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Declining Sales Situation and Customer Dissatisfaction: A Tyre Retailer

Define research problem and formulate research questions

Goal: 

This task provides you with the opportunity to define research problems and formulate research questions based on four scenarios

Format: 

Define the research problems and formulate research questions for four business research scenarios found on Blackboard. Complete the template on Blackboard on the Problem Definition and Research Question. The template is available in the Assessment area of Blackboard.


Answer

An investigation into the reason behind declining sales situation and customer dissatisfaction

 A Tyre Retailer case study

1. Introduction:

Marketers and retailers have long known that shopping is no longer a matter of buying products but also depends on experience and enjoyment. If consumers don't like a product, on the shopping experience, they tend to look for an alternative way to buy the products from a different retailer. This heavily impacts the sales of the current retailer (Sagaerta2017). The focus of the study is to determine whether the shopping experience of the retail store has any impact on the customer footballs. In this report, feedback from various customers was considered for justifying the downward sales of the well-known tire retailer in Australia. Feedback from more than 50 retail stores across the country, both from regional and in the cities, was considered to understand the problem underlying this decrease in sales. Proper literature review and other aspects were considered in this report for a better understanding of the core problem.

1.1 Purpose of research

The purpose of conducting the present research is to investigate how store attractiveness influence customer visits and purchase decisions. 

1.2 Scope

The scope of this report is to thoroughly understand the underlying problem and find remedies to rectify those problems so that the retail store can again increase its sales. It is a research proposal to check if changing the attractiveness and buying experience in the retail stores would increase the number of customers per retail store.

1.3 Limitations

Detail the ethical and financial limitations of this research

2. Background:

This report is on Tyre Retailer, well-known tyre retailer in Australia. The company holds 25 per cent of the market share in the Australian tire market. However, over the past few years, the tire sales have been declining steadily. Although the company sales trusted, well-known brands like Dunlop and Goodyear, they are steadily losing their customers. Thus, a new CEO was appointed by the company to make a change. To make a difference in the sales market, the CEO visited and checked around 20 of their retail stores in both urban and rural areas. She found a few problems in their retail stores that might lead to the decrease of customers there. The stores had a very high counter, and it was uncomfortable to talk to short customers. Only taller men had been able to talk to the managers across the counter comfortably. As most of the cash customers of the retail stores were mainly women, they felt very uncomfortable and wanted to leave the store as soon as possible. It was not at all a comfortable environment for customers as there was no place to sit in case a customer felt tired. All customers had to stand and interact with the staff and management. However, as the company has more than 700 stores across the country, the CEO thought that thorough research was needed to check the condition of all the retail stores. Thus, research analysis of all the data collected from the different stores across the country was studied thoroughly, and the detailed identification of problems and their solutions are presented in this report.

2.1 Problem Definition

2.0.1 Management Problem

The retail business was suffering due to a severe management problem. No steps whatsoever were taken by the management to rectify the counter height or the sitting problem. No feedback from the customers was taken to check if they felt comfortable shopping here or not. With no systematic procedure to rectify these problems, the retail business kept on losing customers every year. Also, the insides of the retail stores looked dull and unattractive. In the marketing industry, attractiveness has a very big impact on sales. However, no work of renovation or redesigning of the stores happened in the last few years making the stores out of date and unfit for marketing. For changing such a deep underlying problem, a centralised management team needs to be recruited for all the 700 stores across the country and renovation should be done in all of them one by one. Attractiveness and customer comfortableness in the store have a direct impact on the salability of a product. A centralised management team, subdivided into regional management team is required to take care of all the stores simultaneously.

2.0.2 Research Question

What is the impact of the attractiveness of retail stores customer visit and purchase decisions?

2.0.3 Research Objectives

Following are objectives of the present research study

  • To investigate the consumer perspective on customer relationship management
  • To identify the consumer perspectives regarding the attractiveness of retail stores on customer visit and purchase decisions
  • To ascertain the relationship between the attractiveness of retail stores, customer visit and purchase decisions

3. Literature review

3.1 Impact of store design on the customer visit

Store design has a huge impact on customer visit and how likely they are to come back again. Using light-coloured paint on the wall gives a soothing look to the overall store. This makes the stone look welcoming for the customers. According to Kaltcheva, and Weitz (2016), the stores should be spacious so that it does not get too overcrowded and customers feel uncomfortable due to standing very close to each other. Also, hiring good looking and attractive staff or spokesperson increases the comfort level of the customers while talking to them. Plenty of sitting spaces needs to be created with chairs and sofas so that the customers feel comfortable even while waiting. The enquiry counter and the cash counter should be in a systematic position so that customers after buying the product can easily queue up in the cash counter (Sachdeva and Goel 2015). Proper implementation of these ideas needs to be executed in this retail stores to boost the number of customers in the store.

3.2 Technology and customer interface

As stated by Burke (2012), technology and graphical interface for customers is an important part to increase the sales of a retail store. Customers who come to buy tires need to look at designs and sizes along with rim plating so that they understand what looks best for their cars. Installing computers along with the graphics of tires that can be placed on different cars should be implemented in the stores so that customers can customise on their own as to which colour and look best fits their cars. Also, cash payment is not always reliable as every customer does not like visiting with stores. 

According to Piotrowicz and Cuthbertson (2014), online transactions from debit and credit cards or e-wallet are much more convenient in today's world. Having the option to pay for the product with any method of payment makes a customer visit the store more. Car magazines with the latest tire designs and rim plating should be kept in the stores so that customers can have a look at the latest trends. Implementing all methods of payment and installing graphical software in the computers would help make the store more attractive and make more customers revisit.

3.3 Visual merchandising and customer brand attitude

Visual merchandising is a clever and strategic way to convert marketing into sales. This is mainly used in retail stores. Products are placed on glass cases and surrounded by ubright lightning to make it more attractive and presentable to customers. Usage of graphics, images and others paintings make even a simple product look attractive for the customers. According to Park et al. (2015), visual merchandising is most commonly used with large brands of products as they tend to attract more customers. Although it is mainly used in fashion branding, it can also be used for any retail stores for the same purposes. This is how products are made more purchasable to customers as they find this way of branding more comfortable and help them select the right product. The tire retail stores should use this strategy to boost their sales. Graphics of cars and tires should be placed on walls across the store and lighting should be used to focus on the tires that are put on display. These tactics can work in both rural and urban areas as most customers have the same method of selecting the desired product (Kaur and Jain2016).


4. Research Design and Methodology

Analytical and detailed research about consumer purchase and decision making has already been established in this report. Various factors were analysed and supported by several independent sources. These results conclude a wide and reliable basis for those factors. The main focus of the report is to investigate the necessity of already known factors influencing the buying decision for car tires among Australian customers and it can be classified as descriptive and detailed research. Follow-up research in the future, digging deeper into the correlation between the various factors can be described as casual research.

No recent or secondary data is available to derive the particular conclusion, that can answer the previously mentioned research questions sufficiently. So, primary or self-collected quantitative data must be collected. For the sake of this project, data should be collected only once, but also fulfilling the general necessities for detailed research. A survey from the online questionnaire is chosen. The online platform saves time and money due to the reduction of staff and distribution effort. Moreover, as data is collected digitally, it can be analysed and processed straight after the completion of the survey. To ensure a steady and high return rate and not stress out respondents the questionnaire is limited to 20 minutes, which is the average human attention span. The questions are closed once they have been answered so that no editing can be done on them. Important questions are followed by reverse control questions to validate the answers. The first draft can be found in the appendix of this report. The language used for the questionnaire is relatively simple and easy to avoid any miscommunication with the respondents.

4.1 Data source

The main source of these data is from customers (primary source) visiting the retail stores of the company and from the staff in the stores or the management in the company.

4.2 Research Approach and Hypothesis

The researcher will collect data and use tradition data analysis methods to analyse the same. The data capturing insights and pain points can be identified by the researches through this process. The qualitative data will be broken down into smaller chunks (Zikmund et al. 2016). Then these separated chunks will be classified and grouped into related information in which the project is done. The data analysis follows a few steps that should be followed by the researchers. The first step is data requirements where the target specific data is chosen. Next is the data collection. This consists of the collection of data from the respondents. The next step is data processing where the data is processed by an expert into the detailed structure of rows and columns. Next step is data cleaning, where corrupted or incomplete data is corrected and properly placed. Then exploratory data analysis is done on the cleaned data with the use of modelling and algorithms. The final step is the data product, where the output is derived from all processed data.

Statistical data hypothesis also known as confirmatory data analysis is the hypothesis that can be tested by observing that might be modelled or set random variables. In the case of the tire retail stores, the data hypothesis can be easily tested by implementing the already proposed plan in real life and checking if there is any change in output. To implement the proposed plan discussed in the project, the store design, introduction of technology and customer interface, visual merchandising and customer branding, all these plans must first be done in one of the urban stores and one of the rural stores as a form of experiment to see the change in customer experience and take their feedback. If customers find it helpful and comfortable after the declared changes, the plan should be executed in the other remaining stores across the country. If any drawback is found in the process and changes made, rectifying those changes and reimplementing the hypothesis is required. This cyclical process of hypothesis testing would truly help to make the changes errorless.

4.3 Data collection method

Qualitative data collection method is required to be followed by the researcher in order to derive all data needed for the research. The mostly include a face-to-face interview and some online surveys. Customer’s necessities and choices, recommendations from staff, and strategies from the management are all required to be considered for the collection of this data.

4.4Data sampling

4.4.1 Target population

The targeted population would be the 30 customers who are the regular visitors of the retail stores in. These customers who tend to buy tires could be selected using a random sampling method for the collection of data for the research. In conducting the interview, three managers of the company are required to be selected who would be providing valuable information related to the research.

4.4.2 Sampling Method

The random or probability sampling method was used as it targets a random set of samples and covers a huge array of age demography and ethnicity and region and people from all professions.

4.4.3 Sample Size

The sample size used in the project was done by all 30 customers who are to be undergoing a survey based on the research questionnaire with ten sets of questions for each customer.

4.4 Data analysis approach

The quantitative data should be broken down into small chunks and grouped according to their necessities. This would highlight the most important changes that need to be made immediately in the retail stores. A thorough analysis of the data collected will be assessed for the present implementation of remedies and would be stored for any future references.

5. Time schedule and Budget

5.1 Timeline

ActivitiesWk 1 to 2Wk 3 to 4Wk 5 to 6Wk7Wk 8Wk 9Wk 10Wk 11Wk 12 
Selection of Topic








Conduction of literature review








Primary data collection from customers through survey








Analysis of data and interpretation








Formulation of a rough draft








Supervisor feedback








Discussion with managers








Final submission








Table 1: Timeline for the research

Source: Self-developed

5.2 Budget

ActivitiesCost (AUD)
Online literature search $     250.00 
Materials and supplies$  2,000.00
Data analysis Equipment $     500.00 
Printing $     500.00 
Total$  3,250.00

Table 2: Budget for a research project




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