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QNT 561 WEEK 4 Business Research Methods, Part II.docx

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QNT 561 WEEK 4 Business Research Methods, Part II.docx QNT561

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QNT 561 WEEK 4 Business Research Methods, Part II.docx
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This 9 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 51 views. For similar materials see Probability and Statistics in Statistics at Ashford University.


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Date Created: 11/05/15
Running Head: Business Research Methods, Part II 1    Business Research Methods, Part II NAME QNT/561 ­ Applied Business Research and Statistics PROFESSOR DATE BUSINESS RESEARCH METHODS PART II 2                                                                            Business Research Methods, Part II Introduction Netflix is investigating expanding their movies on demand and DVD ­by­mail 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. This  research will address the question “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 Netflix's plan is viable  considering the myriad of media products already established in the industry. Netflix 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 Sony's Bravia, game  consoles like Microsoft's Xbox 360, and even gadgets like Apple's iPad. That makes Netflix's  $8.99 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  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  BUSINESS RESEARCH METHODS PART II 3                                                                            this possibility by determining what percentage of Netflix 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 Netflix premium channel  streaming project was a survey to solicit scaled, open­ and closed­end responses by Netflix  customers to determine interest in the proposed streaming capabilities.  Using the Internet via Facebook and Google Adwords to find respondents to pretest the  survey questions, the team commissioned an exploratory study to measure subscription interest  in premium channels through Netflix (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 to pretest the survey questions from current Netflix  customers who are on the internet. 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. Sample Design and Data Collection The sample design for this communication study is a non­probability sampling. Current  and former Netflix customers volunteered to respond to an experience survey. Data was collected through a self­administered Internet survey or through personal interviews. The participants were BUSINESS RESEARCH METHODS PART II 4                                                                            selected through convenience sampling are considered to be representative of the average Netflix subscriber. A sample of convenience is a subjective approach and offers an unknown probability  of selecting population elements (Cooper & Schindler, 2006), and is unrestricted. In other words, because some members of the population have no chance of being sampled, the extent to which a convenience sample actually represents the entire population cannot be ascertained with a high  level of confidence. Although this type of sample design also presents challenges with regard to  bias, the design was chosen for practical considerations. “While a convenience sample has no  controls to ensure precision, it may still be a useful procedure. Often you will take such a sample  to test ideas or even to gain ideas about a subject of interest” (Cooper & Schindler, 2006, Non­ probability Sampling, para. 4). Thus the sample of convenience was considered worthwhile for  pretesting the survey questions to determine practicality, validity and clarity of communication. Convenience sampling is often chosen by researchers to satisfactorily meet the limited  objectives of the study.  In this exploratory research a range of conditions are examined in an  effort to determine attitudes and possible conditions for selections of Netflix services. “In the  early stages of exploratory research, when you are seeking guidance, you might use this  approach. The results may present evidence that is so overwhelming that a more sophisticated  sampling procedure is unnecessary” (Cooper & Schindler, 2006, Non­probability Sampling,  para. 4). In addition, other factors to consider in non­probability sampling are cost and time  (Cooper & Schindler, 2006). “Carefully controlled non­probability sampling often seems to give  acceptable results, so the investigator may not even consider probability sampling (Cooper &  Schindler, 2006, Non­probability Sampling, para. 4). BUSINESS RESEARCH METHODS PART II 5                                                                            To maintain data validity, the survey must be a good measurement tool. A good  measurement tool is one that should be an accurate counter or indicator of what the research is  interested in measuring and easy and efficient to use (Cooper & Schindler, 2006). To mitigate  the weaknesses of the sample design, the internal validity of the survey was assessed and edited  to ensure measurement success. The content validity, criterion­related validity, construct validity  were enhanced to ensure the measurement is actual, reliable, and practical (Cooper & Schindler,  2006). General Response Types 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).  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) 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  respondent to the survey question can chose from $1 to $15. 2) 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 II 6                                                                            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? o HBO o Cinemax o Showtime o Encore o Starz o Other 7)  If you have quit your subscription to Netflix, what was the reason for leaving? o Price o Limited selections o Bad Customer service o Other  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 5) If you are not currently a subscriber to Netflix, have you subscribed in the past?     [ ] Yes     [ ] No     [ ] Not applicable BUSINESS RESEARCH METHODS PART II 7                                                                            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 Classify Findings in NOIR Scales The survey includes data on all scales except for the interval scale. The majority of  questions are centered on the nominal scale where numeric values are used to classify the data  for labeling purposes. The questions using the nominal data scale are: 3) Which premium channel would you be most interested in subscribing? 4) Are you currently a Netflix subscriber? 5) If you are not currently a subscriber to Netflix, have you subscribed in the past? 6) Would the availability of premium streaming channels (like HBO, Showtime,  Cinemax or Starz) be a reason for you to subscribe to Netflix? 7) 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: 1) As a Netflix subscriber, how likely would you subscribe to premium channels (like  HBO, Showtime, Starz, Cinemax) BUSINESS RESEARCH METHODS PART II 8                                                                            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: 2) What is the maximum monthly price you would be willing to pay for premium  channel (like HBO, Showtime, Starz, Cinemax) subscription through Netflix? Conclusion The initial results from this pretest sample show the need for research into this subject as  there is a viable market opportunity for Netflix or their competitors to pursue premium channel  streaming. The initial pretest sample also demonstrates the questions are viable in that they  communicate clearly to the respondent and are able to be completed with minimal time.   Leveraging the internet does provide a good sample of convenience for pretesting, but a  thorough study should use a random sample for Netflix target demographics of Internet  connected homes in North America. The sample of convenience has validated the interest in this  subject by respondents and the usefulness of the survey questions for this audience. While the  random sample will be expensive to generate for the final analysis, the benefits of this data for  strategic use is critical for business planning. BUSINESS RESEARCH METHODS PART II 9                                                                            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 from­bloomberg_businessweek/


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