A STUDY ON THE DEMAND OF MOBILE COUPONS AND THEIR POTENTIAL USE AT CHIPOTLE
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1 G R O U P MARKETING RESEARCH PROJECT A STUDY ON THE DEMAND OF MOBILE COUPONS AND THEIR POTENTIAL USE AT CHIPOTLE S E C M A R K E T I N G R E S E A R C H 3010
2 TA B L E O F C O N T E N T S EXECUTIVE SUMMARY...3 INTRODUCTION...5 RESEARCH DESIGN...5 EXPLORATORY RESEARCH... 6 SAMPLING TECHNIQUE... 8 SURVEY DATA COLLECTION METHOD... 8 MEASUREMENT...9 ANALYSIS PROCEDURES...10 RESULTS RECOMMENDATIONS...15 APPENDIX...18 SECTION A...18 SECTION B...19 SECTION C...20 Supporting Data...21 Hypothesis Testing...24 Works Cited...31 S E C M A R K E T I N G R E S E A R C H
3 E x e c u t i v e S u m m a r y The rapid growth of technology is evident across the globe. Constant research and innovations are improving the speed, convenience, and efficiency of a multitude of tasks. Therefore, combining new technology with economic savings in the current recession seems to be an obvious promotional strategy. For this reason, G201 decided to conduct its research on mobile coupons, a new technology and marketing tool recently introduced in the United States. The research methodology used as well as the major findings/implications follow. RESEARCH METHODOLOGY Problem Formulation To lay the foundation for the research project, G201 specified the managerial problem: If there is demand in our demographic for mobile coupons, should Chipotle implement them as part of their regular promotions? Next, research objectives were derived from the managerial problem: 1. Determine the demand for mobile coupons amongst the college population at the University of Minnesota. 2. Enhance the promotional strategy at Chipotle. (Chipotle was chosen mainly for its popularity amongst college students.) After determining two research objectives, four research questions were specified and research hypotheses stated to answer each question. Research Design The research design was outlined with the ultimate intention of solving the managerial problem. First, exploratory research was conducted, including both secondary and primary data. Surveying the college demographic was the next step in gathering descriptive research. Final steps in the survey follow: coding survey data; analyzing results with hypothesis testing, regression, and descriptive statistics; and lastly making managerial recommendations to Chipotle. 3
4 Data Collection Secondary research from online sources, primary data from in-depth interviews and a questionnaire complete our data collection. Interviews were chosen instead of focus groups to gain detailed insights through a one-on-one setting and also for convenient timing. With this information, the questionnaire was compiled and distributed using convenience sampling on the University of Minnesota campus. Data Analysis The first step in data analysis was editing the data and assigning missing values to unsatisfactory results through substituting imputed responses. Coding the questionnaire and transcribing the data came next, followed by preliminary exploration of the data to understand the data. Finally, Chi-Square tests, paired mean t-test, twosample mean t-test, and histograms constitute the data analysis techniques used to test the null hypotheses and make recommendations. MAJOR FINDINGS AND IMPLICATIONS We found that it was statistically significant that texters will use their phones for mobile coupons. We found that there was a statistically significant result that college students find mobile coupons more convenient and attractive than paper coupons but saw no difference between paper and mobile coupons value, helpfulness and usefulness. Through our research we found that there was a statistically significant difference in the different types of coupons Chipotle should offer, with a coupon offer of a free item being the prevailing top choice of college students. Our final test finds that texters will use their phones for mobile coupons at Chipotle. From our results we were able to formulate three reasonable recommendations for Chipotle. We determined that texters will use their phones to receive mobile coupons from Chipotle and that the best promotion to offer via mobile coupon is a free item. If this is implemented, we think Chipotle will see an increase in in-store traffic and repeat customers. Therefore, for our managerial decision we decided that Chipotle should implement mobile coupons. 4
5 M a r k e t i n g R e s e a r c h P r o j e c t A STUDY ON THE DEMAND OF MOBILE COUPONS AND THEIR POTENTIAL USE AT CHIPOTLE INTRODUCTION The marketing industry is constantly searching for new ways of reaching consumers. All marketers know that determining wants and needs will increase customer satisfaction the ultimate goal of marketing. Environmental scans pinpoint technology as the variable that can provide the greatest innovation for current methods. Our marketing research group has stumbled upon the new method of mobile coupons in the marketing industry. It is a very new concept, with more retailers conducting trial coupons and implementing a mobile advertising campaign on a daily basis. Observations of our peers sparked the desire to know if mobile coupons would be a viable promotional strategy between college students and campus-related businesses. Because of our personal interests, we decided to narrow our study s focus to the attitudes and perceptions of mobile coupons directed toward Chipotle. We understand the cell phone as a necessity in every day college life. Putting the cell phone in your pocket comes right after putting your shoes on and grabbing your house keys. We feel like the cell phone is an under-utilized resource for reaching consumers. Our internet and television is bombarded with generalized messages. Who cares? The medium of a cell phone offers a chance to receive personalized messages and opportunities that you actually want. Additionally, the economic recession increases the demand for deals, including coupons. Our research objectives are to (1) determine the demand for mobile coupons amongst the college population at the University of Minnesota and (2) enhance the promotional strategy at Chipotle. The managerial question we seek to answer is: If there is demand in our demographic for mobile coupons, should Chipotle implement them as part of their regular promotions? To this end, we developed four research questions to guide our data collection and conclusive recommendation. (1) Will texters use their mobile phone for text coupons? We know that the cell phone is used for , socializing, organizing, and entertainment. We would like to know if people 5
6 would be open to accepting another function: starting a personalized relationship with the marketing industry. (2) Are mobile coupons perceived as better than paper coupons? We wonder if a mobile coupon is perceived as something new and different based on testable attributes. (3) Which coupon type is right for Chipotle to increase business on campus? There are several different types of coupons that Chipotle could implement. We want to know which ones are preferred, which will lead us to determine those which are most likely to be used by consumers. (4) Will texters use their mobile phone for coupons from Chipotle? This last question will answer our managerial decision directly. As new researchers, our project ran into some obstacles. Not having a foundation of research knowledge put us at a disadvantage when planning our study. Our trials and mistakes resulted in much knowledge gained and proficiency after the fact. Because we are learning as we go, some of the data s usefulness has been compromised. Nonetheless, we are able to provide significant results and recommendations. EXPLORATORY RESEARCH We used exploratory research to develop ideas and provide direction for further research. Our goals were to learn more about what mobile coupons are, their potential as a marketing tool, the expected growth of this medium, current successful form of mobile coupons, and University of Minnesota students opinions of mobile coupons. This research mainly consisted of secondary data. Initially we investigated online resources to get a broad scope. We gathered that cell phones are an underutilized marketing medium with the potential to grow exponentially. For instance, in 2008, mobile coupon usage increased 119 percent over the previous six months (Kahn). Moreover, JupiterResearch estimates that by 2011, over 87 billion dollars in sales will be generated by 3 billion mobile coupons (Dorf). From the online research process we uncovered many themes. For one, mobile devices are exceptionally popular. A technology involving cell phones could influence millions of people, and in the economic recession, many people are looking to save money. Additionally, we learned that 68% of customers who redeemed mobile 6
7 coupons were between the ages of ( How it Works ). Targeting a younger marketing segment would be effective for a mobile coupon service. An advantage of secondary data is its low cost (free) and small time commitment. This allowed us to easily and quickly gain knowledge about mobile coupons and how they are perceived. We used this secondary data to explore ideas and gain more insight on mobile coupons and its usage. Beyond secondary research, our exploratory data collection included in-depth individual interviews to identify college students opinion about mobile coupons. Advantages to this method are convenience and in-depth opinions. From the interviews we found 27% of the interviewees knew what mobile coupons were. After asking if participants would want to receive mobile coupons from Chipotle, 87% said they would. Interviews were effective in providing general themes of opinions among college students, as well as important factors to further explore in our surveys. After collecting our data and finding that college students would want to receive mobile coupons from Chipotle we met with John Hopp Jr., the general manager at the Chipotle located on the East Bank of the University of Minnesota campus. He was able to describe Chipotle s marketing strategy of both store and corporate levels. After explaining our findings on mobile coupons Hopp felt that it was a good idea for a promotional method and that it would correspond with their current i-phone application. The company currently offers three promotions: free item, buy one get one free and free chips & guacamole. Hopp was able to give us more insight into the store s seasonality, which they try to combat by drawing in business professionals during the summer when most students are gone. The knowledge that he provided during the interview allowed us to gain a better understanding of Chipotle s current promotional strategies and how our research can support new methods. SAMPLING TECHNIQUE The sampling technique that we used to collect our data was convenience sampling. Although this may not be the most accurate technique, the reason we choose this method was because of time restrictions. It was the most appropriate method for our experiment since we were able to receive a large amount of data relatively fast, which was both cost and time efficient for us as college students. This technique was also useful since our sampling 7
8 population for the most part is homogeneous; all being around the same age, living in the same place, having the same income and experiencing the same things. The limitations of using convenience sampling for our project are that we did not collect a representative amount of data from each age group and we did not survey a wide range of students from different schools/locations within the University of Minnesota. SURVEY DATA COLLECTION METHOD The data for this study was collected using surveys that were passed out to respondents by hand during classes or while they were on campus. We chose this method for several reasons. First, handing out our surveys allowed us to reach our target participants, college students attending the University of Minnesota. Second, it allowed us to give our respondents privacy since the surveys were handed out in large groups but it was also time efficient for both the respondent and the researcher. Third, it gave us some control over what age, grade or gender we were collecting data from by selecting various places and classes to hand out our survey in. This way we were able to plan on how we would try to reach a wide variety of students. Lastly, this method for collecting data allowed us to meet our sample size and permitted us to code data once we received it. We did several calculations for our sample size due to the three types of questions our survey contained. Our nominal questions resulted in the largest sample size containing 385 students with a precision level of 5%. Due to time limitations we were not able to conduct a study this large so we chose to have a sample size of 150 students and a precision level of 8%. The results of the limitation are that our recommendation will not be as strongly supported as we would like for the company to accept our managerial decision and that other biases that may have occurred from our convenience sampling could skew the data. If we were able to repeat our study we would plan for more time so that we would be able to collect enough data to be most precise on our recommendation. M EASUREMENT Research Objective 1: Determine the demand for mobile coupons amongst the college population at the University of Minnesota To address Research Objective 1, we asked the following research questions: 1. Will texters use their mobile phones for text coupons? 8
9 2. Are mobile coupons perceived as better than paper coupons? Measurement required coding of several survey questions. Question 11, agreement/disagreement with the statement, I never leave the house without my cell phone was coded to find frequency of cell phone usage. 1 Question 3, How often would you want to receive mobile coupons? was coded to find interest in receiving mobile coupons. Question 7 and 8, a 1 7 Likert Scale addressing the perception of paper coupons and mobile coupons, respectively, used the ratings to analyze how consumers views differ between mobile coupons and paper coupons. Question 6, a paired comparison between mobile coupons vs. paper coupons addressed consumer s preference of mobile coupons to paper coupons. Research Objective 2: Enhance the promotional strategy at Chipotle To address Research Objective 2, we asked the following research questions: 3. Which coupon type is right for Chipotle to increase business on campus? 4. Will texters use their mobile phones for text coupons from Chipotle? Question 9, a rank order of coupon offers was used to find consumer preference of coupon type. A histogram was used to compare this ordinal data. Question 10, a nominal frequency of how long mobile coupons should last before expiring, was utilized to determine what type of coupon should be offered as well. Question 11, used for research question 1 about cell phone usage, was also applied to answer research question 4. Question 5b, a nominal frequency of mobile coupons received from Chipotle, was used to determine interest in receiving mobile coupons from Chipotle. Finally, Question 5c was utilized to measure the likeliness of respondent s use of mobile coupons from Chipotle. In hindsight, Question 5b should have read: How often would you eat at Chipotle if you had a mobile coupon? However, the question was still useful to determine whether there is a relationship between wanting to receive mobile coupons from Chipotle and the frequency of eating at Chipotle with a coupon. 1 See Appendix Section B 9
10 ANALY SIS PROCEDURES We used multiple analytic procedures to find the results of our data collection. For research question one about demand for mobile coupons among texters (mobile people) chi-square was used. The relationship between nominal variables agreeing with never leaving the house without my cell phone and frequency Rarely, Often, and Very Often is determined. Research question two used a paired mean comparison. From the first research objective we formulated the second research question, Are mobile coupons perceived as better than paper coupons? We analyzed better as containing five concert ideas, convenience, attractiveness, value, helpfulness and usefulness. We wanted to find out how consumers rated these attributes for mobile coupons in comparison to paper coupons. Research question three used a histogram to test difference in coupon offers and chi-square to test difference in expiration of coupon offers. To answer research question four a Chi-Square test was used. If the relationship between the variables is independent then the data is inconclusive to answer if texters will use their mobile phones for text coupons from Chipotle. However, if the variables have dependent relationship, we can conclude that texters will use their mobile phones for text coupons from Chipotle. The statistical package used is Excel. We found it important to code many responses that would otherwise be hard to measure. When we initially launched our survey, many questions gave respondents a range of five choices to choose from. For example, question three asked, How often would you want to receive mobile coupons? Respondents were given the choices; Never, Once a Month, Twice a Month, Once a week, Twice a Week, and More than Twice a Week. Instead of initially giving them the choices of Rare, Often, and Very Often, which could be interpreted to mean different amounts to different people, we chose this method to set a specific amount to each level. Rare, Often, and Very Often are tied to numerical data. For other questions we made a base and used dummy variable to compare data. Finally, data cleaning was implemented to assign values where respondents missed a question. To do this accurately we looked at their responses to other questions and assumed what they would have responded for the missing value. 10
11 RESULTS RESEARCH QUESTION 1 To determine the demand for mobile coupons amongst the college population at the University of Minnesota our data collection responded to Research Question 1: Will texters use their mobile phone for text coupons? Null Hypothesis : Mobile people will not use their phone for text coupons. Testing The Test used for finding if Mobile People will use their phone for mobile coupons was a Chi Square test. The questions from the survey used in this data comparison were Question 3 and Question 12B. This method was chosen because of the nominal level of Question 3. Question 3 asks, How often would you want to receive MOBILE COUPONS? Question 12B asks for the degree of agreement on the statement, I never leave the house without my cell phone. This comparison allowed us to conclude if people who always had their cell phones with them, mobile people, would use their phone to receive mobile coupons. Based on our findings 2 we reject the null hypothesis and conclude that mobile people will use their phone for mobile coupons. Having a cell phone and use of mobile coupons are not statistically independent. If the statement I never leave the house without my cell phone is true, then there will be some frequency of demand for mobile coupons. RESEARCH QUESTION 2 Additionally, as part of research objective one, we wanted to find out how consumers rated attributes for mobile coupons in comparison to paper coupons with Research Question 2: Are mobile coupons perceived as better than paper coupons? Null Hypothesis Ho: There is no difference between mobile and paper coupons. 2 See Appendix C Table H1 F 11
12 Testing Two semantic differential interval questions asked respondents to mark on a spectrum how they felt about each attribute (convenience, attractiveness, value, helpfulness, usefulness) for both mobile and paper coupons. A paired mean t-test is appropriate for analyzing survey respondents attitudes on two variables mobile coupons and paper coupons. We tested the significance of each individual attribute 3. College students perceive mobile coupons as more convenient and more attractive than paper coupons; yet, saw no difference between mobile and paper coupons value, helpfulness and usefulness. The test showed a majority of college students find mobile coupons more attractive than paper coupons. There was not a statistically significant difference to prove that college students saw a difference in mobile and paper coupons value, helpfulness and usefulness. This is logical; a coupon whether in paper form or mobile form creates marginal discounts on products. Our findings proved that although college students do not feel the value of a coupon will change when its form is changed, their perceptions about other coupon characteristics did change. This information is very useful because if consumers find a coupon more attractive and convenient and are given a choice, they will choose mobile coupons. RESEARCH QUESTION 3 To determine how Chipotle should enhance their promotional strategy our data collection answered Research Question 3: which coupon type is right for Chipotle to increase business on campus? Null Hypothesis : There is no right coupon for Chipotle Testing HISTOGRAMS To test this hypothesis, we used two different methods for finding if there is in fact a right coupon that Chipotle should offer. First, histograms were used to analyze question 10 which asked the respondent to rank five different types of coupon offers in order of their preference. This method is appropriate due to its ordinal level; it also allowed us to look at each separate coupon offer in detail. After analyzing the data, we chose to look at the number of people who ranked the coupon offer as either their first or second choice. The offer that 3 See Appendix C Table H2 A-E 12
13 received the highest preference was free item" which was ranked first or second among 84% of respondents. 4 This demonstrates that among this demographic, the most effective coupons to offer would be "free item" followed by "dollars off" and "buy one, get one." The different preferences toward various coupon types demonstrate that there is a statistically significant difference among which type of coupon is offered by Chipotle and allows us to reject the null hypothesis. CHI-SQUARE The second method we used to further examine another attribute of coupons was a Chi-Square test comparing survey question 6 and question 11. Question 6, a nominal question, asks, Would you like to receive mobile coupons from Chipotle? Responses were categorized as Yes or No. Question 11, nominal, states, How long would you like a mobile coupon to last before it expires? Responses were grouped as Very Long (ranging from never expire to 1 year), Long (six months to one month) and Short (one week to one day). We found that there is a not a statistically significant difference between wanting coupons from Chipotle and how long coupons last before expiring. 5 Although consumers do not find how long the coupon lasts is a significant attribute, the type of offer they preferr is significant. We can still reject the null hypothesis that there is no right coupon for Chipotle. RESEARCH QUESTION 4 To offer more specificity to a promotional strategy enhancement we asked a final research question. Will texters use their mobile phones for text coupons from Chipotle? Null Hypothesis : Mobile people will not use their phone for mobile coupons from Chipotle. Testing To answer this question, it was important to determine the frequency of cell phone usage, seeing as consumers who use their mobile phone on a regular basis will be more likely to use text coupons from Chipotle. The results of the survey proved that an overwhelming 93.3 percent of respondents either agree or strongly agree with the 4 See Appendix C Charts H3 A E for other Histograms and other rankings 5 See Appendix C Table H3 A - B 13
14 statement, I never leave the house without my cell phone 6. This statistic shows that the vast majority of cell phone users at the University of Minnesota have the potential to be targets for a mobile coupon campaign from Chipotle or another on-campus business. Secondly, consumers must have interest in receiving text coupons from Chipotle and so the question was asked, How often would you want to receive mobile coupons from Chipotle? Almost 97 percent of respondents answered that they would be interested in receiving mobile coupons from Chipotle, with 40 percent wanting to receive them 1-2 times/month. Though this is the majority, 29 percent of respondents would only want to receive them 1-2 times/year and 27 percent would like to receive them 1-2 times/week. 7 According to this data, mobile coupons will enhance Chipotle s promotional strategy. However, further research must be conducted in order to determine the frequency of mobile coupon use. It would be beneficial for Chipotle to segment mobile coupon promotion to satisfy different groups of mobile coupon users individually. Lastly, though consumers may be interested in receiving mobile coupons, it is also important that they use the mobile coupons received. To test likeliness of coupon usage, the question was asked, How often would you eat at Chipotle if you had a coupon? To this question 100 percent of respondents indicated that they would eat at Chipotle with a coupon. Forty-nine percent of respondents answered 1-2 times/year, 29 percent indicated 1-2 times/week, and 22 percent said 1-2 times/year. Interestingly, the percentages of respondents who would eat at Chipotle with a coupon Never, Rarely, Often, and Very Often matches closely with those respondents who want to receive text coupons Never, Rarely, Often, and Very Often. This implies that the redemption rate of mobile coupons would likely be great and further supports a mobile coupon promotion for Chipotle. Again, further research would need to be conducted to determine redemption rate of mobile coupons at Chipotle. 6 See Appendix C Table 12.B 7 See Appendix C Table 5.B 5.C 14
15 Overall, through the aforementioned survey questions, as well as rejecting Hypothesis 1 8, the survey results support the statement that texters will use their mobile phones for text coupons from Chipotle. Furthermore, these results suggest that mobile coupons should be used to enhance the promotional strategy at Chipotle. RECOMMENDATIONS Based on our results, there are three alternative recommendations that we feel Chipotle could implement. The first recommendation is that Chipotle should implement mobile coupons as part of their regular promotions. Our data from Research Question 1 proves that there is demand for mobile coupons among our demographic. Our chi-square test from Research Question 4 was able to further support this key finding by illustrating that texters will use their cell phones for receiving mobile coupons from Chipotle. This demand can be explained by our secondary research which shows that cell phone usage is growing rapidly. By taking advantage of this new marketing technology which is becoming more widely used, Chipotle will be able to stay competitive in its industry. Mobile Coupons also fit with the company s current strategies such as their i-phone application. The data we collected for Research Question 3 also showed that college students prefer coupon offers for free items and buy one get one free, which are the main promotions Chipotle currently offers. If students receive these coupons on their cell phones then we think Chipotle will see an increase in in-store traffic and repeat customers. Our data strongly supports that the Chipotle on campus should offer mobile coupons. However, after talking with the general manager we discovered this type of marketing tactic would only be offered on a national scale. Before Chipotle would implement this recommendation to that extent, they will need to do more research among various demographics and run several market tests to ensure effectiveness of a mobile coupon campaign. Our second alternative recommendation is that Chipotle should not implement mobile coupons as part of their regular promotions. The secondary research conducted illustrated that new technology would be needed to scan the mobile coupons from cell phones at the time of purchase. This investment may be too costly for Chipotle to implement in all of their locations. After interviewing Chipotle s general manager, we learned that the business doesn t experience much seasonality and that their in-store traffic is not affected by weather. This had been one of the main advantages to having mobile coupons which could draw in consumers when business was slow. 8 See Appendix C Hypothesis Testing 15
16 Lastly, instead of using mobile coupons to enhance their promotional strategy, Chipotle could use other alternatives such as running in-store promotions. They currently do this type of promotion on Halloween and the general manager emphasized it is largely marketed inexpensively by word of mouth. These key findings make us believe that Chipotle may not need to offer mobile coupons. A final possible alternative Chipotle could use to enhance their promotional strategy would be to implement the usage of paper coupons. Although they are not as technologically advanced, our data from Research Question 1 found that there was only a 10% difference in the amount of people who preferred mobile coupons compared to paper coupons. This can be explained by the paired mean comparison test from Research Question 2, which demonstrated that texters don t see a significant difference between attributes of mobile versus paper coupons. They do find mobile coupons to be more convenient and attractive but overall the value of the coupon would be the same whether it is paper or mobile. We feel that getting a coupon in the hands of consumers would be an effective way to gain new customers. All of these alternatives are feasible options for Chipotle, but we feel that the best way for the company to enhance their promotional strategy would be to implement recommendation 1 and use mobile coupons as a regular marketing tool. As stated above, there is demand for using this type of medium in marketing and that college students do want to see Chipotle offer mobile coupons. This strategy would work especially well at the Chipotle locations on the University of Minnesota campus. However, before implementing mobile coupons nationwide, more research must be done conducted on additional demographic groups that make up Chipotle s target market. 16
17 APPENDIX SECTION A SUMMARY OF EXPLORATORY RESEARCH FINDINGS From the exploratory research we found that cell phones are an underutilized marketing medium with the potential to grow exponentially. Mobile coupon usage has grown dramatically in the past few years and is showing signs of becoming widely used in the future. Some general themes we uncovered from our secondary research include, mobile devices are exceptionally popular and a technology involving cell phones could influence millions of people. Moreover, many people are looking to save money and receive a deal. We also learned that most mobile coupon users are between the ages of 18-34, so targeting younger generations would be effective for a mobile coupon service. Furthermore, we conducted in-depth individual interviews to see what college students think about mobile coupons and about receiving mobile coupons from Chipotle. From the interviews we found that only 27% knew what mobile coupons were. After asking if participants would want to receive mobile coupons from Chipotle, 87% said they would. College students say they spend too much money on food, alcohol, and entertainment and don t currently use paper coupons often or at all but like to receive deals. They believe mobile coupons are a good idea but have the potential to be too excessive, and are meant the younger generation (ages 18-35). Students would not pay to receive mobile coupons but would want to receive them if they were free. Lastly, we interviewed the General Manager, John Hopp Jr., from the East Bank Campus Chipotle. He was able to provide us with insight into Chipotle s current marketing strategy, such as their current promotions, advertising mediums and specific store level techniques. After educating John on what mobile coupons were, he felt that they were a good idea and that would fit well as a regular promotion at Chipotle. From this interview we also discovered that this type of marketing promotion would not just be done on a store-by-store basis and that the Chipotle on campus does not experience a change in sales due to weather. Both of these observations were something we had not discovered from our exploratory research and they both played a role in the types of alternative options we recommended. 17
18 SECTION B QUESTIONNAIRE AND BASIC RESULTS Survey: The basic results are transcribed from total respondent data and detailed in the column at left, or within the question line. 1. Rare 65.33% Often: 27.33% Very Often: 7.33% 2. Yes: 34.00% 1. How often do you use PAPER COUPONS? Never 1 2 times/year Once/month Once/week More than once/week Other 2. Do you know what MOBILE COUPONS are? Yes No* *Definition of Mobile Coupons (courtesy of Mobile Marketing Association): An electronic ticket solicited and/or delivered by mobile phone that can be exchanged for a financial discount or rebate when purchasing a product or service 3. Rare: 52.67% Often: 33.33% Very Often: 12.00% : 5a. Rare: 50.67% Often: 42.67% Very Often: 5.33% 5b. Rare: 22.00% Often: 49.33% Very Often: 28.67% 5c. Rare: 29.33% Often: 40.00% Very Often: 27.33% 3. How often would you want to receive MOBILE COUPONS? Never Once/month Twice/month Once/week Twice/week More than twice/week Other 4. What industries would you like to see offer mobile coupons? Circle all that apply. Restaurant Retail Grocery Coffee shops Other Check the blank which completes the sentence: times/year never How often twice/week once/week 1-2 times/month 1-2 A. do you eat at Chipotle B. would you eat at Chipotle if you had a coupon C. would you like to receive MOBILE COUPONS from Chipotle 7a % prefer mobile coupons 6. Would you want to receive MOBILE COUPONS from Chipotle? Yes No 7. Out of the following pairs, please circle your preferred choice. 18
19 A. Paper coupon vs. Mobile coupon B. Mobile coupon vs. In-store sale C. In-store sale vs. Paper coupon 8. Actual totals for each interval 8. Complete the statement to your preference by marking the spectrum: I find PAPER COUPONS to be: Inconvenient Convenient Unattractive Attractive Invaluable Valuable Unhelpful Helpful Not Useful Useful 9. Complete the statement to your preference by marking the spectrum: I find MOBILE COUPONS to be: Inconvenient 12_ 0 9_ 17_ 24_ 61_ 27_ Convenient Unattractive _8 8 14_ 42_ 42_ 24_ 12_ Attractive Invaluable _ 43_ 38_ 16_ Valuable Unhelpful _7 4 7_ 34_ 42 38_ 18_ Helpful Not Useful _6_ 4 12_ 21_ 40_ 45_ 22_ Useful 10. Please rank from the following COUPON types from 1 5 in the order you would most like to receive them (1 is your top choice and 5 is your last choice. Do not use a number more than once). _2_ Dollars off _1_ Free item _3_ Buy-one-get-one-free _5_ Buy-one-get-one-half-off _4_ Manufacturer s Coupon (valid discount for multiple products from a manufacturer) 11. Short: 20 Long: 61 Very Long: How long would you like a MOBILE COUPON to last before it expires? One day One week One month 6 months 1 year Never Expire 12. Indicate your degree of agreement with the following statements by circling the appropriate number. Agree Strongly Disagree Strongly A. It is important for me to save money Mean Rank A B C D % of respondents were female B. I never leave the house without my cell phone C. Mobile coupons are an invasion of my privacy D. Chipotle should send me mobile coupons A. Gender Male Female B. Age C. Year in School 19
20 SECTION C TABLES AND OTHER DATA SUPPORTING DATA Sample Size Calculations Nominal: P= 0.5 Zq= 1.96 H= 0.05 n= Zq^2 x p(1-p) = 1.96^2 x.5(1-.5) = = 385 H^2.05^2 Interval: s= (7-1)/6 = 1 Zq = 1.96 H =.25 n= s^2 x Zq^2 = 1^2 x 1.96^2 = = 62 H^2.25^2 Ratio: s= (25-18)/6 = Zq= 1.96 H= 1 n= s^2 x Zq^2 = 1.667^2 x 1.96^2 = = 6 H^2 1^2 Descriptive Statistics Results Table 5.B I would (Never/Rarely/Often/Very Often) eat at Chipotle if I had a coupon. # Respondents % Respondents Never Rarely (1-2 times/year) Often (1-2 times/month) Very Often (1-2 times/week) (1-2 times/week) Total Respondents Table 5.C I would like to (Never/Rarely/Often/Very Often) receive text coupons from Chipotle. # Respondents % Respondents Never Rarely (1-2 times/year) Often (1-2 times/month) Very Often (1-2 times/week) Total Respondents Table 12.B I never leave the house without my cell phone. 20
21 # Respondents % Respondents Strongly Agree (5) Agree (4) Neither Agree nor Disagree (3) Disagree (2) Strongly Disagree (1) Total Respondents Table 7 Mobile Coupon vs In-store sale Preferred Mobile Coupons over In-store Sale: 15% Preferred In-store Sale over Mobile coupons: 85 % In-store sale vs Paper Coupon Preferred In-store sale over Paper Coupon: 87 % Preferred Paper Coupon over In-store Sale: 13% Table 8 A - D Survey Question 8 and 9 comparing Mean and Median Likert (1-7) Ratings of Attributes: Convenience, Value, Helpfulness, Usefulness A. B. Mobile people: Convenience Paper People: Convenience Mobile people: Value Paper People: Value Mean Mean Mean Mean Standard Error Standard Error Standard Error Standard Error Median 6 Median 5 Median 5 Median 4.5 Mode 6 Mode 6 Mode 6 Mode 5 Standard Deviation Standard Deviation Standard Deviation Standard Deviation Sample Variance Sample Variance Sample Variance Sample Variance Kurtosis Kurtosis Kurtosis Kurtosis Skewness Skewness Skewness Skewness Count 82 Count 68 Count 82 Count 68 Confidence Level(95.0%) Confidence Level(95.0%) Confidence Level(95.0%) Confidence Level(95.0%) C. D. Mobile people: Helpfulness Paper People: Helpfulness Mobile people: Usefulness Paper People: Usefulness Mean Mean Mean Mean Standard Error Standard Error Standard Error Standard Error Median 5 Median 4.5 Median 6 Median 5 Mode 6 Mode 4 Mode 6 Mode 5
22 Standard Deviation Standard Deviation Standard Deviation Standard Deviation Sample Variance Sample Variance Sample Variance Sample Variance Kurtosis 2.6\2395 Kurtosis Kurtosis Kurtosis Skewness Skewness Skewness Skewness Count 82 Count 68 Count 82 Count 68 Confidence Level(95.0%) Confidence Level(95.0%) Confidence Level(95.0%) Confidence Level(95.0%) Table 10 Survey Question 10 Coupon Type Ranking 1-5 ID Dollars off Free Item BOGO BOGO1/2 Manufac Total Demographics Statistics Table 13 A - C A. Gender / Frequency B. Age / Frequency Female 106 Male 44 C. Year in School / Frequency Freshman 17 Sophomore 10 Junior 77 Senior 38 5 th year Senior HYPOTHESIS TESTING Objective 1, Research Question 1, Hypothesis 1 Question 1: Will texters use their mobile phone for text coupons? Null Hypothesis (1): Mobile people will not use their phone for text coupons. 22
23 Tests (2): Two Sample Mean t-test and Chi-Square Data Set: Two Sample Mean t-test Table H1 A. Table H1 B. t-test: Two-Sample Assuming Unequal Variances t-test: Two-Sample Assuming Unequal Variances CONVENIENCE ATTRACTIVENESS Mobile Mobile people Paper People people Paper People Mean Mean Variance Variance Observations Observations Hypothesized Mean Hypothesized Mean Difference 0 Difference 0 df 122 df 133 t Stat t Stat P(T<=t) one tail P(T<=t) one tail t Critical one tail t Critical one tail P(T<=t) two tail P(T<=t) two tail t Critical two tail t Critical two tail Table H1 C. t-test: Two-Sample Assuming Unequal Variances VALUE Mobile people Paper People Mean Variance Observations Hypothesized Mean Difference 0 df 126 t Stat P(T<=t) one tail t Critical one tail P(T<=t) two tail t Critical two tail Table H1 D Table H1 E. t-test: Two-Sample Assuming Unequal Variances 23 t-test: Two-Sample Assuming Unequal Variances HELPFULNESS USEFULNESS Mobile Mobile people Paper People people Paper People Mean Mean Variance Variance Observations Observations 82 68
24 Hypothesized Mean Difference 0 Hypothesized Mean Difference 0 df 123 df 112 t Stat t Stat P(T<=t) one tail P(T<=t) one tail E 06 t Critical one tail t Critical one tail P(T<=t) two tail P(T<=t) two tail E 05 t Critical two tail t Critical two tail We reject the null hypothesis that mobile people will not use their phone for text coupons. Our p-values < 0.05 are significant. Conclusion for Two Sample Mean t-test: Mobile people will use their phone for text coupons, as this group sees them as significantly convenient, attractive, valuable, helpful, and useful. Data Set: Chi-Square Table H1 F ACTUAL RARE OFTEN VERY OFTEN TOTAL TRUE FALSE TOTAL EXPECTED P VALUE E 08 RARE OFTEN VERY OFTEN TOTAL TRUE FALSE TOTAL We reject the null hypothesis that mobile people will not use their phone for text coupons. Our p- values < Conclusion for Chi-Square: People answering True will want to receive mobile coupons, and people answering False will not. Objective 1, Research Question 2, Hypothesis 2 Question 2: Are mobile coupons perceived as better than paper coupons? 24
25 Null Hypothesis (2): There is no difference between mobile and paper coupons Test: Paired Means t-test Data Set: Paired Means t-test and convenience, attractiveness, value, helpfulness, and usefulness Table H2 A. Table H2 B. t Test: Paired Two Sample for Means t Test: Paired Two Sample for Means Paperconvenience Mobileconvenience Paper Attitude: attractiveness Mobile Attitude: attractiveness Mean Mean Variance Variance Observations Observations Pearson Correlation Pearson Correlation Hypothesized Mean Difference 0 Hypothesized Mean Difference 0 Df 149 df 149 t Stat t Stat P(T<=t) one tail 6.769E 10 P(T<=t) one tail t Critical one tail t Critical one tail P(T<=t) two tail 1.35E 09 P(T<=t) two tail t Critical two tail t Critical two tail Table H2 C. Table H2 D. t Test: Paired Two Sample for Means t Test: Paired Two Sample for Means Paper Attitude: Value Paper Attitude: Helpfulness Mean Mean Variance Variance Observations Observations Pearson Correlation Pearson Correlation Hypothesized Mean Difference 0 25 Hypothesized Mean Difference 0 Df 149 df 149 t Stat t Stat P(T<=t) one tail P(T<=t) one tail t Critical one tail t Critical one tail P(T<=t) two tail P(T<=t) two tail t Critical two tail t Critical two tail Table H2 E t Test: Paired Two Sample for Means Paper Attitude: Usefulness
26 Mean Variance Observations Pearson Correlation Hypothesized Mean Difference 0 Df 149 t Stat P(T<=t) one tail t Critical one tail P(T<=t) two tail t Critical two tail Conclusion for Paired Means t-test: The variables we used were the interval ratings for paper coupon s convenience, attractiveness, value, helpfulness, and usefulness and the interval ratings for mobile coupon s attractiveness, value, helpfulness, and usefulness. We can reject the null that there is no difference between mobile and paper coupons for their convenience and their attractiveness. We cannot reject the null that there is no difference between mobile and paper coupons for their value, helpfulness and usefulness. Convenience: E-09 < 0.05 Attractiveness: < 0.05 Value: >0.05 Helpfulness: > 0.05 Usefulness: > 0.05 Objective 2, Research Question 3, Hypothesis 3 Question 3: Which coupon type is right for Chipotle to increase business on campus? Null Hypothesis (3): There is no right coupon for Chipotle. Sub-Hypothesis (1): There is no most desired coupon offer Sub-Hypothesis (2): Coupon expiration makes no difference in coupon preference Tests (2) : Histogram and Chi-Square Data Set: 5 Histogram charts 26
27 Dollars Off 60 Frequency More Frequency Ranking Chart H3 A. Ranked first or second choice by 84% of respondents Free Item 150 Frequency More Frequency Ranking Chart H3 B. Ranked first or second choice by 51% of respondents Buy One Get One Frequency More Frequency Ranking Chart H3 C. Ranked first or second choice by 47% of respondents 27
28 Frequency Buy One Get One 1/2 Off Frequency More Ranking Chart H3 D. Ranked first or second choice by 12 % of respondents Frequency Manufacturer's Coupon Frequency More Ranking Chart H3 E. Ranked first or second choice by 5 % of respondents Conclusion for Histogram: The rankings significantly favor one coupon type: Free Item. We can conclude that this is the right coupon type for Chipotle to offer. Data Set: Chi-Square Table H3 A. Actual Long Very Long Total No Yes Total Table H3 B. Expected Long Very Long no yes p value=
29 Conclusion for Chi-Square: The p-value for our Chi-Square test is greater than the level of significance, 0.05 and we cannot reject the null hypothesis that expiration is part of a right coupon type for Chipotle. Objective 2, Research Question 4, Hypothesis 4 Question 4: Will texters use their mobile phones for text coupons from Chipotle? Null Hypothesis (4): Mobile people will not use their phone for mobile coupons from Chipotle. Tests : Chi-Square Data Set: Chi-Square Table Table H4 A. ACTUAL DATA Question 5B Very Rare Often Often Question 5C Total Rare Often Very Often Total Table H4 B EXPECTED DATA Question 5B Very Rare Often Often Question 5C Rare Often Very Often Conclusions for Chi-Square: Running the Chi-Square test gave a p-value of E-10. The p-value is less than the level of significance, We reject the null hypothesis based on this statistically significant value. Texters will use their mobile phones for text coupons from Chipotle. Those who want to receive mobile coupons from Chipotle are also likely to eat at Chipotle with a coupon (though no causal relationship). 29
30 WORKS CITED Cameron, Gwen. "Location Driven Coupons on iphone." GPS World Aug. 2009: 16. GPS Wor;d. Questex Media Group, 1 Aug Web. 5 Oct \ Dorf, David. "Mobile Coupons." Web log post. Oracle Blogs. Oracle Corporation, 2 June Web. 5 Oct < "How it Works." Cellfire. Cellfire Inc, Web. 5 Oct "Introduction to Mobile Coupons." MMA Mobile Marketing Association. Ed. Mobile Couponing Committee. The MMA, Web. 5 Oct Khan, Mickey A. "Mobile Coupons Work for Subway Franchisees." Mobile Marketer. 27 Feb Web. < Reedy, Sarah. "Mobile Coupons Go Mainstream." Telephony Online. Prism Business Media, July & aug Web. 5 Oct Roselli, Dan. "Print to Mobile Coupons." Mobile Marketing Association. Web. < 30
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