Market Research Proposal ‐ PepsiCo
Market Research Proposal ‐ PepsiCo
Is PepsiCo Healthy?
Is PepsiCo Healthy?
Team
Team 5: Ilaria
5: Ilaria Caputo
Caputo Aneesha
Aneesha Duga
Duga Marga
Marga Galmes
Galmes Daria
Daria Ilgen
Ilgen
Jean‐Loup Senski
The proposed research aims to measure the PepsiCo brand’s consumer perception as “healthy” within the North American market and to analyze the results in order to gather data to generate recommendations on the strategic marketing of the company.
The research will survey a sample of 1,000 people in the US different by age, income, location and personal preferences for drinks. The population will be selected randomly by a computer by using the grocery store loyalty programs members as reference. The extent of the research is wide enough to ensure that the survey will give us a framework of the feelings towards the healthy feature of the PepsiCo brands. A questionnaire will be administered to the selected sample over the Internet and the results will be collected and analyzed by a computer. The criteria under which each question of the questionnaire has been conceived cover the main concerns for the company. For example, does the consumer perceive PepsiCo as provider of healthy drinks or not?.
The research also highlights the main possible outcomes of the survey. For each type of result, the research has already identified a strategic direction the company should take.
The research is extensive enough to provide a comprehensive understanding of the brand perception. The accuracy of the research is ensured by the size of the sample, the techniques applied, the different features of the research – which covers both qualitative and quantitative aspects. The internet survey is in fact coupled with a series of focus groups so PepsiCo can gain a real firsthand knowledge of the opinions consumers have about the brand.
The research might suffer typical problems of any research as related to personal bias of the surveyed population. Surveyed people in fact may have issues that can prevent them from answering accurately to the questionnaire and this possibility has been already addressed by designing the questionnaire in the easiest and less embarrassing possible way. The possibility of not being able to reach a customer has also been addressed by setting the computer on the way to select an alternative number to be selected.
Contents
1.
INTRODUCTION
2.
OBJECTIVES
3.
RESEARCH DESIGN
3.1 Sampling Techniques: Qualitative/Quantitative 3.2 Data Collection Method
3.3 Measurement
3.4 Analysis Procedures
4.
EXPECTED RESULTS
4.1 Summary of Secondary Data
4.2 Expected Findings: Primary Research
4.3 Data Organized According to Related Variables 4.4 Findings Implications & Recommendations 4.5 Statistical Significance
5.
RECOMMENDATIONS
6.
CONCLUSION
Appendices
Sources
PepsiCo’s corporate mission is to be the leading global consumer products company with primary focus on convenient foods and beverages (PepsiCo Annual Report, 2010). Due to growing demand from our customers, consumer advocacy organizations and heavy political pressure to add “healthier” snack and beverage products to our portfolio. More recently, Michael Bloomberg, Mayor of New York City, is pushing for a municipal ban on the sale of super-sized sugary drinks to help mitigate the growing obesity rate. Other legislators, including the FDA, are looking at imposing a “soft drink tax” to also help curb consumption of our primary product base. If we seek to achieve our mission, we must consistently measure our brands perception of being healthy to target consumer markets. If we do not, we will fail to meet the growing demand from our customers for new innovative and healthy food and beverage products.
It is the goal of this research proposal to layout a detailed plan of how to measure this perception and reinforce the urgency of ensuring PepsiCo is responding to growing trends for healthier food and beverage alternatives. We will primarily focus our research methods through qualitative marketing research methods to fully divulge customers understanding, awareness and perception of PepsiCo’s food and beverage product lines in relation to what they perceive as “healthy.” Through this assessment and information gathering, we will be able to deduce valuable consumer insight into new and current product offerings, the success of current marketing tactics and the true desire of consumers’ health demands.
3.1 Sampling techniques
The research will be carried out over a selected sample of the population. Since our target are all current Pepsi customers, we cannot perform a random selection. Instead we will frame a selected population using the “loyalty cards” of grocery stores as reference. Those cards in fact represent a powerful marketing tool because of the data that help gathering. We are able to realize if a customer has ever purchased a Pepsi drink and therefore if he or she can be included in the survey population to help Pepsi understand what the perception is among consumers of different age, gender, income and personal preferences in terms of drinks.
Quantitative Research
Once the grocery outlets throughout the US have been decided (4 different chains that all sell Pepsi drinks), the approach used will be the systematic sampling. The population will be represented by 10,000 customers of these 4 chains randomly selected and the sample size will be 1,000. The selection will be performed with a probability method: every tenth person from the population of 10,000 is selected for the sample. Since the selectee will be identified by his/her email address, it will be possible to reach him/her over the email and ask to fill a brief online questionnaire. The computer
1
INTRODUCTION
2
OBJECTIVES
will also randomly select a second, much smaller sample (30 people) for the conjoint analysis (see the “measurement” section).
Qualitative Research
The probability method will be also used to select participants to the qualitative part of the research, the focus groups. For the focus groups the sample size is much smaller – since we need 15 people only – and the selection will be performed again using a probability method: this time the 667th
person will be called to be part of the focus group (10,000 / 15). If he/she is not available or cannot be reached, we will proceed with the 668th and the 666th person.
See appendix 1 for Time Requirements and Sampling Process.
3.2 Data Collection Method Quantitative
For the quantitative part, the questionnaire will be filled out over the internet. The selected customer will be sent a link over the email: the link will give him/her access to the questionnaire and by clicking on “submit ” the answers will be collected and the results processed.
Potential Issues
1) The customer’s email address might not be valid anymore;
2) The customer might just ignore/trash the email and not fill the questionnaire;
3) The customer might be inaccurate in filling the questionnaire due to inability to formulate a coherent response or unwillingness to respond accurately due to such reasons as: time pressure, fatigue, personal bias over privacy or other personal matters, lack of information, and response style.
These issues are considered in the margin of error and therefore the computer will select another customer in the place of the unreachable one. While the first two types of issues can be fixed by the computer, the machine has no control over the issue no.3 where the problems are connected to the data collection method itself: the interviewer has no interaction with the customer but also the environment where the survey is performed can help – because the customer is in front of his/her computer in a location of his/her choice.
Qualitative
For the qualitative research, the customer will be reached over the phone and asked to participate to a focus group on Pepsi drinks. He/she will be compensated for the participation with a gas reimbursement and a $20 gift card.
The focus group will be executed in an ad-hoc location with a one-way mirror behind which the researcher will sit and observe the reactions of the participants to the questions asked. The plan is to perform all focus groups in one day, from morning to evening. The moderator will ask the question and help frame the discussion among the participants; the moderator will also record the answers on tape. Then the answers will be put on paper and analyzed by the experts. The focus group should also include some real time administration of advertising techniques (showing
commercials or printed advertisement) in order to appreciate the immediate reaction from the customers.
3.3 Measurement
The main aim of this research is to investigate on the brand awareness of Pepsi, to be specific; our aim is to measure the perception of Pepsi drinks in relation to health. The first question we would like to address in our research is whether Pepsi health drinks are conceived as really healthy? The main objectives of administering this question to the respondents to measure the demand of healthy drinks VS the various alternatives available in the market, to measure the association of Pepsi to health concepts and finally to measure the perception of the marketing effort so far done by Pepsi. In order to conduct the research, the questionnaire that will be directed to the respondents/focus group would cover both qualitative as well as quantitative questions. The key elements that it would include are: Demographic data- such as the age, gender, location and income, Behavior/ Lifestyle questions which would cover factors like frequency of consumption, on what occasion the consumption of the product takes place, if the respondents felt that the product was a post work out drink or not etc. The next important part of the questionnaire is to figure out how to re-position the Pepsi brand in the health market, its important in this part of the questionnaire to understand what percentage of people are social media active users, whether they are actively participating in the various social media campaigns etc.
In the entire research procedure, the focus groups are for generating hypothesis and to test them qualitatively. In order to figure if the respondents actually like the product or not, ambiguous questions could be asked such as if they consume Pepsi drink products, how would they rate Pepsi products as far as heath is concerned etc. The three most important factors that can be researched here are- age, weight and lifestyle i.e. exercise habits etc. See appendix 2 for sample questionnaire.
3.4 Analysis Procedure
The method of analysis that we opted for are MULTI DIMENSIONAL SCALING (MDS) and CONJOINT ANALYSIS. The reason is because our client Pepsi is a multi product company so these methods can assist us in understanding what perceptions the customers have about the products and which is the main driver that is determining the purchase decisions. It’s important to determine how Pepsi is perceived as compared to its competition. How do people view the brand in terms of its offering, price and quality? The most important problem here is of positioning its offerings in an interpretable multi dimensional space, for which Multi dimensional scaling is used. Today in different places like schools, restaurants, movie theatres etc, there is a constant battle between Pepsi, Coke and other competitors to place their product in that place. Another research technique that we would use is the conjoint analysis where we would administer this technique to a smaller sample size of 20 to 30 people.
4.1 Summary of Secondary Data
Our secondary data research provides us with the following information: General Information on Carbonated Drinks
U.S. Consumption of carbonated soft drinks has steadily declined in the past decade, mainly
due to alternative beverages now offered by the market (health concerns in the US, primarily related to obesity problems).
Healthier drinks are growing more popular. Including bottled waters, juice drinks, teas and
sports drinks, bottled beverage sales rose 0.8 percent to 15.2 billion cases in 2011. That represented a slowdown from 2010, when sales rose 1.7 percent.
According to Beverage Digest, the top four sodas -- Coke, Diet Coke, Pepsi-Cola and Mt. Dew
-- all saw declining sales last year. Of those, Coke's market share was flat, while the other three all lost share.
There have been several studies recently proving the cardiac problems aspartame (a fake
sweetener) causes, including heart attacks and strokes. Also, certain studies prove that aspartame is a multipotential carcinogen causing brain, kidney, breast, liver and lung cancer.
Health consciousness and trends in the US
More and more, consumers in the US are making choices based on what helps them create
and manage optimum health. Managing health through food and drink choice is a growing consumer trend that is already having a huge impact on purchase behavior.
Food and beverage marketers who recognize the opportunity within this trend, by developing
and positioning their products in support of it will be the next brand leaders.
US consumers are more aware of the fact that the consumption of sugar-sweetened beverages
is associated with weight and obesity, and that changes in consumption can help predict changes in weight.
The FDA strictly regulates carbonated drinks and bottled water as a food product. Bottled water
companies must adhere to the FDA's Quality Standards, Standards of Identity (Labeling Regulations) and Good Manufacturing Practices. The FDA has recently banned certain chemicals (sweeteners, coloring agents…), on the grounds that they’ve been shown to be carcinogenic and/or toxic to the consumers, cause obesity or other diseases.
Research suggests a statistically significant inverse relationship between consumption of
carbonated beverages and bone mineral density. PepsiCo’s Strategy: The New Health Kick
PepsiCo’s CEO is trying to redefine the playing field by promoting healthier drinks and food
under the “good-for-you” and “better-for-you” slogans. The company is betting big on creating healthy foods through its Quaker Oats, Gatorade and Tropicana divisions.
Their new group of products is part of a long-term strategy to grow their nutrition business from
about $10 billion in revenues today to $30 billion by 2020.
Ms. Nooyi (the CEO) seeks to refocus Pepsi by stating that lifestyles have changed and that their
company has to modify its products.
PepsiCo’s Struggle
In March 2010, Pepsi slipped to become the third most popular soda in America, behind Coke
and Diet Coke.
Coke’s Consistent Strategy Wins the Cola War:
Coke’s beverage volume in North America dropped only 2% last year.
In comparison, Pepsi’s beverage volume in the same region plunged 8%.
Last year, Coke brands commanded 41.9% of the total market last year compared to PepsiCo’s
29.9%. While both brands have been declining, Pepsi is doing so at a slightly faster rate. Coke, among others, continues to steal market share away from Pepsi.
4.2 Expected Findings: Primary Research
Basing our research objectives on the information above, we are aiming to obtain the following information from our marketing research plan:
These main findings will improve our understanding of the market place and of Pepsi’s opportunities.
4.3 Data Organized According to Related Variables
The questions in the questionnaire will be grouped in “subsections” that satisfy the same research objective.
The responses to questions 3,4 can be summarized in a subsection titled “Customer perception
and brand awareness.” Once it is obtained, this information will be useful to see the extent to which the consumers are aware of the Pepsi’s focus in health products.
The responses to questions 3,4,5,7 can be summarized in a subsection titled “Healthy
Campaign Efficiency.” Once it is obtained, this information will be useful to weight the firm’s healthy campaign efficiency.
1 Do consumers perceive Pepsi as a provider of healthy drinks? 1b Is Pepsi’s “better-for-you” campaign effective?
2 Does people’s health consciousness include the consumption of healthy drinks? 2b If so, do they drink Pepsi’s healthy drinks?
2c If not, what would be the product profile they would consume? Is there a specific type of drink that would look more attractive to them?
Are consumers engaged and reachable through social media?
The response to question 5 can be summarized in a subsection titled “Healthy Consciousness
Scope.” Once it is obtained, this information will be useful to evaluate how important are drinks in people’s “health-perception”.
The response to questions 6 can be summarized in a subsection titled “Ideal product profile.”
Once it is obtained, this information will be useful to recommend the launch of a specific product.
The responses to questions 3,4,5,6,7 can be summarized in a subsection titled “Strategy
decision.” Once it is obtained, this information will be useful to customer perception and brand awareness. See Appendix 3 for Summary Table: Customer Perception and Brand Awareness.
4.4 Findings Implications & Recommendations
After interpreting and discussing the results obtained from the research, these are the recommendations we will be able to make depending on our findings:
a), c), e), h) Pepsi should carry on with their campaign
b), d), f), g) Pepsi should change their strategy and launch a
new product with a different profile.
4.5 Statistical Significance
The margin of error will be checked for all the data gathered to ensure the validity of the answers and appropriate to make recommendations based on them. Outliers will be removed and the systematic method will ensure the participants are randomly selected for the study.
Based on the results of the survey, PepsiCo will be able to choose between keep pursuing the current strategy or changing it in order to enhance the perception of its drinks as healthy drinks. In case a change is recommended, the company will also be able to infer from the results of the survey what specific features the customers want in a drink (about taste, flavors etc.). The changes can happen in the product development line or the new product launch.
Another recommendation PepsiCo will be able to draw from the results is whether the company should invest more in a social media campaign as adverting media for the next future and how the social media efforts can be modified in order to guarantee a deeper penetration of PepsiCo message. In this particular case, PepsiCo’s top management can gain an idea of which social media are worth more the investment effort and which are worth less.
Even if the results will project an image of PepsiCo as already “healthy”, there will still be margins of improvement that can be appreciated from the market research performed (new flavors, different advertising). In this specific case, the focus groups will provide most of the insights.
IF THEN
PepsiCo needs to pursue a marketing strategy that stays current with the fast changes in the market as far as consumer preferences, spending habits, sources of information etc. For this reason, this market research is essential to acquire that knowledge that represents the foundation for any strategic discussion for PepsiCo’s top management.
It is the intent of our marketing research team to find the true perception of PepsiCo’s brand image in relation to “healthy” perceptions and use these findings to help steer corporate strategy for ongoing success in an ever-changing consumer market.
Appendix 1: Time Requirements & Sa mple Process
Location framed: the US;
Time needs for the sampling process:
a) Time necessary to perform the selection of the population and the sample: 1 week; b) Time necessary to send the questionnaire and allocated time for response: 1 month; c) Time necessary to select participants, send RSVPs and schedule the focus groups: 1
month.
Whereas task b) obviously follows task a), tasks b) and c) can be performed simultaneously.
Appendix 2:Sample Questionnaire
Name: Age:
Gender: Location:
1) Do you consume Pepsi drink products? Yes/ No
If yes, name some products that you consume ________________________________ 2) How often do you consume these drinks?
o Everyday
o 2-3 times a week
o Only on certain occasions
3) Are you aware of Pepsi’s “better-for-you” healthy drinks offering? Can you name one? ____________________________________________
4) How would you rank Pepsi in terms of its healthy drink offerings?
1 2 3 4 5
Extremely Very health-focused moderately Barely health- Unhealthy brand
health-focused health-focused focused
Grocery store chains Population extracted Sample selected
Grocery store chain no.1 2500 250
Grocery store chain no.2 2500 250
Grocery store chain no.3 2500 250
Grocery store chain no.4 2500 250
Total 10,000 1000
5) Rank health’s importance for you in your life?
High Moderate Low
If high, do your health concerns include drinking healthy drinks in a regular basis? Yes/No
6) Describe the best healthy drink you can imagine. What attributes would make you consume it?
________________________________
7) Are you an active social media user? If yes, what are the different social media accounts that you have?
o Facebook
o Twitter o LinkedIn
o Other ________________________________________________
Appendix 3: Summary Table: Customer Percept ion & Brand Awareness
Related questions: Nº 3,4
Potential Findings:
a) Pepsi is perceived as a health-focused brand
b) Pepsi is NOT perceived as a health-focused brand
Related questions: Nº 3,4,5,7
Potential Findings:
c) The campaign is penetrating d) The campaign is not penetrating Related questions:
Nº 5
Potential Findings:
e) People include healthy drinks in their understanding of healthy lifestyle
f) People don’t think of healthy drinks when it comes to living a healthy life Related questions:
Nº 6
Potential Findings:
g) People’s idea of healthy drinks differ from Pepsi’s offering
h) People’s description of healthy drinks coincides with Pepsi’s offerings
Related questions:
Nº 3,4,5,6,7 i) Pepsi should carry on with their
campaign
j) Pepsi should change their strategy
Customer perception and brand awareness
Healthy Campaign Efficiency
Healthy Consciousness Scope
Ideal product profile
Strategy decision
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