Research Methodology

Research Design

Problem Statement:
Determining the key product attributes to launch a new health beverage in the Indian market.

Information required:
To understand the current market:
- How is the health beverage industry defined?
- What are the kinds of the products available in the market and which segment are they
targeted at?

To understand the customer demand & target segment:

- What are factors/product attributes that drive purchase of beverages in the Indian
market?
- Is there a need gap present in the market? What are the product attributes that
customers expect from such products?
- What are the different customer segments? What are the product awareness levels
(nutritional value, health benefits, etc) and their effect on purchase behaviour?

To understand the viability of a new product launch:

- What is the market potential? How should a new company position itself in the
market?
- What are the different cost drivers that will affect the new product launch?

Research Approach

The research shall be conducted in multiple phases.

Phase I: Secondary Data

 A detailed literature review about the current Indian market scenario, industry, major product
offering and position of the key competitors.

Phase II: Primary Data (Qualitative and Quantitative)

Subsequently, qualitative research will be undertaken to gain further insights in consumer

behaviour and narrow down to a specific problem definition.

Finally, quantitative research will be carried out using survey questionnaire, which will
be conducted in both online and offline modes.

Exploratory research:
- Focus group discussion

- Interviews of current consumers as well potential consumer base

- Interviews of local market players and non-branded retailers would be taken to gain
insight on demand and preferences.

Conclusive research:
This would be conducted through online surveys distributed via mail and social media. A
few surveys would be collected from control groups of daily consumers.

Sampling Distribution:
The samples would be taken from the following different customer segments:

- Location: The availability of products directly affects the consumption pattern.

- Age: The purpose of product and its usage may vary amongst different age groups

- Gender: Males and Females have different dietary preferences due to biological
differences which affects the consumption levels.
 - Lifestyle choices:
Research Matrix:
Decision Research Research Questions Sources of information Expected Analysis
Problem Problem Techniques
Determining the To understand the 1. What are the different Primary data: Qualitative Analysis –
key product current health categories of health Consumer Survey, Interviews, Subjective to the data
attributes to beverage market beverages in the market, and FGDs, Expert Interviews available.
launch a new in India. on what parameters are they
health beverage in differentiated? Secondary data: Literature
the Indian market. 2. What are the existing Review, Trade publications,
brands in the market, and Library Resources,
what are their market shares? Intelligence Reports
What are their strengths and
weaknesses?
To understand 1. What kind of health Primary data: Regression Analysis,
consumer buying beverages does the consumer FGDs, Hypotheses testing
behaviour towards buy with what frequency and Interviews, Consumer Survey
health beverages. purpose?
2. How often does the Secondary data:
consumer change the product Literature review
he/she is using and reasons
for the change?
3. Are there any additional
attributes that the consumers
want?
What are the key 1.What are the attributes of Primary data: Consumer Factor Analysis,
attributes that the beverage that drive the survey, FGDs, Interviews, Regression Analysis,
drive the purchase? Expert interviews Hypotheses Testing
purchase? 2. What is the relative
importance of different Secondary data: Literature
attributes? review, Trade publications,
3. What are the consumer Intelligence reports, Library
preferences for size, price, resources
packaging, etc.?
Is it feasible to 1. What are the different Primary data: Expert Interview Cost-Benefit Analysis
launch the costs to be considered? Secondary data:
product? 2. What is the expected Industry analysis, Library
demand in the market? resources
Primary Data Research

Insights from Literature Review

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Primary Data Collection

Quantitative Research

In order to understand more about the health drink market and its consumers we conducted an
extensive qualitative research. This research involved a qualitative survey questionnaire, one-
on-one personal interviews and focus group discussions. Through this we tried to derive
insights on the factors/attributes that customers consider while fulfilling a purchase.

Qualitative Survey Questionnaire

This questionnaire was built to collect information as decided in the research matrix given in
exhibit 1. It was sent to few people in order to get more clarity towards building our final
questionnaire that is to be used for quantitative research in further stage of this project. We
received a good response of 20 candidates in this. The survey included subjective questions on
the perception of both current and potential consumers. The survey is shown in exhibit 2.

The qualitative survey will be used to improve the final questionnaire in respect of improving
the quality of the survey by reducing redundancy, biases, time required to fill the survey and
additional variables required. The survey for quantitative research shall be improved upon by
all inputs from qualitative survey, interviews and FGDs.
Personal interviews

Five personal interviews were taken, three of consumers (respondents were two students IIM
Ahmedabad campus, one working professional located in tier 1 city), one of the owner of a
restaurant specializing in fruit juices and smoothies (MIY Bistro at Ahmedabad) and one of the
owner of a road side juice shop. The detailed transcript of these interviews is shown in exhibit
3.

Focused group discussion

Two FGDs were undertaken; one from frequent consumers of healthy drinks and the other from
users who don’t consume healthy drinks.

Personal interviews

Consumers:

The interviews gave us good insight in the customer behavior and market trends. The
consumers have become more specific in their demand from the beverages. Customer insights
on the products are driven by the way they are marketed and presented to them. The customers
want to know how can the beverages help them supplement their dietary needs. There are
majorly 5 factors that a customer considers when he/she buys a healthy drink. First and the
most important factor is composition of the drink (if the drink is fruit based or milk based, etc).
Second is the ease of consumption; customers are majorly looking for on-the-go drinks.
Subsequently, the preservatives, shelf life and visibility in the market acts as major forces
driving the purchase. All the respondents agreed that they have become more conscious, as
compared to 5-years ago, towards the drinks they are consuming due to the increase in
awareness regarding the benefits. Also, it was found that the dissatisfaction among current
consumers is mostly because of lack of a variety of options available that suits their needs and
the fear of added preservatives. In the options available, fresh juices from local juice shops and
the products offering similar benefits (organic, fresh, no preservatives and sugar) are perceived
to be healthy. The limitations with such options are availability and price.

Sellers:

These interviews gave us insights on how the market trends affect the sellers side of the market.
The restaurant (MIY) faces major variability in demand due to seasonal changes. The general
consumption of fruits juices and smoothies increases during the summer. This tells us that a
major proportion of the demand is still driven by thirst-quenchers attitude instead of the health-
seeking attitude that the restaurant is primarily targeting. Both the sellers see a higher demand
in the morning and in the evening. This tells us that the healthy drinks option is being utilized
as a substitute for breakfast and evening snack and is not popular as a complement to the lunch
and dinner (unlike other soft beverages). Both the shop service the corporate and educational
areas as the demand in residential complexes is low.

Focused group discussions

Two FGDs were conducted with students of IIMA. First with regular consumers (once a two
days) of healthy drinks and second with non- regular (less than once a week) consumers of
healthy drinks.

FGD 1: 8 panelists

The panel consisted of regular consumers of healthy drinks. They were both males and
females, living in Tier II cities pursuing their postgraduate studies. They were not informed
about the agenda of the discussion and were promoted to answer the following questions in no
particular order.

1. Which drink according to you should be classified as a health drink?

Further questions were posed by the moderator on the basis of the discussion.

Trust: Currently, all users are regular consumers of the fruit based drinks or milk based drinks.
They are loyal to certain form of consumption such as buying juice from local vendors as they
can see the juice being made in front of them or buying milk and adding supplements to it.
They do not trust the brands that position themselves as 100% real as due to the apparent taste
difference and extended shelf life which gives a perception of some added components.

Fresh: is the most important attribute for all the users. They expressed their need for it in
different ways such as using trusted brands and distribution channels. Fresh is also used to
describe all milk products consumed with supplements. The shelf life and freshness of the drink
is based on the base being used and not on the supplement being added.

Price: is a major factor when the drinks are being considered since it forms a daily part of their
consumption. For a single serving of fresh juice, they are willing to shell out Rs 30-50. Though,
they are selectively willing to attach a premium to these prices and pay more for more brand
trust, freshness and regularity of service. For example, for a subscription of a juice service they
are willing to shell Rs 80/serving.

The taste & colour of the product was considered important by most of them. Since they are
accustomed to certain taste of the base (milk, fruit, vegetable etc) they attribute freshness and
quality to the taste of the product.

Packaging is a hygiene factors. Tetra packs and other safe material that keeps the freshness
intact and promotes ease of use is important for standard products such as juice boxes and
flavored milk. They do not like glass and plastic pouches since they are tedious to store and
carry. In local shops or with unbranded products, packaging helps them identify the hygiene
attached to the product.

When probed regarding the possibility of switching to a new brand that promises these key
attributes (freshness, low price, taste etc.) 62.5% of the panel was positive about trying the
product.

FGD 2: 10 panelists

The panel consisted of non-regular consumers of healthy drinks. They were both males and
females, living in Tier II cities pursuing their postgraduate studies.

The non-regular consumers are largely aware about the products available in the market. They
are regular consumers of raw fruits, vegetables, plain milk etc. and have not included the
supplements or juices in regular diet. The reasons for such behavior as identified by them is
the lack of trustable products in the market, lack of hygiene amongst the local options, price of
the products etc. A major percentage of them, engage in other activities and make conscious
efforts to attain a balanced diet. Also, the perceptions of these non-users were based on the
traditional family values they grew up with. As cited by a panelist, turmeric milk was healthiest
for him as his family believed in it. Similarly, simple lemon water is also considered a healthy
compliment to food.

When probed about the lack of trust in the products available, issue of the added preservatives
was a major factor deterring the purchase. The promise of ‘only juice’ was defied when they
read the nutritional fact chart in detail.

For the lack of hygiene, the major concern was the maintenance of basic food grade quality at
the restaurants and other such outlets. They flagged that they have considered buying a juicer
machine to supplement dietary needs if required, though the panel didn’t have a consensus on
the viability of this option.

They were not averse of consuming milk based products but lacked the drive to pursue the
habit regularly due various time constraints and effort required.

The panel also formed a consensus that the current time commitments have deterred them to
think in this direction and the off-shelf products do not service their needs. Every panelist
appreciated the fact that favorable attributes were convenience, shelf life, taste and price.

When probed regarding the possibility of changing consumption behavior if their basic needs
of hygiene and trust were resolved. 80% of the panel was positive about at least increasing the
consumption of healthy drinks to 2-3 times a week.

Highlights from both FGDs:

Participants cited the desire to maintain healthy dietary habits and convenience as the main
drivers for purchasing healthy drinks. Quality remained of the highest priority while choosing
among different brands.

While non- users were deeply concerned about the added preservatives and the truth in the
claims of these drinks being healthy. They were willing to change their behavior if they found
a product that suited their needs. The non-users were not influenced by the marketing/branding
of the products or the recent fads. They majorly based their perceptions on their own research
and understanding of the product. Traditional perception and prevalent family orientations.
Such users cited hygiene and trust in the quality of the product as the major drivers of purchase
for them.

Both users and non-users are willing to purchase a new healthy drink that promises the key
attributes of hygiene, freshness and low prices; provided it has adequate certifications, and is
free of preservatives. If any of the above these criteria are amiss, a purchase shall not be
conducted due to disbelief in the claims.

Quantitative Questionnaire development

Based on the results of the exploratory research and insights from the literature review, a
questionnaire comprising of 12 questions was designed to analyse the consumer’s current
preferences in purchasing a healthy drink and also to analyse the customer gap for the current
product usage. The questionnaire is segmented into the following categories: demography,
brand usage, attributes/factors, size, packaging and pricing related. The questionnaires were
pre-tested and analysed to update it for content and scale to have detailed and unbiased data
analysis.

The objectives of pre-testing were as follows:

 To reformulate or eliminate ambiguous or superfluous questions.

 To determine the sequence of the questions so as to reduce the redundancy.
 To provide material to design the answer categories/ scale for open ended questions.
 To determine whether the questionnaire developed are properly aligned with the
research matrix.
 To find any implicit alternatives that could be included as explicit options.

Our pre-test questionnaire survey was inquisitive in approach to determine the final draft
survey of our study. We selected a mix of male and female users as well as non-users from
students to working professionals. Since the main focus of pre-questionnaire testing was to
alienate unnecessary data projections from the feedback, the survey team consisted of both
known as well as unknown users. These individuals were acquaintances and colleagues of
the group members and personalized feedback via personal interview, e-mail and telephone
were sought.

Demographics of participants for pre-test survey

Participant No. Age Gender Profession Annual Income

1 22 M Student NA

2 27 M Working Professional – 5-10 Lakhs

Tier 1

3 23 M Student NA

4 38 F Working Professional – 10-15 Lakhs

Tier 2

5 42 M Student (ex- NA
professional)
The research instrument is a mix of nominal questions that will be used to mark different
customer group in our data analysis. But, our major emphasis is on the ordinal, ranked order
scaling and likert questions that require the respondents to rank various attribute and perceived
importance factors and select the likelihood of consumption. This will be used further for
meticulous data analysis and form the basis of consumer behaviour. The combined survey will
be used to determine the customer gap, if any, and formulate the suggestions that would be
required.

This data shall be quantitatively used to determine the following:

 Target Customer Segment: Regression shall be used taking the following factors into
consideration in order to identify the target customer segment.
Y= The maximum price the customers are willing to pay for one serving of their
preferred health drink.
Xi= The variables that shall define the different customer segments are: Age, gender,
Income, Place of Residence.
New Product Positioning: What are the product attributes that matter to the target
segment and by how much? Which size and packaging is most appealing to the target
segment? What is the maximum price that a significant portion of the target segment
is willing to pay for the product?

The questionnaire consists of 12 questions:

 Section 1 – Demographics
This section comprises of questions related to demographic. The initial questions were
kept simple and demography based questions to get the responded in the flow of
answering the questions.
 Section 2 – Attributes
In this part we are trying to find out what are the factors/attributes that drive consumer
to purchase a health drink. This was done through ordinal and rank order scale to
identify the drinks (identified in the secondary survey) that the consumer thinks are
healthy and the specific attributes they consider before making the final purchase.
 Section 3 - Current brand image
In this section we try to find out the perception of the consumer towards the popular
brands servicing the health drinks market. It helps us to find out what factors make
people choose a brand.
  Section 4 – Price, Shelf Life and Packaging
In this section we try to find out the how these external factors such as price, packaging
and shelf life affect the purchase and what are the desirable factors It helps us to find
out what factors make people choose a brand.

Findings from the Pre-Test Questionnaire

There were several questions in pre-test questionnaire that have been improved upon detection
using the sample responses and direct feedback from the respondents which were informed of
the pre-testing objective after the survey. We have mentioned section- wise, and the subsequent
changes that have been made after identification of the discrepancy in the information sought
and the information received. Also, if a type of error was found in the overall questionnaire,
they have been mentioned separately at the end:

Section 1
1. Demographic details frontloaded- Did not cause the response fatigue (as expected) as
the length of the questionnaire of kept short and the respondents answered all the
questions as thoughtfully as the initial questions.
2. The respondents were not comfortable sharing the details of their income and
majority of respondents were students who will be entering the work force soon. This
resulted in skewed data that was not representative of the target segment. Hence, the
income question was deemed redundant and eliminated from the final questionnaire.
3. In a question regarding the place of residence, the respondents did not understand the
meaning of Tier 1, 2 and 3 cities. Hence examples of these cities were added in the final
questionnaire.

Section 2

1. The rank order scale format was changed to make it more user friendly. Dragging option
was introduced instead of selecting ranks from a drop down.

Section 3
1. The brand perception was worded in a way that respondents were rating the brand
instead of the product that these brands produce. The question was detailed out to make
it more explanatory.