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MANAGEMENT WITH INFORMATION SYSTEMS

Research Methodology in Management [MGT 2217]

ConsumerPreference: Phoenix Beer v/s Black Eagle Lecturer: Mrs. R. R. Ramsaran-Fowdar

Number of words: 2921

Date: 19/04/06


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Consumer Preference: Phoenix Beer v/s Black Eagle

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ABSTRACT

This research is based on the beer industry where consumers’ preference is being questioned due to the advent of a new competitor in the market. In fact, this research aims at determining the first choice of consumers: Phoenix Beer versus Black Eagle. Across this inquiry, the extent the market share of PBL has been affected would be found. Moreover, with this study, data which will help in the decision making process of PBL in relation to Black Eagle, will be gathered, recorded and eventually analysed.

This applied research will be conducted by making use of published sources as secondary information and additionally surveys and structured and mechanical observation as field data. The desk data helps to go forth with the investigation and to find gaps in what others have alleged in view to our title. As far as the survey is concerned, it will be conducted through a questionnaire, which intends to gather both quantitative and qualitative responses from a selected sample. Since our problem is explicitly defined, structured and mechanical observation will be utilized so as to scrutinize consumers’ behaviors in supermarkets while purchasing beers.

Eventually the collected data will go to the next process of the research work, where they will be fully explored. The data obtained are to be keyed in special software, technically termed as SPSS.

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Consumer Preference: Phoenix Beer v/s Black Eagle

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ABSTRACT [Continued‌]

Figure 1: Beer Source: www.lexpress.mu

After having described the data collection and analysis procedures, the magnitude of the research shall be unearthed. The favorite of beer consumers will firstly be determined, and then, PBL will be able to market its beers accordingly so as to attract optimum clientele. Moreover, this research will help PBL to rectify its four Ps of the marketing mix in its marketing programme in view of Black Eagle, as its competitor.

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TABLE OF CONTENT PAGE Abstract

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1. Introduction

1

2. Problem Statement

2

3. Background

3

4. Literature Review

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5. Justification for this Research

6

6. Methodology

8

7. Ethical Considerations

15

8. Significance of the Study

16

9. Conclusion

17

Bibliography

18

Gantt Chart

19

Newspaper Articles

20

Source for sample determination

21

List of Figures & Tables Figure 1

ii

Figure 2

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Table 1

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Consumer Preference: Phoenix Beer v/s Black Eagle

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1. INTRODUCTION

Phoenix Beverages Ltd (PBL) has been operating as a monopoly on the local beer market since 1963. The reason behind was that the market was initially bounded by a legal contract that PBL has had with the government, according to which PBL was the only organisation which had the authority to supply its beer on the local market for more than 30 years.

However, due to the end of the contract, PBL’s sole commercialisation of beer came to an abrupt end. Subsequently, in 2005, United Breweries Ltd emerged as its competitor, introducing the new beer ‘Black Eagle’ on the local market.

PBL has been an unchallenging leader on the Mauritian beer market, but now its competency is yet to be proved. According to Claude Pougnet, the director of Phoenix Beverages Ltd, “C’est toujours bon d’avoir un concurrent. Cela va nous motiver a ameliorer notre efficience.”

(Newspaper article published on the 20th January 2005)

This research proposal is based on the stiff competition that has arisen in the local beer market. Will it be possible for PBL to maintain its market share? Will United Breweries succeed in luring beer consumers? In other words, Phoenix Beer or Black Eagle- What will be consumers’ preference and how will PBL, through its marketing strategy, influence beer consumers?

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Consumer Preference: Phoenix Beer v/s Black Eagle

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2. PROBLEM STATEMENT

To know the impact of the new competitor in the beer market, PBL will have to analyze the market situation, beer consumers’ satisfaction and consumer preference. The question to be tackled with is-

What are the factors contributing consumers to prefer Phoenix Beer to Black Eagle or vice versa?

Based on the information obtained, PBL will know what marketing strategy to develop in order to promote its beer and thus maintain a major part of its local market share. Therefore another question that can be answered from this study is-

How will the marketing department retain customer loyalty given the major change that has occurred in the microenvironment in which it is operating?

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Consumer Preference: Phoenix Beer v/s Black Eagle

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3. BACKGROUND

The competition that has emerged can in no way be neglected; it is not a trivial matter. Universal Breweries Limited (UBL), the company that has introduced Black Eagle on the local market, though an infant enterprise, has had a prosperous start. Black Eagle has already established itself in the Mauritian beer market and is actually occupying 17% of the market share. Moreover, the company is targeting 25% of the market share by the end of its first year. PBL is on the edge of losing a major part of its local market share.

Universal Breweries will not be going for a price war with PBL, as its director has stated to journalists, instead it will compete on the quality of the beer offered but most importantly on consumers’ preference.

Universal Breweries Ltd, an investment of more than Rs 300 million and fully mechanized is in a very good position to compete with PBL. However, the latter is also not in a weaker position. In 2001, it has been a gold medalist during the Australian Beer Award for its quality of beer. Furthermore, it has also created customer loyalty among the Mauritian people for the past 40 years. However, all will be determined by how well PBL will be using its marketing strategy to influence customer preference.

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4. LITERATURE REVIEW

MARKET STUCTURE After the entry of UBL in the local market, the market structure has shifted from monopoly to an oligopoly. Since PBL and UBL similar but differentiated product (through different tastes and packaging) the structure of the market is specifically known as a differentiated oligopoly. According to the principles of Economics, a price cut from either party will generate a price war. This part of the literature review explains why the price of both Phoenix Beer and Black Eagle are the same on the market. The only weapon left for PBL is to stimulate demand for Phoenix Beer without changing its price. POSITIONING In order to avoid marketing myopia (Levitt 1986) and to survive in the long run, firms need to assess their offerings (Park et al. 1986; Bernstein 1992) and manage their organizations in relation to their competitors (McKenna 1986; Ries and Trout 1986; Wright 1997). Hence, PBL must position its beer in the minds of consumers in such a way that consumers perceive the beer as meeting their expectations and requirements else the rival firm will succeed in luring consumers. HAVING, BEING AND CONSUMPTION People from any culture can be addicted to a certain good. Such insatiable appetites typically focus on a single product (Campbell 1986: 37). However, before their was only the Phoenix Beer as a beer product but now people have the choice: Phoenix Beer or Black Eagle and they can now express their preference. ________________________________________________________________________________________________ Š2006

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Consumer Preference: Phoenix Beer v/s Black Eagle

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4. LITERATURE REVIEW [Continued…]

CONSUMER PSYCHOLOGY Under the study of consumer psychology, consumer habits and effects of advertising are analysed. It has been seen that sometimes consumers do change their buying behavior to respond to the changing situation. For instance, some consumers who were once buying Phoenix Beer, are now buying Black Eagle due to the availability of similar product which has crop up. Such a tendency to change is referred to as self-monitoring. Individuals with low selfmonitoring are found to have less tendency to change (Snyder, 1987).

SATISFACTION PERSPECTIVE Consumers are satisfied when their expectations are met and the experience perceived to be good upon the consumption of the product (Hunt 1977). When consumers’ expectations are met, they are more likely to be satisfied ( Oliver 1980; Woodruff et al. 1983).

QUALITY PERSPECTIVE Quality has become a priority for consumers (Leonard and Sasser 1982; Rabin 1983; Takeuchi and Quelch 1983). Moreover, it has been found that if a product is of good quality, the firm will be able to increase its market share and expand (Phillips et al. 1983; Anderson and Zeithaml 1984).

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Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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5. JUSTIFICATION FOR THIS RESEARCH

Why this topic? This topic will provide an insight to PBL in assessing its newly formed competitor’s influence on the local beer market. This research is of utmost interest since competition has emerged in the beer market after more than 40 years. It will be really helpful to know to what extent PBL has provided consumer satisfaction over the past years.

Aim of the study The aim of the study is to analyse the extent to which consumers’ preference has changed upon the arrival of Black Eagle on the local market. The information obtained from the study will help PBL in its marketing strategy in targeting and positioning Phoenix Beer.

Research objective The research objective is to find out what factors are contributing consumers to buy Phoenix Beer or Black Eagle. Given that the prices of the two beers are similar, on what basis will consumers choose their beers on the shelf of retail shops? Next, the research will also analyse beer customers on the basis of their gender and age.

________________________________________________________________________________________________ ©2006

Boolaky V. 0510646

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Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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5. JUSTIFICATION FOR THIS RESEARCH [Continued…]

Research hypotheses Researchers function at the empirical level where concepts are expressed in terms variables. Relationships between variables are expressed in the form of hypothesis. Two research hypotheses have been formed for the research purpose.

H1: Due to the good quality of Phoenix Beer, the latter is numerated first among beer consumers’ preference.

H2: More and more of the Mauritian people prefer Black Eagle to Phoenix Beer.

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Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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6. METHODOLOGY

Introduction According to Zikmund “Business Research is the systematic and objective process of gathering, recording and analyzing of data for aid in making business decisions� Information about what contributes consumers to prefer one beer to another will help the management of PBL to take appropriate actions. The chapter consists of how the research will be undertaken and the data analysis phase.

Research design The research design is the basic plan guiding the data collection and the data analysis phase. The type of research to be conducted is a conclusive one where information will be obtained and appropriate actions will be undertaken. The research will be undertaken using a cross-sectional study. As such a representative sample will be selected from the population from which primary data will be obtained.

Primary data It is data collected for the specific purpose of the research. The primary data collection methods to be used in the research are observation and survey research.

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Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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6. METHODOLOGY [Continued‌]

Secondary data This type of data is also referred to as desk research. It is data which will be useful to the research but had been collected foe another purpose.

SAMPLING Sampling is a process of selecting a representative portion from the whole population to conduct the survey. Sampling will be used in this study as it is cost and time proficient and more apt. Sampling can be separated into two types and each has its own merits and limitations. Sampling methods

Probability techniques

Non probability techniques

Simple Random Sampling

Convenience Sampling

Stratified Random Sampling

Purposive Sampling

`Cluster Sampling

Quota Sampling

Snowball Sampling

Figure 2: different sampling techniques that can be used

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6. METHODOLOGY [Continued‌] Sample size The best sample size is one which embodies the whole population and which is precise. Each and every inhabitants of Mauritius cannot be surveyed, so 100 persons are to be elected to form part of the sample. This selection is to be made on the basis of age groups and gender as shown in table 1. Sample= (gender per age composition)/Total Population*100 Age group

Gender Male

Sample

Female

Sample

Below 15

151.305

12

154.578

12

15

401.446

33

410.131

33

57.349

5

58.590

5

610.1

50

623.3

50

60 & above Total

Table 1: Sample See Source for sample determination [page 26] This sample has been devised by using a stratified random sample where the whole population of Mauritius has been divided into mutually exclusive groups and then random samples are drawn from each stratum. Here the control characteristics are age and gender.

DATA COLLECTION This stage involves the fieldwork and the collection of required information and data. It is at this level that questionnaires will be circulated and mechanical observation conducted. ________________________________________________________________________________________________ Š2006

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6. METHODOLOGY [Continued…]

DATA COLLECTION METHODS 1. Survey As mentioned earlier, a survey will be conducted to collect respondents’ viewpoint. Surveys are qualified as quantitative primary research because it aims at getting maximum information from the sample audience. A clear definition of the objective is fundamental for a survey.

For the survey a questionnaire will be the research instrument, designed to generate the data necessary for accomplishing the research objectives. It will comprise of questions logically related to the problem under study. Naturally, the questions will have to be formulated with great care because reliable and meaningful returns depend to a large extent on this. The structure of the questionnaire should be standardised so that comparisons can be easily made between different respondents, thus data will be analysed much easily.

The questionnaire is constructed according to a procedure. In other words, the questionnaire’s content, questions wording and sequence, and so on need to be properly determined. Ambiguous and confusing questions must be avoided since respondents can misinterpret them and consequently provide biased data. Moreover, a combination of multiple choices, dichotomous and open ended questions are included so that respondents do not feel bored while replying. ________________________________________________________________________________________________ ©2006

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6. METHODOLOGY [Continued‌]

2. Face to Face Interview The face to Face method of administering a questionnaire is a two way conversation initiated by an interviewer to obtain information from the participant. It also encloses a number of advantages such as rate of response is normally high, quality information to the interviewer because the participant will tend to be more careful while answering during the interview.

Here, the interviewer will elucidate all ambiguity so as to decrease biasness, arouse response through an audio visual aid and thus generate high response rate. It cannot be denied that this type of survey has its disadvantages; however with a disciplined and qualified interviewer, these drawbacks can be minimized, if not eliminated.

3. Mechanical Observation The other method used to collect field data in this research is through observation. There exists a spectrum of classifications of observation like natural versus contrived, disguised versus undisguised observation etc. For the research a mechanical observation in supermarkets like Jumbo and Shoprite Hyper is mostly appropriate. As its name tells us, it is an observation conducted through mechanical devices, such as hidden cameras.

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Consumer Preference: Phoenix Beer v/s Black Eagle

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6. METHODOLOGY [Continued‌]

Mechanical observation is more advantageous than human observation as human beings tend to be tired and gets bored. Moreover mechanical observation is more accurate and less costly. In our context the help of motion picture camera will be needed to record for example shopping behavior in a super market.

It is factual that this technique grants only surface reactions but it also bestows direct reactions without any hidden conduct. This will also show whether consumers hesitate before purchasing beers. Betterstill, it will give you an idea about who buy what, in other terms, it depicts what portion of the population (in terms of age and gender) buy which brand of beers. This method tends to be advantageous as it is more truthful and less pricey.

PITOT TESTING Pilot Testing is a trial test of a specific aspect of the study. The questionnaire must be pre tested in order to find out how it works before launching off on a full scale survey. In other words, before administering it to the whole sample, it has to be pre tested on a few people, usually from the sample itself, so as to deter any flaws in the questionnaire and immediately correct the errors. Hence shunning biasness which can turn out exorbitant if administered to the whole sample.

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6. METHODOLOGY [Continued‌]

This often solves unforeseen problems in field work and indicates any necessary change in the questions and other problems with the questionnaire. There can be changes such as re-phrasing or simpler words could be used for clarifications.

DATA ANALYSIS Data will be collected; they will be gathered for the purpose of analysis. The information will be edited, analysed and put in forms where they will be interpreted in a better way. Those forms can be pie charts, bar charts and tables. Analysis of data will be carried through SPSS 13.0 software whereby much statistical analysis will be made with the data inputted such as mean, mode, median, correlation, regression and other tests.

Limitations of the study 1

The survey will be time consuming.

2

Respondents may be unwilling to cooperate.

3

Respondents may be biased and provide false information, thus invalid data will be obtained.

4

Respondents may hesitate to reveal the truth.

5

Respondents may be interviewee biased.

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Consumer Preference: Phoenix Beer v/s Black Eagle

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7. ETHICAL CONSIDERATIONS

Ethics has to do with the standards of behaviour that people follow: what is right and what is wrong. Without any qualms, the research being undertaken about consumer preference with regards to Phoenix Beer v/s Black Eagle would also have to involve certain ethical considerations. These are listed below: 1. No intentionally and deliberately falsified information or invention of data will be included in the study. 2. Respondents will not be bugged to participate in the research. Respondents reserve the right to withhold completely from the study, or withhold any information judged as confidential. 3. Confidential information revealed, if any, will be used with extreme discretion, and would not be revealed or mentioned in this study. Respondents will be guaranteed anonymity. 4. The research will be undertaken in an unbiased manner, and special care will be taken so as not to cause any harm, in whatsoever form, to the two aforementioned Beer Brands.

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8. SIGNIFICANCE OF STUDY

It cannot be denied that this research proposal will be of utmost significance to PBL as it will contribute to the company in knowing precisely what beer consumers prefer. Moreover, with the obtained results, the marketing department of PBL will have a clear idea of its market share in the local beer market and how to influence consumers preference. Eventually, PBL will be in a better position to address the 4Ps accordingly and change or enhance its marketing programme so as to attract optimum clientele. This can be done through aggressive advertising campaigns and promotional offers or simply providing more differentiated beer to meet the consumers’ choice.

On the other hand, if this study had not been conducted, PBL could have remained under the false impression that it will always remain the boss in the beer industry and that Black Eagle cannot attract its customers. Herein, the latter could have engaged itself in such a marketing strategy that as time effluxes, and obtain more of PBL’s customers, thus increase its market share.

________________________________________________________________________________________________ Š2006

Boolaky V. 0510646

Govinden S. 0514538

Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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9. CONCLUSION

This proposal has been conducted to know to which extent consumers prefer Phoenix Beer to Black Eagle and how PBL can ameliorate its beer. Questionnaires will be used to conduct interviews so as to obtain concise information from consumers. Moreover, mechanical observation will be used to observe what type of customers, classified into gender and age group, are purchasing what type of beer. After obtaining the information, it would be easier for the PBL to know what step it will need to take to improve on its beer.

________________________________________________________________________________________________ Š2006

Boolaky V. 0510646

Govinden S. 0514538

Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


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BIBLIOGRAPHY

REFERENCE BOOKS: 1. Kotler P, Armstrong G. 2006, Principles of marketing (11 ed.), Prentice Hall, USA 2. Dr Jawaheer D. et al. 2005, Statistics Stat 1010, University of Mauritius, Mauritius. 3. Avi Shankar and James A.Fitchett 2002, Journal of Marketing Management“Having, Being and Consumption”, Vol.18, pp.501-516. 4. Charles Blankson and Stavros P. Kalafatis 2004, Journal of Marketing Management- “The Development and Validation of a scale Measuring Consumer/Customer-Derived Genetic Typology of Positioning Strategies”, ,Vol.20, pp.5-43. 5. Robert S.Feidman (3rd ed.), UNDERSTANDING PSYCHOLOGY, Mc Graw Hill.

WEBSITES: 6. L’Express Archives [www.lexpress.mu] 7. PBL’s website [www.phoenixbeveragesgroup.com] 8. CSO’s Website [http://statsmauritius.gov.mu]

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Boolaky V. 0510646

Govinden S. 0514538

Dosemahamed M.S. 0510158 Jeebun L. 0513644 Beelatoo V. 0511524


GANTT CHART MONTH Week

Jan 1

Look for research topic Write introduction Problem definition Write background Literature review Justification for research Methodology Methodology Ethical consideration Significance of study Conclusion Questionnaire preparation

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2

Jan - Feb 3 4

5

Feb - Mar 6 7

8

9

Apr 10 11

12

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