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Table of Contents Introduction 2 Task 1-A 2 Primary Research Plan 2 Customer profile 3 Customer preference 3 Customer attitude and buying behavior 4 Data Collection Method 5 Sampling Techniques 5 Task1-B 6 Secondary Research Plan 6 Size of the market & Market structure 6 Competitors and their market share 7 Task 2 8 Summary of Collected Data and research findings 8 Data analysis 9 Study of correlation 9 Task 3 10 Report to senior manager 10 Health and wellness issues in the beverage industry 11 Task 4 14 Project Plan for the development of a new product 14 Resource Allocation 15 Project Costing 15 Business Analysis on the projected revenue and cash flow 16 Conclusion 17 References 17 Appendix 18

Introduction
Star Bottling and packaging company is a medium sized business which is working for years in the UK market. Recently Star has decided to follow the diversification growth strategy by introducing a new product in a new market. The opportunity exists outside the current market. The beverage industry of UK is highly attractive and Star is planning to launch new drinks in the UK market. As the coordinator of the new product development it is important to analyze the customer profile and the customer preference and the consumer buying behavior and attitude about the soft drinks. This report focuses on data collection about the UK beverage industry, the current trends in the market, the major competitors and the size and structure of the market. In this report the collected data from primary and secondary sources have been analyzed to take the correct business decision. Finally, project Plan for the development of a new product and the supporting evidence for the financial viability is provided for better business decision making.
Task 1-A

Primary Research Plan
In every research projects the researcher tries to find out the some sort of scenarios or sectors to be investigated for the analysis where the researcher goes with identifying the problems (Jha, 2008). Here, the main focus of this primary research is to find out the market potential of the new beverage. To estimate the market potential it is very important to find out the potential customer and their preference. The attitude and buying process of the consumers also have influence in this research. The main purpose of this research is to find out the customer profile, customer preference and customer attitude and behavior. So the basic objective of this research includes: * To find out the key customers profile * To find out the customer preference for beverage in the UK Market * To analyse the buying behaviour and attitude of the customers
To meet the research objectives the researcher used the following research questions for the research; I. Who will be the main consumers of the new beverage? II. What is the preference of the customers in UK market? III. What is the buying behaviour and the attitude toward the new product?

Customer profile
The beverage market of UK includes a wide range of consumer groups. Almost all age range people consumes soft drinks and beverages. For the soft drinks children and the younger people are the main customer of it. Children prefers bottled juice and other drinks. The customers can be further divided into underweight, normal weight, overweigh and obese. Huge number of customers belongs to the underweight and overweighed group. Obesity is increasing in the UK market so need for diet drinks and healthy drinks are increasing day by day. Customers were basically divided into groups based on their profile. The customer profile information included their gender, nationality, age group and income level.

Customer Profile I. Gender: □ Male □ Female II. Nationality: □ British (UK) □ German □ Italian □ Other European □ Chinese □ USA III. Age Group: □ 10-15 □ 15-25 □25-35 □35-45 □45- Above
Customer Profile IV. Gender: □ Male □ Female V. Nationality: □ British (UK) □ German □ Italian □ Other European □ Chinese □ USA VI. Age Group: □ 10-15 □ 15-25 □25-35 □35-45 □45- Above

Figure: Consumer group of soft drinks in UK market

Customer preference
Changing consumer preference for beverages is changing the actions of the key players of the beverage industry. The impact of increasing healthy fruit drinks is influencing the brands to launch fruit and vegetable based juices. The fruit juice basically remained on the top choice of the children and older customers. Middle aged population is far more attracted to the energy drinks and functional bottled water. However, innovation is required for maintain the sustainable product demand.

Figure: Customer Preference
Source: UK Soft Drinks Sector, 2012
Data Collection Method
Survey research: Survey is best fitted for the descriptive research. The survey method was taken for collecting information about the people’s knowledge, preference, beliefs and the level of satisfaction with the current beverage. Some instruments were required by the survey research. A questionnaire was prepared for this purpose to collect information from the respondents.
Observational data: Fresh data can be gathered by observing the market, the competitors and other relevant factors. Here, in these report observational techniques was used for collecting information by observing the shop of beverage, vending machines and the customers who are consuming the products.
Focus group discussion: A focus group is a gathering of six to ten respondents who spends a few hours with the moderator by sharing their experience about any product. In this report several focus group discussions was created to fetch the customer insights about the soft drinks and other beverages.
Behavioral data: The actual purchase of the consumers can reflect the actual buying behavior and the attitude of a customer towards a product. Behavioral data was collected for this report by observing different customer groups.
Sampling Techniques
Two types of sampling are basically used in research method which are random sampling and non-random sampling. For the research of new product both types of sampling method was used. In this project stratified sampling is used. In this sampling whole population of London is stratified into number of groups or the population is divided into homogeneous groups. After that each group was used for choosing sample.
Sampling unit: The required data was mostly collected from the survey research. For that reason, a questionnaire was prepared. The questionnaire was distributed to the college students, shoppers and the consumers of soft drinks.
Sampling size: The sampling size was 100. Equal number of men and women responded to this questionnaire.
Sampling procedure: The main demographic for this research targeted was the youngest group. Mainly the consumers who are conscious about health and who wants a healthy drink are targeted for this research. The survey was face to face as well as an online survey was conducted.
Task1-B
Secondary Research Plan
In secondary research data is collected from secondary sources of information. As secondary data is less reliable than the primary data, necessary steps should be taken to ensure the credibility and reliability of data. The way of collecting information from secondary sources was government data, journals, research papers, magazine, statistical bureau, and other sources. There are three important questions which should be kept on mind while using data from secondary sources. They are: * Is the data suitable for the research purpose? * Is the data id adequate for meeting the need of the research? * Is the data accurate?
Size of the market & Market structure
The total revenue of the fruit juice industry was £506.5 million over the year 2012-2013 (IBIS World, 2013). The market profitability is expected to grow in the next five years. With the ongoing marketing activities and innovative products the demand for healthy and convenient beverage is increasing. The size of the beverage market is UK is huge and it is increasing day by day. The raising awareness for healthy food structure is increasing the demand for healthy fruit drinks. The consumers demand for natural product without artificial color and flavor is getting higher. So the market trend is going to the increasing demand for higher value fruit drinks and smoothies. According to IBIS World industry analyst Steven Connell, “since 2008, however, fruit juice has been among the worst performing beverage classes, with recessionary conditions leading consumers to trade down or across to carbonated soft drinks and more economical still beverages”. However, the market has turned from this financial crisis. So innovative product features is required with ensuring the nutritious value of the drinks. The fruit juice industry in UK has a high level of market share concentration. Pepsico, Gerber and innocent these three fruit juice giants covers most of the market share which is about 75% of the total market share.

Competitors and their market share
The fruit juice industry in UK has a high level of market share concentration. Pepsico, Gerber and innocent these three fruit juice giants covers most of the market share which is about 75% of the total market share. The specific brands of fruit juice and their market share are the followings. Tropicana has 33 percent market share and Fresh gold has 6 percent market share. Real fruit drinks cover almost half of the market share that is 53 percent. These are the key players in the market.
A huge shift of consumer interest took place in 2012 for the beverage. Consumers are now far more interested about healthy fruit drinks. Fruit juice is considered to be a family purchase. In UK Tropicana remained the market leader in the fruit juice category. It had 15% market share in 2012.

Figure: Market Structure of Beverage Industry (Anon, 2014)
Task 2
Summary of Collected Data and research findings
The beverage market of UK includes a wide range of consumer groups. Almost all age range people consumes soft drinks and beverages. For the soft drinks children and the younger people are the main customer of it. Children prefers bottled juice and other drinks. The customers can be further divided into underweight, normal weight, overweigh and obese. Huge number of customers belongs to the underweight and overweighed group. Obesity is increasing in the UK market so need for diet drinks and healthy drinks are increasing day by day. The consumers were basically divided based on their profile. The respondents were asked about their preferences and their buying habits. It was found that they are more loyal to a particular brand either due to the flavor or the convenience of the product. But now a days they are more conscious about the health issues and the nutritious value of the drinks. So they are preferring healthy fruit drinks.
Data analysis
Study of correlation
The set of data used in this analysis is driven from the survey results. The sampling size was 50. Equal number of men and women responded to this questionnaire. The required data was mostly collected from the survey research. For that reason, a questionnaire was prepared. The questionnaire was distributed to the college students, shoppers and the consumers of soft drinks. In this analysis X represents the age group whereas Y represents the demand for fruit juice. If there is a positive correlation between age and demand, the target customer group selection for the new brand will be easier. If there is no relationship among these data, the sales of the fruit drink will not depend on the age of the customer group. Age | Demand (%) | 5 | 20 | 15 | 35 | 25 | 10 | 35 | 5 | 45 | 5 | 55 | 15 | 65 | 15 |

R = -0.4447
As r is = -0.4447
As r represents a negative figure, there is no relationship between age and demand for juice.
Task 3
Report to senior manager
The total revenue of the fruit juice industry was £506.5 million over the year 2012-2013 (IBIS World, 2013).The total sales and revenue from the fruit juice drinks was declined in the years from 2001 to 2006. But the market is now growing. The market profitability is expected to grow in the next five years. With the ongoing marketing activities and innovative products the demand for healthy and convenient beverage is increasing. The size of the beverage market is UK is huge and it is increasing day by day. The raising awareness for healthy food structure is increasing the demand for healthy fruit drinks. The consumers demand for natural product without artificial color and flavor is getting higher.
The beverage market of UK includes a wide range of consumer groups. Almost all age range people consumes soft drinks and beverages. For the soft drinks children and the younger people are the main customer of it. Children prefers bottled juice and other drinks. The customers can be further divided into underweight, normal weight, overweigh and obese. Huge number of customers belongs to the underweight and overweighed group. Obesity is increasing in the UK market so need for diet drinks and healthy drinks are increasing day by day. The consumers were basically divided based on their profile. Based on the gender and age group the customers of fruit juice can be divided into these groups:

Figure: Consumers of fruit juice (Zenith International, 2012)
The survey was conducted among 100 participants. The required data was mostly collected from the survey research. The survey was conducted basically to the college students, shoppers and the consumers of soft drinks. Equal number of men and women responded to this questionnaire. The main demographic for this research targeted was the youngest group. Mainly the consumers who are conscious about health and who wants a healthy drink are targeted for this research. The survey was face to face as well as an online survey was conducted.
For analyzing the customer preference there were a significant difference among the requirements of the households and the younger people and school going kids. For the teenagers and the school going kinds a reasonable container is needed do that they can have it on the way to school and home. This packaging issue is very important because some of the consumers choose a drinks only based on the packages and convenience of carrying it. Households and the children’s prefer to use paper boxes and foil packages in an average. These boxes are taken as kid friendly boxes. * How would you like to get your juice? * In paper package/ Foil packages * Cartons * Glass Bottles * In glasses
Health and wellness issues in the beverage industry

* Do you ever read the ingredients of the soft drinks? * Yes * No * Do you think soft drinks have any nutritious value? Please comment:

There are some primary health concerns about fruit drinks and other beverages. Obesity is one important issue which affects this industry very much. Childhood obesity is major concerns for the parents. So the demand for less sugar and limited artificial ingredients are increasing. Based on the answer of the respondents it was found that many people do not read the ingredients behind the packages but the scenario is changing they are now more concerned about the nutritious value of juice drinks than its flavor.

Survey Questions | 1 | I have preference for only one beverage brand | | | | | | 2 | I think my drink has nutritious value | | | | | | 3 | I think the juice drinks contains harmful elements | | | | | | 4 | Diet soft drinks and juices are healthier than the usual soft drinks | | | | | | 5 | I definitely have a wanting for healthy soft drinks. | | | | | |

The respondents were asked about their preferences and their buying habits. It was found that they are more loyal to a particular brand either due to the flavor or the convenience of the product. But now a days they are more conscious about the health issues and the nutritious value of the drinks. So they are preferring healthy fruit drinks. * What is the price you normally pay for a 250 ml. soft drink bottle?
____________ (please write-in the amount) * How often do you consume juice? * More than once a day * Few times a week * In special occasions * Never

Figure: frequency of consumption (own research work, 2014)
Task 4
Project Plan for the development of a new product
Star Bottling and packaging company is a medium sized business which is working for years in the UK market. Recently Star has decided to follow the diversification growth strategy by introducing a new product in a new market. The opportunity exists outside the current market. The beverage industry of UK is highly attractive and Star is planning to launch new drinks in the UK market. As the coordinator of the new product development it is important to create a plan for developing the new product. The project plan includes eight stages. They are followings:

Figure: Stages of new product development (Kotler, 2013)
For the development of the new product ‘Star Juice’ first of all the strategy of the product should be developed. Then the main idea for this product is to generate juice from fresh fruits. Here this juice will be basically a lychee based drinks. The idea should go through the screening and evaluation process. The business should be analyzed. The industry, market and the competitors should be analyzed. The external and internal business environment should be analyzed. The finally the new product will be developed. This product will be produced as a trial basis. Then the product will be provided to the market for testing the market. Then the final stage of a new product development is the commercialization. If the product run successful in the test marketing stage is commercialized to the marketplace. So these steps will be followed to develop the new fruit juice ‘Star Fruit Juice’.
Resource Allocation
Star Juice Company will be providing energy drink with fruit flavor and original vitamin without the effect of any harmful chemical. Resource allocation is an important part of the business process. So the allocation of resources must be carefully planned for the new fruit juice. The fruits will be collected directly from the farmers. It should be ensured that the fruits are arriving in the plants as fresh as possible and should be undamaged. As the fruits are seasonal, it needs to be stock properly. There are several other competitors who are providing juice, pickle and honey but we are specially focusing on litchi drink with original fruit content.
The blending and production should be carefully planned. No concentrated juice or sugar will be added. No preservatives or artificial color will be added. First the fresh fruits will be received from the farmers. Then the crushing, maceration process will be executed. Finally the filtration of the juice will take place. The resource allocation plan includes several stages. They are followings:
Fresh fruits will be provided by the farmers. The personnel for production will be taken from the current business. But an expert will be hired with sufficient knowledge of production. Third party suppliers will be used for the distribution process. The main distribution channel will be super market, departmental store, food and beverage store, convenience store etc.
Project Costing
After analyzing the market effectively it is important to calculate the startup costing of the business. Star Bottling Company is providing its excellent service in the bottling of fruit juice. By following the diversification strategy it is introducing a new lychee based fruit juice Star Juice. The projected cost for the startup of the business is the followings: Startup Expenses | Costs (in £) | Rent or Mortgage | 5000 | Utilities | 500 | Advertising and promotion | 2000 | Payroll | 3000 | Inventory replenishment | 8000 | License and permits | 5000 | Insurance | 1500 | Professional Fees | 3000 | Services | 3000 | Decorating | 2000 | Distribution | 3000 | Miscellaneous | 4000 | Total | 40000 |

Projected start-up cost for this fruit juice company is £40000. Furthermore, monthly cost will be about £6000.
Business Analysis on the projected revenue and cash flow

Figure: Projected Profitability in years
Conclusion
Star Bottling and packaging company is a medium sized business which is working for years in the UK market. Recently Star has decided to follow the diversification growth strategy by introducing a new product in a new market. The beverage industry of UK is highly attractive and Star is planning to launch new drinks in the UK market. This report focuses on data collection about the UK beverage industry, the current trends in the market, the major competitors and the size and structure of the market. In this report the collected data from primary and secondary sources have been analyzed to take the correct business decision. Finally, project Plan for the development of a new product and the supporting evidence for the financial viability is provided for better business decision making.

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Appendix
Serial Number: | | | | |
Survey Form
“Preference for of a new healthy soft drinks”
Dear participant,
I am conducting a survey for realizing different which determines the preference for a soft drinks. The questionnaire is completely anonymous and prepared only for discovering the buying behavior and preference of the customers. It would be of your kind if you spent few of your valuable time to express your opinion concerning the survey questions. Participant’s Socio Demographic Profile |

SECTION A: Socio Demographic Profile VII. Gender: □ Male □ Female VIII. Nationality: □ British (UK) □ German □ Italian □ Other European □ Chinese □ USA IX. Age Group: □ 10-15 □ 15-25 □25-35 □35-45 □45- Above

Please rate the following questions with respect to the products and services of M & S Plc. Strongly disagree | Disagree | Neutral | Agree | Strongly agree | 1 | 2 | 3 | 4 | 5 |

Survey Questions | 1 | I have preference for only one soft drinks brand | | | | | | 2 | I think my drink has nutritious value | | | | | | 3 | I think soft drinks contains harmful elements | | | | | | 4 | Diet soft drinks are healthier than the usual soft drinks | | | | | | 5 | I definitely have a wanting for healthy soft drinks. | | | | | |

6. What is the price you normally pay for a 250 ml. soft drink bottle?
____________ (please write-in the amount) 7. How often do you consume soft drinks? * More than once a day * Few times a week * In special occasions * Never 8. Do you ever read the ingredients of the soft drinks? * Yes * No 9. Do you think soft drinks have any nutritious value? Please comment: