Case Study 1
GoodBuy is a large big box retailer that has a track record of success offering popular brands of electronics such as Samsung, Sony, LG, and HP. Although the bulk of their sales revenue comes from big-ticket items like computers, big-screen HD televisions, and smartphones (for which they receive supplementary revenue for selling contracts to data suppliers), the margin is higher for small- ticket items (under $100) that include accessories for the other electronics. Many of these accessories are unplanned purchases that customers discover in the store.They sell a disproportionate portion of accessories in-store as opposed to online as customers are able to actually try a lot of them out in the store or have the product demonstrated by a service associate. Management believes one strategy for increasing sales of these items is through more purchases from loyal customers. Thus, the overall decision statement expressed to the research team is:
- In what ways can we allocate resources to consistently encourage our current customers to spend more time in a GoodBuy store and increase purchases of valuable accessories?
In particular, they have approximately $500K allocated per store that can be directed toward enhancing the atmosphere by creating more spacious and luxurious shopping space.This would include leasing out space to Samsung and Apple to operate their own stores within each store. In addition,”living rooms” would allow shoppers to experience all the store’s major products in a home-like environment. Alternatively, they could direct this investment toward more multimedia promotion about the low prices at GoodBuy.
After some discussion between the research team and GoodBuy management, the researchers mention that they recently conducted a survey of shoppers that contains relevant data. They translate the decision statement into research questions related to:
- How does the store atmosphere affect customer loyalty?
- Do customers bond with other customers in the store and does this lead to positive reactions among consumers?
In the prospectus for the research, the lead researcher describes the situation background as follows:
The other shoppers are a prominent part of the shopping atmosphere. As shoppers see others who share curiosity about the same sorts of products, they interact and enhance the shopping atmosphere. We know from previous research across other retail types that consumers enjoy shopping with others that they view as similar to themselves. Thus, as a consumer’s attitude toward the other shoppers improves, so does their attitude of the shopping atmosphere. Both of these are factors known to increase customer satisfaction, which is a conduit to increased customer loyalty.
The lead researcher comes to you and asks you to serve as the analyst for this project. Using the data available (refer to the excel file attached), she encourages you to use the scales available to measure the impression of other Good-Buy shoppers (ATS1-ATS4) and the favorableness of the GoodBuy atmosphere (ATM1-ATM4), along with the customer satisfaction (CSD1-CSD5) and loyalty scales (LOY1-LOY4), to test the theory above using multivariate data analysis.Your job is to supply a brief report to her that can be used as a key part of the presentation that will go to GoodBuy management.
Use the following questions to help shape your report:
For data please refer to this link:
- Are the data appropriate for multiple regression analysis? If so, what technique/s would you suggest as appropriate and why?
- The researcher suggests that you first use only half of the data to do an initial analysis (split the entire sample randomly into two halves of 200 respondents each). Do you think that is a good idea? Explain.