Company and organizational background
The united bakery limited is a Californian based company that specializes in baking biscuits, cookies and cakes.Recently, the bakery’s management team headed by its five directors decided that it would be important for the company to venture into baking breads so that it can compete effectively with its competitors in the region. Following this decision, the company wishes to conduct a market research to establish whether it will be viable to bake breads (Beall, 2010). The bakery is based in Los Angeles County and it is a medium-sized bakery with eighty employees and twenty-five outlets. Over the ten years that the company has been in the bakery industry, it has made profit consistently that has been re-invested into the business.Some of the new business ventures in the company include dough, mixes and tortillas. Following these investments, the company has become a multi-million company and it wishes to expand its products by baking breads to capture a new market segment. Once the new market segment has been captured, the company is expected to grow by 15 percent. This will be a huge growth for a company that wishes to expand to other geographical regions in the near future.
The business issue at hand is that of establishing the type of bread that the company should produce for its target market as well as the price for that bread. Other minor issue relates to packaging and the number of breads the company should produce on daily basis to meet the market demand. Following these issues, the company wishes to conduct a market research before venturing into the new business. The issue affects the people that live in Los Angeles County and neighboring counties that the company has access to. The issue affects these people in the sense that they form the target market for the company.
Based on the above business issues, the following will be the research questions that need to be answered before the company starts baking breads.
First question: what are the factors that affect bread consumption in Los Angeles county and neighboring counties.
Second question: what would be the best price for the bread the company wishes to produce?
Third question: what attributes do bread consumers in Los Angeles and neighboring regions consider when buying breads?
Fourth question: which type of breads are the most appropriate for the target market?
The first question is important because certain factors have been known to affect the way people spend their money. Such factors might affect the way people living in Los Angeles consume breads. The second question is important because the price of bread might hinder some people living in the region from consuming breads thereby it would be important to consider it. The third question is important because some bread consumers in the region might be concerned about certain attributes such as packaging, brand and type of bread they buy. Lastly, the fourth question is important because different people prefer different types of bread and it would be important to know the type of bread that should be produced in large quantity. Once the above questions have been answered, it will be simple for the company to venture into baking breads (Marsden, & Littler, 1996).
Based on the above questions, the following will be the objectives of the research.
- To identify the factors that affect bread demand in the region.
- To identify the most probable price for the bread
- To identify the type of breads the company should produce
- To identify the attributes that bread consumers in the region consider when buying breads
Based on literature review, it has been hypothesized that age, income level, marital status, level of education and gender are likely to affect the price of the product. Based on this assumption, the following will be the hypotheses for the proposed study.
The above hypothesis indicates that none of the factors stated earlier on has any effect on the price of the product. If this will be true, it will mean that age, income level, marital status, level of education and gender do not affect the price of the product. The product in this case is the bread.
The above hypothesis indicates that at least one of the factors mentioned earlier on affect the price of the bread. If this will be true for the proposed study, it will mean that at least one of the factors namely age, income level, marital status, level of education and gender affect the price of bread. In this regard, the focus of the proposed study will be to establish whether any of these factors affect the price of bread in Los Angeles.
Once the factors that affect the price of bread in Los Angeles have been identified, it will be possible to consider these factors in determining the price of the company’s bread. The other research questions will be answered from the responses obtained directly from research participants. Accordingly, there is no need of developing hypotheses for those research questions.
In order to answer the above research questions, the researcherwill utilize the survey method. This will involve developing a set of research questions and typing them on pieces of paper. The typed research questions will be contained in a questionnaire that will be utilized to collect the data. The overall method will involve identifying potential research participants, approaching them and interviewing them using the questionnaire (Verschuren, 2003). Once research participants respond to research questions, the researcher will record the responses on the questionnaire and proceed to the next question. If need be, research participants will be issued with questionnaires so that they can respond to research questions easily. After the process of collecting the data is over, the questionnaires will be gathered together. The open ended questions will be coded and the responses entered into Excel program. The qualitative questions that will be contained on the questionnaire will be analyzed separately for accuracy purposes.
Given that the company is based in Los Angeles and its new business venture will affect people living in Los Angeles County and a few neighboring counties, then research will take place in the affected counties. This means that the study will concentrate on Los Angeles County and the few counties that will have distribution channels for the bread. The extent of the other counties will depend on the far the company intends to distribute its breads once it bakes them. Consequently, the areas that will not be distributed with the bread will be excluded from the study.
The sample size for the proposed study will be calculated using the following formula.
Where M.E will be the preferred margin error
Z will be the z-score for the preferred confidence interval
P will be the p value from literature review
n will be the sample size to be determined (Griffith, 2013)
The researcher with the help of three people will conduct the research. The three people in question will be responsible for collecting the data from the field. After collecting the data, the three people will also be responsible for coding the data and entering it into Excel program. The researcher will oversee the entire exercise of collecting and entering the data into Excel program. Furthermore, the researcher will be responsible for analyzing the data once it has been entered into the Excel program.
The most potential ethical issue associated with the proposed study relates to recruitment of research participants. This will be an ethical issue because inappropriate recruitment of research participants will automatically affect the outcomes of the study in the sense that it will provide a distorted picture of the market.
The following is a survey with the research questions that will be utilized to collect the data.
- What is your name? (Optional) ______________
- What is your e-mail address? ______________
- What is your gender?
- What is your age?
- Above 53
- What is your marital status?
- What is your highest level of education?
- Primary education
- Secondary education
- Based on the following income levels, what is your income level?
- Below $300
- Above 1500
- Do you buy bread?
- If yes, how often do you buy it? (If no, terminate the interview by thanking the respondent).
- Every day
- 2-3 times a week
- 4-6 times a week
- Which is your favorite type of bread?
- White bread
- Brown bread
- Milk bread
- Others (specify)
- What factor(s) do you consider when buying bread?
- Others (specify)
- Would you kindly arrange the above factors in rank starting with the most important one to you?
- Does the price of bread matter to you?
- How does the price of bread matter to you? Explain
- How would you explain the breads in the market today?
- What would you expect to improve in these breads?
Rationale for including the above questions
The first question is not intended to gather much from research participants except their names for reference purpose as well as act as a way of introducing research participants into the study. For this reason, it has been marked as optional meaning that research participants might fill it or leave it blank. The second question is intended to obtain e-mail addresses from research participants so that in case of ambiguity they can be contacted for clarification purposes. The third question is intended to collect information regarding the gender of research participants. The type of scale used in this question is nominal scale because being a male or female does not make one better than the other even if it might affect the outcomes of the study. Furthermore, the ranking of the responses can be interchanged without affecting the outcomes of the study. The purpose of including this research question in the study is to find out whether gender has any significant effect on the product and its price. If it has any effect on the product, it will be factored in the final decision, and vice versa.
The fourth question deal with the age of research participants and it is intended to capture the age group of research participants. The type of scale used in this question is both interval and ordinal scale. Ordinal in the sense that people aged between 18 and 23 years are different from those aged between 24 and 29 years and so on. The scale is interval in the sense that it covers a specified range. The purpose of including this question in the study is to find out whether age has any significant effect on the product and its price. The fifth question deal with the marital status of research question. It has been hypothesized that marital status of research participants is likely to affect the marketing of the product. The type of scale used in this question is nominal scale because being single or married does not make one better than the other even if it might affect the outcomes of the study. The purpose of including the question is to establish the way one’s marital status might affect the marketing of the product.
The sixth question deal with the level of education of research participants. This question is intended to capture the level of education of research participants with an aim of establishing whether this factor would have any significant effect on the outcomes of the study. The type of scale used in this question is ordinal scale because being a graduate is quite different from being a certificate holder and so on.Consequently, order is important in this question (Cavusgil, 2009). The question will help the researcher to establish whether the level of education has any effect on the product thereby help in making the final decision. The seventh question deals with the income level of research participants. The purpose of including this question in the study is to establish the effect that it is likely to have on research participants’ spending. It has been hypothesized that researchers’ income are likely to affect their spending behaviors. Based on this hypothesis, it would be important to find out how it affects research participants’ behavior on purchasing breads. The type of scale used in this question is ratio scale.
The eighth question deals directly with the product with an aim of establishing whether research participants buy bread or not. Only two options are possible for this question. Once research participants respond to this question, it will be possible to establish whether research participants should proceed with the interview or it should be terminated. If research participants respond to this question with yes as the answer, the researcher should proceed with the interview. On the contrary, if the research responds with no as the answer, the researcher should terminate the interview with a vote of thanks to the respondent. The type of scale for this question is nominal scale. The ninth question deals with the number of times the respondent buys bread and its purpose will be to establish the number of times the respondents are likely to purchase the company’s product. The type of scale used in this question, tenth, eleventh and thirteenth question is nominal scale because order is of no importance in these questions. The last three questions are qualitative in nature and they are intended to capture certain issues from research participants thereby no response has been provided for those questions.
Looking at the way the research questions have been formulated as well as the design of the study, it is clear that there will be one dependent variable and a number of independent variables. The dependent variable in this case will be the price of the bread whereas the independent variables will include age, marital status, level of education and income level of the research participants. Given that some variables will be discrete whereas others will be continuous, then the most probable statistical test for the study will be the multiple regressions. This test will try to establish the relationship between product’s price and the level of education, income, age and marital status of the research participants. Once the relationship has been established, it will be possible for the company to decide the most probable price of the bread. In addition, it will be possible to determine the type of bread the company should produce as well as the packaging method to utilize.
The main challenge for the proposed study will be that of recruiting the right research participants. Given that it might not be possible to identify these people easily, this will be the major shortcoming for the proposed study. The other shortcoming for the proposed study will be that of obtaining the right p value for determining the sample size. On the other hand, the ethical concern will be to ensure that data clerks will not influence the way research participants respond to research questions as well as ensuring that they capture the right responses.
In terms of handling these challenges, the researcher will train data clerks to desist from changing responses from research participants. In addition, the researcher will encourage data clerks to capture responses from research participants the way they will be. With regard to recruiting research participants, the researcher will determine the number of people in each age group that should participate in the study. As for the p value, the researcher will try to get this value from literature review. If not possible to get it from literature review, the researcher will estimate it fairly.
Beall, A. (2010). Strategic market research: A guide to conducting research that drives businesses. New York: iUniverse.
Cavusgil, S. (2009). Conducting market research for international business. New York, NY: Business Expert Press.
Griffith, D. (2013). Establishing qualitative geographic sample size in the presence of spatial autocorrelation. Annals of the association of American geographers, 103(5), 1107-1122.
Marsden, D., & Littler, D. (1996). Evaluating alternative research paradigms: a market-oriented framework. Journal of marketing management, 12, 645-655.
Verschuren, P. (2003). Case study as a research strategy: some ambiguities and opportunities. Social research methodology, 6(2), 121-139.