BTEC HND Business (marketing) Unit 6 Business Decision Making

Assignment 1 -

Task 1 Sample survey for local newspaper ABC

1.1 Plan for Data Collection

As the data is to be collected mostly from current readers within the region, a
notice on the local newspaper itself shall be used to invite readers to participate in the
survey. The notice shall direct readers to an automated telephone survey, or to fill in
on-line questionnaire on the newspapers website or mobile app. Both means are
quick, effective, reliable, not labour intensive and therefore are less costly, when
comparing to personal interview or paper survey by mail. The readers are motivated
to participate by offering them free subscription of the weekly newspaper say for 4
weeks, once the survey is completed and validated by a proper contact detail provided
by the respondent. IT support is required to set up the required telephone system and
on-line questionnaire or mobile apps. Google provides a free platform for online
questionnaire.

1.2 Survey methodology and sampling frame

Objective
To conduct a market survey for the local weekly newspaper ABC, in order to
(1) find out the strength and weaknesses of the paper; and (2) ways to increase sales
and how much, by introducing colour, leisure and/or business supplement etc.

Methodology
Survey shall be carried out via automated telephone interface and on-line
questionnaire posted on newspaper website and mobile app. Literature search via web
based search engine (Google, etc) is conducted out to identify most perceived strength
and weaknesses of local newspaper, in relation to the expectation of readers in the
target demography. Key words used include strength and weakness, local newspaper,
community newspaper. Questions shall be designed to rate the perceived view of the
readers according to these strengths and weaknesses, as well as accessing potential
ways of improving sales by introducing colour and/or supplement. The time required
for answering the questionnaire shall not exceed 5 minutes. Questions shall be simple
and direct, requiring selection of a single answer from multiple choice or in a scale of
1 to 5, etc. Answers to each question are input digitally and recorded on backend
server for retrieval and data analysis. Frequency tables and bar charts will be

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generated to summarise the responses on each surveyed items, to reflect the degree of
public opinion.

Sampling Frame
Random sampling is used by recruiting voluntary participants who read the
notice in the local newspaper and respond to the invitation. Employees, shareholders
or their family members are excluded. The sampling size shall be set at around 150
response in order to get at least 100 qualified sample or above (n>100), for a
statistically large sample. Inclusion criteria are fully completed questionnaires with
verifiable contact details. Exclusion critieria are partially completed questionnaires,
repeated respondent input based on same contact address or telephone number or
email address.

1.3 Questionnaire

Are you or any of your family members an employee or shareholder of ABC newspaper?
(1) If yes, please discontinue. (2) If no, please continue.

a. How often do you read ABC newspaper?

(1) every week; (2) 2 to 3 times a month; (3) once a month; (4) once few months; (5) rarely

b. How do you rate or agree with the following aspects of ABC newspaper?
In a scale of 1 to 5:
(1) Strongly agree; (2) agree; (3) neutral/not sure; (4) disagree; (5) strongly disagree.

Easy to obtain in most outlets (1) (2) (3) (4) (5)

Reasonably price / value for money (1) (2) (3) (4) (5)
Handy portable size (1) (2) (3) (4) (5)
Clear layout and easy to read (not crowded) format (1) (2) (3) (4) (5)
Good printing and paper quality (1) (2) (3) (4) (5)
Good local coverage of news and events (1) (2) (3) (4) (5)
Good insight and sharp editorial write ups (1) (2) (3) (4) (5)
Acceptable amount and placement of advertisement (1) (2) (3) (4) (5)
Popular & useful classified section (1) (2) (3) (4) (5)
Encourage community feel and responsibility (1) (2) (3) (4) (5)
Reasonable coverage on national news (1) (2) (3) (4) (5)
Reasonable coverage on finance & business (1) (2) (3) (4) (5)
Reasonable coverage on sports (1) (2) (3) (4) (5)
Reasonable coverage on entertainment (1) (2) (3) (4) (5)

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c. How much does the following feature may increase your interest in buying ABC
newspaper to read?
In a scale of 1 to 5 :
(1) Strongly agree; (2) agree; (3) neutral/not sure; (4) disagree; (5) strongly disagree.

Additional colour pages (1) (2) (3) (4) (5)

Additional leisure supplement (1) (2) (3) (4) (5)
Additional business supplement (1) (2) (3) (4) (5)
Additional local community supplement (1) (2) (3) (4) (5)

d. Personal information

Gender (1) male, (2) female

Age group (1) below 25; (2) 25-34; (3) 35-44; (4) 45-54; (5) 55-64; (6) above 65
Location (1) town, (2) urban, (3) rural
Employment- (1) employed; (2) not employed; (3) student; (4) retired
Income (1) under 10k (2) 10-15k; (3) 15-20k; (4) 20-25k; (5) 25-30k; (6) over
30k
Preferred contact (1) telephone/fax no (2) email address (3) postal address
(for receiving free subscription coupons)

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Task 2 Stock investment volatility of return rates

Summary of data collected from sample stocks in stock market

There are total of 50 sample stocks from 5 different industry categories, including
hotel, technology, banking, retail and real estate. The research data collected
indicated that the average annual return rate ranges from 0.5% to 30%, generally
ascends from hotel to technology, banking, retail and reach the highest in real estate.
The amount of market capitalization ranges from HKD 20mil to 45mil, also ascending
from hotel to technology, banking, retail and reach the highest in real estate. The
data indicated a general trend that the higher the market capitalization had produced
higher return rate.

Number of Stock
samples from industries 12%
hotel
20%
15 technology
hotel 14%
10 banking
5 technology
28% retail
0 banking 26%
real estate
retail
real estate

Market capitalisation of industries (HKD million)

60
Hotel
40 Technology
Banking
20
Retail
0 Real Estate
sample stocks of different industries

Average return rate of industries (annual)

35.0%
30.0%
25.0% Hotel

20.0% Technology
15.0% Banking
10.0% Retail
5.0% Real Estate
0.0%
sample stocks of different industries

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 35.0%
Return rate and market capitalisation of
industries
30.0%

25.0%
Return Rate

20.0% hotel
technology
15.0% Banking
Retail

10.0% Real Estate

5.0%

0.0%
0 10 20 30 40 50
Market Capitalisation (million HKD)

Statistical information by excel:

Range = 30% - 0.5% = 29.5%
To get the result of the range we just calculate the return rate starting to the biggest
number 30.0% minus to the smallest 0.5% then the result is 29.5%.
Q1 = 4.125%
Q3 = 20.400%
Inter-quartile range (Q3 Q1) = 16.475% (by calculation)
Mean = 12.378%
Median = 12.650%
Mode = 2.200%
Standard deviation = 8.24%
40th percentile = 7.060%
60th percentile = 15.040%

Findings:
From the above statistical information, the dispersion can be measured by the
interquartile range (6.475%) and the samples standard deviation (8.328%). Both
figures indicated that the dispersion of the return rate is quite wide, meaning a high
degree of volatility shown by the stocks samples.
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For an investor to pick stocks of higher than 40% and 60% in the sample stocks, the
expected returns rate are 7.06% (40th percentile) and 15.040% (60th percentile)
respectively.

Frequency table (by 2 to the k rule)

No. of class = 6
Class width = (30.0%-0.5%)/6=29.5%/6 = 4.9167% = 5%

low er upper
frequnecy m idpoint freq x m idpt m idpt - m ean (m idpt -m ean)2 freq x (m idpt - m ean)2
lim it lim it
0 5 16 2.5 40 -9.800 96.040 1536.640
5 10 6 7.5 45 -4.800 23.040 138.240
10 15 8 12.5 100 0.200 0.040 0.320
15 20 6 17.5 105 5.200 27.040 162.240
20 25 12 22.5 270 10.200 104.040 1248.480
25 30 2 27.5 55 15.200 231.040 462.080
freq
50 m ean = 12.3 total = 3548.000
total =

variance = 70.96
SD = 8.42 %
From the frequency table, the mean and standard deviation are similar to previously
calculated by Excel.

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Task 3

From previous section, it is known that for the sample stocks: mean=12.4%; standard
deviation= 8.24%
Sample standard Error SEx = 8.24% / (50-1) = 1.17%

Set up null hypothesis to be the mean average annual return rate is 10%, and
significance level (2 tailed) to be 5%.

From table z-score at 1.5 correspond to 0.9332 i.e. 93.32%

(100%-93.32%) = 6.68%
i.e. (6.68%/2)= 3.34% at two tails

mean

3.34% 3.34%

2.5% 95% 2.5%

Acceptance zone

It is within the 95% acceptance zone, therefore null hypothesis is not rejected.
It is concluded that hypothesis of the mean average annual return rate is 10% is
accepted.

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Task 4
Correlation of coefficient by Excel=CORREL(C2:C51,D2:D51)
R= 0.9036 ; R2 = 0.8126
The figure indicated that the return rate can explain about 81% of the relationship
with market capitalization. The remaining 19% may be due to factors other than those
considered in the sampling survey. Therefore it can be concluded that the average
annual return rate is closely related to the market capitalization.

Linear Regression by Excel

SU M M A R Y O U T PU T

R egression Statistics
M ultiple R 0.903565
R Square 0.816429
A djusted R Square 0.812605
Standard E rror 0.036051
O bservations 50

ANOVA
df SS M S F Significance F
R egression 1 0.277456 0.277456 213.4794 2.71E -19
R esidual 48 0.062385 0.0013
T otal 49 0.339841

C oefficient
Stsandard E rror t Stat P-value L ow er 95% U pper 95%L ow er 95.0%
U pper 95.0%
Intercept -0.24488 0.025741 -9.5129 1.27E -12 -0.29663 -0.19312 -0.29663 -0.19312
M arket C ap (H K D m il) 0.011622 0.000795 14.61093 2.71E -19 0.010023 0.013222 0.010023 0.013222

Market Cap (Million HKD) Line Fit Plot

35.0%

30.0%

25.0%

20.0%
Return Rate

15.0% Return Rate

Predicted Return Rate
10.0%

5.0%

0.0%
0 10 20 30 40 50
-5.0%
Market Cap (Million HKD)

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From above, a= intercept = -0.2449, m= slope= 0.0116
Therefore, return rate = 0.0116 (market cap) 0.2449

If the market capitalization can explain more than 80% of the return rate, the
hypotheses of the market capitalization really has a relationship with return shall not
be rejected.

Assuming that the regression reflects the real picture, for an investment of HKD 50
mil, the expected annual return rate (by Excel =TREND(D2:D51,C2:C51,50) is
33.62%.

40.0%
Average return rate for Market capitalisation on
35.0% stock investment of various industries
33.6% Return rate forecast at market cap
30.0%
Return Rate (annual)

of 50 mil
25.0%

20.0%
y = 0.011x - 0.244
15.0% R = 0.816

10.0%

5.0%

0.0%
0 10 20 30 40 50 60
-5.0%
Market Capitalisation (million HKD)

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