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This report provides insight to the research options available to Dell when considering their expansion into the retail market. The report is a research proposal which would enable Dell to understand the nature of consumption of retail customers and consider whether the expansion is necessary.
The report reviews various components of research available to Dell at the pre-entry level into the retail market. In addition, apart from developing a research proposal, this report informs the reader of both the positive and negative sides of the data analysis and how this analysis would provide viable in the present data when considering the expansion.
The report consists of several sections, which elaborate on the number of research methods available and a critical analysis of the choices, followed by discussion of any ethical questions that may arise when conducting a research and conclusion.
Dell is one of the most well known names in the computer industry. Dell Computer Corporation was established in 1984 by Michael Dell and today ranks among the world's largest computer systems companies.
Dell pioneered the concepts of built-to-order computer systems initially selling them directly to customers so that the company could best understands the needs of customers and provide the most effective computing solutions to meet their needs. However, due to the high level of competition in the direct sales market and the availability of the competitor products in the major retail stores prompted Dell to consider new strategies allowing them to meet their customer latest needs and remain amongst the computer industry leaders.
In this report we will look at Dell's position prior to 2007, when they were only
pursuing the direct sales strategy and considering the penetration into the UK3
and USA retail markets. The questions faced by Dell at that stage were as to whether the customers would react positively to the availability of Dell products in retail stores and what would be their main criteria when choosing the retail purchase over the online purchase.
It is argued that the business world is very complex and can be understood by looking into the complex things by the way of research. For example, Remenyi et al noted that "to discover the details of the situation it is important to understand the reality or perhaps a reality working behind them".
Furthermore, the research and analysis process as said by Zikmund (2003) must ensure that the data is accurate, consistent with other information, uniformly entered, complete and arranged to simplify coding and tabulation.
In addition, in order to ensure the accuracy of data, it has to be carefully analysed, edited and sometimes coded. This information is important to establish appropriate tests. For example, Zikmund believes that the appropriate tests depend on central tendency or total distribution, variables involved, measurement scale, etc.
Lawley (2007) provides that while conducting a research, it is essential to decide on what is the best way to gather the information to provide the answers to the research objectives. Zikmund states that 'a research design is a master plan specifying the methods and procedures for collecting and analyzing the needed information'. Research design includes three common research designs: exploratory research, descriptive research and causal or experimental research. Furthermore, according to Sekaran (2003) data can be obtained from primary or secondary sources, where primary data refers to information obtained firsthand by the researcher on the variables of interest for the specific purpose of the study while the secondary data refers to information gathered from the already existing sources.
The purpose of the project
As we have already mentioned, the questions faced by Dell prior to 2007 were as to whether the customers would react positively to the availability of Dell products in the retail market and what would be their main criteria when choosing the retail purchase over the direct purchase. Although the market expansion and development were viewed to be essential, the problem was the potential reaction of customers and a better understanding of whether this expansion would be necessary in fact.
Therefore, in order to obtain the answers to the above questions, the next step for Dell was to carry out the research. This research, as suggested by Robson 2002:591 could be an exploratory or descriptive study.
Exploratory research would allow establishing what was happening in the marketplace and provide a better insight of the problem. Therefore, this approach would be appropriate in this case because a problem has not been clearly defined due to Dell not yet being an existing retail entrant and so it would allow Dell to gain a greater understanding of the market that were considering to enter.
Exploratory research would often rely on secondary research such as reviewing available literature or data, or qualitative approaches such as informal discussions with consumers or competitors, and more formal approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies.
Although the results of exploratory research would not be usually held to be useful for strategic decision-making, they could allow us to obtain significant insight of the problem.
Descriptive research could be used for the purposes of data and
characteristics description about the studied subject. For instance, this
1 Saunders et al. (2009
research could be used in order to find out what age group is buying a particular brand product or to discover how many competitors a company has in their marketplace. While carrying out descriptive research, it must be remembered that in order to obtain accurate results, the research requirements must be properly complied with.
Usually, the descriptive research would involve examining the data and would deal with everything that could be counted and studied. This research would usually have an impact to the lives of the people and so by applying it Dell could identify the needs of their potential customers and retail market tendencies when it comes to examining the buyers. This type of research could include various research methodologies, such as observations, surveys and tests.
The basic difference between exploratory and descriptive research is the research design. Exploratory research follows a format that is less structured and more flexible than descriptive research. This approach works well when the researcher does not have an understanding of the topic or the topic is new and it is hard to pinpoint the research direction. The downside however is that results may not be as useful in decision-making. Nevertheless, the exploratory research could contribute to a more structured descriptive study.
Again, while descriptive research often fails to meet the test of research validity and reliability, when conducted in a way that adheres to a strict set of research requirements it is likely to capture relevant and reasonably useful results.
Therefore, in Dell case, in order to understand customer needs better and to better understand the market place it would be appropriate to carry out market research by employing both the exploratory and descriptive research to collect the information required. However, in this case, it should be considered carrying out the exploratory research first implementing the descriptive research at the early stages of the retail market entry or, alternatively, it could6
be used at this stage to obtain the data to supplement further planned
As it was already mentioned, market research would allow us to collect the information or data to better understand what is happening in the market place. This research would also make a good reference point for Dell marketing department who would need to know about economic trends and the customers' views. Based on this information, they could put together a marketing plan, which could meet their own needs as well as the needs of their customers.
There are two general types of research that could be adopted for the
purposes of this project - primary and secondary.
Primary research would be useful when seeking to obtain new data for a specific purpose. Typically, this data would be gathered by the methods of interview, survey, diaries, product tests, projective techniques and other.
In the instance of this project, the techniques most associated with market
research and therefore most appropriate would be the telephone interview and postal and/or online survey.
As the main markets of Dell are the USA and Europe, the telephone ownership in these geographical areas would be very common. Furthermore, the customer details could be easily extractable from Dell existing databases. This technique is ideal for collecting data from a wide or various geographical areas. Although the telephone interviews tend to be very structured and tend to lack depth, they are cheaper to conduct compared to face-to-face interviews.
However, it should be taken into consideration that when conducting the
telephone interviews there could some disadvantages. For example, the7
could simply hang up, the interviews could be a lot shorter, visual aids could not be used and the interviewees' behavior or body language could not be observed. Therefore, the above could affect the accuracy and validity of collected data.
In addition, in order to collect primary data it could be beneficial to utilize the Internet as the majority of Dell's current sales were being completed online. Visitors to the Dell website could be asked to complete electronic questionnaires. Mail survey could also be a good way to gather primary data. In this case the predesigned questionnaire could be mailed or, again, even emailed to a sample of respondents. In this case, in order to obtain the required data, it would be advisable to randomly select at least 200 respondents as no specific segment group has yet been established. When collecting data by the way of postal survey or Internet facilities, it would be appropriate to device a questionnaire, which would enable to find out whether the existing or potential customers would prefer to have Dell products available in the retail stores and why.
It would be advisable that the questionnaire features both open and closed questions. Open questions would allow the interviewee to give any answer they choose, meaning they do not have to choose from a list. For example an open question could be, ''would you prefer buying a PC product online or in the retail store? Please explain why." Closed questions would give the interviewee an option to choose from. For example, a closed question could be, "Have you ever purchased a PC product online?'', '' Do you prefer buying in the store?", then it would give a yes or no option. It could be beneficial to feature more closed questions in the beginning and then ask the open questions to keep the research precise. In this case, open questions could play an important role as should the participants not be able to provide the direct answers to the closed questions, rather than providing some random unjustified responses, they would have an option to list their own views.
Secondary research would usually employ using the existing data that already
has been collected. Referring to the secondary data such as competitor
company reports, their financial data, media and other numerous available sources could allow Dell to understand their position in the market better. Should Dell decide to penetrate into the retail market, the secondary research would become extremely appropriate as it would provide the data about the competitors, buyers and enable to collect other relevant market data.
Data analysis and interpretation
In order to examine the collected research data, quantitative and qualitative
data analyses could be involved.
Quantitative research, for example, could involve the examination of data obtained via questionnaires. The data would be presented in numerical order so it could be analysed graphically and statistically. Several types of samples could be used to gather quantitative data, such as:
Random sampling - this would allow each member of the public an equal chance of being used in the sample. The interviewees would often be chosen from a telephone directory of from the Electoral Register.
Quota sampling - this method would involve the interviewees being grouped into segments which would share certain characteristics (i.e. age, gender or social status), where a certain number of the interviewees would be chosen from each segment. However, the numbers of people interviewed in each segment would not usually represent the population as a whole.
Cluster sampling - this would normally involve the interviewees being grouped into geographical groups (or 'clusters'), where a random sample would be carried out within each location.
Stratified sampling - the interviewees would be grouped into segments (or
'strata') based upon some previous knowledge of how the population was9
divided up. The number of people chosen to be interviewed from each
'strata' would be proportional to the population as a whole.
In Dell case, it would be appropriate to employ cluster sampling first and employ the use of quota sampling at a later stage when the segment groups have been established. The implementation of the other two sampling methods could become relevant sometime in the future, however, due to the lack of market knowledge they would not be appropriate to be used in this particular instance at this particular stage.
In terms of quantitative data, it could be divided into two distinct groups: categorical and quantifiable. Categorical group would refer to the values that couldn't be measured numerically but could be either classified into categories or placed in rank order, which could be sub-divided further. It would depend on the data available how to categorise it, considering which way would be the most appropriate to achieve the results we would be looking for. However, it must be born in mind that sometimes the existing categories would need to be revised and/or the data in these categories rearranged.
Qualitative research would attempt to gain an insight into the motivations that drive a consumer to behave in a particular way by referring to a non-numeric data. It is based on the meanings of words rather than the meanings of numbers.2 Qualitative research could assist in discovering the rationale behind consumers' purchases and give a better insight of their buying behaviour.
In Dell case it would also be appropriate to consider using the 'grounded theory'. This theory was defined by Strauss & Corbin3 as follows: "The grounded theory approach is a qualitative research method that uses a systematic set of procedures to develop an inductively derived grounded theory about a phenomenon". This theory is referring to the data disaggregation into units, which are known as open coding. Open coding
2 Sounders at al. (2009)
3 Strauss & Corbin are the authors of "Basics of Qualitative research: Grounded Theory'
Procedures and Techniques", 2008
involves "breaking down, examining, comparing, conceptualising, and
Data for open coding would be selected using a form of theoretical sampling known as "open sampling." This would involve identifying situations/portions of the transcripts that would lead to a greater understanding of categories and their properties. However, Glaser and Strauss (1967) note that the grounded theory coding and sampling should never be delegated to hired assistants, but should be done by the researchers who have a stake in the theory emerging from the project.5
In addition, when analysing data, it would certainly be advisable to incorporate the use of the computer software. These could range from simple Excel spreadsheets to more advanced data management and statistical analysis software packages such as CAQDAS, SAP, SPSS and other. The use of the software would make the analysis process being very efficient if used properly. Therefore, instead of cumbersome searches through filing cabinets or myriads of loose cards, the data or notes could be found at the ease of a mouse click.
When conducting a research, it should be carried out in the ethical way. Ethics is the study of the right behaviour and addresses the question of how to conduct the research in a moral and responsible way. There are two dominant philosophical standpoints on research ethics: deontology and teleology.6 They guide the relationship between researchers and the participants, researchers and the integrity of the research. In general, the research must be designed properly and should avoid sensitive topics. Also, the actual purpose and benefits of the research must be identified and confidentiality, informed consent and freedom from any potential unwanted conduct must be promised. Knowing why one is being asked questions
4 Strauss & Corbin (2008)
56 Blumberg et al. (2008
improves cooperation through honest disclosure. So a respondent does not
suffer any discomfort, embarrassment or loss of privacy.
Ethnical issues are one of the necessities to be considered during the whole research process. For example, when conducting a postal survey, the covering letter should briefly explain the aims of the research, promise the confidentiality, provide a description of the procedures for returning the survey and a questionnaire and a stamped pre-addressed envelope in which the surveys could be returned to the researchers. When conducting the telephone interviews or obtaining data by using other relevant method, the assurance of privacy and clause of confidentiality are also very important.
Referring back to the project proposal, we have looked at the methods available for the research required. Therefore, it would be important to collect the data by asking relevant questions and structures, avoiding the circumstances which may jeopardise the interviewees' ability to provide truthful and relevant to the research responses. However, it must be born in mind that in order for the research being successful it is important that the data is not only relevant, but has a desirable level of validity. It is easy to obtain perfect reliability with no validity at all. On the other hand, perfect validity would assure perfect reliability.
The initial research proposal suggested some potential approaches that would be relevant at the initial stages of Dell plans for market expansion. At this stage the research would be likely to provide the very basic 'surface data'. However, once the entry has been enrolled, further research would be required to investigate the retail market and consequently views and behaviour of the buyers more precisely, which would give a rise to further project