QUESTION 2

Mini-case

Using Loyalty Data at Flowers 4U

Flowers FU is an online flower and plant service. Like 1-800-Flowers, Flowers.com, and FTD (.COM), Flowers FU takes customers orders by phone or online and executes the order by contacting their preferred local florists nearest the requested delivery site. The local florist partner then fulfils the order and delivers the flowers to the recipient.

Currently, Flowers FU is much smaller than these other competitors, and it is trying to expand its market share. It knows that it needs to build relationships with more local florists, and it is working on that. The marketing manager knows that once their distribution channels are extended, the company will merely be meeting the existing competition. The manager is thinking about how the brand can be perceived as better than the competition. The company has been considering offering a variety of additional services, from a yearly planner with reminder-prompts to buy flowers for birthdays and anniversaries, to the delivery of gourmet foods, to partnering with other retailers to allow customers to pay for a variety of gift certificates to accompany the flower delivery, such as $100 salon treatment, $35 dry-cleaning pick-up, $50 local restaurant coupon, etc.

Flowers 4U knows that it will need to grow by attracting new customers. However, in developing these service expansion efforts, the marketing manager plans to ask current customers to voluntarily complete online surveys. The manager wants to sample the companys best customers.

Traditionally, to define best customer, customer relationship marketing and direct marketing programs look at three dimensions, known popularly as RFM-regency, frequency, and monetary value. That is, good customers have probably made purchases recently, they probably purchase frequently, and their orders are probably bigger than other customers. All three dimensions, RFM, are used because they do not provide redundant information (in other words, R, F, and M are not that highly correlated).

The marketing manager is confident that once a sample of best customers are contacted , the company will get good guidance about what additional services Flowers 4U should offer.

QUESTION 2

1. Advise on the sampling method and the sampling technique that can be used in conducting this research. [10]

2. Advise on the steps to be followed when designing a questionnaire for this research project. [15]

3. Advise on any two ethical principles that should be adhered to by researchers when conducting a survey. [5]