Exploring Attitude of Potential Customers to Wooden Toys - Essay Example

? Exploring Attitude A pilot research proposal for exploring attitude of potential s to wooden toys By Submitted to Executive Summary This work constitutes a proposal for a pilot research project to be undertaken for Playful Times Toys to explore attitude of potential consumers to wooden toys. The purpose of the research project is to acquire sufficient insight so that suitable promotional programme aimed at parents and grandparents can be developed to market traditional wooden toys. This would necessitate clear understanding of the perspectives of parents and grandparents, which is critical for Playful Times Toys as the company was earlier in the business of electronic teddy bear and its relative lack of experience in wooden toys market. The pilot study will be undertaken to capture the attitude of a convenient sample in and around Hertfordshire, where Playful Times Toys which will be representative of the companies population. Both qualitative and quantitative techniques will be used. In the qualitative categories, in depth interviews of about 25 existing channel partners of the acquired company will be undertaken using the semi-structured interview technique. In the quantitative category, questionnaires will be administered both physically and using internet to about 500 potential customers comprising parents and grandparents of kids. The qualitative data will be analysed using subjective, interpretative techniques. The quantitative data will be analysed using both descriptive and inferential statistical techniques such as hypothesis testing, Chi-square testing, analysis of variance, correlational studies, and regression analysis. Subsequently conclusions will be drawn and recommendations will be made. 2. Introduction 2.1 Background Playful Times Toys’ decision to move away from the electronic toy market to traditional wooden toy market and consequent acquisition of a company that specialised in production of traditional wooden toys necessitated a market research to develop suitable promotional programme aimed at the potential customers in the wooden toys market. The research is significant for Playful Times Toys as the acquired company specialised in production of wooden building blocks, farmyard animals, train sets, and other vehicles for children aged 2-10. The company marketed these products on the basis of their perceived educational value. Playful Times Toys intention to develop promotional programmes aimed at the parents and grandparents customer segment signs a departure from its own and that of the acquired company’s marketing experience and infrastructure. 2.2 Overview of toy market Toy market is dependent on two factors (1) the number of children, and (2) gross domestic product (GDP), which would enable to purchase. Usually toy products are categorised under 11 categories as (1) action figures & accessories; (2) arts & crafts; (3) building sets; (4) dolls; (5) games & puzzles; (6) infant/preschool toys; (7) youth electronics; (8) outdoor & sports toys; (9) plush; (10) vehicles; and (11) all other toys. World’s toy market can be divided into two categories (1) 0 to 14 years old, and (2) 15 + years based on based on the GDP/Inhabitant. 2.2.1 Top toy markets of the world In 2007, European region was the largest market with 32 per cent market share, closely followed by North American region with 31 per cent market share, while the Asiatic region accounted for 24 per cent market share. Latin America and the Caribbean markets accounted for 7 per cent, African region 4 per cent and the Oceania accounted for 2 per cent of the global market share. However, by the end of 2008, the Asiatic market grew by three per cent whereas both North American and European markets registered decline. Latin American and the Caribbean markets grew by 1 per cent. The composition of world toy market by region is placed in the figure below. Figure 1: World toy market by region – 2008 Source: Guinaudeau, P., 2009. Toy Markets in the World. [Online] The NPD Group (2009 Edition) Available at: http://www.toyassociation.org/AM/PDFs/Trends/ToyMarkets09.pdf [Accessed 14 June 2011], p.20. The traditional toy markets in the world include Australia, Austria, Belgium, France, Germany, Italy, New Zealand, Poland, Portugal, Spain, UK and USA. However, off late, Asian countries such as China and India are now entering the top ten toy markets of the world. In 2008, the top 10 toy market countries in the world are (1) United States, (2) Japan, (3) China, (4) United Kingdom, (5) France, (6) Germany, (7) Brazil, (8) India, (9) Mexico, and (10) Italy. The size of these markets, spending per kid, kids population and market to 15 years old + is placed in the figure below. Figure 2: World toy market ranking Source: Guinaudeau, P., 2009. Toy Markets in the World. [Online] The NPD Group (2009 Edition) Available at: http://www.toyassociation.org/AM/PDFs/Trends/ToyMarkets09.pdf [Accessed 14 June 2011], p.22. According to a research report conducted by the NPD Group for to the Trade association for United States producers and importers of toys, games and children's entertainment products, in the year 2009, the world toy market stood at $ US 78 billion (Guinaudeau, 2009). The toy market was experiencing a decline during the year 2007 – 2009 (Guinaudeau, 2009) placed in the figure below. As growth of toy market is dependent on macroeconomic outlook, world financial crisis (WFC) played an important role in the decline. Figure 3: World toy market (billion $) 2007-2009 Source: Guinaudeau, P., 2009. Toy Markets in the World. [Online] The NPD Group (2009 Edition) Available at: http://www.toyassociation.org/AM/PDFs/Trends/ToyMarkets09.pdf [Accessed 14 June 2011], p.34. 2.2.2 Market leaders As per a recent Bloomberg report, “Lego Wins Toy Market Share, Boosts 2010 Net Income to a Record” Lego “increased its share of the global toy market to 5.9 percent compared with 4.8 percent in 2009 and 3.6 percent the year before. The closely held company gained market share in all of its regions, with the U.S., the U.K., Russia and eastern Europe driving growth” (Christian Wienberg; Bloomberg, 2011). However, according to the NPD (2009) study, no commonalities were observed in the top selling items across the countries. Some manufacturers/brands such as Lego and Ben 10 were highly successful across all countries. Consumption in the other categories such as video games was strong. Toy units per selling items decreased from 2006 to 2008, where it was the lowest. Consumers purchased late in the season to take advantage of the discounts/promotions, which could be an issue with the price perception. Top 5 selling toy items ranked by value across various countries in the world is placed in the figure below. Figure 4: Top 5 selling toy items ranked by value across various countries in the world Source: Guinaudeau, P., 2009. Toy Markets in the World. [Online] The NPD Group (2009 Edition) Available at: http://www.toyassociation.org/AM/PDFs/Trends/ToyMarkets09.pdf [Accessed 14 June 2011], p.30. 2.2.3 Research problem From the review of the world toy market, several other important points were apparent, such as, there has been not much specific information available either on the global wooden toy producers and wooden toy consumers. Besides, production and consumption of wooden toy market is researched to a lesser extent. In addition, secondary information on customer attitude towards wooden toys is not adequately available. In view of the above and it greater significance for Playful Times Toys to commission a primary market research. Accordingly, the question for the market research is what is the attitude of potential consumers to traditional wooden toys? 2.2.4 Research objective The purpose of a market research project is to support management in pursuing towards consumer orientation, long-term profitability, achieving cross-functional perspective, keeping and building customer relationships and implementing total-quality management approach. It enables to transit from absolute ambiguity through uncertainty finally to complete certainty. The objective of this market research project is to acquire sufficient insight so that suitable promotional programme aimed at parents and grandparents can be developed to market traditional wooden toys. 2.3 Research methodology Market research enables achieving the objectives by identifying the problem; setting the parameters; defining terms, and understanding the nature of the research; creating the appropriate research design, selecting the most suitable research methodology and data collection technique; finalising an appropriate sampling procedure; collecting data; and processing, analysing, and presenting the data. The research methodology constitutes the study of research methods and their applicability to understand a particular phenomenon (Trochim, 1998). In this section, a brief discussion of the research methods available for market research and their applicability will be discussed along with the proposed research methodology for undertaking this research. 2.3.2 Research method According to Smith & Albaum (2010) two broad types of methodologies can be used to answer any research question, these are experimental research and non-experimental research. In the experimental research, extraneous variables can be controlled and manipulated by the intervention of the investigator, which is an advantage. On the other hand, the non-experimental research does not provide any liberty to control and manipulate the variables beyond that needed for purposes of measurement (Smith & Albaum, 2010). The particular research being commissioned to investigate the attitudes of potential customers in and around Hertfordshire, UK, which cannot be controlled; hence, the non-experimental research method would be more appropriate. 2.3.3 Research Design Smith & Albau (2010) defined the research design as the specific methods and procedures for acquiring the information needed for the research. It is a plan or organisational framework for doing the study and collecting the data, which is unique to a methodology. For the present research the research design proposed is placed in the figure below. Figure 5: Intended plan for the market research 2.3.4 Data collection Quantitative techniques Data collection can be undertaken by employing particular techniques to be used in solving the problems formulated and in carrying out the selected method (Smith & Albaum, 2010). A number of data collection techniques are available such as (1) quantitative survey and, (2) qualitative survey. The qualitative research is a widely used term for research that does not subject research findings to quantification or quantitative analysis (Proctor, 2005). It helps the marketer to understand the richness, depth and complexity of consumers (Malhotra and Birks, 2007). The qualitative analysis deals with understanding instead of measurement ( (Hague et al., 2004). Chisnall (2007) stated that the qualitative analysis seeks deeper understanding of factors that may influence people, and hence it is impressionistic rather than conclusive. In other words it does not count; it probes and is essentially subjective (Chisnall, 2007). Some of the qualitative data collection techniques include personal interviews, depth interviews, focus group discussions, projective technique, ethnography, observational techniques, telephone interviews, questionnaires. Some of the qualitative survey designs include face to face interviews – which may comprise of such specialised types as street interviews, shopping centres/ hall tests, in-home studies, and at-work studies. It may also have other specific approaches such as retail audits, telephone interviews, postal and e-mail surveys, consumer panels, tracking studies, observation, and mystery shopping. One drawback of the qualitative studies is that the interviewers necessarily has to be well trained ideally using the Interviewer Quality Control Scheme (IQCS) set up by the MRS. Besides, there should be thorough briefing for each research programme they work on. Quantitative techniques On the other hand, consistency and uniform approach is important for quantitative techniques, whereas, there is more flexibility in qualitative interviewing. Accuracy, speed and costs are three important considerations to be taken into account while deciding about the data collection techniques to be employed. The quantitative techniques are non-probing, can be counted, and use statistical analysis such as hypothesis testing, Chi-squared rest, analysis of variance and regression analysis to analyse the data. The essential differences between qualitative and quantitative research techniques are placed in the table below. Table 1: The essential differences between qualitative and quantitative reserch techniques All the available techniques under both qualitative and quantitative survey categories were studied. Of these, four techniques were found to be particularly useful for the study. These are (1) personal interviews. (2) focus group, and (3) questionnaire, and (4) internet surveys. Interviews An interview is a conversation initiated by the interviewer for the specific purpose of obtaining information that is relevant to the research. The interview is content specific and is focused by the interviewer on the research objectives and enables systematic description, prediction or explanation (Cohen and Manion). It is also defined as a conversation directed to a definite purpose other than satisfaction in the conversation itself (Chisnall, 2007). The interviews can be of several types such as personal interviews and group interviews or focus groups. Personal interviews A personal interview is a one-to-one interview which can have questions that are structured, semi-structured, or unstructured depending upon the depth and quality of information required to be collected. Focus groups Group interviews or focus groups technique comprise the process of obtaining possible ideas or solutions to a marketing problem from a group of respondents by discussing it. The emphasis in this method is on the results of group interaction when focused on a series of topics a discussion leader (or moderator, or facilitator) introduces (Kumar, Aaker and Day). The essential differences, advantages and disadvantages between personal interviews and focus groups are placed in the table below: Table 2: Essential differences between focus groups and individual interviews Questionnaire A questionnaire is a tool for gathering information and recording responses from informants in the light of the survey objectives. Internet surveys Online surveys through a questionnaire administered to random internet browsers and also to conveniently selected potential customers to respond to the questionnaire can also be undertaken by using Internet. The Instrument for quantitative data collection The instrument for collection of quantitative data will be based on several available measurement techniques such as Likert scale and will contain dichotomous and open- and close-ended questions. The questionnaire in both physical administration and Internet will be similar, and will have similar order. The questionnaire will primarily collect information on the attitude of the potential customers to wooden toys. The questionnaire will be based on the following product attributes. Figure 6: Customer attitude Source: http://www.aboutsurveys.com/wp-content/uploads/2007/05/image001.png While designing the questionnaire for the attitude survey to wooden toys, consideration due consideration to the following aspects will be given (1) the research objectives; (2) what information is needed; (3) what to measure and type of response format required; (4) issues to be included, and question content; (5) wording of the questions; (6) question sequence and question layout; (7) pretesting (piloting) and correction of problems; (8) the profile and number of the informants; (9) distribution and administration; (9) the method of editing, coding and analysis to be used: how, precisely, the data will be analysed; (10) the respondent's ability/willingness to access factual information; and (11) reminder/monitoring/follow up procedure to be adopted. The questionnaire will ensure that (1) each question is relevant; (2) each question generates information, not data; (3) the informant will be able to understand the question; (4) the question will really ask what the researcher thinks is required without making it ambiguous; (5) it will be easy for the respondent to answer the question; (6) it will have access to appropriate factual information; and finally (7) the respondent should be willing to answer. 2.3.5 Setting up the pilot A pilot research survey will be set up in Hertfordshire, where the Playful Times Toys is located. These three techniques were evaluated on the basis of speed, accuracy and cost, and it was decided that only two techniques will be used for collection of qualitative and quantitative data. These are administering semi structured interviews to a select few informants such as the sales channel partners; and administering a questionnaire to a relatively large number of potential customers, such as parents and grandparents of kids. The focus group technique was also considered, however, was rejected considering the limited resource available with the student researcher. Prior to the survey, the questionnaire will be pretested on a small group of informants. Also prior to the survey, informants will be adequately informed about the purpose of the survey. 2.3.5 Sampling As far as the potential customers of Playful Times Toys are concerned, the entire population in UK who are likely to purchase toys for their kids are considered as the population of the study. However, a representative sample that stands in place of the population need to be considered for the pilot study, so that conclusions can be drawn. The following approach to sampling will be adopted. Figure 7: Identifying the population sampling frame Identifying the population members - Sampling Frames Sampling frames of the potential customers comprising the parents and grandparents of the kids of various ages will be identified using up to date, complete, and affordable frames. Accordingly four sources for sampling frames will be used (1) the Electoral Register; (2) the Postcode Address File (PAF); (3) telephone directories; (4) subscriber / membership records of the acquired company; and (5) customer records of Playful Times Toys. Sampling type and approach Both probability and non-probability type sampling method were studied in detail. A detailed discussion on the various sampling methods and their suitability to various types of investigations are placed in the Appendix 1. Suitability of probability sampling techniques The probability sample, which is a member having a positive, calculable probability of being chosen. It is objective and the response rate is important. It is expensive. Three main types of probability sampling methods are available and include (1) simple random sampling, (2) stratified random sampling, and (3) cluster sampling. These three probability sampling types were considered and their suitability to this project was examined as follows: Table 3: Suitability of probability sampling method Sampling type Method Remarks Simple random sampling A procedure in which every possible sample of a certain size within a population has a known and equal probability of being chosen. Suitable. Stratified random sampling Segments of the population are identified; these segments are called strata. The strata might be something like Big companies and Little companies or Men and Women. We carry out separate simple random samples for each stratum and then pool the results. Strata are chosen so that groups that we think have similar characteristics are in the same stratum. (Similar characteristics with respect to the study aims.) Gives better estimates than simple random sample and ensures all parts of the population are represented in the sample. Suitable. Cluster sampling The sampling frame is made up of convenient administrative chunks CLUSTERS. Simple random sample within these clusters are taken. Suitable Suitability of Non-probability sample The non-probability sample is subjective and uses human judgment; therefore is subject to errors that cannot be measured. This type of sampling is cheaper than the random methods. Some of the non-probability sample method includes quota sampling, convenience sampling, and judgement sampling. These three probability sampling types were considered and their suitability to this project was examined as follows: Table 4: Suitability of non-probability sampling method Sampling type Method Remarks Quota sampling In this form of sampling, the interviewer instead of a list of names and addresses, receives a quota to fill This will instruct her to conduct a set number of interviews with people in various categories, e.g. six interviews with women aged under 35 in the AB social grades (Collins, ). Creating the cells for quota sampling is straightforward (resembles stratified random sampling) Step 1 The population of interest is divided into segments (cells) via certain based on control characteristics: e.g., age, sex, level of education. Step 2 A quota of units to be selected is determined by the judgement of the researcher. Step 3 Interviewers are instructed to fill quotas assigned to the cells. Unlike probability sampling, here the interviewer is given some freedom in selecting the sample units. Choice of variables in quota sampling Choice of quota variables is governed by such things as: • Up-to-dale available data being at hand • The data being applicable for setting quotas for a wide range of different geographic areas • Interviewer being able to classify people correctly on the quota variable, e.g. social class • Relevance, e.g., working and non-working in a convenience foods study Suitable. Convenient sampling No sample design. Similar to an interviewer questioning people as they meet them. Choice of the respondent is left entirely to the interviewer. Some methods, allow potential respondents to decide for themselves whether or nor to respond. E.g., • test new chocolate recipes on the staff in the chocolate factory; • heart-disease studies carried out on the nurses at the hospital; • psychological perception tests done by university research staff on university students. Will be suitable for both quantitative and qualitative survey. Judgement sampling Relies on sound judgment or expertise. Depends on selecting elements believed to be typical or representative of the population. Believed that errors of judgment in the selection will cancel each other out. Tend to be used more often in industrial market research than in consumer market research. Not suitable For the purpose of the study, the convenient sample procedure will be adopted for the qualitative survey, while cluster sampling technique will be employed. It is proposed that for the qualitative study, individual interview will be conducted with 15 wooden toys sales channel partners of the acquired company around Hertfordshire will be selected conveniently and interviewed. For the quantitative study, approximately, 500 respondents will be aimed to respond both through physical administration of the questionnaire and also administration through internet. 2.4 Data analysis Data analysis will be carried out for both qualitative and quantitative data. The qualitative data will be analysed by subjective and interpretative means. The quantitative data will be analysed using both descriptive and inferential statistical techniques. The descriptive statistics will include such techniques as mean, median and standard deviation, maxima and minima; while the inferential statistics will use such as hypothesis testing, Chi-square testing, analysis of variance, correlational studies, and regression analysis. On the basis of the findings, conclusions will be drawn and recommendations will be made. 2.5 Conclusion and recommendation In view of the product shift by Playful Times Toys from electronic teddy bear to traditional wooden toys, it is imperative that the company undertakes a primary research to understand the potential customers’ attitude to these types of toys. A pilot study will be undertaken to capture the attitude of a convenient sample in and around Hertfordshire, which will be representative of the population. Both qualitative and quantitative techniques will be used. In the qualitative categories, in depth interviews of about 25 existing channel partners of the acquired company will be undertaken using the semi-structured interview technique. In the quantitative category, questionnaires will be administered both physically and using internet to about 500 potential customers comprising parents and grandparents of kids. The qualitative data will be analysed using subjective, interpretative techniques. The quantitative data will be analysed using both descriptive and inferential statistical techniques such as hypothesis testing, Chi-square testing, analysis of variance, correlational studies, and regression analysis. On the basis of the findings, conclusions will be drawn and recommendations will be made. It is recommended that the proposal be approved. Bibliography Brace, I., 2004. Questionnaire Design. London : Kogan Page. Bradley, N., 2010. Marketing Research. Tools and Techniques. 2nd ed. Oxford : Oxford University Press. Chisnall, P., 2007. Marketing Research. 7th ed. London: McGraw-Hill Education. Christian Wienberg; Bloomberg, 2011. Lego Wins Toy Market Share, Boosts 2010 Net Income to a Record. [Online] Bllomberg L.P. (Newsreport: Mar 3, 2011 4:50 PM GMT) Available at: http://www.bloomberg.com/news/2011-03-03/lego-wins-toy-market-share-boosts-2010-net-income-to-a-record.html [Accessed 15 June 2011]. Guinaudeau, P., 2009. Toy Markets in the World. [Online] The NPD Group (2009 Edition) Available at: http://www.toyassociation.org/AM/PDFs/Trends/ToyMarkets09.pdf [Accessed 14 June 2011]. Hague, P., 1988. A Practical Guide to Market Research. [Online] Grosvenor House Publishing Ltd Available at: http://www.b2binternational.com/b2b-blog/ebook/practical-guide-to-market-research.pdf [Accessed 19 June 2011]. Hague, P., Hague, N. & Morgan, C.-A., 2004. Market Research in Practice. 1st ed. London: Kogan Page Ltd. Malhotra, N. & Birks, D., 2007. Marketing Research: An Applied Approach. 3rd ed. Pearson Education. Malhotra, N.K. & Dash, S., 2009. Marketing Reserch: An Applied Orientation. 5th ed. Dorling Kindersley Pvt. Ltd. Smith, S.M., 2007. How to Measure Customer Satisfaction: Satisfaction Measurement and Theory. [Online] (May 9th, 2007) Available at: http://www.aboutsurveys.com/how-to-measure-customer-satisfaction-satisfaction-measurement-and-theory/ [Accessed 19 June 2011]. Smith, S.M. & Albaum, G.S., 2010. An Introduction to Marketing Research. [Online] Qualtrics Available at: http://www.qualtrics.com/university/wp-content/uploads/2010/05/IntrotoMarketResearch.pdf [Accessed 19 June 2011]. Trochim, W.M.K., 1998. Research Methods. Electronic Edition ed. Trochim, William M.K. www.npd.com, 2011. Complete Category List. [Online] NPD Group, Inc. Available at: http://www.npd.com/corpServlet?nextpage=toys-complete-category_s.html [Accessed 14 June 2011]. Appendix 1 Sampling Techniques Identifying the population members - Sampling Frames Good frames are up to date, complete, and affordable, while poor frames are old, incomplete, and inappropriate. Common frames include the Electoral Register the Postcode Address File (PAF) Telephone directories Subscriber / membership records Customer records Sampling type and approach Probability sample The probability sample is a member having a positive, calculable probability of being chosen. It is objective and the response rate is important. It is expensive. Some of the probability sampling methods include simple random sampling, stratified random sampling, and cluster sampling. Simple random sampling A procedure in which every possible sample of a certain size within a population has a known and equal probability of being chosen. the lottery there is a population of 49 numbered balls, from which a simple random sample of six balls is taken. Things that make it a simple random sample: every member of the population has an equal chance of being included (6/49) in the sample. Stratified random sampling Segments of the population are identified; these segments are called strata. The strata might be something like Big companies and Little companies or Men and Women. We carry out separate simple random samples for each stratum and then pool the results. Strata are chosen so that groups that we think have similar characteristics are in the same stratum. (Similar characteristics with respect to the study aims.) Gives better estimates than simple random sample and ensures all parts of the population are represented in the sample. Cluster sampling The sampling frame is made up of convenient administrative chunks CLUSTERS. We take a simple random sample within these clusters. For example, sampling students on this module, there are six tutorial groups; the tutorial groups would be our clusters. We might randomly choose two out of the six tutorial groups. All or some of the units in the chosen cluster are studied. We could e.g., apply a questionnaire to the students, during their tutorials. Compare with trying to find one third of the students on the module by simple random sample. Studying schools we might use local education authorities as our clusters. Non-probability sample The non-probability sample is subjective and uses human judgment; therefore is subject to errors that cannot be measured. This type of sampling is cheaper than the random methods. Some of the non-probability sample method include quota sampling, convenience sampling, and judgement sampling. Quota sampling In this form of sampling, the interviewer instead of a list of names and addresses, receives a quota to fill This will instruct her to conduct a set number of interviews with people in various categories, e.g. six interviews with women aged under 35 in the AB social grades (Collins, ). Creating the cells for quota sampling is straightforward (resembles stratified random sampling) Step 1 The population of interest is divided into segments (cells) via certain based on control characteristics: e.g., age, sex, level of education. Step 2 A quota of units to be selected is determined by the judgement of the researcher. Step 3 Interviewers are instructed to fill quotas assigned to the cells. Unlike probability sampling, here the interviewer is given some freedom in selecting the sample units. Choice of variables in quota sampling Choice of quota variables is governed by such things as: Up-to-dale available data being at hand The data being applicable for setting quotas for a wide range of different geographic areas Interviewer being able to classify people correctly on the quota variable, e.g. social class Relevance, e.g., working and non-working in a convenience foods study Convenience sampling No sample design. Similar to an interviewer questioning people as they meet them. Choice of the respondent is left entirely to the interviewer. Some methods, allow potential respondents to decide for themselves whether or nor to respond. E.g., test new chocolate recipes on the staff in the chocolate factory; heart-disease studies carried out on the nurses at the hospital; psychological perception tests done by university research staff on university students. Judgment sampling Relies on sound judgment or expertise. Depends on selecting elements believed to be typical or representative of the population. Believed that errors of judgment in the selection will cancel each other out. Tend to be used more often in industrial market research than in consumer market research. Read More