QNT 561 WEEK 2 Business Research Methods, Part I.docx
QNT 561 WEEK 2 Business Research Methods, Part I.docx QNT561
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Date Created: 11/05/15
Running Head Business Research Methods Part I Business Research Methods Part I NAME QNT561 Applied Business Research and Statistics PROFESSOR DATE BUSINESS RESEARCH METHODS PART I 2 Business Research Methods Part I Introduction Net ix is investigating expanding their movies on demand and DVDbymail business model to include streaming premium channels currently available through cable and satellite providers Grover 2010 To validate if this is a viable business expansion area for Net ix this research Will analyze the market acceptance of the premium channel streaming offering Are customers Willing to purchase this service and how much would they be Willing to pay for this service Also Which premium channels are customers most interested in purchasing The research is focused to determine if Net ix39s plan is viable considering the myriad of media products already established in the industry Net ix bought the rights to stream films from three studios That will make it the first true Webbased movie channel The company already has 15 million subscribers and allows customers to stream movies through devices including Webready TVs like Sony39s Bravia game consoles like Microsoft39s Xbox 360 and even gadgets like Apple39s iPad That makes Net ix39s 899 a month mailorder and online service a threat to moreexpensive premium cable channels Grover 2010 Technology has finally advanced to the point Where it is easy and convenient to stream movies through the internet to a high definition television This fact has opened the door for Net ix to capture additional market share by diversifying programming and adding premium channels that once belonged exclusively to cable providers The research project is focusing on BUSINESS RESEARCH METHODS PART I 3 this possibility by determining what percentage of Net ix subscribers would upgrade to stream premium channels and what price points the market will bear Research Design Characteristics Research design is the blueprint for fulfilling objectives and answering questions Cooper and Schindler 2006 The research design chosen for the Net ix premium channel streaming project was a survey to solicit scaled and closedend responses by Net ix customers to determine interest in the proposed streaming capabilities Using the Internet via Facebook and Google Adwords to find respondents the team commissioned an exploratory study to measure subscription interest in premium channels through Net ix independent variable price structure dependent variable and premium channel offering possibilities dependent variable The design of the survey questions is causal designed to determine if an asymmetrical relationship exists between likelihood of customers subscription channels offered and monthly fee the customer is willing to pay The method of data collection employed was to collect responses through a sample of convenience from current Net ix customers who are on the intemet Whereas the reliability and validity provides challenges in evaluating the independent status of Team A in the survey mitigates any perceived bias in the survey Operational Definitions The following survey questions will inform management of Net ix about a sampling of customers attitudes about the new channel streaming product and pricing possibilities Operational definitions will be given for the following three survey questions BUSINESS RESEARCH METHODS PART I 4 1 As a Net ix subscriber how likely would you subscribe to premium channels like HBO Showtime Starz or Cinemax Operational De nition The question is identifying current customer acceptance of this new product o ering With ve categories and an ordinal scale this provides a good comparison on customer preference and intensity level of interest a Very Likely Customer is very interested in adding the new channel streaming product b Somewhat Likely Customer is open to subscribing to the new channel streaming product c Uncertain Customer is not sure if they will adopt the new channel streaming product d Somewhat Unlikely Customer is not open to subscribing to the new channel streaming product e Very Unlikely Customer is not interested in the new channel streaming product What is the maximum monthly price you would be willing to pay for premium channel like HBO Showtime Starz or Cinemax subscription through Net ix Operational Definition Identifying what price customers are willing to pay for a Netflix premium channel upgrade Respondents could select any dollar amount from 1 through 1 5 for the monthly subscription price via a drop down selection field This field gives data on the ratio scale for comparison and analysis Which premium channel would you be most interested in subscribing Operational definition Gather customer preference on the premium channels they would prefer to upgrade with Respondents could enter any information they wanted into an open text box These nominal data points were then entered into a spreadsheet so they could be sorted and categorized Research Question and Sample BUSINESS RESEARCH METHODS PART I 5 The initial survey gathered 66 responses from team members posting links to the survey on their Facebook profile and through advertising on Google Adwords The online survey was hosted through Survey Monkey and can be accessed at httpwwwsurvevmonkevcomsJVHHNFH Google Adwords used to gather respondents were Net ix HBO CinemaX Showtime streaming movies Movies on demand and Net ix streaming Because all potential customers for Net ix streaming products would have intemet connections gathering respondents through Google Adwords delivers a relevant sample of convenience from the customer population From the first question there were five options for selection and here are the results from the 66 respondents A5 a Netflix eueeeriuer new likely weulu yeu eubeeriije te premium ehennele like HE SheMime Starz Cinemax ever Net ix l were Liker l umwnat Likely I Uncertain I Sumewnat Unl39ikel39ljr l infer Unlikely From the second question the respondents were able to select a 1 through 15 in 1 dollar increments Here are the results from the 66 respondents BUSINESS RESEARCH METHODS PART I 6 What is the maximum monthlyr priee you would be What is the maximum monthly price you would be willing to pay for willing to par for premium ehannel like HBE premium channel like HBD Showtime Starz Cinemax subscription Showtime Stare Cinemas subscription through thrDUQh NEt lx Neti39lix 13 514 o c 161 15 f 1442 13 1212 1112 101i 9quot 3 3 4 51 51239 4r 3K 2i 1 1 2 3 4 55 35 s so so 10 11 12 13 14 15 From the third question which had an open 19 box for text responses here are the results Whieh premium ehannel would you he most interested in subserihing l Cinema I HEB l Showtime l Star I NFL l Playboy l Home Hot Sure The initial results from this sample show a potential market of 51 of Net ix subscribers that are willing to pay for premium channel streaming The key channel for Net ix to focus their launch around should be HBO which is preferred by 53 of respondents Because 15 of respondents would pay a 5 monthly subscription price and 24 would pay a 10 monthly BUSINESS RESEARCH METHODS PART I 7 subscription price the research would recommend a tiered pricing strategy full HBO streaming for 10 per month and have limited HBO certain movies and original series streaming for 5 per month Conclusion Net ix is the premiere web based movie channel because the company has the rights to stream films through the web from three studios Net ix has an opportunity to gain additional revenue by providing their customers with an option to stream premium channels through a Net ix s subscription A survey was conducted with current Net ix s customers to measure the interest level of adding a premium channel to his or her subscription which premium channel is preferred and the price customers are willing to pay Based on these results from the small sample population the research recommends further analysis with a larger pool of Net ix customers to see if these trends will still show a significant interest in this area The survey revealed the potential opportunities Net ix customers are interested in streaming premium channels through Net ix Customers are willing to pay between 5 and 10 to stream premium channels Customers would like to add HBO to their Net ix subscription Net ix has an opportunity to increase their revenue by providing premium channels through their service which would satisfy their customers and increase customer loyalty to the company Net ix will be successful in both the shortterm and longterm by adding the option to stream premium channels through their service BUSINESS RESEARCH METHODS PART I 8 References Cooper DR amp Schindler PS 2006 Business research methods 9th ed Boston McGraW HillIrwin Retrieved from University of Phoenix QNT561 Applied Business Research amp Statistics Website Grover R 2010 Net ix Premium Cable39s Worst Nightmare Bloomberg Businessweek Retrieved from httpwwwmsnbcmsncomid39237941nsbusinessbloombergbusinessweek
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