Description
This is documentation on health drinks on customer buying behaviour.
RESEARCH METHODOLOGY
A Research Study on
“Analyzing Consumer Preference in Selection of Health Food Drinks”
CHAPTER 1 - INTRODUCTION TO THE STUDY......................................3
Malted Health Food Drinks....................................................................................................3 Industry Development............................................................................................................3 Future Trends..........................................................................................................................5 The Problem – The Stagnant Industry....................................................................................6
CHAPTER 2 - RESEARCH METHODOLOGY............................................7
What is Marketing Research?.................................................................................................7 Problem Identification............................................................................................................7 Research Objectives...............................................................................................................8 Research Methodology...........................................................................................................8 Data Collection.....................................................................................................................11 Designing the questionnaire.................................................................................................11 Sampling Procedure..............................................................................................................12 1.Data Tabulation and Analysis............................................................................................13
CHAPTER 3 - ANALYSIS OF DATA...........................................................15
Sample Distribution based on income categories and family size.......................................15 Brand Awareness and Current Consumption.......................................................................15 Distribution of Brand Consumption.....................................................................................16 Attribute Importance.............................................................................................................16 Brand Preference..................................................................................................................17 Purchase Decision Influencers..............................................................................................18 Distribution of Flavor Choices.............................................................................................18 Consumption Frequency and Timings..................................................................................19 Purchase Place......................................................................................................................19 Purchase Packing and Size...................................................................................................19 Perception Mapping..............................................................................................................20 Hypothesis testing:...............................................................................................................21 Likert Scale Analysis............................................................................................................23
CHAPTER 4 - CONCLUSIONS AND RECOMMENDATIONS................26 APPENDIX A....................................................................................................28 APPENDIX B....................................................................................................30
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CHAPTER 1 - INTRODUCTION TO THE STUDY
Malted Health Food Drinks
The Market: ? The malted food beverage industry is popularly known as the health beverages sector ? The health food drink segment is classified into two categories — white liquid (Horlicks, Viva, Complan, Milo) and brown liquid (chocolate based drinks: Boost, Bournvita) ? South and East India are a major market for the white liquid while the brown liquid has a major presence across North and West India ? White drinks account for almost two-thirds of the 90,000 ton, Rs.1400 crores market
Brown Foods (Bournvita, Boost) 34%
White Foods (Horlicks, Complan) 66%
Industry Development
Historically, malted beverages have had a strong association with milk, which also explains its strong presence in the southern and eastern regions of the country. These regions suffered from milk deficit and malted beverages positioned themselves as substitutes for milk. Operation Flood, launched in the 1980s, changed the scenario. Undertaken by National Dairy Development Board, Operation Flood made milk available in all parts of the country and the demand for white drinks was hit. With a view to revive demand for the brands, malted foods
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were repositioned as strength and energy drinks with a nutritional thrust. And this positioning stands valid till date. The players The major players in the Rs.1400 health beverages market are SmithKline Beecham, Cadbury, Nestle and Heinz. The market is dominated by SmithKline Beecham with about 69 per cent share. The competition is among the others for the number two slot. SmithKline Beecham (Horlicks, Boost, Maltova, Viva) Heinz (Complan) Cadbury (Bournvita) Nestle (Milo) 69% 14% 14% 3%
Companywise Marketshare
14% 14%
3%
69%
SmithKline Beecham (Horlicks) Cadbury (Bournvita)
Heinz (Complan) Nestle (Milo)
Consumer behavior ? Energy drinks or milk drinks are perceived as a luxury. This explains the slow offtake. ? While white beverages are hailed for their therapeutic offerings, consumers look at browns as mere taste additives. ? Brand loyalties are not very strong as the key target, children, are always looking for new products.
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? Promotion campaigns such as freebies and contests also play an important role in influencing brand choice. These campaigns are mainly targeted at children who force their parents to buy these products. Free gifts like crystal jars, pet jars and sippers also attract consumers. ? The milk-deficient South and East prefers white liquid powders (Horlicks, Viva, and Complan) as the drink can be prepared with hot water whereas the milk-flush North and West prefers the chocolate drinks that taste good in milk. Further, south in general is a coffee-drinking market and for the people products like Horlicks are generally reserved for special guests/relatives and for the sick and convalescing. Penetration Level: The penetration of malted food in India is a low 6.1 per cent. Over the last few years, there have been a number of attempts to expand the health-beverages business. In view of the tremendous growth potential, many multi-national corporations (MNCs) as well as domestic players have made aggressive investments in this sector, but there are very few players left in this sector in India, today. This is mainly because it is perceived as a luxury item. Key Sales Areas Malt beverages are still an urban phenomenon, with a majority of the sales coming from urban areas. The total market is placed at about 75,000-100,000 tons. Geographically speaking, it has a big market in the south and the east. Product life Cycle of the category Health drinks is a relatively mature category. ORG-MARG estimates pin the growth of the malt beverages category at a meager 1.6% cumulative October ‘03. In the past, the southern markets were the high growth markets for white drinks, due to the scarce availability of milk.
Future Trends
Risk of White segment stagnating is high: The current 70:30 ratio of white and brown drinks will tilt in favor of browns for two reasons:
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1. Increase in milk availability: Historically, Horlicks (and Other White food drinks) were promoted as a substitute to milk and are thus more popular in milk deficient areas in Eastern and Southern India. Even now, about 10-20% is taken as a substitute to milk. With increased availability of milk there is possibility of decline in consumption of white drinks (taken with water as milk substitute) in the long term. Indian dairy industry has been growing steadily and milk production is expected to increase by about 2.8% to 91 million tons in CY06. The milk availability scenario has also changed over the last two years on account of entry of Nestle, Britannia and Amul in UHT milk. Browns are more suitable for consumption with milk. 2. Significantly higher competition in Browns: As the competitive scenario is more in Brown drinks the players spend more on ASP and trade push resulting in overall growth of the segment which could be at the expense of White drinks.
The Problem – The Stagnant Industry
The Rs.13 billion HFD market has been relatively stagnant in India with penetration levels of only 6 per cent. Although growth opportunities in the sector are tremendous, it has been growing in single digits at about 7-9 per cent per annum. The decline is partly because of excessive promotional activities which were started initially, but were discontinued. Besides, price hikes by players in the malted food beverages market has translated into poor volume growth for brands. Other reasons include: 1. Lack of innovation leading to brands entering one another’s territory 2. Communication Imbalance:-The key challenge still is being able to achieve the right balance between talking to the mother and the child. It currently seems to have two distinct parts — the product directed at the mother and the packaging trying to pull in the child. MFD manufacturers need to either redefine the product offer or the target audience — preferably — both in order to grow. Another significant reason for medium growth rates of malted food industry lies in its limited acceptability and/or its reach in Indian society. Malted foods have primarily been used in upper and upper middle-class families, which constitute a small proportion of the Indian population.
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CHAPTER 2 - RESEARCH METHODOLOGY
What is Marketing Research?
“Marketing Research is the function which links the consumer, the customer and public to the marketer through information, used to identify and define marketing opportunities & problems, refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process” ………American Marketing Association
Report & Presentation Data Analysis
Follow Up
Problem identification Data Collection
Research objectives
Research Design Sampling Procedure Research Methodology
Problem Identification
A research problem, in general, refers to some difficulty which a researcher experiences in the context of either a theoretical or practical situation and works to obtain a solution for the same. In the context of Health Food Drinks, some key problems are: ? What are the various factors that affect the buying / non buying of health food drinks
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? To identify reasons for declining sales and thereby identify ways to increase sales ? To identify key purchase behavior patterns influencing the buying of HFDs
Research Objectives
The Key Research Objectives are: ? Identifying Consumer behavior attributes that influence buying decision ? To study the consumption pattern of existing customers. ? To identify the most preferred brand, pack size, and the amount the customer is willing to spend. ? To identify reasons for not consuming HFD
Research Methodology
The research methodology has been designed keeping research objectives under consideration. The research methodology aims to provide segmentations of health food drinks market and to understand the relative importance of flavors, prices and other such attributes, which influence purchase decisions. a) Research Design Research design is a total plan or strategy of a proposed research. It is a series of anticipated steps like the blue print of a building. It is a conceptual structure within which research is conducted.
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Research Design
Exploratory research
Descriptive Research Survey
Secondary Research
Survey pilot study
Method adopted: - A two-step research design was adopted. An exploratory research was done initially to identify the various reasons as to why consumers buy/don’t buy HFD’s. The key reason for conducting an exploratory research was that the study aimed at getting a feel of the situation and emphasized a discovery of ideas & possible insights in terms of HFD consumption A primary research and interview method - open ended questionnaire was used to collect the relevant data. This was followed by a descriptive research, which helped identify the different factors that affect buying and the importance of each of these factors. The survey method was adopted A closed ended questionnaire was used for this purpose. The questionnaire was administered on both users/non users of HFD’s. The respondents for the survey were cross-sectional.
What was our Secondary Data?
A secondary research was done to identify the industry condition and the position of Health Food Drinks with respect to the key players involved. Demand growth in recent times has been driven by: ? Advertising led positioning, ? Promotional efforts. ? Repositioning by major players have on the “health platform”
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Key Category Drivers ? Domestic market is unlikely to witness exponential growth, but higher exports could drive sales. ? Supporting key players over the peak winter months ? Capitalizing on new products, packaging and flavor initiatives within the segment ? Supporting market leaders who drive category growth and profit ? User friendly pack formats, premium quality product and value for money price points What is being currently done to increase sales in the product category? Freebies: Some of the usual freebies offered with the products include Tiffin boxes, watches, sunglasses and toys like cars and balls. Re-launches: Faced with stagnant demand, manufacturers are using re-launches, promotions and repositioning to keep the category ticking Consumer Behavior ? Energy drinks or milk drinks are perceived as a luxury. This explains the slow off-take. ? While white beverages are hailed for their therapeutic offerings, consumers look at browns as mere taste additives. ? Brand loyalties are not very strong as the key target, children, are always looking for new products. ? Promotion campaigns such as freebies and contests also play an important role in influencing brand choice. ? These campaigns are mainly targeted at children who force their parents to buy these products. ? Free gifts like crystal jars, pet jars and sippers also attract consumers. ? The mother was the key decision maker for the category to be brought into the home. Pester power is not very high (at least in south). However it has been increasing in the recent times.
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Data Collection
The Exploratory Phase An exploratory primary research was conducted on 10 respondents. All of them were regular internet users. These respondents were personally interviewed by us on various aspects which were aligned with the research objectives. No questionnaire was used for this and it was a general interview regarding use of internet and online advertising. Data Collected:Key findings –Consumer ? High usage of internet among the users ? Users were aware about online advertisement ? Security was a major concern for the users ? On an average users were using internet since last 4-5 years ? Consumers came to knew about the new products through online advertisement
Designing the questionnaire
The respondents were asked to fill the questionnaire in an online survey. The questions were designed in such a way so as to align them with the research objectives. What Information is needed? We have endeavored to obtain information about surfing habits of the users and their response to online advertisement What was the content of the Individual questions? ? Only questions those were necessary to draw inferences and conclusions ? Questions where we knew the respondent would have true information ? Questions which were within the respondents experience ? Questions which would be easy to understand and interpret for the respondent.
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What was the wording of the questions? It was endeavored for the questions to be ? Simple ? Unambiguous ? Specific ? Mix of positive and negative statements to measure attitude. What was the sequence of the questions? The sequence of the questions was to secure ? Initially, basic information with respect to their type and duration of internet usage. ? Concerns with the security ? Their brand awareness and purchase of products based on online advertising (Please refer the questionnaire) Pre-testing the questionnaire The questionnaire was pre-tested on 5 respondents to identify if the respondents faced any difficulty while answering the questionnaire
Sampling Procedure
Target customer group: This study was aimed at the age group of 20 to 45 residing anywhere in India. The main target was users with high internet usage. A structured questionnaire was circulated online in order to obtain the information. The target sample size was taken as 100. We could actually get 93 responses from our online survey
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The Sampling Process Step 1. Define the population Description The population is defined in terms of an element :- Users Units- across all the sections Extent- those who you are using internet 2.Specify sampling frame 3. Specify sampling unit 4. Specify sampling method Time – using internet since atleast 6 months Users using internet anywhere in India since last 6 months The unit for sampling – is a internet user Non probability sampling has been used as we do not have a sampling frame, it is less time consuming, and we have limited resources. Disadvantages of using non-probability sampling are sampling error cannot be calculated, we do not know the degree to which the sample is the representative of the population, the results cannot and should not be projected 5. Determine sample size to the total population. A total of 93 samples has been arrived at. The sample size has been determined considering the following constraints:Severe Time constraints Awareness constraints.
1. Data Tabulation and Analysis
Data obtained from the questionnaires was summarized in single and cross tabular form. The tables were designed in such a way that cross variant analysis of two different variables was possible. To ascertain relationship between two variables, e.g. choice and flavor Chi-square test was used. (The chi-square test is one of the most widely used methods in research. It is useful because, under reasonable assumptions, easily calculated quantities can be used to prove relationship between two variables)
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The data tabulation and analysis went through two tier checks to avoid data entry errors. Microsoft Excel spread sheets were used for the same. The program had inbuilt tools to calculate various statistical variables, that are widely used for simple calculations.
Limitations
1. The sample primarily consists only of people residing in Mumbai. The attributes preferred by this segment may not be preferred by the consumers residing at other locations. Therefore, the findings of this study should not be generalized across geographical locations. 2. The questionnaires were distributed as per convenience of researchers. (Convenience sampling). Therefore, researcher are not sure of the extent to which sample represents the population. 3. Consumer preference for the product depends upon number of internal and external environmental factors. This research is being carried out to assess impact of specific factors on choice of the product. However, it should not be judged that choice of product depends only on the factors discussed in the research. 4. The research was carried out by students of post-graduate management program and they do not have any prior experience of carrying out market research
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CHAPTER 3 - ANALYSIS OF DATA
Sample Distribution based on income categories and family size The sample size had equal number of respondents from different income levels, thus ensuring adequate socio-economic representation. 90% of the respondents had 3 or 4 members in their families.
Income Categories
23%
8% 29%
5% 5% 30%
0-15
15-30
30-45
45-60
60-75
75+
Brand Awareness and Current Consumption Almost all respondents were aware of the different brands with a few exceptions for Milo and Maltova.
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Out of the 50 respondents, 40 were current consumers of Health Food Drinks, while the remaining 10 were not.
NonConsumers, 10
Consumers, 40
Distribution of Brand Consumption In terms of current brand consumption, half of the respondents consumed Bournvita, whereas one-third of respondents consume Horlicks.
Attribute Importance
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The weightage given by all respondents to the importance of different attributes in HFD were compiled and consolidated. The most important attribute listed by this particular sample of respondents was Nutrition, thus providing a key focus area for companies and marketers.
A ttribute im portance
55% 50%
Percent importance
45% 40% 35% 30% 25% 20% 15% 10% 5%
il k en de d
51%
15% 2%
it
13% 3%
en t e na m rs em T
16%
0%
n tr it io pl ai n
m
m
ra nd
co m
lik
re
B
D on ’t
D oc
to r
A ttributes
Brand Preference
Attributes in Brand bought Percent Importance 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 49.6%
E
nd o
11.3%
11.6%
12.3% 1.4%
13.7%
Taste/Flavour
Package attractiveness
Attributes
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Brand name
Free gifts/ Discounts
Nutritional value
Price
It ’s
N u
e
as t
y
17
This shows that nutritional value is the attribute that people rate as having 50% importance in choosing any brand. The attribute of nutritional value governs people’s choice of a particular brand more than anything else. The above two graphs have showcased the fact that people want HFD for nutritional value and their final brand preference is also based on their perception of a particular brand’s nutritional value. That means the consumers are consistent on what they want out of their HFD. Purchase Decision Influencers 75% of the respondents purchased a HFD brand based on their own knowledge or their spouse’s recommendation.
Distribution of Flavor Choices The majority of respondents preferred Chocolate flavors in their HFDs, while others preferred it to be either natural or vanilla flavored.
Distribution of Flavors
Vanilla 4%
Natural 12%
Chocolate 84%
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Consumption Frequency and Timings Once a Day 37 Morning 33 Afternoon 0 Twice a day 3 Evening 0 Night 7
No of respondents No of respondents
Purchase Place A majority of respondents indicated that they purchase HFDs from supermarkets whereas the remaining bought it mainly from medical stores.
Purchase Packing and Size In terms of packing preferences, the majority of the respondents preferred Refill packs and 500 gm sizes.
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Perception Mapping
Taste Vs. Nutrition
Bournvita Com plan Boost Horlicks Nutrition
Milo
Taste
The above perception map shows the position of each brand on the parameters of Nutritional Value and Taste. To obtain this the ratings provided by respondents were used. The rating for above parameters was on the scale 1 to 5. From the above perception map we can infer that Bournvita is perceived to be high on Nutritional Value and low on Taste. As against this, Milo was high on Taste and low on Nutrition. Horlicks, Complan and Boost had significant rating on both scale. Complan and Boost do not have much difference in the minds of consumers on this particular map.
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Price Vs. Brand Name
Complan Milo
Brand
Bournvita
Horlicks Boost
Price
The above perception map is on the parameters of price and brand value. Here too, respondents were asked to rate a particular brand on scale of 1 to 5 for these parameters. Using these ratings this map was created. Here we can see that Bournvita is the highest on brand value. Complan is the next in line. Boost is comparatively smaller brand than Bournvita.
Hypothesis testing:
Based on the responses and data analysis, the following hypotheses were tested to establish correlation between different factors: Hypothesis # 1 Ho: The brand suggested and the brand actually bought, are interrelated. Ha: The brand suggested and the brand actually bought, are independent.
Horlicks Bournvita Boost Milo Maltova Complan Other Retailer 0 0 0 0 0 0 0 Kid 0 4 0 0 0 0 0 Doctor 2 0 0 0 0 0 0 Friends 4 2 0 1 0 0 0 Spouse 10 14 3 0 0 2 0 Others 0 4 0 2 0 1 0 Total 16 24 3 3 0 3 0
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Total
0
4
2
7
29
7
49
Degree of freedom = (r-1) (c-1) = (7-1) (6-1) = 30 Level of significance = 95% Chi-square critical = 18.5 Chi-square calculated = 23.81 Reject the null hypothesis and accept the alternate hypothesis. Conclusion: There is no relationship between brand suggested and brand actually purchased by consumer. Hypothesis # 2 Ho: Location of purchase and quantity purchased are interrelated. Ha: Location of purchase and quantity purchased are independent.
200 gm 0 0 3 3 500 gm 6 9 19 34 1 kg 2 3 7 12 Total 8 12 29 49
General Store Medical Store Supermarket Total
Degree of freedom = (r-1) (c-1) = (3-1) (3-1) =4 Level of significance = 95% Chi-square critical = 0.711 Chi-square calculated = 2.226 Reject the null hypothesis and accept the alternate hypothesis. Conclusion: Location of purchase does not affect quantity purchased by consumers. Hypothesis #3 Ho: Total consumption of HFD/day and monthly income, are interrelated.
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Ha: Total consumption of HFD/day and monthly income, are independent.
Total teaspoon consumption/day Monthly income 15-30K 30-45K 45-60K 60-75K Total 1 3 3 3 1 10 2 3 5 3 5 16 3 1 4 2 0 7 4 1 6 0 2 9 6 0 0 3 1 4 8 0 1 0 1 2 12 0 1 0 0 1 Total 8 20 11 10 49
Chi-square calculated = 19.7 Degree of freedom = 6*3 = 18 Confidence interval = 95% Chi-square critical = 9.39 Reject the null hypothesis. Conclusion: Monthly income does not affect HFD consumption. The monthly consumption of HFD can be calculated from daily consumption. Monthly consumption is a better indicator of the monthly expenditure because any consumer would have an accurate idea of the amount he consumes daily, in terms of number of teaspoons, rather than his average monthly expenditure which could be inaccurate.
Likert Scale Analysis
For Likert Scale Analysis we prepared a set of 15 statements. We asked every respondent to give their responses on a 5-point scale as given below: • • • • • Strongly Agree Agree Neutral Disagree Strongly Disagree
Respondents gave answers on the above scales. We converted them to a number scale in the following way: • Strongly Agree =1
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• • • •
Agree Neutral Disagree Strongly Disagree
=2 =3 =4 =5
We calculated the mean score and standard deviation for each statement. Using single-tailed z-test we tested whether the statement has to be accepted or rejected for the sample of respondents considered. The results are shown in the table below: Standard Deviation 1.27 1.25 1.15 1.17 1.17 1.02 1.21 1.01 1.03 1.12 1.12 1.20 1.20 1.32 1.18
Hypothesis Health Food Drinks are meant only for kids Health Food Drinks are meant only for sick people Health Food Drinks are Fun to have I need HFD because I don’t have a balanced diet everyday Health Food Drinks are meant only for convalescent mothers HFDs are expensive I am already healthy and don't need HFD Health Food Drinks are meant only for health conscious people I don’t drink milk because it is fattening The aroma of HFD tempts me to drink more Bournvita will make my child more confident Health Food Drinks are meant only for sportsmen I will buy HFD if offered in a sachet Claims made in advertisements of HFDs are untrue HFDs are useless
Mean 3.37 3.63 3.20 3.27 3.71 3.27 3.41 3.84 3.67 3.29 3.80 3.61 2.61 2.88 3.65
Zcalculated 2.03 3.53 1.24 1.59 4.26 1.83 2.37 5.82 4.58 1.79 4.98 3.56 -2.25 -0.65 3.87
Zcritical 1.64 1.64
Result Reject Reject
1.64 Accept 1.64 Accept 1.64 1.64 1.64 1.64 1.64 1.64 1.64 1.64 Reject Reject Reject Reject Reject Reject Reject Reject
1.64 Accept 1.64 Accept 1.64 Reject
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Conclusions: 1. The consumers feel that HFD are not meant only for kids, sick people or convalescent mothers. 2. Consumers feel that HFD are fun to consume. 3. Consumers also feel that they are not meant for health conscious people or sportsmen. 4. Consumers feel that HFD are a supplement to balanced diet because the statement “I need HFD because I don’t have a balanced diet everyday” has been accepted. 5. Consumers do not perceive that HFD are expensive. 6. The statement “The aroma of HFD tempts me to drink more” is rejected which means aroma of HFD is not the reason for consumption. 7. The statement “Bournvita will make my child more confident” is rejected and “Claims made in advertisements of HFDs are untrue” is accepted. So claims in advertisements that HFD make your child more confident is not something that attract people to HFD. 8. People are ready to bur HFD in sachet form 9. Finally, people do not think that HFD are useless.
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CHAPTER 4 - CONCLUSIONS AND RECOMMENDATIONS
The findings of the research and the suggestions based on the same are enumerated below. These suggestions can be considered by the HFD companies in their marketing strategies, product development as well as advertising campaigns. Brand Awareness The awareness about brands has been very high in case of all the brands mentioned to respondents. All the consumers had heard about the brands mentioned in the questionnaire. Hence most of the companies need to follow Reminder-Advertising as most brands are in the growth or maturity stage. Decision Making Contrary to expectations, the decision maker is not the kid in the family, but more commonly the mother or father in the household. Hence, communication strategies and the marketing mix should be aimed at these decisive factors. Attribute Focus Most respondents were very clear that “Nutrition” was the key attribute that they sought in a HFD. Hence, this should be addressed in the marketing mix of the company to consistently promote this feature in all communications. Flavor The majority (84%) of the respondents preferred chocolate flavored drinks. This indicates a strong preference in the market which has to be considered by the product makers. Place Most consumers buy HFD’s from supermarkets. Hence appropriate distribution channels considering this trend should be used. In-store promotions and attractive shelf space will help brands. Brands of HFD’s have to focus on visibility and. Packing
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The respondents showed a strong preference for Refill Packs of size 500 gms, with more than 75% of current consumers using this pack. This is a clear indicator of consumer preference for marketers to consider. Price The results based on the survey as well as Likert analysis show that price is not a major criterion in choosing health drinks as we can see that people are not accepting the statement “HFD are expensive”. Hence, marketers would need to avoid positioning themselves on this front and use other attributes to position their product. The target market Popular perception of a product plays a key role in selecting a market. Based on the Likert analysis results, it is very clear that Health Food Drinks are not perceived as products meant only for kids, sick people, health conscious people or sportspersons as the statements claiming so have been summarily been rejected. Hence, there is a very good potential for companies to expand their current market by positioning themselves differently, to address new segments. Confidence Most respondents don’t feel that Bournvita will make their child more confident and hence Cadbury’s Bournvita should communicate this positioning to the target consumers more effectively. For that matter any HFD company should consider this case that claims of child gaining confidence by drinking HFD that these companies make through their advertisements are not being accepted by the consumers. So they should either make that statement more effectively or change the claims they make to something that is more acceptable. Fun Most consumers associated HFDs as a fun product and this can be used as an effective tool in all communications to enhance the “Fun” perception of the product. Breakfast HFD’s can also be promoted as a healthy drink to be had along with breakfast. The sample which was considered showed that majority of the consumers had HFDs in the morning along with their breakfast.
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APPENDIX A
SWOT Analysis of key players in Indian HFD Industry
Brand / Strength Company Horlicks About 100-yr old SBCH extremely strong brand with about 80%+ market share in the White segment. Weakness ??Consumption by price sensitive consumers (Sec C) could impact pricing power. Opportunity ??Ready-to-drink format offers opportunity to tap out-ofhome consumption. Threat ??Possibility of Cannibalization from Viva ??Current competition is very weak entry of new players like Amul/ HLL/Others, is a possibility given high margins and weak competition. ??Competition from Milo. Possible cannibalization by Maltova. Growth at ?? expense Horlicks. the of
Very strong ??Product is taken distribution/presence as milk-substitute in South and East. in certain regions. Increase in availability of UHT milk could impact the demand. Boost SBCH ??Strong in South with about 60% market share. Growth possibility from distribution expansion in North/West. Distribution ?? expansion. Market ?? Expansion owing to low-pricing strategy. Maltova SBCH Attractive pricing ??
Viva SBCH
Attractive pricing ??
Gains ?? from Growth at the ?? expansion in expense of Boost. distribution. ?? Market Expansion due to low pricing. ??Premium pricing ??The brand reach Strategy is not in in no. of 28
Complan Heinz
??Strong medical heritage owing to its
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link with erstwhile Glaxo. ??Company claims product superiority in terms of higher milk content.
sync with households is competition. about 1/10th of Horlicks. The company grow expanding distribution although growth will limited to A/B. ??Weak presence in South. ??Market share trend has been erratic. can by the be Sec
Bournvita Cadbury
Association with ?? target consumers (kids) through 'BQC' Gain in market share ?? of about 1.5% in last 12-months.
Milo Nestle
Attractive Pricing. ?? For example, 1-kg pack can compete even with Maltova . World's largest Chocolate Malted drink.
??Initial track ??Possibility of record is not gaining share by impressive expanding distribution / Non-availability ?? introduction in Jar in Jar format. format. Advantage of Nestle's wide portfolio for crosspromos /institutional sales/ distribution. ??Entry in the White segment.
??Continuation of High promos/ discount schemes could impact the image.
Nutramul GCMMF
??Lowest pricing driven Marketing ?? by GCMMF business support philosophy of is minimal providing value-formoney products.
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APPENDIX B
Questionnaire
Dear Sir/Madam, We are MBA students of NMIMS and are conducting a survey on buying behaviour of milk based Health Food Drinks. We solicit your kind cooperation and request you to answer the following questions. Thank You. 1) Which are the different Health food drinks you are aware of? ? Horlicks ? Bournvita ? Maltova ? Bournvita ? Milo ? Complan
?
Others please Specify
2) Do you or any body in the family consume health food drinks? ( If No ,goto Q 18 ) ? Yes ? No 3) Please divide 100 points among the following characteristics so that the division reflects relative importance of each attribute to you, in selection of a health food drink. It Provides Nutrition Don’t like plain milk Doctor recommended it Brand name Your favorite Actor/Sportsman advertises for it It’s Tasty TOTAL
100
4) Which brand have you been buying since the last six months?” ? Horlicks ? Boost Bournvita ? Complan ? Others, Please Specify 5) This brand has been suggested to you by: ? Retailer above ? Doctor ? Your Kid ? Friends
? Milo
? None of the
6) What capacity pack do you generally buy? ? 200 g bottle ? 500 g bottle
? 1 kg bottle
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? ? ?
200 g jar 200 g refill pack Sachets
? 500 g jar ? 500 g refill pack
? 1 kg jar ? 1 kg refill pack
7) Which flavour do you generally buy? ? Natural ? Strawberry ? Mango ? Chocolate ? Others
? Banana ? Vanilla
8) How many new flavours have you tried in the last 6 months? ? None ?1 ?2 ?3 9) How often do you consume health food drinks? ? Once a day ? Once in 2 days ? Twice a day ? Once a week
?4
?5
? Rarely
10) How many scoops of powder do you use per serving? ? 1 spoon ? 2 spoons ? More then that_________ 11) When do you consume health food drink? ? Morning(breakfast) ? Afternoon ? Evening (breakfast ) ? Night (Before sleeping)
12) From where do you buy Heath food drinks ? Kirana/general Store ? Petrol Pump Outlets ? Super Market ? Online Shopping ? Medical Store ? Others, Specify______________ 13) Please divide 100 points among the following characteristics so that the division reflects relative importance of each attribute to you, in selection of a health food drink. Taste/Flavour Nutritional value Price Brand name Package attractiveness Free gifts/ Discounts TOTAL 100 14) Rate the following brands on the given attributes( 1-least 5- maximum) Bournvita Boost Complan Horlicks Milo Taste / Flavour ___ ___ ___ ___ ___ Nutritional / Energy level ___ ___ ___ ___ ___ Price/Affordability ___ ___ ___ ___ ___ Brand Name ___ ___ ___ ___ ___ Package attractiveness ___ ___ ___ ___ ___ Free gifts/ Discounts ___ ___ ___ ___ ___
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15) How much do you spend on health food drink per month? ? Rs 50-100 ? Rs 100-150 ? Rs 150-200 ? Rs 200-250 ? Rs 250-300 ? Rs 300+ 16) Have you changed your brand in the last 6 months ?( If no, goto Q 18) ? Yes ? No 17) If Yes, Why? ? New Flavour ? Cheaper option ? Other, Please specify 18) Please ‘tick’ appropriate box ? Strongly Agree “Health food drinks is meant for KIDS” “Health food drinks is meant for SICK people” “Health food drinks are FUN to have ” “ I NEED health food drink because I DON’T have a balanced diet everyday” “Health food drinks are meant for convalescent mothers” “Health Food Drinks Are expensive “ “I am already healthy and don’t need health food drinks” “I am already healthy and don’t need health food drinks” “Health food Drinks are only For health conscious people” “ I don’t drink milk because its fattening” ? ? ? ? ? Free gift/Discount ? Recommended by someone
? Agree
? Neutral ? ? ? ? ? ? ? ?
? Disagree ?Strongly Disagree ? ? ? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
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“Bournvita will make my child more confident” “Health food drinks is meant only for SPORTSMEN” “I will buy Health Food Drink if offered in a sachet “Claims made in the advertisements of Health Food Drinks are untrue”
? ?
? ?
? ?
? ?
? ?
? ?
? ? ?
? ? ?
? ? ?
? ? ?
“Health Food Drinks are useless” ?
19) What comes to your mind when you hear the word “Health Food Drink” Nutritious food supplement Just Flavored/Tasty Milk Alternative to FOOD NONE of the above 20) What comes to your mind when you hear the word “Bournvita” ___________________________________________________________________________ ______________________________________________________________ 21) I think people who drink health food drinks are ___________________________________________________________________________ _________________________________________________________ PERSONAL INFORMATION Name: _________________ Age: __________________ Marital Status: _________ Occupation: ____________ Gender: ______________ Area: ________________ Educational Qualification: __________ No of Members in Family: _________
MONTHLY HOUSEHOLD INCOME
? ?
Upto Rs 15,000 Rs 15,000 – 30,000
? Rs 30,000-45,000 ? Rs 45,000 -60000
? 60000-75000 ? 75000+
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doc_986005074.doc
This is documentation on health drinks on customer buying behaviour.
RESEARCH METHODOLOGY
A Research Study on
“Analyzing Consumer Preference in Selection of Health Food Drinks”
CHAPTER 1 - INTRODUCTION TO THE STUDY......................................3
Malted Health Food Drinks....................................................................................................3 Industry Development............................................................................................................3 Future Trends..........................................................................................................................5 The Problem – The Stagnant Industry....................................................................................6
CHAPTER 2 - RESEARCH METHODOLOGY............................................7
What is Marketing Research?.................................................................................................7 Problem Identification............................................................................................................7 Research Objectives...............................................................................................................8 Research Methodology...........................................................................................................8 Data Collection.....................................................................................................................11 Designing the questionnaire.................................................................................................11 Sampling Procedure..............................................................................................................12 1.Data Tabulation and Analysis............................................................................................13
CHAPTER 3 - ANALYSIS OF DATA...........................................................15
Sample Distribution based on income categories and family size.......................................15 Brand Awareness and Current Consumption.......................................................................15 Distribution of Brand Consumption.....................................................................................16 Attribute Importance.............................................................................................................16 Brand Preference..................................................................................................................17 Purchase Decision Influencers..............................................................................................18 Distribution of Flavor Choices.............................................................................................18 Consumption Frequency and Timings..................................................................................19 Purchase Place......................................................................................................................19 Purchase Packing and Size...................................................................................................19 Perception Mapping..............................................................................................................20 Hypothesis testing:...............................................................................................................21 Likert Scale Analysis............................................................................................................23
CHAPTER 4 - CONCLUSIONS AND RECOMMENDATIONS................26 APPENDIX A....................................................................................................28 APPENDIX B....................................................................................................30
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CHAPTER 1 - INTRODUCTION TO THE STUDY
Malted Health Food Drinks
The Market: ? The malted food beverage industry is popularly known as the health beverages sector ? The health food drink segment is classified into two categories — white liquid (Horlicks, Viva, Complan, Milo) and brown liquid (chocolate based drinks: Boost, Bournvita) ? South and East India are a major market for the white liquid while the brown liquid has a major presence across North and West India ? White drinks account for almost two-thirds of the 90,000 ton, Rs.1400 crores market
Brown Foods (Bournvita, Boost) 34%
White Foods (Horlicks, Complan) 66%
Industry Development
Historically, malted beverages have had a strong association with milk, which also explains its strong presence in the southern and eastern regions of the country. These regions suffered from milk deficit and malted beverages positioned themselves as substitutes for milk. Operation Flood, launched in the 1980s, changed the scenario. Undertaken by National Dairy Development Board, Operation Flood made milk available in all parts of the country and the demand for white drinks was hit. With a view to revive demand for the brands, malted foods
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were repositioned as strength and energy drinks with a nutritional thrust. And this positioning stands valid till date. The players The major players in the Rs.1400 health beverages market are SmithKline Beecham, Cadbury, Nestle and Heinz. The market is dominated by SmithKline Beecham with about 69 per cent share. The competition is among the others for the number two slot. SmithKline Beecham (Horlicks, Boost, Maltova, Viva) Heinz (Complan) Cadbury (Bournvita) Nestle (Milo) 69% 14% 14% 3%
Companywise Marketshare
14% 14%
3%
69%
SmithKline Beecham (Horlicks) Cadbury (Bournvita)
Heinz (Complan) Nestle (Milo)
Consumer behavior ? Energy drinks or milk drinks are perceived as a luxury. This explains the slow offtake. ? While white beverages are hailed for their therapeutic offerings, consumers look at browns as mere taste additives. ? Brand loyalties are not very strong as the key target, children, are always looking for new products.
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? Promotion campaigns such as freebies and contests also play an important role in influencing brand choice. These campaigns are mainly targeted at children who force their parents to buy these products. Free gifts like crystal jars, pet jars and sippers also attract consumers. ? The milk-deficient South and East prefers white liquid powders (Horlicks, Viva, and Complan) as the drink can be prepared with hot water whereas the milk-flush North and West prefers the chocolate drinks that taste good in milk. Further, south in general is a coffee-drinking market and for the people products like Horlicks are generally reserved for special guests/relatives and for the sick and convalescing. Penetration Level: The penetration of malted food in India is a low 6.1 per cent. Over the last few years, there have been a number of attempts to expand the health-beverages business. In view of the tremendous growth potential, many multi-national corporations (MNCs) as well as domestic players have made aggressive investments in this sector, but there are very few players left in this sector in India, today. This is mainly because it is perceived as a luxury item. Key Sales Areas Malt beverages are still an urban phenomenon, with a majority of the sales coming from urban areas. The total market is placed at about 75,000-100,000 tons. Geographically speaking, it has a big market in the south and the east. Product life Cycle of the category Health drinks is a relatively mature category. ORG-MARG estimates pin the growth of the malt beverages category at a meager 1.6% cumulative October ‘03. In the past, the southern markets were the high growth markets for white drinks, due to the scarce availability of milk.
Future Trends
Risk of White segment stagnating is high: The current 70:30 ratio of white and brown drinks will tilt in favor of browns for two reasons:
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1. Increase in milk availability: Historically, Horlicks (and Other White food drinks) were promoted as a substitute to milk and are thus more popular in milk deficient areas in Eastern and Southern India. Even now, about 10-20% is taken as a substitute to milk. With increased availability of milk there is possibility of decline in consumption of white drinks (taken with water as milk substitute) in the long term. Indian dairy industry has been growing steadily and milk production is expected to increase by about 2.8% to 91 million tons in CY06. The milk availability scenario has also changed over the last two years on account of entry of Nestle, Britannia and Amul in UHT milk. Browns are more suitable for consumption with milk. 2. Significantly higher competition in Browns: As the competitive scenario is more in Brown drinks the players spend more on ASP and trade push resulting in overall growth of the segment which could be at the expense of White drinks.
The Problem – The Stagnant Industry
The Rs.13 billion HFD market has been relatively stagnant in India with penetration levels of only 6 per cent. Although growth opportunities in the sector are tremendous, it has been growing in single digits at about 7-9 per cent per annum. The decline is partly because of excessive promotional activities which were started initially, but were discontinued. Besides, price hikes by players in the malted food beverages market has translated into poor volume growth for brands. Other reasons include: 1. Lack of innovation leading to brands entering one another’s territory 2. Communication Imbalance:-The key challenge still is being able to achieve the right balance between talking to the mother and the child. It currently seems to have two distinct parts — the product directed at the mother and the packaging trying to pull in the child. MFD manufacturers need to either redefine the product offer or the target audience — preferably — both in order to grow. Another significant reason for medium growth rates of malted food industry lies in its limited acceptability and/or its reach in Indian society. Malted foods have primarily been used in upper and upper middle-class families, which constitute a small proportion of the Indian population.
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CHAPTER 2 - RESEARCH METHODOLOGY
What is Marketing Research?
“Marketing Research is the function which links the consumer, the customer and public to the marketer through information, used to identify and define marketing opportunities & problems, refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process” ………American Marketing Association
Report & Presentation Data Analysis
Follow Up
Problem identification Data Collection
Research objectives
Research Design Sampling Procedure Research Methodology
Problem Identification
A research problem, in general, refers to some difficulty which a researcher experiences in the context of either a theoretical or practical situation and works to obtain a solution for the same. In the context of Health Food Drinks, some key problems are: ? What are the various factors that affect the buying / non buying of health food drinks
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? To identify reasons for declining sales and thereby identify ways to increase sales ? To identify key purchase behavior patterns influencing the buying of HFDs
Research Objectives
The Key Research Objectives are: ? Identifying Consumer behavior attributes that influence buying decision ? To study the consumption pattern of existing customers. ? To identify the most preferred brand, pack size, and the amount the customer is willing to spend. ? To identify reasons for not consuming HFD
Research Methodology
The research methodology has been designed keeping research objectives under consideration. The research methodology aims to provide segmentations of health food drinks market and to understand the relative importance of flavors, prices and other such attributes, which influence purchase decisions. a) Research Design Research design is a total plan or strategy of a proposed research. It is a series of anticipated steps like the blue print of a building. It is a conceptual structure within which research is conducted.
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Research Design
Exploratory research
Descriptive Research Survey
Secondary Research
Survey pilot study
Method adopted: - A two-step research design was adopted. An exploratory research was done initially to identify the various reasons as to why consumers buy/don’t buy HFD’s. The key reason for conducting an exploratory research was that the study aimed at getting a feel of the situation and emphasized a discovery of ideas & possible insights in terms of HFD consumption A primary research and interview method - open ended questionnaire was used to collect the relevant data. This was followed by a descriptive research, which helped identify the different factors that affect buying and the importance of each of these factors. The survey method was adopted A closed ended questionnaire was used for this purpose. The questionnaire was administered on both users/non users of HFD’s. The respondents for the survey were cross-sectional.
What was our Secondary Data?
A secondary research was done to identify the industry condition and the position of Health Food Drinks with respect to the key players involved. Demand growth in recent times has been driven by: ? Advertising led positioning, ? Promotional efforts. ? Repositioning by major players have on the “health platform”
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Key Category Drivers ? Domestic market is unlikely to witness exponential growth, but higher exports could drive sales. ? Supporting key players over the peak winter months ? Capitalizing on new products, packaging and flavor initiatives within the segment ? Supporting market leaders who drive category growth and profit ? User friendly pack formats, premium quality product and value for money price points What is being currently done to increase sales in the product category? Freebies: Some of the usual freebies offered with the products include Tiffin boxes, watches, sunglasses and toys like cars and balls. Re-launches: Faced with stagnant demand, manufacturers are using re-launches, promotions and repositioning to keep the category ticking Consumer Behavior ? Energy drinks or milk drinks are perceived as a luxury. This explains the slow off-take. ? While white beverages are hailed for their therapeutic offerings, consumers look at browns as mere taste additives. ? Brand loyalties are not very strong as the key target, children, are always looking for new products. ? Promotion campaigns such as freebies and contests also play an important role in influencing brand choice. ? These campaigns are mainly targeted at children who force their parents to buy these products. ? Free gifts like crystal jars, pet jars and sippers also attract consumers. ? The mother was the key decision maker for the category to be brought into the home. Pester power is not very high (at least in south). However it has been increasing in the recent times.
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Data Collection
The Exploratory Phase An exploratory primary research was conducted on 10 respondents. All of them were regular internet users. These respondents were personally interviewed by us on various aspects which were aligned with the research objectives. No questionnaire was used for this and it was a general interview regarding use of internet and online advertising. Data Collected:Key findings –Consumer ? High usage of internet among the users ? Users were aware about online advertisement ? Security was a major concern for the users ? On an average users were using internet since last 4-5 years ? Consumers came to knew about the new products through online advertisement
Designing the questionnaire
The respondents were asked to fill the questionnaire in an online survey. The questions were designed in such a way so as to align them with the research objectives. What Information is needed? We have endeavored to obtain information about surfing habits of the users and their response to online advertisement What was the content of the Individual questions? ? Only questions those were necessary to draw inferences and conclusions ? Questions where we knew the respondent would have true information ? Questions which were within the respondents experience ? Questions which would be easy to understand and interpret for the respondent.
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What was the wording of the questions? It was endeavored for the questions to be ? Simple ? Unambiguous ? Specific ? Mix of positive and negative statements to measure attitude. What was the sequence of the questions? The sequence of the questions was to secure ? Initially, basic information with respect to their type and duration of internet usage. ? Concerns with the security ? Their brand awareness and purchase of products based on online advertising (Please refer the questionnaire) Pre-testing the questionnaire The questionnaire was pre-tested on 5 respondents to identify if the respondents faced any difficulty while answering the questionnaire
Sampling Procedure
Target customer group: This study was aimed at the age group of 20 to 45 residing anywhere in India. The main target was users with high internet usage. A structured questionnaire was circulated online in order to obtain the information. The target sample size was taken as 100. We could actually get 93 responses from our online survey
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The Sampling Process Step 1. Define the population Description The population is defined in terms of an element :- Users Units- across all the sections Extent- those who you are using internet 2.Specify sampling frame 3. Specify sampling unit 4. Specify sampling method Time – using internet since atleast 6 months Users using internet anywhere in India since last 6 months The unit for sampling – is a internet user Non probability sampling has been used as we do not have a sampling frame, it is less time consuming, and we have limited resources. Disadvantages of using non-probability sampling are sampling error cannot be calculated, we do not know the degree to which the sample is the representative of the population, the results cannot and should not be projected 5. Determine sample size to the total population. A total of 93 samples has been arrived at. The sample size has been determined considering the following constraints:Severe Time constraints Awareness constraints.
1. Data Tabulation and Analysis
Data obtained from the questionnaires was summarized in single and cross tabular form. The tables were designed in such a way that cross variant analysis of two different variables was possible. To ascertain relationship between two variables, e.g. choice and flavor Chi-square test was used. (The chi-square test is one of the most widely used methods in research. It is useful because, under reasonable assumptions, easily calculated quantities can be used to prove relationship between two variables)
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The data tabulation and analysis went through two tier checks to avoid data entry errors. Microsoft Excel spread sheets were used for the same. The program had inbuilt tools to calculate various statistical variables, that are widely used for simple calculations.
Limitations
1. The sample primarily consists only of people residing in Mumbai. The attributes preferred by this segment may not be preferred by the consumers residing at other locations. Therefore, the findings of this study should not be generalized across geographical locations. 2. The questionnaires were distributed as per convenience of researchers. (Convenience sampling). Therefore, researcher are not sure of the extent to which sample represents the population. 3. Consumer preference for the product depends upon number of internal and external environmental factors. This research is being carried out to assess impact of specific factors on choice of the product. However, it should not be judged that choice of product depends only on the factors discussed in the research. 4. The research was carried out by students of post-graduate management program and they do not have any prior experience of carrying out market research
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CHAPTER 3 - ANALYSIS OF DATA
Sample Distribution based on income categories and family size The sample size had equal number of respondents from different income levels, thus ensuring adequate socio-economic representation. 90% of the respondents had 3 or 4 members in their families.
Income Categories
23%
8% 29%
5% 5% 30%
0-15
15-30
30-45
45-60
60-75
75+
Brand Awareness and Current Consumption Almost all respondents were aware of the different brands with a few exceptions for Milo and Maltova.
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Out of the 50 respondents, 40 were current consumers of Health Food Drinks, while the remaining 10 were not.
NonConsumers, 10
Consumers, 40
Distribution of Brand Consumption In terms of current brand consumption, half of the respondents consumed Bournvita, whereas one-third of respondents consume Horlicks.
Attribute Importance
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The weightage given by all respondents to the importance of different attributes in HFD were compiled and consolidated. The most important attribute listed by this particular sample of respondents was Nutrition, thus providing a key focus area for companies and marketers.
A ttribute im portance
55% 50%
Percent importance
45% 40% 35% 30% 25% 20% 15% 10% 5%
il k en de d
51%
15% 2%
it
13% 3%
en t e na m rs em T
16%
0%
n tr it io pl ai n
m
m
ra nd
co m
lik
re
B
D on ’t
D oc
to r
A ttributes
Brand Preference
Attributes in Brand bought Percent Importance 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 49.6%
E
nd o
11.3%
11.6%
12.3% 1.4%
13.7%
Taste/Flavour
Package attractiveness
Attributes
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Brand name
Free gifts/ Discounts
Nutritional value
Price
It ’s
N u
e
as t
y
17
This shows that nutritional value is the attribute that people rate as having 50% importance in choosing any brand. The attribute of nutritional value governs people’s choice of a particular brand more than anything else. The above two graphs have showcased the fact that people want HFD for nutritional value and their final brand preference is also based on their perception of a particular brand’s nutritional value. That means the consumers are consistent on what they want out of their HFD. Purchase Decision Influencers 75% of the respondents purchased a HFD brand based on their own knowledge or their spouse’s recommendation.
Distribution of Flavor Choices The majority of respondents preferred Chocolate flavors in their HFDs, while others preferred it to be either natural or vanilla flavored.
Distribution of Flavors
Vanilla 4%
Natural 12%
Chocolate 84%
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Consumption Frequency and Timings Once a Day 37 Morning 33 Afternoon 0 Twice a day 3 Evening 0 Night 7
No of respondents No of respondents
Purchase Place A majority of respondents indicated that they purchase HFDs from supermarkets whereas the remaining bought it mainly from medical stores.
Purchase Packing and Size In terms of packing preferences, the majority of the respondents preferred Refill packs and 500 gm sizes.
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Perception Mapping
Taste Vs. Nutrition
Bournvita Com plan Boost Horlicks Nutrition
Milo
Taste
The above perception map shows the position of each brand on the parameters of Nutritional Value and Taste. To obtain this the ratings provided by respondents were used. The rating for above parameters was on the scale 1 to 5. From the above perception map we can infer that Bournvita is perceived to be high on Nutritional Value and low on Taste. As against this, Milo was high on Taste and low on Nutrition. Horlicks, Complan and Boost had significant rating on both scale. Complan and Boost do not have much difference in the minds of consumers on this particular map.
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Price Vs. Brand Name
Complan Milo
Brand
Bournvita
Horlicks Boost
Price
The above perception map is on the parameters of price and brand value. Here too, respondents were asked to rate a particular brand on scale of 1 to 5 for these parameters. Using these ratings this map was created. Here we can see that Bournvita is the highest on brand value. Complan is the next in line. Boost is comparatively smaller brand than Bournvita.
Hypothesis testing:
Based on the responses and data analysis, the following hypotheses were tested to establish correlation between different factors: Hypothesis # 1 Ho: The brand suggested and the brand actually bought, are interrelated. Ha: The brand suggested and the brand actually bought, are independent.
Horlicks Bournvita Boost Milo Maltova Complan Other Retailer 0 0 0 0 0 0 0 Kid 0 4 0 0 0 0 0 Doctor 2 0 0 0 0 0 0 Friends 4 2 0 1 0 0 0 Spouse 10 14 3 0 0 2 0 Others 0 4 0 2 0 1 0 Total 16 24 3 3 0 3 0
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Total
0
4
2
7
29
7
49
Degree of freedom = (r-1) (c-1) = (7-1) (6-1) = 30 Level of significance = 95% Chi-square critical = 18.5 Chi-square calculated = 23.81 Reject the null hypothesis and accept the alternate hypothesis. Conclusion: There is no relationship between brand suggested and brand actually purchased by consumer. Hypothesis # 2 Ho: Location of purchase and quantity purchased are interrelated. Ha: Location of purchase and quantity purchased are independent.
200 gm 0 0 3 3 500 gm 6 9 19 34 1 kg 2 3 7 12 Total 8 12 29 49
General Store Medical Store Supermarket Total
Degree of freedom = (r-1) (c-1) = (3-1) (3-1) =4 Level of significance = 95% Chi-square critical = 0.711 Chi-square calculated = 2.226 Reject the null hypothesis and accept the alternate hypothesis. Conclusion: Location of purchase does not affect quantity purchased by consumers. Hypothesis #3 Ho: Total consumption of HFD/day and monthly income, are interrelated.
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Ha: Total consumption of HFD/day and monthly income, are independent.
Total teaspoon consumption/day Monthly income 15-30K 30-45K 45-60K 60-75K Total 1 3 3 3 1 10 2 3 5 3 5 16 3 1 4 2 0 7 4 1 6 0 2 9 6 0 0 3 1 4 8 0 1 0 1 2 12 0 1 0 0 1 Total 8 20 11 10 49
Chi-square calculated = 19.7 Degree of freedom = 6*3 = 18 Confidence interval = 95% Chi-square critical = 9.39 Reject the null hypothesis. Conclusion: Monthly income does not affect HFD consumption. The monthly consumption of HFD can be calculated from daily consumption. Monthly consumption is a better indicator of the monthly expenditure because any consumer would have an accurate idea of the amount he consumes daily, in terms of number of teaspoons, rather than his average monthly expenditure which could be inaccurate.
Likert Scale Analysis
For Likert Scale Analysis we prepared a set of 15 statements. We asked every respondent to give their responses on a 5-point scale as given below: • • • • • Strongly Agree Agree Neutral Disagree Strongly Disagree
Respondents gave answers on the above scales. We converted them to a number scale in the following way: • Strongly Agree =1
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• • • •
Agree Neutral Disagree Strongly Disagree
=2 =3 =4 =5
We calculated the mean score and standard deviation for each statement. Using single-tailed z-test we tested whether the statement has to be accepted or rejected for the sample of respondents considered. The results are shown in the table below: Standard Deviation 1.27 1.25 1.15 1.17 1.17 1.02 1.21 1.01 1.03 1.12 1.12 1.20 1.20 1.32 1.18
Hypothesis Health Food Drinks are meant only for kids Health Food Drinks are meant only for sick people Health Food Drinks are Fun to have I need HFD because I don’t have a balanced diet everyday Health Food Drinks are meant only for convalescent mothers HFDs are expensive I am already healthy and don't need HFD Health Food Drinks are meant only for health conscious people I don’t drink milk because it is fattening The aroma of HFD tempts me to drink more Bournvita will make my child more confident Health Food Drinks are meant only for sportsmen I will buy HFD if offered in a sachet Claims made in advertisements of HFDs are untrue HFDs are useless
Mean 3.37 3.63 3.20 3.27 3.71 3.27 3.41 3.84 3.67 3.29 3.80 3.61 2.61 2.88 3.65
Zcalculated 2.03 3.53 1.24 1.59 4.26 1.83 2.37 5.82 4.58 1.79 4.98 3.56 -2.25 -0.65 3.87
Zcritical 1.64 1.64
Result Reject Reject
1.64 Accept 1.64 Accept 1.64 1.64 1.64 1.64 1.64 1.64 1.64 1.64 Reject Reject Reject Reject Reject Reject Reject Reject
1.64 Accept 1.64 Accept 1.64 Reject
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Conclusions: 1. The consumers feel that HFD are not meant only for kids, sick people or convalescent mothers. 2. Consumers feel that HFD are fun to consume. 3. Consumers also feel that they are not meant for health conscious people or sportsmen. 4. Consumers feel that HFD are a supplement to balanced diet because the statement “I need HFD because I don’t have a balanced diet everyday” has been accepted. 5. Consumers do not perceive that HFD are expensive. 6. The statement “The aroma of HFD tempts me to drink more” is rejected which means aroma of HFD is not the reason for consumption. 7. The statement “Bournvita will make my child more confident” is rejected and “Claims made in advertisements of HFDs are untrue” is accepted. So claims in advertisements that HFD make your child more confident is not something that attract people to HFD. 8. People are ready to bur HFD in sachet form 9. Finally, people do not think that HFD are useless.
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CHAPTER 4 - CONCLUSIONS AND RECOMMENDATIONS
The findings of the research and the suggestions based on the same are enumerated below. These suggestions can be considered by the HFD companies in their marketing strategies, product development as well as advertising campaigns. Brand Awareness The awareness about brands has been very high in case of all the brands mentioned to respondents. All the consumers had heard about the brands mentioned in the questionnaire. Hence most of the companies need to follow Reminder-Advertising as most brands are in the growth or maturity stage. Decision Making Contrary to expectations, the decision maker is not the kid in the family, but more commonly the mother or father in the household. Hence, communication strategies and the marketing mix should be aimed at these decisive factors. Attribute Focus Most respondents were very clear that “Nutrition” was the key attribute that they sought in a HFD. Hence, this should be addressed in the marketing mix of the company to consistently promote this feature in all communications. Flavor The majority (84%) of the respondents preferred chocolate flavored drinks. This indicates a strong preference in the market which has to be considered by the product makers. Place Most consumers buy HFD’s from supermarkets. Hence appropriate distribution channels considering this trend should be used. In-store promotions and attractive shelf space will help brands. Brands of HFD’s have to focus on visibility and. Packing
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The respondents showed a strong preference for Refill Packs of size 500 gms, with more than 75% of current consumers using this pack. This is a clear indicator of consumer preference for marketers to consider. Price The results based on the survey as well as Likert analysis show that price is not a major criterion in choosing health drinks as we can see that people are not accepting the statement “HFD are expensive”. Hence, marketers would need to avoid positioning themselves on this front and use other attributes to position their product. The target market Popular perception of a product plays a key role in selecting a market. Based on the Likert analysis results, it is very clear that Health Food Drinks are not perceived as products meant only for kids, sick people, health conscious people or sportspersons as the statements claiming so have been summarily been rejected. Hence, there is a very good potential for companies to expand their current market by positioning themselves differently, to address new segments. Confidence Most respondents don’t feel that Bournvita will make their child more confident and hence Cadbury’s Bournvita should communicate this positioning to the target consumers more effectively. For that matter any HFD company should consider this case that claims of child gaining confidence by drinking HFD that these companies make through their advertisements are not being accepted by the consumers. So they should either make that statement more effectively or change the claims they make to something that is more acceptable. Fun Most consumers associated HFDs as a fun product and this can be used as an effective tool in all communications to enhance the “Fun” perception of the product. Breakfast HFD’s can also be promoted as a healthy drink to be had along with breakfast. The sample which was considered showed that majority of the consumers had HFDs in the morning along with their breakfast.
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APPENDIX A
SWOT Analysis of key players in Indian HFD Industry
Brand / Strength Company Horlicks About 100-yr old SBCH extremely strong brand with about 80%+ market share in the White segment. Weakness ??Consumption by price sensitive consumers (Sec C) could impact pricing power. Opportunity ??Ready-to-drink format offers opportunity to tap out-ofhome consumption. Threat ??Possibility of Cannibalization from Viva ??Current competition is very weak entry of new players like Amul/ HLL/Others, is a possibility given high margins and weak competition. ??Competition from Milo. Possible cannibalization by Maltova. Growth at ?? expense Horlicks. the of
Very strong ??Product is taken distribution/presence as milk-substitute in South and East. in certain regions. Increase in availability of UHT milk could impact the demand. Boost SBCH ??Strong in South with about 60% market share. Growth possibility from distribution expansion in North/West. Distribution ?? expansion. Market ?? Expansion owing to low-pricing strategy. Maltova SBCH Attractive pricing ??
Viva SBCH
Attractive pricing ??
Gains ?? from Growth at the ?? expansion in expense of Boost. distribution. ?? Market Expansion due to low pricing. ??Premium pricing ??The brand reach Strategy is not in in no. of 28
Complan Heinz
??Strong medical heritage owing to its
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link with erstwhile Glaxo. ??Company claims product superiority in terms of higher milk content.
sync with households is competition. about 1/10th of Horlicks. The company grow expanding distribution although growth will limited to A/B. ??Weak presence in South. ??Market share trend has been erratic. can by the be Sec
Bournvita Cadbury
Association with ?? target consumers (kids) through 'BQC' Gain in market share ?? of about 1.5% in last 12-months.
Milo Nestle
Attractive Pricing. ?? For example, 1-kg pack can compete even with Maltova . World's largest Chocolate Malted drink.
??Initial track ??Possibility of record is not gaining share by impressive expanding distribution / Non-availability ?? introduction in Jar in Jar format. format. Advantage of Nestle's wide portfolio for crosspromos /institutional sales/ distribution. ??Entry in the White segment.
??Continuation of High promos/ discount schemes could impact the image.
Nutramul GCMMF
??Lowest pricing driven Marketing ?? by GCMMF business support philosophy of is minimal providing value-formoney products.
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APPENDIX B
Questionnaire
Dear Sir/Madam, We are MBA students of NMIMS and are conducting a survey on buying behaviour of milk based Health Food Drinks. We solicit your kind cooperation and request you to answer the following questions. Thank You. 1) Which are the different Health food drinks you are aware of? ? Horlicks ? Bournvita ? Maltova ? Bournvita ? Milo ? Complan
?
Others please Specify
2) Do you or any body in the family consume health food drinks? ( If No ,goto Q 18 ) ? Yes ? No 3) Please divide 100 points among the following characteristics so that the division reflects relative importance of each attribute to you, in selection of a health food drink. It Provides Nutrition Don’t like plain milk Doctor recommended it Brand name Your favorite Actor/Sportsman advertises for it It’s Tasty TOTAL
100
4) Which brand have you been buying since the last six months?” ? Horlicks ? Boost Bournvita ? Complan ? Others, Please Specify 5) This brand has been suggested to you by: ? Retailer above ? Doctor ? Your Kid ? Friends
? Milo
? None of the
6) What capacity pack do you generally buy? ? 200 g bottle ? 500 g bottle
? 1 kg bottle
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? ? ?
200 g jar 200 g refill pack Sachets
? 500 g jar ? 500 g refill pack
? 1 kg jar ? 1 kg refill pack
7) Which flavour do you generally buy? ? Natural ? Strawberry ? Mango ? Chocolate ? Others
? Banana ? Vanilla
8) How many new flavours have you tried in the last 6 months? ? None ?1 ?2 ?3 9) How often do you consume health food drinks? ? Once a day ? Once in 2 days ? Twice a day ? Once a week
?4
?5
? Rarely
10) How many scoops of powder do you use per serving? ? 1 spoon ? 2 spoons ? More then that_________ 11) When do you consume health food drink? ? Morning(breakfast) ? Afternoon ? Evening (breakfast ) ? Night (Before sleeping)
12) From where do you buy Heath food drinks ? Kirana/general Store ? Petrol Pump Outlets ? Super Market ? Online Shopping ? Medical Store ? Others, Specify______________ 13) Please divide 100 points among the following characteristics so that the division reflects relative importance of each attribute to you, in selection of a health food drink. Taste/Flavour Nutritional value Price Brand name Package attractiveness Free gifts/ Discounts TOTAL 100 14) Rate the following brands on the given attributes( 1-least 5- maximum) Bournvita Boost Complan Horlicks Milo Taste / Flavour ___ ___ ___ ___ ___ Nutritional / Energy level ___ ___ ___ ___ ___ Price/Affordability ___ ___ ___ ___ ___ Brand Name ___ ___ ___ ___ ___ Package attractiveness ___ ___ ___ ___ ___ Free gifts/ Discounts ___ ___ ___ ___ ___
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15) How much do you spend on health food drink per month? ? Rs 50-100 ? Rs 100-150 ? Rs 150-200 ? Rs 200-250 ? Rs 250-300 ? Rs 300+ 16) Have you changed your brand in the last 6 months ?( If no, goto Q 18) ? Yes ? No 17) If Yes, Why? ? New Flavour ? Cheaper option ? Other, Please specify 18) Please ‘tick’ appropriate box ? Strongly Agree “Health food drinks is meant for KIDS” “Health food drinks is meant for SICK people” “Health food drinks are FUN to have ” “ I NEED health food drink because I DON’T have a balanced diet everyday” “Health food drinks are meant for convalescent mothers” “Health Food Drinks Are expensive “ “I am already healthy and don’t need health food drinks” “I am already healthy and don’t need health food drinks” “Health food Drinks are only For health conscious people” “ I don’t drink milk because its fattening” ? ? ? ? ? Free gift/Discount ? Recommended by someone
? Agree
? Neutral ? ? ? ? ? ? ? ?
? Disagree ?Strongly Disagree ? ? ? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
? ? ? ? ? ?
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“Bournvita will make my child more confident” “Health food drinks is meant only for SPORTSMEN” “I will buy Health Food Drink if offered in a sachet “Claims made in the advertisements of Health Food Drinks are untrue”
? ?
? ?
? ?
? ?
? ?
? ?
? ? ?
? ? ?
? ? ?
? ? ?
“Health Food Drinks are useless” ?
19) What comes to your mind when you hear the word “Health Food Drink” Nutritious food supplement Just Flavored/Tasty Milk Alternative to FOOD NONE of the above 20) What comes to your mind when you hear the word “Bournvita” ___________________________________________________________________________ ______________________________________________________________ 21) I think people who drink health food drinks are ___________________________________________________________________________ _________________________________________________________ PERSONAL INFORMATION Name: _________________ Age: __________________ Marital Status: _________ Occupation: ____________ Gender: ______________ Area: ________________ Educational Qualification: __________ No of Members in Family: _________
MONTHLY HOUSEHOLD INCOME
? ?
Upto Rs 15,000 Rs 15,000 – 30,000
? Rs 30,000-45,000 ? Rs 45,000 -60000
? 60000-75000 ? 75000+
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doc_986005074.doc