BUS 562 Marketing Research The assignment for this

BUS 562 Marketing Research The assignment for this report was to analyze the results of a survey (which was developed by the entire class) of the food habits of MBA students. Furthermore, we had to evaluate the possibility of a opening a new type of restaurant (or other type of food source) close to the NCSU College of Management. 1

BUS 562 Marketing Research Analysis of Preferences, Habits and Alterative Food Sources for North Carolina State University Evening MBA Students BUS 562 Seth Palmer Denise Spath Dan Wolf 2

BUS 562 Marketing Research Executive Summary. . . Introduction/Background. . Map of Food Establishments. Research Method. . . Objectives and Hypotheses. . Descriptive Interpretations. . Purchase Habits. . MBA Student Profile. . What are MBA Students Likely to Patronize? Correlations. . Understanding Basic Needs. Factor Details. . Factor Analysis Table. . Quantitative Issues. . . Linear Regression Tables. What are Spending Habits? . Market Size. . Total Spending. . Purchase Frequency. . Average Purchase Amount. Reliability Analysis. . Hypotheses Results. . . Conclusions/Recommendations. . Limitations. . . Topics for Further Investigation. . Appendix. . Evaluation of Alternatives (Pros and Cons) Data Cleaning Procedure. Survey. . . Table of Contents. . . . 3 4 5 6 7 8 9 12 14 15 16 17 18 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 3

BUS 562 Marketing Research Objectives ü Understand Food Purchase Preferences And Habits Of Evening MBA Students ü Discover The Demand For Food ü Evaluate Preferences Of Three Food Alternatives Executive Summary Of Findings ü High Degree Of Dissatisfaction Overall Satisfaction ü 48% Not Happy Method Overview ü Started With Focus Group To Uncover Issues ü Designed 17 Question Survey To Quantify Issues ü Received 66 Out Of 220 MBAs (Census Sample) ü Two Distinct Groups In MBA Program Snackers and The Health Conscience ü Two Of Three Alternative Options Positively Perceived ü Evening MBA Food Market Is $1100/wk Survey Uncovered Dissatisfaction, Provided Guidance For Improvement And Quantified Market Size 4

BUS 562 Marketing Research Introduction Situation Call To Action! q Dr. Zahay Was Amazed To Find Students Unaware Of University Towers Cafeteria • Apply Marketing Research Tools To Quantify Preferences, Habits And Opinions q In-class Focus Group Uncovered: • Lay Groundwork For Potential Improvements For Food Options ü BUS 562 MBA Students Too Busy To Eat Arrive “JIT” ü Eat Snacks ü Many Eat After They Get Home ü Not Satisfied With Current Food Options ü Felt Most Other MBA’s Behaved In The Same Way q BUS 562 May Not Be Representative Need Survey To Verify And Quantify Tackled A Real World Problem To Learn Marketing Research Tools 5

BUS 562 Marketing Research Introduction Food Establishments within Walking Distance of Nelson Hall East Village: American cuisine, $5 -8 dinners, eat-in Pizz. America: Italian, $6 -8 dinners, eat-in, take out Subway: Sandwiches, $3 -6, eat-in, take out Wolf. Mart: Snacks Sakura Express: Japanese, $5 -6 dinners, eat-in or take-out v v v University Towers: Cafeteria, $5 -6 per dinner College of Management (Nelson Hall): 2 soda machines and 1 candy/chips machine 200 Feet http: //www. ncsu. edu/campus_map/north. htm Seven Options Within 400 Feet Of Nelson Hall 6

BUS 562 Marketing Research Method q Exploratory: Focus Group (Qualitative) Explor atory Surve y Desig n Surve y Proce dures Analy sis Concl q Survey Method Chosen As Research Tool ü Need To Answer Who, What, Where, When And How About The Target Population ü Data Must Allow For Identifying Relationships, Establishing The Existence Of Differences, And Verifying Validity Of Relationships ü Desire To Collect Substantial Amounts Of Measurable Information From Population ü Low Distribution Cost q Survey Design ü 17 Questions Developed In Class üAnswer Key Questions § What Is The Potential Market Size? § What Drives Satisfaction? § What Are Frequency and Dollar Spending Patterns? § Evaluate Alternatives q Survey Procedure ü E-Mailed To All 220 MBA Students on 4/7/2003 üResponses Collected From 4/7/2003 -4/21/2003 ü Offered $50 Gift Certificates As Incentives ü Generated 30% Response Rate (66/220) usions and q Analysis (Quantitative) Reco ü Cleaned Data mmen ü Simple Descriptive Statistics, Factor Analysis ü Answer Key Questions Using Anova, Cluster and Regression dation Useds. Structured Disciplined Approach To Solve A Real World Problem 7

BUS 562 Marketing Research Objectives and Hypothesis Hypotheses § Understand Food Purchase Preferences And Habits Of Evening MBA Students § Students Are Generally Dissatisfied With Current Options § Estimate Market Demand § Students Likely To Frequent University Towers And Nelson Express § Evaluate Three Alternative Food Choices § Time Is A Prohibitive Factor ü University Towers: Full Service Cafeteria ü Expanded Nelson Hall Vending Machines: Prepackaged Microwave-able Items ü Nelson Express: Kiosk In Nelson Hall (Deli Sandwiches, Hot Dogs, Snacks, Fresh Fruit) § Part Time Students Will Spend More And Will Be More Likely To Frequent One Of The Three Alternatives Than Full Time Students § Everyone Eats Something Before Class § Snacking Is A Major Component Of Food Options Marketing Research Process Will Address Research Objectives And Test Hypotheses 8

BUS 562 Marketing Research Descriptive Interpretations Overall Satisfaction ü 48% Not Happy 48% Of Students Not Satisfied With Current Food Options 9

BUS 562 Marketing Research Purchase Habits # Of Purchases Per Week ü 85% Buy At Least Once A Week % Purchases Per Class Per Week ü 65% Buy Every Class Most Students Making Purchases Before Class 10

BUS 562 Marketing Research Purchase Habits Food Type Preferences ü Most Prefer Mexican, American and Chinese Market Share – Of Visits By Satisfaction Level Food Provider Market Share By Satisfaction Level ü How To Read: Of The Very Satisfied People, 10% Visit Wolf. Mart ü Dissatisfied People Visit Subway ü Satisfied People Visit “Other” and East Village ü Wolf. Mart Has Largest Market Share At 33% Of All Purchases Wolf. Mart Leads The Pack With 33% Food Purchases (# Basis) 11

BUS 562 Marketing Research Purchase Habits Students Buying Lots Of Snacks… Food Provider # of Visits/Month Wolf Mart 2. 1 Nelson Vending 1. 3 Subway 0. 9 East Village Avg Purchase Amount 0. 6 ü Snack Providers Dominate ü 58% of Purchases <=$4. 00 … Because They Don’t Have Time Arrival Time ü 38% Arrive Within 15 Minutes of Class 12

BUS 562 Marketing Research MBA Student Profile MBA Student Demographics § 70% Part Time Students § 70% Work Full Time § 67% Male § Average Age 31 Years § 75% Have Two Classes Per Week MBA Students Have Strong Feelings… % Strongly Agree, Agree § Feel Rushed Before Class § Prefer Nutritious Meal § Usually Have Chips and Soda § Eat From Vending Machines § Like FF Combo Meals § Late for class % Strongly Disagree, Disagree 65% 11% 52% 11% 26% 40% 26% 47% 18% 52% 9% 59% ü Want To Eat Right and (Say) They Want To Avoid Fast Food ü “Average Student” Is 31 years Old Male, Employed, Part Time Student ü Closely Matches Published Profile ü Implies Survey Responders Representative Of MBA’s … And Many Important Factors % Ext. Imp. , Important § Sanitation § Speed § Taste § Parking § Close to Nelson Hall § Take Out § Variety § Atmosphere § Decor § TV 86% 85% 81% 70% 71% 68% 41% 30% 7% 9% % Not Important 0% 0% 2% 2% 3% 8% 2% 8% 31% 64% ü Demanding Crowd… But Speed and Convenience Dominate 13

BUS 562 Marketing Research MBA Student Profile Observations – Supported By Anova Analysis q Bus 562 Class vs. All MBA’s ü BUS 562 Class 40% “Strong Snackers” VS. 20% Of MBA Population q Arrival Time ü The Longer You’ve Been In Program The Later You Arrive ü Health Conscience Arrive Later ü Part Times Arrive Later q Gender ü Females Take Fewer Classes (2 For Males Vs 1. 75 Females) ü Males Are More Snack Oriented, Females More Health Conscience ü Females More Concerned With Speed/Convenience Than Males ü No Differences In Spending Amount Freq Or Locations q Full vs Part Time ü Part Times Spend Less Than Full Timers Lack Of Differences Among Demographics Interesting 14

BUS 562 Marketing Research What Are MBA Student’s Likely To Patronize? University Towers: Cafeteria Expanded Nelson Hall Vending Machines ü Not Likely (11% Likely +) ü Somewhat Likely (27% Likely+) Nelson Express: Food Kiosk ü Most Likely (62% Likely+) Nelson Express Had Most Positive Response 15

BUS 562 Marketing Research Correlations Significant Correlations Correlation Coefficient ü Employment Status (1= Full Time 2 = Part Time -0. 81 ü Student Status (1=Part Time, 2=Full Time) 0. 52 ü Employment Status (1=Full Time, 2 Part Time) ü Avg Amount -0. 55 ü East Village Visits ü Avg Num Of Purchases -0. 51 ü Avg Number Of Classes ü Arrival Time 1=Early, 5=Later) Very Few Significant Relationships (Correlation Coefficient) 16

BUS 562 Marketing Research Understanding Basic Needs q Factor Analysis Is Data Reduction Tool That Finds Commonalities In Data Two Food Attitude Factors Three Restaurant Characteristics Factors % Of Students ü Fast Food Junkies ~25 -30% üDining Experience ~20 -30% ü Health Conscience ~50 -60% üSpeed/Convenience ~70 -80% üFood Quality ~50 -70% § Explain 28% of Variance § Explain 54% of Variance Factor Analysis Reduced 32 Individual Questions To Five Factors 17

BUS 562 Marketing Research q. Fast Food Junkies Tend To Be: ü ü ü Eat Fast Food Feel Rushed Before Class Buy From Vending Machines Buy Soda And Chips 562 has 2. 5 x more FF Junkies than average q. Health Conscience Tend To Be ü Eat Nutritious Balanced Meals ü Pay More For Healthy Food Factor Details q Dining Experience ü Dish Presentation ü Decor ü Atmosphere q. Speed/Convenient ü Close to Nelson Hall ü Take-Out ü Good Parking q Food Quality: ü Taste ü Variety Factors Not Surprising 18

BUS 562 Marketing Research Factor Analysis Table q Factor Analysis On Important Restaurant Characteristics Found Three Factors q “Other” Does Not Explain Significant Variance And Is Difficult to Interpret “Dining Experience” “Speed/Convenience” “Food Quality” 2 Missing Values Replaced with question mean value MBA’s Concerned With Dining Experience, Speed/Convenience and Food Quality 19

BUS 562 Marketing Research Factor Analysis Table q Factor Analysis On Food Attitudes Found Two Significant Factors q “Others” Do Not Explain Significant Variance and Are Difficult to Interpret “Snackers” “Health Conscience” 9 Missing Values Replaced With Question Mean Value MBA Program Made Up Of Snackers and Health Conscience 20

BUS 562 Marketing Research Quantitative Issues Overall Satisfaction ü 48% Not Happy q What Drives Current Satisfaction Level? q Linear Regression On Overall Satisfaction: Arrival Time Likelihood To Use Nelson Express Later You Arrive The Happier You Are Concept Satisfies The Dissatisfied Age Younger Are Happier Arrival Time Drives Overall Satisfaction 21

BUS 562 Marketing Research Linear Regression Tables What Drives Satisfaction? q Also Tried Logistic Regression On Satisfaction. Response Defined As Values 1 Ad 2 (Strongly Agree, Agree) Of Satisfaction Question. Non Response Defined As Values 3, 4 And 5. q Same Results As Above q Tried Logistic On Dissatisfaction With Same Results As Above Model Explains 25% of Variance 22

BUS 562 Marketing Research What Are Spending Habits? Goal: Find Buying Habit Segments q Used Average Expenditure and the Prob of Purchasing A Snack Before Class (Q 8/Q 6) q Found Four Identifiable Segments Snackers Cheap Diners Indifferent Avg Purchase: Purchase Freq: Avg. Sat (Low=Good): Market Share: Elite Diners Snackers Cheap Diners Low 2. 6 13% Low High 3. 9 44% Moderate High 3. 2 32% 76% of Market Are Snackers and Cheap Diners Elite Diners High 3. 2 11% 23

BUS 562 Marketing Research Market Size Goal: Determine Market Size and Understand Drivers of Consumption q Market Size: Average Spending X Frequency Of Purchase = Total Spending/Week X 220 MBA Students = Market Size/Week q What Drives Total Spending, Average Purchase Amount and Frequency Of Purchase? ü Number of Classes (Q 6) ü How Many Times You Buy (Q 8) ü Correlation Coefficient =. 66 $3. 34 1. 5/week $5. 01 220 $1102 ü What’s Interesting Is What’s Not Here: • • Demographics Attitudes Spending habits Restaurant Characteristics Demographics Not Driving Spending Habits 24

BUS 562 Marketing Research Total Spending What Drives Total Spending? (Details) ü On the Margin, Question 16 Does Not Explain Much Variance Model Explains 99% of Variance In Total Spending 25

BUS 562 Marketing Research Purchase Frequency What Drives Purchase Frequency? (Details) Model Explains 99% of Purchase Frequency Variance 26

BUS 562 Marketing Research Average Purchase Amount What Drives Average Purchase Amount? (Details) Model Explains 46% of Average Purchase Amount 27

BUS 562 Marketing Research Reliability Analysis q Reliability Analysis Is Used To Assess Reliability of Using Multiple Questions To Create A Scale Reliability Analysis – Attitude Questions Reliability Analysis – Restaurant Characteristics • Alpha =. 66 • Statistically Significant • F Test • Alpha =. 62 • Statistically Significant F test Questions 12 and 14 Can Be Reliably Used to Create Scales 28

BUS 562 Marketing Research Hypotheses Results Hypothesis Result q Students Are Generally Dissatisfied With Current Options ü True q Students Likely To Frequent University Towers And Nelson Express ü More Likely to Frequent Nelson Express, Less Likely to Frequent University Towers q Time Is A Prohibitive Factor ü True q Part Time Students Will Spend More And Will Be More Likely To Frequent One Of The Three Alternatives ü False, Part Time Spend More And They Are No More Likely To Freq One Of The Three Alternatives q Everyone Eats Something Before Class ü True q Snacking Is A Major Component Of Food Options ü True All Conclusions Supported With ANOVA Analysis Most Hypotheses Turned Out To Be True 29

BUS 562 Marketing Research Conclusions/Recommendations q MBA Students Dissatisfied, Something Should Be Done q Nelson Express And Expanded Vending Are Preferred Alternatives q MBA Evening Market Size ~ $1100 /Week q Survey Suggests MBA Evening Solution Should: ü Be Viable On A Percentage of $1100/Week ü Address Health Conscience And Junkies Needs ü Recognize Most People Spending $3 -$5 ü Fast and Convenient ü Expanded Vending Seems Most Viable ü UT Not Viable ü Nelson Express – MBA Evening Market Not Big Enough… But Adding Prof. , MAC, Econ, and Undergrads Could Help Justify q Next Steps: ü Share Findings With MBA Office ü Generate Specific Proposals ü Think Through Pros And Cons of Options ü Balance Student Needs Within University Constraints Survey Uncovered Dissatisfaction, Provided Guidance For Improvement And Quantified Market Size 30

BUS 562 Marketing Research Limitations q Nonsystematic (Sampling) Error: ü 30% Response Rate (66/220) May Cause Invalid Findings q Disadvantages of Survey Method: ü Response Rates Lower Than Face-toface Interviews ü Inaccuracies In Construct Development, Scale Measurements, And Questionnaire ü Limited Use Of Probing Questions ü Intentions And Behaviors Are Often Different ü Census Is Ideal For Populations Under 500 ü Respondents Were Self Selected, Which May Introduce Bias q Systematic (Nonsampling) Error: ü Q 10 -1 To Q 10 -8 • Missing Responses Greater Than 5% • Obvious Misunderstanding Of Instructions • Missing Responses Are Most Likely “Zero” Visits ü Q 14 -13: Misunderstanding Of Instructions 68% Did Not Answer This Question Low Response Rate May Introduce Bias 31

BUS 562 Marketing Research Further Investigation q Topics for Further Study • Survey students in other curriculums, e. g. , engineering, textiles, education, etc. , who may be taking • MBA classes to determine if they have similar views on purchasing food before evening classes • Survey only full-time MBA students to determine if they have concerns about the availability or variety of food during lunch hours • Survey professors, MAC, Econ and Undergraduates of the College of Management to determine if they have concerns about the availability or variety of food available within walking distance of Nelson Hall during lunch and dinner hours. • Survey nearby buildings such as Kilgore, Scott, or Bostian Halls to see if other students and/or professors have concerns about lunch or evening meals (please see slide 5 for a map of nearby buildings) • Conduct a survey to determine if there would be demand for meals or snacks from the NCSU food court during evening hours (it is within walking distance from Nelson Hall but closes at 3: 30 pm) Professors And Students From Other Disciplines Located Close To Nelson Hall Could Be Surveyed To See If They Have Similar Food Preferences. The Discovery Of Additional Segments May Lessen The Risk Of Opening A New Food Venture In Or Near Nelson Hall 32

BUS 562 Marketing Research APPENDIX 33

BUS 562 Marketing Research Evaluating Alternatives Nelson Express Expanded Vending Pros: Cons: ü Available 24 x 7 ü Space Issues ü 62% Likely To Use ü Space Issues ü Fits Price Range ü Zoning (? ) ü Zoning ü Minimal Financial Risk To University ü Mess Factor ü Better able to Offer Fresh Food ü Meets “Rushed” ü Would Not Be Perceived as Healthy ü Mess Factor ü Limited Availability ü Financial Risk ü May Be Out of Price Range Survey Is First Step In A Long Process To Address This Issue 34

BUS 562 Marketing Research What We Did Data Cleaning Rationale q 19 Attitude Questions (Q 12_1 to Q 12_19) ü Missing 9 Values On 7 Different Responders ü Filled in with Average Value ü One Missing Data in Factor Analysis Wipes Out the Entire Row of Data – Avoided Losing 10% of the Responders. q Restaurant Characteristics Question Q 14_13 ü 46 Missing Values ü Threw Question Out ü One Missing Data in Factor Analysis Wipes Out the Entire Row of Data – Avoided Losing 10% of the Responders. q 12 Restaurant Characteristics Questions (Q 14_1 to Q 14_12) ü Missing 2 Value On 2 Different Responders ü Filled in with Average Value ü One Missing Data in Factor Analysis Wipes Out the Entire Row of Data – Avoided Losing 13% of the Responders. q 8 Frequency Of Visiting Restaurants Questions (Q 10_1 to Q 10_8) ü Assumed Missing Meant 0 Visits ü 60 Missing Values on 15 Different Responders Special Coding of Missing Values Allowed for Customized Treatment 35

BUS 562 Marketing Research Survey Would you like a chance to win a $50 gift certificate to PF Chang’s China Bistro? Dear NC State M. B. A. Student: The students of BUS 562 (Marketing Research) are asking for your help. As part of their joint class project, we have decided to conduct a survey of the eating habits before classes of the students who have evening classes in Nelson Hall. We intend to present our results to fulfill our class requirements and also share them with the M. B. A. office. The questionnaire should take only 5 -10 minutes to complete. All responses will be analyzed in aggregate and no individual response will be identified. Only aggregate reports will be shared with the M. B. A. office and all individual responses will remain strictly confidential. Please print out the questionnaire and fill it out by hand. When you have finished the survey, please return the survey to any of your evening or day professors. They will have a special envelope for the surveys to be returned to us. If you have any questions while completing the survey, please contact Glen Ridout at glenandveni@aol. com Thanks in advance for your help. We need your response before April 15. Sincerely yours, Spring '03 M. B. A. 562 class Only complete surveys that are turned in to your professor by April 15 will be eligible for the drawing. We will be giving away 2 gift certificates! Please be sure to include Name/Email so you may be contacted if you are one of the winners! Name: ____________ E-Mail Address: _____________ 36

BUS 562 Marketing Research Survey (continued) First, please provide us with some background information: 1) What is your student status? □ Part-time □ Full-time □ I am not currently taking classes. 2) In which year of the MBA program are you? □ Year 1 □ Year 2 □ Year 3 □ Greater than 3 Years 3) Are you currently employed and what is your status? □ I work part-time □ I work full-time □ I am not working at this time 4) What is your gender? □ Male □ Female 5) What is your age? □ < 21 years □ 21 -25 □ 26 -30 □ 31 -35 □ 36 -40 6) How many 6: 00 PM Classes do you have per week? □ 0 □ 1 □ 2 □ 3 □ 41 -45 □ 46 -50 □ > 50 □ 4 7) What time do you usually arrive for your 6: 00 pm class in Nelson Hall? Before 5: 00 ___ 5: 00 to 5: 15 ___ 5: 15 to 5: 30 ___ 5: 30 to 5: 45 ___ 5: 45 to 6: 00 ___ 8) □ □ □ On average, how many times per week do you have a meal or snack before your evening class? 0 day per week 1 days per week 2 days per week 3 days per week 4 days per week More than 4 days per week 37

BUS 562 Marketing Research Survey (continued) 9) How much do you spend, on average, for meals/snacks on nights you have class? Please place “X”. $0 $1 $2 $3 $4 $5 $6 $7 >$7 10) Please indicate the number of times you have made purchases from the following establishments within walking distance of Nelson during the past month: Wolfmart Subway Pizza America East Village University Towers Nelson Vending Machines Sakura Express Other 11) Zero One Two Three More than Three Indicate the extent to which you agree with this statement: I am generally satisfied with the choices of restaurants/snack food available within walking distance of Nelson. (circle one) 1 = Strongly Agree 2=Agree 3 = Neutral 4=Disagree 5 = Strongly Disagree 38

BUS 562 Marketing Research Survey (continued) 12) On a scale of 1 to 5, with 1 = Strongly Agree, 2 = Agree 3 = Somewhat Agree, 4= Somewhat Disagree, 5 =Disagree 6=Strongly Disagree , please check the number that best expresses the extent to which you agree or disagree with each of the following statements. 39

BUS 562 Marketing Research Survey (continued) 13) What kind of cuisine do you enjoy the most? (Check Only One) □ Fast Food □ American (Family Restaurant) □ Chinese □ Japanese □ Mexican □ Italian □ Other (Specify) __________________ 14) How would you rate the following restaurant characteristics in determining your choice before class? Using a scale of 1 (Extremely important) to 5 (not at all important. Please Check. 40

BUS 562 Marketing Research Survey (continued) 15) How likely are you to use Expanded Vending machines in Nelson? (vending machines containing microwave-ready prepackaged vending items and a microwave oven. ) Please circle one. 1 = Very Likely 2=Likely 3=Somewhat Likely 4=Somewhat Unlikely 5=Unlikely 6=Very Unlikely 16) How likely are you to visit University Towers Cafeteria, located across the street from Nelson Hall? For a reasonable price you can purchase a meal card or an individual meal with choices including a salad bar, sandwich line, and several hot meal selections. They serve dinner between 4 PM and 7: 30 PM. Please circle one. 1 = Very Likely 2=Likely 3=Somewhat Likely 4=Somewhat Unlikely 5=Unlikely 6=Very Unlikely 17) How likely are you to purchase deli sandwiches, hotdogs, snacks, and fresh fruit available at a food stand located in Nelson Hall? Please circle one. 1 = Very Likely 2=Likely 3=Somewhat Likely 4=Somewhat Unlikely 5=Unlikely 6=Very Unlikely Please add any additional comments you may have: Thank you again for taking the time to complete this survey! 41