HBAT: Understanding Customers1
HBAT (Hair, Block, Anderson and Tatham Company) sells paper products to two market segments: the newsprint industry and the magazine industry. Further, these paper products are sold to these market segments, either directly to the customer or indirectly through a broker. HBAT wanted to develop a better understanding of both the characteristics of its customers and the relationships between their perceptions of HBAT, and their actions towards HBAT (e.g., satisfaction and likelihood to recommend). From this understanding of its customers, HBAT will be in a good position to develop its Forecasting plan for the next year.
To develop this level of understanding of its situation, a survey of existing customers of HBAT was conducted through an established marketing research firm. Three types of information were collected in a survey of 200 purchasing managers from firms buying from HBAT. A first type of data reflects the characteristics of the respondent and includes information such as the size of the customer and length of the purchase relationship. The second type of information was perceptions of HBAT’s performance on 13 attributes. These attributes (developed through focus groups, a pre-test, and used in previous studies) are considered to be the most influential in the selection of suppliers in the paper industry. The third type of information relates to purchase outcomes and business relationships (e.g., satisfaction with HBAT and whether the firm would consider a strategic alliance / partnership with HBAT).
The data are available in the HBAT DATA.xls file on Blackboard and a definition of each variable and an explanation of its coding are given in Appendix 1. Please assume the sample of 200 respondents is representative of HBAT’s customers.
In addition, management at HBAT have provided you with sales data from 2010 to 2018 on a monthly basis. Please see Table 1;
Table 1. HBAT sales (in £000s)
Please write a report, of no more than 3,000 words, to the management of HBAT addressing the following issues:
Part (a) -Forecasting comparison practice
· Describe the historical data on HBAT sales, including a discussion of the general direction of sales and any seasonal tendencies that might be occurring.
· Choose, giving your justification, which time series forecasting techniques are appropriate for producing forecasts with this data set. Compare the models based on ex post forecasts. Use your chosen forecasting model to generate forecasts for each of the months in year 2019.
· Discuss how these forecasts might be integrated into the planning operations and policy required by management at HBAT.
Part (b) -Regression Analysis
· Make a recommendation to HBAT that enhances their understanding of their customers so that the management can develop its marketing plan that will feed into their Forecasting Plan for the next year.