Industry summary
The food and beverage industry is saturated with different participants. Companies such as Coca-Cola and PepsiCo constitute the largest share of the market. Other local and small organization also increase direct competition for Honest Tea. As a subsidiary of Coca-Cola, Honest Tea retains its control over the production of its products. It delivers high-quality products and has a captured a value perception in its clientele. This paper will explore a management and market research issue that is faced by the company and explores an appropriate research design to resolve the issue.
Management decision problem
Should Honest Tea add new flavors to the market?
Though Honest Tea has a variety of products in the market, the management decision problem is a constant issue. It operates in a highly competitive market where consumers have changing tastes and preferences. Besides, the availability of substitutes creates a situation where clients can switch brands easily. Hence, adding new flavors in the market ensures that Honest Tea captures consumers with different tastes. It also allows the company to provide a variety of favors for consumers to choose. This management problem concentrates on the product aspect of the marketing mix. It aims to diverse Honest Tea’s product line. It also ensures that the company can reach a substantial target market.
Marketing research problem
How will consumers react to the new flavors?
The management decision relates to whether or not the company should introduce new flavors to the market. The marketing research issue seeks to determine the preference of consumers. Where negative feedback is provided, the management will not proceed to introduce new flavors. The information can be collected through the use of focus groups. This methodology allows for market testing before the product is sold to the consumers. The research problem will focus on the following questions.
What are the taste and preferences of consumers?
What are the consumers’ opinions about the new flavors?
How can the need flavors be developed to meet consumer demand?
Research design
The research seeks to gather information on the opinions of consumers on the new flavors. Depending on the conclusion made, the management will make the appropriate decision. An exploratory research design will be used to collect the qualitative and quantitative data necessary to make the right choice. Qualitative information will provide information on preferences while quantitative data will give a representation of how the market will react to the new flavors. Since Honest Tea has ventured into the Food and Beverage industry, it can gather a focus group from its loyal clientele. Focus groups ensure that the company collects relevant information at a short period.
For measurement and scaling purposes, ranking and comparison scales, as well as, ratios will be used. It will allow the company to classify and compare the acceptance of the new flavors. The questionnaire will require the participants to answer questions after tasting the new flavors. The questions will include their ranking of the flavors and which ones they could purchase often. Random sampling from the brand community will be used. The data will then be analyzed by using various market assumptions and hypotheses to make decisions.
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