Virginia Commonwealth University s1

Virginia Commonwealth University Executive MBA Program Survey and Sampling Project Drs. Andrews and Custer

TEAM SURVEY AND SAMPLING PROJECT

Project Overview:

Your team has been contracted by a venture capital firm to help identify investment opportunities. The firm is looking for innovative consumer products that will appeal to a large market. Your role in the project is to develop information to evaluate market size and market composition along with suggested pricing levels. You do not need to be concerned with potential technical, manufacturability or distribution issues.

Go to the website www.ideaconnection.com/new-inventions and select a suitable product or idea that can be developed into a consumer product. Do not spend too much time and effort on selecting and researching the product. The purpose of this project is to gain experience in developing, conducting and analyzing consumer surveys, not savvy product identification, nor accurate assessment of the feasibility of being able to successfully manufacture and deliver a product with the stated capabilities. The website does not give a lot of product information. You can take liberties here. You can assume product features or functions that are not clearly indicated.

Your team should design and pilot test a survey to obtain information to develop pricing and marketing strategies for the product. Specific objectives are: - Identify the potential appeal of the product to different market segments, such as male/female, age group… - Identify what features of the product have greatest appeal or additional features that would add to the appeal. - Provide information to give pricing guidance for the product. For example, estimate the quantity purchased or likelihood of purchase for three different price levels.

Your project will have three phases consistent with the Plan, Do and Report steps used in the Sharpe text.

Plan:  Identify the target population, parameters of this population that will guide future decisions related to this product and sampling frame for a full-blown survey for your chosen proposed product.

 Develop a sampling plan for a full-blown survey that can be conducted at a reasonable cost. Your plan should minimize sampling biases and identify any unavoidable biases that may result if your plan is implemented.

 Develop a questionnaire or survey instrument. 1  Your survey should include the following subjective variables (questions that solicit a respondent’s state of knowledge, attitudes or opinions.) - At least two binary variables – two questions with only two allowable responses, e.g. yes/no; agree/disagree; interested/not interested. - At least two categorical variables with 5 or more choices for responses, e.g. strongly agree, agree, neither agree or disagree, disagree, strongly disagree.

- At least two quantitative variables, e.g. how much would a respondent pay for an item or service. For these variables the respondent may respond with an actual amount or be offered a series of ranges, for example, $5.00 or less, $5.01 up through $7.00 and so forth. There must be at least 8 ranges.

Data analysis can be performed if a representative value is selected for each range and used as the respondent’s response value (i.e., use $6.00 for someone selecting the $5.01 through $7.00 range. The quantitative variable could also be a rating of an opinion on a scale of 1 to 10, e.g. rate your interest in this product on a scale of 1 to 10.

 Your survey should include the following objective individual characteristics or demographic variables (questions that solicit objective information from a respondent, e.g. age, gender, town of residence.) - At least one binary variable e.g. male/female; student/non-student. - At least one categorical variable with 3 or more choices for responses. - At least one quantitative variable, e.g. age, income. For these variables the respondent may be offered a series of at least 8 ranges.

 Define all variables clearly and precisely so that there can be no misunderstanding relative to what is being measured and how it is to be measured (provide adequate Operational Definitions).

 Make sure your survey results will provide the data needed to address the specific objectives listed under Project Overview.

 Your team should estimate the percentage of respondents that have no interest in the product prior to gathering any data. Be specific. "We don't think many people will have an interest in this product," is inadequate. But, "We think 25% of respondents will not have an interest in this product," clearly specifies a numerical value for the percentage. Be sure to collect information that will allow you to test your estimate. You must be able to calculate the proportion of respondents who have no interest in the product. The accuracy of your estimate will not affect your grade on the project. Your estimate will be used for subsequent analysis.

2 Do:  You should perform a pilot test of your survey. The pilot should test the clarity and completeness of the survey instrument and your analysis plan. It does not necessarily have to test the feasibility of all aspects of your sampling plan. Your sampling plan should obtain data to represent the target population as nearly as possible, but population representativeness of your pilot sampling frame is not a requirement for your pilot test. You may test the survey on your friends and family even though this may not be a representative sample.

 Your pilot should include enough respondents to give a 10% or better Margin of Error for a 95% confidence interval estimate of proportional variables. (See section 11.4 page 315 of the Sharpe text.)

 Note any changes that need to be made to your survey instrument before implementing a full blown survey, e.g., questions that were unclear or ambiguous, or questions that did not yield the information sought.

 Show the results for all variables individually using whatever data summary or display approaches you feel are appropriate.

 Give confidence interval estimates of proportions for key binary variables and means for key quantitative variables.

 Perform a test of the null and alternative hypotheses for your guesses/estimated value for the percentage of respondents who have no interest in the product. The null hypothesis is that the estimate you made prior to performing the pilot test is the true population value. The alternative hypothesis is that your estimate was incorrect. State the appropriate null and alternative hypotheses (in symbolic form), the test statistic and the P-value for your test. What conclusions do you reach about your original estimate?

 Determine any correlation or dependences between key variables. Include appropriate Contingency Tables (Excel Pivot Tables), and Scatter Plots along with conclusions reached based on these tables or graphs.

3 Report (due December 16, 2011):

Prepare a report for the venture capital firm summarizing your work on the survey. Your report should be in the order below and include:

1. An Executive Summary at the beginning that concisely states: - A very brief description of your proposed consumer product. - What you were trying to accomplish and for what purpose. - Summary of important results and conclusions. - Any unique problems or situations that might significantly affect the pilot study results and conclusions include any bias that may exist due to the frame used for your pilot. - Overview of what you learned during the pilot project. - The target population, sampling frame and sampling method for a full blown survey. - Your recommendation about proceeding with a full blown survey. The Executive Summary should be no more than a page and a half of text, in an easily readable style and format. You may include a chart or table to support a particularly important result. Insert each chart or table where it is referenced. 2. The initial survey instrument 3. A description of the proposed full blown survey sampling plan and the pilot study sampling plan. 4. Explain how the survey and full blown sampling plan will give the necessary information to accomplish your stated purpose. 5. Summarize problems encountered when conducting the pilot study, if any. 6. Summarize the pilot survey results using appropriate summary statistics, displays and tables and include any problems encountered when conducting the pilot study. Include the summary results for each question, but you do not need to show results for testing/assessing all possible relations and dependences. Only include those that are important or surprising. If none meet these criteria show two or three anyway. 7. Give your hypothesis test results for your guessed/estimated value for the percentage of respondents who have no interest in your product and results for any other hypothesis tests you performed. 8. Tell what you did to assess any observed differences between your specified market segments. 9. Summarize any recommended changes for the survey or full blown survey sampling plan giving specific revised questions for the survey and/or specific steps for the full blown survey sampling plan.

Put everything in a single Word document. Do not use appendices. Insert each chart or table where it is discussed. Arrange the report to facilitate reading. Number the pages. Use the order specified above. Remember BS stands for Business Statistics, we do not want any other kind of BS. Be concise and to the point.

Deliverable to be graded:  A written final report – due December 16, 2011 4