Sample Market Research Process Conducted by PDP and how it Addresses Key Issues

Portland Drake Beverages (PDB), a refreshment manufacturing industry, was up to carry out market research to determine a strategic position for their newly acquired drink, Crescent Pure (Crescent), which was yet to launch its product in three U.S states in early 2015. However, the decision by PDB to fund the product would base on a soft launch, which they set for early 2014. A marketing research process considers several factors; examination of the market to detect possible inhibitors, provision of information by managers to researchers on the importance of the research, proficient interpersonal skills between managers and researchers, and provision of feedback by researchers.

Product positioning is a marketing problem set to determine the function and features under investigation (Johansson & Thorelli, 1985). Due to Crescent’s qualities, high- energy content, and hydrating abilities, the PDB executives had a hard time deciding where to position the product. Some felt it better served as an energy- drink, while the other party felt it would better serve as sports- drink (due to its hydrating power). The decision of product positioning is an essential element in the market research process; it takes a central role in how customers perceive the product or why they choose to use it (Aaker & Shansby, 1982). A study carried in Ghana; proved that when positioning a product, the management should consider the service offered, profitability, physical appeal, how reliable it is, and name (Adokou & Kyere- Diabour, 2017). When deciding where to position a product, its attributes should not be so close to another already in the market to avoid direct competition (Johansson, J. & Thorelli, H., 1985, 58). It should give the customer a better perception of it. The marketing vice president, Sarah Ryan, was given a task to evaluate market opportunities available in positioning, to yield information to be used in the soft launch. Market positioning involves three primary steps; assessing and analyzing gaps in the market, selecting the market, determining target groups, and finally determining the strategy (DiMingo, C., 1988, 5-7).

Market research evaluated the general non-alcoholic beverage industry. Since Sarah had to provide a brief about her findings six weeks later and time was not on her side, she first relied on secondary data. They used data previously collected on beverage intake. Findings were as follows; energy drink consumption had elevated by 40 % in two years, consumers were mainly men between 18 and 34 years, and demand for healthier drinks was increasing. However, 32% of consumers stated that they had not taken an energy drink in 6 months for their health safety. Four competitors shared 85% of the consumers, while 15% was amongst around thirty suppliers. For the sports drink, there was men’s dominance in consumption, half of all male consumers.

On the other hand, only a third of women consumed them. On age factor, consumption was as follows; 62% for 18 to 24 years and 77% for 12 to 17 years. Two competitors shared 94% of the consumers, and the other 6% was among twenty firms. The opportunity available was due to increasing demand for low-sugar drinks since the government had ruled out high-calorie products comprised of some sports drinks. The uptake of these healthy drinks had increased by 33% in two years. The study evaluated the perceptions of the consumers on the two positioning strategies. The majority perceived sports drinks to be more reliable in that they were more fun, nourishing, healthy, pocket friendly, hydrating, enjoyable, less sweet, natural, and suitable for teenagers. However, 52% of the respondents perceived that energy drinks characterized none of these. Also, 27% of the respondents did not have any of the perceptions about sports drinks.

An evaluation of how its consumers perceived Crescent indicated that 80% of the respondents, 59 % being men, perceived the drink to be more nourishing, healthy, affordable, natural, and hydrating. This fits the general perception of sports drinks consumers since distributors gave positive feedback about the product’s sale. Customers who had never consumed the drink before tested the drink. They found it favorable due to taste, energizing power, and pocket friendly. Information gathered is of great use to determine the product niche. Also, there would be the establishment of a prelaunch by the distributors and relevant advertising strategies undertaken.

Summary

The research process should meet an appropriate decision; there is effective communication between the researcher and the management, therefore enhancing timely feedback. There is an establishment of opportunities and threats related to the market of each positioning. Competition is evaluated to determine an efficient approach to reach the market, thus identifying a market gap. Consumer expectations were tested by evaluating their perceptions towards sports drinks, energy drinks, and specifically Crescent. A positioning strategy should meet all needs required by consumers (DiMingo, E. 1987, 10). However, it would just be short-termed. The time to establish a stable product positioning strategy was inadequate. ‘The most advantageous position for the producer is one that yields the highest rating among the target segment” (Johansson, J. & Thorelli, H., 1985, 60).

 

 

 

Reference List

Aaker, D. A. & Shansby, J. G., 1982. Positioning your product. Business Horizons, 25(3), 56-62

Adokou, F. A. & Kyere- Diabour, E., 2017. Positioning strategies of retail firms in Ghana. Journal of African Business, 18(2), 221- 237

DiMingo, E. P., 1988. The fine art of positioning. Journal of Business Strategy, 1-10     Available from; http://www.artofpositioning.com/wp-content/uploads/2013/04/Fine-Art-Of-Positioning.pdf

Johansson, J. K & Thorelli, H. B., 1985. International product positioning. Journal of International Business Studies, 16(3), 57- 75