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Final Research Report on Vitaminwater

By the Observ8tors:Erin ButlerTrey LundquistCourtney PeretsMichael PerezMiriam RattesIrving RomeroNicole SandlerSupachaya Sucharitvanitwong

Advertising ResearchADV3500 Section: 02D5Submitted: December 6, 2011

3 Vitaminwater

Executive Summary.................................................................................................................5Part 1: Secondary ResearchSituation Analysis....................................................................................................................9 Industry Analysis...........................................................................................................9 Company Analysis.......................................................................................................10 Product Brand Analysis...............................................................................................12 Consumer Analysis.....................................................................................................14 Competitive Analysis..................................................................................................16 Macro-Environmental Analysis.................................................................................18SWOT............................................................................................................21Opportunity Recommendation for Research.................................................................21

Research Problem Statement............................................................................................22Proposed Questions for Research Objectives..............................................................22Part 2: Qualitative ResearchIntroduction.............................................................................................24Research Problem Statement.............................................................................................24Research Objectives.............................................................................................................25Research Method..................................................................................................................25 Why Qualitative Research?........................................................................................25 Why Focus Group?....................................................................................................26 Procedure....................................................................................................................27 Instruments.................................................................................................................28 Participants................................................................................................30Focus Group Findings..........................................................................................................31

Theme 1........................................................................................................................31 Theme 2.......................................................................................................................32

Theme 3........................................................................................................................33 Theme 4........................................................................................................................34 Theme 5.......................................................................................................................35Future Quantitative Research...........................................................................................36Part 3: Quantitative ResearchIntroduction......................................................................................................40Concepts of Interest............................................................................................................41Research Method..................................................................................................................42 Quantitative vs. Qualitative...............................................................................42 Web vs. Other types of surveys..........................................................................43 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Participants.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46Survey Findings......................................................................................................................47

Table of Contents

Observ8tors 4

Table of ContentsResearch Conclusions..........................................................................................................53Bibl iography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56Appendices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Appendix A: Tme/Cost Table....................................................................................60 A.1 Secondary Research............................................................................60 A.2 Qualitiative Research.............................................................................61 A.3 Quantitative Research.........................................................................62 Appendix B: Secondary Research Appendix........................................................63 B.1-3 Mintel Charts........................................................................................63 B. 4 Price Comparison Chart.......................................................................64 B. 5 Direct Competitors Chart....................................................................65 B.6 Packaging...................................................................................................65 B.7 Logo............................................................................................................65 Appendix C: Pre-Screening Questionnaire..........................................................66 Appendix D: Informed Consent Form...................................................................67 Appendix E: Moderator Guide...............................................................................68 Appendix F: Additional Focus Group Materials...................................................72 Appendix G: Cognitive Map.......................................................................................76 Appendix H: Survey Questionnaire.........................................................................77 Appendix I: Statistical Results of Quantitative Analysis.....................................83

5 Vitaminwater

Executive Summary The Observ8tors successfully conducted secondary, qualitative and quantitative

research to understand the Vitaminwater brand and its competitive environment. We have

discovered that opportunities for growth lie within targeting college-aged female consumers

and repositioning Vitaminwater as a healthy product consumed in casual settings. Vitaminwater

is currently associated with masculine physical activity and compared to market-leading sports

drinks including Gatorade and Propel. Focusing on the rejuvenating benefits of Vitaminwater

will help the brand break through the clutter of the enhanced water industry by establishing a

unique identity among a less penetrated market.

The Observ8tors conducted secondary research to gain overall insight into the

Vitaminwater’s history, products, consumers and competitive environment. Data collected

and analyzed from various databases, financial reports, news articles and books revealed

Vitaminwater’s lacking market share in the non-carbonated, non-alcoholic beverage category.

Additionally, research showed the brand did not occupy a clear position in the minds of

consumers.

Qualitative research was necessary to further examine in-depth consumer attitudes,

preferences and beliefs relating to the enhanced water category. The Observ8tors conducted

a focus group of 12 University of Florida students, both male and female, to explore our target

market’s motivations when purchasing enhanced beverages. After analyzing the participants’

responses, we concluded Vitaminwater does not stand out among the sports and energy drink

industries. Our team observed five reoccurring themes reflecting consumer attitudes toward

beverages: lifestyle, taste and health, social media, image and price.

The Observ8tors felt quantitative research was crucial to confirm our belief that

Vitaminwater would benefit from marketing its product toward college-aged women as a

Observ8tors 6

relaxed and peaceful product, a significant departure from its previous active, after-party image.

This would require a complete repositioning of the product use, which is costly and time

consuming. We distributed online surveys to our target market and received 98 respondents: 26

males and 72 females. The objective of our quantitative research was to understand consumers’

perception of our brand, its relation to competitors, and the purchase environment. Additionally,

we aimed to identify Vitaminwater’s ideal celebrity endorser and discover how our target

interacts with brands online.

The Observ8tors recommend that Vitaminwater reposition itself as a rejuvenating,

relaxed and practical beverage. Our research revealed the drink is currently associated with

athletics and physical activity, competing directly with top-of-mind products in a heavily

saturated market. By marketing the beverage toward college-aged females as a casual drink,

Vitaminwater can create a unique niche for itself. The window of opportunity is open for

Vitaminwater to use trendy endorsers and social media to attract this lesser-tapped market and

establish a strong brand image. Transferring the focus from athletic males to practical female

consumers will give Vitaminwater a prominent edge in a competitive market.

7 Vitaminwater

Project 1: Secondary Research

9 Vitaminwater

Situation AnalysisIndust ry Ana l ys i s Vitaminwater is a unique product due to the multiple industries of which it is considered

to be a part. The beverage can be labeled as a sports drink, bottled water and, more directly,

enhanced water. These industries are quite large and involve a great majority of Americans. From

2004 to 2006, sales for enhanced water and sports drinks, which are the closest definitions of

Vitaminwater, grew 73% to 1.3 billion dollars (Americans Flocking, 2007). Further, in 2007, water

with added vitamins grew 135% in sales (Farr, 2008). Americans are health-conscious and look

for alternatives to soda. As more Americans are becoming obese and overweight, they tend to

stay away from carbonated beverages, meaning a decline in soda sales and an increase in sports

and energy drinks.

In the sports and energy drink category, Vitaminwater is not close to the competition.

Gatorade is the leading product with a grossed 827 million dollars in 2009 (Rovell, 2010).

According to Montague-Jones, PepsiCo’s Gatorade controls 75% market share in the sports

drink industry (2010). Coca Cola, PepsiCo’s leading competitor in the sports drink category,

considers Powerade its flagship sports drink product over Vitaminwater. According to Rovell,

Vitaminwater yielded NCAA championship rights to Powerade, as well as the rights to two

National Basketball Association teams, 12 Major League Baseball teams, Little League Baseball

and Pop Warner Football League (2011).

In the larger bottled water industry, Vitaminwater holds a strong majority in enhanced

water sales. In 2010, every American drank an average of 28.3 gallons of bottled water,

accumulating to 8.75 billion gallons of water. All bottled water variations, including enhanced

and flavored, accounted for 7.7 billion dollars in sales (Bottled Water, 2011). The industry for

bottled water is a large one, and Vitaminwater has only a slight portion of these sales. However,

Observ8tors 10

Vitaminwater does hold the lead in enhanced water sales with a 582.2% increase in sales

to 186.6 million dollars in 2010. The next competitor, SoBe, recorded sales of $73.8 million

(Bottled Water, 2011). In the enhanced water industry, Vitaminwater is the leading product. The

brand is trying to differentiate some of their products to reach a wider range of consumers.

Vitaminwater can enter the energy drink market and broaden its sales to foreign

countries. According to Dean, it was predicted that Vitaminwater could increase annual growth

by 12% and sales of over $9 billion if it repositioned itself as an energy drink in Asia. The Asia

Pacific region boasts 30% of the global volume of energy drinks (2011). Even in the American

and Canadian markets, overall sales of energy drinks have doubled in the last five years.

Vitaminwater could become a player in this growing industry.

Company Ana l ys i s Vitaminwater is owned by Energy Brands, otherwise known as Glaceau, a privately

-owned subsidiary brand of The Coca-Cola Company. The Coca-Cola Company’s mission, “We

strive to refresh the world, inspire moments of optimism and happiness, create value and make

a difference,” represents what the company stands for. The Coca-Cola Company is the leading

manufacturer and distributor of non-alcoholic beverage concentrations and syrups, which are

sold to bottling companies globally.

According to the company website (2011), Atlanta pharmacist John Pemberton invented

Coke in 1886 as an effort to create a non-alcoholic drink during prohibition. In the 1960s the

firm began expanding overseas and launching new drinks including Sprite, Fanta, Tab, and Diet

Coke (Hoover’s, 2010). The company consolidated its US bottling operations into Coca-Cola

Enterprises in 1986 and sold 51% of the new company to the public. The Coca-Cola Company

purchased Energy Brands, the creator of Vitaminwater, for $4.1 billion in 2007. The company

11 Vitaminwater

now operates in more than 200 countries and licenses more than 500 brands.

The Coca-Cola Company has a portfolio of more than 3,500 beverages, including

sodas, sports drinks, waters, teas, juices, energy drinks and coffees. Some of the main sparkling

beverages include Coca-Cola, Sprite, Diet Coke/Coca-Cola Light, Fanta and Schweppes. Some

select juice drinks include Minute Maid, Hi-C and Cappy. Select waters include Ciel, Dasani,

Bonaqua, Kinley and Glaceau Smartwater. Other beverages include Full Throttle, Powerade,

Glaceau Vitaminwater and FUZE. The main Anchor Bottlers include Coca-Cola Amatil Limited,

Coca-Cola Enterprises, Coca-Cola FEMSA, Coca-Cola Hellenic Bottling Company and

Coca-Cola Refreshments. Coca-Cola has numerous subsidiaries, some of which are Atlanta

Manufacturing, Caribbean Refrescos, Inc. and Energy Brands (Hoover’s, 2010).

The Coca-Cola Company is the market leader in the non-alcoholic beverage category,

with 43% of the market share. PepsiCo and Cadbury Schweppes are Coca-Cola’s main

competitors. According to CNNMoney (2011), the U.S. carbonated soft drink category

fell about .05% in 2010, and experienced a 2.1% and three percent drop in 2009 and 2008

respectively. This drop correlated with the growing health concern trend in the United States.

According to Hoover’s (2010), The Coca-Cola Company reported a Return on Assets of 19.49%,

a Dividend Yield of 2.61% and a Return on Equity of 41.23%.

The Coca-Cola Company reported sales of $35.12 billion and revenues of $25.119

million during the financial year ended December 2010, a 13.3% increase over that year

(Hoover’s, 2010). The growth in revenue was mainly due to addition of more than one

billion incremental unit cases of volume and a five percent growth in unit case volume

(Datamonitor360, 2010).

Observ8tors 12

Key Personnel:

•Muthar Kent: Chairman and CEO

•Gary Fayard: EVP and CFO

•Edmund Steinike: VP and CIO

•Guy Wollaert: SVP and CTO

•Beatriz R. Perez: Chief Sustainability Officer

The Coca-Cola Company believes one of its fundamental strengths is the ability to

generate cash from operating activities. Capital expenditures, a significant portion of dividends,

contractual obligations, and share repurchases and acquisitions are typically funded with cash

from operating activities (EdgarOnline, 2010). The issuance of stock is not generally used to

raise capital. The company instead uses an optimal mix of short-term and long-term debt. Coca-

Cola believes its current liquidity position is strong, and feels confidently about meeting all

financial obligations in the upcoming future.

Produc t /B rand Ana l ys i s Glaceau’s mission is to “help people on the go feel better, perform better and live

healthier lives through better hydration.” The fresh, hip image the brand exudes is Vitaminwater’s

most apparent attribute. The product’s accessibility and variety offer consumers pleasing benefits

(Vitaminwater Book, 2011). Consumers can find Vitaminwater anywhere: gas stations, small

grocery stores, and vending machines worldwide.

According to BevNET website (2011), Vitaminwater positions itself as a fresh new

approach to bottled water that is inspired by nature and enhanced by science. The drink

was intended to provide a healthy medium between sports drinks and water. Vitaminwater

represents young, fresh and health-conscious consumers looking for an alternative to sports

13 Vitaminwater

drinks, sodas and juices. The brand targets younger consumers by using hip packaging, celebrity

endorsements, and social media to identify the product.

Light, trendy and fresh are the three words associated with Vitaminwater. “Light” because

the product will not leave consumers with the same bloated feeling after drinking typical

carbonated beverages. Vitaminwater is considered “trendy,” because numerous celebrities and

athletes including Carrie Underwood, LeBron James, and rapper 50 Cent represent the product

(Carrie Underwood partners, 2008). The brand is wildly known for its trendiness (Bell, 2007).

Lastly, it’s considered “fresh” because Vitaminwater is delicious and refreshing.

Vitaminwater maintains a strong social media connection with its consumers (Correll,

2010), consistently providing updates on products, up-coming activities, and events via Facebook

and Twitter. Starting campaigns and posting videos on Facebook have been extremely successful

and effective in creating brand personality and character awareness. Direct interaction with

consumers has positively positioned the brand as innovative in the eyes of its target market,

with the brand even consulting its Facebook fans to create a new flavor (Ostrow, 2008).

Vitaminwater’s actual health content is a debatable subject among consumers, and therefore, the

brand’s most impending negative attribute.

The price of the product ranges from $1.00 to $2.00 per bottle (depending on sale

location), making the product relatively inexpensive and affordable. The bottles have colorful

labels and entertaining messages for the consumers to learn more about the product. Each

flavor differs in vitamins and source of energy. According to Glaceau Vitaminwater Information

(2010), Glaceau expanded distribution to Europe and Canada in 2006 after posting record

profits of $350 million. The beverage is widely distributed in supermarkets, gas stations,

cafeterias, vending machines, gyms and sporting goods stores.

Observ8tors 14

Vitaminwater is fighting to stand out among the rest of non-carbonated beverages.

According to the Athlete Promotions Website (2011), the main feature of their advertising is

the use of celebrity endorsements; the association between celebrities and the brand helps

consumers remember and recall the product. Vitaminwater spent $39 million on measured

media last year (2010), a marked decline from previous years. The brand spent $55 million in

2008 and $50 million in 2009 (Zmuda, 2011). Vitaminwater’s newest ad campaign created by

VitaMDC Partners’ CP&B is “You’re up.” It includes TV, digital and out-of-home.

Consumer Ana l ys i s Vitaminwater attracts users over a broad range of ages, not simply confined to college

students. The brand more recently has targeted college students aged 18-24 in its advertising.

Typical consumers are men and women aged 18-34 living in the northeastern U.S and California

regions, particularly in second-tier cities. They are also those who are attending or have

graduated college and tend to be of African-American and Asian descent (Mediamark Internet

Reporter, 2009). These consumers belong to two primary example segments from the Nielsen

PRIZM Classification: “Up-and-Comers” and “Bohemian Mix.”

“Up-and-Comers” are young, upscale singles that are in college or recent graduates,

who are into athletic activities, the latest technology and nightlife entertainment. “Bohemian

Mix” consumers are young multicultural urbanite singles who are students and professionals.

They are early adopters who enjoy the latest movies, nightclubs and liberal lifestyles (Nielsen

MyBestSegments PRIZM Segmentation System, 2010).

These self-motivated individuals keep active and strive to be successful, but they

always have time to pencil drinks into their busy schedule. These consumers are influenced

by television stations such as BET, MTV, E! and Adult Swim. Magazines also contribute to their

15 Vitaminwater

perspective on culture and life in general. These include Cosmopolitan, Entrepreneur, and In

Style (Mediamark Internet Reporter, 2009).

These young consumers are motivated to buy Vitaminwater because of its unique

features, such as its low-calorie count and vitamin enrichment. Two-thirds of consumers would

rather have a beverage other than water with a meal and enjoy trying new flavors in drinks

(Appendix B.1). This leads to consumers choosing Vitaminwater to satiate their longing for a

variety of flavors while keeping the integrity of water.

The designated consumer not only uses Vitaminwater as a flavored complement to

their meal, but also as a supplement before, during, and after physical activity. In addition,

Vitaminwater’s low calorie product line minimizes concern regarding high-sugar and caloric

content (See appendix B.4). When shopping for beverage products, the array of colors

and flavors, as well as the aesthetic packaging of Vitaminwater, attract the aforementioned

consumers.

Vitaminwater consumers would respond notably to an ethnic, young celebrity

spokesperson. In recent years, the brand commissioned hip rapper 50 Cent as a promoter

of the beverage, even naming the “Formula 50” flavor after him. As a prominent figure in pop

culture, these consumers admire 50 Cent, and he helped increase revenue by 250% over a

period of four years. An organic, flavorful celebrity with a mind geared toward fitness and an

entertaining lifestyle resonates most with the Vitaminwater’s consumers, such as Nicki Minaj

(Thompson, 2004).

These buyers have a tendency toward heavy Internet usage, and are among the light TV-

watchers (Mediamark Internet Reporter, 2009). It is common for members of this age group to

multi-task while watching TV, especially with women (Attitudes Toward Advertising and Media,

Observ8tors 16

2008). Deemed “digital natives,” 18-24-year-olds have grown up online and are comfortable using

networking sites and social media for a wider variety of uses beyond dating and communication

(Social Networking, 2010).

Compe t i t i ve Ana l ys i s Competitive Overview: According to Hoover’s database (2011), Vitaminwater

(Energy Brands) has many direct competitors in the sports and energy drink category, along

with the enhanced water category. Two of these competitors are Gatorade and Sobe. Indirect

competitors include mostly all ready-to-drink beverages in the market, including Fuze and

AriZona Iced Teas.

Product attributes, functions, & positioning: The top two direct competitors

position themselves as sports and energy drinks used for refueling and replenishing the body.

Gatorade in particular has the tag lines “Fuel that goes beyond hydration” and “Be fueled to

achieve your best with Gatorade sports nutrition” (Gatorade, 2011). Gatorade strives to be the

best at hydrating athletes and keeping them in the best shape to perform. Gatorade also offers a

variety of options and product lines which are geared toward specific needs.

On the other hand, SoBe focuses on its wide variety of flavors and different types of

drinks for specific needs. One of their products is, “Zero-calorie SoBe Lifewater with PureVia,

which is a naturally sweetened vitamin enhanced water beverage that gives you vitamins and

antioxidants” (SoBe, 2011). AriZona Iced Teas maintains the position of being a natural beverage

made with 100% natural ingredients (AriZona, 2011). Fuze positions itself as a natural juice and

focuses on its diverse fruit flavors that come together to create a drink with helpful nutrients

for the body. Although all of these indirect targets have different positions, they all serve the

function of replenishing the body with energy and natural health.

17 Vitaminwater

Packaging: Vitaminwater’s direct competitors all have a distinct packaging, but a

similar bottle. The indirect competitors are more distinct, for example, AriZona, which is well

known for packaging because each of their products has its own original design that could be

considered a work of art. Refer to Appendix B.4 for images of the packaging.

Past and current campaigns: Gatorade has always been in the forefront of

advertising in this category. They have been known to get many high-level athletes and sporting

events to push their products and achieve high notoriety. Their popularity goes as far back as

their “Is It In You?” campaign, which tapped into the active, competitive team sports athletes

(Rovell, 2006, p. 180). Gatorade has, however, begun to focus more on its core athletic

consumers rather than lifestyle drinkers and, according to Advertising Age (2010), the company

is doing well. “In 2010, volume rose 6.5%, a marked improvement from the 13% decline in 2009.

Its share of the sports drink category fell three points to about 71% of the category”(Zmuda,

2011). Since the launch of the new G-Series, Gatorade has gone through with some rebranding.

This culminated in the 2009 “What does G mean to you?” Superbowl commercial. Gatorade

wanted to stay current and modern with their advertising and marketing techniques (Jackson,

2009). In 2010, their advertising expenditures totaled $218,602,400 (Ad$pender, 2011).

Sobe’s current advertising is based on a web-savvy strategy and heavy advertising

(Stanford, 2010). They have a very colorful and interactive website that highlights the company

as being fun and shows their vast collection of flavors. In 2008, they launched a Superbowl

commercial, which reintroduced the brand to the market and made a big splash online with

their dancing lizards campaign. Life Water’s market share grew to 6.1% in the first half, according

to Beverage Digest (2008), while volume was up 167% from a year earlier (Zmuda, 2008). Sobe

spent $874,500 on advertising in 2010 (Ad$pender, 2011).

Observ8tors 18

AriZona Iced Teas is not currently running a campaign, nor have they ever used any

other form of traditional media as a promotion except for coupons (Zimbio, 2011). Fuze just

recently initiated its new campaign, “It’s Better When You Mix Things Up” (Fuze Facebook Page,

2011). The company has been doing quantitative research for over nine months and found that

consumers, specifically the 18 to 24 year old segment are “blending types of music, food, and

even wellness” (Advertising Age, 2010). Fuze just recently initiated its new campaign, “It’s Better

When You Mix Things Up” (Fuze Facebook Page, 2011). They’ve been doing quantitative research

for over nine months and found that consumers, specifically 18- to 24-year-olds are “blending

types of music, food, and even wellness” (Advertising Age, 2010). In 2010, their advertising

expenditures totaled $1,117,700 (Ad$pender, 2011).

Price: See Appendix B.4 for price comparisons.

Macro-Env i ronmen ta l Ana l ys i s Demographic Trends: People aged 16 to 24 have the lowest earnings among

workers and are likely to be at or below the minimum wage. In 2010, 25% of 16- to19-year-

old and 11% of 20- to 24-year-old consumers had earnings at or below the minimum wage

(Highlights of Women’s Earnings in 2010, 2011). Members of this age group have the highest

unemployment rate. Nevertheless, they have significant discretionary income. They count with

an aggregate income of nearly $1 trillion (Generation Y Market Research Reports, 2011).

Although consumers in this group cut down spending during economic recession, they

held back less than other groups and were the quickest to increase their purchases. Because

most young people are dependent on their parents, they do not worry about debts, bills, and

other payments, which enables them to spend more impulsively (Spending Habits of the Teen

Consumer, 2011).

19 Vitaminwater

In 2010, Asians earned more than Whites, Blacks and Hispanics. White men earned 91%

as much as Asian men; Black men earned 68% as much; and Hispanic men, 60% (Highlights of

Women’s Earnings in 2010, 2011). Nearly 40% adults among 18 and 29 years are members of

multicultural population groups. Hispanics comprise 18% such population, while Blacks account

for 15%, and Asians approximately four percent. Between 2010 and 2015, the non-Hispanic

White 20- to 29- year old population is expected to decline by 350,000 (Generation Y Market

Research Reports, 2011).

On average, people under 25 years old spend $232 on nonalcoholic beverages annually.

This accounts for .8% of their average annual expenditures. Additionally, higher household

expenditures on nonalcoholic drinks equally come from all U.S. regions, except for the

Northeast. The last comprises Connecticut, Maine, Massachusetts, New Hampshire, New Jersey,

New York, Pennsylvania, Rhode Island, and Vermont, where sales are one percent lower (Bureau

of Labor Statistics, 2009).

Social Trends: Weight loss and other health-related concerns are driving many

consumers to purchase healthier food and to change their eating patterns. These consumers

are experimenting with beverages that can help them achieve their goals. Many are also making

extra efforts to find bargains on their favorite beverages to reduce household expenditures

(Nonalcoholic Beverages: The Shopper, 2011).

Another trend finds that, on average, college students slept 8.4 hours, engaged in

educational activities for 3.6 hours, and enjoyed leisure and sports activities for 3.5 hours on

a typical weekday during the school year over the 2005–2009 period (Back to College, 2011).

Ninety percent of people aged 18 to 29 own a computer, 82% own a mobile phone, which 72%

use to receive and send text messages. People in this group spend more time online than they

Observ8tors 20

do watching television, with 42% watching online video at least once per month (Ferguson,

2008).

Economic Trends: As economic recovery began with the ending of the economic

recession in June 2009, the U.S. economy entered 2011 showing signs of improvement, but still

facing economic and budgetary challenges. The home ownership rate has fallen to its lowest

level since 1998, 66.5%, down significantly from its peak of 69.2% during the fourth quarter of

2004. Unemployment remains high at 8.9% for February 2011, and it is anticipated to remain

above eight percent. Meanwhile, inflation remains subdued due to persistence of excess slack

and limited pricing power of producers. The forecast for real Gross Domestic Product is slightly

under historical trends at 3.1% (Gnuschke, 2011).

The food price index for consumers rose 0.4% in July 2011 after rising 0.2% in June.

Except for the cereals and bakery product index, grocery store food groups all increased in July.

The index for nonalcoholic beverages increased 0.9% in July as the coffee index continued to

rise sharply (CPI Detailed Report, 2011). Sales for the last industry largely remained depressed

in 2010, growing only 0.8% to $50.5 billion during 2009 to 2010 (Nonalcoholic Beverages: The

Market, 2011).

Over the past 12 months, the food index has risen 4.2%, with the food at home index up

5.4%. All major grocery store food group indexes rose over the past year; the increases ranged

from 3.5% other food at home) to 7.9% (dairy and related products) (CPI Detailed Report,

2011).

21 Vitaminwater

SWOT Ana l ys i s

Op p o r tun i t y Re commend a t i o n The opportunities for growth lie within targeting the college-aged consumers, especially

women, and repositioning the beverage to reflect the concerns and desires of a more casual

segment, as opposed to the current sporty or party-going college students. Through our

secondary research, we found that females tend to consume Vitaminwater more than males,

and believe it would be beneficial to focus on this demographic in advertising efforts. Currently,

Vitaminwater’s advertising and marketing efforts target young consumers, but especially appeal

to men, with their “after party” and athletic mentality. Due to Vitaminwater’s current positioning,

it faces fierce competition with enhanced sports and energy drinks, such as Gatorade.

Vitaminwater has the opportunity to reposition itself as a rejuvenating beverage

consumed in more relaxed settings. Generally, we have found that consumers do not use

Vitaminwater in vigorous, athletic situations, placing it in an inopportune position with more

Observ8tors 22

suited competitors. Appealing to women allows the brand to tap into a less penetrated market

and focus on benefits that this consumer cares about, such as light fitness activities, inner and

outer beauty and health. This way, the nutritional and trendsetting features of Vitaminwater will

be highlighted, rather than understated in all the noise of its unparalleled competition.

Research P rob l em S ta temen t Vitaminwater’s unfocused advertising directed at a broad target group has caused the

company to have an undefined message. If Vitaminwater focuses on college-aged consumers,

18-24, who have a high discretionary income, they can have a simple unified message and attract

the right consumers. Vitaminwater will have a better understanding of how to target this market

by researching this market. We hope to understand what motivates the college consumer to

choose one sports and enhanced water drink over another and the environment in which they

are purchasing these products.

Prop osed Qu a l i ta t i ve Resea rch Quest i o ns :• Do you think that price reflects quality or are you paying for the brand name?• What is your perception of sports drinks? Enhanced water?• What is your definition of enhanced water?• Have you ever purchased Vitaminwater?• If you had your choice of something to drink after playing a sport, what would it be?• What are the most important attributes you look for in a bottled beverage?• Why would you purchase a beverage other than water?• Which benefit is more important to you when selecting a beverage, health or taste?• How much would you be willing to pay for a bottled beverage?• What celebrity between the ages of 18-24 do you most identify with or aspire to be like?• Do you often research the products you consume?• How many hours do you spend a day on social media Web sites?• Do you trust advertisements on social media? • Do you follow your favorite brands on Twitter or Facebook?• Do you make any purchasing decisions based on social media?• Have you ever posted anything on a brand’s Facebook page?• What would motivate you to share a website, article or video with your friends?• Have you ever visited the website of your favorite sports and enhanced water beverage? If so,

why?• Have you visited the Vitaminwater Web site? What were your opinions about it?

• Have you searched Vitaminwater on the Internet?

Project 2: Qualitative Research

Observ8tors 24

I n t ro du c t i o n to Qu a l i ta t i ve Resea rch Following a thorough examination of the Vitaminwater brand’s current situation, the

Observ8tors have identified the company’s consumers and competitors, as well as its current

positioning and environmental factors. Secondary research was conducted to determine a future

opportunity for Vitaminwater’s advertising. As a result, the Observ8tors decided to further

explore the college-aged market through qualitative research.

Through secondary research, we discovered that Vitaminwater’s direct competitors are

in the sports and energy drink categories. These brackets of beverages have surged in popularity

and sales as the American market has weaned off of high-calorie carbonated beverages and

become more health-conscious. Overall, Gatorade is one of the top direct competitors of

Vitaminwater and has been the overall leading advertiser in the category. Unfortunately,

Vitaminwater has been overshadowed by Gatorade and is not primarily seen as a sports drink.

Thus, we discovered that Vitaminwater would be best suited in a different beverage category.

Vitaminwater consumers were found to be those influenced by trending culture and liberal

lifestyles, as well as college students or recent college graduates. The brand is a popular choice

among women, in particular, which is a key finding leading to our proposed brand strategy.

Due to the current primary consumers and perceived image of Vitaminwater, the

Observ8tors believe college-aged students should be involved in the following qualitative

research, as we further investigate how the brand relates to the female market.

Prob l em S ta temen t Vitaminwater’s unfocused advertising directed at a broad target group has caused

the company to have an undefined message. If Vitaminwater focuses on college-aged female

consumers, aged18 to 24, who have a high discretionary income, they can unify their message

25 Vitaminwater

and attract the right market. Vitaminwater will have a better understanding of how to target

these consumers by researching this market and the brand’s image. We hope to understand

what motivates the college consumer to choose one sports and enhanced water drink over

another, the environment in which they are purchasing these products, and how they interact

with that brand online.

Research Ob j e c t i ves The objective of our research is to determine the beliefs, perceptions, motivations,

attitudes and preferences of college students, especially women, aged 18 to 24, towards non-

carbonated, non-alcoholic beverage brands. Discovering how the environment affects the

decision to purchase the product and what benefits and attributes these consumers look for

will lead us to a better understanding of Vitaminwater in the marketplace. Through this research,

we would also like to identify what spectrum of American culture enhanced water consumers

most identify with, and therefore, who would be the most appropriate, relatable spokesperson

for the brand.

Qua l i ta t i ve Resea rch Me th ods Observ8tors learned from our secondary research project that, despite efforts by its

advertising to target sporty, party-going male college students, Vitaminwater’s main consumers

are female college students aged 18 to 24. Vitaminwater’s informational needs, therefore, lie

within understanding what motivates consumers to choose one non-carbonated, non-alcoholic

beverage over another, and the environment in which they purchase these products. Qualitative

research was needed at this stage in order to find the “why” behind the nature of the brand’s

problem. Consequently, Vitaminwater would be able to change its unfocused advertising, which is

making the company message unclear and less profitable.

Observ8tors 26

Qualitative research provided us with intimate interviewing of a small number of

individuals in order to collect detailed, in-depth insights on a subjective level that would

uncover the nature and structure of attitudes and motivations of our participants. At this stage

of our research, we are not concerned with information on frequency or distribution, giving

us numbers and statistics. Statistics-oriented and close-ended questions used in quantitative

research would not have been appropriate for our research objectives at this point, as we

were looking for insights that would help us understand consumers’ culture and underlying

motivations. Additionally, Observ8tors wanted to use qualitative research to help us develop

better future research by allowing us to refine our problem definition and complementing

quantitative research.

During this stage, we explored the 18- to 24-year-old market to better understand

why, when and how they buy certain products and to acquire knowledge that would satisfy

our advertising informational needs. Qualitative research allowed us to get close to our

data, interact with participants, learn from their language, gestures and expressions, and gain

information about consumers and competitors. Qualitative questions, using open-ended

prompts, probing, and adaptiveness to responses, are more flexible and exploratory in nature.

Additionally, we found that qualitative research would be quicker and less costly to conduct.

However, the results we found through qualitative research may not be easily replicated or

generalized like those of quantitative research.

Why a Focus Group?

Observ8tors found that conducting a focus group would be the best way to satisfy

our informational needs for our qualitative research. In-depth interviews are recommended

to investigate confidential, emotionally charged or embarrassing topics, but we considered our

27 Vitaminwater

topic as a whole to be uncontroversial enough to carry out a focus group. Additionally, focus

groups are less costly and time-consuming, and do not require too much labor or a highly

trained interviewer. They also provide a bigger sample size compared to in-depth interviews.

The team aimed to foster a comfortable and dynamic environment for our participants through

a focus group, in order to stimulate a deeper, richer and more creative discussion. We wanted

to create a motivating environment to stimulate thoughts in other participants. Often times,

participants find it easier to verbalize their thoughts in groups, as well as to see things from a

different perspective. We used various questioning techniques to discover what was underneath

this market’s buying culture.

Finally, our moderator attempted to overcome the limitations of focus groups, such as

silent participants, by inviting every individual to speak after a question. We also provided our

group with individual white dry-erase boards to write down their answers to certain questions

before revealing them, in order to prevent bias. Our moderator prepared by rehearsing for the

focus group in front of all members of the Observ8tors to avoid anything that could have been

interpreted as moderator-introduced bias.

Procedure

After completing our secondary research, Observ8tors concluded that conducting

a focus group would be the most convenient way to carry out our qualitative research and

meet the informational needs regarding Vitaminwater. On September 29, 2011, the members

of the Observ8tors met to discuss when, where and how we would complete this focus group.

Additionally, we created a pre-screening questionnaire to be disbursed to and answered by

potential focus groups participants. During the following week, we distributed and evaluated the

questionnaires and determined which participants were best suited for our focus group. Thus,

Observ8tors 28

we chose 12 college students aged 18 to 24 who we felt were qualified for the research and

asked them to complete a consent form before participation in the study.

Prior to conducting the focus group, all members of the Observ8tors met to create

and review a moderator guide on October 9. Our guide consisted of informational needs,

moderator guidelines, and a discussion guide. Our focus group then was held on October

10 at 6:00 p.m. in room 1098 in Weimer Hall at the University of Florida campus. We chose

this conference-style room to maintain professionalism and as well as its adequate size and

convenient location. Proper reservation of the room was arranged more than a week in

advance. The focus group lasted just over an hour, and included pizza, bottled water and chips

for participants. The session was recorded with a computer. Beside our moderator, another

member of the Observ8tors was present to observe, take notes, and assist in distributing

materials. Other members watched the session through a Skype video conference from a

nearby location. The conversation was slow to start, as participants warmed up to the process

and each other, but as the questions carried on, there was rarely a shortage of expressed

opinions.

After the focus group was completed, all members met the next day to analyze and

discuss the results, findings and potential themes from the focus group. The qualitative research

report was completed on October 23, and the findings were presented on October 25 in class.

Please refer to Appendix A: Time Cost Table for a complete description of all qualitative research

activities.

Instruments

The participants of this focus group were recruited using a pre-screening questionnaire,

which oriented them about the purpose of the focus group; asked questions about the

29 Vitaminwater

respondents’ consumption of non-alcoholic, non-carbonated beverages, as well as physical

activity; and requested basic demographic and contact information (Refer to Appendix B for

Pre-Screening Questionnaire). The purpose of the pre-screener was to determine which 18- to

24-year-old college students were appropriate candidates for the focus group, based on the

description of our target market and that of our biggest competitor. We did not explicitly reveal

the brand or company for which our group was conducting research.

Another instrument the Observ8tors used in conducting this qualitative research was an

informed consent disclosure. We asked that qualified respondents sign and date the document

to participate, agreeing to the details outlined. The informed consent disclosure explained the

purpose of the study and described what participants should expect during the focus group,

with a general explanation about the subject of the research. It also stated that there were no

anticipated potential risks associated with their participation and ensured participants that their

responses were voluntary and would be kept confidential. Included was Professor Song’s contact

information should any questions or concerns arise as a result of this focus group (Refer to

Appendix C for Informed Consent Disclosure).

Of the tools utilized for the conduction of the study, the most vital to its success and

seamlessness was the moderator guide used during the session. Containing a streamline of

organized information and questions, the guide’s purpose was to pilot discussion to specifically

address informational needs. First, it explicated the rules governing the moderator’s behavior

and specific instructions to remain objective, impartial, considerate, and audible during the

focus group. Following was a scripted introduction that informed participants of their rights and

ability to leave upon will. At that point, the moderator then concisely explained the purpose of

the research and why the participants were chosen. Also in the guide was an icebreaker, asking

Observ8tors 30

the participants to introduce and state something about themselves, at which point, other

participants with something in common would say, “Me too,” and continue with something

about themselves. The guide continued with 23 qualitative and probing questions that addressed

various informational needs (Refer to Appendix D for the Focus Group Moderator Guide).

Through the use of these delineated questions, the Observ8tors aimed to obtain detailed,

authentic responses from which we could extract relevant and applicable insights to attitudes,

behaviors, and opinions surrounding Vitaminwater.

Participants

In selecting members to participate in our focus group, our team distributed pre-

screening questionnaires to determine appropriate demographic and behavioral characteristics

amongst 18- to 24-year-old friends, classmates, and roommates who attend the University of

Florida. Primary criteria included having consumed non-carbonated, non-alcoholic beverages in

the past three months, working out at least once a week, and preferring different types of the

aforementioned beverages, our characteristic of interest.

We found it to be most appropriate to conduct one focus group with 12 people, both

males and females, of a variety of backgrounds, in order to most properly represent students

at the University of Florida. This diversity would allow us to confirm or disprove our previous

notions from secondary research about different attitudes, behaviors and beliefs, especially

toward Vitaminwater’s relationship to women and its competitive products. The focus group

contained eight boys and four girls, with majors ranging from biology to advertising to

engineering. All were familiar with or users of the products in question, and provided very

insightful information during the study.

31 Vitaminwater

Fo cus G roup F i nd i ngs After conducting our focus group and evaluating the audio recordings, the Observ8tors

came to the conclusion that Vitaminwater is not highly distinguished among the sports drink and

energy drink industries. Through this research we saw the development of five major themes:

Social Media, Lifestyle, Taste and Health, Image, and Price. It was evident that the participants

in the focus group acknowledged Gatorade as the leading product in this category, while

participants felt Vitaminwater did not have nearly as prominent a presence in the beverage

category. The following themes reflect what our team found as crucial insights in regards to the

Vitaminwater brand and product (Refer to Appendix F: Cognitive Map).

Social Media

Theme One: Motivations for visiting a Brand’s social media profile include promotions and

exclusivity.

The majority of participants stated that they would only visit a brand’s social media

profile to receive discounts on products or exclusive information. When the moderator asked

what was the ideal way to interact with a brand online, responses showed that the participants

had little interest in brand interaction, especially being such a low involvement product category.

Because there are so many brands available, the majority of the participants believed that there

was nothing extraordinary to seek from any which one of them through a social media profile.

One participant even said:

“It’s not like it’s something exclusive, it’s not like… there was only one of them out there. You’d wanna be a part of it. But… you know, you can go to any convenience store and get it. If you’re like a Miami Heat fan, you’d like the Miami Heat because it’s like a group.”

The overriding theme of brands in social media is that people would only visit a brand’s

website if it were something they felt a part of or if one could receive a special deal from visiting

Observ8tors 32

the site. One participant expressed this opinion by saying,

“There’s nothing I want to see out there, I’ve seen all of it in the store.”

However, many agreed that if “the first 100 ‘likes’ were to get free Powerade for the rest

of your life, I would definitely ‘like’ that.” Despite this, we still believe that social media is an

integral facet to the brand’s digital strategy, because it’s users saturate this media and expect

brand representation. A social media presence is key to formulating a brand personality and

preference.

Lifestyle

Theme Two: Vitaminwater is described as being hip, “zen,” and for females.

When discussing the type of job or characteristics of the person who drinks

Vitaminwater, answers included “a yoga instructor” and “someone who focuses on health.” If the

characteristics of the consumers are an indication of those who represent the target market

of this product, then the challenge would be the fact that this target market is quite broad and

generic. We would, however, like to keep this aforementioned image and build upon it for the

female consumer. Vitaminwater needs to send a clearer message about whom they are targeting,

their target market and the brand character. The brand was construed as a less mainstream

beverage:

“When I think of who drinks Vitaminwater, I think of a hipster or zen. Someone who thinks about multivitamins and stuff like that, not just taste or physical activity.”

This same question was asked for Powerade and AriZona Tea. The majority of the

participants agreed that the characteristic that best described the consumers for Powerade

would be “athletic,” with some members specifying a “construction worker.” AriZona Tea is seen

as an “environmentalist” or “teacher.” When examining these two products’ characteristics, the

personalities of Powerade and AriZona Iced Tea are more apparent than that of Vitminwater.

33 Vitaminwater

Also correlating with lifestyle views, the celebrity paring result shows a strong

correlation between Gatorade and male celebrities, while Vitaminwater on the other hand

associates more toward female celebrities. According to the results, even if four of the

male celebrities were picked as product endorsers for Vitaminwater, none were athletes or

particularly known for their masculinity. We believe the brand seems to be missing an apparent

“product character,” compared to other related products. One recurring celebrity match for

Vitaminwater amongst participants was Kim Kardashian:

“I think [Kim] thinks highly of herself so she stays fit and healthy, but she’s still pretty chill.”

Without a clear product positioning, it can be difficult for consumers to identify with

Vitaminwater as brand or relate to the lifestyle, therefore, this is a challenge for the company to

overcome.

Taste and Health

Theme Three: College-aged consumers value taste over health-content when purchasing

beverages.

The majority of focus group participants revealed that purchase decisions were based

more on a beverage’s taste than on its health content. The participants voiced their opinions on

the importance of taste, with many of them failing to mention health content at all, and never

putting Vitaminwater’s true health content into question. Participants seemed concerned with

receiving benefits from the beverages they consume, exhibiting a sense of entitlement to high-

quality and unique products.

When the moderator asked participants to compare regular and enhanced water, many

participants appeared to prefer pleasing tastes and added flavors, despite calorie and sugar

content. One participant even said:

Observ8tors 34

“We drink water to survive. Some people just prefer to drink water that has a little extra stuff

in it. Whether that is flavor or taste…. it makes the drink more enjoyable even if regular water may be healthier.”

Participants seemed to place high value on beverages with a multitude of flavors, viewing

variety as an indicator of high-quality and personal freedom. A participant mentioned:

“I would view Vitaminwater as having additional benefits because of its different flavors.”

However, when asked about the taste of enhanced water specifically, participants

felt flavoring was artificial and a “watered down dull taste of the actual kind of fruit.” Many

proclaimed when choosing to drink a beverage for taste, they would select a flavorful drink. One

said:

“If I’m going for something sweet, I’d actually get a real sweet drink.”

From the focus group, it is evident that Vitaminwater faces strong competition on the

grounds of taste, but may have a one-up on fellow brands on the healthiness scale.

Image

Theme Four: Vitaminwater lacks a clear position in the sports drinks and enhanced water

industries, while male and females view the packaging of Vitaminwater differently.

The enhanced water category struggles to maintain a foothold in the sports drink and

bottled water industry. Focus group participants thought of enhanced water as “flavored water,”

and its taste artificial. When the moderator asked what types of sports drinks and enhanced

water the participants have had to drink in the past month, none of the participants stated

they had enhanced water. Due to the lack of performance from the enhanced water industry,

Vitaminwater is not a top of mind product and does not have a clear product position.

The participants struggled to define a particular niche for enhanced water. They viewed it

as a “casual drink” but did not have a specified action for Vitaminwater. One participant stated:

35 Vitaminwater

“I feel like people would buy Vitaminwater at the store as a regular drink, and Powerade more for doing physical activity.”

The definition of Vitaminwater as a “regular drink” does not provide the beverage with a

distinguished position in the sports and enhanced water industries.

Further, focus group members did not feel that the brand presented itself in a favorable

manor on shelves in stores. When asked to make a decision at a store to buy any type of drink,

participants stated they first looked at the deals and then at the package design of the products.

One male participant remarked that Vitaminwater looked like a “pharmaceutical drug packaging”

and was drawn away by the simplistic design of Vitaminwater. The dull packaging contradicts the

flavorful essence of Vitaminwater and further pushes itself away from top of mind. However, one

female enjoyed the minimalistic design of Vitaminwater, and other female participants agreed.

This difference in the visual image of Vitaminwater further displays the lack of design focus.

Price

Theme Five: Price does not play a major role as a determining factor when choosing a

sports or enhanced water drink.

Participants in this study shared the thought that most brand name companies were

overpriced. Many participants felt that they paid for both the object and the added value of the

brand. In regards to enhanced water, the participants felt as though they were being charged

extra for very little in return. Specifically, one girl expressed that brand name enhanced waters

were “a way for companies to charge a dollar for three drops of flavor.”

It was unanimous that they would not put forth much effort or perform product

research when deciding what to shop for in this category. Especially while they shopped at

grocery stores, most participants went based on habit or simply what their parents bought.

Observ8tors 36

“I probably only do it [research] for a big purchase, but anything at a grocery store I would just get.”

Some participants said that they would go for these drinks when they were on sale or

somehow given a coupon online for the enhanced water or energy drink. One group member

said:

“Anytime I look up prices I am looking for a deal or like a coupon.”

Fu tu re Qu an t i ta t i ve Resea rch A variety of opportunities for further research have been revealed to the Observ8tors

after having conducted qualitative research. We would like to reposition Vitaminwater in a

casual, healthy drink category primarily targeting women, and to do so, it is imperative to further

understand such opportunities. Our team feels that surveys would best satisfy our quantitative

informational needs. We aim to take these abstract findings and quantify them into measurable

outcomes. By using our qualitative research findings, we will formulate a variety quantitative

nominal, ordinal, interval, and ratio survey questions that will be used to further understand and

generalize assumptions about our target market’s mindset. Our team also intends to rank the

importance of certain attributes of non-carbonated, non-alcoholic beverages that we found in

our qualitative research in order to prioritize which benefits of our product to emphasize for a

new advertising strategy.

Of the aforementioned insights acquired through conducting secondary and qualitative

research, concepts meriting further investigation include: ways to incentivize social media brand

interaction, the notion of the drink’s apparent preference among casual women rather than

athletic or party-going men, lifestyles and celebrities most associated with Vitaminwater, and the

degree to which taste is preferred over health content. Each can be a measured male against

female and among races to solidify a proper target market. These factors are each imperative in

37 Vitaminwater

formulating the most effective advertising strategy.

Observ8tors found that there is not much room for significant growth in the sporty

male market for drinks. Thus, through quantitative research, we expect to discover which

qualities Vitaminwater should position themselves with to become more appealing and

marketable. At the same time, we would like to learn about how to best communicate with the

target market through social media and celebrity endorsement. With this information, we will

be able to formulate a well-defined positioning for Vitaminwater, so that it can be differentiated

from other non-carbonated, non-alcoholic beverages.

Observ8tors 38

39 Vitaminwater

Project 3: Quantitative Research

Observ8tors 40

I n t ro du c t i o n to Qu an t i ta t i ve Resea rch The Obser8tors have conducted thorough secondary and primary research. The

research has centered on Vitaminwater, the enhanced water and athletic drink categories, and

the attitudes of both male and females aged 18 to 24 about non-carbonated, non-alcoholic

drinks. Our research has been more focused on 18 to 24 year old females due to their

enhanced preferences and opinions toward Vitaminwater and their competing brands.

Through secondary research, Observ8tors discovered that Vitaminwater’s direct

competitors are in the energy and sports drinks categories. These categories have surged

in popularity as sales of carbonated beverages have declined and Americans have become

more health conscious. Secondary research proved that Gatorade and other sports drinks

overshadow Vitaminwater, thus Vitaminwater is not a top of mind product. Observ8tors

gathered that Vitaminwater should pursue a more trendy and liberal position, and more

emphasis should be placed on female consumers.

Oberserv8tors conducted qualitative research to further explore the attitudes and

perceptions of college aged male and females towards non-carbonated, non-alcoholic beverages.

We conducted one focus group of 12 University of Florida students of varied backgrounds and

majors aged 18 to 24. We included both male and female participants because we wanted to

gather more insight as to why Vitaminwater was more accepted by women than men, and to

provide a wider variety of insight. After our data was collected and analyzed, Observ8tors came

up with five key themes. The themes consisted of social media, lifestyle, taste and health, image,

and price. Through these findings, we further proved that Vitaminwater has no clear product

position within the sports and enhanced water industries. Vitaminwater was described as being

‘hip’ or ‘zen,’ which further strengthens the point that Vitaminwater has no clear focus or

41 Vitaminwater

group to market towards. We found that females prefer Vitaminwater and Vitaminwater should

be geared towards women. Further research should be conducted to clarify the position of

Vitaminwater and to find out what activity and purpose Vitaminwater serves, in relation to how

it is currently marketed.

Con cep ts o f I n te res t After conducting our qualitative research the Observ8tors discovered several different

themes to focus on for our quantitative research. The main themes found were the buying

factors, image of Vitaminwater, product use and social media brand interaction. These four

main concepts will allow the Observ8tors to expand on our previous research and give a

better understanding of what strategy Vitaminwater should use going forward on our target

demographic of college students at UF ages 18 to 24.

Buying Factors: It has been identified that taste and packing are the most influential

buying factors in the non-alcoholic, non-carbonated beverage category for the target market,

females. It is important to know that price was not a major factor in the decision process

since Vitaminwater is relatively expensive. Thus, further research will help us understand how

Vitaminwater can use its packaging and taste as appealing aspects in their future marketing

efforts.

Image: One of the major issues we found with Vitaminwater was its lack of a strong

position. Through the focus group we conducted it was clear that we needed more information

on where consumers thought Vitaminwater should be placed having mixed views on it. It is

important to see what type of a brand Vitaminwater would be seen as. Thus further research

in this area would be beneficial to finding how people felt about the brand and its position.

Furthermore, in our qualitative research we found that for the most part our participants

Observ8tors 42

leaned toward a female celebrity but we did not have a clear concise favorite. This meant we

would need to quantify our answer through the use of our quantitative research by giving him

or her a set of celebrities and seeing how appropriate they believed each celebrity would be as

a spokesperson for Vitaminwater.

Product Use: Further research is needed to determine what activities are being done

while drinking Vitaminwater. This would allow us to see who we should target to better position

the product. Another key point is to determine if their is a difference in thought between users

and non users of Vitaminwater.

Social Media Brand Interaction: Although in our previous finding we saw that the only

reason most would visit a specific brands social media site would be for coupons and giveaways

we wanted to see where the consumer would want to see Vitaminwater either on Facebook,

Twitter or through other online mediums. Another concern for the social media strategies was

to find the best online media content. This could mean by building Vitaminwater into more of a

brand icon through exclusive content or just having a much simpler approach by pushing deals

for our followers.

Quan t i ta t i ve Resea rch Me th odsQuantitative Research vs. Qualitative Research

Upon the completion of secondary research and primarily qualitative research,

the Observ8ators considered it necessary to conduct quantitative research to fulfill the

informational needs of Vitaminwater. Quantitative research would further complement in a

formal, objective and systematic manner the findings that resulted from the previous research

we conducted. Through our secondary research, we obtained available information collected

by others regarding Vitaminwater. Through our focus group, we were able to collect detailed,

43 Vitaminwater

in-depth insights of consumers about taste and health, lifestyles, social media, image and price.

Quantitative research would allow us to measure and analyze statistically reliable and numerical

data.

Through the focus group, qualitative research allowed the Observ8tors to intensively

observe and interview a small number of individuals about their insights regarding Vitaminwater.

While this research focused on the nature and structure of attitudes and motivations of

participants, we recognized the need of more objective data, for which we could compare

differences in magnitude and generalize research findings. The informational needs of quantitative

research originated from the data previously collected. Once research was conducted, our team

had the ability to analyze and understand the collected data in terms of numerical descriptors.

We gained additional information about attitudes and essential preferred attributes and benefits

of college students, especially women, aged 18 to 24, towards non-carbonated, non-alcoholic

beverage brands as a result of using descriptive, inferential statistical procedures and in the end

we could confidently apply our findings to a larger population of target research participants.

Web vs. Other types of surveys

Specifically, the Observ8tors used web surveys in executing quantitative research. This

method was very convenient for us as the questionnaire design; study administration; and

data analysis were free of charge thanks to the free access to the private research software

Qualtrics available to students of Advertising Research. Web surveys were appropriate for our

target population due to how technologically savvy they are. Thus, by approaching potential

respondents through Facebook, we contacted them in a familiar, comfortable, casual setting,

which resulted in a high response rate.

Through the use of the Internet, biased responses due to sensitive topics were not an

Observ8tors 44

issue, increasing the validity of our data. In addition, a web-based questionnaire was useful to

design interviews with complex skip patterns. We designed the study to disregard the answers

of respondents below 18 or over 24 years old, as well as non-UF students. Finally, although the

questionnaire design was a fairly complex process due to initial unfamiliarity with the Qualtrics

program, the administration of the study was extremely time efficient. Upon distributing

the survey online, it did not take long to obtain the desired number of responses (Refer to

Appendix A for Time/Cost Table).

Though the Observ8tors delivered that the strengths of web surveys made them the

best choice to execute our research, it is worth noting the weaknesses of this method. This

particular method normally receives a low response rate, but we tried to overcome this by

developing a clear, straightforward questionnaire that guaranteed potential participants not to

take too long to complete. We achieved this, in part, through the use of skip patterns. Special

programming skills were needed but the Observ8tors found the class lecture on Qualtrics very

useful to develop our survey. Additionally, by getting started on this project quite ahead before

the deadline, extended timing of data collection was not an issue. We also used online reminders

through Facebook messages and e-mails to make potential respondents remember to take our

survey.

Procedure

The consumer insights and findings garnered through our conducted focus group

needed to be further explored, confirmed, and enumerated, so the Observ8tors composed and

distributed a quantitative research survey to accomplish this next step.

Foremost, our team analyzed and prioritized concepts of interest from the qualitative

studies in order to develop a variety of appropriate questions for a survey that would be able

45 Vitaminwater

to solidify results into measurable data. A survey was essential in facilitating the detection of

unambiguous issues and opportunities for a marked change in the marketing of the Vitaminwater

brand and product. The web survey, created on Qualtrics, was open for distribution on Friday,

November 11, 2011 (Refer to Appendix A for Time/Cost Table).

Prior to answering the body of questions, respondents had to read and agree to our

informed consent form as well as answer some key screening questions to participate in full.

Members of the Observ8tors dispensed the link to the web survey to people within the target

market via social outlets such as Facebook, as well as email listserves. The survey required

an estimated 8 minutes to answer, but the variance was great, because a significant portion

of respondents left the survey open in their browser for hours or even days. On Thursday,

November 17, 2011, distribution was ceased and our team began analysis of the 98 completed

response sets.

Instruments

The first page of the web survey was an informed consent form, explaining the survey’s

purpose and the team’s expectations. Their reading and agreement to the terms described

permitted the use of the responses and proved the legitimacy of the study. The informed

consent also included the lack of potential risks and compensation involved, and explained that

all information provided on their behalf would be completely confidential. We listed contact

information for the supervising professor in the case that questions or concerns should arise.

The Observ8tors included a short series of pre-screening questions with skip patterns

at the beginning of the survey to determine which participants fit the criteria for the data

collection. These pre-screeners segmented respondents into sex, age, and product use

categories, only eliminating those who were not between the ages of 18 and 24 and who did not

Observ8tors 46

attend the University of Florida.

Using nominal, ordinal, interval, and ratio classifications, we composed an array

of questions, ranging from multiple choice to constant sum responses. The questionnaire

comprised of 20 questions including the informed consent agreement (Refer to Appendix H

for full survey). As previously stated, the first three nominal questions were for demographic

and pre-screening purposes. Beyond those, the remaining survey was generally structured from

general to specific, with topics including the general drink market, Vitaminwater specifically, and

last social media behavior and attitudes. When arranging questions, we intermixed the styles (e.g.

dichotomous and Likert) to keep participants interested, while avoiding confusion.

Data and key concepts were extracted using a numerical coding system for answers,

allowing Qualtrics and IBM’s SPSS to analyze and categorize each response for more holistic

views as well as in-depth exploration. The research team classified appropriate questions under

the handful of key concepts to determine from which data the most useful insights could be

found.

Participants

Members of the research team distributed the web survey link to friends, acquaintances,

roommates and classmates between the ages of 18 to 24 who attend the University of Florida.

Anyone fitting these criteria was permitted to take the survey, whether or not they had

consumed Vitaminwater in the past three months, because we were interested in the views,

attitudes and behaviors of not only loyal customers, but also those with an aversion to the

product. Each team member strived to attain at least 10 participants, a number which we

exceeded. Ninety-eight survey responses were completed within the week timeframe and

qualified for use. Respondents included 26 males and 72 females in the proper age segment, with

47 Vitaminwater

41% having drunk Vitaminwater in the past three months. All valid data came from UF students

aged 18 to 24. Although there were more females than males, our researched opportunity

focuses heavily on advertising to the former, and therefore, it has proven beneficial.

F i nd i ngs After conducting our quantitative research using Qualtrics and evaluating the data

through SPSS, the Observ8tors saw the development of four major themes: social media brand

Interaction, buying factor, product use and image. These following concepts reflect what our

team found as crucial insights in regards to the Vitaminwater brand and product and their

implications for the brand future marketing endeavors.

Social Media Brand Interaction:

From our qualitative research our group decided it was best to look further into how

consumers would like to interact with their favorite brands online and where Vitaminwater

could fit digitally. To do this we asked participants where they would like to see Vitaminwater on

the Web. We found that that 60%(51) participants felt an enhanced water drink would be best

served online on Facebook, closely followed by 51%(43) respondents believing an independent

website would be best (Refer to Appendix I.17). Taking this into consideration, these findings

show that most 18- to 24-year-olds are more interested in Vitaminwater having a presence on

Facebook.

In order to see what the consumers would like the brand’s online experience to be

like, the Observ8tors asked participants to rank the five different reasons to “like” or follow

a brand online. The response with the highest ranking was “to receive an exclusive deal on a

product or service,” with a mean of 1.33 having all but five of the respondents ranking it one or

two (Refer to Appendix I.13). The next closest reason to follow or like a brand was “supporting

Findings

Observ8tors 48

your brand” with a mean of 3.01, having 67%(49) of respondents that answered ranking it in

the top three. The lowest ranked reason was “expressing your opinion publicly” with a mean of

3.77. This would imply that the major part of Vitaminwater’s online approach would be to offer

specials and or to show their strong support from their consumers.

Furthermore, it was best to look where an advertisement for Vitaminwater should fit

if it were in a magazine, to better understand who its online target would be compared to the

magazine. Most respondents felt that Sports Illustrated, Cosmopolitan and People magazines

would be the most likely to carry ads by Vitaminwater (Refer to Appendix I.15). With that being

said there was a slight correlation between respondents that felt Cosmopolitan magazine was

most likely to contain these ads as well as People magazine. With these findings it can show

that the drink can be leaned toward a more feminine target, which would then imply that our

focuses should be on the females of this age group.

Finally, the Observ8tors found it essential to find if there was a difference in thought

between males and females when seeing a post by a brand on their Facebook or Twitter feeds,

seeing as those are two of the most notable social media websites. We gave respondents five

different faces ranging from happy to sad and had them decide which emotion they felt upon

seeing content from a brand. After conducting an independent samples T-test, females were

found to be more open-minded to seeing brand content online, having a lower mean of 2.93

compared to 3.31 in male respondents, with a 95.1% confidence level. This would also lead us to

believe that a Facebook presence would be much needed and appropriate for the target market

of females ages 18 to 24.

Buying Factors:

As a result of quantitative research, the Observ8tors have indicated which factors

49 Vitaminwater

of interest are most outstanding according to males and females when they purchase non-

alcoholic, non-carbonated beverages. Male and female respondents were asked to divide 100%

among attributes of this category of beverages, according to what they value the most. Upon

conducting an independent samples T-test, males were found to be more price sensitive than

women when purchasing non-alcoholic, noncarbonated beverages (Refer to Appendix 1.30).

With 99.996% confidence, the mean in which males emphasized price was 24.06 against females

who had a mean of 13.23. This evidence is conducive to our research, being that our target

market for Vitaminwater is females. Thus, pricing factors will not affect females as much when

conducting marketing efforts.

A second independent samples T-test was conducted to determine the degree to

which the participants agreed or disagreed with statements in regards to non-alcoholic, non-

carbonated beverages. With a 99.98% confidence, females are heavily responsive to attractive

packaging with a mean of 4.09 as opposed to a 3.44 mean for males (Refer to Appendix 1.31).

Once again, these results demonstrate that the attractive packaging of Vitaminwater is a positive

factor in the decision-making process when their target market, females, purchase these

beverages. Based on the following results, appearance ranks higher than price among women.

In addition to packaging, taste is another buying factor for females. A cross tabulation

chart was created to identify correlations between gender and buying factors. When the

participants were asked to check the reasons that influence them to purchase Vitaminwater, the

number one reason for females was taste. Fifty-five percent of females chose “taste” and 58%

of males selected “on sale” as the leading influential reason (Refer to Appendix 1.32). Yet again,

price was found to be more of a determining factor for males. For females, another tangible

factor was more influential in their purchasing decisions.

Observ8tors 50

The conclusion that can be made in regards to factors that influence consumers to

purchase nonalcoholic, non-carbonated beverages is that males are more price sensitive and

females focus on more tangible benefits and features such as taste and packaging. Considering

Vitaminwater’s pricier retail value, these results are favorable for our stated target market.

Product Use:

While Vitaminwater is not a top-of-mind brand, respondent opinions about the

beverage’s use differ significantly depending on their level of usage. Out of respondents who

hadn’t consumed Vitaminwater in the past three months, 54%(52) associated the beverage

with the gym and physical activity. However, respondents who had drunk Vitaminwater in

the past three months associated it most with everyday activities such as relaxing at home, a

source of vitamins and going to class. While these associations considerably differ, 57.5%(56) of

respondents hadn’t purchased the product recently.

Respondents who don’t use Vitaminwater view the product as athletic, with 56.6%(55)

comparing the beverage most to Propel and 18.9%(18) comparing it to Gatorade. However,

respondents who have used the product recently view Vitaminwater similarly to other sports

drinks, enhanced waters and teas.

Overall, the Observ8tors found that other sports drinks outshine Vitaminwater amongst

non-users, who compare the beverage to drinks associated with athletics and physical activity.

Vitaminwater users view the brand as being less pigeonholed, and associate it with a wide array

of day-to-day activities. Both frequent and non-frequent users did not associate the beverage

with eating meals, instead viewing the beverage as an accompaniment to actions throughout the

day.

Image:

51 Vitaminwater

Throughout secondary and qualitative research, Observ8tors had not been able to

establish a clear product position for Vitaminwater. Vitaminwater is not a top of mind product

in the non-carbonated, non-alcoholic beverages category. Further, Vitaminwater does not have

a clear message associated with its brand, nor do consumers know how to describe or place

Vitaminwater within a particular category. Through quantitative research, Observ8tors found

that 48% (52) participants closely relate Vitaminwater with Propel while another 22%(19)

related Vitaminwater with Gatorade (Refer to Appendix I.23). These findings proved that

Vitaminwater inhabits the sports drink industry, but the problem is that consumers do not think

of Vitaminwater as top of mind. Our participants could not even pinpoint a particular definition

for what Vitaminwater is. Observ8tors asked a question probing participants to use an adjective

to describe Vitaminwater. Seventy-three percent (63) participants showed a strong positive

correlation (1 to 5) for the adjective “trendy” (Refer to Appendix I.26). These findings confirmed

our belief from secondary and primary research that Vitmainwater was believed to be a trendy

drink, but these findings proved that only 31%(37) participants thought of Vitaminwater as

‘Hipster.’ This went against our previous findings that Vitaminwater was both trendy and hipster.

Vitmainwater still does not have a clear product position.

A staggering fact found through crosstabs with the same question showed that 82%(69)

participants showed a positive correlation for the adjective “healthy” for Vitaminwater. Another

question asking participants to describe the drink as either unhealthy or healthy found that

66%(57) participants thought of Vitaminwater as either somewhat healthy, healthy or very

healthy. Further, 59%(50) participants described Vitaminwater as somewhat satisfying, satisfying

or very satisfying. If Vitaminwater wants to compete against health conscious drinks, they need

to improve on their perception of being a healthy and satisfying drink. To solve this problem,

Observ8tors 52

Vitaminwater needs to look at the findings of a question concerning a strong spokesperson for

the brand.

Both male and female consumers agreed that Tom Brady represented the best match for

Vitaminwater. Seventy-nine percent (67) participants thought of Tom Brady as an appropriate

or very appropriate spokesperson (Refer to Appendix I.24). Our previous qualitative research

pointed to Kim Kardashian as the most appropriate. As we want to move away from the

masculine and sporty perception of Vitaminwater, findings showed that another spokesperson

could be actress Mila Kunis. Sixtey percent (53) participants found Mila Kunis to be an

appropriate or very appropriate spokesperson for Vitaminwater. Further, Mila Kunis appeals to

the female market and could help boast a new image for Vitaminwater.

Another major image issue has to do with the perceptions of female and male

consumers about Vitaminwater. A question asking participants to label Vitaminwater as either

masculine or feminine showed 53% (27) of women believed that Vitaminwater was masculine

and only 31%(5) males thought of Vitaminwater as masculine. This proves that women think

that Vitaminwater is a manly drink and may be shy to try it. More men, however, believe that

Vitaminwater is feminine.

53 Vitaminwater

After performing thorough secondary, qualitative and quantitative research to better

understand the brand and its competitive environment, as well as to gather insight into the

beverage industry and its consumers, the Observ8tors have compiled and analyzed results to

draw a comprehensive conclusion and recommendation for the Vitaminwater brand.

Initial secondary research led to discovering opportunities to mend the fact that the

advertising is currently directed at too broad of a target market and is too focused on purely

entertaining this consumer. Vitaminwater is getting lost in the clutter of the highly-saturated

non-alcoholic, non-carbonated beverage category, with its chief competition being Gatorade,

Fuze, AriZona Iced Tea, and Sobe. College-aged consumers, the recommended target, were

found to have a high discretionary income, with women having an ever-increasing buying power.

Therefore, secondary research hinted at an untapped opportunity to market primarily to

women within this age segment. Further investigation of these concepts, as well as the behaviors,

attitudes, and motivations of 18- to 24-year-olds regarding the purchase of this genre of

beverages, would be necessary to draw more insightful conclusions.

Conducting a focus group for qualitative research manifested a handful of themes

including social media, lifestyle, taste and health, image, and price. Without revealing the brand

name in question, participants expressed varying opinions on Vitaminwater, such as it’s artificial

taste and the opinion that it is girly, healthy and “hipster.” Gatorade was found to be the leader

of this product category, posing daunting competition for Vitaminwater in the sports drink

industry. As for social media, participants voiced strong views stating that they would only

interact with a brand online to receive exclusive deals or express interest to feel part of a

collective group of fans.

Conclusion

Observ8tors 54

In order to further explore and confirm the aforementioned themes, the Observ8tors

distributed a web survey reflecting the concepts of interest. Analysis of quantitative results

validated many points, but also revealed new views and behaviors. The most resounding finding

was that Vitaminwater’s brand positioning, character, and purpose are not solidified, causing a

wavering, unclear image in consumers’ minds. While qualitative research pointed toward the

beverage being girly and “hipster,” the quantitative study exhibited Vitaminwater as slightly more

masculine and sporty. This schism in fundamental positioning is a significant issue for the brand,

and must be addressed.

After analyzing the findings, Observ8tors believes that the 18- to 24-year-old target

market is a promising target with the potential to better position Vitaminwater within the non-

alcoholic, non-carbonated beverage category. Vitaminwater’s current position within the sports

drink industry is too weak a competitor against the major brand names, such as Gatorade.

Survey analysis confirmed that Vitaminwater has a strong product but lacked a strong brand

image. Although the product is strong concerning health and satisfaction, the Observ8tors

believe that a strong product should be paired with an equally strong brand image. Vitaminwater

must stand out.

The brand needs to reposition itself away from the masculine and athletic niche and

focus more on females. Results from qualitative research showed that Vitaminwater was

viewed as “trendy,” which is typically a feminine word and relates more to the female market.

Vitaminwater has the potential to be an everyday drink, which puts them in a different and less

competitive industry.

Based on conclusions drawn from the three research projects: secondary, qualitative and

quantitative, we believe that it will be beneficial for Vitaminwater to position itself as a relaxing,

55 Vitaminwater

rejuvenating enhanced water beverage. We also found out that both frequent and non-frequent

users see Vitaminwater as an accompaniment to actions throughout the day, hence, the brand

should focus on what Vitaminwater can offer to its consumers; feeling fresh and relaxed while

performing casual daily routine. We also believe that selecting an appropriate spoke person

can significantly give Vitaminwater a stronger and a more apparent brand character. That being

said, our group has found that both males and females agreed that Mila Kunis represented the

best match for Vitaminwater. Having a suitable spoke person would not only give the brand a

stronger character, but also improve their perception as a whole.

For the social media aspect, we found that participants felt an enhanced water drink

would be best served online on Facebook and Vitaminwater’s online approach would be to offer

exclusive specials and to reward the strong support from their consumers.

Vitaminwater faces the challenge of developing a focused position among a highly

saturated beverage market. Repositioning presents Vitaminwater with the challenge of inciting

female consumers to purchase the drink over other casual beverages like sodas and teas.

Image and health-content strongly affect purchasing decisions of young women, presenting

Vitaminwater with an opportunity to provide its target with benefits directly related to their

product preferences.

Our research team devised the following recommended brand positioning statement

based on the results of this holistic research: To female college students between the ages of

18 and 24 who are looking for a relaxing, rejuvenating enhanced water beverage. Vitaminwater

provides a light and healthy drink to accompany casual daily activities. The brand character is

trendy, health-conscious, and practical.

Observ8tors 56

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Observ8tors 60

Append i x A : T ime/Cos t Tab l es

A.1 Secondary Research

61 Vitaminwater

A.2 Qualitative Research

Observ8tors 62

A.3 Quantitative Research

63 Vitaminwater

Append i x B : Se cond ary Resea rch I n fo rma t i o nB.1 Mintel Consumer Survey

B.2 Mintel Non-Alcoholic Beverage Survey

Observ8tors 64

B.3 Mintel Consumer Beverage Survey

B.4 Price Comparison Chart

65 Vitaminwater

B.5 Direct Competitors Chart

B.6 Packaging

B.7 Logo

Observ8tors 66

Append i x C : P resc reen i ng Quest i o nna i r ePre-Screening Questionnaire

We are students from the University of Florida in an advertising research class. For part of research for our course we are looking for people to participate in a focus group about non-alcoholic, non-carbonated beverages. The focus group will last for about one hour, and although we cannot recompense you financially we do promise snacks and refreshments! We need to gather some information from potential participants before we start the discussion. Thank you for your participation!

1. Name: ____________________________________ 2. Age: ______3. Sex: ______

4. Have you consumed any non-alcohlic, non-carbonated beverages in the last three months? If so, which brand? ___________

5. To feel rejuvenated/replenished, what kind of drink would you choose?____________

6. On average, how many days a week do you work out? __________________________

7. Of the following, please circle the one you are most likely to drink:Water Energy Drink Sports Drink Soda Flavored Water Tea Other

8. Check all of the following that you have consumed in the past month:_____ Energy Drink _____ Flavored Water_____ Tea _____ Soda

9. Are you currently attending college? Yes No

If so what year are you?: ________ What’s your major?: _____________

10. Are you okay with being recorded during this focus group? Yes No

Our focus group will be on Monday October 10th at 6 pm in Weimer 1098.If you wish to participate, please fill in the following:

E-mail: ______________________________Phone: ______________________________

67 Vitaminwater

Append i x D : I n fo rmed Consen t D i sc l osu rePurpose of this Study:The purpose of this study is to gain insight into the perceptions, attitudes and preferences of college students, ages 18 to 24, towards non-carbonated, non-alcoholic beverage brands.

Expectations of Study Participants:Those who choose to participate in this study will be asked to participate in a focus group to discuss various aspects of their lifestyle as well as their opinions and knowledge of non-carbon-ated, non-alcoholic beverages. The focus group will consist of eight to fifteen participants led in their discussion by a male moderator. The group will be video or audio taped and the focus group session should last approximately one hour.

Potential Risks:There are no potential risks, health or stress related, involved with the study nor will there be any personal discomfort. Should any participant feel uncomfortable at any time during the study, they will be free to discontinue their participation with no risk of any penalty and no questions asked.

Compensation & Benefits:Participants will receive no compensation for their involvement with this study. Involvement will be completely voluntary. However, refreshments will be made available to participants including beverages, pizza and snacks.

Confidentiality:All information collected will remain confidential and specifics about participants will be avail-able only to the moderator and members of Observ8tors. None of the statements made dur-ing the focus group session will be linked to the individual participants. Participants are free to withdraw at any time during the study for any reason.

Questions/Contact Information:If you have any questions or comments regarding the study feel free to contact Professor Doori Song in the Advertising Department. His office is located in Weimer 2026 and you may contact him by telephone at (352) 392-0835 or by e-mail at songdoori@jou.ufl.edu.

Agreement:I have read and understand all of the above information and agree to participate in the focus group study. I understand that my participation is completely voluntary and I have received a copy of this information.

Participant:________________________ Date: __________________________

Primary Researcher: __________________ Date: __________________________

Observ8tors 68

Append i x E : Mode ra to r Gu i deModerator Guidelines 1.Introduce yourself and your assistant to the participants and welcome them to

the focus group. Thank the participants for taking time out of their day to contribute to our research. 2. Confirm that all of the participants have filled out the Pre-Screening Questionnaire

and have read the Informed Consent Disclosure form. Confirm the participants have signed the Informed Consent Disclosure form and have their own copy. 3. Let participants know if they have any questions or concerns regarding the study that

they can contact Mr. Song. Also remind them that they may leave at any time during the study. 4. Use the provided questions as a guide for discussion, but listen intently to participant

responses to probe for additional information and discussion. 5. If you ask a probing question remain unbiased and neutral in body language. 6. If a participant responds with a one-word answer, do not ask “Why?” but rather learn

each individual and figure out ways to further elaborate their responses without pressuring them. 7. Make sure that every participant is actively involved in the discussion. Encourage those

that are quiet to speak out without pressuring them. Do not allow one participant to dominate the discussion. 8. Avoid any cultural signs that convey my thoughts. Avoid head nods, saying yes or no,

providing praise, etc. Neutral statements such as okay and uh huh are preferred. 9. Visuals must be given to participants in large size handouts. White boards and markers

must be made available for certain projective questions. 10. Commence the group discussion within one hour.

Discussion GuideIntroduction Hello my name is Trey. Thank you so much coming out this evening to contribute to our focus

group. This session is a part of our research project for an advertising research class here at the University of Florida. I will be the discussion moderator today and Erin will be assisting me. Our group name is the Observ8tors, including me, Erin Butler, Courtney Perets, Miriam Rattes, Michael Perez, Supachaya Sucharitvanitwong, Irving Romero, and Nicole Sandler.

PurposeThe purpose of this focus group today is to gain insight on consumer opinions, behavior,

and motivations toward non-alcoholic, non-carbonated beverages, such as sports drinks and enhanced water. You have all been chosen because you are between the ages of 18 to 24, attending the University of Florida, represent a variety of racial backgrounds, and overall have potential to represent the target market.

Icebreaker“Me too”— I will start by saying things about myself and when you hearsomething that we have in common then say, “me too.” We will continuearound the room until everyone has gone.

69 Vitaminwater

Main Discussion1) [Elaboration / Grand tour] Describe your routine upon entering the grocery store• [Elaboration/ Specification]Do you go for the sales, stick to your favorite brands…?

2) [Straightforward / Structural] Do you think that price reflects quality or are you paying for the brand name?

3) [Straightforward / Direct] How do you research the products you consume?

Non-alcoholic Beverage Market4) [Elaboration/ Idealization] What is your idea of an ideal non-alcoholic, non-carbonated

beverage?

5) [Straightforward / Direct] How do you define a sports drink and name the first example that comes to mind.• Probe: [Straightforward / Direct] How do you define enhanced water and name the first

example that comes to mind.

6) [Straightforward / Factual] What types of sports drinks or enhanced water have you consumed in the past month?

7) [Straightforward / Structural] What, if anything, motivates you to buy enhanced water?• Probe: [Hypothetical] Where would you typically consider buying it?

8) [Straightforward / Structural] What is your perception of enhanced water?• Probe: [Elaboration / Idealization]: How important is taste with enhanced water?• Probe: [Elaboration / Idealization]: How important is nutrition?• Probe: [Elaboration / Idealization]: How important is price?• Probe: [Elaboration / Idealization]: How important is its energizing effects?• Probe: [Elaboration / Idealization]] How important is brand image?

9) [Specification / Hypothetical] How would you describe enhanced water to five-year-old boy from another planet? Name the brand you have in mind and its qualities.

10) [Elaboration / Contrast] In what ways is Vitamin Water different from Sobe? Describe it in terms of taste, health, usage, personality, and popularity.• Probe: [Specification] In what ways is different from Gatorade?

11) [Projective / Sentence Completion] The type of job a person that drinks (Brand) has is ___.• Probe: [Projective / Personification] If (Brand) were a human, what kind of style would he

or she have?

Please pull out your whiteboard and marker for the next question.12) [Projective / Word association] Which of the brands listed would you associate with the

following word or activity? Why? (Gatorade, Vitamin Water, Sobe, AriZona)

Observ8tors 70

• Going to the gym• Sitting in class• Hangover/Sobering up• Gas Station• Classy• Relaxing• Dinner• Chaser

Online and Social Media Usage13) [Elaboration / Grand Tour] How do you use the Internet on a daily basis?• [Elaboration / Specification] How do you allocate time among those different websites?

14) [Elaboration / Third Person] Another person we’ve interviewed often shares articles on Facebook when he think they’ll make his friends laugh. Someone else never shares articles or videos because she thinks it’ll annoy her friends. What do you think of these two points of view?

15) [Straightforward / Structural] Why would you visit the website or social media profile of a beverage brand?• [Projective / Role Playing] Why do you think so many college students “like” a brand on

Facebook or follow it on Twitter?

16) [Straightforward / Direct] Where would you look for more information, like health content, price, on a product brand?• Probe: Facebook page, Twitter, Brand website

17) [Elaboration / Idealization] What is the ideal way that you would wish to interact with a drink brand online?

18) [Specification] What kind of information, if any, would you like to see from a brand in your news feed?• [Elaboration / Specification] Do you prefer just good deals, fun facts, events, new

products?

19) Here is someone’s grocery list. Please describe the personality and character of the person who would purchase the items on this list

Shopping List:List A List BCereal CerealMilk MilkEggs EggsVitamin Water GatoradeFish FishStrawberries Strawberries

71 Vitaminwater

20) Picture Projection:Here is a picture of a man in the beverage aisle of the grocery store. Provide the dialogue,

thoughts, or feelings of this person in this situation.

21) Cartoon Tests:Here is a picture of a boy and a girl leaving the gym, each with their own beverage. The boy is

saying, “Wow that was a great workout, but this drink isn’t quenching my thirst.”Please complete the speech bubble for what the girl is saying in response.

22) Picture Sort:Please look at the handouts we have provided and match the pictured celebrities to the

beverage brand that you think they best represent.

23) Collage:Please arrange these magazine clippings into a collage that best represents an enhanced water

beverage.

Observ8tors 72

Append i x F : Ad d i t i o n a l Fo cus G roup Ma te r i a lsPicture Sort

73 Vitaminwater

Please match the each of the following brands with the picture you feel is most representative. Write the corresponding letter on the blank line under each photograph.

Coca-Cola Pepsi Red Bull AriZona Gatorade Powerade Rockstar Fuze Sobe Aquafina Vitaminwater Tropicana Crystal Light Propel Fresca

Observ8tors 74

P i c tu re P ro j e c t i o n

75 Vitaminwater

Ca r to on Tes t

Collage: See Hard Copy Submitted

Observ8tors 76

Append i x G : Co gn i t i ve Map

PACKAGING & POSITIONING

LIFESTYLE SOCIALMEDIA

Vitaminwaterlacks a clearposition in the sports drink and enhanced water categories

“I probably only do it [research] for a big purchase, but anything at a gro-cery store I would just get.”

TASTE & HEALTH

Price does not play a major role when choosing a sport/en-hanced water drink

PRICE

Overpriced

Way to charge money for 3 drops of fl avor

Considered small purchase

Not much thought/effort before purchasing

Would go for this category if on sale

Design

Looks like a Pharmaceutical Drug

Flavored Water/Artifi cial Taste

Watered down dull taste of the actual kind of fruit

Casual drink

“Hip” or “Zen”

Regular drink, not like Powerade for physical activity

Dull

Females seemed to like the design

Exclusivity

Coupons

“But… you know, you can go to any convenience store and get it. If you’re like a Miami Heat fan, you’d like the Miami Heat because it’s like a group.”

People don’t identify with particular variet-ies of Vitaminwater like they would with a special football team

Incentive for visiting the product online

Little interest in interacting with product online

Doesn’t feel like belonging to group/showing other people your interests

Audience

Gatorade paired with male celebrities

Gatorade

Linked with healthy and strong people

Vitaminwater is always compared to this so why doesn’t it have it’s own association?

Vitaminwater paired with female celebrities

“We drink water to survive. Some people just prefer to drink water that has a little extra stuff in it. ”

Taste is valued over health content

Taste was referenced a lot and health content was barely mentioned

If there is a benefi t con-sumers have a sense of entitlement to a high-quality and unique product

If I’m going for something sweet, I’d actually get a real sweet drink

Variety

High-esteem for products with many fl avor options

I would view vitaminwater as having additional benefi ts because of itsdifferent fl avors.

Hipster

Not top-of-mind

People haven’t drunk Vitaminwater in the past month

Lack of focus for positioning leads to lower sales

No activity related to drinking Vitaminwater

Seen as a female drink or for “Hipsters”

Vitaminwater

77 Vitaminwater

Append i x H : Su r vey Quest i o nna i r e w i t h Enumera ted Code

Informed Consent Disclosure

Purpose and goals of this Study: The purpose of this study is to gain insight into the perceptions, attitudes and preferences of college students, aged 18 to 24, towards non-car-bonated, non-alcoholic beverage brands, specially, Vitaminwater. The goal of the study is to better understand Vitaminwater in the marketplace. Expectations of Study Participants: Those who choose to participate in this study will be asked to participate in a survey and provide truthful answers about various aspects of their lifestyle as well as their opinions and knowledge of non-carbonated, non-alcoholic bev-erages. The sample will consist of UF students, aged 18 to 24, answering an online survey. Potential Risks: There are no potential risks, health or stress related, involved with the study nor will there be any personal discomfort. Should any participant feel uncomfortable at any time during the study, they will be free to discontinue their participation with no risk of any penalty and no questions asked. Compensation & Benefits: Participants will receive no compensation for their involvement with this study. Involvement will be completely voluntary, but much appreciated. Confidentiality: All information collected will remain confidential and specifics about partici-pants will be available only to the members of Observ8tors research group. None of the state-ments made during the focus group session will be linked to the individual participants. Par-ticipants are free to withdraw at any time during the study for any reason. Questions/Contact Information: If you have any questions or comments regarding the study feel free to contact Professor Doori Song in the Advertising Department. His office is located in Weimer 2026 and you may contact him by telephone at (352) 392-0835 or by e-mail at songdoori@jou.ufl.edu. Agreement: I have read and understand all of the above information and agree to participate in the survey. I understand that my participation is completely voluntary and I have received a copy of this information. PLEASE CLICK “I AGREE” IF YOU AGREE WITH THE INFORMATION ABOVE I agree (1) I do not agree (2)If I do not agree Is Selected, Then Skip To End of Survey

Q1 Which gender do you identify with? Male (1) Female (2) Other (3) ____________________

Q2 What is your age? <18 (1) 18-24 (2) >24 (3)If <18 or >24, Then Skip To End of Survey

Observ8tors 78

Q3 Are you a student at the University of Florida? Yes (1) No (2)If No Is Selected, Then Skip To End of Survey

Q4 Rank the products below according to your frequency of purchase. Place “1” for highest frequency of purchase, and “6” for the least. ______ Vitaminwater (1)______ Gatorade (2)______ SoBe (3)______ Arizona Iced Tea (4)______ Fuze (5)______ Propel (6)

Q5 Have you drunk Vitamanwater in the past three months? Yes (1) No (2)

Q6 Rate the degree to which you agree or disagree with the following statements in regards to non-alcoholic, non-carbonated beverages.

79 Vitaminwater

Q7 Please use the following adjectives to indicate how well they describe Vitaminwater. Select the number that best represents your opinion of the drink.

Q8 Which beverage do you believe is most comparable to Vitaminwater? Gatorade (1) Fuze (2) Arizona Iced Tea (3) Propel (4) Other (5) ____________________

Q9 Please select which activity or purpose with which you associate purchasing Vitaminwater. Check as many or as few that apply. (0=not checked, 1=checked)• Studying (1)• Gym (2)• Hangover cure (3)• Going to class (4)• Relaxing at home (5)• To accompany a meal (6)• Source of vitamins (7)• Other (8) ____________________

Q10 Please select which reasons that influence you to buy Vitaminwater over its competitors. Check as many or as few that apply. (0=not checked, 1=checked)• Aesthetic Packaging • Variety of Flavors • Tastes good • Health Benefits • Positive image • On sale • Other ____________________

Observ8tors 80

Q11 Please select how appropriate each of these celebrities would be as a spokesperson for Vitaminwater?

Q12 Divide 100% among the following attributes of non-carbonated, non-alcoholic beverages, according to what you value the most. All percentages must add up to 100.______ Taste ______ Healthy Content______ Availability/Convenience______ Popularity______ Price

Q13 Rate the degrees of femininity or masculinity you associate with each beverage using the sliding scale. “-10” is most masculine and “10” is most feminine.Masculine-----------------------Feminine Gatorade Masculine-----------------------Feminine Fuze Masculine-----------------------Feminine Vitaminwater Masculine-----------------------Feminine AriZona Iced Tea

Q14 In comparison to buying an bottle of water, at the average price of $1, how much would you be willing to pay for an enhanced water beverage (E.g. Vitaminwater, Propel, Sobe)? Less than $1.00 (1) $1.00 - $1.50 (2) $1.51 - $2.00 (3) More than $2.00 (4)

81 Vitaminwater

Q15 Please use the following adjectives to describe Vitaminwater as a brand in general. Next to each word or phrase are numbers ranging from -5 to +5. Think about how accurately or inaccu-rately each word or phrase describes Vitaminwater. The more a word or phrase describes Vita-minwater, the larger the positive number you should chose. The less a word or phrase describes Vitaminwater, the larger the negative number.

Q16 Please rank the following reasons for which you would “Like” or “Follow” a brand or com-pany on a social media site. “1” indicates the most desired benefit and “5” being least desired benefit. (0=not checked, 1=checked)______ Receive an exclusive deal on a product or ______ Give support to the brand or company ______ Gain access to special content like videos or games ______ Express your interests publicly ______ Receive updates and information from the brand

Q17 Where would you like to see your favorite enhanced water drinks online? Check all that apply. (0=not checked, 1=checked)• Facebook (1)• Twitter (2)• Blog (3)• Website (4)• None (5)• Other (6) ____________________

Observ8tors 82

Q18 Please indicate which magazine a Vitaminwater ad would appear. Next to each word or phrase are numbers ranging from -5 to +5. Think about how likely or unlikely you would see Vitaminwater advertisements. The more likely you would see a Vitaminwater advertisement, the larger the positive number you should chose. The less likely you would expect to see a Vitamin-water advertisement, the larger the negative number you should circle.

Q19 How do you feel when you see a post by a brand in your Facebook or Twitter newsfeed? (0=not checked, 1=checked)

83 Vitaminwater

Append i x I : S ta t i s t i ca l Resu l t s o f Qu an t i ta t i ve Ana l ys i sTable I.1

6. Have you drunk Vitaminwater in the past 3 months?

Table I.2

7. Rate the degree to which you agree or disagree with the following statements in regards to non-alcoholic, non-carbonated beverages.

Male Respondents

Observ8tors 84

Table I.3

Female Respondents

Table I.48. Please use the following adjectives to indicate how well they describe Vitaminwater. Select

the number that best represents your opinion of the drink.

85 Vitaminwater

Table I.510. Please select which activity or purpose with which you associate purchasing Vitaminwater. Check as many or as few that apply.

Table I.610. Female Respondents

Table 1.7 10. Male Respondents

Observ8tors 86

Table I.811. Please select which reasons that influence you to buy Vitaminwater over its competitors. Check as many or as few that apply.

Table I.912. Please select how appropriate each of these celebrities would be as a spokesperson for Vitaminwater?

87 Vitaminwater

Table I.1013. Divide 100% among the following attributes of non-carbonated, non-alcoholic beverages, ac-cording to what you value the most. All percentages must add up to 100.

Table I.1114. Rate the degrees of femininity or masculinity you associate with each beverage using the slid-ing scale. “-10” is most masculine and “10” is most feminine.

Observ8tors 88

Table I.1217. Please rank the following reasons for which you would “Like” or “Follow” a brand or com-pany on a social media site. “1” indicates the most desired benefit and “5” being least desired benefit.

Table I.1317. Cont’d

89 Vitaminwater

Table I.14

18. Where would you like to see your favorite enhanced water drinks online? Check all that ap-ply.

Table I.15

19. Please indicate which magazine a Vitaminwater ad would appear. Next to each word or phrase are numbers ranging from -5 to +5. Think about how likely or unlikely you would see Vitaminwater advertisements….

Observ8tors 90

Table I.1620. How do you feel when you see a post by a brand in your Facebook or Twitter newsfeed?

Table I.17

Table I.18

91 Vitaminwater

Table I.19

Table. 1.2

Table 1.21

Observ8tors 92

Table 1.22

Table 1.23

93 Vitaminwater

Table 1.24

Table 1.25

Observ8tors 94

Table 1.26

Table 1.27

95 Vitaminwater

Table 1.28

Table 1.29

Observ8tors 96

Table 1.30

97 Vitaminwater

Table 1.31

Observ8tors 98

Table 1.32