MKT5612 Applied Marketing Research

MARKETing RESEARCH PROJECT

Submitted byCHENG Sheng, Cecilia 5334 3587

CHI Tong, Vicky 5322 9096XIONG Xinli, Icy 5328 0049

TAN Lianghan, Ever 5328 1151YANG Yang, Vincent 5328 6275

ContentExecutive Summary 2

1. Background Information 2

1.1 Company Background 2

1.2 Marketing Decision Problem Definition 2

1.3 Marketing Research Problem Definition 2

1.4 Research Design 3

1.5 Survey Sample Overview 3

2. Research Overview 4

3. Findings and Analysis 4

3.1 Findings #1: Understanding of the alcohol market 4

3.2 Findings #2: Current Usage Behavior 6

3.3 Findings #3: Brand Measurement 9

3.4 Findings #4: Media Habit and Promotion 12

4. Hypothesis Analysis 13

4.1 Hypothesis #1: Understanding of the alcohol market 13

4.2 Hypothesis #2: Current Usage Behavior 15

4.3 Hypothesis #3: Current Usage Behavior 17

5. Recommendations 19

6. Limitations 20

Appendix 21

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Executive summary

This project would explore the market performance of Bacardi Breezer by sending questionnaires to the category recognizers of FAB (Flavored Alcoholic Beverage) drinks or the customers of Breezer. The questionnaire contains questions about the demographic information of the respondents, product usage behaviors, brand awareness measurement, media habits and promotion methods, and the hypothesis test analysis on the respondents’ attitude variation among different subgroups or attitudes. Based on the data collected, some research findings could be carried out and some suggestions for the future development of Bacardi Breezer could be generated based on the theoretical analysis. The software and technical supports acquired in this research includes Quatrics ((http://www.qualtrics.com/ ), SPSS, Microsoft Office etc.

1. Background Information

1.1Company Background

Bacardi Limited is the largest privately held, family-owned spirits company in the world. Originally known for its eponymous Bacardi white rum, it now has a portfolio of more than 200 brands and labels. The brand that would be discussed in this project is Bacardi Breezer, which is categorized in RTD FAB (Ready To Drink, Flavored Alcoholic Beverage) business of Bacardi.

In China, the FAB market has been expanded fast during the past few years. In 2014, the predicted consumption amount of FAB reaches 6100 million Liters (Source: Data-monitor). However, the fast growth of FAB in China market has brought Bacardi few improvements, the Breezer business in China market has been growing quite slowly. The reasons behind this phenomenon would be explored in this project and some suggestions for Breezer’s future development would be carried out. Due to the limited knowledge known about the customers, some marketing research methodologies would be adopted to enable the writer to have better understanding of the targeting and potential customers of Breezer.

1.2 Marketing Decision Problem Definition

In this project, the management decision problem (MD problem) is defined as to develop a strategic plan for the future development in China market based on the comprehensive understandings of targeting customers.

1.3 Marketing Research Problems Definition

Based on the MD problem, the marketing research problems (MR problems) are defined as following:

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To understand customers’ current usage behaviors and attitudes towards Breezer;

To compare Bacardi Breezer’s brand image with that of its main competitors;

To investigate the welcomed media channels and promotion methods to the targeting customers

1.4 Research Design

Sampling method: Samples used in this research were collected through the online questionnaire survey via Qualtrics (http://www.qualtrics.com/ ).

Respondent criteria: The respondents in the survey include both male and female, and they are required to be alcohol non-rejecters who have tried FAB products during the last 3 months. Besides, the respondents shall be the people who are able to recognize the key brands in FAB category, such as Breezer, RIO etc.

City coverage: Based on the results, the living places of the respondents cover several cities, including the tier 1 cities, for example Beijing, Shanghai and Guangzhou, and also tier 2/3 cities, such as Xi’an, Wuhan and Chengdu.

Sample completion: This survey has collected 189 responses in total, among them, 157 are valid samples considering the completion level and reasonableness, the valid response rate is 78.9%.

1.5 Survey Sample Overview

Among the 157 valid responses, some basic understanding of the demographic information from the respondents could be shown as following:

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Exhibit 1

2. Research Overview:

This project contains 5 steps to carry out the final suggestions and strategic plan to the object brand, Breezer. The analysis process is listed as following:

1. Understanding the alcohol market:

This part is designed to have an overview of the current situation of FAB in China market, including the category recognition of FAB, brand awareness of the drinks, etc.

2. Current customers’ usage behaviors:

This part would mainly explore the consumer usage behaviors through the key “W”s terms (including Where, What, (with Whom), Why).

3. Brand measurement:

In this part, the brand image of Breezer would be compared with its main competitors in the FAB category, such as RIO, Kirin and Reloaded Red etc. the results of the comparison shall be able to show some of the customers’ key considerations and perceptions towards Breezer.

4. Media habit/promotion methods:

This part would discover customers’ media habits and their favorite promotion methods, in order to make proper promotion and advertising plans in future.

5. Hypothesis analysis:

This part is designed to explore whether the respondents’ attitudes would vary among different subgroups or attributes, details of the analysis would show in latter part of the report.

3. Findings and Analysis

3.1 Findings #1: Understanding of the alcohol market

3.1.1 Popularity of FAB:

Based on the results of the questionnaires, it can be seen that beer and wine are still the most popular alcohol drinks in China market, while the category FAB takes the 3rd place, namely 45% of the total. This result may indicate that the FAB drinks in China have rich

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customer resources and it is widely accepted by the public.

Exhibit 2

3.1.2 Key players in FAB category:

A table can be generated by summarizing the packaging, volume, flavor and price of the main brands in the FAB drinks market nowadays in China:

Exhibit 3

From the comparison, it can be indicated that Bacardi Breezer seems to provide different flavors at a reasonable price. A potential limitation of Breezer might be that it only has the bottle packaging, while RIO and Kirin also provides can packages.

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Exhibit 4

Considering the brand awareness of the four brands, Bacardi Breezer takes the top among the competitors, and it also has the highest conversion rate (from visitor to buyer). RIO is the brand follows the figure of Breezer closely, therefore it is a powerful competitor of Breezer. Due to few respondents mentioned their experiences on drinking Reloaded Red (5 aware and 3 trial), this brand would not be discussed in latter part.

3.2 Findings #2: Current Usage Behavior

3.2.1 Key ‘W’s

The key ‘W’s including where: where is the most often consumed place? What: what is customers’ favorite flavor and consumption volume? Who: drink Breezer with whom? Why: why people drink Breezer for the first time and what are the triggers?

Where

It can be seen clearly from the chart that among Breezer users, KTV is the most often consumed place, accounts for 33%. At home during meal ranks 2nd accounts for 26%. However, in bar/pub consumed less compared with KTV.

Exhibit 5

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What

Among Breezer tried respondents, lime is the favorite flavor has a percentage of 39, followed by lemon, blueberry, peach, grapefruit and orange.

Exhibit 6

For the consumption volume, 70% of respondents choose 1 bottle per time. The mean for consumption volume is 2.74 and median is 2.

Exhibit 7

There are also some improvement areas supposed by the respondents. 48% of respondents hope to develop new flavor, such as mix fruit flavor. 29% of respondents want a price reduction. And 10% of respondents hope to improve the cap design to open the cap easily, that is to say unscrew the cap with hand and does not need a bottle opener.

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Who

Breezer’s customers are shown as follows:There are more female customers than male customers. 53% of the respondents age range from 25 to 34. There are 8% more respondents from tier 1 city than tier 2/3 city. Most of the respondents have a bachelor or higher degree and monthly income is RMB 3,000- 4,999 accounts for 53%.

Exhibit 8

Among Breezer users, they often drink Breezer with friends, schoolmate and colleagues, accounts for 88%. It means that Breezer is a drink can share with friends. However, there is also 23% of the respondents choose to drink Breezer alone.

Exhibit 9

Why

54% of respondents first time drink Breezer because of the good-looking product/liquid color. 49% of respondents drink due to others’ recommendation. In addition, diverse

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flavors, good-looking package color, intention to try and moderate alcohol level were chosen almost equally, accounts for 39%, 37%, 33% and 32% respectively.

Exhibit 10

3.2.2 Breezer purchase channel

Convenience store is the channel Breezer users purchase most. Meanwhile, hypermarket ranks 2nd accounts for 30%. However, respondents purchase less in bar/pub and nightclub.

Exhibit 11

3.3 Findings #3: Brand Measurement

3.3.1 Breezer’s Performance on Key Attributes Compared with its Competitors in FAB Category

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In the questionnaire, first it requires respondents to give importance to each listed key attributes and then rate for the key attributes of different brand. The key attributes includes high brand awareness, good taste, variety of flavor choice, beautiful color of products, stylish package, fashionable brand image, reasonable price, easy to buy, variety of package volume and variety of package format.

Among the attributes, Breezer performs better in high brand awareness and beautiful productscolor. Meanwhile, Rio performs better in variety of package format and variety of package volume. What Breezer can improve is to increase the variety of package format and package volume. For example, to launch can format or sharing package. When compared with Kirin, Breezer performs well on high brand awareness and beautiful color of products. Kirin performs well on price. Breezer can make improvements on price attribute.

Exhibit 12

3.3.2 Performance on Key Attributes- Dual users

Compared with Rio, Breezer performs better in brand awareness, product design and package, such as taste, product color, and variety of flavor choices, stylish package. Rio

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performs well on varieties of product format and volume, which means that Breezer has a plenty of room to improve in the variety of package format and package volume.

Exhibit 13

3.3.3 Breezer’s Brand Perception

Based on the performance of Breezer on the listed attributes and the importance respondents given to each attribute, it can draw the following map to find out which aspect Breezer did well and which aspect Breezer need to improve.

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Exhibit 14

The attributes on the top right corner are those have a good performance and rated higher importance by respondents. It can be seen clearly from the following chart that it is good to keep Breezer’s stylish and colorful package. The attributes in the left top corner are those have a good performance but respondents rated lower. It is nice for Breezer to have good taste and reasonable price. What is more, the attributes on the left bottom corner with lower importance mean that although it does not perform well, but it does not matter. Additionally, the right bottom corner is the attributes Breezer needs to improve. Breezer can improve its products on variety package format and package volume.

3.4 Findings #4: Media Habit and Promotion

3.4.1 Information Channel - Alcohol

Friends’ recommendation is the most popular information for the alcohol followed by social network, portal website, and TV advertisement.

When compared the Breezer information channel with the alcohol information channel, it can see clearly that Breezer needs to improve its information channel on social network, TV advertisement. Because customers get information from those channels often.

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Exhibit 15

3.4.2 Welcomed Promotion Methods

The most welcomed promotion method is direct discount accounts for 58%. Customers are also interested in buy one get one free activity and new product free tasting activity, accounts for 46% and 41% respectively.

Exhibit 16

4. Hypothesis Analysis

4.1 Hypothesis #1:

As far as we are concerned, female and male consumers may have different attitudes towards alcoholic products. Generally speaking, there is a common conception that female may prefer low concentration alcoholic beverage while male may prefer strong liquor. If it is true, the female and male consumers may value our product differently. Therefore, we want to find out the gap between female and male consumers in terms of the importance of our product’ 10 different attributes.

4.1.1 Process:

Recoding: we recode the gender, grouping to “1=female” and “2=male”

Question: we want to know do the mean differences of the 10 attributes’ importance

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ratings between female and male make statistical sense. Separately we can make 10 questions, namely does female’s attitude towards brand awareness significantly differ from male’s, does female’s attitude towards taste significantly from male’s, and etc.

Test: Independent Simple T Test

Hypotheses:

H0: A1m = A1f (female’s attitude towards brand awareness doesn’t significantly differ from male’s)

H1: A1m ≠ A1f (female’s attitude towards brand awareness does significantly differ from male’s)

Repeatedly, we can make 9 more hypotheses in terms of the 9 other attributes.

4.1.2 Result

1. Significance Testing

For stylish package, firstly, We use the Levene’s Test (based on F-statistic), p-value =0.011<0.05, suggesting variances are unequal.

Then we check the row “equal variances not assumed”,the P-values of Stylish Package is 0.016,which is less than 0.05, thus the null hypotheses should be rejected, and that is to say female and male consumers do have different attitudes towards Stylish package.

For ‘High Brand Awareness’ and ‘Variety of Package Format’, the P-values of the Levene’s Test (based on F-statistic) are both smaller than 0.05, but after checking the P-value of “equal variances not assumed”,they are larger than 0.05, thus the null hypotheses should not be rejected, and that is to say no big difference on attitudes towards these two attributes between male and female.

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For rest P-values of the Levene’s Test (based on F-statistic) are all larger than 0.05, then checking the row of equal variance assumed the P-value are all lager than 0.05, thus the null hypotheses should not be rejected, and that is to say female and male consumers do not have different attitudes towards these attributes.

2. Mean Comparison

Female Male Gap

Stylish Package 1.96 2.70 (0.736)

3. Implication

There is great gap between female’s and male’s attitudes towards package. Male consumers think ‘Stylish package’ is more important compare to female consumers.

4.2 Hypothesis #2

The flow of hypothesis 2 is similar with hypothesis 1, we just choose different subgroups to test their differences in attitudes, namely consumers from tier 1 cities and consumers from other cities.

4.2.1 Process:

Recoding: we recode the location, grouping to “1=Tier 1 city” and “2=Tier2/3/4 cities”

Question: similar with hypothesis 1

Test: Independent Simple T Test

Hypotheses:

H0: A11 = A12 (tier 1 cities’ consumers’ attitudes towards brand awareness don’t significantly differ from that of consumers from other cities)

H1: A11 ≠ A12 (tier 1 cities’ consumers’ towards brand awareness significantly differ from that of consumers from tier 2/3/4 cities)

Similarly, we can make 9 more hypotheses in terms of the 9 other attributes.

4.2.2 Result

F Sig. t df Sig. (2-tailed)

Mean Difference

Std. Error Difference

High Brand 5.534 .021 1.336 70 .186 .333 .250

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Awareness 1.336 62.749 .186 .333 .250Good Taste 2.851 .096 .664 70 .509 .083 .126

.664 61.433 .509 .083 .126Variery of flavor choices

2.343 .130 .621 70 .537 .111 .179.621 68.021 .537 .111 .179

Beautiful color of the products

.042 .839 -.098 70 .922 -.028 .284-.098 69.880 .922 -.028 .284

Stylish package .847 .361 .449 70 .655 .111 .247.449 69.169 .655 .111 .247

Fashionbale brand image

.259 .613 .854 70 .396 .194 .228.854 69.712 .396 .194 .228

Reasonable price .282 .597 .415 70 .679 .083 .201.415 69.958 .679 .083 .201

Easy to buy 2.478 .120 1.195 70 .236 .222 .1861.195 65.397 .236 .222 .186

Variety of package volume

.351 .555 .547 70 .586 .167 .304

.547 69.986 .586 .167 .304Variety of Package format

.074 .786 .571 70 .570 .167 .292

.571 69.886 .570 .167 .292

1. Significance Testing

The P-values of High Brand Awareness is less than 0.05, thus the null hypotheses should be rejected, and that is to say they do have different attitudes towards brand awareness;

The P-values of the rest attributes are larger than 0.05, thus the null hypotheses should not be rejected, and that is to say they do not have different attitudes towards these attributes.

2. Mean Comparison

3. Implication

i. Generally speaking, there is not too many differences between tier 1 cities and other cities in terms of consumers’ attitudes towards our product.

ii. Relatively speaking, consumers from tier 1 cities care more about the brand

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Tier 1 Cities Tier2/3/4 Cities Gap

High Brand Awareness 2.39 2.06 (0.333)

awareness than other consumers do.

4.3 Hypothesis #3

In our research, we find that people have different importance ratings of the 10 attributes. Among the 10 attributes, we care most about the consumers’ attitudes towards the flavor and package. Thus, we want to know that does the difference between consumers’ importance ratings for.

4.3.1 Process

Variable Choosing:

Q15.2: Consumers’ attitude towards FAB in terms of the importance of Good Taste;

Q15.2: Consumers’ attitude towards FAB in terms of the importance of Beautiful Color of the Products.

Tested Sample Size: 72

Test: Paired Sample T Test

Hypothesis:

H0: A1 = A2 (the importance rating of Good Taste is similar with the importance rating of Beautiful Color of the Products)

H1: A1 ≠ A2 (the importance rating of Good Taste is different from the importance rating of Beautiful Color of the Products)

4.3.2 Result

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1. Correlation

The P-value of the correlations of the two variables is 0.803, larger than 0.05, thus these two variables are not correlated

2. Significance Testing

The P-value, generated by the Paired Sample Test, is 0.000 less than 0.05, thus the null hypothesis should be rejected and that is to say the two variables are different.

3. Mean Comparison

For the Good Taste: mean is 1.26, SD is 0.531;For the Beautiful Color of the Products: mean is 2.40, SD is 1.195

4. Implication

People care more about the color of FAB products instead of the taste. A reasonable speculation for this result is that people would like to enjoy the atmosphere of drinking this kind of products instead of for pure taste.

5. Market Recommendations

Our research was commissioned to investigate the consumers’ behavior and attitude in order to examine Breezer’s brand image, as well as to discover consumers’ preference on media channels and promotion methods. Based on the analyses and findings that we concluded before, we can draw three market recommendations as follows.

5.1 Targeting-We recommend that Breezer could target at social and out-going people and focus on occasions that are suitable for collective activities.

According to our research, FAB is the third popular alcoholic beverage, following beer and red wine. And among those respondent who have tried Breezer, 33% of them, namely the largest proportion, consumed this product at KTV and 88% usually drink Breezer with friends, only 23% will drink it alone. Moreover, when asked about the reasons they choose Breezer for the first time, good-looking package and friends’

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recommendation are the two major reasons. Hence, we can draw a conclusion that drinking Breezer is more like a social activity to people instead of an individual deed.

In the light of this conception, we think that Breezer could target at social and out-going people. Because they are more like to hang out with friends, especially to drink alcohol together. Our product is alcoholic but people can drink a lot without getting drunk. Besides our product has a good-looking appearance and novel flavor. It can decorate the party, making the party more fashionable. Therefore, this group of people can be Breezer’s core customers. What Breezer should do is to educate these people and let them know Breezer is exactly what they are looking for.

5.2 Brand/Product-We recommend that Breezer brand should Keep the advantage of fashionable brand image and high awareness and develop new package format, volume and design.

According to the respondents’ rates, variety of package format and variety of package volume are two very important attributes of FAB products. However Breezer does not do very well in these two attributes.

Besides, the respondents’ also mentioned that they hope Breezer could develop a new flavor, reduce price and make the product easy to decap. Relatively speaking, we think that redesign the cap would be the most cost efficient choice. Consumer can feel this convenience immediately.

Moreover, we conduct a hypothesis test that if the color significantly more important than the flavor in the eyes of people who tried Breezer. The result says that the color do be more important, which is also in accordance with our former conclusion that people usually do not drink Breezer alone. Therefore a colorful package will make them glamorous in front of their friends.

5.3 We recommend that Breezer should attach importance to the product placement in TV programs and social networks and also pay more attention on product channel, CVS and KTV.

Traditionally, wine dealers will put their resource into the retail chains, especially for the in-store promotions. However, according to our research social networks and TV programs are also very important information sources for the consumers. People are easily influenced by the opinion leaders online or in the TV programs, especially the latter one. The TV programs can represent a real scenario where handsome actors and actress drink some beverages and wines. This scenario can give the audiences a very direct incentive so that they would like to imitate. The TV programs can play a very important role in educating the customers.

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6. Limitations

Limited sample size

There are 189 interviewees in total answered the questionnaire. The valid response is 157. However, among the respondents, only 57 respondents are Breezer users, which means they drank Breezer before. The sample size is not large enough to represent the whole Breezer market.

Limited knowledge of the market

The outcome is theoretical given by the result of questionnaire and the output of SPSS. Whether it is feasible to improve the product is not clear without actual information of the market.

Appendix

Questionnaire

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