MKTG2001 Marketing Research

Introduction

This report has conducted a marketing survey on the company named Fonterra Co-operative Group Limited which is the largest dairy product company in New Zealand. Even though, company had increased their level of production in the past decade but it has not increased their profit margin significantly and they have not been able to increase their growth rate (Louisson, 2018).  The report is the continuation of the previous report which has aimed to identify the perception of the consumers towards the organizational products and develop strategies to improve the payout of Fonterra Co-operative Group Limited. The report has followed the methods mentioned in the proposal to develop relevant findings.

Research methodology

As stated in the previous section research methodology is mostly kept the same but the instead of using the mixed method analysis, the study has only used a single research design. The market survey only comprised of primary data collection as using mixed method would have significantly increased the overall time span and cost of the research. While conducting the survey, it has been seen that primary data is sufficient to provide valuable information regarding the product line of Fonterra and consumer opinion regarding the products.

The study has conducted online surveys by using google forms so that chances of getting missing values can be avoided.  The study has conducted practical research so that the result generated can be used to provide suitable recommendations that can be used by the managers of Fonterra to improve their marketing strategies.

The study has used simple random sampling to collect data randomly from population in New Zealand. The sample size in the study is 30 for ease of calculation and reducing the overall cost of the research.  Moreover, the study did not use regression analysis for inferential statistics and cross tabulation, descriptive statistics, chi square and frequency tables has been used for developing relevant conclusions.

Findings and analysis

Frequencies and Charts

1. What is your gender?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Female	14	46.7	46.7	46.7
	Male	16	53.3	53.3	100.0
	Total	30	100.0	100.0

Table 1: Gender

(Source: As created by author)

Graph 1: Gender

(Source: As created by author)

The survey shows that 53.3% of the respondents are male and remaining respondents are female.

2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	$100- $200	9	30.0	30.0	30.0
	$200 and above	6	20.0	20.0	50.0
	$50-100	7	23.3	23.3	73.3
	Less than $50	8	26.7	26.7	100.0
	Total	30	100.0	100.0

Table 2: Expenditure

(Source: As created by author)

Graph 2: Expenditure

(Source: As created by author)

The results show that 30% of the respondents have an expenditure of between $100-200, 26% of the respondents have an expenditure of less than $50, 23.3% of the respondents have an expenditure of $50-100 and 20% of the respondents have expenditure of more than $200.

3. Which is the best quality dairy product in the market?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Fonterra Co-operative Group Limited	10	33.3	33.3	33.3
	Miraka	6	20.0	20.0	53.3
	Nestle	8	26.7	26.7	80.0
	Westland	6	20.0	20.0	100.0
	Total	30	100.0	100.0

Table 3: Best quality dairy product

(Source: As created by author)

Graph 3: Best quality dairy product

(Source: As created by author)

The results show that Fonterra is still preferred by majority of the respondents but there is not no clear majority. Fonterra is preferred by 33.3%, Nestle is preferred by 26.7%, Miraka and Westland is preferred by 20% each.  This shows that even though Fonterra is the largest producer of dairy products, its market capitalization is comparatively less.

4. Kindly choose the best product offered by of Fonterra Co-operative Group Limited?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Anchor (milk, cream, butter)	4	13.3	13.3	13.3
	Anchor CalciYum (flavoured milk, custard yoghurt, ice cream)	3	10.0	10.0	23.3
	Anchor Greek Yoghurt.	9	30.0	30.0	53.3
	Anchor Uno (Kids yoghurt)	4	13.3	13.3	66.7
	Anmum.	2	6.7	6.7	73.3
	Country Goodness (butter-margarine blend spread, cultured sour cream dips)	1	3.3	3.3	76.7
	De Winkel (yoghurt)	3	10.0	10.0	86.7
	Fresh 'n Fruity (yoghurt)	4	13.3	13.3	100.0
	Total	30	100.0	100.0

Table 4: Best quality dairy product by Fonterra

(Source: As created by author)

Graph 4: Best quality dairy product by Fonterra

(Source: As created by author)

The findings show that the anchor Greek yoghurt is the most popular product of the organization and the organization needs to push the other products.

5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	More than five times	8	26.7	26.7	26.7
	Once a month	6	20.0	20.0	46.7
	Three to five times a month	8	26.7	26.7	73.3
	Twice a month	8	26.7	26.7	100.0
	Total	30	100.0	100.0

Table 5: Frequency of purchase

(Source: As created by author)

Graph 5: Frequency of purchase

(Source: As created by author)

It is evident from the result that majority of the respondents’ shops for more than twice a month. However, this does not reflect in the sales volumes of Fonterra Co-operative Group Limited.

6. Do you agree that Fonterra Co-operative Group Limited have variety in their product line?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	No	10	33.3	33.3	33.3
	Yes	20	66.7	66.7	100.0
	Total	30	100.0	100.0

Table 6: Variety in product line

(Source: As created by author)

Graph 6: Variety in product line

(Source: As created by author)

It is evident from the findings that majority of the respondents have agreed that Fonterra Co-operative Group Limited offers variety of products.

7. What is your opinion regarding the prices of the different products offered by Fonterra Co-operative Group Limited?

		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Affordable	16	53.3	53.3	53.3
	Costly	14	46.7	46.7	100.0
	Total	30	100.0	100.0

Table 7: Prices of products

(Source: As created by author)

Table 7: Prices of products

(Source: As created by author)

The products offered by the company is affordable to more than half of the respondents but still there is no clear majority.  This indicates that there are considerable amount of consumers that consider the organizational products as expensive.

Cross Tabulation

1. What is your gender * 3.Which is the best quality dairy product in the market? Crosstabulation
Count
		3.Which is the best quality dairy product in the market?				Total
		Fonterra Co-operative Group Limited	Miraka	Nestle	Westland
1. What is your gender	Female	4	4	3	3	14
	Male	6	2	5	3	16
Total		10	6	8	6	30

Table 8: Gender vs product

(Source: As created by author)

Graph 8: Gender vs product

(Source: As created by author)

The cross tabulation between gender and product shows that 6 male respondents have favored Fonterra Co-operative Group Limited and in respect to that only 4 female respondents have done the same thing.

1. What is your gender * 4. Kindly choose the best product offered by of Fonterra Co-operative Group Limited? Crosstabulation
Count
		4. Kindly choose the best product offered by of Fonterra Co-operative Group Limited?								Total
		Anchor (milk, cream, butter)	Anchor CalciYum (flavoured milk, custard yoghurt, ice cream)	Anchor Greek Yoghurt.	Anchor Uno (Kids yoghurt)	Anmum.	Country Goodness (butter-margarine blend spread, cultured sour cream dips)	De Winkel (yoghurt)	Fresh 'n Fruity (yoghurt)
1. What is your gender	Female	1	2	2	3	2	0	1	3	14
	Male	3	1	7	1	0	1	2	1	16
Total		4	3	9	4	2	1	3	4	30

Table 9: Gender vs product offered by Fonterra

(Source: As created by author)

The results show that majority of the respondents have preferred Greek yoghurt among which 7 respondents are men. This means that this product is more preferred by male consumers.

Graph 9: Gender vs product offered by Fonterra

(Source: As created by author)

2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?  * 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month? Crosstabulation
Count
		5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?				Total
		More than five times	Once a month	Three to five times a month	Twice a month
2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	$100- $200	3	1	4	1	9
	$200 and above	3	0	2	1	6
	$50-100	0	1	1	5	7
	Less than $50	2	4	1	1	8
Total		8	6	8	8	30

Table 10: Expenditure vs Frequency

(Source: As created by author)

Graph 10: Expenditure vs Frequency

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The results are as expected, the consumers having more disposable income are more frequent buyers than the consumers having low disposable income.

Table 11: Expenditure vs Choice of product

(Source: As created by author)

Graph 11: Expenditure vs Choice of product

(Source: As created by author)

The results show that consumers having high disposable income prefer Greek yoghurts and consumers having low disposable income are focused on basic products like milk, cream and butter.

2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?  * 7.What is your opinion regarding the prices of the different products offered by Fonterra Co-operative Group Limited? Crosstabulation
Count
		7.What is your opinion regarding the prices of the different products offered by Fonterra Co-operative Group Limited?		Total
		Affordable	Costly
2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	$100- $200	4	5	9
	$200 and above	4	2	6
	$50-100	5	2	7
	Less than $50	3	5	8
Total		16	14	30

Table 12: Expenditure vs Prices

(Source: As created by author)

Graph 12: Expenditure vs Prices

(Source: As created by author)

2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?  * 6.Do you agree that Fonterra Co-operative Group Limited have variety in their product line? Crosstabulation
Count
		6.Do you agree that Fonterra Co-operative Group Limited have variety in their product line?		Total
		No	Yes
2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	$100- $200	2	7	9
	$200 and above	1	5	6
	$50-100	3	4	7
	Less than $50	4	4	8
Total		10	20	30

Table 13: Expenditure vs Variety

(Source: As created by author)

Graph 13: Expenditure vs Variety

(Source: As created by author)

Central tendency

Statistics
		1. What is your gender	3.Which is the best quality dairy product in the market?	4. Kindly choose the best product offered by of Fonterra Co-operative Group Limited?	5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	6.Do you agree that Fonterra Co-operative Group Limited have variety in their product line?	7.What is your opinion regarding the prices of the different products offered by Fonterra Co-operative Group Limited?	2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?
N	Valid	30	30	30	30	30	30	30
	Missing	0	0	0	0	0	0	0
Mean		15.13	18.80	8.87	22.53	25.00	6.80	5.67
Median		17.00	18.00	7.00	24.00	27.00	4.00	2.50
Mode		17	14	7	19a	27	4	1
Percentiles	25	13.00	14.00	6.75	19.00	21.00	4.00	1.00
	50	17.00	18.00	7.00	24.00	27.00	4.00	2.50
	75	17.00	20.00	11.25	25.00	27.00	10.00	16.00
a. Multiple modes exist. The smallest value is shown

Table 14: Central tendency and percentile

(Source: As created by author)

Descriptive Statistics
	N	Minimum	Maximum	Mean	Std. Deviation
1. What is your gender	30	13	17	15.13	2.030
3.Which is the best quality dairy product in the market?	30	14	26	18.80	4.382
4. Kindly choose the best product offered by of Fonterra Co-operative Group Limited?	30	5	23	8.87	4.006
5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	30	19	25	22.53	2.403
6.Do you agree that Fonterra Co-operative Group Limited have variety in their product line?	30	21	27	25.00	2.877
7.What is your opinion regarding the prices of the different products offered by Fonterra Co-operative Group Limited?	30	4	10	6.80	3.044
2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	30	1	16	5.67	6.381
Valid N (listwise)	30

Table 15: Descriptive Statistics

(Source: As created by author)

Chi Square test

Crosstab
			5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?				Total
			More than five times	Once a month	Three to five times a month	Twice a month
2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	$100- $200	Count	3	1	4	1	9
		% within 2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	33.3%	11.1%	44.4%	11.1%	100.0%
		% within 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	37.5%	16.7%	50.0%	12.5%	30.0%
		% of Total	10.0%	3.3%	13.3%	3.3%	30.0%
	$200 and above	Count	3	0	2	1	6
		% within 2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	50.0%	0.0%	33.3%	16.7%	100.0%
		% within 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	37.5%	0.0%	25.0%	12.5%	20.0%
		% of Total	10.0%	0.0%	6.7%	3.3%	20.0%
	$50-100	Count	0	1	1	5	7
		% within 2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	0.0%	14.3%	14.3%	71.4%	100.0%
		% within 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	0.0%	16.7%	12.5%	62.5%	23.3%
		% of Total	0.0%	3.3%	3.3%	16.7%	23.3%
	Less than $50	Count	2	4	1	1	8
		% within 2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	25.0%	50.0%	12.5%	12.5%	100.0%
		% within 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	25.0%	66.7%	12.5%	12.5%	26.7%
		% of Total	6.7%	13.3%	3.3%	3.3%	26.7%
Total		Count	8	6	8	8	30
		% within 2. How much do you spend on products of Fonterra Co-operative Group Limited in a month?	26.7%	20.0%	26.7%	26.7%	100.0%
		% within 5. What is your frequency of purchase of Fonterra Co-operative Group Limited products in a month?	100.0%	100.0%	100.0%	100.0%	100.0%
		% of Total	26.7%	20.0%	26.7%	26.7%	100.0%

Table 16: Cross Tabs

(Source: As created by author)

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	17.594a	9	.040
Likelihood Ratio	18.196	9	.033
N of Valid Cases	30
a. 16 cells (100.0%) have expected count less than 5. The minimum expected count is 1.20.

Table 17: Chi Square

(Source: As created by author)

The results show that the Chi square value is significant and there is association between the expenditure capabilities to the frequency of purchase of products and the χ=   17.594^a    and p – value is   0.040.  This means that the p value is less than 0.05 which is highly significant.  The Cramer's V and Phi  shows  strong  relationship between the variables and  it is significant.

Symmetric Measures
		Value	Approx. Sig.
Nominal by Nominal	Phi	.766	.040
	Cramer's V	.442	.040
N of Valid Cases		30
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.

Table 18: Symmetric Measures

(Source: As created by author)

Graph 14: Chi Square

(Source: As created by author)

Discussion

The study aimed to identify the perception of the consumers on the products offered by Fonterra Co-operative group limited.  The Chi Square test and cross tabulation has been able to develop significant results. It has already been mentioned in the previous part of the research and in this research that even though the product of Fonterra Co-operative group limited have increased by 108%, there has not been significant increase in the profit margin. The primary objective of the study was identifying the factors affecting the sales volumes of Fonterra Co-operative group limited. The results is evident that the price of the products and the variety of products offered by the company are valid reasons for significant decrease in the sales volumes and market price of the shares.  The price of the products is not affordable for almost 47% of the respondents which means that almost half of the population in New Zealand are not purchasing products from Fonterra and are preferring to use other brands. Upon questioning the respondents regarding the choice of their favourite company, the result showed that Fonterra has been preferred by majority which represents 33.3% of the respondents.  At the same time, this result reflect that the company does not have a clear majority in terms of their product volume.

The next objective of the study has been evaluating the product line of the company and the result show that Greek yoghurt has been the most popular product and the popularity of the remaining products are almost similar.  The basic products offered by the company such as milk, cream and butter are not popular which means that the lower end products offered by the company are not preferred by the consumers.  This gives us the idea about the perception of the consumers regarding the products offered by the company where the consumers having higher disposable income are frequent purchaser of products of Fonterra.  The frequency of purchase, expenditure and price of the products have string degree of association between them. However, as Chi Square has been used, the nature of relationship cannot be identified.  The expenditure and frequency of purchase of the products are directly proportional to each other, where it has been seen that respondents having higher disposable income and expenditure capabilities are more frequent purchasers and vice versa.  This addresses the research problem but there is lack of clarity on few factors as there may be other factors responsible for stagnancy in profit margin.

Recommendation

Therefore, it is recommended that Fonterra will have to reduce the prices of the products to increase their target market and develop products that are cheaper for the segments having low disposable income. This means that Fonterra will have to implement economies of scale to decrease their overall production cost and implement cost leadership strategy to increase their sales volumes and increase their profit margin. The survey conducted included only 30 respondents but it gave a clear picture of the overall scenario where Fonterra has been leading the market but their growth is stagnated and other rival companies are coping and increasing their market share. The products that are not popular will have to be pushed by using effective marketing strategies. There are certain products such as Country Goodness (butter-margarine blend spread, cultured sour cream dips) and Anmum are least favourite products among the consumers. These products have to be changed or removed from the product line and new products have to be developed that increase the product sales. Fonterra will have to develop substitute products and use test marketing to send these products for promotion to check the reaction of the consumers. They should also conduct a survey of their total consumer base to revaluate the overall product line. The price of the existing products have to be reduced and discount offers have to be provided to attract more consumers and compete with the rival companies. The discount offer on products and other offers such as buy1 get 1 free and 20% extra on the same price will increase the sales volumes which will increase the overall profit margin and growth rate.

Conclusion

The report has successfully conducted the survey and the results have positive assisted in identifying valuable insights regarding the products offered by the organization.  The results show that Greek yogurt is the most popular product among the consumers and there are products that are not at all popular. Therefore, it is essential for the company to change their product line and use cost leadership strategy to attract more consumers in the market. However, there is still lack of clarity about the fact that whether the above mentioned factors are the only reasons for the stagnancy of the growth of the company in the past decade. There may be other reasons which cannot be highlighted from this perspective and other approaches may be required to analyse the situations.  Therefore, the future scope of research in this respect is huge as quantitative analysis using a larger population sample and combining it with qualitative analysis will result in better results. 

The study has the limitation that only a single research design has been used and the questions are limited which lacks in depth analysis of issue. The in-depth analysis can only be conducted by using interviews where broad answers collected will provide a different dimension to the research.   The result show that at least 47% of the respondents are price sensitive and therefore, strategies for effective management of product prices is necessary to improve the market share.

References and Bibliography 

Hussein, A. (2015). The use of triangulation in social sciences research: Can qualitative and quantitative methods be combined?. Journal of comparative social work, 4(1).

Louisson, S. (2018, 02 09). Fonterra a failure in concept and in practice. Retrieved from The Standard: https://thestandard.org.nz/fonterra-a-failure-in-concept-and-in-practice/

Nardi, P. M. (2018). Doing survey research: A guide to quantitative methods. Routledge.

Palinkas, L. A., Horwitz, S. M., Green, C. A., Wisdom, J. P., Duan, N., & Hoagwood, K. (2015). Purposeful sampling for qualitative data collection and analysis in mixed method implementation research. Administration and Policy in Mental Health and Mental Health Services Research, 42(5), 533-544.

Treiman, D. J. (2014). Quantitative data analysis: Doing social research to test ideas. John Wiley & Sons.