Discuss about the Market research plan for NTUC Fair Price Xtr Shops.
Market research is an essential activity of the organizations that are undertaken to get an idea about various business factors, such as, the current market status, market opportunities for business expansions, risk factors, rivals’ positions and customers’ tastes and preferences (McDaniel and Gates 2012). This helps the businesses to make strategies for capturing a bigger market share, and for increase profit. There are two types of business research, qualitative and quantitative. Both types of researches have benefits and limitations. Those are discussed and compared below.
Qualitative market research
Qualitative market research is conducted on the basis of the attitude, opinion, intentions and beliefs of the customers (Bailey 2014). This type of research mainly deals with the questions like what the customers are thinking, why they are making certain choices and how they feel about a certain product. For example, in case of changing the branding of a product, the manufacturer would perform a qualitative research to get an idea about the emotional reactions that the customers might have about the new brand identity of the product and whether they are going accept or reject it (Sarstedt and Mooi 2014). This research process is semi structured and the output is not necessarily scientifically or statistically valid, as the opinions are generally collected from a small number of people. Ormston et al. (2014) states that qualitative market research is helpful in identifying the potential issues and challenges as well as scopes that can be explored by using quantitative research method to find out the feasibility.
Qualitative research is mostly about people and not so much about the numbers. People’s or customers’ opinions about the business count most in this research. This research is not used for predicting the future performance of the business; rather it gives an anecdotal perspective to the business, which can be beneficial or challenging for the companies (Bernard and Bernard 2012). The questions in this type of research seek long answers to get the in-depth insights about the perceptions on the business. It is usually conducted by using the Focus groups and interview method. Questions are asked either one-on-one or to a focus group to learn about the beliefs, opinions or attitudes of the customers about the particular product or service. The response data is mostly revealing and beneficial. However, it is time consuming and expensive to collect, especially for any small business or start up (Barnham 2015).
The benefits of this type of research are:
The major limitation of this process is that, it does not consider a large sample size and use statistical tools for data analysis. The analysis is based on the interpretation and observation skills of the researchers. The typical questions under qualitative market research include the reason or opinion about the superiority of a product to other similar products, what steps to be taken to improve the appeal of the product, opinion about the company’s new logo, opinion regarding the advertisement etc. However, it does not focus on getting the numbers and analyze those using statistical tools (Bernard 2017).
Quantitative market research is the one that deals with large samples and numeric data. It focuses on scientific data analysis by applying statistical tools on large dataset. This type of research is more structured due to statistical nature (Mertens 2014). It addresses questions like how many, how often, who, when, where etc. which mainly deals with numerical response information. For example, a product company conducts quantitative market research to know the percentage of customers finding the product attractive, number of people buying a particular product from stores as well as from online retailers, how many among the total population will try out a new cosmetics after giving a free sample etc. (Bernard 2017).
The businesses can get a precise snapshot of the target market, acceptance percentage of their products, and can determine their strategies based on the numbers (Davies and Hughes 2014). A sizeable or large sample size is generally chosen and a list of close ended questions is given to them with list of possible answers. Those responses are then converted into numeric values for the purpose of applying statistical data analysis tools. The businesses can rank these answers to get an idea of the market share and can plan accordingly. Questionnaires and surveys are the most common methods that are used for quantitative market research. Often the results are presented in the form of graphs and charts, making it easier to understand. It is a straight forward approach and the reports are written in easy and language. There is no ambiguity in the questions or answers (Punch 2013).
The major benefits of quantitative market research are:
The questions that are mostly dealt in quantitative research are like the number of people interested in a particular product, the level of market or brand awareness, number of visits to a particular website or store, type of consumers, type of purchasing habits of the customers etc. However, Brannen (2017) states that the major limitation of this type of research is the too much dependency on the scientific application. It produces only numbers but ignores any qualitative aspect of the market.
To conduct an effective marketing research, a business should always adopt for both the qualitative and quantitative research methods. Combination of both the research types allows the business to get an in-depth idea about the target market. Qualitative study helps the business to know about people’s opinions and attitudes about the business and its products, while quantitative study helps in getting the bigger picture about the industry (Bernard and Bernard 2012). Focus group study is chosen for applying qualitative research method and questionnaire method is chosen for the quantitative study for the consumer behavior for NTUC fair price shops of Singapore. The detailed discussion about the research designs for the focus group and the questionnaire method are as follows.
Focus group study is a very important and very commonly used technique for qualitative research in marketing. A focus group refers to a small group of participants from within the target market of a company. This group consists of demographically diverse people, whose reactions and responses are studied by a product company for the purpose of having a bigger picture of the potential reactions from the larger population (Gibbs 2012). This method consists of conducting interview of the focus group on various aspects of the product or business. Focus groups offer useful insights into how the people think and provide a much deeper understanding of the research phenomenon (Cheng 2014). Focus group provides the scope for group interviews, giving the opportunity to capture in depth information in a more economical manner than the individual interviews. It also saves valuable time for the companies.
The major benefits of focus group include group interaction and non-verbal communication. Group interaction among the members of the target population often encourages the participants to engage in the discussions on variety of topic, which is not possible in an individual interview. A skilled facilitator encourages the members to engage in useful discussions on the relevant topic. Non verbal communication refers to the reactions of the participants regarding a specific topic. This is more of observational data (Ryan et al. 2014).
Focus group discussions need to be facilitated. Themes of discussions should be triggered by the facilitator, who is also responsible for capturing the valuable information coming out from the discussions. There are three stages in facilitating a focus group. Those are preparation, pre-session and the session (Ritchie et al. 2013).
To study the behavior of the consumers of NTUC, the focus group has been chosen from the consumers of NTUC. 5 consumers are chosen to be participants in the focus group. There will also be an assistant who will take down the important notes during the session. In the preparation stage, the questions should be memorized. A script of questions will be made for verification but the questions should not be read from that as that would detract the conversation. The themes for the focus group are chosen to find out the behavior of the consumers of NTUC. The revenue from the NTUC Fair Price Xtr. sales has reduced recently. This is a matter of concern for the company. Hence, the themes for the focus group have been chosen according to the potential problem areas. The overall impression of the brand, product quality, price changes and differences, logo, slogan, and concepts will be the themes of the focus group for NTUC Fair Price Xtr. shops of Singapore.
Pre-session of the focus group is the time for being familiarized with the group dynamics. Hence, engaging in small talks is beneficial during this session. This will help the participants to be comfortable around the facilitator and can divulge important information through the focus group.
While opening the session, the participants should be informed about the purpose and consent will be taken from them. Introduction of all will take place. The ground rules will be explained. The members will be asked open ended questions about the following themes:
The session will be closed after taking down all the important notes from the discussion.
A questionnaire survey will be conducted on the consumers of NTUC Fair Price Xtr. Shops in Singapore to get the bigger picture about the fall in sales. After the important factors have been noted down in the focus group, the survey questionnaire will be made on the basis of those findings. The purpose of this survey is to get the factors that would be used to improve the performance of the NTUC shops to motivate the customers.
Sampling method will be applied to choose the survey participants. Sampling is the technique to choose a subset, called sample, from the larger population. It is not possible to study the entire population, and hence sample is drawn. A sample is the subset of a larger population with the same characteristics (Acharya et al. 2013). There are two types of sampling, probability and non-probability sampling techniques.
Probability sampling is the technique of sampling where random sampling techniques are used for creating a sample. The principle of probability sampling is that every member of a population has equal and known chance of being selected (Levy, P.S. and Lemeshow 2013). The major types of probability sampling are simple random sampling, stratified random sampling, systematic sampling, cluster sampling and multistage random sampling. Each of these sampling techniques has advantages and disadvantages. The primary advantages of using probability sampling are the absence of the sampling bias and systematic error, higher level of reliability of the research findings, more accuracy of the sampling error estimation and the possibility of making inferences about the larger population is high (Weiss and Weiss 2012). These sampling techniques are convenient and easy to use, and create samples that are highly similar to the population.
However, there are some disadvantages also. These techniques are more time consuming, usually draw big samples, such as, in case of simple random sampling and stratified random sampling, and comparatively more expensive than the non-probability sampling. Moreover, cluster sampling does not work well when the members are heterogeneous, and systematic sampling is not random like the simple random sampling (Uprichard 2013).
Non probability sampling is the one where the samples are selected on the basis of the subjective judgment ability of the researcher rather than using random selection techniques. In this method, the odds of any member of a population being selected cannot be calculated (Weiss and Weiss 2012). There are many types of non-probability sampling, such as, convenience sampling, purposive sampling, expert sampling, haphazard sampling, quota sampling, snow ball sampling, heterogeneity or diversity sampling and model instance sampling (Acharya et al. 2013).
The major advantage of non-probability sampling is that it is comparatively time and cost-effective than the probability sampling. It is easier to use and can be applied in those cases when probability sampling is not feasible to be used, especially, when the population size is small. On the other hand, the major disadvantage of non-probability sampling is that it is not possible to know how well the sample represents the population. There can be calculating and margins of error or sampling biasness (Levy and Lemeshow 2013).
Considering the benefits and disadvantages of the two types of sampling, it can be said that probability sampling would be more suitable to choose the sample for questionnaire survey. Probability sampling allows the use of large samples. A large sample represents the population more precisely and quantitative analysis method can be applied on the response data to get a scientific result of the analysis (Ritchie, Lewis and Elam 2013). It helps in getting more unbiased data and reduced margins of error in the outcomes and the results are predictable. Hence, for the survey, a large sample should be chosen from the customer case of NTUC shops by applying simple random sampling technique under the probability sampling.
NTUC can use the information on the loyalty membership to get an idea about the number of memberships from the loyal customers. This gives an impression about loyal customer base of NTUC. With the monthly and yearly sales data, it can analyze how much cash and how many credit points are being used, which gives an indication about the size of the loyal customer base. It can use this information to make strategies increase the customer base by introducing new offers and benefit schemes.
However, the numbers may not reflect accurate information regarding the numbers of loyal customers. The cards are transferable. One card may be used by many in a family or by friends. This would reflect more sales but the size of customer base may not be increased. Hence, while making decision and strategies for implementing measures to increase sales and customer base, NTUC should focus more on increasing the number of loyal members. There should be more attractive offers for the loyal members so that word-of-mouth publicity happens and more people become interested to purchase the membership. Moreover, the card should be non-transferable, so that exact number of loyal members can be measured precisely and strategies can be made to increase the membership.
References
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Bailey, L.F., 2014. The origin and success of qualitative research. International Journal of Market Research, 56(2), pp.167-184.
Barnham, C., 2015. Quantitative and qualitative research: Perceptual foundations. International Journal of Market Research, 57(6), pp.837-854.
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