Marketing Research Assignment

MOTHER – RESEARCH PROPOSAL

OVERVIEW

Mother is an energy drink produced by The Coca-Cola Company, which is marketed in Australia and New Zealand. Mother is targeted towards young males and includes guarana, ginseng and the Amazon berry acai as key ingredients (Datamonitor 2010). It was formulated and introduced to the market in 2007 to compete with Red Bull and V (Datamonitor 2010). The original Mother formula was largely unsuccessful and after 18 months on the market, the beverage’s formula and packaging were re-vamped following extensive market research (Entertainment Close-Up 2010). The new formula of Mother has been successful and is a natural juice-based drink. A natural focus acted as a point of difference to set Mother apart from Red Bull and V. “By juxtaposing this healthy formulation with tattoo-like designs on the can, the beverage aimed to gain appeal as a natural-based energy drink with attitude” (Datamonitor 2010 pp. 5). However, there is greater scope to emphasise health in a new product extension beyond the ‘all-natural’ claim that is being used at the moment. For example, added vitamins, added minerals, low calorie, low GI or sugar-free claims.

NEED FOR RESEARCH This project assumes that Mother is not performing well relative to competitors. One way to help regain market share may be to launch a new flavour of energy drink as a product extension. “The most popular claims in energy drinks have a more healthy focus, with the top three leading claims of this period being ‘natural’, ‘high in vitamins’ and ‘low in fat’” (Datamonitor, 2010, pp. 2). There is a growing trend towards healthy energy drinks and functional nutritional drinks, which fill a need for consumers (Jacobsen, 2011). “A lot of consumers who are energy drink users show interest in hybrid products like juice-based energy drinks or tea-based energy drinks… so those kinds of products can expand the market beyond what consumers are drinking now” (Jacobsen, 2011). Management needs to decide whether a new product extension that features a healthy point of difference, will meet a need in the energy drink market. By meeting this need, Mother can encourage switch over from competitor brands that may not offer this option, or entice potential energy users into the market, therefore increasing market-share.

MDP Should Coca-Cola introduce a new flavour of Mother energy drink, that has a health focus, to increase market-share?

MRP Do consumers in the target population have positive attitudes towards healthy energy drinks and what aspects of health/nutrition do consumers value most in an energy drink? TARGET POPULATION - The target population for the study will be 15-24 year old consumers

in the Australian domestic market, including energy drink users and potential energy drink

users. This age group has been chosen because “ the 15–24 year old age group purchases

the most energy drinks” (Datamonitor, 2010 pp. 2).

OBJECTIVES

1) To determine if consumers in the target population deem the nutritional value of energy drinks to be important (cognitions).

2) To identify consumers feelings towards healthy energy drinks (affect). 3) To determine consumer’s purchase intention in relation to healthy energy drinks

(conations). 4) To identify the aspects of health and nutrition that these consumers value most in

energy drinks (preferences).

RATIONALE FOR OBJECTIVES The first three objectives aim to determine consumer’s attitudes towards healthy energy drinks. As attitudes are comprised of thoughts, feelings and actions, three separate objectives have been used to measure the totality of consumer attitudes. Knowing consumer attitudes will help managers predict how successful a new healthy formula will be in generating increased sales and market-share and improving Mother’s competitive position. The fourth objective will provide managers with insight into which of the popular marketing ‘health’ claims will be most successful for Mother in the formulation of a new product.

RESEARCH DESIGN

A descriptive research design will be used, as the main purpose of this research is to

generalise about and describe characteristics of the target population (Zikmund et al, 2011).

“Descriptive studies are based on some previous understanding of the nature of the

research problem” and the descriptive research will provide conclusive and accurate

information to justify a course of action (Zikmund et al, 2011, pp. 23). Secondary research

has already uncovered that there is a potential need in the market for energy drinks that

have more of a heath focus. The proposed descriptive research will build on this initial

understanding and provide results that can suggest a course of action for management.

The descriptive research will be based on a communication design format (i.e. a

questionnaire) rather than observation research.

DATA COLLECTION FORM

The data collection form will be a questionnaire. This will provide the researcher with an

inexpensive, quick, accurate and efficient means of assessing population characteristics

(Zikmund et al, 2011).

This will be a cross-sectional study, as the research aims to describe market characteristics

at the current point in time (Zikmund et al, 2011). Therefore respondents will be questioned

only once.

Questions will be undisguised as it is assumed the respondents will be willing to reveal the

information relevant to our marketing research objectives. The undisguised format is

appropriate because the questionnaire will not deal with personal or sensitive topics or

issues that may be threatening to a person’s self-concept.

The questionnaire will use fixed alternative questions, allowing for a high degree of

standardisation to be imposed on the questionnaire (Zikmund et al, 2011). Closed questions

allow the responses to be easily analysed and encoded into quantitative analysis. The closed

questions will incorporate dichotomous, scale questions, a filter question and a checklist

question that uses a numbering system.

The formal questionnaire uses a funnel technique. General questions are asked at the start,

with more detailed and specific questions placed towards the end. There are two reasons

for this. Firstly, the general questions at the beginning will make the respondents feel

relaxed and confident in answering the questionnaire. Secondly, the funnel system

minimises bias, because when the specific questions are placed at the end, they do not

influence the responses given to the general questions.

The formal questionnaire will use a paging layout. The paging layout will have one question

per page, with a status bar at the top of the page indicating how much of the questionnaire

the respondent has completed (this will improve the chances of respondents completing the

entire questionnaire). Respondents will be required to enter an answer before being

allowed to proceed to the next page, as this will avoid skipped questions (i.e. error trapping

using forced answering software).

METHOD OF ADMINISTRATION

The questionnaires will be distributed via electronic interactive media over the internet,

where feedback can be given immediately. This will reduce costs (less handling of paper)

and reduce the time it takes to undertake the research (due to the quick response time and

fast distribution) (Zikmund, 2011).

There is a large proportion of 15-24 year-olds who would never consider consuming energy

drinks and so these consumers will be excluded. The research will instead focus on whether

current or potential energy drink users have a need for a healthier version.

Firstly, a screening questionnaire will be used to compile a database of current and potential

users from the target market (see appendix A). The screening questionnaire will be posted

in the form of an advertisement on a social networking site such as Facebook, where a high

proportion of the users are in the 15-24 year-old age bracket. Participants will be offered

the chance to win an iPhone 4 if they complete the short screening questionnaire. The

responses will then be sorted and the current and potential energy drink users in the 15-24

year-old age bracket (who have given permission to be contacted with a further survey) will

be compiled in a database. This database will become the sampling frame.

A random sample will be chosen from this sampling frame. The Respondents will be emailed

a link to a web address where they can go to complete the survey. The website will keep all

the data entered in a central location. Participants will be offered the opportunity to go into

a draw to win a prize (e.g. Apple iPad) as an incentive for completing this questionnaire.

If the required number of responses is not received, a further random sample will be chosen

from the database and emails will be sent out. This process will continue until the desired

sample size is achieved. A sampling without replacement method will be used to avoid

having respondents complete the questionnaire twice.

The questionnaire will be tested first using a pilot study, to make sure questions are

targeted correctly (Zikmund et al, 2011). The test will involve a small number of respondents

from the database. Once the questionnaire has been finalised, it will be sent out to the

formal sample.

SAMPLING TECHNIQUE

A probability sampling technique will be used to choose respondents from the sampling frame. Probability sampling means that each sampling unit has an equal, non-zero chance of being chosen, and these results can be projected to the population (Zikmund et al, 2011). This research will use simple random sampling, where a random number generator will be used to choose participants from the database. SAMPLE SIZE: The initial screening test will aim to achieve a large response rate. The formal sample will be 300 respondents. This target of 300 has been chosen based on similar academic research exploring consumer preferences (Choi et al 2010). There is a degree of sampling frame error present in this process. Not all current and potential energy drink users will sign up to complete the screening test. This means that our sampling frame may be limited in terms of its representation of the target population.

EVALUATION OF ETHICAL CONSIDERATIONS

Researchers should maintain anonymity of respondents. Maintaining anonymity reduces

respondent anxiety and lessens the fear of losing social status (Joinson, 1999). If a firm

breaches anonymity, this will negatively impact the firm’s reputation, credibility and public

image. “Not only is the respondent the loser, but also the client pays a toll in terms of higher

costs, a damaged reputation, and possible legal actions” (Casey et al, 2001, p. 105).

Research also needs to be undertaken in a non-intrusive way. For example, posting the

questionnaire on Facebook allows the respondent to have the power to accept or decline

the offer to participate.

Another issue is data security. Data gathered via the internet is more vulnerable to attack

from hackers compared to data gathered by paper questionnaires (Fox et al, 2003).

Therefore the database must be secured against hackers and viruses, and personal details

must only be used for the purpose stated on the questionnaire. Details should not be

disclosed to third parties.

Finally, the respondents should be provided with feedback, thanked for their participation and "informed that a summary of the findings will be available at the research web-site in due-course" (Fox et al, 2003, p. 179).

POTENTIAL LIMITATIONS

A range of extraneous variables may act as potential limitations. These are events that are

external to the research but occur at the same time, reducing the level of responses

(Zikmund et al, 2011). These events may include family issues, personal problems, career

issues, health issues or even technical dramas.

The maturation of time may impact the degree of responses collected as respondents could

potentially change their email address following their submission. This would eventuate in

the questionnaire being sent to an incorrect email address, resulting in a lost respondent

(Zikmund et al, 2011).

‘Mortality’ may act as a potential limitation as respondents may be out of the country or

unable to access their email, resulting in the loss of test units (Zikmund et al, 2011).

Due to the questionnaire taking place online, long questions cannot be included as

respondent interest may be lost. Also complex questions cannot be explained once the

questionnaire is sent out.

Research suggests that respondents feel more comfortable answering questions that

include a ‘don’t know’ option (Fox et al, 2003, p. 179). However, as respondents may tick

this option for many responses, this could potentially limit the accuracy of the research.

Budget constraints may also impact the research. Web-based questionnaires are 38%

cheaper than mail surveys and data collection time is much shorter (Schleyer & Forrest,

2000), therefore an online questionnaire is appropriate for a small budget.

A further limitation for web-based questionaries is that internet users may not represent

the entire population. “Those who have web access and those who do not may have

different opinions, and thus the usefulness of web-based questionnaires depends on the

population under study” (Cole, 2005, p. 422). This is an example of coverage error.

Further limitations include poor completion rate of questionnaires, untruthful responses,

people misrepresenting themselves or multiple submissions of the same questionnaire.

TIMELINE

See appendix C.

RATIONALE FOR RESEARCH DESIGN

The research question seeks to define the needs/attitudes of the target population, and provide managers with conclusive results that can be projected to the population (descriptive focus). The research is not looking for in-depth understanding of why these needs/attitudes exist (exploratory focus), and it is not looking to explain the relationship between two variables (causal research). Therefore quantitative analysis in the form of a descriptive research design is appropriate. A questionnaire was used rather than observation because you cannot observe people’s attitudes.

REFERENCES

- Casey, M., Dickson, J. P., Wyckoff, D., & Wynd, W. (2001). Invisible Coding of Survey

Questionnaires. Public Opinion Quarterly, 41(1), 100-112.

- Choi, T., Liu, N., Liu, S., Mak, J., & To, Y. (2010). Fast fashion brand extensions: an empirical

study of consumer preferences. Journal of Brand Management, 17(7), 472

- Cole, T. S. (2005). Comparing Mail and Web-Based Survey Distribution Methods: Results of

Survey to Leisure Travel Retailers. Journal of Travel Research, 43(4), 422-430. doi

10.1177/0047287505274655

- Datamonitor. (2010). Mother energy drink case study. Retrieved 15/09/2011 from http://0-

web.ebscohost.com.library.newcastle.edu.au/ehost/pdfviewer/pdfviewer?vid=3&hid=8&sid

=c9531b5a-46b5-4144-a4ec-5d38f32455e3%40sessionmgr15

- Denscombe, M. (2006). Web-Based Questionnaires and the Mode Effect: An Evaluation

Based on Completion Rates and Data Contents of Near-Identical Questionnaires Delivered in

Different Modes. Social Science Computer Review, 24(2), 246-254. doi:

10.1177/0894439305284522

- Dillman, D. A. (2000). Mail and Internet Surveys: The Tailored Design Method. New York:

John Wiley.

- Entertainment Close-Up. (2010). Research and Markets Offers Report: Functional Drinks in

Australia. Retrieved 15/09/2011 from http://0-

proquest.umi.com.library.newcastle.edu.au/pqdweb?index=4&did=2217384101&SrchMode

=2&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1315891937&cli

entId=29744

- Fox, J., Murray, C., & Warm, A. (2003). Conducting research using web-based questionnaires:

practical, methodological, and ethical considerations. International Journal of Social

Research Methodology, 6(2), 167-180. doi: 10.1080/13645570210142883

- Google Finance (2011). The Coca-Cola Company. Retrieved 19/08/2011, from

http://www.google.com/finance?q=coca-cola#

- Jacobsen, J. (2011). Drinks and shots see energised sales. Beverage Industry, 102(8), 12

- Joinson, A. (1999) Social Responsibility, anonymity, and internet-based questionnaires.

Behaviour Research Methods, Instruments & Computers, 29, 274-279.

- Schleyer, T., & Forrest, J. L. (2000). Methods for the Design and Administration of Web-

Based Surveys. Journal of the American Medical Informatics Association, 7(4), 416-425.

- The Coca-Cola Company. (2011). Products. Retrieved 19/08/2011, from

http://www.thecoca-colacompany.com/brands/index.html

- Zikmund, W. G., Ward, S., Lowe, B., Winzar, H., & Babin, B. J. (2011). Marketing Research.

Cengage Learning Australia Pty Ltd

APPENDIX A – SCREENING TEST NOTE: Italicised writing will not appear in the consumer questionnaire.

INSTRUCTIONS

- Complete this short questionnaire to be in the draw to WIN an Apple iPhone 4!

- Tick the box that best describes you and your preferences.

- The information given in this questionnaire will be stored securely and your personal details

will not be disclosed to third parties.

- Read Coca-Cola Australia’s privacy policy here.

1) Do you drink energy drinks? (identification of current energy drink users)

Yes (go to question 3)

No (go to question 2)

2) Would you consider drinking energy drinks if there was a healthier version available?

(identification of potential energy drink users)

Yes

No

3) I am:

Male

Female

This is required to make sure that when the simple random sample is taken, it is not comprised only of males or

only of females. While the main purchasers of energy drinks in Australia are young adult males (Datamonitor,

2010), a key finding of this research may be that a healthy version will appeal greatly to females and Mother

could therefore expand their market-share by creating a product that appeals to these females.

4) How old are you?

0-14 years old

15-24

25 years or above

5) What is your email address? We require this information so that we can notify you if you win

the prize.

6) Tick the box if you would like to be contacted by Coca-Cola Australia about future

short surveys where you have the chance to win prizes.

Thank you for participating in this questionnaire.

We will contact you in the event that you win the prize.

Those who fit the 15-24 year-old category, who have indicated that they are current energy drink users or who

would consider purchasing a healthy energy drink AND who have given permission to be contacted, will be

chosen for the database.

APPENDIX B – FORMAL QUESTIONNAIRE

STUDY OF CONSUMER PREFERNECES FOR HEALTHY ENERGY DRINKS

STATUS BAR – Indicates the proportion of the survey completed

INSTRUCTIONS

- Complete this short questionnaire to be in the draw to WIN an Apple iPad!

- Tick the box that best describes you and your preferences.

- The information given in this questionnaire will be stored securely and your personal details

will not be disclosed to third parties.

- Read Coca-Cola Australia’s privacy policy here.

(Screening section –Including these questions will enable analysts to track the interest in energy drinks of

potential users compared to current users)

1) Are you:

Male

Female

2) What is your age?

0-14

15-24

25 years or above

3) Do you drink energy drinks?

Yes (go to question 5)

No (go to question 4)

4) Would you drink energy drinks if there was a healthier version available?

Yes

No

(Section specific to answering the research objectives)

5) Indicate your level of agreement with the following statement:

The nutritional value of energy drinks is important to me. (Cognitions)

Strongly Disagree Disagree Neutral Agree Strongly Agree

1 2 3 4 5

6) How do you feel about energy drinks that have healthy formulas? (Affect)

Very negative Negative Neutral Positive Very positive

feelings feelings feelings feelings feelings

1 2 3 4 5

7) How likely is it that you would buy a healthy energy drink? (Conations/purchase intention)

Won’t Probably Neutral Might Will definitely

purchase won’t purchase purchase purchase

1 2 3 4 5

8) Number the boxes from 1 to 10 (with 1 being the feature that is most important to you

when choosing an energy drink, and 10 being the least important feature):

(Consumer preferences: The order of items in this list will be randomised each time via computer programming

so as to avoid bias)

Low sugar

Added vitamins

Added minerals

Low fat

Low glycaemic (low GI)

High antioxidants

High protein

No carbonation (no bubbles)

Low calories

All natural ingredients

OR tick the box here if none of these elements are important to you.

9) How likely is it that you would buy a tea-based energy drink?

Won’t Probably Neutral Might Will definitely

purchase won’t purchase purchase purchase

1 2 3 4 5

10) How likely is it that you would buy a fruit juice-based energy drink?

Won’t Probably Neutral Might Will definitely

purchase won’t purchase purchase purchase

1 2 3 4 5

11) What is your email address? We require this information so that we can notify you if you win

the prize.

Thank you for participating in this questionnaire.

We will contact you in the event that you win the prize.

APPENDIX C - Research Timeline October/November 2011

Task name: Oct- 03

Oct- 10

Oct- 17

Oct- 24

M T W T F S S M T W T F S S M T W T F S S M T W

Undertake secondary research (current consumer needs/market trends)

Set research question and objectives

Determine research design

Data collection methods

Plan method of administration

Determine sampling technique

Research potential limitations

Consideration of ethical issues

Construct questionnaire

Post screening survey

Check screening survey links work

Sort responses and compile database

Conduct pilot study

Evaluate and finalise questionnaire

Task name

Oct- 31

Nov- 07

Nov -14

T F S S M T W T F S S M T W T F S S M T W T F

Create online web link and check it works

Send out formal questionnaire

Monitor incoming submissions of questionnaires

Thank respondents

Encode data into SPSS

Analyse data

Evaluate results, conclude findings

Prepare report

Present findings to relevant stakeholders