group1 sec c mm report

INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Market Study of Packaged Fruit Juices in India

A Marketing Management Proposal

Group - 1 Abhinav Tandon –PGP/17/126

Kaustubh Dudhane –PGP/17/141 Leah S Zacharias- PGP/17/150

Rohit Jaiswal- PGP/17/162 Shalini Singh- PGP/17/166 Suhani Doshi- PGP/17/182

Under the guidance of :

Dr. Atanu Adhikari

2

Table of Content

Sr. no Description Page no.

1 Research Objective 3

2 Introduction 3

3 Research Questions 5

4 Literature Review 5

5 Sampling and Data Collection Techniques 7

6 Market Analysis – Factor Analysis 8

7 Market Analysis – Cluster Analysis 12

8 Market analysis – Conjoint Analysis 19

9 Conclusion 23

3

Research Objective

To understand all related aspects of fruit juices and their interplay.

Introduction

This report focuses on the packaged fruit juices market existing in India. Our food habits are

defined by our constantly changing lifestyles. Over the years Indian has witnessed a very high

rate of urbanization, we see a constant progression towards nuclear families and it is not

uncommon in families for both the partners to be working. This trend is begetting the trend of

rising consumption of ready to eat foods and beverages. Also the higher spread of disorders and

more awareness about the lifestyle diseases due to these trends have also made people health

conscious. We see the population looking for nutritious options along with convenience.

According to National Sample Survey Office1 report published in February 2012 Urban

Consumption of fruit surpassed rural consumption in value as well as quantity despite almost

72% 2

of the population living in rural areas, this clearly indicates the health consciousness and

buying power characteristics of the urban population. Also, 86% of all the fruits consumed

comprised of 8 main fruits, among these were mango, grapes, apple, orange, banana and papaya.

No wonder that these are the staple flavors available in most of the flavored food items. These

statistics serve show hoe the scales have gradually been tipping in favor of juices over

carbonated drinks in recent years. This can partly be attributed to the reports of them being

unhealthy and having harmful ingredients. The purpose here is not to examine the causes, but to

establish the credibility of the idea to be researched by a preliminary cost benefit analysis.

The juice category is one of the fastest growing beverage categories in India. The report

published by Indian Institute of Foreign Trade in collaboration with the Govt. of India3 states

that, “The market for fruit and vegetable has grown at a steady rate over the last five years. This

is largely due to increasing importance of leading a healthy life in India.” It further goes on to

4

quantify and state, “The market has grown from just under Rs.1200 crore to Over Rs.3200 crore

over the last 5 years. This indicates a CAGR of 21.67%; and in terms of volume from under

250million litres to close 550 million litres.” These figures indicate the trend in the category and

thus makes it relevant to pursue this research.

1. India. National Statistical Organisation , National Sample Survey Office, 66th

round,

Report No. 541(66/1.0/3), February 2012, p-39.

2. Rural-Urban distribution Census of India: Census Data 2001: India at a glance, Rural-

Urban Distribution. Office of the Registrar General and Census Commissioner, India.

Retrieved on 2008-11-26.

Not only academicians but industrialists are also well aware of this trend and are ready to take

advantage of it. An interview with MD and chairperson of Manpasand Beverages – a relatively

small player – in October 2013 quoted him as saying4, “The packaged fruit drink market in India

is currently pegged at Rs. 5000 crore, and it is witnessing tremendous growth.

The per capita consumption of fruit juice-based beverages is 45 litre in Germany, 42.5 litre in

Switzerland and 39 litre in the United States, but India's per capita fruit juice-based beverage

consumption is just 20ml. In the carbonated soft drink segment, the country's per capita

consumption is just under three litre (which is also negligible compared to other countries). This

shows the huge opportunity India has in terms of business if proper strategies are devised to

make fruit juices available and affordable.” These words capture the picture in a nutshell, smaller

players‟ investment in new developing markets is a good sign.

All the above go on to substantiate that considering ourselves as a new player in the category we

have immense opportunities, but first is required minute research and confirmation of statistics.

It needs to be observed if the trends are consistent and correlated with the factors cited above or

is it a boom due to some other reasons. Also required is an understanding of the views experts

have taken on the growth of the market, its sustainability and the drivers leading to this growth.

Thus, the next section outlines the secondary research undertaken for reasons well stated above

and to get some idea of the data, trends, findings already available, which could guide us in the

exploratory research process.

http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspx

5

Research Questions

• What factors are considered by consumers while purchasing packaged fruit juice?

• What factors should be considered for product positioning by a company wishing to

launch a new product?

Literature Review

1. ‘Evaluation of packing attributes of orange juice on consumers’ intention to purchase

by conjoint analysis and consumer attitudes expectation’: Journal of Sensory Studies

ISSN 0887-8250

This study based in Brazil evaluates the effect of packaging on the consumer‟s decision to

purchase ready-to-drink orange juice. It looks into the effect of 4 major factors- nutritional

information, sense of natural or industrialized product, information on preservatives and

price.

2. ‘Juices in Asia Pacific February 2013’: MarketLine Industry Profile

The report provides a comprehensive overview of the Juice industry in terms of market

value, category and geography segmentation as well as key players in the juice industry in

the Asia Pacific region

3. ‘The Influence of Disorganized Shelf Displays and Limited Product Quantity on

Consumer Purchase’: lana A. Castro, Andrea C. Morales & Stephen M.Nowlis

The research aims to establish the relationship between shelf displays of items, both

ingestible and non-ingestible as well as the stocked quantity on the purchase decision of

the consumer. It concludes that for products such as juices the likelihood of ingestible

products such as juices seem to decrease if shelves are disorganized.

4. ‘Mama Roz, Instant Fresh Fruit Juice: Blue or Red Ocean?’: Amalia E. Maulana

6

This paper focusses on the factors and strategies needed by a start-up in the juice industry

to be successful. Taking the case of a start-up Mama Roz in Indonesia, the paper sheds

light on some of the factors affecting fruit juice sales.

5. ‘Consumption Pattern of Soft Drinks and Fruit Juices: A Comparative Study’ : Dr.

Simranjeet Kaur Sandhar, Dheeraj Nim, Shikha Agrawal, SVIM e-Journal of Applied

Management

This article deals with the factors affecting the consumption of fruit juices based on

research conducted in Indore. The journal also discusses the frequency of fruit juice

consumption.

6. ‘Study of the Indian fruit juice market along with fruit juice export potentiality

analysis’: A report by the Indian Institute of Foreign Trade

The report focuses on the existing fruit juice market along with the potential to grow. It

concludes with a study of basic market access requirement along with the opportunities for

the exporters.

7. ‘Packaging Industry: A Review’: An Aranca Report prepared for The Assocham

Packaging Summit 2012

The report gives detailed information about the packaging industry in India and global

packaging trends. It also describes various innovations in the packaging of food stuffs and

beverages.

8. ‘Healthy Eating: Clarifying Advice About Fruit And Vegetables’: Carol Williams,

BMJ: British Medical Journal, Vol. 310, No. 6992, pp. 1453-1455

This paper reflects upon how information regarding health that is given to consumers is

often ambiguous. It is a widely accepted fact that one should eat more fruits and

vegetables, but how much and in what form is left to interpretation. In the process of

answering this question, the paper discusses fruit juices and its variations which are

recommended or not recommended, as the case may be.

7

9. ‘Consumer trends that matter: Personalization’: Brush, Marc. Functional

Ingredients. September 2013, Issue 131

This author makes a comment on the effects of mass personalization of products on

consumer buying. Further emphasis is laid on the same through insights from the fruit juice

industry.

Sampling and Data Collection Technique

1) Focus Group Discussion was conducted with 8 people to get a brief overview of the

purchasing and consumption pattern of these individuals. The members of focus group

discussion were from the age group 20-30 and mostly students. The inputs received from

this focus group discussion were used in the preparation of the questionnaire floated.

2) Due to the lack of significant responses from other age group outside the range of 20-30,

this study is being done on the basis of random sampling for young and mostly

unmarried people. The method being used here is one stage cluster sampling where all

the elements of the mutually exclusive age group of 20-26 years old are considered.

Sampling with replacement, a formal questionnaire was administered to respondents for

collecting primary data. The respondents were given the questionnaire over the internet to

get further valuable information.

Sampling for Questionnaire

Population – Defining characteristic is the age group

(20-26 years)

Sampling Procedure- Random sampling

Data collection- Survey of approximately 79

respondents

Independent survey for Conjoint analysis of 16

respondents

8

The population is defined in keeping with the objectives of the research. The study was

conducted in IIM Kozhikode campus aimed at middle and upper class families with the focus of

youth.

Methodology Used

1. Exploratory Factorial analysis

2. Cluster analysis

3. Ranking analysis

4. Defining Cluster

Market Analysis

1) Factor Analysis

Factor Analysis is a tool that is used in order to narrow in on the variables and group them into

„factors‟ on the basis of some underlying commonality in order to facilitate analysis. Variables

that seem to have something in common (based on correlation as calculated by the software) are

grouped into factors and it can be deduced that they move in the same direction at similar

degrees. For the purpose of this project, our questionnaire tested 12 variables.

In order to apply factor analysis to any data, however, it is important to run KMO and Bartlett‟s

Test to check the suitability of the variables for factor analysis. Variables need to be sufficiently

related to each other in order to have a common measure denote their movements. This adequacy

is measured through KMO and Bartlett‟s Tests. A KMO Measure lower than 0.6 shows

unsuitability for factor analysis. This takes us to the anti-image matrix, the diagonal of which

gives the correlation between the variables. Variables having this value less than 0.3 may be

eliminated.

After elimination of these variables for further analysis, KMO and Bartlett‟s tests are rerun to

check adequacy. The accompanying Rotated Component Matrix would have grouped the

remaining factors into credible groups called „factors‟. The total variance table can be used to see

how important each of these factors are for the analysis. The procedure undertaken for this

project is given below:

9

KMO and Bartlett’s test is used to understand the correlation between the various variables. As

in this case the value obtained is 0.423, which is less than 0.6 it is not suitable for applying

factor analysis. We will thus have to look at the anti image matrix diagonals and remove

components below the value of 0.3. Hence, in our case we will be removing two variables which

are taste and thickness.

After the removal of the two least significant variables which are taste and thickness. The value

of KMO and Bartlett’s test becomes greater than 0.6 and thus it is suitable for apply factor

analysis.

Rotated Component Analysis

Rotated Component Matrixa

Component

1 2 3 4

Please read the following

statements and indicate how

much the following factors

influence your purchase

intent for the packaged juice

the most- Nutritional Value

.845

10






the most- No Preservative

Label

.779






the most- Product

Ambassador

-.743






the most- Organic Product

.638






the most- Pulp Content

-.545






the most- Product Brand

.543 -.468






the most- Package Type

.846

11






the most- Package Size

.780






the most- Product

Advertisement

.735






the most- Price

.706

The rotated component analysis is a matrix with the help of which we are able to align all the

variables to one of the four factors. Thus from the above rotated component analysis table we

can see that :

Component Variables

1) Product Information Nutritional value, preservation

2) Brand Perception Product ambassador, organic product,

Pulp content, Product Brand

3) Package Package type, Package Size

4) Price Promotion Advertisement, Price

Total Variance Explained

Component Rotation Sums of Squared Loadings

Total % of Variance Cumulative %

1 1.792 17.916 17.916

2 1.716 17.155 35.071

12

3 1.651 16.511 51.582

4 1.342 13.424 65.006

Extraction Method: Principal Component Analysis.

From the above table we can see the amount of variance that is explained by the factors. Thus,

we see that factor-1 explains 17.916% of the variables similarly factor-2 explains 17.155 % and

so on. The significance of this table is that it helps to decide the number of factors as any value

below 1 is not selected as a factor.

Component Transformation Matrix

Component 1 2 3 4

1 .625 .503 -.497 .332

2 -.045 .786 .545 -.288

3 .578 -.297 .668 .363

4 -.523 .204 .097 .822

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

2) Cluster Analysis

We have done the cluster analysis in order to form clusters. The customers are divided into the

clusters depending on many parameters. Based on these clusters, we can target the customer

base. The sizes of the clusters are as follows –

Number of Cases in each

Cluster

Cluster 1 39.000

2 31.000

Valid 70.000

Missing .000

The final clusters which we got after 4 iterations are as follows –

Final Cluster Centers

13

Cluster

1 2

Product Information -.5 .6

Brand Perception -.5 .7

Package -.1 .2

Price Promotion .0 .0

It is evident from the high fluctuations observed for the clusters 1 and 2 for Product Information

and Brand Perception that –

Moreover, if one could look at the Anova Analysis, the same two factors - Product Information

and Brand Perception are significant for both clusters.

ANOVA

Cluster Error F Sig.

Mean Square df Mean Square df

Product Information 19.837 1 .723 68 27.437 .000

Brand Perception 24.545 1 .654 68 37.545 .000

Package 1.256 1 .996 68 1.261 .265

Price Promotion .039 1 1.014 68 .039 .845

The F tests should be used only for descriptive purposes because the clusters have been chosen to

maximize the differences among cases in different clusters. The observed significance levels are not

corrected for this and thus cannot be interpreted as tests of the hypothesis that the cluster means are equal.

The other two factors do not show that much significance from the Anova analysis.

Ranking Analysis:

14

We did the ranking analysis so as to rank the characteristics of the fruit juices. They are –

Descriptive Statisticsa

N Range Minimum Maximum Mean Std. Deviation Variance

Please rank the

characteristics of fruit juices

that are important for your

purchase, with Rank 1 for the

most important and Rank 9

for the least.-Taste

39 7 1 8 2.08 1.855 3.441

Please rank the





for the least.-Brand

Ambassador

39 7 2 9 6.90 2.447 5.989

15

Please rank the





for the least.-Pulp content

39 6 1 7 2.64 1.287 1.657

Please rank the





for the least.-Nutritive Value

39 8 1 9 3.05 1.669 2.787

Please rank the





for the least.-Packaging

39 6 3 9 5.56 1.334 1.779

Please rank the






39 8 1 9 5.46 1.620 2.623

Please rank the





for the least.-Price

39 8 1 9 5.18 1.931 3.730

Please rank the





for the least.-Advertisements

39 8 1 9 7.69 1.641 2.692

16

Please rank the





for the least.-Thickness

39 7 2 9 6.44 2.162 4.673

Valid N (listwise) 39

a. Cluster Number of Case = 1

From the above chart, we could figure out that Cluster 1 has ranked the following parameters as

follows:

1) Taste

2) Pulp Content

3) Nutritional Value



Please rank the





for the least.-Taste

31 3 1 4 1.48 .769 .591

Please rank the






Ambassador

31 4 5 9 8.58 .886 .785

Please rank the





for the least.-Pulp content

31 7 2 9 4.19 1.815 3.295

17

Please rank the





for the least.-Nutritive Value

31 6 1 7 3.48 1.913 3.658

Please rank the





for the least.-Packaging

31 6 1 7 5.10 1.620 2.624

Please rank the






31 6 1 7 3.90 1.660 2.757

Please rank the





for the least.-Price

31 6 1 7 4.84 1.881 3.540

Please rank the





for the least.-Advertisements

31 5 4 9 7.45 1.261 1.589

Please rank the





for the least.-Thickness

31 7 2 9 5.97 2.373 5.632



18

From the above chart, we could figure out that Cluster 1 has ranked the following parameters as

follows:

1) Taste

2) Nutritional Value

3) Brand

Defining clusters:

The clusters are defined also on the time of consumption of juice as well as on the brand loyalty

of the consumers towards a specific brand.



When do you usually drink

fruit juice? 39 5 0 5 1.44 1.651 2.726

How many different brands

of fruit juices do you

purchase?

39 2 0 2 .82 .721 .520





When do you usually drink

fruit juice? 31 5 0 5 2.03 1.663 2.766

How many different brands

of fruit juices do you

purchase?

31 3 0 3 1.16 1.003 1.006



The mean value of cluster 1 suggests that the respondents of cluster 1 prefer to consume juice in

the morning while those in cluster 2 prefer to consume later in the day.

Moreover, those in cluster 1 are fiercely brand loyal while those in cluster 2 are not.

19

3) Conjoint Analysis

Having gotten a fair idea of the factors influencing the purchasing decision of packaged juices,

we next perform a conjoint analysis to determine the contribution of some of these factors in

their purchase decision as well as determining the utility of the options given to them. We take

the following 4 factors- Brand, Flavour, Cost per litre, Type of Packaging. The table below lists

the options under each of these factors:

Brand Flavour

Cost

per

litre

Type of

packaging

Tropicana

Mango

60 per

litre

Packed

bottle

Real

Litchi

80 per

litre

Tetra-pack

Minute

Maid

Guava

100 per

litre

Canned

Mixed

Fruit

Using the above options we get a total of 3x4x3x3= 108 options. We next generate cards for our

analysis giving a minimum limit of 15 and get the following cards-

Brand Flavor Cost per 1 litre Type of packaging

Real Mango 60 per litre Tetra

Minute Maid Litchi 60 per litre Packed bottle

Real Guava 60 per litre Tetra

Tropicana Mixed Fruit 60 per litre Canned

Real Mixed Fruit 100 per litre Tetra

Minute Maid Guava 80 per litre Tetra

Tropicana Litchi 60 per litre Tetra

Real Mango 60 per litre Packed bottle

Real Guava 60 per litre Canned

20

Minute Maid Mango 100 per litre Canned

Minute Maid Mixed Fruit 60 per litre Tetra

Real Mixed Fruit 80 per litre Packed bottle

Real Litchi 100 per litre Tetra

Real Litchi 80 per litre Canned

Tropicana Guava 100 per litre Packed bottle

Tropicana Mango 80 per litre Tetra

We have these cards rated on a scale of 10 from 15 respondents belonging to IIM Kozhikode &

NIT Calicut, consisting of students aged between 20-27. After receiving the responses, we next

create dummy variables taking Minute Maid, Mixed Fruit, 100 per litre, Packed Bottle as the

reference combination. We ran regression on all individuals to determine their individual

combinations of these factors. The overall contribution of the factors was then determined by

taking an average across all respondents. A sample regression output is given below:

Model Summaryb

Model R

R

Square

Adjusted

R

Square

Std.

Error of

the

Estimate

1 .971a .942 .856 .30264

a. Predictors: (Constant), Price_Eighty, Mango,

Real, Tetra, Guava, Price_Sixty, Tropicana,

Litchi, Canned

b. Dependent Variable: Rating

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig. B

Std.

Error Beta

1 (Constant) 4.665 .277 16.849 .000

Mango 1.220 .243 .733 5.020 .002

Litchi .141 .259 .071 .544 .606

21

Guava .419 .232 .235 1.807 .121

Tetra 1.106 .183 .711 6.049 .001

Canned .091 .264 .046 .346 .741

Real .379 .196 .246 1.939 .101

Tropicana .345 .222 .193 1.550 .172

Price_Sixty .573 .181 .371 3.166 .019

Price_Eighty -.191 .244 -.096 -.782 .464

a. Dependent Variable: Rating

The overall contribution by averaging across all respondents gives us the following

breakup:

We determine the flavour plays the most important contributor to the purchase decision which

also corroborates with our larger survey results highlighting taste as an important factor. Brand

has the least contribution in a buyer‟s purchase decision which implies that the students who

gave the survey are mostly brand neutral. We next do a deep dive by calculating the individual

utilities of 3 users selected on the basis of their high R2

scores indicating consistency in replies.

23

Conclusions

From the above analysis, we present below some of the findings which can be used by a

company who wishes to launch a new packaged juice product for the Indian markets.

1) Cluster 1 is the ideal customer target as it is larger in size and fiercely brand loyal

2) Cluster 1 is the ideal customer target as it is larger in size and fiercely brand loyal

3) Taste should be the major area to concentrate on for product and promotion

emphasis

4) Cluster 1 doesn‟t depend on the product information as given on the pack with

regard to nutritional value and preservatives and the Brand Perception with regard

to Organic content, Pulp Content, and Brand Ambassador Etc.

5) Cluster 1 doesn‟t depend on the product information as given on the pack with

regard to nutritional value and preservatives and the Brand Perception with regard

to Organic content, Pulp Content, and Brand Ambassador Etc.

group1 sec c mm report

Documents

years indian

research objective

urban population

favor of juices

research questions

recent years

rural areas

nuclear families