Group1 Sec C MM Report

INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
Market Study of Packaged

Fruit Juices in India
A Marketing Management Proposal
Group - 1
Abhinav Tandon PGP/17/126
Kaustubh Dudhane PGP/17/141
Leah S Zacharias- PGP/17/150
Rohit Jaiswal- PGP/17/162
Shalini Singh- PGP/17/166
Suhani Doshi- PGP/17/182
Under the guidance of :
Dr. Atanu Adhikari
Table of Content
Sr. no
Description
Page no.
Research Objective
Introduction
Research Questions
Literature Review
Sampling and Data Collection Techniques
Market Analysis Factor Analysis
Market Analysis Cluster Analysis
12
Market analysis Conjoint Analysis
19
Conclusion
23
Research Objective
To understand all related aspects of fruit juices and their interplay.
Introduction
This report focuses on the packaged fruit juices market existing in India. Our food habits are
defined by our constantly changing lifestyles. Over the years Indian has witnessed a very high
rate of urbanization, we see a constant progression towards nuclear families and it is not
uncommon in families for both the partners to be working. This trend is begetting the trend of
rising consumption of ready to eat foods and beverages. Also the higher spread of disorders and
more awareness about the lifestyle diseases due to these trends have also made people health
conscious. We see the population looking for nutritious options along with convenience.
According to National Sample Survey Office1 report published in February 2012 Urban
Consumption of fruit surpassed rural consumption in value as well as quantity despite almost
72% 2 of the population living in rural areas, this clearly indicates the health consciousness and
buying power characteristics of the urban population. Also, 86% of all the fruits consumed
comprised of 8 main fruits, among these were mango, grapes, apple, orange, banana and papaya.
No wonder that these are the staple flavors available in most of the flavored food items. These
statistics serve show hoe the scales have gradually been tipping in favor of juices over
carbonated drinks in recent years. This can partly be attributed to the reports of them being
unhealthy and having harmful ingredients. The purpose here is not to examine the causes, but to
establish the credibility of the idea to be researched by a preliminary cost benefit analysis.
The juice category is one of the fastest growing beverage categories in India. The report
published by Indian Institute of Foreign Trade in collaboration with the Govt. of India3 states
that, The market for fruit and vegetable has grown at a steady rate over the last five years. This
is largely due to increasing importance of leading a healthy life in India. It further goes on to
3
quantify and state, The market has grown from just under Rs.1200 crore to Over Rs.3200 crore
over the last 5 years. This indicates a CAGR of 21.67%; and in terms of volume from under
250million litres to close 550 million litres. These figures indicate the trend in the category and
thus makes it relevant to pursue this research.
1. India. National Statistical Organisation , National Sample Survey Office, 66th round,
Report No. 541(66/1.0/3), February 2012, p-39.
2. Rural-Urban distribution Census of India: Census Data 2001: India at a glance, RuralUrban Distribution. Office of the Registrar General and Census Commissioner, India.
Retrieved on 2008-11-26.
Not only academicians but industrialists are also well aware of this trend and are ready to take
advantage of it. An interview with MD and chairperson of Manpasand Beverages a relatively
small player in October 2013 quoted him as saying4, The packaged fruit drink market in India
is currently pegged at Rs. 5000 crore, and it is witnessing tremendous growth.
The per capita consumption of fruit juice-based beverages is 45 litre in Germany, 42.5 litre in
Switzerland and 39 litre in the United States, but India's per capita fruit juice-based beverage
consumption is just 20ml. In the carbonated soft drink segment, the country's per capita
consumption is just under three litre (which is also negligible compared to other countries). This
shows the huge opportunity India has in terms of business if proper strategies are devised to
make fruit juices available and affordable. These words capture the picture in a nutshell, smaller
players investment in new developing markets is a good sign.
All the above go on to substantiate that considering ourselves as a new player in the category we
have immense opportunities, but first is required minute research and confirmation of statistics.
It needs to be observed if the trends are consistent and correlated with the factors cited above or
is it a boom due to some other reasons. Also required is an understanding of the views experts
have taken on the growth of the market, its sustainability and the drivers leading to this growth.
Thus, the next section outlines the secondary research undertaken for reasons well stated above
and to get some idea of the data, trends, findings already available, which could guide us in the
exploratory research process.
Research Questions
What factors are considered by consumers while purchasing packaged fruit juice?
What factors should be considered for product positioning by a company wishing to

launch a new product?
Literature Review
1. Evaluation of packing attributes of orange juice on consumers intention to purchase
by conjoint analysis and consumer attitudes expectation: Journal of Sensory Studies
ISSN 0887-8250
This study based in Brazil evaluates the effect of packaging on the consumers decision to
purchase ready-to-drink orange juice. It looks into the effect of 4 major factors- nutritional
information, sense of natural or industrialized product, information on preservatives and
price.
2. Juices in Asia Pacific February 2013: MarketLine Industry Profile
The report provides a comprehensive overview of the Juice industry in terms of market
value, category and geography segmentation as well as key players in the juice industry in
the Asia Pacific region
3. The Influence of Disorganized Shelf Displays and Limited Product Quantity on
Consumer Purchase: lana A. Castro, Andrea C. Morales & Stephen M.Nowlis
The research aims to establish the relationship between shelf displays of items, both
ingestible and non-ingestible as well as the stocked quantity on the purchase decision of
the consumer. It concludes that for products such as juices the likelihood of ingestible
products such as juices seem to decrease if shelves are disorganized.
4. Mama Roz, Instant Fresh Fruit Juice: Blue or Red Ocean?: Amalia E. Maulana
This paper focusses on the factors and strategies needed by a start-up in the juice industry
to be successful. Taking the case of a start-up Mama Roz in Indonesia, the paper sheds
light on some of the factors affecting fruit juice sales.
5. Consumption Pattern of Soft Drinks and Fruit Juices: A Comparative Study : Dr.
Simranjeet Kaur Sandhar, Dheeraj Nim, Shikha Agrawal, SVIM e-Journal of Applied
Management
This article deals with the factors affecting the consumption of fruit juices based on
research conducted in Indore. The journal also discusses the frequency of fruit juice
consumption.
6. Study of the Indian fruit juice market along with fruit juice export potentiality
analysis: A report by the Indian Institute of Foreign Trade
The report focuses on the existing fruit juice market along with the potential to grow. It
concludes with a study of basic market access requirement along with the opportunities for
the exporters.
7. Packaging Industry: A Review: An Aranca Report prepared for The Assocham
Packaging Summit 2012
The report gives detailed information about the packaging industry in India and global
packaging trends. It also describes various innovations in the packaging of food stuffs and
beverages.
8. Healthy Eating: Clarifying Advice About Fruit And Vegetables: Carol Williams,
BMJ: British Medical Journal, Vol. 310, No. 6992, pp. 1453-1455
This paper reflects upon how information regarding health that is given to consumers is
often ambiguous. It is a widely accepted fact that one should eat more fruits and
vegetables, but how much and in what form is left to interpretation. In the process of
answering this question, the paper discusses fruit juices and its variations which are
recommended or not recommended, as the case may be.
9. Consumer
trends
that
matter:
Personalization:
Brush,
Marc. Functional
Ingredients. September 2013, Issue 131

This author makes a comment on the effects of mass personalization of products on
consumer buying. Further emphasis is laid on the same through insights from the fruit juice
industry.
Sampling and Data Collection Technique
1) Focus Group Discussion was conducted with 8 people to get a brief overview of the
purchasing and consumption pattern of these individuals. The members of focus group
discussion were from the age group 20-30 and mostly students. The inputs received from
this focus group discussion were used in the preparation of the questionnaire floated.
2) Due to the lack of significant responses from other age group outside the range of 20-30,
this study is being done on the basis of random sampling for young and mostly
unmarried people. The method being used here is one stage cluster sampling where all
the elements of the mutually exclusive age group of 20-26 years old are considered.
Sampling with replacement, a formal questionnaire was administered to respondents for
collecting primary data. The respondents were given the questionnaire over the internet to
get further valuable information.
Sampling for Questionnaire
Population Defining characteristic is the age group

(20-26 years)
Sampling Procedure- Random sampling
Data collection- Survey of approximately 79
respondents
Independent survey for Conjoint analysis of 16
respondents
The population is defined in keeping with the objectives of the research. The study was
conducted in IIM Kozhikode campus aimed at middle and upper class families with the focus of
youth.
Methodology Used
1. Exploratory Factorial analysis
2. Cluster analysis
3. Ranking analysis
4. Defining Cluster
Market Analysis
1) Factor Analysis
Factor Analysis is a tool that is used in order to narrow in on the variables and group them into
factors on the basis of some underlying commonality in order to facilitate analysis. Variables
that seem to have something in common (based on correlation as calculated by the software) are
grouped into factors and it can be deduced that they move in the same direction at similar
degrees. For the purpose of this project, our questionnaire tested 12 variables.
In order to apply factor analysis to any data, however, it is important to run KMO and Bartletts
Test to check the suitability of the variables for factor analysis. Variables need to be sufficiently
related to each other in order to have a common measure denote their movements. This adequacy
is measured through KMO and Bartletts Tests. A KMO Measure lower than 0.6 shows
unsuitability for factor analysis. This takes us to the anti-image matrix, the diagonal of which
gives the correlation between the variables. Variables having this value less than 0.3 may be
eliminated.
After elimination of these variables for further analysis, KMO and Bartletts tests are rerun to
check adequacy. The accompanying Rotated Component Matrix would have grouped the
remaining factors into credible groups called factors. The total variance table can be used to see
how important each of these factors are for the analysis. The procedure undertaken for this
project is given below:
KMO and Bartletts test is used to understand the correlation between the various variables. As
in this case the value obtained is 0.423, which is less than 0.6 it is not suitable for applying
factor analysis. We will thus have to look at the anti image matrix diagonals and remove
components below the value of 0.3. Hence, in our case we will be removing two variables which
are taste and thickness.
After the removal of the two least significant variables which are taste and thickness. The value
of KMO and Bartletts test becomes greater than 0.6 and thus it is suitable for apply factor
analysis.
Rotated Component Analysis

Rotated Component Matrix
Component
1
Please read the following

statements and indicate how
much the following factors
influence your purchase
.845
intent for the packaged juice

the most- Nutritional Value

.779

the most- No Preservative
Label
-.743

the most- Product
Ambassador
.638

the most- Organic Product
-.545

the most- Pulp Content
.543
-.468

the most- Product Brand
.846

the most- Package Type
10

.780

the most- Package Size
.735

the most- Product
Advertisement
.706

the most- Price
The rotated component analysis is a matrix with the help of which we are able to align all the
variables to one of the four factors. Thus from the above rotated component analysis table we
can see that :
Component
Variables
1) Product Information
Nutritional value, preservation
2) Brand Perception
Product ambassador, organic product,

Pulp content, Product Brand
3) Package
Package type, Package Size
4) Price Promotion
Advertisement, Price
Total Variance Explained

Component
Rotation Sums of Squared Loadings

Total
% of Variance
Cumulative %
1.792
17.916
17.916
1.716
17.155
35.071
11
1.651
16.511
51.582
1.342
13.424
65.006
Extraction Method: Principal Component Analysis.
From the above table we can see the amount of variance that is explained by the factors. Thus,
we see that factor-1 explains 17.916% of the variables similarly factor-2 explains 17.155 % and
so on. The significance of this table is that it helps to decide the number of factors as any value
below 1 is not selected as a factor.
Component Transformation Matrix

Component
.625
.503
-.497
.332
-.045
.786
.545
-.288
.578
-.297
.668
.363
-.523
.204
.097
.822
Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
2) Cluster Analysis
We have done the cluster analysis in order to form clusters. The customers are divided into the
clusters depending on many parameters. Based on these clusters, we can target the customer
base. The sizes of the clusters are as follows
Number of Cases in each

Cluster
1
39.000
Cluster
2
31.000
Valid
70.000
Missing
.000
The final clusters which we got after 4 iterations are as follows
Final Cluster Centers
12
Cluster
1
Product Information
-.5
.6
Brand Perception
-.5
.7
Package
-.1
.2
Price Promotion
.0
.0
It is evident from the high fluctuations observed for the clusters 1 and 2 for Product Information
and Brand Perception that
Moreover, if one could look at the Anova Analysis, the same two factors - Product Information
and Brand Perception are significant for both clusters.
ANOVA
Cluster
Error
Sig.
Mean Square
df
Mean Square
df
Product Information
19.837
.723
68
27.437
.000
Brand Perception
24.545
.654
68
37.545
.000
Package
1.256
.996
68
1.261
.265
Price Promotion
.039
1.014
68
.039
.845
The F tests should be used only for descriptive purposes because the clusters have been chosen to
maximize the differences among cases in different clusters. The observed significance levels are not
corrected for this and thus cannot be interpreted as tests of the hypothesis that the cluster means are equal.
The other two factors do not show that much significance from the Anova analysis.
Ranking Analysis:
13
We did the ranking analysis so as to rank the characteristics of the fruit juices. They are
Descriptive Statistics
N
Range
Minimum
Maximum
Mean
Std. Deviation
Variance
Please rank the

characteristics of fruit juices
that are important for your
purchase, with Rank 1 for the
39
2.08
1.855
3.441
39
6.90
2.447
5.989
most important and Rank 9

for the least.-Taste
Please rank the
for the least.-Brand
Ambassador
14
Please rank the

39
2.64
1.287
1.657
39
3.05
1.669
2.787
39
5.56
1.334
1.779
39
5.46
1.620
2.623
39
5.18
1.931
3.730
39
7.69
1.641
2.692

for the least.-Pulp content
Please rank the
for the least.-Nutritive Value
Please rank the
for the least.-Packaging
Please rank the
Please rank the
for the least.-Price
Please rank the
for the least.-Advertisements
15
Please rank the

39
6.44
2.162
4.673

for the least.-Thickness
Valid N (listwise)
39
a. Cluster Number of Case = 1
From the above chart, we could figure out that Cluster 1 has ranked the following parameters as
follows:
1) Taste
2) Pulp Content
3) Nutritional Value
N
Range
Minimum
Maximum
Mean
Std. Deviation
Variance
Please rank the

31
1.48
.769
.591
31
8.58
.886
.785
31
4.19
1.815
3.295

for the least.-Taste
Please rank the
Ambassador
Please rank the
for the least.-Pulp content
16
Please rank the

31
3.48
1.913
3.658
31
5.10
1.620
2.624
31
3.90
1.660
2.757
31
4.84
1.881
3.540
31
7.45
1.261
1.589
31
5.97
2.373
5.632

for the least.-Nutritive Value
Please rank the
for the least.-Packaging
Please rank the
Please rank the
for the least.-Price
Please rank the
for the least.-Advertisements
Please rank the
for the least.-Thickness
Valid N (listwise)
31
17
From the above chart, we could figure out that Cluster 1 has ranked the following parameters as
follows:
1) Taste
2) Nutritional Value
3) Brand
Defining clusters:
The clusters are defined also on the time of consumption of juice as well as on the brand loyalty
of the consumers towards a specific brand.
N
When do you usually drink
fruit juice?
Range
Minimum
Maximum
Mean
Std. Deviation
Variance
39
1.44
1.651
2.726
39
.82
.721
.520
How many different brands

of fruit juices do you
purchase?
Valid N (listwise)
39
N
When do you usually drink
fruit juice?
Range
Minimum
Maximum
Mean
Std. Deviation
Variance
31
2.03
1.663
2.766
31
1.16
1.003
1.006
How many different brands

of fruit juices do you
purchase?
Valid N (listwise)
31
The mean value of cluster 1 suggests that the respondents of cluster 1 prefer to consume juice in
the morning while those in cluster 2 prefer to consume later in the day.
Moreover, those in cluster 1 are fiercely brand loyal while those in cluster 2 are not.
18
3) Conjoint Analysis
Having gotten a fair idea of the factors influencing the purchasing decision of packaged juices,
we next perform a conjoint analysis to determine the contribution of some of these factors in
their purchase decision as well as determining the utility of the options given to them. We take
the following 4 factors- Brand, Flavour, Cost per litre, Type of Packaging. The table below lists
the options under each of these factors:
Brand
Flavour
Tropicana
Mango
Real
Minute
Maid
Litchi
Cost
per
litre
60 per
litre
80 per
litre
100 per
litre
Guava
Mixed
Fruit
Type of
packaging
Packed
bottle
Tetra-pack
Canned
Using the above options we get a total of 3x4x3x3= 108 options. We next generate cards for our
analysis giving a minimum limit of 15 and get the following cards-
Brand
Real
Minute Maid
Real
Tropicana
Real
Minute Maid
Tropicana
Real
Real
Flavor
Mango
Litchi
Guava
Mixed Fruit
Mixed Fruit
Guava
Litchi
Mango
Guava
Cost per 1 litre

60 per litre
60 per litre
60 per litre
60 per litre
100 per litre
80 per litre
60 per litre
60 per litre
60 per litre
19
Type of packaging
Tetra
Packed bottle
Tetra
Canned
Tetra
Tetra
Tetra
Packed bottle
Canned
Minute Maid
Minute Maid
Real
Real
Real
Tropicana
Tropicana
Mango
Mixed Fruit
Mixed Fruit
Litchi
Litchi
Guava
Mango
100 per litre

60 per litre
80 per litre
100 per litre
80 per litre
100 per litre
80 per litre
Canned
Tetra
Packed bottle
Tetra
Canned
Packed bottle
Tetra
We have these cards rated on a scale of 10 from 15 respondents belonging to IIM Kozhikode &
NIT Calicut, consisting of students aged between 20-27. After receiving the responses, we next
create dummy variables taking Minute Maid, Mixed Fruit, 100 per litre, Packed Bottle as the
reference combination. We ran regression on all individuals to determine their individual
combinations of these factors. The overall contribution of the factors was then determined by
taking an average across all respondents. A sample regression output is given below:
Model Summaryb
Std.
Adjusted Error of
R
R
the
Model
R
Square Square Estimate
1
.971a
.942
.856
.30264
a. Predictors: (Constant), Price_Eighty, Mango,
Real, Tetra, Guava, Price_Sixty, Tropicana,
Litchi, Canned
b. Dependent Variable: Rating
Coefficientsa
Model
1 (Constant)
Mango
Litchi
Unstandardized Standardized
Coefficients
Coefficients
Std.
B
Error
Beta
4.665
.277
1.220
.141
.243
.259
20
.733
.071
t
16.849
Sig.
.000
5.020
.544
.002
.606
Guava
Tetra
Canned
Real
Tropicana
Price_Sixty
.419
1.106
.091
.379
.345
.573
.232
.183
.264
.196
.222
.181
.235
.711
.046
.246
.193
.371
1.807
6.049
.346
1.939
1.550
3.166
.121
.001
.741
.101
.172
.019
Price_Eighty
-.191
.244
-.096
-.782
.464
a. Dependent Variable: Rating
The overall contribution by averaging across all respondents gives us the following
breakup:
We determine the flavour plays the most important contributor to the purchase decision which
also corroborates with our larger survey results highlighting taste as an important factor. Brand
has the least contribution in a buyers purchase decision which implies that the students who
gave the survey are mostly brand neutral. We next do a deep dive by calculating the individual
utilities of 3 users selected on the basis of their high R2 scores indicating consistency in replies.
21
22
Conclusions
From the above analysis, we present below some of the findings which can be used by a
company who wishes to launch a new packaged juice product for the Indian markets.
1) Cluster 1 is the ideal customer target as it is larger in size and fiercely brand loyal
2) Cluster 1 is the ideal customer target as it is larger in size and fiercely brand loyal
3) Taste should be the major area to concentrate on for product and promotion
emphasis
4) Cluster 1 doesnt depend on the product information as given on the pack with
regard to nutritional value and preservatives and the Brand Perception with regard
to Organic content, Pulp Content, and Brand Ambassador Etc.
5) Cluster 1 doesnt depend on the product information as given on the pack with
regard to nutritional value and preservatives and the Brand Perception with regard
to Organic content, Pulp Content, and Brand Ambassador Etc.
23

Group1 Sec C MM Report

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INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Market Study of Packaged

Sampling and Data Collection Techniques

Market Analysis Factor Analysis

Market Analysis Cluster Analysis

Market analysis Conjoint Analysis

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

Ingredients. September 2013, Issue 131

Sampling and Data Collection Technique

Sampling for Questionnaire

Population Defining characteristic is the age group

Rotated Component Analysis

Please read the following

intent for the packaged juice

Please read the following

intent for the packaged juice

intent for the packaged juice

intent for the packaged juice

intent for the packaged juice

intent for the packaged juice

influence your purchase

Please read the following

influence your purchase

intent for the packaged juice

influence your purchase

Nutritional value, preservation

Product ambassador, organic product,

Package type, Package Size

Total Variance Explained

Rotation Sums of Squared Loadings

Extraction Method: Principal Component Analysis.

Component Transformation Matrix

Extraction Method: Principal Component Analysis.

Number of Cases in each

Final Cluster Centers

Please rank the

most important and Rank 9

Please rank the

most important and Rank 9

Please rank the

purchase, with Rank 1 for the

most important and Rank 9

a. Cluster Number of Case = 1

Please rank the

most important and Rank 9

Please rank the

most important and Rank 9

a. Cluster Number of Case = 2

How many different brands

a. Cluster Number of Case = 1

How many different brands

a. Cluster Number of Case = 2

Cost per 1 litre

100 per litre

a. Dependent Variable: Rating

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