MARKETING RESEARCH

The following research report was conducted for a live client, Student-Run Business Initiative, to gather information on the potential demand in the Kirksville area for non-profit pet merchandise business Wiggle Butt. The study was conducted as a group project in Marketing Research class. Please note, names have been omitted for confidentiality.

STUDENT-RUN BUSINESS INITIATIVE - WIGGLE BUTT

Fall 2016, Marketing Research

Alex Ward, Chloey Guffey, Brett Judkins, and Lane Pritchard

Executive Summary

The purpose of this research report is to obtain valuable information regarding student-led entrepreneurial venture Wiggle Butt, its sale of pet-themed merchandise, and the strength of the demand for such products. The research is also to explore the effectiveness of a possible storefront in the Kirksville area.

The research first pointed in the direction of what type of product(s) consumers in the Kirksville and surrounding areas prefer. “Common pet animals,” such as dogs and cats, for types of animal to be depicted on merchandise was the most popular response. “Souvenir items” and “t-shirts/apparel” for types of products to purchase were rated the highest among respondents.

Researching the efficacy of a physical storefront led the team to important information regarding consumer’s tastes and opinions on the matter. It was found that respondents preferred to shop in-store at 61% versus online in the local community at 39% when shopping for gift items. From 296 respondents the team calculated an average score of 4.72 on a seven-point scale assessing a respondent’s support of local businesses over national chains. This value correlates to a neutral to slight favoring of local business over national chains. Respondents reported an average score of 4.45 on a seven-point scale, indicating a very slight preference towards not-for-profit businesses. It is recommended that Wiggle Butt open a physical storefront, as the research shows it would most likely be successful. 

Introduction

Discussion of RFP

The Request for Proposal submitted by [the client] and a student group specifies the focus points [she] was seeking research on. The primary focus for the research was to determine demand for pet products, both in the local and online markets. It was later decided that further research was necessary to determine the overall demand for pet accessories in the Kirksville area and to determine the products most desired in the pet accessory industry in Kirksville and the surrounding areas. Additionally, the RFP detailed the scope of the work and the expectations that were to be met by the research team. A full copy of the RFP can be found in the Appendix.

Background

Wiggle Butt is a student-run business led by [the client] that sells pet accessories. They are looking to create a presence in the Kirksville area while servicing a wider geographic market. [The client] is looking to do so by maintaining a storefront and conducting much of the business of Wiggle Butt online.

The pet industry, including the sale of pets, pet accessories, and pet food, is a $63 billion growing industry, with non-food supplies contributing to 40.6% of revenue. PetSmart and Petco currently dominate the market, controlling nearly 60% of the market share in the industry (Pet Industry Market Size & Ownership Statistics). There is also competition from supermarkets for low-cost pet products. It is expected that the size of these competitors’ operations will continue developing and push out smaller competitors, rather than operating in the small businesses' geographic locations simultaneously.

[The client] has worked with the Marketing Research class on many projects in the past including Blink of an Eye, a women’s accessories store operated in Kirksville. Blink of an Eye operated a storefront for nearly six years in downtown Kirksville before closing in early 2015 due to a decrease in demand within the surrounding area. [The client] is also a board member of the Adair County Humane Society and faculty advisor for the Tau Upsilon chapter of Alpha Kappa Psi, a professional business fraternity.

Exploratory Research

Secondary. Secondary data focused on the pet industry and the demand for pet-themed merchandise. The research indicated that, as previously stated, the pet industry is a $63 billion dollar growing industry, and the demand for pet-themed merchandise is expected to grow as well. This information is useful for the client, as it offers insight into growth opportunities within the pet industry. Unfortunately, the team was unable to gather sufficient data regarding the pet industry’s differentiation of sales between items for pets and pet-themed items for consumers. Much of the research gathered indicated the psychological relationship often formed between people and their pets. However, this connection does not necessarily address the research objectives set forth by the client and the team; it has already been discussed in a report to the client by the previous team that worked with her.

Primary. Primary data was retrieved through the use of a survey conducted through SurveyMonkey. The survey’s questions were formed to measure attitudes towards, awareness of, and potential behavior regarding pet-themed merchandise. The survey also explored demographics and psychographics of respondents to better understand the expected consumer, both within the storefront and through online business. Additionally, we formed questions that aimed at measuring the attitudes towards pets, online shopping, local businesses, student-run businesses, and not-for-profit businesses. Our survey was distributed through social media, email, and announcement boards in local businesses.

Management Decision

The decision problem emphasized that Wiggle Butt needed to determine demand for their products, both in local and online markets. The pet industry is displaying growth and Wiggle Butt would like to ensure as much success as possible before fully funding a business venture. To do so, they must have a suitable understanding of their market and foresee any opportunities they have as a new business.

Research Objectives

After reviewing the research problems, the team concluded that the two research objectives would be (1) to determine the overall demand for pet accessories in Kirksville and the surrounding areas, and (2) to determine the products most desired in the pet accessory industry. The research for objective 1 would allow analysis of the possibility to open and run a successful storefront in the Kirksville area. The research for objective 2 would allow further information to suggest ways to penetrate the local market, especially utilizing the convenience of shopping at a storefront, should one be opened. These two objectives offer the greatest value in terms of providing information that is likely to address the decision problem.

Research Design

Secondary

Secondary research provided previously established and credible information regarding the strength of the pet industry and whether the demand for pet-themed merchandise is suitable to run a successful business. To obtain satisfactory secondary research, the team met with the Head of Public Services at Pickler Memorial Library at Truman State University, to assist in the proper finding and use of secondary research.

Primary

Primary data was retrieved through the use of a survey that tests demographics, psychographics, and the awareness of potential Wiggle Butt products. Additionally, the attitudes towards pet-themed merchandise, pets, online shopping, local businesses, student-run businesses, and not-for-profit businesses were measured. The data was analyzed and presented both in a graphical and statistical model. Primary data was conducted through a SurveyMonkey survey, which was distributed through social media, email, and flyers to ensure a large enough sample size to yield accurate results.

Sampling

The target populations studied in primary research were Truman State University students and faculty, as well as other survey respondents across the country. Targeting these populations gave the team a strong idea of who exactly the ideal consumer is and their opinions and attitudes towards potential products. In order to obtain a satisfactory sample in a timely and appropriate manner, the sampling method used was a nonprobability convenience sampling method. The ideal sample size for a survey of this nature would be anywhere from 300-500 participants but no less than 200 participants (Potential Product Survey). To obtain an appropriate and successful sample size, the team distributed the survey across social media and email platforms. 

Data Collection

Instrument(s)

The sole primary data collection instrument was a survey developed through survey hosting site SurveyMonkey, which was chosen due to its ease of use, level of structure, and quality of output. The survey consisted of twenty-one questions designed to explore information useful in understanding target consumers, specifically the respondents’ attitudes towards pet-themed merchandise and various business structures, as well as demographic information. The questions within the survey meet the research objectives set forth by the client and the team. These objectives were to measure demand for pet-themed merchandise within the Kirksville area and particular categories of products, i.e. t-shirts and souvenirs. Though only one survey was created, responses were separated using two different collector URLs: one for students at Truman State University and another for anyone else. By segmenting the data in this way, the team hoped to explore differences between the two groups. The survey opened November 1st and closed November 30th.

Procedure(s)

The survey was publicized mostly through social media accounts of the team members, primarily Facebook. However, the team also utilized resources such as mass emailing and distribution to certain classes on campus, with a focus on marketing classes. The team also distributed advertisements for the survey to local businesses to be posted in their windows.

Data Validation

Data validation was difficult for the team to ensure due to the nature of the questions asked. The questions with a Likert scale each discussed a different business structure, with very little overlap. For example, one question measured the preference of a consumer towards student-run businesses while another measured consumer preference towards not-for-profit businesses. While there are certain qualities of each structure that may overlap, the questions are not necessarily testing the same quality within a consumer. As such, it would be reasonable to assume there would be discrepancies between answers by individual respondents, as a consumer may value a business with strong charitable contributions differently than a student-operated business. Some responses were eliminated due to obvious apathy or failure to complete the survey.

Data Processing

Preparation

To analyze the data further than graphical representations of each question, the team had to reorder the data. The responses to each question were coded and entered into Minitab. The SurveyMonkey data was exported in a summarized output and in coded values for individual responses, which was done for each collector individually (Truman and External) and for the complete data set. The questions analyzed in this method were those regarding the likelihood of respondents to purchase pet-themed merchandise.

Analysis

Because many results of the survey were not a continuous, numerical value, the ANOVA was unable to be run to distinguish what aspects of the business were more preferred or what products were most demanded in what area of the country. However, graphical representations for the total responses of each question sufficed for explaining preferences of the consumers. Though the entire data set could not be inserted into a statistical program for analysis, the team decided to divide the survey into various responses and potential causes of variation.

The first result analyzed was the consumer’s likelihood to purchase pet-themed merchandise as a gift. The total number of respondents were split between genders and assessed. The team inserted coded data into Minitab and ran an ANOVA with responses to the likelihood to purchase pet-themed merchandise as the dependent variable and the respondent’s gender as the independent variable. The ANOVA discovered a significant difference between male and female respondents. Upon further investigation using Tukey’s Honest Significant Difference, a standard in reliable comparisons between treatment groups, it was concluded that female respondents were more likely to purchase pet-themed gift items than male respondents. The likelihood to purchase pet-themed merchandise was analyzed multiple times but with different predictor variables. An ANOVA was run using income bracket, age bracket, education level, and ethnicity as predictor variables. None of these variables were shown to have a significant effect on a respondent’s likelihood to purchase pet-themed gift items.

Another analysis run by the team was pet ownership against the likelihood to purchase pet-themed merchandise. This was performed like the previous analyses but with pet ownership, specifically the type of pet a person owns, predicting his or her likelihood to purchase pet-themed merchandise. When exploring the various types of pets a consumer could have and whether ownership of that type of pet influenced a respondent’s likelihood to purchase pet-themed merchandise, three categories were shown to have a significant effect: dog ownership, cat ownership, and bird ownership. However, because bird owners were very under-represented within the survey respondents, the results regarding bird owners are inconclusive and will not be discussed further. According to the analysis, both dog and cat owners are significantly more likely to purchase pet-themed merchandise.

Results

Objective One

The first objective was to determine the overall demand for products in Kirksville and the surrounding areas. Because of certain limitations (that will be discussed later), the team observed Truman respondents and respondents listing their address as Kirksville or the surrounding communities (Lancaster, Macon, Troy, etc.). It was found that respondents preferred to shop in-store at 61% versus online in the local community at 39% when shopping for gift items. This shows a divergence from what the client and team expected and is beneficial, as the client insisted on maintaining a storefront to allow more opportunities for students.

The team then analyzed the local community’s support of local business. Kirksville is a community that is protective of those that are a part of the community, which often translates into apprehension regarding new business. The team therefore investigated the local community’s feelings regarding new business in the community. From 296 respondents the team calculated an average score of 4.72 on a seven-point scale assessing a respondent’s support of local businesses over national chains. This value correlates to a neutral to slight favoring of local business over national chains. This is good for the client, as community support will be vital in maintaining a storefront within the niche industry of pet-themed merchandise.

The team also looked at various business structures employed by the client. The first structure explored was respondents’ preferences to not-for-profit business structures. Respondents reported an average score of 4.45 on a seven point scale, indicating a very slight preference towards not-for-profit businesses, but nothing substantial. Though the result is not necessarily positive, it certainly is not negative; it is important to note that most respondents felt no preference, meaning they are not turned away from a business because it operates as a not-for-profit business.

The second structure the team investigated was favorability of a new business within the area. This was similar to the examination of local businesses over national chains, but removed the size of the incoming company from consideration. Respondents answered in favor of local businesses, averaging 5.84 on a seven-point scale, which correlates to a slight to moderate desire to explore new businesses. This is promising for the client, as Wiggle Butt and the client are strongly in favor of maintaining a storefront. This shows that people within the community would not be deterred from the business because it is new, but rather being a new business may attract attention and interest from the community.

A third structure investigated was student-run business ventures. While this is similar to not-for-profits, as many student-run businesses are, the two are not mutually exclusive. Respondents averaged a score of 4.91 out of a seven-point scale, indicating a potential slight favoring of student-run businesses, but a preference toward student-run businesses over not-for-profit businesses. The stronger score could correlate to the number of Truman respondents of the survey and that providing a student-run business offers the students career development opportunities, or that the local community values the contributions of Truman State University highly. Regardless of the cause of the score this is good news for the client. This result shows that the communities surrounding Kirksville, including Truman State University students, are more likely to support Wiggle Butt as a business over competitors because it gives back to the community.

An aspect the client and team expected to give the business an edge was the use of students as designers of products. While there are local stores that could offer competitive goods Wiggle Butt may produce, there are none that use the Truman State community to design their products. This is an aspect that could truly set Wiggle Butt apart from local competitors. Respondents averaged a score of 4.49 on a seven point scale to the question regarding the use of Truman State students as designers, showing a neutral to non-negative view of the practice. Though the team was expecting this score to be higher, especially regarding the support of student-run businesses shown in a previous question, this still is not a bad sign for the client. Though it is a relatively average score, it is not negative; the use of students as designers of products would not deter the local community from supporting Wiggle Butt, though emphasizing it through marketing efforts may not have much of a benefit.

Another aspect the team measured was the local community’s attitude of an organization’s charitable contributions to local animal rescue. When asked if they are more willing to support a business that supports local animal rescue, respondents averaged a score of 5.16 on a seven point scale, which is a good sign since charity is a potential staple function of Wiggle Butt. The average score for attitudes toward a business contributing to local animal rescue was a bit higher than those toward a not-for-profit business, which suggests respondents would favor a business contributing to local animal rescue slightly more than other causes. Because this is a big priority of Wiggle Butt and because of the community’s support of the cause, the client may see benefit in promoting this aspect of the business in future marketing.

A final level of local attitude was assessed in a question measuring the likelihood to purchase pet-themed merchandise. The team felt that regardless of the community’s feelings towards various business structures, the products had to be significantly desired to see any potential in maintaining a storefront. Respondents averaged 2.44 on a five-point scale in regards to the likelihood to purchase pet-themed merchandise as a gift. While this is not ideal, it is also not unexpected, since pet-themed merchandise is a niche industry. A likelihood of purchase splitting “rarely” and “sometimes” purchasing pet-themed merchandise is not terrible. However, this does emphasize that in the local community the client should focus advertising expenditures in the large gift buying seasons of fall and winter (when questioned, 54% of respondents answered that they buy gift items in the winter and 21% answered that they buy gift items in the fall) in an attempt to keep costs manageable, since not all consumers are enticed by pet-themed gifts.

Objective Two

The second objective of the survey was to determine the overall demand of goods, not only in the local community, but across the country. The team used the same survey as with local respondents and summarized the data.

In regard to the various business structures employed by Wiggle Butt and the client survey responses were very slightly more favorable. However, the difference between the scores from local respondents and the total group of respondents was so small as to be negligible in most cases.

The team looked more closely at a few other questions when dealing with product demand. To accurately assess demand the team asked respondents what pet-themed merchandise they would be most likely to purchase and what animal classifications they would want depicted on their pet-themed merchandise.

The team first asked what animals would be most depicted on the merchandise. There was some variability here though the “common pet animals” category was chosen by 50% of respondents. This category includes animals such as dogs and cats. “Wild animals” was second most demanded with 26% of respondents desiring the category. “Farm animals” and “mythical creatures” were equally demanded, each receiving 11% of the total number of respondents. This is beneficial information in that it provides the client with a direction as to how to stock a storefront and where to focus product designs in the future.

Secondly, the team asked respondents what products they would most likely purchase as a gift. To the surprise of the team, “souvenir items” such as keychains, paper weights, and coffee mugs made up the largest portion of responses with 35%. Second most demanded was “apparel”, such as t-shirts, with 28% of responses. “Home decor items and household decorations” followed closely with 25% of responses and “posters / pictures” bringing in 10% of total demand. This is good news for the client as well as souvenir items tend to take up less space and offer far more variety, both allowing students to express creativity and offering a wide range of products for consumers.

Limitations

Error Sources

There are a few limitations to the data collected from the survey. First of all, 72% of respondents were 18-27 years old, whereas the target demographic (40-60 years old) only made up 20% of respondents. Therefore, the team was limited in their representation of the target consumer by age. Secondly, only 25% of respondents reported to be from Kirksville and the surrounding area, which means 75% of respondents are not from the area (8% of those surveyed did not respond to the question). The team was thus limited in their representation of the target consumer by location as well. A third limitation was the gender of respondents. 48% of Adair County residents are male and 52% are female (Adair County Missouri Gender Ratios); 32.5% of respondents were male and 67.3% of respondents were female. The respondent gender mix was a bit skewed compared to that of the Adair county area. These limitations can be best explained by the limited reach the team had with the survey. With the means available, it was much easier to reach potential respondents at Truman and outside the Kirksville area, not respondents necessarily permanently inside the target demographic.

The number of respondents also limited the team; only approximately 450 responses were received. To solve this, the team could have purchased extra responses from SurveyMonkey, but didn’t have the financial resources to do so.

Objectives

The first objective was to determine the overall demand for pet accessories in Kirksville and the surrounding areas. The team found that because of the error sources, it was not possible to form an accurate representation of the target demographic. The second objective was to determine the products most desired in the pet accessory industry. Respondents were asked to answer two questions that measured what category animals they would prefer to be depicted on products they would buy and what type of products they would prefer to buy. “Common pet animals” (i.e. dogs, cats, etc.) was the most popular response with 50% of respondents. “Souvenir items” and “t-shirts/apparel” were rated the highest among respondents for types of products to purchase. Again inclusion of these statistics in the target demographic was limited because of the aforementioned limitations.

Conclusions and Recommendations    

The survey results conclude very promising things for Wiggle Butt. First of all, the vast majority of respondents own pets, with 56% owning dogs and 25% owning cats.

Respondents reportedly had a non-negative to positive attitude toward local, not-for-profit, new, student-run, and student-manufactured-product businesses. The team agrees with the client that Wiggle Butt should open a storefront in the Kirksville community. Furthermore, the team recommends Wiggle Butt’s marketing efforts be focused on two major facets of the business; the first being charitable contributions of the company to animal rescue and the second being that Wiggle Butt is a student-run business. These two factors scored highest among respondents with scores of 5.16 and 4.91, respectively. While respondents also scored highly in regards to interest in new businesses in the area, the team recommends Wiggle Butt not focus extensively on this aspect of the business. This is simply because no business stays new forever and the interest in new businesses will eventually be a non-factor for the company.

50% of national respondents reported that they would buy products depicting common pet animals, such as dogs and cats. 26% of respondents reported that they would buy products depicting wild animals, such as lions and bears. The team recommends that Wiggle Butt sell mostly items depicting these two categories of animals. 11% of respondents reported that they would buy products depicting farm animals and 11% reported that they would buy products depicting mythical creatures, so the team recommends that the company sell items of these two categories only as secondary items.

The type of product that respondents reportedly would buy, when asked if they were to buy pet themed merchandise, was a close mix. 35% of respondents reported that they would buy souvenir items if they were to buy pet-themed merchandise. 28% reported that they would buy t-shirts and apparel. 25% reported that they would buy home decor, and 10% reported that they would buy pictures. The team recommends that Wiggle Butt sell all four of these categories of products, but primarily souvenir items, t-shirts and apparel, and home decor.

The team recommends that Wiggle Butt follow through with the plan to contribute to local animal rescue, seeing as though all but 7% were neutral or positive towards charitable contributions by the company. Furthermore, Wiggle Butt should push to sell more products in the Winter and Fall months, since 54% of respondents answered that they shop for gift items in Winter, and 21% in the Fall. 

Below is the presentation we gave to the client - designed with Canva.