Sale decreasing in Tesco

in home electric product category

_________________________
Agency: M Plus Ltd.
Client: Tesco plc

Group members:

2030297

2025397

1927350

2032208 11 November 2011

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Contents

1. Introduction....................................................................................................... 3
2. Why the research is important?.............................................................................. 3
3. Research Objective.............................................................................................. 3
4. Research Questions.............................................................................................. 4
5. Hypotheses......................................................................................................... 4
6. Literature Review................................................................................................ 4
7. The Scope of Research.......................................................................................... 6
8. Sampling........................................................................................................... 7
9. Research method................................................................................................. 8
9.1 Target population................................................................................................ 8
9.2 Data collection method.................................................................................... 8
9.3 Data capture instrument.................................................................................... 8
9.4 Quality control............................................................................................... 9
9.5 Coding........................................................................................................ 9
9.6 Data editing.................................................................................................. 9
9.7 Data analysis................................................................................................. 9
9.8 Pilot testing................................................................................................... 9
10. Work Schedule.............................................................................................. 11
11. Fees............................................................................................................. 12
APPENDIX............................................................................................................ 13

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 1. Introduction

Tesco is one of the largest supermarket all over the world, ranked after Metro and Carefour.
However, in 2011, Tesco has faced with a sale decline problem in non-food business,
particularly in important areas such as electronics and entertainment while other
supermarkets do not have decline in non-food sales. For this reason, Tesco now want to
commission research to identify the causes making customers change their mind to other
supermarkets.

M Plus is a marketing research company. We provide qualified information from customers

for companies to propose correct and timely business decisions in competative market. Tesco
plc has invited M Plus company to present this proposal for the research. These have been
prepared by consumer research team. They are based on research brief received in October of
this year to complete the reasearch proposal.

2. Why the research is important?

It can be clearly seen that Tesco succeeds in order to raise the sale in food product category.
Nonetheless, to follow the strategy which is being strong in everything they sell as well as
they are in food, Tesco is planning to increase their non-food sale, especially in electronic and
entertainment, illustrating the significant falls than other goods in this category. In addition,
raising sale in electric and entertainment is able to grow the overall sales in non-food product,
bringing about more opportunity to compete with the competitors such as Dixons and Argos.
By doing this, it will contribute to the overall growth in UK picture in the long run.

To go up the sales in electric and entertainment, Tesco want to know more about consumer
behavior related to those productsThus, to focus on entertainment From our observation shell
Space in home electronic more than in entertainment so we assume that Tesco have more
focus on

3. Research Objective

This research aims to identify the factors in term of marketing mix affecting consumer
decision-making to buy home electric products at Tesco supermarket in order to propose fact-
based solutions on how to develop competitive marketing strategies.

4. Research Questions

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 1 What are the factors in term of marketing mix affecting decision-making of
consumer to buy electronic product from Tesco supermarket

2 How should the solutions be developed to maintain and increase the sales in
electronic category from Tesco
5. Hypotheses

Hypothesis 1: Sales of home electric product in Tesco is related to customer relationship

management: consumers are more likely to buy electric product with supermarket and receive
after-sales service, calling to call centre when having enquiry and facing some problems
about the product purchased.

Hypothesis 2: The home electric sales growth may be supported by customer service:
consumers are more likely to buy electric product with supermarket that provides the delivery
service

Hypothesis 3: Marketing mix strategy (4Ps) may influence on decision-making of consumer:

- Consumers are more likely to shopping at supermarket situated in the centre of city.
- Products with promotion are more likely to be interested and purchased by
housewives
- Consumers are more likely to purchase item at supermarket where there are variety of
goods.
- House wives are more likely to purchase an outstanding price product without
concerning of product quality.
6. Literature Review
Marketing mix (4Ps) its term refers to 4 key areas of decision making in the marketing
process that are integrated to satisfy the consumers need and want. There are 4 elements
which are product, promotion, place (distribution) and price.

Product is the goods or service offered to meet the customer needs and wants of customer.
Those products that consumers take time for consideration, gathering information and making
comparisons of price, quality, style and suitability called shopping goods. It is classified into
2 categories. Uniform shopping goods are similar in quality but differ in price. Consumers
compare price differences by focusing on product characteristics. While non-uniform goods
differ in both quality and price. (http://www.enotes.com).

Price is the amount of money that consumers are willing to pay for a product or service. The
consequences of buying means the satisfying of consumer especially with the price;
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however, there are a variety of factors influenced consumer purchasing the goods customer
such as demand, information availability, competition, profit motives, product considerations
and legal considerations. (http://www.enotes.com).

Promotion promotional strategy or known as marketing communications is the most visible

element of the marketing mix. Its primary roles are to inform, persuade, or remind customers
about the product presenting and to location the product in the marketplace and its primary
objective is to create consumer awareness and provide information about where to gain and
how to use the product (Hoffman, Douglas .K, 2005)

Place is to having the right product, in the right location, at the right time to be purchased by
consumers. This called the channel of distribution which consists of interdependent
manufacturers, wholesalers, and retailers. These concerns with three basic utilities: time,
place, and possession. Time utility refers to having a product available at the time that will
meet the needs of target market. Place utility occurs when a firm provides satisfaction by
locating products where they can be easily acquired by consumers. The last utility is
possession utility. The wholesalers and retailers provide services to consumers with as few
obstacles as possible. (http://www.enotes.com).

Consumer Decision-Making Process classified in to 5 stages (1) consumers identify their

needs, (2) search information, (3) evaluate alternatives, and (4) make the purchase decision.
(5) post purchase evaluation. These actions are determined by psychological and economical
factors, and are influenced by environmental factors such as cultural, group, and social values
(http://tutor2u.net)

Consumer decision-making rules are usually divided into 2 categories: Compensatory

decision rules people choosing this to offset a experienced weakness in one aspect of the
product by compensation it against experienced strengths. In contrast, with
Noncompensatory decision-making rules a consumer cannot compensate the negative
aspects of a brand or product with positive one (Statt, David A. 1997)

7. The Scope of Research

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In this study, marketing mix factors affecting consumer decision-making will be identified.
The research population is 1,800 housewives in the UK.

The conceptual framework of this study can be displayed as follows

Sampled 1,800 housewives

in UK

Marketing mix factors

- Price point
- Product
- Distribution channels
- Promotion

Consumer Choice of buying home

electric product with Tesco

- Choose to buy

- Not choosing to buy

Proposed solution

Picture 1: Conceptual Framework

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8. Sampling
The research aims to be investigated for motivation of the decreasing of sales in Tesco
focusing on home electric products vacuums, refrigerators, and dishwashers. Tesco
runs 2,715 stores in the UK in 7 different formats; extra, homeplus, superstores,
express, metro, onestop, and dobbies. We suggest 3 stages of sampling; purposive
sampling, stratified random sampling, and accidental sampling procedure.

Purposive sampling: choosing from 5 largest cities in UK - London,

Birmingham, Leeds, Glasgow, and Sheffield. Peter (2005) claims that to
estimate the sales performance, at least 4 areas should be used. This approach
is selected because consumer boundary is unable to define and limitation of
time and facilities.
Stratified random sampling: 5 out of 39 branches of Tesco extra stores in 5
areas are chosen to conduct the survey. The selection criteria are to opt the
store with highest sales from each city. We suppose those stores as good
representative samples.
Accidental sampling: 1,800 interviews are randomly selected in front of the
stores.

5 cities will be chosen from all the

UK cities.

1 store will be selected from each

city (totally 5 stores)

1,8001,800
sets of questionnaires
cases will be will be
distributed by coincident
accidentally in front
picked in
of the store.
front of the store.

The figure above describe sampling method

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 Sample size
We propose to have totally 1,800 cases as representative for the whole Tescos
customers in the study.

9. Research method
9.1 Target population
The method starts from selecting 5 cities in the UK citing from the size of population.
Then, 5 best performance stores in those areas will be randomly picked. This means
one store in each city will be selected. After that, we will accidental pick 1,800
housewives to answer the questionnaires.
Housewives, in this study, means a person aged 18 or more who resident in the UK. In
some case, housewives could be a man. He or she has highly concerned with decision-
making in buying and cooking for the household.

9.2 Data collection method

After indicating stores, we will do 360 questionnaires in each store by using

accidental sampling method. Brenda and Elizabeth (1997) mention that, the survey is
the most commonly used data collection method for quantitative market research. It is
generally used when the purpose of the research is to generate findings from a
proportion of a population (known as a sample) so that generalisations can be made
about the behaviour, attitudes and/or opinions of the whole population from which the
sample is drawn. During the data collection process, the interviewer will be asked to
stand in front of the store to ask respondents to complete the survey. Then, the
questionnaire papers and e-copy version needs to be posted back to the company for
data re-checking.

9.3 Data capture instrument

Questionnaires will be divided into 4 sections related to Marketing mix; product,

place, promotion and price.

Section 1: the variety of products impact on customer buying behaviour

Section 2: the important of shop location in customers opinion
Section 3: the appropriate promotion for consumers
Section 4: the influence of price on consumer buying behaviour.

As we operate focus group before so we choose a closed-ended questionnaire design.

In this research, we intend to ask people on the street for responses. The benefit of

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closed-ended questionnaire is that we can narrow down the field of option. This
questionnaire can be answered among people of all ages above 18 in questionnaires
order in short time (Aaker&Day,1990; Kotler,1994)

The questionnaire will be designed basing on Likert Scales in order to generate

consumers attitude more clearly

9.4 Quality control

Interviewers need to meet the standard of IQCS, Interviewer Quality Control

Standards. Then, they will be trained by our staffs in order to understand the interview
process. Ten percent of respondents will be back-checks. Moreover, ten percent of
clients database will be rechecked for reliability. To ensure the quality of the
questionnaire, pilot survey will be conducted to test reliability and validity. Then, the
completed version of questionnaires will be submitted to clients.

9.5 Coding

1,800 questionnaires will be coded by using Likert scales number.

9.6 Data editing

All questionnaires will be rechecked for incompletion paper, which will not be
included in the database for analyzing.

9.7 Data analysis

Central limit theorem and SPSS are used for data analyzing. We will apply 1,800
questionnaires to this analysis.

9.8 Pilot testing

Pilot testing is a play significant role in every stages of questionnaire development to

ensure that all the questions are easily to understand, direct to the research objectives,
and can be answered by samples. It will be tested among employees within our
company by using the online survey on the company website. This process helps in
reducing cost of questionnaire developing.

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 10. Work Schedule
Our best estimate of how the timing could proceed is as follow

Wee Wee Wee Wee Wee Wee Wee Wee Wee Week Week Week Week Week Week
k1 k2 k3 k4 k5 k6 k7 k8 k9 10 11 12 13 14 15
qualitative
research
qualitative
presentatio
n and
report
quantitativ
e
questionair
e
developme
nt
pilot
briefing
Poster
presentatio
n
questionair
e
alterations
and
printing
fieldwork
brief
fieldwork
coding and
data

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preparation
data
analysis
report

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The overall timeframe of this study is 16 weeks begin from 11Nov.2011 to 1Mar.2011. First
week, we started on research about consumer decision-making to buy electric product with
Tesco in UK and review for variables, theories, and models which will spend time about 4
weeks. After that, we will develop the questionnaire and sampling on week 4 -5 and collect
the primary data, questionnaire to 1,800 housewives in 5 Tesco branches each in 5 big cities;
London, Birmingham, Leeds, Glasgow, and Sheffield. It will take about 5 weeks covering
travelling time. Then, our team will analyse, process all data which takes time about 3 weeks
and doing the presentation to showing the research result with client on 17 Feb. 2012. Lastly,
after writing a full report for 2 weeks, this research report will be submitted to client both
hard and soft copy on 1st March 2012.

11. Fees
The budget of 30,000 is distributed as below detail.

Lists Cost
Overheads (40% of total budget) 12,000
Street interview (10/questionnaire completed) 18,000
Total 30,000

Full amount of money is required to pay 7 days in advance before starting the research. The
price quoted above excluded the UK Value Added Tax, 20%, which will be added to the final
total. Invoice will be sent to your company for your approval. The costs are specified to
Marketing Research only for Tesco and strictly used to the conditions of contract.

From the total fees, we will provide the following documents:

1 5 hard copies of full report in colour.

2 2 soft copies in DVDs

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APPENDIX
QUESTIONAIRE

(Non-food items in this questionnaire mean electronic product that you are using in your
house for example vacuums, refrigerators, and dishwashers)

Q1. Have you ever been to Tesco?

Yes [continue]
No [stop here]

Q2. What supermarket do you often go except from Tesco?

Sainsburys
M&S
Asda
Argos

Q3. Have you bought any non-food items in Tesco?

Yes
No

Q4. Have you ever visited non-food categories in Tesco ?

Yes [bypass Q5 and continue with Q6]

No [continue to Q5]

Q5. Have you ever visited non-food categories in other supermarkets?

Yes [continue with Q7]

No [stop here]

Q6. Your opinion about non-food items in Tesco

Good Not Good Verbal Not bad Bad

Diversity of
brand
Displaying
Service
Quality of
items
Price
Promotion

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Q7What characteristics of other supermarkets selling non-food items do you like?

Price Displaying Service Qualified Diversity Promotion Location

items of items (near
your
house)
Sainsburys
M&S
Asda
Argos

Q8. According to your opinion, what the most important aspect of non-food categories
should Tesco improve?

Reduce price
More attractive display
Enhance customer service
Switch brand of non-food items for better quality
Increase promotion
Increase brands of non-food items for choice

Q9. How much was your average budget for supermarket fee per month last year ?

Under 50
50 - 100
100-150
150-200
Over 200

Q10. How much is your budget for supermarket fee last month?

Under 50
50 - 100
100-150
150-200
Over 200

Q11.How many people are included in your supermarket budget?

Only you
2 people
3 people
4 people
5 people
Over 5 people

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Q12. Gender

Female
Male

Q13. Which age category are you fall in?

18-20
20-24
25-29
30-39
40-49
50-59
Over 60

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Background

M Plus was found in the United States in 1923. We provide own retail-measurement

technique to serve clients reliability, specialise in researching the company and competitors

performance and promotion effectiveness. Clients can use the information supplied by M

Plus as one of instruments to measure corporate performance.

In 1939, the first international office of M Plus was launched in the UK, then continued

Western Europe, Australia and Japan. Survey Research Group in Asia Pacific was introduced

in 1994, and the company took over AMER World Research in the Middle East and Africa in

the late 1990s.

VNU, a world leader in marketing information, media measurement and information and

business media, admitted M Plus to be a part of the organisation in 2001.

In 2003, a new organisational structure was announced for VNU Marketing Information

(MI), its largest business group, in order to satisfy client needs and increase growth

Values

We're a company of enquiring minds and passionate people driven by three core values:

dedication to our clients' success; innovation and results.

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Why M Plus?

The M Plus Company operates in more than 100 countries and provides the most

comprehensive view of consumers worldwide. From shopping trips to purchase intent to

technology adoption, M Plus is tuned into the activity of roughly 10 million consumers to

provide insight on current trends and emerging opportunities.

Our clients

Turner Broadcasting, Philips Lifestyle Incubator, Association of Investment Companies

(AIC), UNICEF UK, UK Government Department, Ferrero Rocher, South Yorkshire

Passenger Transport Executive, London Borough Council, Blackberry squash drinks

company, Financial Reporting Council, Promotional Agency, British Land, Consumer

champion organization, A global personal care and packaging product company, Nestle, Shell

Eastern Petroleum (Pte) Ltd, Broadcaster, B&Q, Unilever, London Evening Standard, Mazda,

Innocent Drinks, Local Government client, AXA UK, Government Agency, SCA, NHS Trust

client, Consumer Focus, Schering-Plough, Pharmaceutical Company

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