Post Graduate Programme in Management

INDIVIDUAL ASSIGNMENT

UNITED WE SAVE
QUALITATIVE MARKETING RESEARCH PROPOSAL

QUALITATIVE MARKETING RESEARCH TERM V

Submitted by:

S Nitish Sivaramakrishnan

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Contents
Abstract .............................................................................................................................................. 3 Introduction & Significance ............................................................................................................... 3 Background and Literature Review ................................................................................................... 3 Research Objectives ........................................................................................................................... 4 Research Questions ............................................................................................................................ 4 Central Research Questions Guiding Research Questions Research Methodology ...................................................................................................................... 4 Research Design ................................................................................................................................. 6 Design Participant sampling Data Collection Data Analysis Limitations and Delimitations Contribution / Expectation from Research......................................................................................... 9 References .......................................................................................................................................... 9

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Abstract Group buying is a business model where people with the same merchandize interests form a group and conduct the purchase together to achieve a discount. Third-party proxy websites negotiate with merchants for appealing deals and then provide them to end customers. We call it online group buying. [1] Group buying in India is faces a number of difficulties, and struggle to find retailers willing to sign up with offers. Despite the rapid growth from the business model, there have been speculations about the sustainability of the model. The role of the joiners, the initiator, and sometimes even the merchants induces some interesting characteristics in group buying, which remain largely unexplored in the research community. This might in fact be the key to solving the sustainability issue of the model. Introduction & Significance Group buy has been gaining importance as a significant business model, and is gaining importance especially in the retailer space and is poised to become an important retail model in the marketing channel. We theorize that there are different attributes and influencers for each mode of group buy business, and this will be analyzed, tested and confirmed from the research conducted. If this is the case, then it is very critical to understand the attributes and influencers in depth and how they affect the group buying business. The value of the group buy channel is great for manufacturers; this study will also figure driving success factors of group-buy model by classifying its modes and analyzing the primary attributes, characteristics and influencers on marketing channel and its members. The analysis from the outcome of the research will be valuable for the channel decisions of retailers and website owners. Background and Literature Review Broad areas of interest in this study is understanding the factors that govern each type of group buying business, so that these can be a thrust area for the businesses to increase sales and activity on their group buy platforms. Current research emphasizes on trends and products which are on preference list of consumers, and ideas to promote group buy business through trend monitoring. Despite much of research and work on analyzing trends and modifying group buying businesses accordingly hasnt shown much effect on turning the group buying business around in any way in the recent past.
"Not enough businesses are coming back to daily deals to make the industry sustainable in the long run,"
- Utpal Dholakia, Jones Graduate School of Business, Rice University's

[1]

Only 55% of biz reported making money, 27% lost money & 18% broke even on their promotions [2] Although group-buying sales attracted customers who were using Supplier Company for the first time in 80% of cases, few customers spent more than the deal's value or returned to purchase at full price
PCPro, United Kingdom

[1]

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Much of the research material on group buying trends of late reflect the same thought, and that there need to understand the factors affecting group buy business at a grassroots level. This prompts us to look into other factors that might be really underlying the group buying business that might actually be worked on to improve and turn around the group buy business. Research Objectives Objectives 1. 2. 3. 4. To identify the key players in group buying business model. And to pin point key attributes of the important players thus identified. To determine the key drivers and success factors of the group-buying business model. To consider the effect of marketing in terms of competition and economic situation on the success of group buying business model.

Research Questions Central 1. Who are the key players in the group buy model? 2. What are the critical attributes and characteristics of those key players? 3. Which characteristics of the initiators influence the success of Group buying? Guiding 1. To what extent do discounts and commissions attract buyers and sellers to the platform? 2. What are the typical products or services that buyers and sellers find attractive for sale on group buy platforms? 3. Do consumers perceive a group-buying platform as a unique brand, or is brand significance diminished by copycats in the same business? 4. Does Group buying have a bright prospect? 5. Which kinds of product are suitable for Group buying or are easy to attract consumers attention? 6. How do the consumers interact in Group buying? Research Methodology We follow an interpretive qualitative research methodology [3], where we are concerned about the meaning-making practices of the key players identified in the group buying business model at the center of explanation. Here we do not start with the concepts determined priori, but we allow patterns and concepts to emerge from the study and encounters with the participants. We then proceed to interpret the results and infer from the findings observed in course of the study. The primary reason for choosing interpretive research is driven by the research objectives of the proposed study, which aims at identifying the key players and interpreting their response and actions into actionable inferences. These inferences will be a guideline to determine the underlying attributes and characteristics of the group buy platform. The inferences will also throw light on the pitfalls and effects of economic considerations on the group-buy business model.

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[Figure 1], suggests the interpretive research methodology that will be followed in the present study, with the details of each section mentioned in the Research Design section that follows.

Consult Literature

Research Objectives

Literature review

Research method selection

Respondent selection relevant to the objectives

1.

Conduct relevant data collection procedures

Data Collection
2. Record, transcribe and codify data 3. Analyze and classify data 4. Make inferences and call for actions

Data analysis

Research Findings

Future Research

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Future

Research Design

Research Selection

Researcher interest in the challenges of group-buying business model

Criticality and importance of the business model in retailing space

Research Design Design The Research techniques for the purpose of data collection are proposed to have the following: 1. Literature review & knowledge sharing sessions with SMEs 2. In-depth interview ( seller side, business managers & owners ) 3. Focus group discussion ( consumers ) Participants Sampling The participants are broadly classified as buyers, sellers and platform owners (initiators). In specific, they include consumers, self employed group buy initiators, managers from media websites, supervisors of popular online communities, and managers from retail side for the group buy business. Following shows how sampling is done for each of the selected research technique: 1. In-depth interview ( with ) a. Business Managers i. A minimum of 5 experienced managers from popular group buying businesses ii. Build in geographical variation, product variation, targeted consumer variation using maximum variation sampling. iii. Extreme/Deviant case sampling, with profitable and unprofitable group-buy businesses b. Sellers/Retailers/Manufacturers i. 8 sellers/retailers/manufacturers based on variation in their product type and range offered, pricing system. ii. Build in variation of geographies and customer segment targeted 2. Focus group discussion a. 10 consumers to be sampled from each prominent group buy business to a total of 30/ 40 consumers, build in variations based on demographic factors (age/gender etc.) using maximum variation sampling. List and profiles can be accessed from the business owners. b. Draw respondents from different geographies, tier 1/tier 2 cities in India. Data collection 1. In-depth interview questions ( with ) a. Business Managers i. Ice breaker questions: How is the business working out? , how long has it been running? , how many employees manage this entire business? , where do you see the group buy business going in the future? ii. Interview questions: What are the products on sale on your website? How do increasing depth and width of product offerings affect sales and site activity?

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Can you tell us about the entire process about how you get buyers and sellers to your platform? How seasonal is the business, and is seasonality dependent on the products on sale? Is the supply and demand both seasonal? Who are the initiators and joiners in the entire process? What are the most critical features, which you believe a group buy portal should have? What are the most important features that your site has? What all factors influence the activity and hits on your portal?

b. Sellers/Retailers/Manufacturers i. Ice breaker questions: What is the type of product you sell? , what are the other modes through which you sell your products? ii. Interview Questions As a retailer what benefits do you see in a group buy business and how do they help you increase your sales? Consumers face a lot of dilemma choosing among traditional and group buy websites, which do you think is beneficial to the consumer and why? Demand and sales must be very volatile now a days, how do you think these impact your business, and what other factors influence your supply and sales? How do you think you can benefit more from the group buy business? 2. Focus group discussion a. Participants sampled using cluster sampling, ensuring demographic diversity and at the same time purchasers of a variety of products, but belonging to same geography due to logistic constraints. If they have already experienced benefits of the process, it would be better. b. Discussion Driver questions How beneficial is group buying for you all? What kind of purchases do you make? Can you share your personal experiences purchasing from group buy websites? What are the kind of discounts you perceive to add value? How do you perceive the quality of the products and services being offered? What incentives drive you to purchase on group buy platform? If you would like to improve or add features to the entire process what would those be? Do you feel you get a fair deal from the group buy platforms? Data analysis Stage 1: Compiling: Identifying different modes of Group-buy business We can broadly group the group buying business model into different modes, based on the initiator profiles, which are a primary determinant of the activeness and function method of a group buy business. Data will be collected broadly on who are the key driver/ initiators of the group buy business model, what are the main attributes for each initiator driven model and what are the various

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influencers of decision making in the channel for initiators, & joiners. Read and review the data collected Stage 2: Disassembling: Pre-build a framework & glossary using literature review and feedbacks from SMEs. Make notes of what each respondent is saying post the discussions, in a descriptive format using memoing technique. Identify the data specifically that can be codified and those that can be left in a descriptive format. Stage 3: Reassembling: Record, Group, & codify the data from in-depth and focus group discussions. Look for patterns in the data and group using arrays and matrices as shown below.
Group-buy Platform www.runpapa.com www.groffr.com www.Groupon.com www.Snapdeal.com .. Products Initiators Joiners Comments

Stage 4: Interpretation: Identify the characteristics of the group buy business Classify the various characteristics of the group buy business based on the initiator profile, Classify and cluster emergent attributes of various forms of group buy, under the initiator profiles as shown below:
Attributes Value Lifestyle Demand Brand <attribute> ..
<initiator profile 1> <initiator profile 2> <initiator profile 3> .. .. .. .. .. .. .. <initiator profile n>

Inferences

The number of imitator profiles and attributes are not limited to the number shown in the above table; these can extend to as many that emerge from the trends observed in the data collected. Further the above data can be quantified based on <very high>, <high>, <moderate>, <low> and <very low> of a 5 point scale to understand the importance of each attribute to the initiator based group-buy business. A further analysis could be done to identify the influencers of decisions for initiators, and joiners, as shown below:
Influencers Product type & range Sellers pricing Promotion Roles Key drivers to success .. < profile 1> < profile 2> < profile 3> .. .. .. .. .. .. .. < profile n> Inferences

Describe each of the attributes and influencers identified, and make a call for action against each, and explanation of how we can go about implementing the call for action in each case. These will 8|Page | Qualitative Marketing Research | S Nitish

form the base of the conclusions to the entire research, and how these can impact the group buy business. Limitations & Delimitations 1. Setting time for in-depth interviews with business managers and stakeholders will take considerable amount of convincing. 2. Conducting respondent interviews and focus group discussions across locations and different cities though very critical, will take significant time and expense. 3. We limit ourselves to 4 focus group discussions and 13 in-depth interviews, to derive most of the data for our research, but a larger sample with more time would definitely provide more insights to the study. 4. Focus group discussions are not possible with business managers and retailers as they might be constrained to reveal specific business catches to their competitors or other stake holders. 5. Focus group discussion for consumers might reveal valuable insights and conflicting thoughts about perception of the group buying. In-depth interview against FGD will generate lesser insights compared to the time and effort

Contribution / Expectation from Research 1. From the study we expect to find the key success factor of a group buy business model which is most likely to be an active internet platform to draw in users from both consumer side and the retailer side. The internet platform should have the ability to draw eye balls, which will act as a driver for the activeness of the internet platform. 2. One more attribute of the business model that is expected to come forth is that the price of the articles on sale are far more than the actual cost, and that the end consumers will benefit highly from the low cost availability of the products on the group buy model. 3. The group buy model is also anticipated to supply valuable information to consumers with online word of mouth and observational evaluation, which is in line with the current research on group buy business models 4. Group buy business model in some contexts has become a serious concern for the traditional retailer model, and pushing them out of business. 5. Some factors that might limit the development of group buy business may include: 6. Maturity of the market which might reduce the margin of the seller and in turn reduce the discounts that are offered to consumers 7. Monopoly of traditional retailers might reduce the attractiveness of the group buy model 8. In the future, valuable studies about the issue of Group buying especially on the changing behavior of e-retailing and consumer preferences and trust on group-buy will help us reach a conclusive answer on making the group-buy business model sustainable.

Formatted: Underline

References
1. http://www.pcpro.co.uk/news/368068/group-buying-sites-unsustainable 2. http://www.mathcs.duq.edu/~packer/IR/IRmain.html -- interpretive research 3. Alvermann, D. E., & Mallozzi, C. A. (2010).Interpretive research. In A. McGill-Franzen & R. L. Allington (Eds.), Handbook of Reading Disability Research (pp. 488-498). New York: Routledge

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4. http://www.afr.com/p/business/companies/the_gloss_goes_off_online_group_FY4cmqtM7T74Kck O1HQezK

10 | P a g e | Q u a l i t a t i v e M a r k e t i n g R e s e a r c h | S N i t i s h