Market Research Proposal To Mother Earth Company

This is a market research proposal being submitted to Mother Earth in response to its request for competitive bids to analyze a sales problem described below. Ryan McAvoy Consulting, LLP (“RMC”) is pleased to offer a research-based method that will analyze the consumer issue to give real-world data to identify objectively the best solution to increase Mother Earth revenues. RMC is ready to begin implementing the solution provided herein immediately and can complete its research and deliver tailored recommendations in four months with the allotted budget. RMC believes the speed that can be provided to Mother Earth with a personalized solution sets this company apart from other bidders. RMC looks forward to helping Mother Earth regain its industry-leading ways with a solution while building a relationship that can become a successful partnership for the long term.

Company Overview

Mother Earth is a consumer food company that is owned and operated in New Zealand. The company’s mission is to offer healthy and delicious food to busy consumers who need to eat quickly but want something nutritious, not greasy, chemically inundated fast-food options. Mother Earth proudly partners with other organizations that help people make healthier food choices, leveraging the Mother Earth brand. Mother Earth is involved with Future Ferns, Enviorschools, and the soft plastic recycling initiative. Mother Earth ingredients are selected carefully from around the world to ensure that the company’s consumers get the best quality without having to stop and prepare the food. All ingredients are GM-free without artificial flavors or colors and associated with only minimal processing. Mother Earth’s products include individually packaged and colorfully branded nuts, spreads, snacks, and bars which can be enjoyed by all ages. Recently, Mother Earth introduced a clever “On the Go” marketing format that is designed for customers to eat their snacks anywhere at any time. These snacks come in a new kind of snack bag that includes a resealable feature so that the consumer can save part of the snack for later, thus eating with ease. Also, Mother Earth recently expanded its product offering by introducing a vegetable and fruit bite combination that should appeal to consumers wanting a better variety in healthy snacks and this product differs from most on the market which usually come as only fruit option. The whole essence of the Mother Earth corporate branding is that it offers tasteful snack options for people who need to eat on the run. Anything that detracts from either the healthy snack or the fast and easy usability of the product will undermine the brand and likely turn away the core customer.

Managerial Problem

One of the Mother Earth core products for years with reliable sales is the Baked Oaty Slice® which are individual packs of oat-based health food snacks that are sold in what is known as a MEBOS box (“MEBOS”). However, for unknown reasons MEBOS boxes are currently decreasing in sales. The company has not changed any of the marketing strategies, packaging components or food ingredients recently so the sales decline is perplexing. Mother Earth thinks that it is possible the reason for the lowered results might be in how individual stores locate the product to the customer. The shelf position for the MEBOS box may be a variable that is important. Customers might not want to reach high up on the shelf or crouch down low to buy a MEBOS box, so they choose an alternative that is located more conveniently. And, if the store makes it hard for the customer to select the product, this undermines the brand which is all about making the product easy to use and fast options.

Research Question

RMC believes the best solution is to determine if, in fact, shelf position is driving lower sales for the MEBOS box. As such, RMC would like to offer Mother Earth a research study that will assess how different store shelf positions affect consumer choice of MEBOS boxes. The right kind of study design for this goal is to create an experiment using a Virtual Store Simulation relying on real shoppers for the data collected. Proposed Research Design In order to resolve the managerial problem, RCM will test various shelf heights using a virtual store simulation lab design. A virtual store simulation is an experiment conducted in a lab environment, not the real store. The lab is set up to look like the kind of store the shopper visits. The reason the lab is used and not the store is because the researcher wants to test several options with the shopper that must be changed around but not change anything else with the experience in order to obtain a statistical result that demonstrates cause and effect. With the lab setting, the researcher retains complete control on how to organize the consumer options in the virtual store. Even though the virtual store looks like a realistic grocery store, it is still considered to be a laboratory experiment because of the control aspect. In our case, the independent variable will be the shelf position because it can be changed in order to assess the customer’s response. The dependent variable will be the various shelf heights. Our hypothesis will be that shelf position affects the consumer’s product choice and the more inconvenient the location, the more unlikely the product will be selected, all other factors being equal in the shopping experience under analysis. The RMC study will be a basic experimental design because the researchers will manipulate a single independent variable to observe its effect on a single dependent variable. It is the most appropriate research method because our shared goal is to evaluate whether or not the consumer’s decision to buy is based on shelf heights of the targeted product. The virtual store simulation is an ideal way to conduct the study because shelf position can be altered quickly and easily between test groups and the researchers can maintain rigorous control that no other variables are changed.

The study will be structured as follows: the dependent variables will be the different shelf positions of the MEBOS boxes. Some will be located near the floor making the consumer stretch down almost to their feet to get the product; others will be located higher where the consumer must stretch very high or even jump to get hold of the MEBOS product. The independent variable will be where to place the MEBOS box at mid-/eye-level, which is the most convenient spot to see and grab the product quickly. The same study group of shoppers will be exposed to both the dependent and the independent variable and their product choices will be collected for analysis. The shoppers selecting the MEBOS box more when it is in one shelf location versus the other will be revealed in a statistically significant way.

In order to control against any other variable affecting the product choice outcome, we will randomly select shoppers from the general population. We will only ask (or verify that) potential participants shop at a local grocery store or not. We want to exclude, for example, shoppers who only buy their food online or rely on others to get it for them. We will use a statistical equation that tells us how many shoppers we need for the study to generate statistically valid conclusions at a 90% probability. If less MEBOS boxes are selected in one of the dependent variable arms than the control arm, then that shelf position likely caused the product not to be selected when compared to if it had been offered at eye level, i. e. , the most convenient shopping experience. By seeking a random population the research team can control against other factors affecting choice beyond the shelf positions being assessed. So the way this study is designed it does not matter if the shoppers rarely or frequently prefer the Mother Earth brand, or if women more than men prefer the brand, or lighting somehow in the store affects the decision, or the color and packaging of the MEBOS box versus other food options is making a difference. The beauty of this study is that the researchers can tell confidently if shelf position affects the choice of the MEBOS product.

Here are more study details: The sample size for the study will be 200 people recruited from different grocery stores around New Zealand, after they are assessed according to the two filtering questions mentioned previously. As stated, a simple random sample method is the most appropriate because it assures each element in the population has an equal chance to be included in the sample. This technique only needs minimal advance knowledge of the population and it is easy to analyze the data and compute error. It is important to have a sample population that embodies “everyday grocery shoppers” as the target population. The sampling will come from members who shop at Countdown and Pak'n Save, as determined from the questions we will ask as part of our sample population filtering. These two popular grocery stores supply the most Mother Earth products out of all other grocery stores in New Zealand. Randomly selecting 200 consumers who shop from these two stores will provide more accurate results because these are the people who are accustomed to the retail store environment and who make decisions based on many things including product positioning. To incentivize the randomly selected members to come to the site of the virtual store simulation, they will be given a $15 gift card either to spend at Countdown or Pak’n Save during their next grocery visit. The 200-person sample size was derived from a statistical equation that is used to determine sample size that can yield statistical significance. Selecting 200 test units will minimize study error because as the sample size increases, random sampling error decreases. Once the 200 study participants are selected, they will be asked to make four different store purchases at the virtual store operated by RMC. All the participants need to be given the same different shelf positions choices so that any consumer preferences that are seen can be assessed within the same population. If only some of the 200-person sample size get exposed to one shelf position and a different subset of the 200-person sample gets exposed to another shelf position, then any difference seen might be due to shelf height or could be due to the people that were involved. Although the entire sample will be randomly selected after filtering for eligibility, which would mitigate the differences between the sample sub-groups, the strongest results will be achieved if the same population is exposed to all the choices and then differences statistically assessed.

Sample test one will see the MEBOS boxes placed at the very top of the shelf in the virtual store where most shoppers will need to get assistance to reach or need to “jump up” to try and grab the item. Sample test two will be exposed to the boxes at a height where they can reach them only by stretching but do not need to do anything extraordinary. Sample test three will need to grab MEBOS boxes from the very bottom of the store shelf. Finally, sample test four will be the control group that gets to select the boxes which is optimal to enhance consumer choice, right in the middle of the shelf (near or not too far from typical eye level) for an average shopper. The optimal height will be set at 5’7”. The test shoppers will be tasked to get any kind of bars for an upcoming tramp. There will be various brands of snack bars on display, but only the Mother Earth MEBOS boxes will be placed on different shelf heights in the different sample tests to assess how, if at all, this alters the consumer’s decision. Importantly, study participants will be given a safety and instruction course before they conduct virtual store simulation. This will ensure a smooth and safe experiment. There will be a debriefing process after the experiment ends to explain the nature and purpose of the test. This will give the participants a better understanding about the experiment and notes will be taken to document any interesting information that is gleaned once the virtual shoppers realize what the test is about. After the data are collected, the statistical analysis will compare the percentage of times shoppers in each sample test chose Mother Earth MEBOS boxes against the control arm, or sample test four. If the difference seen between the experimental and control arms in any of the sample tests is determined to be statistically significant, this will mean that shelf height at the variable level studied in that situation impacted the consumer choice, either favorably or unfavorably against the control arm height. It is possible the data will show some of the variable heights produced a significant difference and others did not which will generate additional important information for Mother Earth.

Secondary research will be conducted after the experiment concludes. An experiment involving a virtual store simulation, as seen, brings shoppers to an artificial environment to be exposed to different shopping experiences compared against a control arm. In order to see whether the virtual store simulation correctly predicts results, RCM would like to visit several actual stores and interview shoppers who selected the MEBOS box and those who did not and ask if shelf position played any role in their decision. This exit polling will not be randomized and thus cannot show cause-and-effect; it will be supplementary data to add additional information to the scientifically rigorous analysis that the simulation predicted.

Limitations

Experimental research can create artificial situations that do not portray real life situations. This is largely due to the tightly controlled variables that can never fully replicate the environment being evaluated. This study only looks at shelf position. It is possible even if shelf position is a factor, that there are other factors doing the same that are not being assessed, such as the lighting in the store, or how clean the store is, or if other products are displayed on the shelf alongside big posters with discounts offered for these competing products only. It will not be known, for instance, from the study design if price versus other products is causing sales decline.

So, this study will explain once and for all if shelf position is at least a key factor in the customer’s selection. RMC suggests that Mother Earth adopt the ideal shelf position recommended by this study and try it for 6 months. If sales continue to decline, then a more complex study needs to be designed.

Another limitation to be aware of in the study design is the validity of the experiment. Experimental research designs help to ensure internal validity but sometimes at the expense of external validity. When this happens, the results may not be generalizable to the larger population. This is not a huge problem because testing 200 participants from all over New Zealand drawing from the two most popular grocery stores should describe well the “grocery shopper” population being targeting.

Outputs

The study will provide extensive information about whether shelf position truly affects customer preference for the Mother Earth MEBOS boxes. Three different shelf positions will be analyzed against what is believed to be the optimal height to sell the product. If the study shows a decreased frequency by the study group in selecting the product at one shelf height compared to the optimal height, then this suggests that the declining revenue Mother Earth is experiencing is due, at least in part, by stores displaying the product at that non-optimal location. By persuading stores to change the shelf position to the optimal height, revenues should be increased, quickly paying for the cost of this study.