G4 Ltd.

1
Project Report

Project Report
On

Pre-launch of Lemon-Lime soft drink

Submitted by;
Kasi VS 82
Abhishek Ghatak 83
Sanya Juneja 84
Vaibhav Srivastav 85
Ruchika Bajaj 86
Amit Shrivastava - 87

Under the Guidance of:

Dr. Gaurav Joshi

LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DWARKA

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Table of Contents

Page No:

1. Introduction.. 3
2. Industry overview. 3
3. Management Problem... 5
A. Problem Statement
B. Background of company
4. Overview of primary research.. 10
5. Research methodology. 10
6. Sampling... 11
A. Define Target population
B. Define sampling frame
C. Sampling technique
D. Quota sampling
E. Sample size
7. Limitation of Research.
8. Estimation of cost and time..

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1. Introduction
This research deals with the beverage industry in which an elaborate study is being conducted
in order to launch a new variety of Lemon-lime soft drink. The core of the paper deals with
identification of factors that influence the success of the product. The paper gives an over
view of the industry, the management problem faced by the company which includes
consumer and competitor analysis.
As a part of research we have found out the objectives and the factors that really affect the
consumer preference. For the sake of the same we have collected primary data with proper
sampling and research methodology. The research objectives, methods, sampling plan and
analysis are discussed in detail in the paper.

2. Industry overview
Carbonated drinks are the beverages that have carbon dioxide dissolved into it. The process is
called as carbonation. Carbonation often helps improve taste and texture of the beverage. We
are all aware of carbonated soft drinks like Coke, Pepsi, and Fanta etc. Experts feel that
carbonated drinks should not be consumed in quantities that we do at the moment. It could be
healthier to have non carbonated soft drinks like Nimbooz, Minute maid, LMN etc. which are
equally tasty and refreshing. Non carbonated soft drinks as the name suggest do not have
alcohol and do not undergo the process of carbonation which generates carbonic acid that is
one of the causes of ill effects on health.
There are studies that suggest carbonated drinks can have several ill effects on your health.
Obesity in adolescents is fast becoming a concern. Carbonated soft drinks are not entirely the
cause or the only cause. However, the amount of carbonated soft drinks that each of us
consumes is pretty high. Regular carbonated soft drinks as well as diet soft drinks are high on
calories and are often consumed with high calorie junk food. This collectively leads to
reduction in the amount of nutritional foods in our diet which in turn can lead to several heath
issues. Tooth decay is also a major cause of over consumption of carbonated soft drinks.
All these health considerations have lead to the increase in the importance of the non
carbonated soft drinks. Customers are becoming conscious about the products and their effect
on their health and wellness. Non carbonated soft drinks are better options. With the public
perception growing in favour of non carbonated drinks many soft drink manufacturers are
introducing new non carbonated drinks along with their carbonated ones in an attempt to
maintain their customer base and revenues.
Although the carbonated drinks are just treading water with flat sales, the category of noncarbonated beverages (no fizz) is booming like never before. Bottled water, sports drinks and
lemon drinks are close behind with a significant increase in sales. What follows is a look at
the categories of waste as the beverage industry, including major brands, new products,
innovations and launch vehicles of the future.

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To succeed in the market are all major players like Coca Cola, Pepsico, to think so in terms of
health innovation, innovative taste and innovative ingredients and specific age groups. These
factors influence the presence of the beverage industry.
Today, consumers on the general health and disease are affected. Accordingly, there is a
significant impact on the purchase of food and beverages. Consequently, lemon drinks as a
category has become very important for all major actors today.

3. Management Problem
What is management decision problem?
The management problem deals with the problem faced by the organization which forms the
basis of the research, consumer analysis and competitor analysis and the major factors that
affect the launch and success of the product.
The Management Decision Problem of our research is:
Whether to introduce new lemon-lime drink into the market and position it as change
of pace product.

Problem Statement
Given that the company, G4 Ltd is planning to launch its Lemon-lime soft drink. This
product is supposed to cater the need of all soft drink users including the heavy cola drinkers.
The company is planning to tap the business opportunity of both cola drinkers and lovers of
non carbonated drinks. It is planning to position itself as a change of pace soft drink in the
market. The company has different sections, various target segments which may or may not
be profitable and success of positioning depends on the strategy it adopts. Hence this market
research is to provide solution for all these strategic problems and to help the company to
launch the product successfully.

Problem Description:

Whether to introduce the product, if yes then is it appropriate to position it as a

change of pace soft drink.
Whether market will accept this new lemon-lime soft drink.
How to position and create value proposition of the soft drink
Whom to target??? - all soft drink users, including heavy cola drinkers.

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Background of the company

The following section provides an insight about the historical background of the company,
along with the consumer and competitor analysis.

About G4 Ltd.
G4 Ltd entered into the beverage industry in 2000 and has grown to become one of the
prominent players in the Beverage industry. G4 Ltd has established the business which aims
to serve the long term dynamic needs of consumers in India. The company products are
presently considered as a reliable and tasty product to quench the thirst of its consumers.
G4 Ltd started its operation in Northern part of the country and now at a verge of expansion
to western region of the country. The company is presently concentrating on the rural parts of
the country. This is mainly due to huge investment required in catering the rural population.
For more than a decade, G4 Ltd nourishes consumers with a range of products that deliver
joy as well as nutrition and always, good taste. PepsiCo Indias beverage portfolio includes
iconic refreshment beverages G4-cola, G4-orange. The packaged water division G4-aqua and
local soda division G4-soda complete our diverse spectrum of brand.

Market and Sales history

During the 2012-13 fiscal years the revenue of G4 Ltd was INR 100 crore. The company
spent INR 70 crore on their expenses. The performance of the company was well above the
total amount used for expenses as well as the expectations. Top three areas where the expense
incurred are in the production activities. The company is able to optimize its production
expense by using the latest equipments. The implementation of new technology decreased the
variable cost and was able to combat the inflation of material cost. This enabled the company
to stabilize its prize and fetch more profit.
The company outsourced the bottling activities in order to concentrate on the other strategic
aspects. The rest of the company expense was dedicated to sales, marketing and
advertisement activities. The major part of the revenue is contributed by the cola division and
packaged water division.

Potential Market segment

Soft drinks are mostly consumed by the young generation, mainly between the ages 15 35.
This will be our potential target which can be easily targeted. As per the latest census by Govt
of India, 65% of the countrys population is between the ages of 18 35. Also the rural
population is about 68% of the total population. Our product is supposed to cater in the

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northern state. The company is planning to launch it in some parts of western India and
looking for a penetration to the rural market, which needs to be researched.
As per the census in the northern states the rural population between the age 15 35
will be about 15 30 crore which is a potential market. Also the increased rate of
urbanization in an unprecedented manner will help the company to acquire the future market
in the present. Hence it is essential that this huge market should be targeted with proper
strategy.

Value proposition of G4-Lime

Soft drinks are not just thirst quenchers; it is not just carbonated drink, it should be a drink for
refreshment. The product should have its own value that adds to customers advantage and
satisfaction. The basic requirement for any soft drink is taste and refreshment. What customer
prefers in terms of taste is a very important factor for the success of the product. Also the
refreshment part which was already mentioned should also be considered. Refreshment can
be in form level of carbonation, or may be based on the ingredients.
The next major factor is the calorie value or how healthy a drink is. Todays customers are
very well empowered with the product ingredients and they are more health conscious than
they were previous. The design of an healthy product will help to reap benefit in the future as
more people are likely get inclined towards it. The latest study reveals that carbonated drinks
are not healthy compared to non carbonated one. It leads to Obesity and other health
problems. Hence the question in front of us is to have a carbonated or Non-carbonated or
both. Proper research and design can be used as an USP of product.
The final value additions that can be provided to the customers are the introduction of exotic
and traditional variety. As the companys major market is concentrated on the rural
population, they may prefer the traditional Indian flavours. This kind of product is very rare
in the market. This may provide them an emotional attachment to the product as well.

Identifying the competitors

As already mentioned this is not a new market for satisfying the untapped needs of the
customers instead this an already existing market with a number of prominent players. The
company faces competition from different varieties of products and competitors. The
competitor list begins with the local brands like Lemonade to MnCs like Pepsi and Coca
cola. The local brand does not possess much impact on the product but the major competition
is from other two brands.
One of the major advantages in this context is the less brand awareness among the rural
population. This will help the company to fight with the well established brands like Coke

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and Pepsi. The local vendors and street shops providing instant drink and lemodade is also a
serious threat.

4. Overview of Primary Research

Research Objectives

Assess why people consume other soft-drinks?

Assess when people consume soft-drinks?
Investigate what they look for in a new soft drink?
Assessment of Challenges in the market
Assessment of the health factors associated with other soft-drink brands
Assess changing consumer preferences and tastes
Should we include varieties?

Research Methodology
The research design is a plan or framework for conducting the study and collecting data. It is
defined as the specific methods and procedures you use to acquire the information you need.
Our general research approach will be based on exploratory research. We have little
information at this point, which is sometimes referred to as the fizzy front end. So it is
better to follow the exploratory research method as it will help to find to find the factors that
should be an integral part of the product.
Data collection has been carried out in two ways,
Qualitative research technique
Quantitative research technique
As far as our research project is concerned we will be carrying out quantitative techniques for
analysis.
Quantitative Research technique
In Quantitative Research, data has been collected by Survey Method. A total of 220 people
will be surveyed and are planning to use a structured questionnaire interviews.

5. Sampling Plan
Define Target population

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Sampling is defined in terms of elements, sampling units, extent and time. An element is the
object about which or from which the information is desired. A sampling unit is an element,
or a unit containing the element, that is available for selection at some stage of the sampling
process.
Element: People of varying age opting for Cola/Nimbu Drinks as refreshments
Data Collection Method: Online and offline
Extent: Delhi-NCR Area
Define sampling frame
As the major consumers fall in the age group of 15 35, the sampling should also be taken
from the same demographic factors. The region under research will be Delhi-NCR.
Sampling Technique : Non Probability Sampling
Methods of Data Collection: Survey Method
Mode of Data Collection: Online and through face to face interview
Sample size: 220

DATA ANALYSIS
To start with the data analysis, first lets have a look at certain pie charts drawn on the basis
of responses.

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F- Test:
An F-test for the null hypothesis that two normal populations have the same variance is
sometimes used, although it needs to be used with caution as it can be sensitive to the
assumption that the variables have this distribution.
Notionally, any F-test can be regarded as a comparison of two variances, but the specific case
being discussed in this article is that of two populations, where the test statistic used is the
ratio of two sample variances. This particular situation is of importance in mathematical
statistics since it provides a basic exemplar case in which the F-distribution can be
derived. For application inapplied statistics, there is concern that the test is so sensitive to the
assumption of normality that it would be inadvisable to use it as a routine test for the equality
of variances. In other words, this is a case where "approximate normality" (which in similar
contexts would often be justified using the central limit theorem), is not good enough to make
the test procedure approximately valid to an acceptable degree.

The test:
Let X1, ..., Xn and Y1, ..., Ym be independent and identically distributed samples from two
populations which each have a normal distribution. The expected values for the two populations
can be different, and the hypothesis to be tested is that the variances are equal. Let

be the sample means. Let

be the sample variances. Then the test statistic

has an F-distribution with n 1 and m 1 degrees of freedom if the null hypothesis of

equality of variances is true. Otherwise it has a non-central F-distribution. The null
hypothesis is rejected if Fis either too large or too small.

Properties

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This F-test is known to be extremely sensitive to non-normality so Levene's test, Bartlett's

test, or the BrownForsythe test are better tests for testing the equality of two variances.
(However, all of these tests create experiment-wise type I error inflations when conducted as
a test of the assumption of homoscedasticity prior to a test of effects.) F-tests for the equality
of variances can be used in practice, with care, particularly where a quick check is required,
and subject to associated diagnostic checking: practical text-books suggest both graphical and
formal checks of the assumption.
F-tests are used for other statistical tests of hypotheses, such as testing for differences in
means in three or more groups, or in factorial layouts. These F-tests are generally
not robust when there are violations of the assumption that each population follows
the normal distribution, particularly for small alpha levels and unbalanced layouts. However,
for large alpha levels (e.g., at least 0.05) and balanced layouts, the F-test is relatively robust,
although (if the normality assumption does not hold) it suffers from a loss in comparative
statistical power as compared with non-parametric counterparts.
Uses :

Test equality of variances of two populations

To test equality of means of three or more populations (known as analysis of
variance)

Analysis & Results

During these analytics it has to be kept in the corner of the mind that if during the group
statisctics if there is a slight difference between the values of Male & Female then in the
independent Sample test significance under equal variances assumed to be considered else
Equal Variances not assumed to be considered.

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As significance > 0.05, there is significant difference between male and female
choices for different categories of drinks

As significance > 0.05, there is significant difference between male and female
choices for different categories of drinks

As significance < 0.05, there is significant difference between male and female
choices for different categories of drinks.

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As significance < 0.05, there is significant difference between male and female
choices for different categories of drinks

Factor analysis
Factor analysis is a form of exploratory multivariate analysis that is used to either reduce the
number of variables in a model or to detect relationships among variables. All variables
involved in the factor analysis need to be interval and are assumed to be normally
distributed. The goal of the analysis is to try to identify factors which underlie the variables.
There may be fewer factors than variables, but there may not be more factors than variables.
It is a statistical method used to describe variability among observed, correlated variables in
terms of a potentially lower number of unobserved variables called factors. For example, it is
possible that variations in four observed variables mainly reflect the variations in two
unobserved variables. Factor analysis searches for such joint variations in response to
unobserved latent variables. The observed variables are modelled as linear combinations of
the potential factors, plus "error" terms. The information gained about the interdependencies
between observed variables can be used later to reduce the set of variables in a dataset.
Computationally this technique is equivalent to low rank approximation of the matrix of
observed variables.
Types of factoring
Principal component analysis (PCA): involves a mathematical procedure that transforms a
number of (possibly) correlated variables into a (smaller) number of uncorrelated variables
called principal components. The first principal component accounts for as much of the
variability in the data as possible, and each succeeding component accounts for as much of
the remaining variability as possible.
Common factor analysis: Also called principal factor analysis (PFA) or principal axis
factoring (PAF), seeks the least number of factors which can account for the common
variance (correlation) of a set of variables.

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Terminology
Factor loadings: The factor loadings, also called component loadings in PCA, are
the correlation coefficients between the variables (rows) and factors (columns)
Communality: The sum of the squared factor loadings for all factors for a given variable
(row) is the variance in that variable accounted for by all the factors, and this is called the
communality.
Eigenvalues: Characteristic roots: The eigenvalue for a given factor measures the variance in
all the variables which is accounted for by that factor.
Factor scores (also called component scores in PCA): are the scores of each case (row) on
each factor (column). To compute the factor score for a given case for a given factor, one
takes the case's standardized score on each variable, multiplies by the corresponding loadings
of the variable for the given factor, and sums these products.

KMO & Bartletts Test of Sphericity

KMO & Bartletts Test of Sphericity is a measure of sampling adequacy that is recommended
to check the case to variable ratio for the analysis being conducted. In most academic and
business studies, KMO & Bartletts test play an important role for accepting the sample
adequacy. While the KMO ranges from 0 to 1, the world-over accepted index is over 0.6.
Also, the Bartletts Test of Sphericity relates to the significance of the study and thereby
shows the validity and suitability of the responses collected to the problem being addressed
through the study. For Factor Analysis to be recommended suitable, the Bartletts Test of
Sphericity must be less than 0.05.

In our research both these criteria are being followed as KMO > 0.6 and Bartletts test of
sphericity < 0.05

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Another important aspect that needs mention is the Rotated Component Matrix. While
deciding how many factors one would analyze is whether a variable might relate to more than
one factor. Rotation maximizes high item loadings and minimizes low item loadings, thereby
producing a more interpretable and simplified solution. There are two common rotation
techniques - orthogonal rotation and oblique rotation. While orthogonal varimax rotation that
produces factor structures that are uncorrelated, oblique rotation produces factors that are
correlated. Irrespective of the rotation method used, the primary objectives are to provide
easier interpretation of results, and produce a solution that is more parsimonious.

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Hence we arrived at two major components which have eigenvalues greater than 1 and the
name components as per the factor loading are delightful refreshment and healthy assortment.