Question

Comfort Surroundings is a retail home furnishing retailer. CSI has been located in Jonesboro, GA for 25 years and has had general success. CSI’s primary market has been residential customers located within 15 miles of Jonesboro. CSI considers itself to be a full-service provider, including delivery and installation services. The owner is Eric Watson and most of the management and staff leaders are family members.

Presently, CSI product lines are:

• Kitchen appliances (such as stoves and refrigerators)
• Kitchen and dining sets
• Living and family room
• Bedrooms

Summary of recent business trends:

Year	Sales	Profit	# of Customers	Marketing Dollars
2018	$5,675,750	$1,702,725	2,011	$25,000
2017	$5,900,500	$1,593,135	2,318	$20,000
2016	$7,978,950	$2,234,106	1,955	$17,500
2015	$7,350,900	$2,205,270	2,405	$15,000
2014	$6,975,900	$2,092,770	2,700	$12,000

Mr. Watson has contacted you to assist him in understanding the trends and to develop a marketing strategy to increase sustainability and reverse what appears to negative trends.

1. Discuss any need for exploratory research. What types of exploratory research would you recommend? Explain your recommendations

2. What would be the research plan?

Please answer in-depth and great detail.

Answer 1

solution:

Ans 1

Market research is needed to gain insights on the concerns and preferences of customers so that we are able to increase customer satisfaction (and customer count/retention thereof), understand the factors that affect our business (and marketplace competition), and elevate our overall performance.

The pictures below provide a visualisation of the given data.

FALLING SALES AND PROFITS (2014-18)

DECLINING CUSTOMER -BASE(2014-18)

We can easily see that the given variables (i.e. sales, profits and customer numbers) are following a downward trend.

Additionally, let's also compute the costs of generating sales and profits per unit over the years (given by sales/marketing cost and profit/marketing cost respectively). Results are available in the table and chart below.

YEAR	SALES PER UNIT MARKETING COST	PROFITS PER UNIT MARKETING COST
2014	581.325	174.3975
2015	490.06	147.018
2016	455.94	127.6632
2017	295.025	79.65675
2018	227.03	68.109

We can see that each dollar of marketing expenditure's generating fewer sales and profits down the years.

Based on our analysis above, the purpose of your market research should be to raise the effectiveness of the client's marketing expenditure and bring about more sales and profits, as well as attract a larger number of customers.

Ans 2

We've already identified the negative trends. For a successful market research you'll have to dive deeper into the client's state of affairs. Some potential questions you could ask-

• On Falling sales/profits: Why are they falling? What could be the probable reasons? What needs to be researched in the market to improve the situation?
• Is your sales personnel bad at its job?
• • Points to research- Declining trends in sales quality and performance, Differences in sales performance per team, per person etc., customer feedback on staff behaviour, Training deficiencies etc.

• Is marketing and sales aligned?

Points to research- Why's the marketing cost decreasing year on year?, Are the marketing team involved in sales? Are they responsible for sales?

• Is the offered product/service consistent?
  • Points to research- Are customers leaving due to changes in the product (its features, quality, price etc.)?
• Do you know what your competitor's upto?
  • Points to research- Is the competitor driving away your customers using a different strategy? Are they producing something better? Is their product cheaper?
• What are the sales/profits/customers/marketing costs per product line?
  • Points to research- Which is the least profitable product line? Which product line has the least number of customers? Why?

• On falling Marketing costs:

• Are you short of financial resources?
  • Points to research- Is the business owner in debt? Have they defaulted on their loans? Are they unable to repay loans?
• Are you short of human capital?
  • Points to research- Does the business lack marketing strategists? Are people not producing enough good plans?
• Are your commitments increasing?
  • Looking to expand in newer markets? Trying to introduce newer product lines? Expenditure on R&D?
• Are you using the wrong promotional tactics?

• On decreasing Customers:

• What do your customers say?
  • Points to research- Are you following up with your customers? Why are they leaving? Are they buying from someone else?
• What do your customers complain the most about?
  • Points to research- Are you customer-focussed? Are you improving your services as per customer need? What are your policies regarding CRM?
• Who are your most valuable customers? Why?
  • Points to research- Which product attracts the highest number of customers? What's the unique value offered by this product?