Ontario Machine Ring (A), (B)

Group-4

Background of Case
OMR Business Model A non-profit, member owned co-operative that provides matchmaking service between farmers that want custom work done and farmers who wanted to do that work Implementation

Maintain database of custom work buyers and sellers: $50 Membership fee Optimize and and match the closest seller with a potential buyer: 2% service fee
USP Way for farmers to save money by avoiding the purchase of new machinery & Spreading the fixed costs of machinery over more units of output Vision To bring more order and standardization to the custom work market

Assumptions & Estimates

Prototype Operation: Huron County
Implemented on 300 farmers of the county Highly popular concept in Europe : Nearly 80% of all farmers were members and used matchmaking services extensively

Annual Total Value of custom work done : $145 mn

Average custom work per farm was $2,250

Estimate of adding 5 new counties each year of operation In first year, it would capture 25% of farms and 50% in the subsequent years Annual promotional budget of $80,000 sufficient for sustaining and expanding operations

Does the Ontario Machinery Ring need to conduct research?

Credibility
Need short term loan of $700,000 Independent assessment of demand

Demand Forecast

Initial estimates driven by European Markets and Prototype implementation Applicability of demand estimates in US scenario Assess thee validity of current Marketing plan

Factors that drive the demand

Seasonality of Demand Environmental Context of the problem

Time Constraint

Availability of data

Nature of the decision

Benefits versus costs

Management Decision Problem

Feasibility of Business Plan
Weather the Machine Ring concept, operating smoothly on prototype 300 farmers could be expanded to the entire province Weather the Promotion strategy were effective Weather the Promotion Budget allocated was sufficient for sustaining the business How accurate is the demand assessment and the estimate of overall 50% penetration across the province Weather other operational costs are sufficient i.e. $40,000 in the first year, increased by $50,000 for the next 5 years How accurate are the financial projections (Exhibit 2)

Marketing Research Problems

Assessment of Demand for custom work Current use and provision of custom work Buyers of Custom work Sellers of custom work Awareness and Interest in Machinery Ring Segmenting Information

Research Design
Research Design

Exploratory Research Design

Conclusive Research Design

Descriptive

Causal

Cross-sectional

Longitudinal

Research Design

Survey Methods

Telephone Interviewing

Personal Interviewing

Mail Interviewing

Electronic Interviewing

Traditional

Computer Assisted

In-home

Computer Assisted

Mall Assisted

E-Mail

Internet

Telephonic Interview
Objectives fulfilled Percentage of farmers using custom work or having custom work done by region Current uses of custom work Methods use to arrange for custom work Level of formality of current arrangements Level of satisfaction with current method Awareness of OMR Attitude toward the proposed pricing structure of OMR Demographic characteristics of likely tries vs non-triers of OMR Objectives unfulfilled Level of satisfaction Reason for satisfaction or dissatisfaction Level of knowledge of OMR Reaction to the OMR concept Benefits and potential problems with OMR concept Likelihood of trial use

Telephonic Interview
Pros

Cons
Higher cost to mail surveys Limited open ended questions Time limitations Chance of interviewer bias Unable to use visual aids Representative samples Socially acceptable response by the Interviewee

Higher response rate(70%) Faster data collection

Allows some personal contact

Easier geographical coverage

Lower cost to personal interviews

Sampling
Agri Studies Inc. proposed a telephone survey to be conducted of 400 Ontario farmers.

Sample was to be stratified by region and farm size to achieve proper sample balance
In order to draw statistically sound conclusions equal allocation of sample to each region was suggested

Surveying Errors
Total Error Sampling Error Non-sampling Error Response Error Non-response Error

Researcher
Variable Selection Error
Surrogate Information Error Measurement Error Population Definition Error Sampling Frame Error

Error

Interviewer Error

Respondent Error
Inability Error Unwillingness Error

Respondent Selection Error Questioning Error Recording Error Cheating Error

Data Analysis Error

Alternative?
Surveys administered through Personal interview:
In-home
Face to face interview at home Contact respondent Ask question Record response High cost

Computer assisted
No human intervention Help screens and courteous error messages Administered through kiosks e.g. at Trade fair

To determine the likelihood of acceptance for OMRs service To determine the effectiveness of promotional/ advertising strategy To be able to make financial projections with reasonable accuracy