A00053

Indian Institute of Management Ahmedabad February 23, 2016

Fruitzone India Limited (A):

Designing the Research Questions
It was the first week of April 2015 and the summers had practically begun. Hemant, the MD of
Fruitzone India Limited, had reached office early. He wanted to have an early meeting with
Preeti, the marketing manager for the snacks division. He had always felt that there was an
opportunity in the fruit juice market and he wanted to discuss this with Preeti. As soon as he
reached office, he immediately went into the meeting hall where Preeti was already present.
During the discussion, Hemant suggested that they should consider launching new fruit juice
flavours and sugarcane might be a good option to consider. He asked her to conduct a detailed
study to examine different issues related to the launch of sugarcane juice and they would then
plan to conduct detailed market research.

Over the next week, Preeti looked at recent fruit juice industry reports and reports on the health
benefits of sugarcane juice. Preeti met Hemant to discuss her findings and they decided that it
might be worth considering the feasibility of a new sugarcane based juice. They decided to
entrust a marketing research company, India Monitor International (IMI), to conduct the market
research study.

Hemant had recently taken over as Marketing Director at Fruitzone India Limited, the Indian
subsidiary of the multinational company Gypsy Inc., the global leader in the beverages
industry. Prior to this he had been the Marketing Manager for the Snacks Division of the
company and was responsible for several new product launches. Since he wanted to study the
performance of the beverages division, Hemant asked the business intelligence team to provide
him with the market research and sales reports for the last five years. He was especially
interested in the juice brand Tropiviva. Hemant was a health freak and loved fruits and fruit
juices. He had always wondered why Tropiviva did not offer more variants; his favourite,
sugarcane juice, was not offered by Tropiviva. Looking at the numbers for Tropiviva, he
realised that the market share had been almost stagnant for the past five years.

He started wondering what to do. He had always felt that juice brands did not offer sufficient
variety, even those that consumers loved. India had large climatic and geographical variations
and was blessed with a number of fruit varieties. Consumer preference for juices also varied
across regions and seasons. Juices such as Bael juice (wood apple, biological name
Aeglemarmelos) and sugarcane juice were quite popular in India. He had seen these being sold
at roadside stalls. Sugarcane juice was his personal favorite and a number of times he had got
down from his car while returning from office on a summer evening to have a glass or two.

Prepared by Professor Sanjeev Tripathi, Indian Institute of Management, Ahmedabad.

The author acknowledges the help and contribution of Kumaravel C (IIMA PGP 2015), and Vishwas
Raichur (Academic Associate, IIM Ahmedabad).
Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for classroom
discussion. They are not designed to present illustrations of either correct or incorrect handling of
administrative problems.
©2015 by the Indian Institute of Management, Ahmedabad.
This document is authorized for use only in Dr. Pooja Sengupta's Research Methodology PGDM 17-19 Trim-III HBS Case course at International Management Institute - Kolkata, from
February 2018 to March 2018.
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India was one of the largest cultivators of sugarcane and he knew that there would be no
supply side issues if they decided to market sugarcane juice. Though his hunch suggested that
launching sugarcane juice might be a good idea, he still wanted to follow a structured approach
and examine whether it made sense to launch such a product.

FRUITZONE INDIA LIMITED

Fruitzone was the leader in the Indian market in fruit juices which it marketed under the brand
name Tropiviva. Originally launched in 1947 with only orange juice, made from high quality
oranges imported from Bradenton, Florida, Tropiviva quickly added five variants of orange
juice over the next decade. After being acquired by Gypsy in 1998, Tropiviva added a variety of
fruit juices including apple, grapes, pineapple, mango and mixed fruit among others. In early
2000, Fruitzone added several juice varieties to its portfolio based on the fruit preferences in the
Indian market and these flavors had added significantly to the bottom line of the business. The
market share of Tropiviva was 6.6% in 2013 among all the fruit juice brands. However, this
share had been almost constant for the past five years. Fruitzone believed it would have to
introduce newer regional juice varieties to improve Tropiviva’s market share. The Tropiviva
team performed some secondary research using existing sources and the summary of their
research is provided below.

MARKET RESEARCH OBJECTIVES AND DECISION QUESTIONS

The initial discussion between IMI and the Tropiviva marketing team defined the business
problem as –

Should FIL (Tropiviva Brand) launch sugarcane juice? If yes, what should be the marketing mix
for the launch?

IMI, after brainstorming and conducting some secondary research on the fruit juice industry,
framed the market research problem as follows.

Is there a willingness to buy packed sugarcane juice in the market? If yes, then

1. What is the target segment for sugarcane juice?

2. What is the price that customers are ready to pay for packed sugarcane juice?
3. What are expectations from the packed sugarcane juice?
4. What are the taste variants that customers prefer in sugarcane juice?
5. Which form would consumers prefer – can, tetra pack or bottle?

Hemant felt that it would be good to know how satisfied consumers were with the Tropiviva
brand. He asked IMI to include this too in their research.

MARKET RESEARCH OVERVIEW

IMI structured the market research broadly into two phases, exploratory research and
confirmatory research. The exploratory research was sub divided into secondary data analysis,
focus group discussions and in depth interviews.

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February 2018 to March 2018.
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Phase I: Exploratory Research

Part I - Secondary Research

Data regarding the performance of Tropiviva products as compared to competitors and the
current demand for existing products was to be collected from published industry reports and
internal marketing data provided by Fruitzone. The information would also be obtained from
different newspapers, magazines and online databases. IMI studied the current market for the
juices and reviewed some secondary research reports that looked at the acceptability of
sugarcane juice in the market.

Based on this research, IMI came up with a list of questions to understand consumer
perceptions in the fruit juice market and specifically about sugar cane juice. These were used as
the lead questions to guide the focus group discussion. Exhibit 1 lists the lead questions used in
the Focus Group.

Part II – Primary data from the Focus Group Discussions

Focus group participants were recruited using a two stage online survey and only participants
who consumed packed fruit juices on a frequent basis (three or more packs/week) participated
in the discussion. The homogenity of the group was maintained by controlling for factors such
as age, profession, marital status etc. The lead questions from the secondary research were used
to moderate the focus group discussions and all the views of the participants were recorded.

Part III – Primary data from In-depth interviews

In-depth interviews with the regional sales manager of the competitor and several retail store
managers were conducted to identify recent trends in the packed juice market. Fruit juice
vendors were also interviewed to understand customer juice consumption behaviors.
Specifically, three roadside vendors of sugar cane juice were interviewed. Combining the
observations from the moderated focus group discussions, the in-depth interviews and
secondary data, a research matrix that contained the seven research questions mapped with the
justification for the information need and potential information sources was created.

Phase II - Confirmatory Research

The confirmatory research was planned to be done with a detailed survey of potential
customers and if favourable, then a test market simulation might also be done in one or two
selected cities.

SECONDARY RESEARCH SUMMARY

The Indian Fruit Juice Industry

A large part of the fruit juice market in India is still untapped due to poor infrastructure, poor
storage facilities and a highly unorganised market, mainly constituted by roadside vendors. In
the juice segment, unorganised corner shops and roadside vendors are still responsible for more
than 90% of sales. However, Indian customers are now moving towards consuming packed

This document is authorized for use only in Dr. Pooja Sengupta's Research Methodology PGDM 17-19 Trim-III HBS Case course at International Management Institute - Kolkata, from
February 2018 to March 2018.
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fruit juices. The major driving factors for this shift are increasing per capita disposable income
and increasing health consciousness. The trends in the Indian fruit juice market were optimistic.

Sugarcane Opportunity

Being a sub-tropical country with prolonged summers, India has a large population which seeks
relief from heat in beverages like cola, fruit juices etc. With increasing levels of health-
consciousness among people, the demand has shifted from cola beverages to packed fruit juices.
In such a scenario, there is a huge potential for juices which also have a cooling effect on the
body - lime and sugarcane being the major ones. Though lime is already seeing a lot of supply
in the packaged form, sugarcane supply is yet to catch up with demand.

Insights from Focus Group Discussions

People consume packed fruit juices along with breakfast or lunch, at parties or as meal
supplements. Most of the consumption happens at homes for families, and with friends for the
young. Families with busy parents tend to use packed juices for children and older family
members as they perceive these to be hygienic and healthy. Families bought packaged juices to
inculcate good drinking habits among children. Ease of consumption and a ready option for
guests are also key factors favouring packed fruit juices. Youth perceive these as inferior to
fresh fruit juice and both target segments were concerned about the effects of preservatives.
Sugarcane juice is consumed during summers predominantly at retail outlets, for its hydrating
effects. Consumers said it was hard to imagine sugarcane juice coming into the home in storable
form. In summary, freshness, great taste, hydrating and cooling effects were the key selling
points for the focus group participants. In winter, tastier variants like ginger, lime etc. might be
tried to bring in people buying it primarily for its taste.

Insights from In-depth Interviews

Retail Store Managers and Regional Sales Managers

Fresh fruit juice is any day better than packaged ones, as the prime reason for drinking juices is
good health. For family consumption, it is not possible to go to a kiosk/juice stall every time,
hence it is better to bring the juice home in packaged form. The brand adds trustworthiness to
the product, thus increasing the trial rate for any new offering. Also, consumers prefer buying
the brand “Real” in packaged juices of 500ml quantity than “Tropiviva” since “Real” is an
Indian brand. Also, consumers largely tend to favour tetra packs over bottles. There is some
difference in the taste of packed juice compared to fresh juice. If the taste was similar, people
might consume more of packaged fruit juice.

Sugarcane Juice Vendors

Sugarcane juice has been consumed typically in summers for its refreshing effects, and good
taste comes a close second. However, for children, it is usually the other way round. Consumers
like watching the juice being prepared right in front of their eyes. They do not believe sugarcane
juice can be preserved for long and still retain its freshness. Consumers feel it is not good for old
people/diabetics. Flavoured cane juice with masala or lime is a good concept, and people are

This document is authorized for use only in Dr. Pooja Sengupta's Research Methodology PGDM 17-19 Trim-III HBS Case course at International Management Institute - Kolkata, from
February 2018 to March 2018.
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ready to pay a little extra for that as well. Coconut water, which is already available in bottles, is
a competitor for sugarcane juice.

IMPLICATIONS FOR THE PROJECT

IMI then consolidated the insights from the focus group discussions and listed the potential
implications of these for the proposed new fruit juice.

• Seen as a summers-only drink serving as a hydrating, coolant and tasty drink.

• For winters, taste alone as a strong attraction remains uncertain.
• However, offerings like ginger-flavour and fizzy-variants might be more in demand
during winters when the main product sales are low.
• Promotion on purity of juice/connect with the relief from kiosk-consumption might
work for elders.
• For children, taste variants might be the incentive as they are not essentially health
conscious.
• Under the prominent brands, a good chance of being tried out by the brand-loyal.
• Positioning based on place of origin, for example, Agra’s Petha 1 is an alternative.
• Quite feasible as the sugar cane juice is not easy to make at home using juicers.
• Preservability is hard to believe; in general, the impression is that it ferments very
quickly.
• Additional preservative perceived as threat to health and taste benefits, hence
positioning becomes important.
• The need for sugarcane juice is much more in summers and very low in winters,
primarily due to it being perceived as a hydrating drink with coolant effects and good
taste.
• In winters, people are reluctant to try it out.
• Positioning of the product should include convenience, easy to preserve (sugarcane
juice usually ferments after a certain time), and a refreshing drink with the taste of
freshly crushed cane.
• The juice can be sold throughout the year if positioned not just as a summer re-hydrant
but as a cool drink to hang-out with.
• If we bring in flavoured sugarcane juice, we can charge a premium over regular plain
sugarcane juice.
• Since coconut water is already available in bottles, we should be careful while
positioning our product so that consumers find something rare and unique in it for
them.
• SKUs of tetra packs in small 100-200 ml can be sold along with the 500 ml big
rectangular tetra packs like other ‘Tropiviva’ or ‘Real’ fruit juices.

The exploratory research provided significant insights to IMI which they used to come up with
a detailed structured questionnaire for the conclusive qualitative research. They gave a report
on their exploratory research findings and also a draft of the detailed survey questionnaire to
Preeti for her review. Once Preeti came back with her comments, IMI planned to move on to the
confirmatory research phase.

1 Petha is a North Indian sweet.

This document is authorized for use only in Dr. Pooja Sengupta's Research Methodology PGDM 17-19 Trim-III HBS Case course at International Management Institute - Kolkata, from
February 2018 to March 2018.
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Exhibit 1: Focus Group Lead Questions

The discussion can start with the broader topic of fruit juices, such as, where and what fruit juices the
group members prefer to drink.

1. How do their preferences differ—on the basis of taste, health benefits, price, cooling effect etc.?
2. What type of fruit juice - fresh ones or packaged juices? Why? If yes, why did they do so? Due to
hygiene reasons or due to unavailability in that particular season? Or due to the fact that street
vendors normally mix ice and degrade the benefits of fruit juice.
3. If they have not consumed fruit juices in packed form, then why not? Do they think that packed
juice lacks freshness, or do they think that packed juice has added flavours and other contents, or
is it due to the higher price?
4. What size of the packaged fruit juice do you buy generally?
5. Are you satisfied with the current number of varieties of juices available? Do you really feel that
more varieties should be added? If yes, which fruit would you want to be added to the current
juices category?
6. Is sugarcane one of the suggestions? If no, then do they get excited when they are told that
sugarcane is one of the juices that is not available in packed form?
7. During the sugarcane season, do they prefer to drink sugarcane juice over their preferred juice
like orange, apple etc.?
8. What kind of benefits do you think packaged sugarcane juice will give you? Which is the most
important one for you?
9. Would you prefer flavoured sugarcane juice? For example, with masala, lime juice, etc.?
10. Among packaged juices, which are your favourite ones, and would you prefer sugarcane juice
over other fruit juices?
11. Do you think it can be sold throughout the year? In winter too? Do you think it can be sold as a
home drink which you can offer to guests?
12. Which form will be most desirable to you: sugarcane juice in cans, tetra packs or bottles? Why?
13. Do you think it is good for health (linked to diabetes)?
14. Finally, if sugarcane juice is made available with a leading brand name like Tropiviva, Real, or
Minute Maid, will they buy it along with other fruit juices or over other fruit juices on the basis of its
taste or health benefits or any other reason?

This document is authorized for use only in Dr. Pooja Sengupta's Research Methodology PGDM 17-19 Trim-III HBS Case course at International Management Institute - Kolkata, from
February 2018 to March 2018.