Case Study

Case Study

Vero Bicycle Pvt. Ltd is a Punjab based bicycle manufacturing company. It was started as a sole proprietorship company in 1950. Mr. Vero, the owner of the company, owned a bicycle repair shop at Ludhiana and had 4 sons who joined hands with their father and established a partnership concern. Subsequently the company had developed into a Pvt. Ltd Company. Today Vero group manufactures wide range of products such as mopeds, motor cycles, shock absorbers, bicycle spare parts etc. At present the company employs many professional managers and most of the group companies have become limited companies. But Vero cycles still remain a Pvt. Ltd., Company (narrowly held). The Owner Mr. Lala runs this company In a very traditional fashion which is quite visible. But this type of running of the company is liked by the employees of the company and the group as a whole does not approve of the style of functioning of Mr. Lala. Despite all these handicap, Vero group was making profit.

Of late, Vero started experiencing cut throat competition in the bicycle business. Profit started declining. This was a cause of worry. Recently Vero Bicycles recruited an MBA, Miss. Anuradha who specialized in marketing. Though there was pressure from within the organization, an MBA from outside was recruited. This was because, two of four sons of Vero were MBA’s.

The Chairman Mr. Ravindra Lal was an ambitious dynamic man.

One day Mr. Ravindra lal called the marketing manager to his cabin and discussed with him the marketing problem facing Vero Bicycle. Mr. Das, the marketing manager told Mr. Ravindra lal that the main problem facing the company is due to continuing manufacturing on the traditional lines. He further told that market research projects have to be undertaken to know the consumer behavior of bicycle buyers. He also said that there is a need to the dealers view point also.

On hearing this, Mr. Ravindra lal immediately told the marketing manager to design a market research project to find the needs of the buyers. He said that the marketing manager could make use of Miss Anuradha, the new marketing executive to carryout research work.

Accordingly, Mr. Das summoned Miss Anuradha to his cabin and instructed her to prepare research design to study dealers and buyers within one week. The work was started thereon.

Questions:

1) What according to you should be the ideal objectives of this study? What type of research is this? State whether hypothesis is to be formulated? If so, What could be the hypothesis?

2) What kind of market research instrument do you recommend for gathering data?

3) What kind of sampling design would you suggest?

4) What type of scale would you use to measure attitude?

Solutions:

1. Defining the problem faced by the company or knowing the objective of the research is the first step in conducting marketing research. The objective of the research should be clearly defined. To ensure that the true problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commence. Some of the ideal objective of studies can be

l To identify the problems causing decline in sales and finding ways of increasing sales and profit.

l Taking decision related to whether there is need for changing manufacturing style.

l Understanding the consumer behavior of bicycle buyer and considering dealers view point helps in forecasting sales.

l Helps in development of new products and modification of existing products or innovation.

Based on the objective there are various types of research design available

Since reason for decline in sales is not very clear so Exploratory Research Design would be a suitable option. Exploratory design is characterized by its flexibility in adapting to situation and has the goal of formulating problem more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypothesis. So we can find all possible reasons and study the problem thoroughly to get insight into the problem. There are various data collection methods in Exploratory Research Design like Literature Search, Experience Survey, Focus group and case study.

Using focus groups will be more suitable as here groups of 8 to 12 people can be formed and data can be collected by allowing the group to discuss problems faced by Vero group and a thorough discussion will give possible solutions to the problems faced.

Since Exploratory Research helps in formulation of Hypothesis, it can be formulated. A hypothesis is a tentative statement that can be either true or false and whose validity needs to be accessed by conducting test. As the problem in this case is regarding the decline of sales in bicycles,

The possible Hypothesis can be

Competition and dissatisfaction among dealers and customers led to the decline in sale of bicycles.

2)

· While going for data collection there is an option of either going for primary data or secondary data. Secondary data is already available in articles, journals it helps in saving of time and cost but there is a disadvantage that data may not fit the problem perfectly so collection of primary data may be a better option in this case. Even in primary data collection method there are various options like going for interview, survey method or questionnaire.

· While selecting measurement instrument, it is important to select a correct instrument. A defective instrument can cause two type of distortions first being use of complex words causing confusion or difficulty for participant to answer second being poor selection of instrument. Some of the characteristics to look for while selecting instrument being

(a) Validity, it refers to the extent to which a test measures what is expected to be measured (b) Reliability, which refers to the accuracy and precision of a measurement procedure

(c) Practicability, concerned with convenience of using instrument and interpretability.

· Accordingly since this case demands for getting reason of dissatisfaction with Vero bicycles, a rating grid type of questionnaire with ranking can be used to collect data from people.

· An example of this can be:

· Please indicate the importance of each of the characteristics in choosing your bicycle:

	Very Important	Important	Neither important nor unimportant	unimportant	V Not so important
· Repair Service
· Cost
· Style
· Weight
· Design
· Service at my location
· Brand
· Comfort
· Extra feature

Have you heard about Vero Bicycle Yes No

Do you have a bicycle Yes No

Would You like to buy Vero Bicycle Yes No

Would You recommend purchase Yes No

of Vero Bicycle

Unstructered questions:

Where did you hear about Vero Bicycle

What do you Like about Vero Bicycle

What do you don’t like about Vero Bicycle

What would you suggest to Vero Bicycle

· Questions can be initially structured target questions and for feedback towards the end Unstructured questions can be placed. These questionnaires can be given outside the cycle shops to the dealers, customers. The advantage of using rating grid type of questionnaire will be its single response per question.

3)

Sampling is a small element of population with the same characteristics as that of entire population. There are basically two types of sampling probability sampling where each sample unit has equal chance of being included into the sample and the other is non- probability sampling where there is no-equal chance of unit of sample to be included in sample. I will suggest Non Probablity sampling. In non probability sampling, Snow ball sampling can be used since information can be collected from few sample and on their recommendation more sample can be selected. An example would be as information is collected from dealer then on their recommendation dealer’s customers can also be asked to give some information and they can recommend about their friends and relatives who will be ready to give information. Thus we can arrive at correct individuals who can give valuable suggestions regarding their expectation about bicycles. It is important to collect information only from individuals having adequate knowledge regarding the criteria that determine the purchase of bicycle. The advantage of Snowball sampling being vague characteristics can be estimated.

4)

Attitude scaling is a process of assessing an attitudinal disposition using a number that represents a person’s score on an attitudinal continuum ranging from an extremely favourable to extremely unfavorable one. An attitude is a learned, stable pre-disposition to respond to one-self, other persons, objects or issues in a consistently favourable or unfavourable way it basically deal with person’s thinking towards life. Attitude helps in explaining to what extent is one ready to do things, attitude do not change much over time, there is usually a consistent in behavior and it can be related to preference of an individual. Selecting and constructing a measurement scale depends upon number of factors that influence the reliability, validity and practicability of the scale.

Some of the factors being

Research Objective – it deals with characteristic of participant in this case regarding the attitude towards Vero bicycles

Response type – a Rating scale type of response will be suitable to collect response. Participants here directly give scores to the questions.

Data properties – deals with order of power. Here interval type of scale can be used.

Balance or Unbalanced – an balanced scale have equal number of attributes below and above the midpoint. Like Strongly disagree, disagree, Neutral, Agree, Strongly Agree

Forced or Unforced – In Unforced participant can select undecided as response or don’t know. We use forced scale to make participant select one of available alternative.

No of scale points – There are different type of scale points depending on category of product like 3 – point scale for simple products, 5- point scale for fast food products, snacks, 7- point scale will give more reliability in this case.

It is important to avoid rater error and halo effect caused by participant’s biasness.

Multiple Rating List scale can be used. It is similar to numerical scales having equal intervals that separate their numeric scale points. The verbal anchors serve as the labels for the extreme points. Here circled responses are accepted from the rater and the layout facilitates visualization of the results. The advantage is that a mental map of the participant’s evaluation is evident to both the rater and the researcher.

Example : Please indicate how important or unimportant each characteristic is by circling one per question.

· Important Unimportant · Repair Service 7 6 5 4 3 2 1 · Cost 7 6 5 4 3 2 1 · Style 7 6 5 4 3 2 1 · Weight 7 6 5 4 3 2 1 · Design 7 6 5 4 3 2 1 Service at my location 7 6 5 4 3 2 1 Brand 7 6 5 4 3 2 1 Comfort 7 6 5 4 3 2 1 · Extra feature 7 6 5 4 3 2 1