Samarth Anand -11020241126

Samarth Anand

11020241126

FLI GrandMas RTE Cookies

FLI was a division of PepsiCo, Incorporated. FLI held an overall 16% dollar share in the %12 billion retail sales dry snack category. FLI contributed over $200 million in operating profits on sales of $1.9 billion in 1981. RTE cookies industry was mainly divided into two segments, packaged and single serve. With $2.5 billion yearly retail sale RTE constituted as the second largest segment of the U.S dry snack food retail market after salty snacks expressed in dollars. In 1980 FLI acquired GrandMa's Foods, Inc., a privately held bakery consisting of three production plants in Beaverton, Oregon for $15 million. GrandMa's was known to be skilled in producing soft, moist cookies and had sales of approximately $29 million. It was a strong regional cookie maker with a 15% share of the northwest market and a full line of products in both single serve and multipack presentations.

Problem Statement:
Whether to launch Grandmas RTE cookies line in U.S and what marketing strategy company should follow to counter competition.

Solution:
In order to arrive at solution following things should be taken into account: Market Analysis Competition Buyer Behaviour SWOT Test Market Result Analysis

Considering above all factors and analysis final solution is suggested. Market Analysis: RTE cookies industry was mainly divided into two segments, packaged and single serve. RTE cookies were sold in bulk packaging. A wide variety of products were sold in the RTE category, including cookies, snack bars, shortcake biscuits, and other goods. No one type of product was dominant with the consumers. Major product types included sandwich type cookies (e.g., Oreos, Keebler Chocolate Crme Sandwiches), which accounted for 30 % of total cookie pound sold in 1980. The Dollar market growth rate is 9-10 % per annum

Samarth Anand

11020241126

In terms of poundage, the total market was estimated to be 1.5 Billion pounds in 1982. The distribution channel mainly consisted of supermarkets. With $2.5 billion yearly retail sale RTE constituted as the second largest segment of the U.S dry snack food retail market after salty snacks expressed in dollars. The dollar market growth rate is 9-10% per annum. But the consumption in poundage was flat. Cookie market was mostly push oriented, trade promotions accounting for more than 40% of the advertising budget.

Competition: The RTE cookie market was dominated by three national brand manufacturers: Nabisco, Keebler, and sunshine. Nabisco led the total category sales with over three times the market share of its nearest competitor. Manufacturers Dollars 1982 % 33 11 7 4 5 40 100 % $Millions 627 209 133 76 95 760 $ 1.9 billion

Manufactures Nabisco Keebler Sunshine Mothers Pepperidge Farm All others Total

Nabisco was market leader in every major segment, including sandwich crmes, chocolate chip, vanilla wafers, and fruit filled cookies. In 1981 Pepperidge Farm, a maker of premium positioned and prices cookies outpaced all the other competitors in terms of dollar, though not pound, growth.

Buyer Behaviour: RTE cookies were purchased by 73% of households, thrice a week. Home- style type cookie was purchased most often and was served primarily as a snack or desert. Cookies were mostly purchased by Mother once a week. Nutritional issues had become more important to consumers during the past 10 years Consumers claimed in testing circumstances that they were eating fewer cookies; in fact tonnage consumed, household penetration, and frequency of cookie consumption had dropped 5%, 9% and 16% respectively between 1972 -1982.

Samarth Anand SWOT: Strengths: Brand equity Strong distribution Channel Market leader in dry snack category

11020241126

Weakness: Poundage consumption is flat Shelf life of cookies was short No expertise in sweet snack business

Opportunities: Competition was complacent Highly fragmented market with Nabisco as the only major player Market research showed clear consumer dissatisfaction levels for the current brands of packaged cookies.

Threats: Competitors response to Grandmas entry in RTE cookies industry Consumers association to locally available private labels Dependence on supermarkets

Test market results analysis: FLI test marketed the cookies in two regions Kansas City and Northwestern area of US. The Kansas City figures were very encouraging, the company achieved 21% market share, much higher than what was expected. This was due to increase in category volume and also reduction in competitors share. The Northwest test yielded a less than satisfactory response with a significantly lower market share, due to lower FLI sales and low category expansion. This was largely due to the fact that consumers in Northwest region are habitual of consuming GrandMas cookies at a much lower price, they could not relate with the new product line, new packaging and increase in price.

Samarth Anand

11020241126

Final Solution:
Marketing Mix: Segments: Usage: heavy and light consumers Behaviour: Product consumption occasion Gender and Age Group: All (male, female, adults, children, old people)

Target Segment: Consumers of all age groups Individual and family members shopping in supermarkets

Positioning: High quality moist cookie which offers better taste than competitors product

Product: Price: Place: Bulk packages should be made available in supermarkets Single Serve pack should be available at small shops and through vending machines in supermarkets, and shopping complexes. Slightly higher than the competitors price High quality RTE moist cookies Available in both single serve and bulk packaging The product line should have a wide variety

Promotion: Both Push and Pull strategy should be used. Push strategy: It should be directed towards Supermarkets and private shop owners through trade discounts, incentives, point of sale branding. Pull Strategy: Directed toward the consumers through advertisements, sponsorship and events.

People: Grandmas Cookie should have separate sales representatives only for making sales calls. Route sales force should be employed just for delivery.

Samarth Anand

11020241126

1.Sample survey and Census survey

Sample Survey:
In a sample survey, only part of the total population is selected. The survey data is then used to make inferences about the whole population, providing a reasonably reliable picture of that population. Surveys are generally conducted on a nationwide basis and produce data at a national, state and sometimes regional level, but detailed data for small areas are not available. Costs are generally much lower than a census so more questions or more detailed questions can be asked, and results can be available far more quickly.

Advantages:

Cost fewer questionnaires to send and chase up Speed less data to process

Disadvantages:

Accuracy whole population not represented Detail estimates for small groups or areas usually unreliable

Census Survey:
A census collects information from every unit in a population. As a result, data is truly representative of the whole population and detailed accurate data can be made available right down to small areas. However, there are huge resource costs arising from the expansive coverage so the number of questions asked is usually kept to a minimum. Processing the data takes time and usually only main results are released. More detailed results are not as readily available and need additional time and money to provide.

Advantages: Accuracy whole population counted Detail reliable statistics for small sub-groups

Disadvantages: Cost expensive for large populations Speed long collection, analysis and publication time-frame

Samarth Anand

11020241126

2.Importance of questionnaire design

A questionnaire is a formalized set of questions for obtaining information from respondents. The overriding objective is to translate the researchers information needs into a set of specific questions that respondents are willing and able to answer. While this may seem straightforward, questions may yield very different and unanticipated responses. For example consider following question Which city is larger Mumbai or Delhi? people might give different answers based on population Mumbai is larger and based on size Delhi is larger.

Importance:
A questionnaire is the main means of collecting quantitative primary data. A questionnaire enables quantitative data to be collected in a standardized way so that the data are internally consistent and coherent for analysis. Imagine how difficult it would be to analyse the data of a national survey conducted by 40 different interviewers if the questions had not been asked in a standard way, that is, if the interviewers had asked different questions using different wording and order. A questionnaire ensures standardization and comparability of the data across interviewers, increases speed and accuracy of recording, and facilitates data processing.

The advantages of questionnaires: Practical Large amounts of information can be collected from a large number of people in a short period of time and in a relatively cost effective way Can be carried out by the researcher or by any number of people with limited affect to its validity and reliability The results of the questionnaires can usually be quickly and easily quantified by either a researcher or through the use of a software package Can be analysed more 'scientifically' and objectively than other forms of research When data has been quantified, it can be used to compare and contrast other research and may be used to measure change Positivists believe that quantitative data can be used to create new theories and / or test existing hypotheses

Samarth Anand The disadvantages of questionnaires:

11020241126

Questionnaires are argued to be inadequate to understand some forms of information - i.e. changes of emotions, behaviour, feelings etc. Phenomenologists state that quantitative research is simply an artificial creation by the researcher, as it is asking only a limited amount of information without explanation Lacks validity There is no way to tell how truthful a respondent is being There is no way of telling how much thought a respondent has put in The respondent may be forgetful or not thinking within the full context of the situation People may read differently into each question and therefore reply based on their own interpretation of the question - i.e. what is 'good' to someone may be 'poor' to someone else, therefore there is a level of subjectivity that is not acknowledged There is a level of researcher imposition, meaning that when developing the questionnaire, the researcher is making their own decisions and assumptions as to what is and is not important...therefore they may be missing something that is of importance The process of coding in the case of open ended questions opens a great possibility of subjectivity by the researcher

3.Explain atleast 2 types of multivariate analysis techniques with relevant examples

Multidimensional Scaling (MDS): The purpose of MDS is to transform consumer judgments of similarity into distances represented in multidimensional space. This is a decompositional approach that uses perceptual mapping to present the dimensions. As an exploratory technique, it is useful in examining unrecognized dimensions about products and in uncovering comparative evaluations of products when the basis for comparison is unknown. Typically there must be at least four times as many objects being evaluated as dimensions. It is possible to evaluate the objects with nonmetric preference rankings or metric similarities (paired comparison) ratings. Kruskals Stress measure is a badness of fit measure; a stress percentage of 0 indicates a perfect fit, and over 20% is a poor fit. The dimensions can be interpreted either subjectively by letting the respondents identify the dimensions or objectively by the researcher.

Samarth Anand Example:

11020241126

Given a matrix of perceived similarities between various brands of soaps, MDS plots the brands on a map such that those brands that are perceived to be very similar to each other are placed near each other on the map, and those brands that are perceived to be very different from each other are placed far away from each other on the map. In this example, the relationship between input proximities and distances among points on the map is positive: the smaller the input proximity, the closer (smaller) the distance between points, and vice versa. Had the input data been similarities, the relationship would have been negative: the smaller the input similarity between items, the farther apart in the picture they would be. Conjoint Analysis: Conjoint analysis is often referred to as trade-off analysis, since it allows for the evaluation of objects and the various levels of the attributes to be examined. It is both a compositional technique and a dependence technique, in that a level of preference for a combination of attributes and levels is developed. A part-worth, or utility, is calculated for each level of each attribute, and combinations of attributes at specific levels are summed to develop the overall preference for the attribute at each level. Models can be built that identify the ideal levels and combinations of attributes for products and services. Example: Suppose we want to market a new golf ball. We know from experience and from talking with golfers that there are three important product features: Average Driving Distance Average Ball Life Price We further know that there is a range of feasible alternatives for each of these features, for instance: Average 275 yards 250 yards 225 yards Driving Distance 54 holes 36 holes 18 holes Average Ball Life Price $1.25 $1.50 $1.75

Samarth Anand Obviously, the markets ideal ball would be: Average Driving Distance 275 yards Average Ball Life 54 holes Price $1.25

11020241126

and the ideal ball from a cost of manufacturing perspective would be: Average Driving Distance 225 yards Average Ball Life 18 holes Price $1.75

Con joint analysis helps in deciding which would be the best choice and what is the most important parameter from the above three factors. All the variables of the factors are given rank and equations are forms solving which part worth is found using part-worth, worth of each factor is found and appropriate decision is taken.

4.Ethics in market research

The importance of ethics in Marketing Research: The topic of ethics is extremely important for marketing research and for market research. Ethics address whether a particular action is right or wrong, good or bad. Marketing has created a perception that, within businesses, marketing is the area most prone to unethical practices. Therefore, it is imperative that market researchers are associated with unethical practices. Volunteer participation is the very heart of marketing research. The consumer research programme would practically cease to continue without the co-operation of the public from which the data are drawn. The need for ethics is thus is very clear. However, ethical decisions have the following characteristics. They are 1. Most ethical decisions have extended or long term effects. 2. Most of the ethical decisions are sometimes doubtful, rather there are multiple alternatives. 3. The viewpoints in the decisions are sometimes positive or negative. 4. These positive and negative outcomes are very uncertain and unpredictable.

Samarth Anand The parties who are affected by unethical practises:

11020241126

The parties that are affected by unethical practices are known as stakeholders. Stakeholders concept is a method of looking at ethical relationships by identifying any group or individual who is or can be affected by the process. In Market Research there are 4 Stakeholders: 1. Public 2. Respondents 3. Client 4. Researcher

Public:
For public, ethical concerns revolve primarily around the methods of gathering and reporting research results. The public often depend upon the Marketing Research for information on products. If this information is distorted by the Marketing researcher or the client the public stands to lose. The information becomes useless and redundant for them. Therefore, it is the joint responsibility of the public and the researcher to avoid incomplete reporting, misleading reporting and biased research. Incomplete Reporting: Whenever a client or researcher does not reveal the complete results, incomplete reporting occurs. This unethical act is more likely to take place when a researcher conceals negative information, which is not acceptable by the public in general. Misleading environment: This involves the distortion of information. The information presented to the public is false. It leaves the public with an erroneous impression. To prove this lets take an example. Suppose there is a research project for a tooth paste which is preferred by the dentists. 90% of the dentists said that they have no specific choice. Out of the10% left, 5% said that they prefer brand A, 3% said that the prefer brand B, and 2 % prefer some other brand (neither A nor B). The conclusion that was arrived at was that dentists prefer brand A. This conclusion can be very misleading and is not the truth. Hence the conclusion is inaccurate and the public suffers with the faulty decision. Biased Research:

Samarth Anand

11020241126

Biased research occurs when there search process is performed improperly resulting in incorrect findings. Errors of this nature occur when the problem is not stated clearly. The finding or the information gathered is clearly incorrect. The researcher gets the desired information but the interest of the public is completely forgotten. Poorly designed questionnaires, improper sample selection, improper statistical methods used to interpret the data etc., are some of the examples of biased research.

Respondent:
Respondents are one of the major stakeholders because without their involvement in the research is not possible .Therefore, market researchers should protect the respondents from unethical research practices. The following will show the respondent-researcher relationship. Conducting a survey to sell products: Respondents have been deliberately deceived by researchers. Some unethical marketers have been known to tell respondents that they were conducting a survey which actually lead-in to a sales presentation, or to get information that could be used for sales leads or mailing lists. This is called sugging in trade language. It is illegal as well as unethical. These practices violate the respondents trust and erode their willingness to support surveys. Invasion of the privacy of Respondents: The privacy of the respondent is a legal right and hence it must be protected. It means that respondents, who are promised with the anonymity or confidentiality, should be given the same. Respondents should also not be contacted at times which are inconvenient for them. Another concern is also the buying and selling of mailing lists through deceptive means also forms a part of these unethical practices.

Client:
The complexity that is surrounding the research-client relationship deserves special attention from an ethical standpoint. Abuse of Position: Since the researcher possesses the research expertise, the researcher has a responsibility not to take unfair advantage of his position. The researcher should make every effort to follow correct research procedures, adopt a suitable approach

Samarth Anand

11020241126

and research design. In short, the researcher must conduct quality research while respecting the clients resources of time and money. Unnecessary Research: The researcher has the ethical duty not to perform unnecessary research. (E.g. Primary research not required if secondary data provide the necessary information) Unqualified Research: The researcher sometimes may not possess technical expertise that is required for the research. Thus, it is his duty to let the client know these limitations and refuse the project. Disclosure of Identity: The client has the right to expect that its identity will be protected before, during and after the completion of the project. The researcher is ethically bound not to reveal the clients identity to competitors, respondents etc. without the consent of the client involved.

Researcher:
The researcher or the research firm has the right to be treated ethically as well. Ethical treatment by clients involves several issues. Improper Solicitation: When a Research firm submits a proposal to a prospective client, it should be confident that the client is seriously considering employing it to conduct the research projects. The client should not make an attempt to misuse the first proposal by turning it over to another firm for execution. The research proposal is the property or the research firm. Proprietary techniques: The researcher has the right to expect that the Proprietary techniques will not be revealed by the client to other research firms. The client should also refrain from using these techniques in future without prior permission by the researcher who has developed the technique. Misrepresentation of findings: The client should not distort the research findings to their own benefit at the expense of the researchers reputation. The client should reveal the truth and nothing else.

Samarth Anand Additional request:

11020241126

The client assigning the project to a particular researcher may request him to provide some additional information at the original project cost. This extra information involves additional expenditure of the researcher. The researcher should be paid extra for such requests.