Executive Summary
The objective of this report is to conduct a market survey of the potential customer_base for the new line of flavoured water that Britvic drinks is about to introduce. The report summarises both the primary research and the secondary research that was conducted to better understand the market and the customer sentiment and readiness for a product such as this. The primary research was conducted with the help of a questionnaire designed for this specific purpose. The results of the research indicate that the timing is highly suitable for a product such as flavoured water to be introduced in the market, because more and more customers are differentiating between beverages on the basis of how healthy the ingredients are. The target market for flavoured water is comprised of consumers who are beginning to adopt a heathier lifestyle so the best approach for Britvic would be to draw attention to the nutritious and healthy ingredients that the drink is composed of. The emphasis needs to be on the fact that the drink allows customers to cut down on their calorie intake while not compromising on taste.
Introduction
Britvic Drinks is a beverage company operating mainly in the United Kingdom. The strengths of the company exist in the fruit juice category, but it has recently started to look towards expanding into the flavoured water market. This expansion being a type of related product diversification should not be operationally very difficult for the company. The managerial expertise and brand name that Britvic has earned for itself in the fruit juice market can be easily transferred to the flavoured water market. This report investigates whether there exists a significant market for flavoured water in the United Kingdom and presents suggestions as to how Britvic Drinks should proceed with this new line of business. An important decision such as this one requires considerable deliberation and planning, therefore conducting a market research is an optimal place to start. Flavoured water is an ideal compromise for consumers who cannot decide between plain water and fruit juices. It gives consumers, especially the more health conscious ones, a healthy product with which to quench their thirst. Consumers now do not have to settle for one option or the other but can choose both in the form of the product known as flavoured water.
Research Objectives
1. Determine the market readiness
To determine the market potential of flavoured water among consumers of soft drinks.
Justification
Flavored and functional water are emerging as healthy alternatives in the ready-to-drink market for consumers who refrain from consuming carbonated or artificial flavored drinks due to growing health concerns. Increasing obesity rate, rising aging population and increasing #urbanization are the major growth #drivers for the flavored and functional water market. Flavored water is a category of bottled mineral, spring or purified water containing flavors. Functional water is a derivative of flavored water with added functional ingredients such as botanicals, vitamins, minerals and oxygen.
Common flavors in the flavored and functional water market are orange, apple, cherry, lemon and peach. Major growth challenges for the industry include threat of substitutes and increasing campaign against packaging bottles. Emerging markets such as countries in Asia, Latin America and the Middle East are witnessing rising urbanization and increasing disposable income, which act as an opportunity for the flavored and functional water. Increasing urbanization has increased the awareness levels of the consumer regarding the products that help in their wellbeing. The increasing income levels have also enabled the consumers to spend on premium products thus providing great opportunity fo`r the market players to focus in these markets. The U.S., Germany, France, Italy and Japan were the top markets for flavored and functional water in 2012. Asia Pacific is emerging as a strong market registering double-digit growth in 2012. Hence forth it is important to probe the question in terms of UK market.
2. Identify the factors which influence buying behavior
To identify the factors affecting the consumers to purchase a certain kind of a soft drink over another.
Justification
The soft drink or beverage market is expansive, and consumers regularly consume drinks to satisfy their basic need. Since water/beverage is a vital part of consumer life hence consumption is readily increased. However the recent findings have suggested that there is a growing concern of health and safety. Furthermore, this concern goes a long way #organic or health conscious choices. Already explained that rising obesity is a growing concern hence it is critical to research research and find what the facts that are impact consumer purchase behavior in making the choice for the brand or type of beverage consumed. 3. Important product attributes To analyze attributes of flavoured water according to changing consumer trends and preferences to fully strategies it marketing approach. Justification Understanding consumer behavior and “knowing customers” is not simple. Customers may say one thing but do another. They can get influenced and change their mind the last minute. Or their needs or wants change from time to time. Consumer buying behavior refers to the buying behavior of final consumers- individuals and households who buy goods and services for personal #consumption. The decision making process can be influenced, this highlights the facts to tailor the marketing strategies accordingly to approach changing consumer behavior in a more organized manner.
B) Methodology
The report draws its conclusions from both kinds of market research; primary and secondary. Primary research is basically research that is being conducted for the first time, unique to the researcher and based upon raw data (Smith, 2015). Primary research is conducted with the help of surveys, interviews, observations and other similar methods. Whereas secondary #research is the analysis and interpretation of material already published, usually the inferences of some other primary researcher. Secondary research is mostly conducted through a review of the existing literature including but not limited to articles, journals, newspapers and books, regarding the subject matter (Heaton, 2008). The report uses questionnaires as a tool of primary research and includes a discussion of relevant literature.
Quantitative Research Method
A comparison was carried out among qualitative and quantitative research methods to select the either one of them the following table shows the comparison.
Qualitative Methods Vs Quantitative Methods
- Methods include
- In-depth interviews Vs Empirical Data
- Focus groups Vs Published data sets
- Reviews of documents Vs Financial Sheet
- Qualitative is subjective
- It defines a problem or condition from the point of view of those experiencing it more
- It is used primarily inductive process to formulate theory or hypotheses.
- Text-based
- More in-depth information on a few cases
- No statistical tests
- Semi-structured or Unstructured response options
- Can be reliable and valid : largely depends on rigor and skill of the researcher
- Time expenditure lighter on the planning end and heavier during the analysis phase
- Less generalisable
- Quantitative is objective
- It provides observed effects (interpreted by researchers) of a program on a problem or condition.
- It is used Primarily deductive process to test constructs, pre-specified concepts, and hypotheses that make up a theory.
- Number-based
- Less in-depth but more breadth of information across a greater number of cases
- Statistical tests are used for analysis
- Fixed response options
- Can be reliable and valid : largely depends on the instrument used or measurement device
- Time expenditure heavier on the planning phase and lighter on the analysis phase
- More generalisable
Tool for Quantitative Research
Questionnaires were used as a tool for primary research in this study, as this is one of the most objective tools of research available and provides data that is quite easy to quantify and subsequently to perform analysis on. Questions were crafted to achieve the specific objectives outlined above and responses were gathered from beverage consumers in the United Kingdom through online dissemination and receipt of the questionnaires, making the data primary in nature.
Building Questionnaire
Appendix A contains the questionnaire used for this purpose. The questionnaire has two parts. The first part asks the respondents general questions about their choice of drink, occasion of consumption and purchase situation, among others. Two kinds of sources were used while developing the questionnaires for the study i.e. earlier used questionnaires and the literature. There were two sections of the questionnaire used for probing the research questions.
Section one was developed to gather information regarding demographic of the participants including ages, gender, for better understanding of background of the participants which helped in the test of different variables. Part two of the questionnaire contains specific statements about flavoured water and asks the respondents to rate their level of agreement or disagreement to the statement. For this purpose, 9 possible items were include where each item was a statement was designed to get response on a five-point Likert scale.
Sample Selection and Size
The population for this study included the average beverage consumers of the United Kingdom they were total 1000 known beverage consumers. Furthermore, care was taken to select specifically those who are most likely to be independent in their choice of beverage and make the purchase themselves. The form was sent to 230 individuals residing in the United Kingdom.
Sampling technique
Random sampling technique was applied to select the sample for quantitative research from target population consumer of #beverages in UK. This technique was used to ensure equal chance of selection for all the population of UK and was arranged by assigning a number to each known consuemr. Then, table of random numbers was used to get random numbers from 1 to 500 to select 230 non-duplicated numbers. Names and numbers of all the selected participants were recorded on a master sheet. The technique was applied for follow up purposes in case of its requirement. Thus, the researcher was able to identify the responses of the respondents.
Secondary Research
It has been found that people are showing an increasing interest in pursuing healthy lifestyles. Rational, informed consumers around the globe have started to inject more nutrition into their diets and have decreased the intake of food products that are known to be high in sugar, with the alarming rate that obesity has developed into a major problem (De Onis, Blössner, & Borghi, 2010). This has strongly influenced the sales within the beverage sector, as many consumers have switched to bottled water and diet colas, foregoing the more harmful sugary drinks. So there exists a gap in the market that can be filled by a product with a calorie content as close to drinking water as possible and a flavouring to match the taste of fruit juices or carbonated sodas.
The availability of flavoured water is increasing in vending machines (Adachi-Mejia et al., 2013), which could be an indication of greater consumer interest in this particular product. The report also shows that vending machines are a viable alternative as a medium to reach a large number of the consumers and penetrate the market. Another report researching the nutritional value of meals provided in school cafeterias revealed that schools across England do offer the option of flavoured water alongside the other fizzy drinks to children of secondary school level (Gould, Russell, & Barker, 2006).
Although it remained undetermined whether flavoured water has a higher nutritional value than other carbonated beverages. But one article claims that flavoured water is as acidic as or only slightly less acidic than other carbonated soft drinks and hence the health benefits flavoured water is proclaimed to contain may be false or are largely exaggerated (Brown, Smith, Shaw, Parry, & Smith, 2007). This greatly depends on the ingredients and it varies from brand to brand along with the nutritional value. Practical consumers with sound judgment can differentiate between flavoured water that is good for them and that which is as detrimental to their health as some sodas with their high sugar content.
One study found that drinks such as flavoured water have important implications for athletes and physically active individuals as well. Eight healthy active male participants were selected for this trial, and it was learnt that when the participants ingested flavoured water after a rigorous workout, it not only restored their blood glucose level to normal but also improved their performance in subsequent workouts (Stephens, Roig, Armstrong, & Greenhaff, 2008). And this effect was unanimous across all research participants. Therefore, at least for the physically active and athletic consumers flavoured water is a desirable choice among beverages. So until more is known about the health effects of flavoured water that is already on the market, it is safe to conclude that the sentiment towards flavoured water is mostly positive, with most of the general public, if not the researchers, believing it to be much safer to consume than other sugary drinks.
C) Theory and Literature Review
Consumer Behavior
Consumer behavior is defined as the behavior that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs. Consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluation on future, and how they dispose of it. In another words, consumer behavior can be define as the behavior of individuals in regards to acquiring, using, and disposing of products, services, ideas or experiences. Consumer behavior also includes the acquisition and use of information. Thus, communication with consumers and receiving feedback for them is a crucial part of consumer behavior which is of great interest to marketers.
Colour and Flavour Rule Consumer Preferences
Donnelly (1995) said intensity of colour and the flavours are the key drivers behind consumer acceptance of soft drinks. But packaging and labelling are not as important for winning over consumers, according to findings published in the journal Food Quality and Preference, The study involved consumers at different stages of development and highlights the importance of adopting a “sensory marketing approach,” said the researchers from French research organisation Adriant, the University of Rennes. “Companies need to continuously innovate to maintain market leadership,” wrote the researchers. “When the market is overloaded the challenge consists in creating innovative products able to attract and satisfy consumers.”
“This experiment showed the feasibility of the proposed multi-sensory design method based on mixed qualitative and quantitative approaches.” The study also demonstrates the importance of flavour and colour selection for new products. The global flavours market was been valued at some US$18bn in 2006 (Business Insights). Meanwhile, the value of the international colourings market was estimated at around $1.15bn in 2010, up 2.5% from $1.07bn in 2007, according to Leatherhead Food International (LFI). Natural colours now make up 31 per cent of the colourings market, compared with 40 per cent for synthetics, according to LFI.
Sense of consumers
Stephen Daniells (2008) said these four factors were identified for the formulation: four colour intensities), three flavourings, two label types (soft versus hard), and two pack sizes (standard versus oversize). By using both quantitative (hedonic testing) and qualitative (focus groups) approaches, the researchers found that “the main factors which drive consumer preference for this concept are colour intensity and flavouring”. Indeed, colour intensity accounted for 43% and flavour 32% of the consumers’ overall liking.
“Pack size and label type are taken into account by the consumer to a lesser extent,” they added. “This methodology of a qualitative screening associated to a conjoint analysis on relevant sensory attributes has shown good performances to fit consumers’ expectation: it has now to be reproduced, as every brand, concept and product is a unique combination designed for a specific consumer group,” concluded the researchers.
Taste or Health
Beverly J. Tepper (1998) examined the relative contributions of taste and health considerations on consumer liking and purchase intent of cola drinks. Eight types of commercial cola drinks were evaluated by 305 adult #consumers who also completed a brief questionnaire on soft drink consumption habits. Data were analyzed using factor analysis. Results revealed that purchase intent of cola drinks was strongly related to degree of liking and to several key sensory attributes including saltiness, drinks flavor and greasiness.
These variables emerged as the first factor in the analysis, suggesting that consumers perceive these characteristics as being most important in their choice of cola drinks. Second described a health dimension and was related to respondents’ attitudes toward fat in the diet. Third factor comprised two remaining sensory attributes (color and crunchiness), which apparently were of minor importance to the respondents. These data suggest that in spite of current concern about reducing dietary fat, health remains secondary to taste in the selection of cola drinks for consumers in this population.
D). Data Analysis
The responses generated through the questionnaire will have to first be reviewed to ensure that only those responses are being included in the research that are complete and have been answered properly. The responses are then transcribed and input into a data file to facilitate analysis with the aid of software such as Microsoft Excel. The tables below display what the responses of the consumers were and give some indication of the success that the product will realize when it is introduced in the market.
Conducting Data Analysis
Pilot Testing the Questionnaire
In this study a Pilot study was conducted to improve the wording of questions and also make understand the ambiguous points of the #questionnaire to make it easy for respondents. It also helps the clarity of data, layout, instructions and suitability of questions for respondents for closed questions. According Green, Camilli, and Elmore (2012) Pilot test can be conducted on colleagues and friends. If there are minor changes, then research should be continued, otherwise, another pilot study should be arranged and evaluated. Hence according to the phenomenon discussed a Pilot study was conducted on a closed group.
Conducting Pilot
Study Pilot study was conducted with 6 participants including female and male participants from the five different social sectors within UK. Fifteen questionnaires (75%) were returned filled. Pilot study helped to evaluate the time duration for completion of one questionnaire was about 15 to 20 minutes. This pilot study added the value to final draft of the questionnaire (appendix A) and helped to remove difficulties in response to the questionnaire for participants. It also confirmed the validity and reliability of the survey instrument.
Response Rate
Out of 230 individuals 125 of those people returned their completed questionnaires in time for the analysis.
Quantitative Data Analysis
SPSS version 17 was used to analyse the data. Random questionnaires were checked to ensure accuracy to remove entering mistakes. Suitable statistical tools were used, including descriptive statistics, mean, standard, deviation, independent sample t-test and one-way ANOVA, in order to find a link between the independent and dependent variables with respect to age, gender, and teaching experiences (Kothari, 2011).
Before quantitative data analysis, questionnaire was verified in terms of completeness in as much as there were answers to questions, questions were correctly answered, and they were correctly interpreted. However, answers that were not linked to a question were set aside. The next step in analysis was data reduction, which meant coding the answers to questionnaire items and deciding methods to be taken for contracting or missing values. Data received from completed questionnaires were entered using SPSS (the Statistical Package for Social Science Software). The dataset was saved for any future analysis.
Quantitative data produces useful results if objective of the researcher is to illustrate a large population. As per Kumar and Phrommathed (2005), an instrument is a self-reporting data collection tool which each research participant fills up as an element of a research project. He further added that by the use of the instrument of questionnaire the researcher can obtain information regarding the beliefs, values, thoughts, feelings, attitudes, perceptions, personality, and the behavioural intentions of the respondents.
This section of the study is described in a same fashion to the quantitative research methods. It denotes the kinds of data collected through a survey, the selection of respondents and the moral and administrative steps carried out, the distribution and collection of the questionnaire, and methods of analysis of the data (Saunders, Saunders, Lewis, & Thornhill, 2011).
E) Conclusion and Recommendation
Conclusion
It is evident from the review of articles and researches related to this theme that with recent advances in health sciences, the awareness of consumers, especially those living in urban areas, has increased and most consumers have become more selective regarding the food that they intake. In this conscious consumption atmosphere where the target market differentiates between healthy and unhealthy food options, the timing is ripe for the introduction of flavoured water which is perceived as more nutritious and less harmful than most other soft drinks that are high in sugar. The primary research via online questionnaires also indicated that a considerable portion of the representative sample considered the health benefits of beverages at the time of purchase and consumption, and thus their purchase behavior would be influenced by the introduction of a delicious, healthy new drink in the market.
Recommendations
If the nutritional value of Britvic flavoured water are appropriately marketed then it is highly probable that the company will be able to generate and sustain a sizable customer base. It is important that the drink is differentiated on the basis of the health advantages it provides while also containing the flavour that normal drinking water does not have. Suitable channels should be adopted for the distribution of the flavoured water to ensure that the product is within the reach of the target market. To this end, if the flavoured water is made available in vending machines of offices and college dormitories, cafes and restaurants frequented by the younger population, and supermarkets or convenience stores where such items are usually purchased from then the product will have high chances of positively influencing the consumer purchase decision.
F). Limitations
1. The reseach sample was chosen 230 which is not adequate for a complete analysis of consumer behavior for a specific product. Hence this presents limitations of fully generalizable facts.
2. Even with considerable measure people do not expose there real intentions and are motivated by personal bias that restricts the research finding.
3. Content Validity was a challenge since populace was motivated by slang language that created a significant barrier in successful administration of this research.
References
Adachi-Mejia, A., Longacre, M., Skatrud-Mickelson, M., Li, Z., Purvis, L., Titus, L., . . . Dalton, M. (2013). Variation in access to sugar-sweetened beverages in vending machines across rural, town and urban high schools. Public health, 127(5), 485-491.
Brown, C. J., Smith, G., Shaw, L., Parry, J., & Smith, A. J. (2007). The erosive potential of flavoured sparkling water drinks. International Journal of Paediatric Dentistry, 17(2), 86-91.
De Onis, M., Blössner, M., & Borghi, E. (2010). Global prevalence and trends of overweight and obesity among preschool children. The American journal of clinical nutrition, 92(5), 1257-1264.
Gould, R., Russell, J., & Barker, M. E. (2006). School lunch menus and 11 to 12 year old children’s food choice in three secondary schools in England—are the nutritional standards being met? Appetite, 46(1), 86-92.
Green, J. L., Camilli, G., & Elmore, P. B. (2012). Handbook of complementary methods in education research: Routledge.
Heaton, J. (2008). Secondary analysis of qualitative data: An overview. Historical Social Research/Historische Sozialforschung, 33-45.
Kothari, C. R. (2011). Research methodology: methods and techniques: New Age International.
Kumar, S., & Phrommathed, P. (2005). Research methodology: Springer.
Saunders, M. N. K., Saunders, M., Lewis, P., & Thornhill, A. (2011). Research methods for business students, 5/e: Pearson Education India.
Smith, J. A. (2015). Qualitative psychology: A practical guide to research methods: Sage.
Stephens, F. B., Roig, M., Armstrong, G., & Greenhaff, P. L. (2008). Post-exercise ingestion of a unique, high molecular weight glucose polymer solution improves performance during a subsequent bout of cycling exercise. Journal of sports sciences, 26(2), 149-154.
Appendix A: Questionnaire
Market Research for Flavoured Water
Dear Sir/ Madam,
We are conducting a research regarding the market acceptance and readiness for flavoured water. With this questionnaire we hope to identify the major factors contributing to the decision to consume flavoured water. The information obtained from this survey will be kept confidential and be used only for research purposes.
Thank you for participating in our survey. Your feedback is extremely important.
Personal Details
Name (optional): __________________________________ Age: __________
Gender: ______________ Occupation: _____________________________
PART – I
1. When choosing a beverage, my main concern is its:
a. Price
b. Health benefits
c. Taste
d. Brand
e. Refreshment value
f. Other (Please specify): ______________________
2. Where do you usually purchase your beverages from:
a. Vending machines
b. Grocery stores
c. Supermarkets
d. Restaurants
e. Other (Please specify): ______________________
3. My beverage of choice is:
a. Water (still or sparkling)
b. Tea or coffee
c. Fruit juice (any flavor)
d. Carbonated drinks
e. Alcoholic drinks
f. Flavoured water
g. Other (Please specify): ______________________
4. How often do you consume flavoured water?
a. Daily
b. A couple of times a week
c. A couple of times a month
d. Never
5. How health conscious are you?
a. Extremely
b. Very
c. Somewhat
d. Not at all
6. What do you think is the most effective form of advertisement for a beverage?
a. Television commercials
b. Online advertising (Social media, Official website, etc.)
c. Billboards
d. Print advertising (Magazines, Newspapers, etc.)
e. Other (Please specify): ______________________
PART – II
For each of the following statements indicate your level of agreement or disagreement.
7. I drink flavoured water as an alternative to water.
a. Strongly agree
b. Agree
c. Neutral
d. Disagree
e. Strongly disagree
8. I have flavoured water along with my meals or at snack times.
a. Strongly agree
b. Agree
c. Neutral
d. Disagree
e. Strongly disagree
9. Flavoured water is good for your health.
a. Strongly agree
b. Agree
c. Neutral
d. Disagree
e. Strongly disagree
