JADDAN BRUHN Conduct Market Research BSBMKG408B Page 1CONDUCT MARKET RESEARCHWHISKASCAT FOODDevelopment and introduction of new environmentally innovative forms of packaging
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 2Executive SummaryTo substantiate the business case for the development and introduction of new environmentallyinnovative forms of packaging, Whiskas cat food have undertaken to investigate the environmentalsustainability values and attitudes of cat food purchasers, and to find out more about the underlyingmotives behind the selection criteria the cat food shopper processes whilst at the supermarket.The hypothesis framing this research is that cat food purchasers are accepting of packaginginnovations designed to reduce wastage and environmental impact. This research supports thehypothesis. Cat owning respondents were recruited from Sydney, Melbourne, Adelaide and BrokenHill to participate in a quantitative survey facilitated by SurveyMonkey (surveymonkey.com), oftwenty two questions in a Likert scale format. The survey responses reflect an overall positiveattitude to the environment, sustainability, recycling and brand variation; most cat food purchasersfind issues like nutrition and palatability to themselves quite important considerations, howeverconvenience – a hitherto core focus for cat food manufacturers was a criterion that split surveyrespondents.
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 4IntroductionIn the Australian supermarket product category cat food, packaging innovation has hitherto onlybeen introduced to enhance a product’s premium perception, prolong content shelf life or varysizing options to mimic convenience meal offerings developed for human consumption.Packaging innovation for environmental sustainability has not been considered necessary. ThePackaging Council of Australia identified in their 2008 report “The Status of Packaging Sustainabilityin Australia” that “Environmental aspects of packaging affected 3% or less of purchasing decisions,well behind price, product and convenience”.1Without the impetus of an emissions trading scheme, the report identifies that only concern fortheir own reputation willing the dominant supermarket chains to exert influence over their supplierswill lead to wide spread adoption of environmentally sustainable packaging in Australia.In contrast, Deloitte found in their 2009 report for the US Grocery Manufacturers Association“Finding the green in today’s shoppers Sustainability trends and the new shopper insights” that of6,498 shoppers surveyed in the US 95% wanted to buy “green” products, though only 22% actuallydid. Of their shoppers surveyed who purchased pet products, only 11% purchased “green”products.2Noting the effect of governments in shaping the developing supply chain environmental imperative,the global authority on packaging Pira International stated in their 2009 report “Market IntelligenceGuide for Packaging” that “Developments in materials technology will lead to growing use of naturalpolymers – driven to a large extent by environmental concerns and regulatory requirements”.3In the report “Industry Insight: Developments in Private Label Packaging” Ashley Gange identifiesanother important focus in the introduction and uptake of environmentally sustainable packaging “Afactor that may significantly encourage the development of the market is improved pricecompetitiveness. This may be expected to be obtained via economies of scale in production, newproduction methods and forecast important comparative increases in the cost of resources used inthe manufacture of conventional mineral oil-based plastics”.4There are significant financial gains to be had for cat food manufacturers that embraceenvironmentally sustainable packaging innovations. The packaging industry resourcewww.packaging-gateway.com has highlighted the Swedish cat food manufacturer Doggy AB as acase in point. Working with Tetra Pak, Doggy AB introduced a new packaging concept for their lineof wet cat food in Sweden in April 2005. As noted in the packaging-gateway appraisal “Consumertests conducted by the company reveal that innovative packaging is a big draw for consumers.Consumers also appreciate environmentally-safe packaging solutions”.5Aside from all otherconsiderations the company now saves enormously on logistics. The new packaging stacks andstores more efficiently, with one delivery truck now able to transport the equivalent volume offifteen trucks laden with the previous package design.1The Packaging Council of Australia, MS2, Perchards, The Status of Packaging Sustainability in Australia, July2008, pg772Deloitte, Finding the green in today’s shoppers Sustainability trends and the new shopper insights, 2009, pg103Pira International, Market Intelligence Guide for Packaging, September 2009, pg44Gange, A., Industry Insight: Developments in Private Label Packaging, 2009, pg115www.packaging-gateway.com , “Doggy ‘Mjau’ Wet Cat Food Packaging from Tetra Pak”
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 5HypothesisCat food purchasers are accepting of packaging innovations designed to reduce wastage andenvironmental impact.MethodExploratory StudyInitially, nine cat owning individuals were interviewed to foster a broad understanding of consumerselection criteria when purchasing wet cat food at the supermarket.Quantitative SurveyFifty five individuals in Sydney, Melbourne, Adelaide and Broken Hill were invited via e-mail toparticipate in an online survey of twenty two questions facilitated by Survey Monkey(www.surveymonkey.com). The selection criteria required they either own a cat or be responsiblefor purchasing cat food or both.ScalingThe quantitative survey undertaken was responded to using an ordinal scale format, employing aLikert Scale framework for respondents to indicate whether they Strongly Disagreed, Disagreed,Agreed, Strongly Disagreed or had a response of Neither to the propositions put forth to them.Sampling ProcedureThe sample for this survey was a convenience sample (non-probability sample) of fifty five people,recruited for participation because they owned a cat / had purchased cat food, and were known tothe researcher. The small size of the survey increases the likelihood of random sampling errors; thenarrow scope for recruiting respondents also subjects the data to systematic errors.Quantitative ProcedureThe Likert Scale format of the survey assigns a value to the responses (Strongly Agree=1, Disagree=2, Agree=3,Strongly Agree=4, Neither=0). The mean value for each question reflects the average response of allrespondents to the question.ResultsFigure 1 - 94% of respondents have a positive attitudetowards the environment Figure 2 - 69% of respondents seek to purchaseresponsiblyStronglyDisagree2%Disagree2%Agree47%StronglyAgree47%Neither2%I have a responsibility to help save theenvironment.StronglyDisagree6%Disagree18%Agree45%StronglyAgree24%Neither7%I strive to purchase environmentallyresponsible products.
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 6Figure 3 - 72% expect to pay more for environmentallyfriendly productsFigure 4 - 60% of respondents expect productinnovation to cost moreThe survey data demonstrates that cat food purchasers have an overwhelmingly positive attitude towards theenvironment. However, while 94% of respondents indicated that they either agreed or strongly agreed withthe proposition that they had a responsibility towards the environment, only 69% of respondents carried thatattitude through to the supermarket.The results also indicate that 72% of respondents believe a product labelled “environmentally friendly” willcost more, while 60% of respondents expect product innovations introduced to supermarket products willactually cost them more.ConclusionThe results of the research support the hypothesis that cat food purchasers accept packaging innovations. Thestrong positive attitude towards the environment in general extends to a desire to encourage peers to beenvironmentally responsible consumers, to select environmentally responsible products, and to seek outgoods in recyclable packaging at the supermarket. There is, though, the perception that environmentallyresponsible products will cost more, that product innovation will lead to a more expensive product, and,paradoxically, a willingness by 62% of respondents to pay more for those products that fit this criterion.Though the reliability of these inferences is contextualised by the systematic and random sampling errors,these results are still strongly positive for Whiskas.The implications for the introduction of an environmentally innovative form of packaging by Whiskas aretwofold. Firstly, the introduction of environmentally sustainable packaging will most likely lead to large longterm cost savings (as input costs for “new” packaging raw materials increase with the introduction of anemissions trading scheme / carbon trading system, the cost of using environmentally sustainable alternativeswill be cheaper; implicit in environmentally sustainable packaging is the imperative to improve overall productvolume per carton / per pallet ratios, dramatically reducing logistics costs). By taking a category leader roleWhiskas could introduce its range as a premium product, taking advantage of positive consumer sentiment.Or, Whiskas could introduce its environmentally sustainable range whilst maintaining its current productposition, but still benefit from directly attributable growth in its market share; Deloitte found in their reportfor The Association of Food, Beverage and Consumer Products Companies (Grocery Manufacturers Association,USA) Finding the green in today’s shoppers: Sustainability trends and new shopper insights thatenvironmentally friendly was the single most significant secondary product attribute that acted as a tie-breaker when supermarket shoppers were deciding between two products that in all other aspects were atparity.66Deloitte, Finding the green in today’s shoppers Sustainability trends and the new shopper insights, 2009, pg 9Disagree24%Agree43%StronglyAgree29%Neither4%Products labelled"environmentally friendly" aremore expensive than competitorsin the same category.StronglyDisagree9%Disagree25%Agree40%StronglyAgree20%Neither6%I believe that a product innovationmust equate to a higher price at thecheck-out.
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 7BibliographyDeloitte, Finding the green in today’s shoppers: Sustainability trends and the new shopper insights,2009Gange, A., Industry Insight: Developments in Private Label Packaging, 2009Pira International, Market Intelligence Guide for Packaging, September 2009The Packaging Council of Australia, MS2, Perchards, The Status of Packaging Sustainability inAustralia, July 2008www.packaging-gateway.com , Doggy ‘Mjau’ Wet Cat Food Packaging from Tetra Pak,http://www.packaging-gateway.com/projects/doggy/
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 8Appendix 1Exploratory Research
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 9Open Questionnaire (n=9)1. How do you feel about your current brand of cat food?2. Are you concerned by waste of product inherent in the packaging design of your current catfood?3. Did environmental values impact your “product type” choice for your brand of cat food (i.e.pouch, single serve tin, medium / large / x-large tin)?4. Do you alternate cat food brands or do you always purchase the same brand? If you doalternate, what is the basis for the alternation (i.e. budget, variety, dietary concern, like totry new things, cat likes different styles of food)?5. Do you select cat food flavours that appear palatable to your own tastes or flavours that youbelieve are enticing to your cat?Content Analysis TableFactors in selecting processed cat food (wet) at supermarket Frequency of RespondentsBudget 5Flavour variety 4Product size 3Premium product 3Cats preferred product 9Flavours that appeal to owner 2Convenience 5Nutritional benefit 5Environmental impact of packaging / recyclability 4Innovation 2Product waste from package design 6Loyalty to current brand 3Fig 5 Content analysis table of nine people questioned.
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 15There are estimated to be 804,000 cats in NSW/ACTialone. With a downward trend in the overallAustralian cat population and in the average number of cats per cat owning household, but with thepercentage of households with cats increasing (approximately 25% of Australian households), thereis an opportunity to develop specialised cat food options that appeal to consumers’ informedknowledge on the latest developments in cat food science while concurrently exploiting consumersocial trends. In 2005 it is estimated that there was $417m expenditure on overall pet care for catsin NSW/ACT, of which 44% is spent on cat foodii. Approximately 61% of cat food expenditure is oncanned food. The market leader in grocery sales is Master Foods (makers of Whiskas) representing64.7% of the canned cat food market in Australia, followed by supermarket generic brands with20.9%iii. Despite the value in this sector there is very little product differentiation between brands.To capitalise on current consumer interest in sustainability and environmental impact Whiskas hasundertaken to explore the viability of introducing a revolutionary new packaging design that willplace it as the only environmentally responsible cat food manufacturer in Australia.In the current market options for processed cat food on the supermarket shelf lack innovation anddo not reflect the environmental and social values of purchasers. To confidently and prudentlyprogress further with their planned implementation strategy Whiskas must determine if cat foodpurchase decisions are based on tradition, nutrition and budget alone or if purchasers would bewilling to alternate and vary the types of cat food bought in response to the product’s positiveattributes, testing acceptability of the product for their needs where the product is commensuratewith their attitudes towards processed wet cat food in tandem with their environmental and socialvalues.Uptake and acceptance of novel product packaging design changes will most likely hinge onconsumer interest in and concern for environmental issues, with choices encouraged to reflectpopular trends and awareness; divergence from historic brand differentiation based primarily onflavour variations and nutritional content has never previously been attempted. Whiskas havedeveloped their novel packaging concept with the view to ultimately replace the pouch and tinpackaging styles currently utilised by the brand. The new packaging is an innovative flip-capped tubedesign that is constructed of materials that are 100% recycled and recyclable, eliminates wastage offood when feeding, allows the product to be refrigerated for a longer period of time without spoiling,and is of a size and flexibility that will support a greater volume of cat food per unit to continueoffering choice in sizing options.The progression of the strategy to adopt and introduce this revolutionary style of packaging is basedon the hypothesis that cat food purchasers are accepting of packaging innovations designed toreduce wastage and environmental impact.From initial exploratory research, issues of product wastage and environmental impact are given lessconsideration than product choices that owners know their notoriously fussy cats will definitelyprefer from experience, and straddle the significance of budget, convenience and nutrition. Productsize and the perception of a product as being “premium” were not seen as substantial factors.To determine the validity of the hypothesis and the relative strength and significance of thecompeting factors that must be satisfied and addressed to ensure successful introduction of the newpackage design, quantitative research using a Likert scale to investigate consumer’s beliefs andconvictions is proposed.As it appears that owners put a greater level of importance on satisfying the needs of their cat, theproposed quantitative research needs to examine the willingness to switch to a better product for
JADDAN BRUHN Conduct Market Research BSBMKG408B Page 16the environment provided the flavours, textures and shelf-life of the product is unchanged orenhanced; whether perceptions of difference would equate to the notion of it being a premiumproduct and therefore act as a deterrent; how slight changes in cost will impact uptake; and whetheradditional inducements would be required to encourage consumers to crossover to the new product(i.e. new/exclusive flavour varieties, larger sizes for bulk purchase discount, improved nutritionalbenefits, cash back offers).The target market for Whiskas is 30-40 year old married and single employed females living insuburban capital cities. To determine the impact on and responsiveness of the target within thelimitations of time and budgetary constraints we propose to conduct our research on a conveniencenon-probability sample of 50 people over the age of 18 who preferably own and are responsible forfeeding a cat and whom either are or can confidently express the beliefs, experiences and opinionsof a married or single employed female. This is intended to allow for research to be conducted by asingle person within a four week timeframe utilising online data capture and analysis methods andreporting functionality.Data collected from respondents will be analysed using inferential statistical methods to determinecorrelation between importance of positive product and design attributes; cost and consumerbudget sensitivities; and attachment to traditional methods of wet cat food packaging; to reinforceor reject the hypothesis underpinning the strategy to roll-out the new product packaging.The completed research report and recommendation will be submitted for review on 20/11/2009 viaa single hard copy document (with the option of an electronically issued soft copy), followed by anonsite presentation in-house on either the 23rdor 30thof November (final scheduling to be advised).The accepted quote only allows for provision of a very brief on-site presentation followingsubmission of final report. Prior to initiating phase two of the research schedule the initial taxinvoice consisting of 40% of the agreed quote must be paid. Billing will be progressively issued withthe tax invoice constituting 50% of the agreed quote to be issued in conjunction with the submissionof the final report. The final tax invoice for the remaining 10% of the agreed quote will be due andpayable prior to the on-site presentation. Invoice retentions will not be accepted and variations toscope will extinguish all outstanding contractual obligations and trigger immediate invoicing ofremaining component of agreed quote value without further engagement or provision of findings(including raw data). Tax invoices are due and payable on receipt.iAustralian Companion Animal Council Inc, Contribution of the Pet Care Industry to the Australian Economy,2006 p9iiAustralian Companion Animal Council Inc, above p3iiiAustralian Companion Animal Council Inc, above p37