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Methodology Product Description Echoed across the streets of Isla Vista, the Hydro Flask is almost ubiquitous. Still, the insulated water bottle can cost upwards of fifty dollars when it includes customizable lids and colors. Despite the price tag, Hydro Flask has been able to convince teenagers and young adults around the world that they cannot live without it. Understanding what aspects of this product increase consumers' willingness to pay will be critical for future product and marketing strategies. Survey Methodology The four features of the Hydro Flask analyzed in this report are price, insulation, lid, and color. The respondent was then asked how likely they were to purchase a water bottle with different combinations of these features on a scale of 0-100, where 0 represented never purchasing the item and 100 represented immediately purchasing it. For the price, the presented bottle cost either $20 or $50. The bottle was either insulated, representing the Hydro Flask bottle, or non-insulated. The bottle then either included a straw lid, which is Hydro Flask’s most popular lid alternative, or its regular wide-mouth lid (Topko, 2018). Finally, the respondent rated a color-customizable bottle compared to a plain black bottle. Ultimately, there were 16 possible combinations of water bottle features that the respondent rated (Appendix A). Respondent Description The respondent, Emily Hansen, was a 21-year-old Sociology and Communication student at UC Santa Barbara. She is very active and spends a lot of time outdoors since she is a big surfer. Recently, Emily got a big dent in her water bottle. The water bottle was already a few years old, so Emily is looking to buy a new one. She is within Hydro Flask’s typical demographic as an active young adult, and she is also in the market for a new water bottle. Surveying an individual like Emily, who is representative of prospective Hydro Flask customers, will reveal aspects of the product that are most appealing. Conjoint Analysis Developed from the multi-attribute attitude model, a conjoint analysis helps determine how much value a consumer gets from each feature of a product (Hamilton, 2023). In this conjoint analysis, the ideal features ($20, insulated, straw lid, and color customization) were denoted by a 1 and the non-ideal features ($50, non-insulated, regular lid, black) were denoted by a 0. A linear regression was then conducted to determine the coefficients that showed how each feature caused variance in the preferences of the respondent (Appendix B). Ultimately, it was discovered that insulation, straw lids, and color customization were all positively correlated with a preference for a water bottle, with insulation having the strongest correlation. Patworths The Patworths numbers were generated by seeing what fraction of the overall preference correlations each feature represented to show how important each feature was to the respondent (Appendix C). This analysis revealed a series of interesting findings. The respondent preferred a water bottle with hot and cold insulation over a bottle with no insulation, which accounted for 43% of the variance in their preference ratings. This was more important to the respondent than any other feature, including price. The respondent was more likely to choose a water bottle that was more expensive but had hot and cold insulation over a cheaper water bottle that was not insulated. The next feature that accounted for the most variation was price, which accounted for 26% of the variance in the respondent’s preference ratings. The last two features, lid, and color accounted for a lesser share of the variance in the respondent’s preference ratings. The respondent preferred a straw lid which accounted for 18% of the variance in her preferences, and

she also preferred choosing the color of her water bottle which accounted for 12% of the variance in her preference ratings. The most important feature to the respondent when choosing a water bottle was insulation, an affordance she was willing to pay more for. Willingness To Pay To understand how much the respondents monetarily valued different features, it was worth calculating their willingness to pay derived from their utility function (Hamilton, 2023). The willingness to pay analysis (Appendix D) led to a $1.15 willingness to pay for each util increase. This number was rounded down, which is why the willingness to pay for a cheaper water bottle was $29.9 as opposed to the expected $30. The willingness to pay for insulation was $49.45, the willingness to pay for a straw lid, as opposed to a regular lid, was $20.70, and the willingness to pay for color customization was $13.80. Willingness to pay illustrates the trade-offs between price and different affordances (Hamilton, 2023). When it came to insulation for example, an individual who would be willing to pay $20 for a non-insulated water bottle would be willing to pay upwards of $69.45 for a bottle with hot and cold insulation. Similarly, an individual who would spend $20 on a bottle with a regular lid would spend $40.70 on a bottle with a straw lid and an individual who would be willing to pay $20 for a black water bottle would pay $33.80 for a customizable one. Willingness to pay is therefore a good indicator of how much people value different features and what they are willing to trade off for them. Limitations One major limitation here is that this survey was only conducted with one respondent. While Emily possessed a lot of the characteristics representative of Hydro Flasks’s target audience, future studies should survey a greater number and variety of individuals. These results are likely only generalizable to other college-age women in the market for a new water bottle and not all prospective customers. Another limitation to note is that the range between water bottle prices was unusually large, which may have caused skews in the willingness to pay for different features. Recommendation Insulation was a primary determinant of willingness to purchase a water bottle among the population sampled. Hydro Flask users tend to be active and always on the go, so insulation is likely connected to an ability to have water available on the go while engaging in a variety of pastimes. Fortunately, all of the water bottles Hydro Flask currently offers are already insulated (Hydro Flask). This means they may not need to change their current offering, but it will be important for Hydro Flask to emphasize how insulation makes their price tag worth it through their marketing campaigns. The research in this report demonstrated that young adults who use Hydro Flask value its insulation more than customizable features such as lids and colors. These users are cost-conscious and do not necessarily want to overspend on minor water bottle details, but they simultaneously value insulation and are willing to pay for it. Because its hot and cold insulation feature is something that differentiates Hydro Flask from most other water bottle brands as well as disposable bottles, they can use this advantage to establish brand equity among young consumers. The findings show Hydro Flask does not need to expand to non-insulated offerings because its users value insulation highly. What they may instead want to do is offer separated bundles that include color customization and a wide variety of lids, affordances that are less important to prospects. Even though young adult users did not value these categories as much as insulation, they were still correlated with propensity to purchase, so Hydro Flask can take advantage of this by offering personalized bundles that may even be based on different demographic categories.

References Choosing a Replacement Lid for your Hydro Flask Water Bottle. (2018, May 4). Topko.

https://topoko.net/blogs/stories-info/choosing-a-replacement-lid-for-your-hydro-flask-bot tle

Hamilton, K. (2023, February, 9). Lecture 9: Attitudes. University of California, Santa Barbara.

Hamilton, K. (2023, February, 9). Lecture 10: Persuasion. University of California, Santa Barbara.

Hydro Flask Website. Hydro Flask. https://www.hydroflask.com/

Appendix A Survey Results

Appendix B Conjoint Analysis

Appendix C Patworths

Appendix D Willingness to Pay