Marketing Research Proposal For Improving Sales Of Harvey Norman In New Zealand

Research Aim

In a business formulation of marketing strategies is very important. Marketing strategy helps to formulate a marketing plan. Marketing strategy helps in determining the most basic goal or aim of an organization and aims at achieving it (Cassar, Ittner, & Cavalluzzo, 2015). A proper marketing plan helps the organization to understand the market condition and the probable opportunities that the company has. Marketing plans are set with certain goals. These goals are realistic, achievable and motivating in nature (Bendekovic, Simonic & Naletina, 2014). In an organization each and every employee should be trained with the marketing plan that has been set up. Proper marketing strategies also help a business to understand its customers or client in a broader way. Other importance of Marketing strategies is it helps to develop financial objectives for the company. According to Bulmer (2017), there are two types of Financial goals, namely sales target and sales expenditure. Sales forecast drives the organization in achieving within one particular financial year. Expenses are estimated by the organization in the starting of a new financial year.

The aim of the paper is to gather information regarding improvement of marketing strategies that will help Harvey Norman to increase its sales and overall profit in New Zealand.

• To investigate about the underlying causes that has led towards a reduced share price in early trade
• To comprehend the particular reason for delivering soft results in spite of powerful performance by Harvey Norman Holdings Limited.
• To evaluate the appropriateness of the marketing attributes of Harvey Norman Holdings Limited.
• To analyse the determinants associated with the consumer purchase intentions of Harvey Norman products
• To analyse the methods in which better marketing strategies could be improved to promote the brand image

On the basis of the research objectives, the research questions could be listed as follows:

• What are the underlying causes that has led towards a reduced share price in early trade?
• What is the associated appropriateness of the marketing attributes of Harvey Norman Holdings Limited?
• What are the determinants associated with the consumer purchase intentions of Harvey Norman products?
• Which methods would be beneficial at framing marketing strategies could be improved to promote the brand image?

In order to analyse the determinants of consumer purchase intentions for the company’s products, three variables have been taken into consideration, namely, age of the consumer, income of the consumer and advertising attributes of the firm. In order to analyse the relationship, three hypothesis has been framed as follows:

H1: Age of the consumer and consumer purchase intentions is directly related

H2: Income of the consumer and consumer purchase intentions is directly related

H3: Advertising attributes of the company and consumer purchase intentions is directly related

The null hypothesis associated with all the above stated hypothesis frames and indirect relation between the dependent and the independent variables.

The chosen organziation for conducting the study is a New Zealand based company named Harvey Norman Holdings Limited. The company was founded by Gerry Harvey and Ian Norman. This company is operating under a franchisee system based in Australia. The company is mainly operating in to the retail business. The main activities of the company are “Property and digital Enterprise”, “Integrated retail” and “Franchise”. It sells various house based products. The products include Kitchen appliances, washroom tiles, carpets for floors, computerized communications and many more. This is a public company which is trading in the Australian Securities Exchange Limited (ASX) (Harvey Norman, 2013).

Research Objectives

The company is witnessing a percentage decrease in the profit. Though the sales from the network of the Australian Franchisee increased by 4.8 percent but the profit of those network was down by 2.9 percent. In a press interview Mr. Harvey said that the portfolio which has been formulated is good and there are no demerits in the formulation of the portfolio but various analysts from the Citi bank is saying that due to the increase in the competition in the market the company is facing such decrease in the losses (Financial Review, 2018). It has been seen that many potential competitors of the company are opening stores in most of the areas very quickly than Harvey Norman. This factor is reducing the sales of the product of Harvey Norman and this is the reason the company is facing decrease in the profit.

Since the profit has significantly decreased in the year 2018, the share price of Harvey Norman has also decreased by 2% (Robinson, 2014). This decrease in the share price has made the investors in the company very upset and most of them are not willing to invest in the company. In a statement the chairman of the company said that the company intends to capitalize in the overseas market and they are looking for new sites to open new stores of the company. In the statement the chairman also said that they are expecting to open 18 more operating stores of Harvey Norman.

The research method which is being mainly used is the data collection through survey. The survey is conducted through a set of questionnaire. The survey has been conducted in two ways. The first method has been through Personal interviews. Various customers of Harvey Norman have been asked a set of questions and their feedbacks has been recorded. The second survey method has been done through sending mails to various customers. The reply of the mail has been considered as the feedback of the customers. The answers of complete 50 respondents has been considered for analyzing the issues associated with marketing of the products of the company. The questionnaire consists of questions that are demographic and conceptualized. Likert scale has been used for the second part of the questionnaire, where the clients answer questions based on their purchasing habits thereby making it easier to provide information regarding their perception of the consumer purchases determinants.

The collected data is analyzed in four methods, percentile analysis, qualitative analysis, chi-square tests for hypothesis testing and cross tabulation methods.

Research Questions

Percentile analysis displays the percentage of score in its frequency distribution. The analysis shows the position where the score of an individual lies in the frequency distribution of scores (Phung, Hardeweg, Praneetvatakul & Waibel, 2015).

Table 1: Percentile analysis of Age

In the analysis the sample contains seventy percent male and thirty percent females. The highest percentile of age attained by the sample is of 21 years to 25 years that is around thirty percent of the sample subject falls under this age group. The lowest concentration of population lies in the age group of 31 to 35 years, around ten percent of the total sample population falls under this category. Thus major sample population lies in the young age group who are the main buyers that should be targeted by the company.

Table 2: Percentile analysis of Hours spent

The lowest hours of visit of paid to each sample are three to four hours on the other hand the highest amount of time spend on a sample is around seven to eight hours.

Thus, the percentile ranking displays the position of the sample in different groups (Singh & Masuku, 2014). The sample represents the target group for the company. The highest concentration of the sample includes individuals from the younger age group, lies in the median income group. The sampler has spent long hours with individuals on his each visits. The company sells a range of consumables ranging from furniture to electronic goods. The decision of buying consumables can have a gender dependency. Changing the gender diversification might change the results.

The qualitative analysis is done through the Pie chart analysis. In the following part each and every pie chart has been briefly analyzed. The questions that have been asked to the  respondents have been taken into consideration and the frequency of their responses is presented in the form of graphs.

The highest percentage of sample is earning around ten thousand to fifteen thousand in a month. The highest income is the median of the distribution. The extreme income groups have the lowest concentration of sample.

This pie-chart focusses on the feedback of the customers based on their interest in purchasing various home appliances immediately when they are launched in the market. From the pie chart it can be seen that 35% of the customers strongly prefer to buy household appliances immediately after they launch in the market. Again it can be seen that 35% of the customers preferably agree to buy the products that are being recently launched in the market. 30% of the customers strongly disagree and have neutral behavior towards this type of purchasing behavior. Hence, it can be said that the most of the consumers prefer to buy the products when they see them launching in the market.

Hypothesis

This pie chart focusses on the consumer knowledge on the various advertisements campaign that are being aired and published in various television channels and print media respectively. From the pie chart it can be seen that 30% of the customers being surveyed strongly follow the advertisement campaigns that are being created by various companies. 25% of the customers agree that they watch or are being aware of the advertisement campaigns. 20% are neutral with this matter and 25% of the customers do not watch or unaware of the various advertisement campaigns. Therefore, it can be said that the majority of the customers being surveyed are aware of the various products that are being launched in the market by various companies.

The third question which was being asked to the various customers are whether they prefer buying products on the basis of their prices or not. 45% of the customers strongly agree to this fact. From the pie chart it can be seen that 20% preferably change their buying behavior on the basis of the price. On the other hand, 35% of the customers disagree and have neutral behavior on this type of purchasing behavior. Thus from this survey it can be concluded that the price is the most preferred factor when it comes to the purchasing behavior of customers.

The fourth question which was being asked is whether the mid aged generation is more inclined towards the buying of house hold appliances. From the survey it has been seen that almost 65% of the customer believe that middle aged generation are more interested in purchasing household appliances. 50% of the people who have been surveyed strongly disagree or agree with the fact that middle aged person is more inclined towards purchasing household appliances.

The fifth survey question was based on the fact that whether household appliances are bought by those who belong to high income group. From the survey report it can be seen that almost 60% of the customers agree to the fact that people falling under high income group are more inclined towards buying household appliances. The other 40% of the customers being surveyed strongly disagree to this fact.

The sixth survey question is about the fact that whether home appliances have become an important factor for people of all age groups. The survey which was being conducted reveals that 60% of the customers believes that it is very important to purchase household appliances and it is an important factor or all the age groups. Whereas only 40% disagree and have a neutral behavior towards this fact.

Overview of the Organization

This survey question highlights the fact that all the companies should advertise the products that are yet to be launched in the market. According to the feedback of the survey that is being conducted it is believed that 60% of the customers believe that it is very important for the company to advertise the product prior to its launch in the market because this would increase the interest among the customers. About 40% of the customers disagree to this fact.

The last question which has been asked to the customers is that whether all companies should sell products that are affordable to customers of all age groups. From the survey that has been conducted it can be seen that 60% of the customers agree to the fact that companies should launch affordable products for all age groups and 40% of them do not agree.  

The cross tabulation of the dependent variables and independent variables displays the count of the households for different responses. The majority of the individuals included in the sample have agreed to the three independent variables as it influences the decision of the purchasers. Very few has rejected that these independent variables have influences the dependent variable. The vertical axis of the table represents the count of the individuals and on the horizontal axis the three independent variables are located. The order of the independent variables is age of individuals, income earned by individuals and effect of advertisement done by Harvey Norman. The majority concentration lying in the agreed and strongly agreed represents that the independent have been selected correctly in order to evaluate the purchase decision for the products of the company.

More than four respondents have rejected hypothesize. While around twelve individuals have agreed to the fact that these three independent variables highly influence the purchasing decision of the consumers. Around ten individuals have strongly agreed to the hypothesize that these three independent variables strongly influence the independent variables. Only two people have fairly agreed to hypothesize. Fair amount of concentration of population in different response group represents the fact that apart from these three variables purchaser’s decision has variable other influencing factors. Every individual has strongly agreed to the fact that decision of buying Harvey Norman products is very much dependent of the income earned by the individual.

Table: Chi-Square test results

Chi Square tests how well, the estimated variables have fitted with the actual value (Smith, 2015). In this case the Chi square value tests the expected dependent variables for consumer purchase behavior. It has been hypothesized that the purchase behavior of consumers depends on three variables; these three variables include the advertisement done by the company, the age of the consumers and the income of the individuals. The null hypothesis (H?) of the study is that the consumers’ purchase decision is not dependent on these three variables, and the alternative hypothesis (H?) is that the decision is dependent on these three variables.

Research Methodology

If the result of the test is greater than one then the null hypothesis is rejected and accepts the alternative hypothesis. In this case the H? is that the purchase decision of the individuals is highly dependent on the three independent variables. Individuals of the sample have instilled great confidence on three independent variable for influencing their purchase decision. The products offered by the company are consumables that include furniture, mobile phones and other electronic goods, thus age and income are the main influencer for the decision making. The respondents have strongly agreed to the fact that advertisement influences their decision making. The respondents have highly agreed to trades the he fact that the company’s home appliance can only be owned by high income group individuals. Moreover the mid-aged consumers are more inclined towards the home appliances sold by the customers. The respondents have highly agreed to the fact that advertisement targeting various age groups can increase the sale of the company’s home appliances. The respondents are of the view that the company should sell different quality of home appliances for different prices in order to target individuals belonging to different income groups. They are of the view that this may increase the sales of the company.

Conclusion and Recommendation

Marketing strategies and approaches are considered to be one of the most effective analysis that can be undertaken by an organization in order to improve their activities and overcome their sales target. The following report analyses the marketing aspects of Harvey Norman in New Zealand. The past performances of the firm has not been quite noteworthy that has thereby negatively impacted the profit margin of the firm. This research analyses had collected data from the customer associated with the retail industry. A survey questionnaire has bene provided to the customers, whose answers would be helpful for Harvey Norman to formulate marketing strategies. Based upon the analysis it has bene inferred that the organization should provide prime focus on its pricing and advertising strategies. It should focus on the target audience of all income groups. The products of the firm should be priced in such a manner so that it is easily affordable for all groups. There should be variations in the products with regards to price, but should be impactful in performing the basic functions of the households. The organization should focus on social media marketing techniques to improve their presence in the market. Several aspects of attracting the clients by broadcasting discount and offers should be available so that customer acquisition is possible. Customer referrals should be formulated as an extensive strategy for improving the sales, that would provide the firm with not only new butt also loyal customers. Creating an impactful and a positive brand image would help the firm to improvise their presence in the industry and thereby overcome their profit structure.

References

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Cassar, G., Ittner, C. D., & Cavalluzzo, K. S. (2015). Alternative information sources and information asymmetry reduction: Evidence from small business debt. Journal of Accounting and Economics, 59(2-3), 242-263.

Financial Review. (2018). Harvey Norman to raise $163.8m after profit falls 16pc to $375m. Retrieved from: https://www.afr.com/business/retail/harvey-norman-to-raise-1638m-after-profit-falls-16pc-to-375m-20180830-h14qy2.  

Harvey Norman, 2013. Company overview. Retrieved from https://www.harveynormanholdings.com.au/company 

Phung, T. D., Hardeweg, B., Praneetvatakul, S., & Waibel, H. (2015). Non-sampling error and data quality: What can we learn from surveys to collect data for vulnerability measurements?. World Development, 71, 25-35.

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Smith, J. A. (Ed.). (2015). Qualitative psychology: A practical guide to research methods. London, UK: Sage.

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