Decision Making Assignment

Report on Market Research for the Computer Hardware Plc.-2009

Submitted To

Mr. Dan Sookun (Lecturer)

Icon College of Technology and Management

Submitted By

Mashukur Rahman

Id. 4098

Mashukur Rahman Id: 4098 Business Decision Making Page no. 1 of 26

Introduction

For a business to be successful, it is vital to know the market and customers profile. This

can be done by an intensive research through various methods of data collection which

will help to making decision about a new venture. Market research can help create a

business plan, launch a new product or service, fine tune existing products and services,

expand into new markets etc. It can be used to determine which portion of the population

will purchase the product/service, based on variables like age, gender, location and

income level. It can be found out what market characteristics your target market has. With

market research companies can learn more about current and potential customers. The

purpose of market research is to help companies make better business decisions about

the development and marketing of new products. Market research may also aid to the

marketers to understand the customer and customer behaviour and also help to know how

and which type of product has been satisfies the customers.

According to Kotler and et al (2008)-(Pg-333),“Marketing research is the

systematic design, collection, analyse and reporting of data relevant to a specific

marketing situation facing on organisation.”


Primary Data

Primary data is specific information that is collected directly by the person who analyse the

data and information also doing research. Primary data are collected for the first time. This

data has not been published before collection.

According to Avasarikar et al (2007)-(Pg-3.8) “It is the data collected for a

specific purpose or for a particular objectives. It is customised according the

requirements of the researcher. It exclusively focuses on current research problem.”

As per Kotler and et al (2008)-(Pg-334), “Primary data is a information collected for

the specific purpose at hand.”

Purpose and advantages of Primary data

Basic and specific information

By using primary data marketers can get basic and specific information about the

product.

Accuracy

Primary data is more accurate because it is directly collected from the population.

Update information

By using primary data researcher may get the latest and up-to-date information

about the product and services and also its environment.

Unbiased data

Primary data collected and processing by researcher. Therefore, the information

might be unbiased.

Secondary data

Secondary data is data that is already collected, processed and published by other person

for the particular reason. It is less expensive than the primary data. This data also can be

collected quickly and be collected from T.V, radio, magazine, books, literature review etc.


As per Avasarikar and et al (2007)-(Page-3.8) stated that, “Secondary is collected

earlier for some purpose other than the purpose of the present research study.”

They also said that, “Secondary data as a matter of fact, provides fundamental and

rich insights into research study.”

As per Kotler and et al (2008)-(Pg-334), “Secondary data is a information that

already exists somewhere, having been collected for another purpose.”

Sources of primary data

As a researcher and observer all primary data were collected by muself. For collecting the

primary data used two methods-

Questionnaire

Interviews

Questionnaire

Questionnaire is one of the important observing, analysing and research instrument for

use the market research. Generally, questionnaire is a series of question in a paper, which

makes for the getting information from respondent that means collect the information from

potential customers about the product and product related environment.

As per Brown (2001)(Page-06), “Questionnaires are many written instruments that

present respondent with a series of questions or statements to which they are to

react either by writing out their answers or selecting form among existing answers.”

Interviews

It one of the important medium for the market research. By this method,

marketer/researcher directly conduct with the customers. And he takes the short interview

about the product and quickly gets the information from the potential customers. Interview

may be face to face or by telephone or may be postal interview. Face to face interview is

the better than the other interview methods.


“Customer interviews is a discussion with customers and uses of projects

deliverables to determine requirements and needs...

Interviews are techniques for one-on-one uses needs assessments.”

Kendrick (2000) The Project Management.2000 Edition. (Page-40)

In this research, applied face-to-face interview method and 100 people were interviewed

on the streets of London as well as near Universities and computer stores.

Outcome of interviews

Customer profile (No.01) based on age

In total 100 people were interviewed, their age range are given following by table:

Range of age Customer (frequency)

15 to 25 25

25 to 35 30

35 to 45 20

45 to above 25

Total 100

Table: 01

The following chart shows the how customer profile based on age appear on a

column chart:

Chart no: 01


The column chart represents the total 100 people were interviewed. Among the 100

people, 25 people were interviewed their age range is 15 to 25. And 35 people were

interviewed they are 25 to 35 years old. Age range of 35 to 45 years old, the

number of customer were 20. At last 25 people were interviewed their age range

was 45 to above.

Customer profile (No.02) based on Gender

Among the 100 interviewees, 55 people were male and rest of the people were

female. Those are following by graphically:

Chart no: 02

The pie chart shows the 55 male were participating in the interviewed and 45

female also participate in the interview.


Customer profile (No.03) based on Occupation

Customer profile based on occupation presents graphically in following:

Chart no.03

The pie chart provides that students are the highest participants among the other

participants, which is 35 percent. 30 percent participants are office staffs that are

also participate in the interview. And rest of the people are households and others

people whose are also participating in the interview and their proportion was 25, 10

percent respectively.

Finally, after analyse the all customer profile it is clear that, among the all

participants most of the participants are young (25-35) aged. And also male

interviewees are slightly more than the female interviewee. Students are highest

participants among the other participants. So, it also is clear that young man those

are students that people were more enthusiastic about participating in my interview.


Data Analysis

Question no : 01 Do you have an own computer?(Desktop or Laptop)(Appendix No: 01)

Chart no.04

The column chart represents that, 70 percent respondents have own desktop or

laptop. And 30 percent respondent have no either desktop or laptop. Since, most of

the people have an own computer. So, there are huge opportunities for Computer

Hardware Plc to establish a computer hardware store in London market.


Yes

No

0 10 20 30 40 50 60 70 80

Own Com-puter

Number of respondent

An

swe

r

Question number: 02 &03 (Appendix 02 and 03)

Data analysis based on customer profile number-03

Chart no.05

This column chart shows the more than 67 percent office staffs have been use own

printers and scanners. Then the second highest category is students. More than 17

percent students have a own printers and scanners and rest of the students have

no any printer or scanner. And 12 percent respondent who are households they are

also used own printer and scanner. At last, in other category, 90 percent interviewee

said that, they have no own printer and scanner. Finally, it is clear that office staff is

the highest proportion that are use the printer and scanner. So, office staff should

be the target customer for Computer Hardware Plc for increasing sales volume of

printer and scanner.


Students Households Office Staffs Others

0

5

10

15

20

25

30

35

6, 17%

3, 12%

20, 67%

1, 10%

29, 83%

22, 88%

10, 33%9, 90%

Own Printer & Scan-ner

YesNo

Category of Interviewee

Num

ber

of In

terv

iew

ee

Question number: 04 How much money have you spend annually on computer

hardware? (Appendix 04)


Category Students Households Office Staff Others

Percentage (%) 80% of 35 (28) 75% of 25 (19) 85% of 30 (26) 70% of 10 (7)

Spend (Approx. amount)

£50 to £100 £100 to £150 £150 to £200 £100 to £150

Table: 02

(N.B. In this table, consider only highest proportion of every customer category.)

This table represents that, office staffs are spend the more money for purchase the

computer hardware which is £150 to £200 annually (approx. figure). Households

and others category were also spend the money yearly between £100 and £150 for

buy the computer hardware. At last, student who is the category those are spend

comparatively less money then the other category, which figure is £50 to £100 per

annum.

Question number: 05 & 06 Would you like cordless keyboard & mouse?

(Appendix 05 & 06)


Chart no.06


15-25 25-35 35-45 45-above

0

5

10

15

20

25

30

35

23, 92%

18, 60%

6, 30%

18, 72%

2, 8%

12, 40%

14, 70%

7, 28%

Cordless Keyboard & Mouse

DislikeLike

Range of Age

Num

ber

of C

usto

me

rs

This column chart represents that, most of the respondent (92%), those are 15 to 25

years aged, they are preferred the cordless keyboard and mouse. Over aged

people (45 over) those people also preferred the cordless keyboard and mouse,

which is 72 percents. 70 percents respondents those are 35 to 45 years old, they

have no interest about the cordless keyboard and mouse. And among the 25 to 35

years aged interviewees, 60 percents like the cordless keyboard and mouse and 40

percents are like to avoid the cordless keyboard and mouse.

Question number: 07 Have you use your monitor as a television? (Appendix 07)

(Would you like the TV Card?)


TV Card

Chart no.07 Chart no.08

The two pie charts represent that, among the all male respondent, 60 percents were

dislike the TV card, and 40 percents were preferred that they like to use the monitor

as a television. Where as most of the female (89%) were like to use the monitor as

a television. And few proportion of female (11%) were dislike the TV Card.


Question number: 08 How often do you change your computer? (Appendix 08)


Chart no.09 Chart no.10

The two pie charts show that, most of the male and female were used the computer

two or less then two years, which is 45 percents and 50 percents respectively. Also

same proportion of man and woman who have been used the computer only one or

no more then then one year, which is 30 percents. And 25 percents male

respondents who have been use the computer three or no more then three years.

On the other hand, 20 percents female were used the computer three or less then

three years.


According to Bharat Book Bureau, estimated or forecasted market demand of computer

hardware in UK is £12.29 billion at end user prices in 2007. And it is increased by 2.1%

within the one year. Therefore, it is very clear that in UK's market demand of computer

hardware is expanding day by day. So, it is a very good prospect/chance for Computer

Hardware Plc. to enter in the London hardware market.

As a market analyst I think that, before penetrate in the market Computer Hardware Plc.

should research the external environment of London computer hardware market. Hence,

for the research of external environment I applied the PESTLE analysis method which is

discussed following:

PESTLE Analysis

PESTLE analysis is a one of the analytical technique which is use for analyse the external

environment. The external environment is also called macro-environment and it refers to

aspects in the environment over which the firm has no control over.

PESTLE stands for-

P > Political Environment

E > Economic Environment

S > Social Environment

T > Technological Environment

L > Legal Environment

E > Ecological Environment


Macro Environment of Business

Political Environment

This refers that what is happening politically in the environment in which government runs

the country including areas such as tax policy, employment laws, attitude of government

officials, types of government in power, environmental regulations, trade restrictions and

reform, tariffs and political stability.

“Marketing decision are strongly affected by developments in political environment.

This environment is composed of laws, government agencies, and pressure groups

that influence and limit various organization and industries. Sometimes these laws

create new opportunities for businesses. For example, mandatory recycling laws

have given the recycling industry a major boost and spurred the creation of dozens

of new companies making new products from recycled materials.”

Kotler, P.(2000) Marketing Management.

The Millennium Edition.


Business Environment

(External)

Political

Legal

Economic

Technological

Social

Ecological

The UK's government promots the computer learning at schools and others educational

institutions, which is the very good opportunity for Computer Hardware Plc. to penetrate

into the london hardware market.

Economic Environment

This refers what is happening within the economy, for example; economic growth/ decline,

interest rates, demand, exchange rates and inflation rate, wage rates, minimum wage,

working hours, unemployment (local and national), credit availability, cost of living, etc.

Social Environment

Social environment refers that what is occurring socially in the markets, cultural norms and

expectations, health consciousness, population growth rate, age distribution, career

attitudes, emphasis on safety, global warming, language, education levels etc.

The information literacy rate in London is nearly 100 percents. It is a great opportunity for

Computer Hardware Plc to exploit and to give the better products at competitive prices.

Technological Environment

According to Lancaster and et al (2002), “Technology has a major environmental

influence upon the marketing firm. It affects not only the firm’s operations and

products but also consumers’ lifestyles and consumption patterns. Management

must be aware of the impact of technological changes.”

UK is the first world country in this universe. And London is the capital city of UK.

Therefore, London city is very advanced in technology that is very good external

opportunity for the Computer Hardware Plc.


Legal Environment

This relates to the laws of the governs and societies in which the firms operates and it

includes a consideration in the following factors:

Employment laws (Minimum wages, working ages etc)

Investment laws

Health and safety laws etc.

In UK's there are no legal constraints to enter in the market. So, The Computer Hardware

Plc. can easily starts the business in the London.

As per Kotler (2003), “Marketing decision are strongly affected by developments in

legal environment. This environment is composed of different types or laws,

government agencies, pressure groups that influence and limit various firms and

individuals. Sometimes these laws also create new opportunities for business.”

Ecological Environment

People and society as a whole are becoming increasingly concerned with natural (ecology)

environment and business firms are now expected to consider in their plans how to

preserve the environment. So, before start the business, The Computer Hardware

Plc.should to consider this issue.

The Computer Hardware Plc. will target that get the 10 percents market share in the first

operation as well as leading to an increase at 12 percents annually. It could be achieve

through and extensive promotion campaign through the media specialist computer

magazines.


Products launching

Timing for launching the products is represents by Gantt chart in following:

[ Proposed date: January 2010]

Months >

Job

Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

Research

Sorting results

Hire outlets

Recruitment & Training

Promotion

Launch

Chart no.11

This gantt chart shows that, The Computer Hardware Plc. was started the market

research from middle of july 2009 to mid-august 2009. And also sorting the result in

second part of month of August 2009. Then in september 2009 Computer Hardware Plc.

was busy for the hired outlets. After hiring the outlets Computer Hardware Plc. spend the

one and half months for recruitment and provided training which is 1st october 2009 to

middle of november 2009. For promoting the products Computer Hardware Plc taking time

from middle of November to middle of December. And finally products are launching after

middle of December.


Demand forecast for The Computer Hardware Plc.

Estimated demand of several products for the next 6 months

Months >

Products

Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Total

In units

Monitor 290 295 300 300 305 310 1800

Printer 250 255 255 260 265 270 1555

Hard drive 80 83 85 85 90 95 518

Scanner 110 112 115 118 118 120 693

Keyboard 150 155 155 160 162 165 947

Total 880 900 910 923 940 960 5513

Table: 03

The line chart shows the monthly forecasted sales:

Chart no.12

The line chart represents that, estimated sales figure of The Computer Hardware Plc. for

January 2010 to June 2010. The Computer Hardware Plc. expected that in january 2010

the sales figure will be total 880 units. Then the next sixth months it will be gradually

increases by more than 12 percents annually.


Jan Feb Mar Apr May Jun840

860

880

900

920

940

960

980

Estimated De-mand

Months---------------->

Un

its -

----

----

----

----

----

>

Estimated Sales Revenue and Expenditure for The computer Hardware

Plc. (From Jan-2010 to June-2010)

Table: 04


M onths Jan-2010 Fe b-2010 Mar-2010 Ap r-2 01 0 M ay-2010 Ju n-2010 Total

Sales R evenue £35 ,000 £ 39 ,0 00 £ 32 ,0 00 £42 ,000 £ 44 ,0 00 £ 45 ,0 00 £237,000

Expend iture:

Cost of sales -£12,000 -£13,100 -£12,500 -£13,700 -£16,000 -£16,800-£84,100

O perating Cost -£6,000 -£6,050 -£5,800 -£6,100 -£6,200 -£6,250 -£36,400

Administrative Exp. -£5,000 -£4,800 -£4,950 -£5,000 -£5,200 -£5,150 -£30,100

Advertising E xpenses -£2,000 -£3,000 -£1,400 -£3,200 -£3,300 -£3,500 -£16,400

Cost of P rom otion -£2,500 -£2,600 -£1,900 -£2,700 -£2,750 -£2,950 -£15,400

O ther Expenses -£1,200 -£1,000 -£1,100 -£1,250 -£1,300 -£1,350 -£7,200

In terest and Tax -£1,400 -£1,500 -£1,550 -£1,600 -£1,575 -£1,620 -£9,245

Total -£30,100 -£32,050 -£29,200 -£33,550 -£36,325 -£37,620-£198 ,845

Profits £4,900 £6 ,950 £2 ,800 £8,450 £7 ,675 £7 ,380 £38,155

Estimated profits of Computer Hardware Plc. from January-2010 to June-2010 appear on

the graph:

Chart no.13

This line chart represents that, The Computer Hardware Plc. expect that in January-2010

profit will be nearly five thousands pounds. From January to February it will be increases

gradually. But from February to March The Computer Hardware Plc. expected that profits

will be steadily decreases by more than four thousands pounds. Then, from March to April

The Computer Hardware Plc. expected that profits will be dramatically grows up which is

more than eight thousands pounds. Then the next two months profits will not be great

increases or decreases that means it will be gradually up and down.


Correlation Coefficient

Analysis of Coefficient of Correlation between Sales Revenue and Advertising Cost

Let,

Advertising cost is denoted by 'x'

and Sales Revenue is denoted by 'y'

Now, as a business analyst I have to find out that is there any relationship have or not

between x and y. That are following below:

Table: 05

Coefficient of Correlation is denoted by 'r'.

N∑ xy−∑ x∑ y

Formula of ' r '=

√[N∑ x2−∑ x2][N∑ y2−∑ y2]

6∗668900000 −16400 ∗237000

=

√[6∗48340000 −16400 2][6∗9495000000 −237000 2]

So, r = 0.97 (Using Calculator)

Since, r = 0.97. That means when variable x is increase that time variable y also

increases. Therefore, there are strongly positive correlation between two variables

(Advertising cost and Sales Revenue).


Months

Jan-2010 2000 35000 4000000 1225000000 70000000

Feb-2010 3000 39000 9000000 1521000000 117000000

Mar-2010 1400 32000 1960000 1024000000 44800000

Apr-2010 3200 42000 10240000 1764000000 134400000

May-2010 3300 44000 10890000 1936000000 145200000

Jun-2010 3500 45000 12250000 2025000000 157500000

N = 6 ∑ x=16400 ∑ y=237000

x2

∑ x2=48340000∑ y2=9495000000 ∑ xy=668900000

y y2 xyx

In following correlation between Advertising cost and Sales Revenue are shown by

graphically:

Chart no.14

The line of best fit also represents that the two variables are strongly positive correlated.

This line chart also shows that when advertising cost decreases that time sales revenue

also decreases. And when advertising cost increases that time sales revenue also

increases. So, The Computer Hardware Plc. should not be worried about advertising

cost.


1000 1500 2000 2500 3000 3500 4000

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Line of Best Fit

Advertising Cost

Sa

les

Rev

en-

ue

Cash Budget

Cash budget is a one of the important business planning mechanism or tool which aid to

the managers anticipate the expected cash inflows that means cash receipts and outflows

that mean cash payments for a budget period. Cash budget ensure and makes the

provision for minimum cash balance has to be maintained all time.

According to Horne et al (2008) (Pg-180)“ A cash budget is arrived at through a

projection of future cash receipts and cash disbursements of the firm over various

intervals of time. It reveals the timing and amount of expected cash inflows and

outflows over the period studied.”

Benefits and significance of Cash Budget

Planning tool

Cash budget is a planning tool. The major benefit of the statement of cash flows is

that users may get the reasonably detailed picture of a company's operating,

investing and financing transactions involving cash.

Forecasting the Future needs

Cash budget forecasts the future needs of funds, its time and the amount well in

advance. It, thus, helps planning for raising the funds through the most profitable

sources at reasonable terms and costs.

Maintenance of cash Balance

Cash is the basis of liquidity of the enterprise. Cash budget helps in maintaining the

liquidity. It suggests sufficient cash balance for expected requirements and a fair

margin for the contingencies.

Controlling Cash Expenditure

Cash budget acts as a controlling device. The expenses of various departments in

the firm can best be controlled so as not to exceed the budgeted limit.


Evaluation of Performance

Cash budget acts as a standard for evaluating the financial performance.

Bank Purpose

The management demonstrate of the ability of company its working capital ability.

Its also represents the lifeblood of a company. Many lenders and or creditors lend

the money to the company after reviewing the company's cash budget. So, to

getting loan company should be prepared and maintain the cash budget statement

regularly.

Projected Cash Flow Statement

The Computer Hardware Plc.

(From January-2010 to June-2010)

Months---> Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010

Cash Receive: Receipts from Cash Sales £31,500 £34,320 £29,440 £36,120 £38,280 £38,250

Payments: Purchase £16,000 £12,000 £13,000 £14,000 £13,700 £22,000

Purchase Fixed Assets £6,000 ----- £10,000 ---- ---- ----

Staff Salary £3,000 £2,800 £3,100 £2,500 £2,700 £3,200

All other overheads £4,200 £3,500 £3,800 £3,500 £4,100 £4,500

Tax ---- ---- ---- £2,500 ---- ----

Total (£29200) (£18,300) (£29,900) (£22,500) (£20,500) (£29,700)

Surplus (Deficits) £2,300 £16,020 (£460) £13,620 £17,780 £550

Cash in Bank (£8,000) (£5700) £10320 £8960 £23480 £41260

Closing Balance (£5700) £10320 £8960 £23480 £41260 £41810


References

Avasarikar, D.P. and Dr.Chordiya, S.B.(2007) Marketing Research. 1st Edition.

(Page- 3.8)

Horne, J. and Wachowicz, J. (2008), Fundamentals of Financial Management. 13th

Edition (Pg-180),Pearson Education Limited.

Kendrick(2000) The Project Management. 2000 Edition.(Page-40)

Kotler, P. Amstrong, G. Wong, V and Saunders, J.(2008) Principles of Marketing. 5th

European Edition.(Page-333)

Kotler, P. Amstrong, G. Wong, V and Saunders, J.(2008) Principles of Marketing. 5th

European Edition.(Page-334)

Kotler, P.(2000) Marketing Management. The Millennium Edition.

Kotler, P.(2003) Marketing Management. 11th edition

Lancaster, G and Massingham, L and Ashford, R.(2002) Essential of Marketing. 4th

Edition


Appendix

1. Do you have an own computer? (Desktop or Laptop) Yes No

2. Do you have a printer? Yes No

3. Do you use a scanner? Yes No

4. How much money have you spend annually on computer £50-£100 £100-£150 £150-£200

Hardware?

5. Would you like cordless keyboard? Yes No

6. Would you like cordless mouse? Yes No

7. Have you use your monitor as a television? Yes No

(Would you like the TV Card?)

8. How often do you change your computer? < 1 year < 2 years < 3 years

9. Would you like laptop with a webcam? Yes No

10. Do you like optical mouse and optical keyboard? Yes No

11. Would you like combined printer and scanner? Yes No


Decision Making Assignment

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