Mbs 510 Stats- Usa Worldbank Probelm Solution

Problem Solution: USA World Bank

USA World Bank is a major bank with both an international and domestic presence that enjoys a large consumer and small business base, and has been successful in several worldwide ventures as well. USA World Bank currently feels the need to develop profitable new products that will continue to expand its market share, thereby increasing profitability. USA WORLD BANK currently has a policy of developing and introducing one new product per year. History shows new product introduction ahs been primarily successful in the past, but focused mainly within the United States. “Briefly defined, business statistics can be described as the collection, summarization, analysis, and reporting of numerical findings relevant to a business decision or situation. Naturally, given the great diversity of business itself, it’s not surprising that statistics can be applied to many kinds of business settings.” (Lind, 2005, pg. 2) “As a businessperson, you may find yourself involved with statistics in at least one of the following ways: (1) as a practitioner collecting, analyzing, and presenting findings based on statistical data or (2) as a consumer of statistical claims and findings offered by others, some of whom may be either incompetent or unethical.” (Lind, 2005, pg. 3)

This year, based on the research data on hand, USA World Bank has to choose between one of two products to develop and introduce to their customers. One product is developed by new product development and the other by the marketing department. The product backed by new product development consists of a credit card, called the Instant Reward’s card that will work like a frequent flier program; customers can earn rewards as a result of their purchases with the card. Instant Reward’s is a customer loyalty product somewhat like the plastic cards issued by supermarkets and other retailers. The program will have two types of benefits. First, it may be used to reduce your banking costs, such as the monthly fee for a checking account, or to increase the interest rate on your savings. Second, the Instant Reward program may offer substantial discounts on the purchase of products and services.

The product developed by the marketing department, is geared toward small business owners. It's a card for small business owners that will allow them to purchase capital items, has a credit line of $200,000, and it also has a reward component like the Instant rewards card. It will include, for those who qualify, discounts on products you use every day and on services such as rental cars and hotels.

Any research study begins by defining the problem or question in specific terms that can be answered by research and relevant variables must also be identified and defined. “The steps in the research process include (1) defining the problem, (2) deciding on the type of data required, (3) determining through what means the data will be obtained, (4) planning for the collection of data and, if necessary, selection of a sample, (5) collecting and analyzing the data, (6) drawing conclusions and reporting the findings, and (7) following through with decisions that take the findings into consideration.” (Lind, 2005, pg. 125)

Situation Analysis

Issue and Opportunity Identification

The first step to formulating a new product is to understand the target market segment and the market area. “Increasingly, finding the right niche for any new product doesn't necessarily mean choosing a particular category, but rather deciding what function or need state the product will fulfill, and finding the right demographic looking for that function.” (Landi, 2007) USA World Bank used focus groups and survey research in formulating the products to be offered to their consumers. Focus groups are one of the most frequently used types of market research in America. “Virtually every company that sells goods and services to retail consumers incorporates focus groups into their efforts to develop more desirable products, better advertising, or more exciting promotions.” (Greenbaum, 1995) Researcher’s using surveys communicate with a sample of individuals in order to generalize on the characteristics of the population from which they were drawn. “It has been estimated that approximately $2 billion per year is spent on survey research in the United States, and the amount is growing by about 15% per year.” (Lind, 2005, pg 126)

Survey research can lead to several kinds of errors, and “it’s recommended that you be a skeptical “consumer” of statistical findings generated by this mode of research.” (Lind, 2005, pg 127) These errors can be described as sampling error, response error, and non-response error. “Sampling error occurs because a sample has been taken instead of a complete census of the population.” (Lind, 2005, pg 127) The sample taken for the Instant rewards card might not be truly representative; the gender percentages were wrong most likely because the population was taken from USA World Bank consumers who logged on to the website, not taking into consideration individuals who are not internet savvy or who do not have access to the internet.

Sampling methods can be categorized as probability or non-probability. The distinction between the two is, with probability sampling, each person or element in the population has a known (or calculable) chance of being included in the sample and allows us to estimate the maximum amount of sampling error between our sample statistic and the true value of the population parameter being estimated. (Lind, 2005) “Non-probability sampling is primarily used in exploratory research studies where there is no intention of making statistical inferences from the sample to the population.” (Lind, 2005, pg 142) To reduce the probability of sampling error, the target population needs to be completely enumerated so that important segments or groups are not excluded from being eligible to participate.

Both the small business card and the Instant reward card used a questionnaire as the data collection instrument for their research. The questionnaire can be filled out personally by the respondent or administered and completed by an interviewer. In the cases of our surveys, the questionnaires were administered both online and/or sent to the respondent via mail where they had to complete the questionnaires and return them. Response errors and non-response errors are always a possible problem when using questionnaires to collect