The decision problem in this case is the fact that Rumstad Decorating Center’s east and west-side stores both suffered losses in 1997. Although both stores are struggling and suffering losses, the west-side store is doing much worse than the east-side store. This is shown through the west-side store’s 21% decrease in sales and its 31% decrease in gross profit. The east-side store has actually improved from its performance in 1996.
The factors suspected to be contributing to west-side store’s problem include the location of the store, advertising done by the store, the customers’ knowledge and awareness of the store’s products, and the customers’ attitudes towards Rumstad compared to its major competitors. Jack Rumstad needs to decide on whether he should make changes to the west-side store and whether he has enough money to make these certain changes. 2) Research Problem and Objectives Sandra Parrett, the owner of a marketing research company, has been appointed by Jack Rumstad to help him identify the reasons involved in the west-side store’s struggles.
There are four objectives in this study to help solve the management problem. These objectives include: 1) Determining the respondents’ attitudes and awareness towards the location of Rumstad’s west-side store. 2) Determining whether or not the respondents are aware of the store’s advertisements. 3) Determining the respondents’ knowledge and awareness of Rumstad’s products. 4) Determining the respondents’ attitudes towards Rumstad and his major competitors, which include Nina Emerson Decorating Center and the Wallpaper Shop. 3) Methodology: i.
Research Design: The research design used in this study is the descriptive research design. This is because Jack Rumstad, has already come up with his own idea of factors that have contributed to the west-side store’s problems. ii. Design of Data Collection: The design of the data collection was primary data. This was done by going door-to-door and administrating questionnaires. These were personal self-administered interviews. iii. Sample Design and Data Collection: Sampling Population: The sample was taken from an area within a two-mile radius of Rumstad, Emerson, and the Wallpaper Shop.
Sampling Frame: The sampling frame is a random sample of five blocks that was created from the ten wards in that area. Sampling Unit: The sampling unit involves households instead of individuals. Every sixth house on each block was chosen to administer questionnaires. If no one was at home or if the respondent refused to cooperate, the next house on the block was substituted. Sample Selection: The selected respondent for this study is the individual that makes decisions for each household. Sample Size: The study produced a sample size of 123 respondents. Response Rate: Response Rate = 123/141 = 87%