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Zen Motors

Shiloh Weber, Marisol Garcia, Bridget Graper


Report Due: 5/7/18
Client Background Zen Motors: Multinational manufacturer with multiple
divisions representing several auto and truck brands.
Zen’s highest profits come from larger vehicles such
as SUVs and trucks.

Advanced Automobile Concepts (AAC): AAC is a new


division of a large automobile manufacturer. AAC was
created to revive the aging Zen automobile brands by
reengineering old models and developing new models
that are more up to date; including a fuel efficient
vehicle that reduces fuel prices.
Source of the Research Problem

Nick carefully follows trade publications and believes foreign brands particularly from Japan and Korea are
causing Zen Motors loses due to the popularity of those brands. Nick was given the authority to make an
executive decision to perform what he thinks is necessary to restore the company.

Opportunity: Nick has the internal reports system as well as the Zen’s intelligence system as his reliable
resources to find a solution to his problem.
Research Problems

Is Global warming demanding for the


new production of alternative fuels?

Will the high demand for small fuel


efficient cars continue to or is it just a
trend that will die down?

Do personal habits and preferences


in a consumer affect the purchase of
a car?
Objectives
What is the markets attitude towards global warming?

Which vehicles do consumers demand most?

Which style or design do consumers prefer?

What are the alternative fuel demands concerning


automobiles?
Construct Scale Name Operational Definition

Current Vehicle Size/ Multiple Choice No Vehicle, Car, Pick-Up Truck, SUV,
Questionnaire Design
Vehicle Type Categorical Van

Global Warming Beliefs Likert Scale Strongly Disagree to Strongly Agree

Gasoline Prices/Trends Beliefs Likert Scale Strongly Disagree to Strongly Agree

Opinions Impacting Alternative Fuel Likert Scale Strongly Disagree to Strongly Agree
Automobiles

Intentions Buying Alternative Fuel Natural Metric Scale Probability 0% to 100%


Automobiles

Preference For Various Size Synthetic Metric Scale Very Undesirable to Very Desirable
Automobiles

Prefered Type Of Media Multiple Choice Different Types Of Media


Categorical
Hometown Size

Category Frequency Percent

Under 10K 154 15.4%

10K to 100K 177 17.7%

100K to 500K 176 17.6%

500K to 1 million 226 22.6%

1 million and more 267 26.7%

Total 1000 100.0%


Gender

Category Frequency Percent

Male 505 50.5%

Female 495 49.5%

1000 100.0%

Total
Marital Status

Category Frequency Percent

Unmarried 487 48.7%

Married 513 51.3%

Total 1000 100.0%


Number of People in Household
Variable Average Standard Minimum Maximum Sample
Deviation

Number of people in household 2.2 1.4 1 9 1000


Age Category

Category Frequency Percent

18 to 24 121 12.1%

25 to 34 174 17.4%

35 to 49 256 25.6%

50 to 64 239 23.9%

65 and 210 21.0%


older

Total 1000 100.0%


Education Category
Category Frequency Percent

Less than High School 194 19.4%

High School diploma 298 29.8%

Some college 214 21.4%

College Degree 222 22.2%

Post graduate degree 72 7.2%

Total 1000 100.0%


Job Type Category
Category Frequency Percent

Management 246 24.6%

Sales 285 28.5%

Service 120 12.0%

Agriculture 29 2.9%

Craft 75 7.5%

General 102 10.2%


labor

Retired 143 14.3%

Total 1000 100.0%


Income Category

Category Frequency Percent

Under $25K 256 25.6%

$25K to 49K 343 34.3%

$50K to 74K 194 19.4%

$75K to 125K 137 13.7%

$125K and more 70 7.0%

Total 1000 100.0%


Dwelling Category

Category Frequency Percent

Single family 452 45.2%

Multiple family 296 29.6%

Condominium/Townhouse 185 18.5%

Mobile home 67 6.7%

Total 1000 100.0%


Primary Vehicle Price Category

Category Frequency Percent

No Vehicle 100 10.0%

Economy 455 45.5%

Standard 271 27.1%

Luxury 174 17.4%

Total 10000 100.0%


Primary Vehicle Type

Category Frequency Percent

No Vehicle 100 10.0%

Car 432 43.2%

Pick-up 210 21.0%


Truck

Suv or Van 258 25.8%

Total 1000 100.0%


Type of Commuting

Category Frequency Percent


Single 588 58.8%
Occupancy

Multiple 62 6.2%
Occupancy

Public 188 18.8%


Transportation

Non-Motorized 125 12.5%

Telecommute 37 3.7%

Total 1000 100.0%


Feelings About Global Warming
Variable Avg S.D. Min Max Sample

I am worried about global 6.1 1.5 1 7 1000


warming.

Global warming is a real 5.6 1.8 1 7 1000


threat.

We need to do something 5.3 1.9 1 7 1000


to slow global warming.
Feelings Toward Gasoline Prices and Usage

Variable Avg S.D Min Max Sample

Gasoline prices are too high now. 6.3 1.3 1 7 1000

High gasoline prices will impact what 5.3 2.3 1 7 1000


type of autos are purchased.

We should be looking for gasoline 5.1 2.2 1 7 1000


substitutes.

Americans use too much gasoline. 5.0 2.0 1 7 1000

Gasoline prices will remain high in the 4.9 2.0 1 7 1000


future.

Gasoline emissions contribute to global 4.8 2.3 1 7 1000


warming.
Most survey participants strongly
agreed that they were worried
about global warming, and
strongly agreed that gas prices
were too high.

Furthermore, survey participants


neither agree nor disagreed that
gas emissions contribute to global
warming.

Most agreed that Americans use


too much gasoline and that there
is a need to look for alternative
fuels.
Effects of the Use of Hybrid Vehicles

Variable Avg S.D. Min Max Sample

Hybrid autos that use 5.8 2.2 1 7 1000


alternative fuels will keep
gas prices down.

Hybrid autos that use 4.1 2.1 1 7 1000


alternative fuels will slow
down global warming.
Highest Agreement:
The American population agreed that any automobile that use alternative fuels will maintain the cost
of gasoline at a low price.

Lowest Agreement:
Americans agreed that using alternative fuels will help decrease the speed of Global Warming.

What is interesting about the result is that the use of alternative fuels will have a positive outcome.
Either by keeping the price of gasoline low and it can also help reduce the speed of Global Warming.
Variable Avg. S.D. Min Max Sam

Hybrid autos that use alternative fuels will 5.8 2.2 1 7 1000
Effects of Vehicle Size keep gas prices down.

Hybrid autos that use alternative fuels will 5.1 2.1 1 7 1000
reduce fuel emissions.

Small autos with high mpg's will keep gas 4.9 2.5 1 7 1000
prices stable.

Very small autos with very high mpg's will 4.8 2.1 1 7 1000
reduce fuel emissions.

Very small autos with very high mpg's will 4.5 2.3 1 7 1000
keep gas prices stable.

Small autos with high mpg's will slow down 4.5 2.3 1 7 1000
global warming.

Hybrid autos that use alternative fuels will 4.1 2.1 1 7 1000
slow down global warming.

Small autos with high mpg's will reduce fuel 4.0 2.2 1 7 1000
emissions.

Very small autos with very high mpg's will 3.5 2.2 1 7 1000
slow down global warming.
According to our research, most
survey participants strongly agreed
that hybrid autos using alternative
fuels will keep gas prices down, and
reduce fuel emissions.

However; there is low agreement on


very small automobiles with high
mpgs (miles per gallon) will slow
down global warming.
Probabilities of Buying Hybrid Automobile Types
Variable Avr S.D. Min Max Sam
g

Probability of buying a standard size 40.2 21.5 0 100 1000


synthetic fuel auto within 3 years

Probability of buying a standard size electric auto 34.6 22.1 0 100 1000
within 3 years

Probability of buying a standard size hybrid auto 30.1 21.2 0 100 1000
within 3 years

Probability of buying a small (2 seat) hybrid auto 20.6 19.3 0 90 1000


within 3 years

Probability of buying a very small (1 seat) 13.8 23.1 0 100 1000


hybrid auto within 3 years
What is the least What is the most
probable/attractive probable/attractive
model? model?
Very small (1 seat) hybrid auto 10% Standard size synthetic fuel auto 29%
Q#1: What percentage of the American
public owns the following type of vehicle?
Primary vehicle type

Category Frequency Percent Lower Upper


Boundary Boundary

Car 432 43.2% 40.1% 46.3%

Pick-up truck 210 21.0% 18.5% 23.5%

SUV or van 258 25.8% 23.1% 28.5%

Total of All Categories 1000

Percentage 95% Confidence Interval Analysis Results

43.2% of the American public owns a Car.


Q #2: How does American public feel about the
following statement?
Variable Sampl Avg Stan. Lower Upper
e Dev. Boundary Boundary

Hybrid autos that use alternative fuels will keep gas prices down. 1000 5.8 2.2 5.6 5.9

Hybrid autos that use alternative fuels will reduce fuel emissions. 1000 5.1 2.1 5.0 5.2

Hybrid autos that use alternative fuels will slow down global 1000 4.1 2.1 3.9 4.2
warming.

(Average(s) 95% Confidence Interval Analysis Results)

The American Population believes if everyone starts using autos that ran with different types of fuels
it will affect the price of gasoline causing it to decrease.
1. Average Hypothesis Test Analysis Results
ZEN Executives
Hypothesis Test for an Average Statistical Values
believe only 5% of
Variable Description Sample Sample Hypoth. Std Std t or z* df Sig consumers would
Average Support Dev Err purchase a 1 seat
hybrid in the next three
Probability of buying 1000 13.8 5.0 23.09 0.73 12.03 999 0.00 years. According to
a very small (1 seat) our research, between
hybrid auto within 3 12.3% and 15.2% of
years
consumers would in
Not Supported. *z is used when df >120 fact purchase this
vehicle.
Average(s) 95% Confidence Interval Analysis Results

Variable Sample Average Standard Lower Upper


Deviation Boundary Boundary

Probability of buying a very small (1 seat) hybrid auto within 3 1000 13.8 23.1 12.3 15.2
years
2. Average Hypothesis Test Analysis Results
Hypothesis Test for an Average Statistical Values ZEN Executives
believe only 5% of
Variable Description Sample Sample Hypoth. Std Std t or d Si
consumers would
Averag Averag Dev Err z* f g
purchase a 2 seat
e e
hybrid in the next
Probability of buying a small 1000 20.6 5.0 19.29 0.61 25.5 9 0. three years.
(2 seat) hybrid auto within 3 6 9 0 According to our
years 9 0 research, between
19.4% and 21.8% of
NOT SUPPORTED *z is used when df >120
consumers would in
fact purchase this
Average(s) 95% Confidence Interval Analysis Results vehicle.
Variable Sample Avg. Standard Lower Upper
Deviation Boundary Boundary

Probability of buying a small (2 seat) hybrid auto within 3 1000 20.6 19.3 19.4 21.8
years
3. Average Hypothesis Test Analysis Results

Hypothesis Test for an Average Statistical Values ZEN Executives believe


only 15% of consumers
Variable Description Sample Sample Hypoth. Std Std t or d Si would purchase a
Averag Average Dev Err z* f g standard sized synthetic
e fuel auto in the next
three years. According
Probability of buying a 1000 30.1 15.0 21.20 0.67 22.5 9 0. to our research,
standard size hybrid auto 5 9 0 between 28.8% and
within 3 years 9 0 31.4% of consumers
would in fact purchase
NOT SUPPORTED
Average(s) 95% Confidence Interval Analysis Results *z is used when df this vehicle.
>120

Variable Sample Average Standard Lower Upper


Deviation Boundar Boundary
y

Probability of buying a standard size hybrid auto 1000 30.1 21.2 28.8 31.4
within 3 years
4. Average Hypothesis Test Analysis Results
ZEN Executives
Hypothesis Test for an Average Statistical Values
believe only 15%
of consumers
Variable Description Sample Sample Hypoth. Std Dev Std t or df Sig
would purchase a
Average Average Err z*
standard sized
synthetic fuel auto
Probability of buying a 1000 40.2 15.0 21.46 0.68 37.0 99 0.0
in the next three
standard size synthetic fuel 8 9 0
years. According
auto within 3 years to our research,
between 38.8%
NOT SUPPORTED *z is used when df >120
and 41.5% of
consumers would
Average(s) 95% Confidence Interval Analysis Results in fact purchase
this vehicle.
Variable Sample Average Standard Lower Upper
Deviation Boundary Boundary

Probability of buying a standard size synthetic fuel auto 1000 40.2 21.5 38.8 41.5
within 3 years
5. Average Hypothesis Test Analysis Results

Hypothesis Test for an Average Statistical Values ZEN Executives


believe only 20% of
Variable Description Sample Sample Std Std t or d Si consumers would
Averag Hypoth. Dev Err z* f g purchase a standard
e Averag sized electric auto in
e the next three years.
According to our
Probability of buying a 1000 34.6 20.0 22.09 0.70 20.9 9 0. research, between
standard size electric auto 6 9 0 33.3% and 36.0% of
within 3 years 9 0 consumers would in
fact purchase this
NOT SUPPORTED *z is used when df vehicle.
Average(s) 95% Confidence Interval Analysis Results
>120
Variable Sample Average Standard Lower Boundary Upper
Deviation Boundary

Probability of buying a standard size electric auto 1000 34.6 22.1 33.3 36.0
within 3 years
Hybrid Types Forecasted to be Purchased In the Next 3
Years
Population: 114, 825,428

Vehicle Lower Boundary Best Estimate Upper Boundary

Very Small (1 Seat)Hybrid 12.3% 13.8% 15.2%


Auto 14,123,528 15,845,909 17,453,465

Small (2 Seat) Hybrid 19.4% 20.6% 21.8%


22,276,133 23,654,038 25,031,943

Standard Size Hybrid 28.8% 30.1% 31.4%


33,069,723 34,562,454 36,055,184

Standard Synthetic Fuel 38.8% 40.2% 41.5%


Auto 44,552,266 46,159,822 47,652,552

Standard Electric 33.3% 34.6% 36.0%


38,236,868 39,729,598 41,337,154
Super Cycle Runabout Sport Runabout With Economy Four- Standard Four-
One-Seat Two Seat Luggage Two- Seat Hybrid Seat Hybrid
Hybrid Hybrid Seat Hybrid
Target Market Profiles
Gender Males Males and Males and Makes and Female
Females Females Females

Marital Status Unmarried Unmarried Married Married and Married


Unmarried

Age 18-24 years old 18-24 years old 18-34 years old 50-64 years old 35-64 years old

Education Less than High Less than High Some College College Degree College Degree
School - Some School - Some and College and and
College College Degree Postgraduate Postgraduate
Degree Degree

Income Under 25k Under 25k 25k-74k 75k-125k and 50k-125k and
more more

Hometown Size 1 million and 1 million and 1 million and 100k-500k to 1 Under 10k-500k
more more more million to 1 million
Summary and Conclusions

What is the Market’s Which vehicles to Which style or design to What are alternative fuel
attitude towards global consumers demand most? consumers prefer? demands concerning
warming? automobiles?
Our research shows that Only 10% of consumers prefer
According to “Feelings about consumers state there is a 29% the very small (1 Seat) Hybrid American consumers are
Global Warming” on average, chance they would buy a Automobile. averagely in agreement that
consumers agree strongly that Standard Size Synthetic Hybrid Automobiles that use
global warming is a real threat Automobile with in the next three While 29% prefer the Standard alternative fuels will keep gas
and that something needs to be years Size Synthetic Automobile prices down, and less believe
done to combat it. because they think it looks more that they will slow global
Furthermore our research attractive. warming.
Consumers are less agreeable shows that consumers state
about gas emissions causing there is a 25% chance they will Zen Motors should place more Consumers care about global
global warming. buy a Standard Sized Electric emphasis on entering the warming, but don’t all completely
Automobile. Standard Size Synthetic agree that it can be changed
Consumers believe global Automobile into the market. quickly by using alternative fuels.
warming is a threat, but do not Consumers are interested in
feel as strongly about proactively alternative models, but still prefer
making the change standard synthetic autos.