Market Research Project - Caddyhome

1. Executive summary

The purpose of this research report is to find out whether customers are interested in an online hypermarket. To analyze this, the research is divided in three topics. The first one discusses the interest from customers to buy online. The second looks at drivers and barriers for people to buy online. Finally, the third topic investigates the different product categories that Caddyhome should include in their assortment. To analyze these topics, a market research was conducted through a face to face questionnaire and the results analyzed through a statistical program called SPSS. These results can be found in Appendix A. On the basis of these results, recommendations are given to Caddyhome regarding these topics.

2. Introduction

Caddyhome is the home delivery service of the Delhaize Group which is active in 7 countries across 3 continents. For years, they have focused on the selling of grocery products. Caddyhome is now thinking of extending their product assortment to become an online hypermarket. With this hypermarket, Caddyhome tries to offer customers the possibility to satisfy all of the weekly shopping needs in one click. This market research focuses on a few topics. First, it focuses on the interest of people to buy in an online hypermarket. Further, it looks at the reasons (drivers) for being interested and the reasons for not being interested (barriers) by customers. Next, it answers the question which non-grocery products Caddyhome should include in the new product assortment. Based on statistical results, it gives recommendations to Caddyhome in terms of their product strategy. Thus, if it is worthwhile for Caddyhome to transform to an online hypermarket and which products should be included in the assortment. The main question this research project seeks to answer is: “does an online hypermarket increase customer satisfaction?”. We chose this problem statement because we believe that customer satisfaction is the clearest tool to evaluate the success of the implementation of an online hypermarket. Sales, for example, wouldn’t be a good tool because sales will increase automatically since Caddyhome offers far more new products. Profit as an evaluative tool is not good either. Profit will change so much because Caddyhome’s business will change drastically. Only after a long run, when the hypermarket is fully implemented, profit can be used to measure the success of the project. But at that time, it could be too late already for Caddyhome to find out that they are investing in a bad project. So we believe that customer satisfaction is the most direct and efficient way to measure the successfulness of the project. Included are statistical test acquired via SPSS. However, the reader should keep in mind that this project will have limitations because it is conducted with a relatively small scale sample.

3. Research design

The purpose of our study is advising Caddyhome about the decision to open an online hypermarket and what type of products they should include in this new assortment. We have decided to collect primary data because there is no data about this topic available yet. To collect this type of data, we performed a descriptive research following the insights discovered by Caddyhome in their exploratory research. Their exploratory research showed the possibility to extend their business from an already existing supermarket to an online hypermarket. Our descriptive research is based on 104 observations from 4 different countries and our conclusions are based on statistical measurements that will be analyzed later. Moreover, we also performed a casual research to outline important relationships between demographics and drivers, barriers and categories of products. The goal was to present Caddyhome with relevant information about which customers preferred which products and what the most important drivers and barriers are for each type of customers. To collect primary data we followed a survey method, face-to-face interviews, which allowed us to be flexible when asking the different questions and to clarify them if the respondents have some doubts about their meaning

4. Sample design

For the purpose of our market research, we used a nonprobability sampling. We focused on people who, at least, sometimes buy online. We used a convenience sample, which means that we asked people who were available when and where we collected our data. Our sample was conducted among 100-150 respondents with Dutch, Belgian, French and Spanish nationalities. This should be enough in order to get some insight of the interest of the customers for the project and derive some relevant results from it.

5. Research questions, hypothesis and data analysis

I. The interest to buy in an online hypermarket

To analyze this topic we have six research questions. After we have tested the corresponding hypotheses, we give a short recommendation to Caddyhome regarding this topic.

Research question 1

Are customers interested in purchasing in an online hypermarket?

H0: Customers are indifferent to buy in an online hypermarket. (Ð'µ=3)

Ha: Customers are not indifferent to buy in an online hypermarket. (Ð'µ is not equal to 3)

The questionnaire question we addressed for this research question is question 4. To test this research question we decided to use a one sample t-test (two tailed) with a test value of 3. We decided to use a one sample t-test because we only have 1 sample (all the respondents) and our dependent variable has interval data. The test is two-sided because the hypothesis are either Ð'µ equals 3 or Ð'µ is not equal to 3, it can go in more than one direction, therefore it is a nondirectional test. We chose this test value of 3 because 3 is the neutral value on our interest scale which goes from 1 to 5. So a non equal score would show interest from the customers for the hypermarket.

When we run this test in SPSS we will compare the significance value according to the significance levels identified by Bowerman and O’Connell (2003). According to them, we need at least a p-value of 0.10 to have some evidence to reject the null hypothesis. The result of the statistic test gives us a p-value of 0.754. Thus the H0 hypothesis will not be rejected for the 10% significance level. We can conclude that customers are indifferent in purchasing in an online hypermarket.

Research