TIAS SCHOOL FOR BUSINESS AND SOCIETY

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REPORT ASSIGNMENT
Subject: Business Research Method

To what extent do annual individual income

and perception of quality affect decision to select movie
theatre in netherlands, and to what extent is this relation
moderated by age?

Author: Khang (Kevin) Minh Nguyen

Student No: u554627
Class: Windmill
Supervisor: Jereon de Jong

February 3, 2016
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Table of Contents
1. RESEARCH PROBLEM AND RELEVANCE OF THE RESEARCH ......................... 3
2. RESEARCH QUESTION ............................................................................................... 3
3. THEORETICAL FRAMEWORK................................................................................... 4
3.1. Theoretical mechanism ............................................................................................. 4
3.2. Hypothesis ................................................................................................................ 5
4. METHODOLOGY .......................................................................................................... 6
4.1. Research design ........................................................................................................ 6
4.2. Sampling method ...................................................................................................... 6
4.3. Data Collection ......................................................................................................... 7
4.4. Data Analyst ............................................................................................................. 7
4.5. Quality Indicator ....................................................................................................... 9
5. OPERATIONALIZATION TABLE ............................................................................. 10
REFERENCES .................................................................................................................. 11

1. RESEARCH PROBLEM AND RELEVANCE OF THE RESEARCH

Netherlands is a developed country so that Dutch, at individual level, state of wellbeing requires higher and higher for their standard of living than their basic need,
according to hierarchy of need (Maslow, 1943). One of these demands is recreation. In
total there are twelve different types of entertainment companies that try to fulfill this
need of entertainment (Vogel, 2004). Currently, cinema is in favor of number of people.
Going to cinema becomes a habit especially for people living in big cities such as:
Amsterdam or Utrecht. From an organizational perspective, doing business in movie
industry is full of potential. Therefore, there are considerable numbers of movie theaters
in Netherlands such as: Path, Wolff and so on. They are in the fierce competition to
become the first option for customers.
Therefore, knowing how customers make decision on choosing cinemas is
necessary for movie theaters to improve their competitive advantages against their
competitors. They might be unsure whether young people are prone to perception of
quality or to annual individual income while making decision. Based on these two
factors, companies can conduct appropriate strategies where to focus on.

2. RESEARCH QUESTION

To what extent do annual individual income and perception of quality affect decision to
select movie theatre in Netherlands, and to what extent is this relation moderated by age

Annual individual
income
Decision to select movie theatre

Age
Perception of quality

Figure 1: Conceptual model

In figure 1, the two concepts Annual individual income and Perception of quality
are presented as independent variables and Decision to select movie theatre is dependent
variable. The relation among three concepts is then influenced by a moderator which is
age.

3. THEORETICAL FRAMEWORK
3.1. Theoretical mechanism
Annual individual income
Annual

individual

income refers

to

an

individual's

total

earnings

from wages, investment enterprises, and other ventures (Cram101 Textbook Reviews,
2012). It is the sum of all the incomes actually received by all the individuals or
household during a year. Personal income is generally computed on a pre-tax basis.
Perception of quality
The factor quality is a widely common used concept. In the oxford dictionary it is
described as follows: the standard of something as measured against other things of a
similar kind; the degree of excellence of something (Ad Huige, 2008). In the quality
handbook, Juran introduces the model fitness for use. In this model he describes five
attributes that have an important impact on the perceived quality. These five attributes are
design, conformance, safety and field use (Juran, 1988). With the use of these five
general attributes, the possibility of the perceived quality change is discussed.
Design

Conformance

Safety

Attributes

- Conform,

those are

Furniture

expected quality? - Light use

movies

important

- Building

- Quality change

- Beverage and food

for a cinema

- Feel safe?

Field Use
- Quality of the

over time?

quality?
Figure 2: Attributes for a cinema quality

Decision to select movie theatre

The final decision which customer makes after considering all the factors affecting
their selection of cinemas such as: their income or the perceived quality. In this study, the
decision is indicated with name of the movie theatres: Path, Wolff, etc.
Age
The number of years a customer is alive. In this study, the author needs to observe
the difference between the young and old people in choosing the cinema. Therefore, there
is no added value to categorize the ages.
3.2. Hypothesis
H1: Annual Individual Income is positively correlated with the decision to select
movie theatre.
H2: Perception of Quality is positively correlated with the decision to select movie
theatre.
H3: The positive correlation between the annual individual income and decision to
select movie theatre is moderated by higher in age.
H4: The positive correlation between the perception of quality and decision to select
movie theatre is moderated by higher in age.
Annual individual income reflects the ability of customers to pay for the service
they would like to utilize. And the price illustrates the purchasing power and annual
individual income. Consumers have a tendency to assume that price is indicator of
quality. Therefore, the difference in price leads to different selection of theatre (Liran
Einav and Barak Y. Orbach, 2001). Moreover, the empirical research has shown that
elasticity of customers demand toward the ticket price of movie theatre is -2.55
(Dewenter and Westermann, 2005). This means customers are sensitive that any change
in price will affect to their decision.
A general model for quality has not been constructed. This can be explained by the
difficulty and flexibility of the concept quality. In every industry the outcome of quality
factors differs and because of these changing factors, every industry uses other attributes
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and measurement tools. For instance, the multi-models in the education (Cheng and Tam,
1997), video quality assessment based on structural distortion measurement (Wang, Lu
and Bovink, 2004). The perceived quality and consumer satisfaction of the attributes of a
cinema are investigated (Gotlieb, Grewal and Brown, 1994). When people perceive the
quality lower than it was decades ago, these factors can also explain the difference in
demand. With the technological changes that were introduced earlier in the model, the
outcome of higher quality could be connected. For this reason, the perceived quality level
of the cinema will be used.

4. METHODOLOGY
4.1. Research design
In terms of framework for the collection and analysis of quantitative data, survey
is selected as the design for this research. The design gives the researcher independence.
Survey is popular in business research and perceived as authoritative. This method also
enables researchers to address a large number of samples. In terms of timing, it is a crosssectional study as it is conducted at one point of time.
4.2. Sampling method
Simple random probability sampling technique is used. There is no added value to
classify precisely the ages of people. This research is aim to examine to difference
between youth and elderly people. The author assumes that youth is below 30 and elderly
is more than 30.
A survey will be conducted via both online and offline. Viewers and audiences
with different groups of age are invited to complete the questionnaire. This research has 2
independent variables and 3 controlled variable (age, gender, educational level).
According to the Rule of Thumb (de Jong, 2012), sample size is targeted at the formula
Sample Size = (independent + controlled variable) * 3 / 30%

Therefore the size would be 500. The response rate is expected at 60-70%. As a
result, the actual sample should be approximately 700.
4.3. Data Collection
Target respondents are audiences and viewers while they are waiting for their
movies in The Netherlands. Survey is designed and conducted a pilot-test with few
audiences first before sending in bulk to the whole population. Based on pre-test
feedback, survey will be refined to be completed in about 10 minutes and emphasized
confidentiality of responses. On-line survey via Google Docs is selected because of fast
speed, convenience for frequent computer users, wide ability to tailor the survey
according to each organization, ease of implementation including reminders, and built-in
features that facilitate data cleaning and improve the survey experience for respondents
and researchers (Dillman, Smyth, & Christian, 2009; Boyer, Adams, & Lucero, 2010;
Israel, 2011). To increase the response rate of online surveys, reminders are sent to partial
and non-respondents over a two-week period. According to Dillman (2009), follow-up
contacts have been considered the most powerful technique for increasing response rate.
However, it should be done with great care. Otherwise, they may become spams which in
turn possibly irritate potential respondents and decrease the response rate
Movie theaters Marketing Department Managers are then contacted with
introductory email informing of the upcoming survey. They are invited to join by
providing the email distribution list of cinemas. The most important benefit organizations
get from the study is the result whether annual income of their customers may impact
customers decision. The information may help organizations understand their audiences
and improve their service. This will thus answer the question So What? expected from
the organizational level.
4.4. Data Analyst
From the collected data, the author will analyze the data via SPSS 26, test the
confidence interval of Cronbachs Alpha, analyze Pearson correlation, analyze regression
and analyze standard deviation ANOVA. The questionnaire contains different closed
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questions. In the book of Sauder (et at., 2012), there are multiple rating scales given
within the Likert-style rating. A real preference is not given in the book, there are logical
explanations to use a 4-, 5-, 6- or 7-point rating scale. This research will use question
with Likert-style with a 5-point rating scale. This seemed to be the easiest for the
respondent to answer (de Jong, 2012)
Confidence interval of Cronbachs Alpha
Confidence interval of Cronbachs Alpha is a measure of the reliability of scale.
This routine calculates the sample size needed to obtain a specified width of a confidence
interval for coefficient alpha at a stated confidence level (NCSS, 2015). This research
will be conducted based on following criteria:
- Eliminate independent variable with corrected item-total correlation smaller than 0.3
- Choose the scale has confidence interval larger than 0.6 (this is new research)
- Cronbachs Apha if Item deleted smaller than Alpha
Pearson Correlation
The Pearson product-moment correlation coefficient is a measure of the strength
of the linear relationship between two variables. Pearson's r can range from -1 to 1. An r
of -1 indicates a perfect negative linear relationship between variables, an r of 0 indicates
no linear relationship between variables, and an r of 1 indicates a perfect positive linear
relationship between variables (David, 2012). This research is going to analyze the
correlation among three variables: annual individual income, perception to quality and
decision to choose a cinema.
Regression analysis
Regression analysis generates an equation to describe the statistical relationship
between one or more independent variables and the dependent variable. In order to
analyze regression, author will build up regression equation, test hypotheses by adjusted
R2 and conduct regression. Regression has to meet following conditions:
- Sig < 0.05
- Adjusted R2 > 50%
In addition, multiple correlation will be also tested to ensure the confidence.
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Standard deviation ANOVA

Analysis of variance, or ANOVA, is a powerful statistical technique that involves
partitioning the observed variance into different components to conduct various
significance tests. ANOVA can be used to examine whether a linear relationship exists
between a dependent variable and an independent variable. The author decides to test
One-way ANOVA
4.5. Quality Indicator
With reliability, it is important to take the following indicators into account:
participant error, participant bias, researcher error and researcher bias (Saunders, M.et al.,
2012). Giving the participant the short time frame can lead to participant error. The
survey has to be completed anonymous so the answer of the respondent will be as nonbias as possible. A researcher can make errors; it is important to always double check the
researcher by other colleague. It is possible that the author becomes bias and his or her
view can then become a problem. To overcome this problem, another researcher should
double check answers and analysis (Saunders, M.et al., 2012).
To check the validity of the research, it is important to check if the relation is
founded among three variables and figure out whether that relation is real. What makes
the research more valid is to check the research data on unusual outcomes. These could
be errors and if so, those should be deleted from the research. (Saunders, M.et al., 2012)
In the preparation of the questionnaire is of importance testing the reliability.
There was chosen to let the questionnaire be tested by 10 respondents, before sending out
the actual questionnaire. Saunders (2012) actually recommends sending out the
questionnaire to every respondent beforehand. Due to the fact that the survey is
completely anonymous which means that it is impossible to measure the consistency in
the answers of the respondent.

5. OPERATIONALIZATION TABLE

Concept
Annual individual
income

Perception of
quality

Decision to select
movie theatre

Age

Definition
It is the sum of all
the incomes actually
received by all the
individuals
or
household during a
year
the standard of
something
as
measured
against
other things of a
similar kind; the
degree of excellence
of something (Ad
Huige, 2008)
The final decision
which
customer
makes
after
considering all the
factors
affecting
their selection of
cinemas
The number of years
an customer is alive

Dimension

- None

- Design
- Conformance
- Safety
- Field use

10

- None

- None

Measure
Flexibility being
measured by answers
for 5-point likert
questions

- Furniture / Building
- Conform, expected
quality?
- Feel safe? Light use
- Quality of the movies
/ Beverage and food

The name of chosen

cinema

REFERENCES
Cheng, Y. &. (1997). Multi-model of quality in education (Vol. Volume 5 (1)). Quality
Assurance in Education.

David,

M.

(2012).

Peasron.

Retrieved

January

26,

2016,

from

http://onlinestatbook.com/2/describing_bivariate_data/pearson.html

de Jong, J. (2015). Business Research Method Slides. Utrecht: TIAS.

Dewenter, R. &. (2005). Cinema demand in Germany. Journal of Cultural Economics,

213-231.

Dillman, D. A. (2009). MAIL AND INTERNET SUERVEYS: THE TAILORED DESIGN

METHOD (THIRD ed.). New York: John Wisley and Sons.

Einav, L. a. (2001). Uniform Prices for Differentiated Goods: The Case of the MovieTheater Industry. Harvard Law School John M. Olin Center for Law Economics
and Business Discussion Paper Series.

Gotlieb, J. G. (1994). Customer satisfaction and perceived quality: complementary or

divergent constructs. Journal of applied Psychology, 7, pp. 875-885.

Huige, A. (2008). Consumer decision making process in Cinema markets: the role of
service and quality. Rotterdam, Holland: Erasmus school of economics.

Juran, J. (1988). Quality Control Handbook (4th ed.). McGraw-Hill Book Company
.
Maslow, A. (1943). Theory of Human Motivation. Psychological Review, 370-396.
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NCSS. (2009). Confidence Intervals for Coefficient Alpha. Retrieved January 23, 2016,
from

http://www.ncss.com/wp-

content/themes/ncss/pdf/Procedures/PASS/Confidence_Intervals_for_Coefficient_
Alpha.pdf

Reviews, C. T. (2012). 2012e-Study Guide for: Managing in a Global Economy:

Demystifying International Macroeconomics: Economics, Macroeconomics and
monetary economics. Cram101 Textbook Reviews.

Saunder. (2012). Research Methods of Business Students. (6 ed., Vol. Chapter 10).

Saunders, M. L. (2012). Research Method for Business Student. Harlow Financial Times
/ Prentice Hall.

Vogel, H. (2004). Entertainment industry economics, a guide for financial analysis.

Cambridge: University Press.

Wang, Z. L. (2004). Video quality assessment based on structural distortion

measurement. Signal Processing: Image Communication 19.

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