Case 12-2 Smith’s Clothing (A)

John Simpson, the head of Simpson Research, was attempting to design a marketing research study that would address the research questions posed by Jim Andrews, the president of Smith’s Clothing, during their morning meeting. The research questions seemed rather well defined:

1. Which women’s clothing stores compete with Smith’s?

2. What is the image of Smith’s, and how does this image compare with that of its competitors? In other words, how is Smith’s positioned with respect to its competitors?

3. Who is the Smith customer and how does she differ from that of Smith’s competitors?

Although no final judgment had been made, Andrews was leaning toward an in-home, self-administered questionnaire. He was not certain, however, whether a questionnaire could be developed that would be responsive to the research questions. The population of interest was operationally defined to be those women whose family income exceeded the median income. Simpson’s immediate task was to draft a questionnaire and to develop a tentative sampling plan.

Smith’s was a six-store chain of women’s clothing stores located in Bayview, a large, growing city in the southwestern United States. The chain had provided fine clothing for the upper class of Bayview for over 40 years. Twenty years previously, Smith’s had opened its first suburban store. Having closed its downtown store 10 years ago, it now had five suburban stores and one in a nearby community of 60,000 people. Smith’s had avoided trendy fashions over the years, in favor of classic, lasting designs. During the last 10 years a set of five or six aggressive, high-fashion retailers had expanded into or within Bayview. Thus, despite the fact that the market for fine women’s clothes had expanded enormously during the past decade, the competition had grown much more intense.

Andrews was justifiably concerned about the performance of his stores. Profits at five of the six stores had fallen during each of the past four years. The sixth store had been opened only 18 months before and had not achieved its target growth rate. Although the chain was still profitable, if the existing trend continued it would soon be losing money.

This performance had stimulated Andrews to engage in serious reappraisal of the whole operation. In particular, he was reviewing the chain’s rather conservative policy toward the product line, advertising, store decor, and store personnel. He felt that it might be time to consider stocking some trendy fashions and attempting to increase the store’s appeal to women in their teens and twenties. A working hypothesis was that Smith’s had a higher appeal relative to other stores to women over 40 and was less attractive to younger women. He realized that any such move was risky in that it would jeopardize the existing customer franchise without any guarantee that new customers would compensate. Before making any such move he felt that it was critical to learn exactly how Smith’s was now positioned. He also felt that he needed a much more reliable fix on the current Smith customers in terms of their age, the stores in which they shop, their preferences, and their purchase profile. With such information he would be in a much better position to identify alternatives and evaluate them.

Assignment

Develop a research design including:

1. What is the type of survey to be employed.

2. Create a five-question questionnaire.

3. What are some recommendations for improvements to a mail-back survey with alternative survey design and justification.