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Module Code: MG 3123 (Final Project) Student Number: 0837185 Department: Brunel Business School Degree: Business and Management (Marketing) Supervisor: Dr May Seitanidi Submission date: 9th March 2010 Word Count: 9200
Acknowledgments
First and most importantly I would like to thank all the participants who took part in my data collection and professional people who helped me in the primary research, without them the task would have been extremely difficult to complete. Secondly I would like to thank Dr May Seitanidi, who has guided, supported and encouraged me with great advice right at the beginning of my project, she was an excellent mentor. I would like to thank my family members for the endless amount of support and encouragement throughout the times of pressure and a special thanks to my most important friend Siraj Patel for having faith in me, encouraging, helping and supporting me throughout the project. Last but not least I would like to thank the one who gave me courage and brought me this far Allah, I thank you God for providing me with willpower to tackle the most valued year in my studies.
Thank You
Abstract
Purpose This report discusses the progress of the Slow Cow brand and evaluates the anti-energy
drink market, using both primary and secondary research, to find the most successful strategic marketing plan for a new product. Literature Review This section assess the different stages of the marketing plan and which according to the nature of Slow Cow, would be the most successful marketing strategies to launch a new product in to the same market.
Findings and Discussion Key findings include the assurance that the launch for a new
product is both feasible and desirable. The most relevant theories have been analyzed in this part.
Research limitation This research is limited in terms of sample size and area which does not represent the whole population of UK. Above all it mostly compares with Red Bull and does not incorporate the newest discounter range introduced as a fight back to discounter retailers.
Contents
1. Introduction 1.1 1.2 1.3 12 1.4 13 2. Literature Review 2.1 Marketing Planning Process 2.2 Marketing Audit 2.3 Marketing Strategies Page 14 Page 14 Page 15 Page 18 Project Synopsis Page Background Rational Aims & Objective Page 8 Page 8 Page 9 Page
3. Methodology 3.1 Introduction 3.2 Primary Research 3.2.1 Screening Model 3.2.2 Concept Testing 3.2.3 Questionnaire 3.2.4 Pilot Testing 3.3 Alternative Research 3.4 Secondary Research 3.5 Ethical Consideration 3.6 Limitation of Research 4. Findings & Discussion 4.1 Introduction
Page 24 Page 24 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 31 Page 32 Page 32
4.2 SWOT analysis 4.3 PEST analysis 4.4 Marketing Segmentation 4.5 Marketing Mix 4.6 Branding 4.7 Budgeting 5. Conclusion & Recommendation 5.1 Conclusion 5.2 Recommendation 6. References 6.1 Books 6.2 Journals 6.3 Websites 7. Appendices 7.1 Appendix A 7.2 Appendix B 7.3 Appendix C
Page 32 Page 34 Page 35 Page 41 Page 49 Page 50 Page 52 Page 52 Page 53 Page 54 Page 54 Page 56 Page 58 Page 59 Page 59 Page 61 Page 63
Contents of Figures
Fig 1 Fig 2 Fig 4 Fig 5 Fig 7 Fig 8 Fig 9 Slow Cow Different Products Planning Process Porters Five Forces Branding AIDA Model Questionnaire Findings Page 8 Page 9 Page 10 Page 14 Page 17 Page 19 Page 21 Page 23 Page 23 Page 32 Page 37 Page 39 Page 46 Page 49
Fig 10 Questionnaire Findings Fig11 Questionnaire Findings Fig 12 Questionnaire Findings Fig 13 Questionnaire Findings Fig 14 Questionnaire Findings
Chapter1: Introduction
(FIGURE 1)
1.1 Background
Red Bull Gmbh was started in 1987 and was set up by Mateschitz and Chaleo Yoovidhya. The innovative idea came from Mateschitz when he visited Thailand in 1982. He wanted to take this product into the global market, which later he did giving it a brand name Red Bull. This simplistic view to business transcended to be what Red Bull is now, a company viewed to be successful, pioneer of energy drinks. In 1987, when Red Bull was started there was little competition; the energy drink industry was virtually non-existent. There were few energy drinks but those were not marketed appropriately. Energy drinks like Red Bull has risen to be one of the most globally recognised brands in little more than twenty years (Mellentin, 2008). Considering Red Bulls success, the number of competition has increased. However, the major threat as a competition currently is an anti-energy drink known as Slow Cow which has an exactly opposite reaction to energy drinks. It has been launched in Canada in December 2008.
(www.shaesdg.com/tiy45/3433v/df.html)
(FIGURE 2)
(FIGURE 3)
The figure above represents a fast change in the attitude of consumers towards healthy diet which has also lead manufacturers to improve their product selections through acquisitions or by renovating the current brands. The ingredients included in the energy drink are usually formed by mixing carbonated water, Vitamin, Caffeine, taurine and sugar. Red Bull, which is the Britains best selling energy drink has caffeine equivalent to a strong cup of coffee while Relentless containing twice the amount of caffeine than Red Bull. An energy drink known as Cocaine which is about to be introduced in UK has 280mg of caffeine which is more than double the amount in Relentless. However few of them do not label the amount of caffeine in a 250ml can while few have warnings about potential health risks. It has been acknowledged by the World Health Organization that intoxication of caffeine is known as a medical condition. Greater consumption of energy drinks is related to toxic behaviour which could be proved dangerous and abusive actions like unprotected sex, violence and abusive behaviour are reported by New York Times. However in few countries these energy drinks are prohibited due to the health issues attached to it. Norway and Denmark are few countries who have banned Red Bull. A school in UK has requested the local shops to stop selling Red Bull to under 18s as the high level of caffeine could be prove risky for students. 9
(http://www.independent.co.uk) On the other hand, the latest buzz is for anti-energy drink which aims to distress and get you relaxed yet focused on what you are doing. As stated earlier this drink was launched in late 2008. It had struck with success at the launch of this drink, with the smart thinking and packaging of the product similar to its rival but yet providing the opposite effect. It is expected to be available in all of Canada and US by the end of December 2008. It is claimed to provide you with a relax frame of mind and it helps in releasing stress. It is expected to be launched in UK soon. Ingredients such as chamile, valerian and passion flower which are present to calm you down without making you feel dizzy are used in this anti energy drink. Other key ingredients include Theanine. Justification for this new product into the UK market lies closely to the fact that Slow Cows success in this industry is already deeply proven, therefore creating opportunity to sell a product in a different market place. With such rare but favourable media timing (the current climate is infatuated with the health attitudes of the UK population and the effects of lifestyle and diet on British people) there is no better time to launch a product of such nature.
Slow Cow into the UK market. This project is an attempt to bring comprehensive discussion on the health issues related to Red Bull and the potential of Slow Cow into the UK market.
Slow Cow drink will be analysed in terms of how it would perform in the UK market if it will be launched here.
Plan suggests what Slow cow should do in relation to what segment geographical, demographical it should target , what pricing strategy it should adopt, types of promotion, in order to become a successful/popular/profitable brand in the UK.
Examine which marketing strategies would be effective in helping the company achieve success within the UK market.
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Chapter 1: Introduction - This chapter has already explained in detail the purpose of study; it has outlined considerable amount of understanding of the topic and the rationale to undertake this area of study.
Chapter 2: Literature review - This chapter will start with an in-depth and extensive understanding of marketing plan and relevant topics through academic journals in regards to the influence of marketing strategies and marketing tools. This study will further deepen as theories will be incorporated with the research. Chapter 3: Methodology - This chapter will cover the introduction to research, primary and secondary methods which will be used to gather highly relevant information to support the project. Finally to conclude, it will have possible limitations and problems encountered during the project and will outline ethical limits. Chapter 4: Research Findings & Discussion - This chapter will present the findings which have been made available through the research conducted to specify the target market and will identify key findings whilst analysing and discussing in relation to the literature and research objectives defined. Chapter 5: Conclusion This chapter will start with concluding the outcome of the research carried out and objectives achieved. It will be followed by the recommendation and prospect for future research.
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2.1 Introduction
A literature review is a critical analysis of a segment of a published body of knowledge through summary, classification, and comparison of prior research studies, reviews of literature, and theoretical articles. (Wisconsin, 1998) This literature review will be based on a marketing
These ten stages allow a marketer to analyse the activity in the chosen from the viewpoint of a particular company, (West, 2006) As a result of this analysis the project will aim to identify the correct product that will increase growth and sales for the company and then finally devise a
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promotional programme to introduce the new product. Although marketing plan appears to be an easy step-by-step process but in reality it is a versatile, difficult activity that goes through every aspect of an organizational life. (Griffin & Mahon 1997) Failing to plan is planning to
fail.(A.Lakin, 1985)
SWOT Analysis This marketing tool helps to identify the strengths and weaknesses of a company and the opportunities and threats in the environment. Kolstad (2007) believes having recognized the factors, strategies could be developed with the help of strengths which could help eliminate the weaknesses and take advantage of opportunities to counter the threats. There are two types of appraisal, internal appraisal which identify strengths and weaknesses and external appraisal which identify opportunities and weaknesses. Freidmans (1972) and Davis (1975) views on being productive is only achieved by defining an objective. If a clear objective has been recognized, SWOT analysis could then be used to track the
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objective. However, De Witt and Meyer (1998) argue that SWOT, introduced at an early time, does not provide with few subtler aspects of latest strategic theory, such as trade-offs. PESTEL Analysis The P.E.S.T.L.E analysis is a framework where you can scan the external macroenvironment in which a business operates. According to Auger et al (2003) an organization has to take into account this analysis as it might have certain factors which can go against them by anyone in the environment. There are certain factors which are beyond the control of a business, however are significant when doing product development and business planning. (Wilson, 1997) PESTEL is a useful tool when introducing a new product or service. It helps the company to come up with numerous assumptions, which then helps the organization to quickly adapt to the reality of the current environment. Kauffman (1999, pg 179) argues that this tool only identifies the external environment and the findings need to be considered with other factors, such as the organisation itself, within its industry and competitors.
Porters Five Forces Porters five forces is the essential step in considering a companys competitive position. It is a tool to identify opportunities and risks when entering a new territory in any market. Vermon (1998, p4) analyses the five forces as a guidance to assess and manage the longterm attractiveness of an industry, it also explains the relationship between the five forces that affect an industrys performance that are:
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(FIGURE 5)
(Solomon et al 2006) discusses the importance of discovering the relationships within the model, which could also change due to shift in the external environment. This guideline will help the plan to achieve the most desired forces against those in the industry. Drummond (2003, Pg12) also takes into account the competitors who should be a priority for a successful marketing plan.
A further approach is to anticipate shifts in the factor basic the forces and to respond to them, thus exploiting change by choosing strategy suitable to the competitive balance before competitors recognise it. (McDonald, 1998) This type of bold thinking is crucial in the beverage industry in which cultural characteristics directly affect suppliers. A criticism on this tool is
bought by Kevin P. Coyne (1992) who states that the information gained from this is too limited.
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Market Segmentation McDonald (1996) states Market segmentation consists of a group of customers within a market who share a similar level of interest in the same, or comparable, set of needs. A company seeks to gain a differential advantage over its competitors by the means of market segmentation. There are certain criteria concerned of what constitutes a market segment which are:
Many of the criteria shown above are obvious when we consider them; in reality practicing market segmentation is one of the most difficult strategies. (Kapfeer, 1997 )
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(FIGURE 6)
Marketing mix is made of certain elements which are four Ps (Product, Place, Price, and Promotion). West (1998, pg 234) defines marketing mix as a marketing tool used by the marketers to find out what customers want, once that has been found it then helps them charge a price for the product, after considering the product and the price then they have to create an awareness of the product, finally they have to make the product land in customers hand. Getting the right product at the right place with the right promotion is an art which all businesses are not successful at. (Bevan, 2007) It stresses the mixing of certain decision factors in a way that both objectives are achieved. However, Peter Doyle (2000) criticizes that marketing mix applied leads to non profitable 18
decisions as it does not consider the financial objectives for instance; increasing shareholder value. According to Doyle the criteria used in determining the best marketing mix has never been transparent.
Branding
The occurrence of branding remains difficult to understand yet complex topic however, it is a most important aspect of a modern culture. As argued by Kapferer (2008, Pg1) brands are one of the strategic assets available to a company that can provide a long-lasting competitive advantage McDonald (1994) analyzes positioning the brand successfully above the competitors, companies have to fight for their customers. In order to be an attractive, exclusive, and give an appropriate message to the current and future customers should develop a brand proposition. Davidson (1997, Pg 28) states that You cant escape your brand. Either you make the customer experience, or it gets made without you. This shows how much importance is given to branding.
However, Criticism has been levelled against the concept and implementation of brands, much of it associated with the "anti-globalization" movement. Kanuk (1983, pg 404) further criticizes branding as an increased marketing expenditure and sometimes the brand creativity does not link with the target audience.
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(FIGURE 7)
Budget
A marketing budget is an estimated cost of marketing the products or services.Mintzberg (1983) view on operating an effective marketing plan requires a certain amount of money, so an organization needs to allocate certain amount of funds from the operating. The marketing budget will allocate the costs according to the media and campaign utilized. A Budget is usually set for marketing plan to bear the expenses such as; advertising and promotional plan advertising and promotions advertising and promotional materials a list of advertising media to be used
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AIDA Model Wiertz (2009) view on the AIDA model is that it is important to take into account the buyers determination while launching a product, in buying the productAIDA model (Wiertz, 2009) which determines the buyers readiness is important to take into consideration while launching any product, most importantly a product which is widely distributed and catches the attention of the majority. However, Fulmer & Goodwin (2003 Pg 198) observed that people in every case may not follow
the stages as explained in the model. They may follow the stages in some situations, but many do jump directly to other stages while ignoring the logical pattern. For example; A child accompanied by a mother to a grocery store is likely to buy a product without getting into the stages of the model like getting aware of it, product being attractive to the customer might persuade them.
(FIGURE 8)
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Chapter 3: Methodology
3.1 Introduction
Saunders et al (2006) tells, Is an organized and systematic way of finding answers to questions. Research method is divided into two parts Primary research and Secondary research. Primary research is further divided into Qualitative and Quantitative data, a research design is chosen based on the project objective. The researcher in this project uses both qualitative and quantitative data collection technique in order to fulfil the objective of the project. Qualitative research is a useful step to explore true consumer perceptions for Slow Cow. Nevertheless quantitative data would be a follow-up for the qualitative research to get an in-depth insight. (Wilson, 2006) Furthermore there were two more critical points which had to be stated when conducting marketing research. These rotate around how the researcher should treat potential and specific participants of the research and to what extent the activities a researcher can or cannot partake (Bryman & Bell 2007)
3.2.1 Screening Model The aim of this screening model is to judge the important areas of the new product development such as growth rate, feasibility, market attractiveness, internal strength and
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synergy. This model also opens the door or creates more opportunity for a more expensive detailed investigation of the new development. As according to Kelly and Storey (2000), screening criteria should be used to consider the category like, does the new product fits well with the company plan, does it includes ability to deliver, customer satisfaction or profit could be expected from the new product development or not. Therefore this model provides consistency between the projects, develops a set of should meet and must meet criteria. Should meet criteria also includes the rating from 1 to 5 which is also quite useful for the comparison of scores among the ideas. This criterion was developed by Renis Likert his scale which had a range from 1 to 5, asked to the participants to state their rating about the product and its launch. (Wilson 2006:176) In the context of my project it was used to find out if the product had fit well with the company plan. It is one of the most effective ways of collecting ideas from a variety of people or team in a little period of time. It is easy to understand and a cost effective method. This model also ease complex decisions to manageable form and it facilitates the researcher to learn more about the project.
Limitations of Screening Model Each model has its own limitations, the limitations of above model include each evaluator might not able to judge all critical areas equally. Profits are crucial criterion not a product score. Reliability of composite scores is also one of the limitations and the respondent might tend to give way neutral scores which could also result in getting inadequate readings for the project. However after considering the usefulness and problems of this model, it has been concluded as, this model has significant importance which helped the researcher to fulfil the objectives. Therefore, all the above facts stimulate the product development team to specifically focus on this model and implement this into their project.
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Concept testing is a process to evaluate consumer response for a product idea by using quantitative and qualitative method prior to the introduction of the product to the market. Concept testing during old days was tagged with an inadequate method but in modern days with the advent of the Internet, concept testing is experiencing resurgence. It normally involves getting peoples reactions to a statement describing the basic idea of the product. This shows that this will help the researcher analyze how slow cow will perform in UK market. Moore and William (1982) supported this testing by claiming that it helps in identifying very poor concepts so that they could be eliminated and to estimate the rate and the sales the product will enjoy. Furthermore they said its relatively easy to get customer input and stated that It can be used as an early screen for new product ideas. Limitations of Concept testing The rating task may not reflect consumers real reaction toward the concept. Most concept testing procedure does not provide the necessary information. Iusom (1994) suggested that a concept testing procedure should be prescriptive of how go as well as if go. There are also often changes in the market place as well as in the legal environment. These changes may also cause the introduction results to differ from the test result (Moore, 1982). Moreover Tauber (1972) adds that trial cannot be translated into adoption depends on satisfaction with the actual product, and a concept test cannot measure this.
3.2.3Questionnaire Questionnaire is a way of gathering data from a large number of respondents as it is an inexpensive method. Chisnall (1991, Pg32) suggests that a well structured questionnaire that is implemented effectively can collect information on both the performances of the test system and guidance on certain components of the system. A questionnaire was designed which had a total of eleven questions, all of them were close
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questions. The reason for keeping the questions close ended was, people here in UK had very little knowledge about the product, as it has not yet been launched in UK. They were total of sixty respondents who were handed out the question in Uxbridge Town centre. The questions also included demographic questions, which were used to link the performance and were approved with the test system among people. The purpose of doing the questionnaire in town rather than in the university itself was to acquire a big target market and to know the potential of the product. The findings of the questionnaire will help in guiding the company to know about the consumers perception of Slow Cow in UK and at what price would they be willing to buy the drink. The primary role of a questionnaire is to provide the information required for management decision making. (McDaniel, 2003) In related to this project it can be identified that questionnaires are one of the most important method of collecting the data as it allows the collection of data regarding consumers perception of the product Slow Cow and will it be successful if launched in UK market. This information was extremely important to the projects aims and objectives. Stokes & Bergin (2006, Pg27) said, It is important to remember that a questionnaire should be viewed as a multi-stage process beginning with definition of the aspects to be examined and ending with interpretation of the results.
Limitation of Questionnaires
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The participants were told about the information being collected and how the result would benefit them. They were asked to reply sincerely, the questionnaire did not require the name of the participant.
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Introduction Pilot testing is usually a test of the procedures and instrument that is planned to use. It also prevents from landing with costly mistakes. Wright and Crimp (2000) discusses the purpose of pilot testing is to find the weaknesses and alter them before they prove to be costly. This testing is usually used while collecting primary data, and will also inform how difficult would it be to complete. Identifying the mistakes early can even change what way you collect information. Questionnaires The researcher had six questions designed for the testing which was handed out to friends and relatives to get an overview of the questionnaire. By carrying out the pilot test, gradually the problems were identified with a few questions regarding the slow cow perception which lead to change the question which then could be understood by the participants, however the construction of the questionnaire was done fast comparatively which forced a higher response rate. Concept testing Researcher also carried out a pre-test of concept testing to ensure that the testing with the students would be easy and would result in an effective manner to support the objectives of the project. By carrying out the trial concept testing which helped in identifying the alterations required in the testing methods.
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Data which is gathered by someone else and is ready to be used comes in secondary research. The expense incurred during secondary research is low comparatively to primary research. According to McDaniel & Gates (2003, pg42) the data gathered previously might be out dated which could bring inadequate result.The research included information gathered from newspaper, articles and journals which were accessed from Brunel University. Databases such as Mintel, GMID and Emerald were used in research. The information gathered from the different sources was useful in providing the detailed reports in this industry. Additionally, secondary research will also include an interview which was carried out by a professor of City University London in 2009 of the owner of Slow Cow drink.
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4.2 SWOT Analysis As the analyses show that the company has clinch to a good initial brand image, which has a calming effect and is made of natural ingredients. Due to the recent recession it could delay companys intention to launch in UK, but they have the ability to develop themselves by evolving opportunities into strengths. According to the reports in Mintel (2009), it is estimated that half of the UK population to be overweight by 2050. So they could persuade people to lead a healthy life and be physically fit. During recent time the health and fitness centres are offering one month free access which then encourages people to live healthy. Below are the few strengths, weaknesses, opportunities and threats that were analyzed after doing the secondary research.
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(Table 2)
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(Table 3)
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L-Theanine is a key ingredient of Slow Cow, which is found in tea plants (White, 2009). Due to this key ingredient Slow Cow has a de-stress effect, which is similar to green tea. Its like a new way to have tea instead, we want people to say lets have a Slow Cow claims Mr.Lino Fleury (Wiertz, 2009). Slow Cow can be considered a subsidiary for tea in North America as stated by Lyon, The quality of tea we get here is often very poor compared to say, Japan. Where their tea is actually rich in L-Theanine, ours has a very small amount of it (Totheron, 2009). On the other hand, it could not compensate for tea. Drinking tea in the UK is a custom and it is irreplaceable. Slow Cow has to take this into consideration before entering the UK market. Hence, it would be better for Slow Cow not to base its predictions on the tea segment of the market in the United Kindom. It is argued that Slow Cow is a healthy drink for consumers, whereas people who are health conscious would substitute Slow Cow with Vitamin water or multi vitamin juice due to the blue, carbonated water. Slow Cow would have to be launched in the UK under the category of relaxation or Anti-Energy drink. This would be appealing to customers who have a stressed routine, such as students, professionals and sport enthusiasts. The main target for Slow Cow would be customers aged 18-45; hence it would have to be launched in the adult soft drink market. The biggest benefit that Slow Cow would reap from this move is that the adult soft drinks market is the fastest growing sector in the soft drinks market. The growth
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rate has been up 84% since 2000 for the adult soft drinks market (Mintel, 2006). Slow Cow is more comparable to iced tea. Sales in volume had an impressive growth as it trebled between 2000 and 2005 (Mintel, 2006) (Refer to Appendix II) Products like iced tea have already gained a lot of popularity in the US and continental Europe (Mintel, 2006). On the other hand, again, due to tea being a major part of the culture in the UK, even products like iced need tea to get accepted by the British customers. Slow Cow is no iced tea but it has a similar appeal to that of tea. Therefore, Slow Cow needs to be promoted as a natural and healthy product rather than promoting it as a substitute for tea, in order to be successful.
(FIGURE 9)
Therefore the adult soft drink market would be a more appropriate sector to base Slow Cows market potential on. As you can see on the above figure that more than 50% of participants that were aged 18-25 had the good news for Slow Cow is that the adult soft drinks sector is one of the fastest growing in the soft drinks market. The growth rate continues to expand since 2000 and has an 84% increase in volume since then (Mintel, 35
2006). Even though it is the flavored water that holds most of the market share currently, iced tea, which Slow Cow is more comparable to, is a newly emerging sector. Sales in volume had an impressive growth as it trebled between 2000 and 2005 (Mintel, 2006). (Refer to Appendix II) Products such as iced tea have already gained much popularity in US and continental Europe (Mintel, 2006). However, again, as tea is part of the British tradition, even products such as iced tea still need to acquire acceptance among the consumers in the UK. Slow Cow is not an iced tea as such but its appeal is similar to one of a tea. Hence in order to successfully market this product in the UK, Slow Cow strongly needs to be promoted as a healthy (e.g. low-calorie) and natural (e.g. natural ingredient) product rather than a substitute for tea.
(Figure 10) The above figure illustrates that 73% of participants were health conscious Health issues have been a recent focus for British consumers. Media campaigns covering issues such as obesity and heart disease for instance have raised awareness immensely, then forcing most consumers to become more health conscious; this has lead to a change in their attitudes towards what they consume then leading to a change in their lifestyle as well. Consumers are making rapid shifts from drinks with high sugar content to drinks with more 36
natural ingredients. The above figure illustrates that 73% of participants were health conscious The percent of carbonated soft drinks such as colas consumed decreased between 2002 and 2004 (Mintel, 2006). Drinks with more juice content such as J20 are now more appealing to the consumers. One particular change in consumers attitudes has been not just to go for a low-calorie or low sugar drink but actually place an increased focus on the products ingredients and their functionality. Slow Cow has a great deal of these healthy ingredients that promote a healthier image and more importantly creates a sophisticated image (Mintel, 2006). This then adds value to the product to justify its premium charge.
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Apart from that the older generation should not be overlooked. After the gym, Slow Cow can be used by this segment of consumers, men or women who can enhance the experience of a relaxing spa with the drink. Moreover, the older generation is the working generation and should be targeted because of their high levels of stress and pressure that they go through in their work and daily lives. For a hardworking employee who has a hectic and fast paced job, a drink such as Slow Cow that promotes the idea of relaxation, can be quite useful.
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(FIGURE 11)
Product Positioning Slow Cow is challenging and is playing with Red Bulls name and logo (www.creativematch.com), yet at the same time it creates the opposite effect. The figure above shows the energy drink consumed by the participants where at least 40% people use to consume energy drink once a week, whereas total of 72% of participants have energy drinks once a week. The company is focusing on a differentiation strategy. It is positioning itself as the opposite of Red Bull and other energy drink with a focus on calmness. In other words, Slow Cow is not necessarily capturing Red Bull customers, but instead it is attracting more potential customers to functional beverages in general and developing the market further. It could be positioned as a cooler version of tea and juices. As far as the UK, market is concerned Slow Cow should position itself as an Anti Energy drink as customers today are open to new imaginative and useful products.
Purchasing Process Slow Cow will be introduced as an anti energy drink which is a completely new segment. Much of the marketing for the product will be done by the consumers itself. The company 39
will have to rely heavily on word of mouth or buzz marketing. The company will have to focus on getting the word out through playing on association with relaxation, calmness and de-stress. The company will have to look at the decision making process of the buyers and analyse their needs and consumption pattern. Consumers will not buy Slow Cow based on impulse. The buying will be based on a detailed and well researched or planned consumer decision process. This is because consumers always look at the side effects associated with such drinks. Peer pressure and other environmental or group pressures do encourage the consumption of products such as Slow Cow, but consumers who actually need the product will make the purchase themselves.
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(FIGURE 12)
Promotion Slow Cow promotion should be centred on the promotion of its benefits that include its ability to calm consumers, to help consumers concentrate and to provide natural energy. After stating the benefits of Slow Cow it shows that 71% of participants would try the drink after the information provided to them.The drink is aimed to target people who live a busy lifestyle, are health conscious and often anxious. The drink should be promoted mainly at spas, gyms, universities and work related areas. The promotion campaign will comprise of three main promotional methods, advertising, sales promotion, Buzz and Viral Marketing.
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Advertising The Company can hire eco-vans from promobikes (www.promobikes.co.uk) to promote the drink around 3 cities in the UK. The vans have visual appeal and will attract customer attention.
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(FIGURE 13) Sales Promotion The sales promotion boosts sales during promotion period because of the incentive effect. The company can offer the drink at various universities, work areas and spas at an introductory offer at Half the price of the original can. The company can also distribute flyers and display posters around UK. The above figure explains that people would like to consume most in university which is 40% where the work load and stress is more. As you can see that there is much less likelihood that people will have Slow cow at the Spa as you will already be having a relaxing session.
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(FIGURE 14)
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At a launch of a new product, an intensive distribution should be applied, since the product should be as widely available as possible. (Brassington and Pettitt) In the presence of an intensive distribution, the product is placed in as many outlets as possible where availability may be just around the corner. This type of distribution usually involves long chain distribution mentioned above (producer-wholesaler-retailer-consumer) where the product is widely distributed. (Refer to Appendix III). The types of retailers in which Slow Cow should be sold and where the target consumers would be found are: 1. Large Supermarkets 2. 24 Hour shops and fuel stations where people might need the relaxation at night after a stressful working day. Demand would peak at night and/or weekends. 3. Universities (vending machines) in induce relaxation in students as well as improve their concentration. 4. Promotion at Sports events such as Golf/chess tournaments. 5. Spas where consumers would need to relax and enjoy their treatment. The geographic location of these retailers should be however based in the city rather than in rural areas. Due to the hectic and stressful City life, there would be a larger proportion of people suffering from stress and needing methods of relaxation, without deterioration in concentration or drowsiness. The wide distribution of the product, in the locations where our target consumers should be located, will increase brand awareness, curiosity and the urge to try the product. The product was launched in December 2008 in Canada and is believed to be available in all large upmarket supermarkets in Canada such as Costos, Seven Eleven, Petro Canada etc by the end of this year, as well as over 1,500 independent convenience stores. (Wahlgren, 2009) The launch of the drink in the UK should undertake the same approach, through the distribution in large, regularly visited supermarkets primarily, since with this approach, the overall sales between December 2008 and August 200 have hit over 1.2 million cans. This distribution approach should however be expanded into the numerous locations mentioned above. 46
(FIGURE 15)
Pricing Pricing is an important factor for determining profits. Pricing can make or break the success of a product. It directly impacts revenue and acts as a competitive weapon. When determining the price a manager needs to remember that prices one set are very difficult to change. The Q4 of the questionnaire states that 62% of the participant fall in the 5001000 category which means the cost of a can of Slow Cow should be relatively less. Ever since energy drinks such as Red Bull took the world by storm, beverage makers have been looking for the next big thing. Datamonitor, the market research company, has tipped relaxation drinks as a trend to watch in 2009. The products are hitting the market in midrecession, as sales of energy drinks - the fastest-growing segment of the $50 billion nonalcoholic beverage market with 300 product launches between 2003 and 2008 are leveling off. (Times, 2009) The following factors determine the price of Slow Cow:
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Product Slow Cow is concerned. The researcher did a direct price response survey for the product. 1.69 Definitely would buy it Probably would buy it Probably wouldnt buy it Definitely wouldnt buy it (Refer to Appendix A for survey) 65% 20% 10% 5% 1.79 45% 20% 20% 15% 1.89 40% 10% 28% 22%
As the customers expect a low price, researcher has set the price at 1.69 per can which is part of our penetration pricing strategy (Bovay, 2008). The researchers aim is to achieve a large market share. As the company faces competition, it can raise its prices accordingly.
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The other strategy which we have tried to implement is psychological pricing strategy by setting a price ending with the 9 digit number. In addition, Slow Cow could also promote price bundling, by offering 4 can packets at stores like Tesco and Sainsbury, which attracts customers as they assume they are getting better value for money and customers.
4.6 Branding
Branding is of great value to consumers since strong brands can show the function of the product and help consumers judge whether it is their sort of product. (Brassington and Pettitt, 2007) The brand name should be simple, familiar and distinctive as well as meaningful. Slow Cow relates too much to Red bull and since the target market should not assume its a competitor to Red bull, the name would be recommended to be changed to Slow Cow, which clearly communicates the products effects and benefits and is an appealing name which could attract consumers simply because of its unique and uncommon name. Furthermore, Slow Cow would be similar to Blue Cow which has been launched on the West Coast of the America in 2005, containing the key ingredient of Suntheanine, a patented formulation based on L-theanine (Times, 2009) and is due to be launched in the UK in 2010.
4.7 Budgeting
Since Slow Cow is in the pre-launch phase of the product life cycle, and is competitive to other energy drinks which dominate the market such as Red Bull, the right promotion techniques need to be implemented. A promotion mix of mass media such viral marketing and internet advertisement as well as publicity through PR is vital to introduce the product effectively to the market. The AIDA model (Wiertz, 2009) which determines the buyers readiness is important to take into consideration while launching any product, in particular a product which is widely distributed and is attractive to the majority of the population.
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(FIGURE 16)
Researcher has have relied on eco trucks (www.promobikes.co.uk) which will cost 290 per day. (Refer to Appendix D) it would recommend hiring five trucks. Three trucks could drive around Zone 1 and Zone 2 in London, 1 truck in Birmingham (student area) and 1 truck at Bath (particularly known for its spas). they will be distributing flyers and putting up posters all around the UK. The cost incurred for 50,000 flyers and 20,000 posters will be 20,390. (http://www.walesprint.com/)
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The remaining balance of 186,110 will be used to offer or promote the drink at spas, gyms, universities and work related areas at an introductory offer at Half the drinks price as well as cover the costs of the staff used to promote the product.
by using primary and secondary research. Consumers concluded that this was the product which stood out to them, and that the most important aspect of this was the innovation of the product and the companys dedication to resolve public issue which was health eating.
Concept testing analyzed and illustrated that consumers would be more than willing to accept an anti-energy drink with natural ingredients over all other possibilities. It also suggested that the participants were enthusiastic about the product launch in UK. Questionnaires suggested that people specifically eighteen and above were willing to try the product. It also illustrated that people were more health conscious. Finally, the discussion showed that the marketing plan took into consideration the expectations of the consumers and the demand of Slow Cow drink. The increasing eagerness to have a healthier lifestyle will boost the growth of new products. The target market has been set. The price which is comparatively low is achievable by Slow Cow due to its cheap packaging material. It is essential to invest into extensive marketing strategies at the introductory level of the product lifecycle to increase the brand awareness.
5.2 Recommendation
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Bevan, J. Energy drinks and its success 3rd edition (2007) Baker, J. Marketing Strategy and Management 2nd edition Macmillan Press (1992) Gilligan, J. and Wilson, M.S. Strategic Marketing Planning British Library (2003) Drummond, G. Ensor, J. and Ashford, R. Strategic Marketing Planning and Control 2nd edition Elsevier (2001) Lambin, J. and Jean Strategic Marketing Management McGraw Hill (1997) Kottler Principles Of Marketing (1997) Jewel, B. An introduction to Business Studies Second Edition. Financial Times. Pearson Education.(1999) McDonald, Malcolm Strategic Marketing Planning (1938) Mullins, J. Management and Organisational Behaviour 2nd edition Prentice Hall (2005) Brassington, F. and Pettitt, S (2007). Essentials of Marketing. Harlow, England: Pearson Education Limited. Lamb, Charles W., Hair Joseph F Jr., McDaniel, Carl. (2009). Essentials of Marketing, 6th
edition, South Western Cengage learning, pp: 137-204
Wiertz 2009: Handbook lecture notes Carter; Meg (2004, June). Opportunity beckons. Marketing, 36-37. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 656709331). 54
xiv.
Emily Rogers (2004, January). Packaging integrity to be key branding issue. Marketing, 10. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 525699081).
xv.
Daniel B Honigman (2007, October). 10 MINUTES WITH EXPERIENTIAL MARKETING GURU BERND SCHMITT. Marketing News, 41(17), 26-30. Retrieved November 5, 2007, from ABI/INFORM Research database. (Document ID: 1370247301).
Drummond, Ensor, Ashford (2003) Strategic Marketing Planning & Control, Elsevier Butterworth Heinemann Pg27 Duffy, Neill. John Wiley & sons c2003 Passion branding Gilligan. Wilson, Strategic Marketing Planning, 2003; Butterworth Publishing, Oxford Greenley, Gordon E. 1990 The strategic and operational planning of marketing Prentice Hall, Devon Grundy (2006). Rethinking and reinventing Michael Porters five forces model. Strategic Change, 15(5), 213. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 1165588081).
xxi.
Hooley, Graham, Saunders, John, Piercy, Nigel Marketing Strategy and Competitive Positioning, Third Edition 2004 Pearson Education Limited, Prentice Hall
xxii. xxiii.
John Simmons (July 2006) Great Brand Stories Building a brand from nothing but fruit CYAN London ID: 139781905736041 Karen Rothwell (2007, July). What Tools Are in Your Tool Kit? Competitive Intelligence Magazine, 10(4), 55-57. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 1309178511).
Lambin, Jean-Jacques, 1933- Market-driven management : strategic and operational marketing McDonald, Strategic Marketing Planning, Cranefield Management, 1996, Second Edition, Pentonville Road; London Mintzberg, Quinn, Ghoshal; Prentice Hall, Devon The Strategy Process, European Edition; 1998
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xxvii.
Robert
Chapman
Wood
(2007).
How
strategic
innovation
really
gets
started. Strategy & Leadership, 35(1), 21-29. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 1177703971). xxviii. xxix. xxx. xxxi. xxxii. Wilson, Gilligan. Strategic Marketing Planning, 2003; Butterworth Publishing, Oxford West; Douglas, Ford; John, Ibrahim; Essam, Published; 2006, Oxford University Press, Oxford West, Ford, Ibrahim (July 2006) Strategic Marketing, Creating Competitive Advantage pg 101-177 Strategic marketing decisions. Whittington, Richard, 1958-.What is strategy - and does it matter? Anon: Study Text; Professional Post-Graduate Diploma in Marketing 2005-2006 June Examination period. Paper 10 Strategic Marketing Decisions.
6.2 Journals:
i. Whitehead, M. Britains Leading Retailer: Quality and Value Worldwide Management Decision, Vol. 32 No. 3, 1994, pp. 38-41 MCB University Press, 0025-1747 ii. iii. iv. v. vi. vii. viii. ix. Springs, A. The internal auditor Vol. 64, iss 5: pg: 73, 3 pgs Milford, M. Retail and services Marketing Energy drinks (2003) Green, M. UK organic in higher demand (2006) Jones, P. and Comfort D. Healthy eating and the UKS major food retailers: a case study in corporate social responsibility British Food Journal, Vol. 107 No. 6, pp. 423-35. Mintel, Energy Drinks UK-November 2004 Mintel, London (2004) Mintel, Functional Drinks UK-November 2005 Mintel, London (2005) Strategic Direction Slow Cow giving competition to Red Bull Vol. 2 NO. 9, pp. 28-31, Emerald Group Publishing Limited, ISSN 0258-0543 (2005) Mintel (2006, January). Adult Soft drinks - UK. Retrieved from http://0academic.mintel.com.wam.city.ac.uk/sinatra/oxygen_academic/search_results/show &/display/id=173695
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Mintel (2008, September), Healthy Eating and Drinking- UK Retrieved on December 7, 2009 Totheroh, G (2009, January 13) Feeling a Little unfocused? Try a Cup of Tea. Retrieved on December 1, 2009 White, M. (2009, May 6) Calm down by sipping a Slow Cow. Retrieved on December 7, 2009 from Canwest News Service Andrew Saunders (2000, March). How the world fell for a bunch of smoothies. Management Today, 76-79. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 50836396).
xiv.
Carter; Meg (2004, June). Opportunity beckons. Marketing, 36-37. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 656709331).
xv.
Emily Rogers (2004, January). Packaging integrity to be key branding issue. Marketing, 10. Retrieved October 29, 2007, from ABI/INFORM Research database. (Document ID: 525699081).
6.3 Websites:
i.
Benefits (2009). Retrieved December 4, 2009, from Slow Cow, An acupuncture session: http://www.slowcowdrink.com/slowcow_en.asp?no=262
ii. Bovay, K. (2008). Market Penetration Pricing - A Quick Market Entry Pricing Strategy. Retrieved December 8, 2009, from http://ezinearticles.com/?MarketPenetration-Pricing---A-Quick-Market-Entry-Pricing-Strategy&id=1341563
iii. Slow Cow Brand Differentiation Strategy. (2009). Retrieved December 6, 2009,
from Creative Match: http://www.creativematch.com/viewNews/?97559 iv. Times, T. (2009, September 8) Blue Cow is poised to take Red Bull by the horns. Retrieved December 8, 2009, from Times Online: http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/arti cle6825334.ece v. Wahlgren. E, (2009, October 7) Adios, Red Bull? Anti-energy drinks seek to soothe frazzled Americans. Retrieved December 5 from http://www.dailyfinance.com/2009/10/07/anti-energy-drinks/ 57
vi. Williams, H. Energy drinks: Do they work? ( 2009, October 20) retrieved November 29 from http://www.independent.co.uk/life-style/health-andfamilies/features/energy-drinks-do-they-work-1805598.html vii. Wilson, D. R. (2000, January 1). The Six Simple Principles of Viral Marketing. Retrieved December 7, 2009, from http://www.wilsonweb.com/wmt5/viralprinciples-clean.htm viii. www.promobikes.co.uk (Retrieved December 8, 2009)
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Chapter 7: Appendices
7.1 Appendix A
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60
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7.2 Appendix B
Screening Model
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Total: ______
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Appendix C
Concept Testing A beverage manufacturer would like to get your reaction to an idea for a new anti energy drink. Please read the description below before answering the questions. Slow Cow Here is a tasty beverage that makes you relax and calm, yet focused on. It releases your stress. It helps in many ways and the ingredients found in this drink are 100% natural, it comes in a similar packaging to Red Bull and it costs 1.69.
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Appendix D UK retail sales of RTD tea and coffee, volume and value, 2000-05 2000 2001 2002 2003 2004 2005 m litres 6 7 9 12 14 17 Index 100 117 150 200 233 283 m 8 10 12 16 18 22 Index 100 125 150 200 225 275
Appendix E Intensive Distribution Total number of outlets covered Number of outlets per region Distribution focus Type of consumer product Number of potential purchases Purchase frequency Level of planned purchases by consumers Typical price ( Brassington and Pettitt 2007) Maximum As many as possible Maximum availability Convenience High Often Low Low
Sweeteners
Preservatives
Flavourings
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Appendix G - Budgeting Promotion Methods Advertising Total cost Eco Trucks: 5 trucks at 290 43,500 a day for 1 month
New Introductory offer at Spas/Gym& half the price at Locations Yoga/Universities/ Office & 186,110 Work areas Posters and Flyers at Tube 50,000 flyers at 590 and 20,390 stations,Universities, Shopping Malls 20,000 posters at 19,800
Appendix H
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The cost of 290 will be incurred through the use of advertisement on vans since the duration of the campaign will be 1 month.
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(http://www.namedevelopment.com/blog/archives/industry/beverages/default.html)
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Brunel Business School Research Ethics Form To be completed for all Undergraduate and Postgraduate projects ___________________________________________________ PLEASE INDICATE BY A TICK WHICH ONE OF THE FOLLOWING CATEGORIES YOUR RESEARCH FALLS WITHIN:
1. Human Participant Research
Does your research primary data collection directly from humans, for example, through the use of interviews or a questionnaire?
If you tick this box, you will need to prepare a Research Consent Form. Prepare your form using the template provided (Page 5). You do NOT need a consent form if participants: (a) are NOT in one of the categories specified in point 7 of the Guidelines; and (b) are anonymised (i.e. their identities cannot be traced (see point 8 in the Guidelines)).
You will NOT need consent if you cannot trace the owners of your intended data.
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Produce your own version of page 3. Please seek advice from your supervisor.
For use in organisations which require that your dissertation/ project can only be used for assessment purposes, and that the content cannot be released for a fixed period of time. This is sometimes requested if the information is sensitive commercially, or in terms of the reputation of the organisation.
Student E-mail:
Degree Course Title: Business and Management (Marketing) Module Number and Title: MG3123 issues and controversies in management Name of Supervisor: May Seitanidi
Title of Research Project: A NEW DRINK "SLOW COW", OFFERS CALMNESS AND RELAXATION, CAN IT FIND A SUCCESS AS A NICHE ALTERNATIVE TO ENERGY DRINKS LIKE RED BULL IN UK
Please view the podcasts (a) Student Briefing: Research Ethics, and (b) Student Briefing: Research Ethics Clearance Application Process (http://people.brunel.ac.uk/~bustcce/Ethics/) Read and understood the Brunel University Research Ethics code (http://intranet.brunel.ac.uk/registry/minutes/researchethics/CoEv6. pdf)
The main aim of this project is to find the potentials of the new drink Slow Cow into the UK market and can it find success in the niche market of energy drinks.
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How have energy drinks been successful and its issues? Introduction of the new product Slow Cow Marketing plan of the new product and its potential in the UK market. Can it find success?
Specific Risk Factors Involved. You should consider the following and select those areas that are a potential risk factor for your research: (a)Unnecessary disclosure of interviewee identity (b)Security of storage of data (c) Company confidentiality (d)Copyright infringement (e)Coercion of interviewees into interviewing (f) Are there any others you would add? YES/ NO If Yes (please specify) Is a Non Disclosure Agreement required by the organisation being researched YES/ NO (if YES), please complete a version of the Form on page 3 Student Declaration
I have viewed the podcasts on (a) research ethics and (b) YES/NO the research ethics clearance application process
I have read through and understood the Brunel University Code of Ethics YES/ NO
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I declare that the above is true and any approval will be given based on my answers and project description provided in this form. Date: 19th Nov 2009
Supervisor declaration
I confirm that the student: Has confirmed to me that s/he has viewed the research ethics podcasts YES/NO Has correctly identified the type of research to be undertaken YES/ NO Has confirmed to me that s/he has read the Brunel University Code of Ethics YES/NO Has provided a Research Consent Letter, if required (page 5) YES/NO/n/a Has completed a Non-Disclosure Form, if required (page 3) YES/NO/n/a For Supervisor: If the ethics form is missing, incomplete or does not meet the Guidelines, the PG Dissertation/UG Project Proposal is referred. The Supervisor may indicate revisions needed as part of her/his written feedback.
Please note that (a) one example of any transcripts/completed questionnaires; (b) a blank copy of the interview questions/questionnaire; and (c) Information Sheet you used must be bound into your final submission. ALL of your transcripts and interview questions MUST be retained by you until you have received formal confirmation of your degree award. Please note that your supervisor has the right NOT to provide research ethics clearance if you have not completed the process and/ or the forms satisfactorily. If there are any substantial queries that cannot be dealt with by your supervisor, please contact the Brunel Business School Research Ethics Committee.
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7.4 Appendix D
Ethical Forms
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Management (Marketing), Brunel Business School, Brunel University 3. Contact Email: E-mail: bu07ssm@brunel.ac.uk 4. Purpose of the research: The main purpose of this research develop a marketing plan that will help in launching Slow Cow in UK. 5. What is involved: Screening Model where 5 people were selected and were asked to analyze if it was feasible to lunch in UK, Questionnaires were asked to 60 people from Uxbridge Town and then finally concept testing was also carried out which had 6 participants. 6. Voluntary nature of participation and confidentiality. Data collected will be kept securely. The data will only be used in an aggregated form in the project report with no reference to you as an individual. Participation is completely voluntary and the participant could stop and leave at any time.
Appendix E
Many thanks for agreeing to participate in my research project. The project has to be completed in part fulfilment of my degree programme and so your assistance is much appreciated.
Consent:
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agreement to participate in the study and for the data to be used as specified. Name of participant or informed third party: Richard Mat Signature: Shahzad Ilyas Date: 20th February 2010
Many thanks for agreeing to participate in my research project. The project has to be completed in part fulfilment of my degree programme and so your assistance is much appreciated.
Consent:
I have read the Participation Information Sheet and hereby indicate my agreement to participate in the study and for the data to be used as specified.
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Name of participant or informed third party: Ahmed Mat Signature: Shahzad Ilyas Date: 20 February 2010
Many thanks for agreeing to participate in my research project. The project has to be completed in part fulfilment of my degree programme and so your assistance is much appreciated.
Consent:
I have read the Participation Information Sheet and hereby indicate my agreement to participate in the study and for the data to be used as specified.
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Name of participant or informed third party: Rutland Peter Signature: Shahzad Ilyas Date: 20 February 2010
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