QNT 561 Week 3 Individual Assignment A Decision of Uncertainty.docx
QNT 561 Week 3 Individual Assignment A Decision of Uncertainty.docx QNT561
Popular in Probability and Statistics
verified elite notetaker
Popular in Statistics
This 12 page Study Guide was uploaded by Topseller Notetaker on Thursday November 5, 2015. The Study Guide belongs to QNT561 at Ashford University taught by in Fall 2015. Since its upload, it has received 30 views. For similar materials see Probability and Statistics in Statistics at Ashford University.
Reviews for QNT 561 Week 3 Individual Assignment A Decision of Uncertainty.docx
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 11/05/15
Running Head: Business Research Methods, Part III 1 Business Research Methods, Part III NAME QNT/561 Applied Business Research and Statistics PROFESSOR DATE BUSINESS RESEARCH METHODS PART III 2 Business Research Methods, Part III Introduction Netflix 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 Netflix, 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 the plan for Netflix is viable considering the myriad of media products already established in the industry. 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 has opened the door for Netflix 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 this possibility by determining what percentage of Netflix subscribers would upgrade to stream premium channels and what price points the market will bear. Statistical Analysis The following survey question will be presented in Likert Scale Summated Rating data because the answer that is given will be either a positive or negative response about an object of interest (Cooper & Schindler, 2006). BUSINESS RESEARCH METHODS PART III 3 1) As a Netflix subscriber, how likely would you subscribe to premium channels (like HBO, Showtime, Starz, Cinemax). o Very Likely (5) o Somewhat Likely (4) o Uncertain (3) o Somewhat Unlikely (2) o Very Unlikely (1) The mode would be used to make a statistical analysis because the data provided are nominal data. The mode for question number one is “Very Likely” because 30% of the 990 respondents of the survey would be very likely to add a premium channel to existing Netflix service. Qsorts would be used for the following survey question because the respondent is indicating a specific point that he or she would pay for a product (Cooper & Schindler, 2006). The respondents to the survey question can chose from $1 to $15. BUSINESS RESEARCH METHODS PART III 4 2) What is the maximum monthly price you would be willing to pay for premium channel (like HBO, Showtime, Starz, Cinemax) subscription through Netflix? The mean, median, and mode would be used to make a statistical analysis because the data provided are interval. Using these analyses, the mode is higher than the mean or median. The standard deviation is large compared to the mean, illustrating the data is highly dispersed around the mean. The most common responses to maximum price were $1, $2, $5, and $10 showing a tendency to select lower price points by respondents. Mean = $6.1394 Median = $5.00 Mode = $10.00 Standard Deviation = $4.2794 Multiple choice single response scale would be used for the following survey questions because there are multiple options a person can chose from but only one answer is needed (Cooper & Schindler, 2006). 3) Which premium channel would you be most interested in subscribing? BUSINESS RESEARCH METHODS PART III 5 o HBO o Cinemax o Showtime o Encore o Starz o Other The mode would be used to make a statistical analysis because the data provided are nominal data. The mode for survey question number three is HBO. Fiftythree percent of the 990 respondents to the survey would prefer to add HBO to an existing Netflix subscription if provided the option to add a premium channel. The simple category scale would be used for the following three questions because there are two mutually exclusive answers for the survey question (Cooper & Schindler, 2006). The simple category scale is nominal information. 4) Are you currently a Netflix subscriber? [ ] Yes [ ] No BUSINESS RESEARCH METHODS PART III 6 The mode is used to make a statistical analysis because the data provided are nominal information. The mode for survey question number four is “Yes,” meaning that of the 990 respondents to the question, 99% were Netflix customers. Because an overwhelming majority of the respondents of the survey were Netflix customers the results of the survey would offer Netflix valuable insight to what current customers feel about the company and potential new product offerings. 5) If you are not currently a subscriber to Netflix, have you subscribed in the past? [ ] Yes [ ] No [ ] Does Not Apply BUSINESS RESEARCH METHODS PART III 7 The data provided for the survey question are nominal; therefore, mode is again used to make a statistical analysis. The mode for survey question number five is “Does Not Apply,” meaning that 99% of the sampled population is currently a subscriber to Netflix. Thus, the question is not relevant to the respondent. 6) Would the availability of premium streaming channels (like HBO, Showtime, Cinemax or Starz) be a reason for you to subscribe to Netflix? [ ] Yes [ ] No BUSINESS RESEARCH METHODS PART III 8 The mode would be used to make a statistical analysis because the data provided are nominal information. The mode for survey question number six is “Yes,” meaning of the 990 respondents of the survey 84% would subscribe to Netflix if the choice to watch premium channels was offered if not already a customer. Potential Challenges to Validity and Reliability Potential challenges to the validity (the extent to which a test measures what we actually wish to measure, Cooper & Schindler, 2006) are unclear questions, inappropriate response options and inappropriate length. All of which were taken into consideration while conducting the survey. The simplicity and clarity of the survey is illustrated by the way the questions were formulated. These questions were direct, easy to understand and the responses provide data that is easy to interpret for the purpose of measuring the potential buying behavior for new products offered by Netflix. In addition to providing a valid and nonbiased survey, reliability (the accuracy and precision of a measurement procedure, Cooper & Schindler, 2006) was insured by reducing ambiguity in the response types. Several of the response types fit into the forced BUSINESS RESEARCH METHODS PART III 9 category to establish unified answers among respondents. Although some of the answers were forced into either yes or no, there was a “Does Not Apply” option. Response types for two of the questions involve “Yes or No,” for one of the questions, ”Does Not Apply” was offered because of the need for this option. One question had five response scales to allow a specific program choice. The price question allowed for fifteen options to narrow down the exact median price customers would be willing to pay. The last question offered six scale points. When scaling was used, the response options were balanced with five alternatives within a range from fully negative, to fully positive options to ensure adequate opportunity for truthful responses. In order to achieve practicality (concerned with a wide range of factors of economy, convenience, and interpretability) (Cooper & Schindler, 2006), questions were formulated in as simple language to avoid uncertainty. The total number of survey questions was also limited to avoid ambiguous responses due to survey fatigue. Using Facebook as a venue for receiving survey responses provided an additional step to ensure the appropriate audience was contacted for the convenience sampling. Respondents who are able to access a computer and use Facebook are more likely to be customers of an online television and movie programming service. Online social networking services are a great way to obtain educated participants in which to survey. Another factor of using the Internet to contact potential customers is the social networking aspect. Simply by offering the survey using Facebook provides the opportunity for users to forward the survey to friends and family and post the survey on their pages. This provides for a random element to be incorporated into the survey. Moreover, using technology BUSINESS RESEARCH METHODS PART III 10 for convenience sampling provides an added benefit over taking the survey in a “brick and mortar” environment. Classify Findings in NOIR Scales The survey includes data on all scales except for the interval scale. The majority of questions are nominal scale, which numeric values are used to classify the data for labeling purposes. The questions using the nominal data scale are: Which premium channel would you be most interested in subscribing? Are you currently a Netflix subscriber? If you are not currently a subscriber to Netflix, have you subscribed in the past? Would the availability of premium streaming channels (like HBO, Showtime, Cinemax or Starz) be a reason for you to subscribe to Netflix? If you have quit your subscription to Netflix, what was the reason for leaving? There is one question that uses the ordinal data scale where the responses will be ranked by increasing desire of the respondent. This scale shows degree of preference, but there is no specific increment by which the data increase is represented. The question with ordinal data for response is: As a Netflix subscriber, how likely would you subscribe to premium channels (like HBO, Showtime, Starz, Cinemax) There is one question that uses the ratio scale as it relates to the amount the respondent is willing to pay. The ratio data represents real dollars and can have an absolute zero data point. The question utilizing ratio data is: What is the maximum monthly price you would be willing to pay for premium channel (like HBO, Showtime, Starz, Cinemax) subscription through Netflix? BUSINESS RESEARCH METHODS PART III 11 Conclusion The results from this sample demonstrate a viable market opportunity for Netflix or their competitors to pursue premium channel streaming. The sample of convenience has validated the interest in this subject by respondents and the usefulness of the survey questions for this audience. From the results of this study, it is recommended that Netflix now move to analyze the business case and ROI for this product. By looking at the price points of $5 and $10 monthly subscription fees that many respondents are willing to pay, Netflix can analyze their royalty and infrastructure costs to deploy premium channel streaming. Based on the respondents interested in these offerings, Netflix can forecast total revenues from their customer base to analyze potential profitability with this offering. BUSINESS RESEARCH METHODS PART III 12 References Cooper, D.R. & Schindler, P.S. (2006). Business research methods (9th ed.). Boston: McGraw Hill/Irwin. Retrieved from University of Phoenix, QNT561 – Applied Business Research & Statistics Website. Grover, R. (2010). Netflix: Premium Cable's Worst Nightmare. Bloomberg Businessweek. Retrieved from http://www.msnbc.msn.com/id/39237941/ns/business bloomberg_businessweek/
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'