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Market Research-Wave

TEAM MEMBERS:

SALLY AMKOA DEBJIT NAYAK BHAKTI MAHATO AHFFAN KONDETH VIJENDRA KRISHNAMURTHY

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Executive summary of the Market Research The goal of this market research project was to test different type of advertisements based on different features, which would help the organization to understand the customer sentiment and help to create targeted ads to promote awareness about Wave. The project was carried out in two phases. In Phase 1, a study was conducted using secondary sources through informal interviews to get an understanding of the existing customers and assess what features would make them switch from their current money transfer service providers. Additional data was collected through a Qualtrics survey to get precise information about customer preferences and demographics. All the interviewees and survey respondents had some experience in using international money transfer services. In Phase 2, we created ads based on two factors: message appeal and celebrity appeal. The message appeal focused on the specific information about Wave, while the celebrity appeal focused on celebrity endorsement. We varied the factors at 3 levels: cost, security and speed, which were the top 3 concerns that respondents in phase 1 reported having when sending money abroad. Key findings:

Lupita Nyongo was a good choice for the celebrity endorsement because of her strong social media presence which made her accessible to Waves target market.

People who frequently made international money transfer were more likely to know about Wave than those who didnt.

Different income groups had varying preferences for international money transfer features.

Students and people below 25 years preferred the celebrity ads.

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Introduction Wave is a technology start up that enables users to transfer money to countries like Kenya and Uganda in East Africa. Wave is trying to break into the well-established money transfer market through its innovative mobile app. Waves most distinctive feature is that it doesnt charge any transaction fees for money transfers. Wave only makes a profit from capitalizing on exchange rates. Wave is able to have this competitive advantage because its process is automated through mobile apps and backend services. The company doesnt have to spend money on establishment and human costs like competitors such as Western Union and MoneyGram. A Wave customer can also track the status of the transfers made and get real time updates as the money proceeds in various stages of transaction. Customers can save about $9 for every $100 transferred using Wave over other competitors.

Background

Wave is a start-up, thus the company doesnt have a full-fledged marketing campaign for its services. The purpose of this project is to recommend an effective advertisement to increase awareness about Wave among Kenyans living in the USA. The ad type to use might vary depending on the market segment; hence our recommendations targeted specific segments based on our quantitative and qualitative analyses.

Project Goals

Phase 1

To conduct in-depth interviews for users who used international money transfer to understand what they looked for in a money transfer app and also learn about the concerns they had with their existing money transfer methods

To administer a survey to a larger sample to get additional data for analysis, to complement the in-depth interviews

Phase 2

To analyze whether celebrity and text ad had significant impact on features like Speed, Cost and Security

To determine if there were preferences in advertisement types for different age groups

To test if different income groups had different preferences for money transfer features

Literature review Since our plan was to design an online ad, we did some research on creating successful social media campaigns. From the article "Increasing the ROI of Social Media Marketing," published in the MIT Sloan Management Review, we concluded that a buzz on social media was mainly generated by word of mouth. Companies could create successful social media campaigns by

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identifying individuals whose social media presence was influential enough to be leveraged to make a marketing campaign go viral. Once we determined how to create a viral ad, we wanted know how to measure its success. The article Can you measure the ROI of your social media marketing? suggested that the traditional way of determining the return on investment of a media campaign (by calculating the cost of launching a blog page for instance) was ineffective. It proposed that companies instead measure the impact of their social media campaigns in terms of number of customer visits to a site or frequency of mentions of the product over a given period. The argument posed was that by looking at hard numbers alone, companies failed to reflect the long term impact of social media campaigns, since a lot of conversations about products evolved over time. The article posited that companies essentially got into a long-term relationship with their target markets through their social media campaigns.

Research Methodology

Phase 1

Analysis

We did an in depth study of customers in the money transfer market. The goal was to get a better understanding of the motivations that people had to send money abroad and how they went about deciding what methods to use. We carried out in-depth personal interviews with 15 respondents who utilize various money transfer methods to send money abroad. We then administered a secondary Qualtrics survey to 45 respondents, including those interviewed during the in-depth interview stage. Results

Our respondents reported using various money transfer methods including: MoneyGram, PayPal, Bank account transfers and Xoom. We determined that majority of cash transfers were done by students and full time employees. Most of the respondents reported sending money to support their families back in their home countries. The next major reason why people transferred cash back home was for loan payments. Despite more than 50% of the respondents reporting being highly satisfied with the method they currently use to transfer money abroad, most of them stated that they would be willing to change their service provider. This result revealed that there was a good chance for a new money transfer company to enter the market if the company was able to identify and meet customers needs. We also found that most of the survey participants transferred money abroad on a monthly basis. This wasnt surprising, considering the fact that paychecks are often received once a month. 75% of customers reported a desire to have their money transferred within a day. This was also expected, considering that majority of the respondents sent money to support their families. 85% of the respondents ranked security as their top priority when sending money. This was a justified observation since there was a lot at stake for respondents: both the money being transferred and the users bank account or credit card information. Cheaper transfer rates and speed of the transaction also emerged as being important factors to many users.

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Conclusion As a result of the insights drawn from our personal interviews, we determined that our ad campaign needed to take advantage the markets openness to switching service providers. We decided to create an ad that focused on security, cost and speed. We wanted ads that emphasized Waves competitive advantage (cheaper cost), while building customer confidence by assuring users that their money and credit card information would be safe. Waves biggest challenge from our analysis was its ability to allay the users security concerns.

Phase 2 Ad design

Our ad, in its basic form, consisted of a picture as a visual aid, and a quote that described the advantage of using Wave to send money to Kenya. The goal of the ad was to raise product awareness about Wave. Figure 1: Advertising model for ad

We manipulated 2 factors at 3 levels. Our factors were message appeal and celebrity appeal. For the message appeal, we used a picture of the interface of the Wave app. For the celebrity appeal, we used a picture of a Kenyan actress (Lupita Nyongo) who we deemed likely to be known by Kenyans in the US, due to her massive social media presence. The ad was manipulated at 3 levels by adding a quote that talked about cost, security or speed. We then used 3 constructs to measure the performance of our ads: memorability, appeal and being informative. For memorability, we asked the question: The ad you just viewed talked about money transfer using Wave. What was the main message conveyed by the ad? For appeal, we asked: On a scale of 1 to 10, how strongly do you agree or disagree with this statement: This ad is appealing. To measure if the ad was informative, we asked: On a scale of 1 to 10, how

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strongly do you agree/disagree with the following statement? This ad provides adequate information about the speed of money transfer using Wave."

Survey Design We tested the memorability of our ads by showing respondents an ad, then asking them a multiple choice question to see if they could recall the main message of the ad. We tested the ads for appeal and informativeness by asking the respondents to rate each ad on a scale of 1-10. A Likert scale was used: 1 meant strongly disagree, while 10 meant strongly agree. Further questions were also asked to collect demographic information such as annual income, occupation and age. Results

Lupita Nyongo was a good choice for the celebrity endorsement because of her strong social media presence which made her accessible to Waves target market

Different income groups had varying preferences in money transfer features. For instance, people with annual income less than $10000 are more concerned about security whereas people with higher annual income have equal concern with security and speed.

Students and people at age less than 25, preferred the celebrity ads

People who frequently made international money transfer were more likely to know about Wave than those who didnt. This is because such people actively research different money transfer services in order to get the best deals

Annual income did not affect the respondents choice of money transfer service

The study didnt provide conclusive evidence that customers preferred any one ad to the rest. However statistical analysis pointed that specific customer segments had definite requirements for a money transfer app. Students and people in low income groups could be targeted using an advertisement that focused on security. Demographics with a good population of full time employees could be targeted using ads that focused on speed of money transfer. Further investigation using a bigger sample size and other statistical methods could uncover more insights and recommendations.

Recommendations

1. Since it was established that the student market segment was most concerned about security when sending money, ads that target students should emphasize the security of money transferred as well as that of credit card information.

2. It was determined that fulltime employees are most concerned about speed. Therefore ads that target this market segment should emphasize Waves instantaneous money transfer.

3. Wave should market to people of all incomes 4. Customers who are below age of 25 should be targeted with celebrity advertisements

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Appendix 1 Ad samples:

Phase 1 Survey Responses Reasons for sending money

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Willingness to switch companies

Major concerns when sending money

# Answer

Response %

1 Security

40 85%

2 Cheaper transfer rates

36 77%

3 Speed

34 72%

4 Hassle-free

28 60%

5 Other (Please mention)

3 6%

Appendix II

Exploratory analysis

We performed an exploratory analysis of our survey results to summarize the main characteristics of our data using various data visualization methods. We did preliminary analysis on the demographic data provided by a total of 63 respondents. Results We asked our survey respondents to rank speed, security and cost based on their level of concern when sending money abroad. Chart 1 revealed that security was ranked as the top concern by most of the survey respondents followed by cost.

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Chart 1: Rank of speed, cost and security

We asked our respondents if they preferred an ad featuring a celebrity endorsing the services or one providing specific details about the service. Chart 2 below revealed a preference for detail-specific ads. Chart 2: Celebrity endorsement vs. specific details

Chart 3 revealed that most of the respondents were students and full time employees, while chart 4 showed that majority of the respondents were 18-25 years old. Chart 3: Responses by occupation Chart 4: Responses by age group

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10

20

30

40

50

60

70

1 2 3

Speed

Cost

Security

Personendorsing theservice

Specific detailsof the service

Full time

Part time

Student

Self-employed

18 - 25years

25 - 35years

35 - 50years

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Chart 5 below showed that most of our respondents had an annual income below $10,000, but a considerable number earned $20,000 - $100,000 annually. Chart 5: Responses by income

Chart 6: Memorability of Ads

Chart 6 revealed that celebrity endorsed ads were more memorable at the security and cost levels; whereas message ads were more memorable at the speed level.

Statistical Analysis

Cross tabulation We used cross tabulation to get a better understanding of the relationships between different variables. The results enabled us to answer important questions below:

1. Is Lupita Nyongo a good choice of celebrity for the ad? We performed a cross tabulation analysis on whether the respondent knew Lupita Nyongo vs. whether the respondent knew about Wave

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101520253035

$0 - $10 000 $10 000 - $20000

$20 000 - $50000

$50 000 -$100 000

More than$100 000

Choose not toanswer

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H0: Whether respondent knows Lupita Nyongo is independent of whether the respondent knows about Wave Ha: Whether the respondent knows Lupita Nyongo is not independent of whether the respondent knows about Wave

P-value =0.1: Therefore, reject H0; the variables have a statistical association. Inference: People who knew Lupita Nyongo were likely to also know about Wave. This was likely because Lupita Nyongo had a strong social media presence, while Waves current marketing was mostly done online. We concluded that our chosen celebrity was well known in Waves target market.

2. Does frequency of money transfer influence awareness about Wave?

We wanted to check if people who frequently transfer money from Kenya or Uganda to U.S. and vice versa knew about Wave. We performed a cross tabulation analysis with the following hypothesis: H0 : Frequency of money transfer is independent of whether a respondent knows about Wave Ha: Frequency of money transfer is not independent of whether a respondent knows about Wave

Did you know about Wave before this survey?

Yes No Total

How often do you make international money transfers?

Weekly 6 1 7

Monthly 24 10 34

Semi Annually/Annually 10 12 22

Total 40 23 63

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Result: Chi-square statistic is 5.3179 P-value = 0.070023 P-value = 0.1: Therefore, reject H0; the variables have a statistical association Inference: The frequency that someone sends money abroad is likely to have an influence on whether that person knows about Wave. This makes sense because someone who sends money often is likely to research on different service providers in order to get the best rates.

3. Does income level influence preference for ad type? To determine if there was a relationship between annual income and the type of advertisement preferred, we performed a cross tabulation analysis with the following hypothesis: H0: Preferred type of the advertisement is independent of annual income Ha: Preferred of type of the advertisement is not independent of annual income

P-value > =0.1: Fail to reject H0; the variables have no statistical association Inference: Since the person income doesnt affect the type of advertisement preferred, we can use any kind of advertisement without having to worry about the annual income segmentation. 4. Does income have any effect on factors considered when sending money?

Since majority of our respondents reported annual incomes less than $10000, we decided collapse the income classes into two main groups: below $10000 and above $10000. We then performed a crosstab analysis between annual income and the three major concerns (speed, cost and security) to see if there was a relationship between the two. H0: Concerns that people have when sending money abroad are independent of annual income Ha: Concerns that people have when sending money abroad are not independent of annual income

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Security Speed Cost Total

Annual Income

Less than 10k 18 6 7 31

Greater than 10k 15 15 2 32

Total 33 21 9 63

Result: Chi-square = 6.89; p-value = 0.03 P-value = 0.1; therefore, reject H0. The variables have a statistical association. Inference: People with annual income less than $10000 were more concerned about security, whereas people with higher annual income are equally concerned about security and speed. This outcome can be explained by the different priorities that people have at different stages of their lives. For instance, fulltime employees are likely to have time sensitive commitments like mortgage payments and important business deals that require speedy money transfer. Students, on the other hand, might be concerned about keeping the little money than they have, safe. ----------------------------------------------------------------------------------------------------------------------------- ---------------------------

T-Tests When we did exploratory analysis on our survey results, we found that a higher number of respondents preferred print ad compared to celebrity ad. To get more accurate results in understanding what factors are more effective to create appeal and generate information in the target audience, we decided to perform t-test on two different age groups. Test to measure appeal of a celebrity ad based on age groups

P-value = 0.05; therefore, reject H0.

7.29

5.91

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1

2

3

4

5

6

7

8

18-25 GREATER THAN 26

Age vs Celebrity - Appeal Ratings

Age 18 to 25 >=25

Mean 7.292682927 5.909090909 Variance 5.462195122 5.134199134 Observations 41 22 Pooled Variance 5.34927847

Hypothesized Mean Difference 0

df 61 t Stat 2.263567441 P(T

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Inference: The p-value of this t-Test (highlighted above) was statistically significant at the 0.05 level. We therefore rejected the null hypothesis. The test revealed a significant difference between the two age groups analyzed, with respect to preference for a celebrity ad. It was concluded that respondents in the age group 18-25 years found the celebrity factor in an ad more appealing. --------------------------------------------------------------------------------------------------------------------------------------------------------

Test to measure appeal of a print ad based on age groups

P-value > = 0.05; therefore, fail to reject H0.

Inference: The p-value of this t-Test was not statistically significant at the 0.05 level. The above results showed there was no significant difference between the two age groups with respect to their preference for an ad that focuses on the message. ------------------------------------------------------------------------------------------------------------------------------------- -------------------

Test to measure informativeness of the celebrity ad Inference: The p-value was statistically significant at the 0.05 level. Therefore, we rejected the null hypothesis. We deduced that there was a significant difference between the preferences of the two age groups with respect to the celebrity factor. We concluded that the respondents in the age group 18-25 years preferred seeing an ad that featured a celebrity.

5.68

4.91

4.4

4.6

4.8

5

5.2

5.4

5.6

5.8

18-25 GREATER THAN 26

Age vs print appeal ratings

Age 18-25 >=25

Mean 5.682926829 4.909090909

Variance 6.97195122 4.753246753

Observations 41 22

Pooled Variance 6.208134928 Hypothesized

Mean Difference 0

df 61 t Stat 1.175171649 P(T

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Test to measure informativeness of a print ad

Inference: The p-value of this t-Test is not statistically significant at the 0.05 level. We were therefore unable to reject the null hypothesis. The results showed that there was no significant difference between the preferences of the two age groups with respect to the ad with the message factor. -------------------------------------------------------------------------------------------------------------------------------

6.9

5.23

0

1

2

3

4

5

6

7

8

18-25 GREATER THAN 26

Age vs celebrity - Informative Ratings

7.05 6.19

0

1

2

3

4

5

6

7

8

18-25 >=25

Age vs print - Informative ratings

Age 18-25 >=25

Mean 6.902439024 5.227273

Variance 6.890243902 4.945887

Observations 41 22

Pooled Variance 6.220875286 Hypothesized Mean

Difference 0 df 61 t Stat 2.541354051 P(T

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ANOVA The respondents were asked to rate 2 ads (1 from each factor) based on how informative and appealing the ads were. The ratings were marked on a scale of 1-10. Our aim was to determine if there were any significant differences between the mean ratings for each of the factors. Significant differences among the mean ratings would be a sign that a particular ad was more informative or more appealing. A total of 63 people took the survey, resulting in about 22 responses for each ad. In order to prove the samples had statistically different means, ANOVA test was used. ANOVA is a statistical method used to compare the means from different groups. H0: The means from the samples are equal Ha: At least one sample mean is different from the other sample means. We first observed the ratings done by the respondents before moving to advanced methodologies. A visual representation of the graph showed the distribution of the ratings over the scale of 1-10. This gave us an idea of the means and their deviations from the average. In this case, the means of ratings were calculated for the celebrity and message factors separately. Statistical tests were done to check if the sample means were equal. The null hypothesis in each test was that our sample means were equal. The charts below show the distribution of the ratings for the celebrity factor under each level and the means of the ratings.

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We utilized statistical methods to determine if the means were equal. We employed the ANOVA test to compare the means among the ratings for the message factor, in order to know if any particular level had higher ratings for information provided by the ad. The table below shows the summary of results generated by Microsoft EXCEL. Single factor ANOVA for Celebrity comparing sample means under each level

SUMMARY

Groups Count Sum Average Variance

Column 1 24 151 6.291667 7.606884

Column 2 25 161 6.44 5.423333

Column 3 21 128 6.095238 8.590476

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 1.357857 2 0.678929 0.095378 0.909153 3.133762

Within Groups 476.9279 67 7.118326

Total 478.2857 69

The highlighted cell shows the p-value as 0.90, which was not significant at the 0.05 level. This meant that there was a 90% chance of the sample means to be equal. We therefore concluded that none of the ads were more informative for the celebrity factor. So the ads for cost, security and speed generated the same rating for informativeness at an average of around 6.5. We performed a second ANOVA test on the message factor to determine if any of the levels were more informative. This test gave similar results to the previous ANOVA test. We determined that the means were almost same.

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ANOVA results for message factor comparing sample means under each level

SUMMARY Groups Count Sum Average Variance

Column 1 22 147 6.681818 4.989177 Column 2 23 150 6.521739 6.988142 Column 3 21 144 6.857143 6.528571

ANOVA Source of

Variation SS df MS F P-value F crit

Between Groups 1.234896 2 0.617448 0.099977 0.905002 3.142809

Within Groups 389.0833 63 6.175925

Total 390.3182 65

The highlighted cell showed that there is a 90% chance that the sample means were equal. This meant that there was little chance of the means being different. The ANOVA results suggested that the information provided by the ads at different levels for both factors were the same and were fairly good. The ratings averaged to 6.5 which is a fair rating for the ads. There were no particular insightful conclusions from this test as the sample means were found to be same. The ads maintained the same standard across all levels for both factors.