Introduction and theoretical framework
Market research is a form of strategy employed by organizations to gather information about the organization’s customers or the market. It is an important aspect for any organization that is seeking to investigate some of the issues that face the organization.
Market research aids in getting vital information in order to identify and analyze some aspects of competition in the market. It also helps identify the needs of the customers in order to gain advantage over competitors (Colvin 23).
The ‘Films 4 You’ organization is an example of organization that requires conducting market research in order to understand the reasons for some of the issues arising. The organization is a small regional chain of DVD rental stores that has been faced with decline in turnover and other issues that are of concern to the management.
The organizations require investigating on the reasons why the numbers of customers have declined and possibly look for alternative solutions. This will also be studied to check whether it is the reason for the decline in turnover in the chain of stores.
Problem statement
The ‘Films 4 you’ organization has experienced a decline in turnover over a period of 24 months and is worried about the future of the organization. Some possible reasons have been suggested after some interviews were conducted on a small sample of the customers.
One of the reasons was that the competitors of the company had won the customers from them. They identified the online rental services as the major competitors. The second reason proposed as the possible reason is that the services offered by the company do not match the requirements and expectations of the customers.
Purpose of study
The purpose of this market research is to identify the reasons for the decline in customer numbers in the ‘Films 4 you’ company. A quantitative study will be conducted on the customers to get this information. They will be inquired to get information on the number of times they use rental services in order to determine the amount of competition from other organizations.
Hypotheses
Two hypotheses will be tested in order to get the results of the market research. The hypotheses include the following:
H0: The competition from the online rental services is the major reason for the decline in customer numbers in the ‘Film 4 you’ company.
H1: The competition from the online rental services is not the major reason for the decline in customer numbers in the ‘Film 4 you’ company.
H0: The services rendered by the company meet the customers’ expectations.
H1: The services rendered by the company do not meet the customers’ expectations.
Research design
Sampling
A suitable sample size will be established from the five shops in order to facilitate the research study. This will also be done over a specific period of time in order for the data collected to be relevant as a representative of the whole population of the consumers visiting the ‘Films 4 you’ chain of stores. The company could use a sample of 20 customers visiting each store. This could be done over a two-week period.
Questionnaire design
The best research design for this market research is the use of questionnaires. The questionnaires should focus on finding out the reasons why customers are renting the films. They could be used either for their own use or for the entertainment of their children.
The customers will also be inquired about how often they use online video rental services. The questionnaires should also retrieve information about how often they rent the films from their company since this information is not in the records.
Data collection
Data will be collected over a two-week period from the sample customers. This data will be useful for analysis of the situation. The questionnaires will be given out randomly to twenty customers visiting each store. This sampling should ensure that the males and females are equally represented. People from the different age categories should also be considered. This will eliminate any form of bias.
Limitations and assumptions
- The company has records of the addresses of the customers of the company but does not have records of the information on how often they rent films.
- It will be assumed that the customers will be selected randomly and the sample selected will represent the whole population of customers visiting the ‘Films 4 you’ company.
Significance of study
This study will be important for the ‘Films 4 you’ company since it will provide information on the causes of decreasing customer numbers and will help the company come up with initiatives to ensure that the number of customers is increased.
In case the reason is due to the quality of service, the company will increase the quality of its services. In case the reason is due to the stiff competition, the company will need to introduce incentives in order to attract customers. This will also help the company to decrease the turnover.
Works Cited
Colvin, Fred. Labor turnover, loyalty and output: A consideration of the trend of the times as shown by the results of war activities in the machine shops and elsewhere. New York: McGraw-Hill, 1919. Print.