Business Analytics;Understanding Customers

Corrugated Paper Sales also known as CPS Paper Products are an independent paper manufacturer based in Manchester, United Kingdom. CPS has been supplying paper products to merchants and packaging companies for years. The company has been suppling paper products since 1984. With their specialist manufacturing machinery and experienced staff, CPS Paper Products thrive in their paper and packaging markets.2
Since the current awareness of customers for the need for ‘re-cycle able environmentally friendly’ packaging materials, CPS has an environmental Paper based packaging system in place that is essential for many industries nowadays. Communication, food and consumer products are just a few of the things that have improved based on paper-based packaging. Products are a versatile and cost-efficient method to transport, protect and preserve a wide range of items whether it is fragile products or heavy items. CPS supplies high quality products that are sturdy, yet lightweight and can be adapted (customized) to meet all customer expectations. In addition, to promote sustainable practices within the industry CPS’s manufacturing enables the company to create products that have a smaller impact on the environment than plastic based packaging. Using only renewable sources, paper supplied is completely recyclable and reusable hence reducing the amount of permanent waste created, playing an important role in preserving the quality of the environment.2
Purchased in 2007 by West Bromwich-based CBS Packaging Group, the business was relocated in 2012 from its long-term base in a 27,000 sq. ft. canal-side factory at Timperley, Manchester to its present 41,000 sq. ft. location a few miles away from Eccles. Although rewinding paper for corrugators is CPS Paper Products’ core business, the Manchester-based manufacturer continues to extend their capabilities. CPS Paper Products process around 20,000 tons of paper per year, repairing and resizing damaged reels and redundant stock2
CPS sells paper products to two main market segments: the Magazines industry and the Book Publishing industry. Further, these paper products are sold to these market segments, either directly to the customer or indirectly through a broker. CPS wanted to develop a better understanding of both the characteristics of its customers and the relationships between their perceptions of CPS, and their actions towards CPS (e.g., satisfaction and likelihood to recommend). From this understanding of its customers, CPS will be in a good position to develop its marketing plan for the next year.

To develop this level of understanding of its situation, a survey of existing customers of CPS was conducted through an established marketing research firm. Three types of information were collected in a survey of 200 purchasing managers from firms buying from CPS. The first type of data reflects the characteristics of the respondent and includes information such as the size of the customer and length of the purchase relationship. The second type of information was perceptions of CPS’s performance on 13 attributes. These attributes (developed through focus groups, a pre-test, and used in previous studies) are considered (to be) the most influential in the selection of suppliers in the paper industry. The third type of information relates to purchase outcomes and business relationships. For instance, satisfaction with CPS, and whether the firm would consider a strategic alliance / partnership with CPS.

The data are available in the 7FNCE040W Business Analytics CW CPS S1 2020_2021.sav file on Blackboard and a definition of each variable and an explanation of its coding are given in Appendix 1. Please assume the sample of 200 respondents is representative of CPS’s customers.

The Task

Please write a memo, of no more than 3,000 words, to the management of CPS addressing the following issues:
• Describe the respondents of the questionnaire. Are there any significant differences in the outcome / relationship measures based on any of the customer characteristics variables?
• Develop models to predict;

  1. Satisfaction of customers,
  2. likelihood to recommendation, OR likelihood to purchase from the perceptions of the performance variables.
    For both models identify the most influential performance variables.
    • Make recommendation to CPS that enhances their understanding of their customers so that the management can develop its Business (Marketing plan) for the next year based on the findings of your analysis of the data provided and any other external factors which would affect the business in this sector. (hint: You may use Simple/Multiple regression models; Logistic regression models and or cluster methods or factor analysis). You are expected to use either SPSS or R to carry out the analysis
    The format of the memo is in Appendix 2. Submission

The memo and supporting appendices, if any, should be combined into one document, which must be submitted
by 13:00 on 10th November 2020 via BB collaborate only. It will automatically be scanned through a text matching system (designed to check for possible plagiarism). YOU MUST include your name, student ID number, and word count on the first page of your assignment.

1 Adapted from Hair, Joseph F. Jr., William C. Black, Barry J. Babin, and Rolph E. Anderson, Multivariate Data Analysis, International Edition, 7th Edition, Pearson Higher Education.

2 https://www.cpspaperproducts.co.uk/paper-products/

Marking Scheme
The document you submit will be evaluated according to the following criteria:

Component Percentage
Presentation
• Word count provided on front page and does not exceed limit
• No spelling, grammar, punctuation errors
• Properly formatted and professional in organisation and appearance
• Citations and references provided, if needed
• Appropriate use of appendices for necessary SPSS results 10%
Quality of the Analysis
• Appropriate selection of variables and analyses
• Selection of analyses are sensible and provides valuable insights
• Appropriate interpretation of the results 50%
Quality of the Communication
• Clarity and completeness of the recommendation
• The rationale for the recommendation is connected to the analyses
• Clarity of the explanation relates to inferences from the results
• Connection between the discussion and the managerial problem 40%

APPENDIX 1
Questionnaire Details

Customer Characteristics

The five characteristics of the responding firms reflect the basic characteristics and their business relationship with CPS. The five variables are as follows:

Variable Name Definition Coding
Q1 Customer Duration Length of time a particular customer has been buying from CPS 1 = Less than 1 year;
2 = Between 1 and 5 years;
3 = Longer than 5 years
Q2 Customer Type Type of industry Publishers that purchases CPS’s paper products 0 = Magazine;
1 = Books
Q3 Customer Size Based on number of employees 0 = Small firm, < 500 employees; 1 = Large firm, ≥ 500 employees
Q4 Customer Region Customer location 0 = Europe;
1 = Outside Europe
Q5 Distribution System Sales and services are provided through this distribution system 0 = Indirectly through a broker;
1 = Directly through salesforce

Perceptions of CPS’s Performance

Each of these variables was measured on a graphic rating scale, where a ten-centimetre line was drawn between the endpoints, labelled “Poor” and “Excellent”. Respondents indicated their perceptions by placing a mark anywhere on the line. The mark was then measured and the distance from zero (in centimetres) was recorded. The result was a scale ranging from zero to ten, rounded to a single decimal place. The thirteen attributes rated by each respondent are as follows:

Variable Name Definition
Q6 Product Quality Perceived level of quality of CPS’s paper products
Q7 E-Commerce Activities/Website Overall image of CPS’s website, especially its user-friendliness
Q8 Technical Support Extent to which technical support is offered to help solve product/service issues
Q9 Complaint Resolution Extent to which any complaints are resolved in a timely and complete manner
Q10 Advertising Perceptions of CPS’s advertising campaign in all types of media
Q11 Product Line Depth and breadth of CPS’s product line to meet customer needs
Q12 Salesforce Image Overall image of CPS’s salesforce
Q13 Competitive Pricing Extent to which CPS offers competitive prices
Q14 Warranty & Claims Extent to which CPS stands behind its product/service warranties and claims
Q15 New Products Extent to which CPS develops and sells new products
Q16 Ordering & Billing Perception that ordering and billing is handled efficiently and correctly
Q17 Price Flexibility Perceived willingness of CPS sales representatives to negotiate price on purchases of paper products
Q18 Delivery Speed Amount of time it takes to deliver the paper products once an order has been confirmed

Purchase Outcomes & Relationship

The first four variables below are measured on a graphic rating scale, where a ten-centimetre line was drawn between the endpoints, labelled as indicated in the coding column. Respondents indicated their perceptions by placing a mark anywhere on the line. The mark was then measured and the distance from zero (in centimetres) was recorded. The result was a scale ranging from zero to ten, rounded to a single decimal place. Five specific measures were obtained that reflected the outcomes of the respondent’s purchase relationships with CPS. These measures include:

Variable Name Definition
Coding
Q19
Satisfaction Customer satisfaction with past purchases from CPS 0 – 10 graphic scale, where ‘0’ indicates “Not at All” and ‘10’ indicates “Completely Satisfied”
Q20 Likely to Recommend Likelihood of recommending CPS to other firms as a supplier of paper products 0 – 10 graphic scale, where ‘0’ indicates “Not at All Likely” and ‘10’ indicates “Definitely”
Q21
Likely to Purchase Likelihood of purchasing paper products from CPS in the future 0 – 10 graphic scale, where ‘0’ indicates “Not at All Likely” and ‘10’ indicates “Definitely”
Q22
Purchase Level Percentage of the responding firm’s paper needs purchased from CPS Measured on a 100-point percentage scale
Q23 Consider Strategic Alliance Extent to which the customer/respondent perceives his or her firm would engage in strategic alliance/partnership with CPS 0 = No, would not consider; 1 = Yes, would consider

Appendix 2 Memo Format

The memo should adhere to the following format.2 With the addition of the point 4.

  1. Introduction / Situation Assessment / Recommendation: This section should provide a statement of the purpose of your memo and your recommendation. Given that you have limited space, eliminate the text about “how you have been hired to do a study” and quickly get to the point of what you are recommending. The key to writing a good statement of purpose is making clear what the situation is that the reader is confronting (threat to profitability or from competitors, market share, harms to society, etc.), and how and/or why following your recommendation addresses this situation. Students usually make a mistake in this paragraph by providing too much descriptive information about the situation. Remember, the reader knows the situation, what is unknown is your insight about the most important factors of the situation.
  2. Rationale for Recommendation: Here is where you link your recommendation to your analysis of the situation. The rationale should clarify how your recommendation evolved from your analysis and addresses the situation faced by management. In this section you should clearly articulate the findings from your analysis – but not the process of your analysis. The reader does not care what you did first, what software package you used, or how you manipulated the data, if at all. The pertinent results should be described, with supporting statistics, in your text. All relevant output and statistics should also be included in an appendix.

The key to writing a good rationale is to make sure your logic or line of reasoning addresses the reader’s concerns, explains how the recommendation serves the major situation identified in the introduction, and provides good coverage of your analysis.

  1. Key Points to Note: Notice there is no conclusion. Unlike academic writing, writing for a business audience requires you to say your case as quickly and succinctly as possible. Essentially, your conclusion is in the introduction.
    Do not include all your SPSS output in an appendix. Be selective about what you include and be sure to note the inclusion of any output in the text memo, otherwise there is no reason for the reader to attend to it in the appendix.
  2. An additional Appendices section 2:
    This section should contain a critique of the method employed. In addition, any additional information related to the application of business analytics techniques used in this sector.

3 Adapted from the Case Study Instructions available at http://www.csed.umn.edu/EMSS/case.htm, accessed 29 January 2018.

Sample Solution

ACED ESSAYS