tools for Technology Transfer, 14(1), pp.53-72
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Quagli, A. (2011). Just some order in financial reporting studies – the need for a taxonomy. financial reporting, (1), pp.5-6.
Stiller, O. (2010). A flow-dependent estimate for the sampling error. J. Geophys. Res., 115(D22)
Wadley, D. (2013). Understanding land development: a project-based approach. Australian Planner, 50(4), pp.374-375
Yadavalli, V. (2012). MAX-EWMA CHART FOR AUTOCORRELATED PROCESSES (MEWMAP CHART). The South African Journal of Industrial Engineering, 18(2)
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Financeformulas.net, (2015). Capital Asset Pricing Model. [online] Available at: https://www.financeformulas.net/Capital-Asset-Pricing-Model.html [Accessed 22 Jan. 2015].
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