Determination of Coffee Shop Franchise Business in Western Australia - Essay Example

?Marketing research proposal for a study about determination of Coffee Shop Franchisee Business in Western Australia Problem ment Management Decision Problem The client is a leading Coffee store brand of West Australia. It has both own and franchisee stores in the region. It already has a considerable presence in the region. The percentage of Franchisee stores is relatively low. However, lately it has been facing stiff competition from stand alone coffee stores in almost all existing locations. As part of its strategy to establish itself as a leading chain of stores and at the same time maintain the profitability, it plans to open new stores in the region on the franchisee model. The client management feels that the strategy to open franchisee stores in the upcoming suburban areas with considerable young population will be appropriate. However they are not sure whether it will do well. Other coffee bars have already come up in the said areas. However, it is too early to say whether they too will be successful. The client wants to gauge the demand for their products which is pizza and coffee with and assortment of snacks. They would like to find the demand for their brand of stores and the way people in the region perceive it. It wants to know whether enough opportunity for franchising exists in the region. To know whether there is enough possibility for the brand to open and run a new store in every area identified for the same in the next two years. Apart from the immediate demand, the client wants to know whether considerable business opportunity for a relatively sustainable span of time exists or not. Research problem As mentioned above, the client wants to measure the demand for its franchisee stores in the identified areas. They have hired us for the purpose and expect us to present the report within a span of three months. The client problem warrants a thorough study of the market, with measurable outcomes. In order to accomplish the task, a study shall be undertaken to understand the underlying factors for current state of the demand and its future ramifications for the coffee industry in general. The Coffee chain store brands need to be subject to a comparative analysis and the competition from stand alone coffee stores needs to be gauged. A thorough analysis of the consumer trends and preferences towards coffee consumption needs to be done with respect to the locations identified by the client for the purpose. The locations shall be subject to separate inspection on measurable parameters which will eventually contribute to the measurement of the location wise demand for the client coffee and snacks store brand. The study will also seek to establish the possibility of enough franchisee ventures at the rate as mentioned by the client. The study will not only seek to measure the current demand for the Clients’ stores but also enough demand for future. The study will analyse the historical sales figures and consumer preferences. In combination with the survey of the consumer tastes it will try and arrive at sales projections for the next five years for each proposed store location. The projections will be categorized for different items on the Client coffee store menu and will suggest ways to maximize profits by better menu planning. Research Objectives Thus, based on the discussion of the research problem, the study will be directed at fulfilling the following salient research objectives: Measurement of current demand for coffee and snack stores in the region (O1) Measurement of current demand for client brand of stores in the locations specified by the client (O2). Measurement of the current and future demand for the client’s brand of stores for next five years, based on the Franchisee model in the specified locations (O3) The study shall first seek to do a contextual scan of the above objectives and will check the validity of the objectives against the Client’s research problem. The scan shall be performed with the help of the pre study feedbacks and interactions with the client representatives for the purpose. The objectives shall be assessed for accuracy using the Delphi Technique (Hsu and Sanford 2007). The above objectives shall be further divided into subordinate objectives for enhanced focus at each aspect of the research. The subordinate objectives shall be as follows: O 1.1 Assessment of the current coffee preferences of the population in the defined region. O 1.2 Assessment of the current preferences of the snacks that go with coffee for the population in the defined region. O 1.3 Demographic evaluation of the current preferences for coffee and snacks in the defined region. O2.1 Assessment of the current scenario of the Coffee and snacks stores industry in the region. O2.2 Assessment of the specific demand for Client’s brand of Coffee stores promising a given service and experience as part of the whole offering. O3.1 Assessment of the current demand for Franchisee stores similar to the client brand for the specified locations O3.2 Assessment of the future demand with sales projections for next five years for franchisee stores similar to the client brand for the specified locations. Qualitative Research The qualitative research shall be conducted to gain sufficient insights into the research topic so that a formal survey could be conducted on a solid ground. The regional coffee industry shall be assessed find answers to the following research questions: How does the present scenario of the coffee industry favour expansion of a retail coffee and snacks store in the given region? How do the Customer preferences in the region align with the brand of coffee and snacks store experience that the client promotes? How does the competition from the stand alone stores affect the coffee and snack store business of the client? Why does a survey of the Specific locations for the expansion of the client chain of stores should focus on the demographic aspects of the population the locations? Survey of Literature In order to achieve the objectives of the qualitative research and provide a valid basis for quantitative survey, a thorough review of relevant information on the subject relevant to the objectives of the study shall be conducted. Various industrial and news publications in the form of books, journals and articles, news features both online and offline shall be referred to. The review will help establish a valid ground for the direction of research and will serve as a guide for finding the right perspective and context for the study. The review shall seek to build upon the existing trends in the coffee industry and the coffee store franchising business. It will seek to uncover the underlying premises of demand measurement for the coffee industry in the defined region. The review shall also be used as one of the basis for assessing the accuracy and validity of the research objectives and the objectives might be reviewed based on the information review. Focus Group Based on the information review and the research objectives, different demographic groups shall be invited to discussion sessions in the presence of a moderator. The Group shall discuss the Ways and means of finding out whether the coffee and snacks business market would respond favorably to opening up new stores in the region. The Focus group shall be drawn from the sample population. The Group size will be 15 to 20 participants. The issues, concerns, ideas and opinions of the group shall be taken into account while finally arriving at the sample survey and its specific objectives. Franchising as a business opportunity for the group of people will also be discussed and the experiences and views of the group members, the arguments, counter arguments and various suggestions will be used to gain valuable insights into the issues concerning the business marketing scenarios concerning the Coffee store business (Escalada and Heong 2012). Objectives and information needs of the Focus group To understand how the Coffee drinking habits are changing and how they are related to the coffee store business. To know as to how the Franchising business is perceived in the defined region To understand the nature of demand for coffee shop services and the level of service expected by the people in the said region Themes of Discussion: a. Identification of demographic groups among whom the coffee drinking habits are relatively more popular b. Identification of the consumer tastes and preferences in the specified locations with respect to Coffee and snacks. c. Perception of a Franchisee business as an opportunity. Perception and likelihood of the success of the client brand of coffee and snacks stores. In depth Interview In order to gain insights on certain contentious or controversial issues, for example those related to ethnic preferences and tastes with respect to the coffee drinking habits, in depth interviews shall be conducted for a limited number of participants. This will further enhance the understanding of the issues and provide a better basis for conducting a formal survey. The in depth interview will be used also as a means of pretesting the survey questionnaire, later mentioned in this report. The target informants for the interviews shall be chosen using the convenience sampling method. This will help gain important exploratory information on the given issues in a relatively inexpensive way and will be more time efficient. The in depth interview will be able to enquire and understand the reasons behind the opinions and views of the issues by informants in the study. The confidential environment in which the in depth interview will be conducted will give enough information for the survey design. They will also help us decide the content and direction of the survey. The specific objectives and research questions for the in depth interviews will be as follows: How does the informant think the new stores in the proposed locations will meet the unmet demand for the client brand of coffee shop or store services? Why does the client store need more stores to gain an edge over the stand alone stores? Survey Research Plan Based upon the Findings of the qualitative research, and the research objectives as mentioned above, a survey of a sample population shall be carried out. The survey shall be done with the help of structured questionnaires which will be administered upon the respondents from the sample population. The research plan is based on the research problem as described above, which in turn stems from the management decision problem. The study area of the study shall be the region of Western Australia and the samples will be drawn from the proposed store locations as specified by the client. The client will be communicated the progress of the research work at the completion of each step of the study and the final report shall be handed over to the client upon the completion of the project. The survey shall be undertaken as a separate project and the schedule for the same is mentioned below in the schedule section of this proposal. However, prior to actually starting the project, a pilot survey will be carried with the questionnaire. This will be done to prevent any bottlenecks at the time of actual survey. A convenient sample of twenty respondents from the study areas shall be chosen for the pilot survey. The pilot survey will be used in conjunction with the results of the qualitative research that is focus group discussion and the in depth interviews to arrive at the benchmarks against which the progress of the survey shall be measured. Hypotheses or Assumptions of the study: The study shall attempt to measure the accuracy or validity of the statement that the following statement(S): There exists significant demand for the client’s brand of coffee and snacks stores in the four locations specified by the client such that a store can be added each year for next three years to the said locations The above statement is based on the following assumptions or hypotheses which are based on the research objectives as mentioned above: There exists sufficient current demand for coffee and snack stores in the specified region (H1) There exists sufficient current demand for client brand of stores in the locations specified by the client (H2) There exists sufficient current and future demand for the client’s brand of stores for next five years, based on the Franchisee model in the specified locations (H3) Sampling Sample population The research shall be carried out in the western Australian region and the four cities as mentioned by the client have been chosen for sampling. Sample size The sample size for the study shall be 100 Sampling method The sampling method used will be Non probability random sampling. The unit sample will be clusters of the people chosen one each from the four locations specified by the client. The respondents from each city will be chosen randomly. Thus the effective sample size will be 400. Data Collection Questionnaire design and Tests A survey will be made personally with the help of structured questionnaires. To finalize the questionnaire, a panel of experts from the relevant field will be consulted and a pilot study will be done to evaluate the effectiveness of the questionnaire. If required, changes will accordingly be incorporated. Before finally administering the questionnaire, its reliability and validity will be tested. Reliability will be found using the ‘Test-retest’ method. For validity, the questionnaire will be rated by four judges out of the experts involved in the process. Pearson’s product moment correlation coefficient will be computed between the ratings of the experts. Method of Collection and Recording Intro Letter An intro email shall be created (see Appendix) to elicit a prompt and accurate response from the sample respondents and sent to them as text covering letter with attached questionnaire. This will ensure a higher response rate for the survey (Survey Monkey 2012). Analysis and Interpretation: A system of scoring based on the weightages assigned to the responses will be adopted. These scores will be subjected to statistical tools and the results interpreted thereof. Suitable statistical techniques will be employed for analysis and treatment of the research data. Each item on the questionnaire has been defined to have an equitable relationship with the respective dimension it represents. Each dimension in turn has been defined to have an equitable relationship with the entity (S) as mentioned above. The questionnaire shall seek to measure the following dimensions D1 to D3 which have been derived from hypotheses H1 to H3. Awareness/understanding of sufficient current demand for coffee and snack stores in the specified region (D1) Endorsement of the fact that there exists sufficient current demand for client brand of stores in the locations specified by the client (D2) Awareness/Endorsement of the fact that there exists sufficient current and future demand for the client’s brand of stores for next five years, based on the Franchisee model in the specified locations (D3) The scores will be assigned to responses by respondents as follows: 5=Almost always True 4=Usually True 3=Not Sure 2=Sometimes True 1=Not at all true The weighted mean scores of all the 400 respondents will be calculated to for each dimension and a final mean score representing a measure of the entity (S) will be arrived at. This measure or score will represent the overall endorsement/awareness of the entity (S) as defined above and help us understand the validity of the theoretical proposition of the study. Statistical tests The scores as mentioned above will be subject to the following tests: The respondents will be categorized on the basis of gender that is male (M) and female (F) and three age groups as follows: A1 (20-30 years) A2 (31-40 years) A3 (41-50 years) The Mean (M) and Standard Deviation (S.D.) will be calculated for the above categories as well for each item of the questionnaire as well as for each dimension. Also, the percentage composition of the various demographic categories among the respondents will be calculated. The mean scores will be subject to the statistical tests measuring the analysis of variance. The values will be subject to t-test and Duncan’s mean test or f-test. The ‘t’ and ‘f’ values will be calculated for the following categories alongside the (M) and (S.D). 1. Comparisons of dimensions of (S) between male and female respondents, significant at .01 level wherein t values will be calculated. 2. Comparison of dimensions D1 to D3 among the three age categories- A1 to A3 wherein Duncan’s mean values or ‘F’ value at .01 significance level shall be calculated. 3. Coefficient of Correlation among the dimensions D1 to D3 shall be calculated. Ethical considerations The study shall be a methodical, standardized and unbiased piece of work. The research shall be conducted in an honest manner and the results will be presented accurately. The researchers involved will be bound by a set of rules for conduct while carrying out the research. Also, since the research firm will be representing the client organization during the course of the research, it will take utmost care in ensuring that the research process takes into account the ethical concerns of the client. Code of conduct In order to preserve the image of both our firm and the client firm, besides discharging our social and legal responsibilities, we shall observe a code of conduct. Besides, we will attempt to reassure the general public and any stakeholders in the process that the research being carried out will be in the beneficial to the interested parties and also in consonance with the principles of social good(MRS 1012). Towards, the same end, the research process will bind the researchers by a code of conduct which is as follows: 1. The research work shall be carried out will conform to all the regional, national and international laws, wherever applicable. 2. The researchers will behave in a socially responsible manner and will not do anything that damages the reputation of the agency, specific survey or the market research process in general. 3. The researchers will take special care while interacting with socially and demographically sensitive and vulnerable groups or members of the society like the senior citizens or the female gender or children. 4. Absolute transparency as to the nature and purpose of the research process shall be observed while obtaining the commitment of the respondents for participation in the survey. 5. The researchers will never allow any personal data to be used for any purpose other than the specific survey. The researchers will confirm to the ethical considerations and concerns of the client and will ensure that the research work meets the requisite standards of quality, accuracy and objectivity. Privacy The information collected by us (xyz agency) shall be collected in accordance with relevant and applicable laws. The information shall be allowed access to for processing and use only by us (xyz agency). The participation of respondents in the research/survey is purely voluntary and they may op out of the process any time they wish to. In such cases, the participation shall be kept confidential. All the personal information obtained shall never be disclosed to any client except for the specific research purposes as stipulated by relevant law. We are very strict at protecting the privacy of the young and the information obtained about people younger than age 13 shall be kept strictly confidential. Confidentiality As part of the proposal, we are obliged to maintain confidentiality in all our dealings with the client as well as the general public and expect the same from the client. For the same, a confidentiality agreement has been drafted (See appendix). The client is required to read and return a copy of the signed agreement. This is prerequisite for starting the research work on our part (WMMA 2012). Consent Form In order to carry out the research, we will need to have a written consent from the respondents both for legal as well as public purposes. A consent form is enclosed herewith (See Appendix) for the same. A signed copy of the same shall be mailed back to us as well before the research can be undertaken (Courser 2012). Timetable Based on our research experience and the research problem at hand we have arrived at a time estimate for the research which is three months. The same has already been communicated to the client. We present a detailed timetable for the same in order to give a clear idea of the various stages of the research as well as the time estimates for each stage. This will help the client to have a closer look at the research progress. Based on project management principles, the research shall be carried out in a time bound and phased manner. The proposed study shall be carried out as per the timetable in the appendix section. Budget The budget for the project has been estimated to be $…… +/- 10 percent. The costs are payable on as is basis. The wages mentioned are as per the wages and labor rules as applicable in the specified locations of Western Australia. The estimate is based on the estimations of monetary costs of the research project under the following heads: Material costs a. Print and Stationary and Internet usage b. Logistics and Transportation Wages a. Wages to the researchers both fulltime and part time b. Transportation and refreshment for the researchers while in field. Incentives a. Incentives to the survey respondents in the form of gift vouchers or cash incentives and copies of survey. b. Incentives to researchers in the form of monetary and gift rewards for better performance. References Hsu C.C. and Sanford B.A. (2007) The Delphi technique: Making Sense of Consensus. Accessed on April 12 2012 Escalada M. and Heong K.L.(2012) Focus Group Discussion. Accessed on April, 15, 2012 Survey Monkey (2012) “How do I create a cover page or Introduction” Accessed on April17, 2012 MRS (2012) The Market research Society Code of Conduct. Accessed on April 14, 2012 WMMA (2012) Market research Confidentiality Agreement.Accessed on April 16, 2012 Courser M., (2012) Consent Form. SAGE research methods. Accessed on April 15, 2012 Appendices Appendix 1 Questionnaire: Please assess by rating each statement using the 5-point scale. Give your assessment by deleting the other numbers, leave the appropriate number or put a tick mark on the appropriate answer. 5= Almost always True. 4= Usually True. 3= Not Sure. 2= sometimes True. 1 = Not at all True. Awareness/understanding of sufficient current demand for coffee and snack stores in the specified region (D1) i. There is an increasing trend amongst the people in your city towards drinking coffee. ii. The said trend is more prevalent amongst the people aged between 14 to 24 years. iii. You usually drop in for coffee at coffee shops at least twice a week. iv. The snacks served with coffee sometimes substitute for a one of the daily meals at least once a week. v. The coffee served in the stores in your city is preferred by you upon the coffee you consume at home. vi. You would like to take friends out for coffee at local stores at least once a week. Endorsement of the fact that there exists sufficient current demand for client brand of stores in the locations specified by the client (D2) i. You perceive the client stores in other cities as favorable places to drink coffee. ii. The client stores would be the best places to take your friends for a short meeting or snack party. iii. There exists a significant acceptance of the kind of service the client stores provide. iv. There is better way to manage the coffee stores currently operating in your location. v. The decor of client stores as shown to you in the promotional material is something you would prefer over the one that belongs to the existing stores. vi. The menu as shown in the introductory material is distinctly superior to the existing coffee shops. vii. You have a positive opinion of the service of the client brand of stores in the existing locations based upon feedback from friends and acquaintances. Awareness/Endorsement of the fact that there exists sufficient current and future demand for the client’s brand of stores for next five years, based on the Franchisee model in the specified locations (D3) i. Given an opportunity and assuming you had enough resources you would like to go for opening franchisee store for client brand of coffee shop. ii. The opportunity for opening up a franchisee store in your city will be a viable option. iii. The Franchisee business for coffee shop will be a sustainable business for at least next five to ten years. iv. You perceive Coffee shop business to be a profitable venture based upon an objective assessment of the views and feedbacks as well trends in your locality. v. The best opportunity in terms of the Franchisee business comes from the coffee and snacks business. vi. The Franchisee business is considered to be the upcoming model for business success in recent times. The Locations (specified by the client) have a great potential for success in next five years for coffee shop Franchisee business. Appendix 2 Market Research Confidentiality Agreement In consideration of the mutual understanding arrived at under this agreement, towards mutual good consideration, the client (Client name) and the marketing research agency (xyz agency) (name)___________________________________ on behalf of client company (company (name) ___________________________ on behalf of marketing research agency, agree as follows: . 1. The Market Research information provided by Marketing research agency(name) under this agreement is intended for the client company only is meant for use only within the company that the client’ owns. The client company agrees to use the Survey information for and inside their company and solely for their own company purposes. 2. The client company agrees that it will disclose the survey research report in part or full to any other party outside of the company’s own employees and also not permit any outside party to copy the report in any way. 3. The client company shall observe the requisite precautions in the form of physical, administrative and any other measures as necessary to prevent any unauthorized use or disclosure of this report. This agreement and any dispute arising under this Agreement will be subject to the jurisdiction of laws and courts as applicable in Western Australian state of Queensland Client representative signature: ___________________________________ Designation: ___________________________________ Email Address ____________________________ Date: _______________________________________________ Appendix 3 INFORMED CONSENT FOR PARTICIPATION IN RESEARCH STUDY Survey Title _____________________________________________________________________ Survey conducted by : XYZ Market research agency ____,on behalf of (client company name) _______________, We request that before agreeing to participate in this research study, please do read the following explanation of this study. This statement describes the purpose, benefits, risks, and precautions involved in the study. We do not guarantee or assure anything as to the results of the study. Purpose The purpose of the study is to identify and assess the possibilities of opening up Coffee franchisee stores in the following four locations of Western Australia (as specified by the client). The research will serve as an instrument for the client company to ascertain whether there exists a significant demand for their brand of coffee stores and also the latest trends habits with respect to coffee drinking. They also seek to assess the possibility of Franchising the business to various parities and want an estimation of the franchising possibilities Benefits The study will benefit not only the client but will benefit the population in general in the specified areas as more franchisees will bring benefits to the local economy in terms of job opportunities and added facilities. On a personal front, the respondents or participants will get a summarized copy of the report of the study. Risks This study just like any other despite our best efforts runs the risk of being sabotaged by certain vested interests. The market competition might prompt certain unethical elements of society to gain unlawful access to the information contained therein. Precautions The study does not guarantee the establishment of said franchisee ventures, thus without prejudice to any unrealistic expectations which should be laid to rest at the very outset. Also, we caution the respondents to themselves be careful about the information they volunteer and try and be objective as possible. Name of the participant: Email address: Signature: Appendix 4 Sl no. Phase Task Duration/week Preceded by 1 Initiation Week 1 - a. Pre survey meeting - b. Delivering the Marketing research proposal to client. 1a. c. Obtaining the signed copy of confidentiality agreement and consent form. 1b 2 Planning Week 1,2 a. Planning the research time, cost and task details of the research 1b,1c b. Planning the manpower and task allocation 2a c. Planning the meetings, reviews and project progress feedback sessions 2b 3 Execution of Research Plan Week 2,3,4 a. Database Collection and sampling for Focus group discussion 2a b. Selection of Respondents for in depth interview 3a c. Execution of Focus Group Discussion 3b d. Execution of in depth Interview 3b, 3c e. Interpretation of Focus Group Discussion 3d f. Interpretation of in depth interview Review of research objectives based on Qualitative research 3d g. Review of the questionnaire for survey based on qualitative research 3f h. Sampling and selection of respondents for structured survey 3g I. Mailing the introduction letter and questionnaire to the sample respondents 3i j. Receipt of responses and collection of data from the respondents 3j 4 Analysis and Interpretation of the survey Data Week 4, 5 3j 5 Market Survey Report writing and Presentation Week 5, 6 3j,4 Appendix 5 Dear Mr. / Ms. We invite you to be part of the survey we are doing about the possibilities of opening up Coffee franchisee stores in the following four locations of western Australia (as specified by the client). Our client (Client name) has assigned us the responsibility to carry out the survey on their behalf. We got your email address from the local online directory of your area. Attached herewith, is a copy of the questionnaire, which is to be duly filled and mailed back at the email id as mentioned at the bottom of this message. The instructions for filling up the questionnaire are mentioned in the body of the The data and information collected from you shall be kept anonymous and confidential and will only be used purely for research purposes. Under no circumstances, the personal information provided therein shall be made public or shared with anyone without your written consent. Moreover, the survey will use the data for analysis and will present the information in a highly summarized form. The survey shall take approximately two to three months to complete. We encourage you to respond as soon as possible so that the survey shall be completed in time. We will be glad to send you a copy of the survey, once it is done. Also, in case you have any queries regarding the survey or questionnaire format, please get back to us at the phone number or email id mentioned below Thank you. Best regards, Survey Coordinator, Xyz market research agency, (Address) (Email id) (Phone number) Read More