JNS 2 Market Research Group

JNS2 Market Research Group Axiom Press : In depth look at the customers Joseph Pacini Nancy Canales Sakura Kato Stephanie Throssell

Background • CultureGrams • Created in 1974 • Over 176 countries • CD-ROM/Internet as well as print • Axiom Press • Kristine Widtfeldt, Executive Vice President • Educational publisher • Based in Lindon, Utah

Objectives • Perceptions held by current customers • Demographic information of current customers • Purchasing habits of current customers • Obstacles in purchasing products • Critical pricing points • Curriculum in classroom • New market research

Methodology • Exploratory Research • Secondary Research • Primary Research

Exploratory Research • Focus Group • Held March 21st at Axiom Press Headquarters • 4 international businesspeople • New market research • Provided munchies, $20 gift certificates • Lasted approximately 1 ½ hours, videotaped

Secondary Research • Competitive analysis • Researched five main competitors • Analyzed the following: • Company • Product • Product description • Target audience • Price

Primary Research • Survey • Sample size • Survey questions • Database

Sample Size • Sample size= (Z2*Standard deviation2)/acceptable error2 • Z-score of 2, meaning 95% of distribution will fall within 2 standard deviations above the mean, and we will have a 95% level of confidence on the results that we receive • Client specified sample size of at least 100 • Standard deviation of 10

Survey Questions • Sent 1022 emails to current customers, assuming a 10% return rate • Received 176 complete responses, over 17% return rate • These questions were pre-tested by Dr. Geurts, as well as employees of Axiom Press • http://www.culturegrams.com/survey.php

Database • All surveys were placed in an Axiom Press database • Cheree Marcov, Axiom Press webmaster assisted us in database management • Put into Excel files and SPSS data files

Findings--Exploratory • All people agreed that international business would only increase over the next 10 years • All agreed that cultural understanding is the most significant aspect of international business • All felt CultureGrams contained useful information but would only be a starting point • Recommended changing the presentation of CultureGrams to increase perceived value

Findings--Laddering • Why is international business important to you? • Because in a world market international business relations are fundamental and essential. • Why do you feel business relations are so important? • Because in spite of all the ramifications of technological advancements the human component of business is still extremely significant. • How does the human component relate to international business? • Well, when it comes down to it people are people. You still want that comfortability, the assurance of the handshake is not yet completely outdated. • Why do you feel that the handshake is still important? • Even though it doesn’t carry with it as much weight as it once did, it still an enjoyable social nicety and it does instill a certain degree of confidence between business professionals.

Findings--Laddering • Why is confidence so important amongst business professionals? • Confidence is important because if you’re not confident in your product and you don’t feel that the person with whom you’re interacting is confident in their product then it’s impossible to be successful. • What would you consider a successful business relationship? • I think a successful business relationship would be one in which both parties feel that they benefit both economically and morally. • How are morals reflected in business? • A businessperson who considers the significance of morality experiences a more fulfilling professional career. • How does this fulfillment reflected in international matters? • There’s a universal language of morality and despite different customs and social norms morality is the universal common ground.

Findings--Secondary • Competitors products contained basic country information yet lacked a strong cultural understanding • The average customer was the traveler or the geography and history teacher • The price depended but was generally more expensive, yet less exhaustive than a CultureGram

Findings--Primary • 80 percent of respondents have an extremely positive viewpoint of CultureGrams • Over 80 percent felt that CultureGrams were extremely useful in the classroom • 60 percent felt that CultureGrams World Edition was inexpensively priced • Most teachers purchase Axiom Press products every 3-5 years • Axiom Press products are used to assist in teaching a variety of curriculum

Primary Cross Tabulations • We cross tabulated data and then used Chi-Square analysis for the following four categories: • Age • Gender • Years Teaching • Grade Taught • The following highlights are significant to the point .005 level

Age • We find that there is a significant difference between age group and frequency of purchases. • The Chi-Square test indicated that differences in age account for differences in valuing the price of CultureGrams.

Gender • We conducted a statistical test and found that gender and how respondents feel about the pricing of CultureGrams was significant at the .005 levels. • Females generally found CultureGrams to be more useful for their students then did males.

Years Teaching • The longer they had taught, the more expensive they felt the product was. • The longer they taught, the more useful they found CultureGrams.

Grade Taught • There was a relationship between grade taught and how they learned about CultureGrams. • Also a relationship between what grade they taught and how often they purchased.

Z-test Information • Null Hypothesis: The proportion of teachers in the 50 to 59 range reporting the price of CultureGrams to be 5 or higher (ranked from a scale where 1 is very inexpensive and 9 is very expensive) is the same or less than the proportion of teachers in the 20 to 29 range reporting 5 or greater. • In other words, do older (50 to 59) teachers feel CultureGrams are priced more expensively than do younger (20 to 29) teachers? • Alternative Hypothesis: The proportion of teachers in the 50 to 59 range reporting the price of CultureGrams to be 5 or higher is greater than the proportion of teachers in the 20 to 29 range reporting 5 or greater.

Z-test continued • Once completing the calculations we get a calculated Z-value of 2.32 • We compare this against the critical Z-value, which is 1.97 with a sampling error of .025, and find that because our calculated Z-value is higher, we reject the null hypothesis. This means that we conclude with 97.5% confidence that the proportion of teachers aged 50 to 59 who rank CultureGrams pricing to be 5 or higher is greater than the proportion of teachers 20 to 29 who rank pricing 5 or higher. • This means that teachers in the age group 50 to 59 feel that CultureGrams are priced more expensively than do their younger (20 to 29 year old teachers) contemporaries do.

Regression

Purchase Decisions • 50 respondents, or 28.4 percent of all surveys received, indicated that they would “Definitely Will Purchase” within the next six months. • 39 respondents, or 22.2 percent of all surveys received, indicated that they would “Probably Will Purchase” within the next six months. • 27 respondents, or 15.3 percent of all surveys received, indicated that they would “Probably Will Not Purchase” within the next six months. • 60 respondents, or 34.1 percent of all surveys received, indicated that they would “Definitely Will Not Purchase” within the next six months

Purchase Decisions • 70 percent of those that suggest that they will “Definitely Will Purchase” actually will, while 35 percent of those who state that they will “Probably Will Purchase” actually will, and 10 percent of those who state they “Probably Will Not Purchase” actually will, and 0 percent of those who state that they “Definitely Will Not Purchase” purchase. • 70% * 50 = 35 • 35% * 39 = 13.65 • 10% * 27 = 2.7 • 0% * 60 = 0 • 35 + 13.65 + 2.7 + 0 = 51.35 or approximately 51 individuals

Limitations • Limited Scope • Surveys • Focus Group • Time Constraints • Only a few months to do research • Non-Response • Only 176 solid responses were submitted • Response Errors • Surveys—the first type of response error possible is encountered on the surveys that were emailed to Axiom Press customers. The respondents might not have been very truthful in their responses—maybe lied about their age. • User Errors • Respondents might not have understood some of the survey questions. • Participants in the focus group were acquaintances of JNS2 • The moderator of the focus group might also have contributed to response bias.

Recommendations • JNS2 suggest that Axiom Press focus on marketing to younger teachers and future teachers that are currently in college. • JNS2 recommends that Axiom Press send discount coupons to older teachers who may think that CultureGrams are overpriced. • JNS2 recommends that Axiom Press figure out what purchasing cycle their customers are on and only market to individuals during their purchasing year. • JNS2 recommend increasing the price of your product between 15 to 20 percent. • JNS2 recommends that Axiom Press focus on building customer awareness of the variety of uses for Axiom Press products. • JNS2 feels that Axiom Press should enter the business market, and in doing so should create a multimedia CD-ROM to add perceived value to the cultural information that they will present

Questions?

JNS 2 Market Research Group