A Focus on the Look What We Found! Brand

Ambient Food, is there a student market?

A focus on the Look What We Found! Brand

WILLIAM HANRAHAN

060953199

BSc Marketing

Newcastle University

Wednesday, April 22, 2009

Ambient Food, is there a student market? A focus on the Look What We Found! brand

Dissertation submitted in partial fulfilment for the BSc Marketing Honours

WILLIAM HANRAHAN

060953199

BSc Marketing

Newcastle University

Wednesday, April 22, 2009

Confirmation

I confirm that this dissertation is my own work and that all sources are fully references and acknowledged.

Word Count: 12,000

Signature:…………………………………………………… Date: …………………

Acknowledgements

The writer would like to thank several individuals for their assistance in completing this dissertation. Mr Karl Christensen, personal dissertation supervisor, for his guidance and support. Mr Eric Ruto and Mr Mitchell Ness for their comments and assistance regarding qualitative data collection. Professor Chris Ritson for his support throughout the last few years at Newcastle University. Finally, all students who participated in the survey, without their help this report would not have been possible.

Abstract

Ambient food is defined as ‘food that can be stored at room temperature’. Wet ambient meals form a small sector which can be found alongside ambient snacks in retailers. The products offer a similar level of convenience to other ready meals but most importantly without the need for refrigeration.

Sales of ready meals are driven largely by consumer demand for convenience food. The advantage of ambient meals is that they can be microwaved in a few minutes and their storage is simplified. The demand for convenience food derives from a number of well established lifestyle trends which have left consumers feeling short on time and energy. The modern day consumer spends less time preparing and consuming meals and this has led to the rise of ‘fast food’ and convenience food market.

Marketers are aware that student consumers do not evaluate all products in the same way. Even brands that are perceived to be very similar are often selectively purchased; this dissertation examines the factors that influence the purchasing decisions of convenience food made by Newcastle University students responsible for providing meals themselves.

A review of relevant literature was conducted which suggested a questionnaire followed by cluster analysis was required to find out what students expected in convenience food and if student segments emerged that could be seen as potential niche market consumers. These methods were utilised to add depth to the empirical setting and context of the study.

The report discusses findings from an online self-administered questionnaire concerning student’s attitudes towards food and convenience food shopping. The results showed that distinct student segments exist within the sample. These segments were different mainly through gender and what could be considered socio - cultural differences. These were most prominent in the students’ attitudes towards cooking time, weekly spend and attitudes towards the meals and soups sold by The Tanfield Food Group. After identifying the most effective ways to measure student consumers from past research, questionnaires were identified to be a useful tool and after extensive cluster analysis on the data the results showed the emergence of 4 similarly sized student cluster groups, these 4 clusters were profiled and the researcher offers his advice based on these cluster groups, it appears that student segments do exist for high end ambient foods and marketing implications follow in the discussion and executive report.

Appendix List

Appendix 1: Literature Summary *

Appendix 2: SPSS Output

Appendix 3: SPSS Cluster Output

Appendix 4: Survey Monkey Summary

Appendix 5: Executive Summary for the Tanfield Food Group

Appendix 6: Social Networking Group

Appendix 7: Response from The Tanfield Food Group *

List of Tables

Table 1.3: Research Objectives

Table 3.1: Theoretical Subject Justification

Table 3.4: Dimensions of Authentic British Food Products

* Not present in the electronic copy

Contents

Acknowledgements...... 4

Abstract...... 5

Appendix List...... 6

List of Tables...... 6

1.0  Introduction...... 9

1.1  Reasons for Study...... 9

1.1.1  Hypothesis...... 10

1.2  Aims and Objectives...... 11

1.2.1  Aims...... 11

1.2.2  Objectives...... 11

1.3  Research Design...... 12

1.4  Structure...... 13

2.0  Market Review...... 15

2.1  Challenges within the Market...... 15

2.2  Generic Strategies Matrix...... 17

2.3  Competitive Advantage...... 19

2.3.1  Differentiation Focus...... 19

2.3.2  Manufacturing Strategy...... 19

2.3.3  Value Chain...... 20

2.4  Learning Curve...... 24

2.5  PEST Analysis...... 25

2.6  Summary...... 27

3.0  Theoretical Background....... 28

3.1  Introduction...... 28

3.2  Shopper Behaviour...... 30

3.3  Student Consumers...... 33

3.4  British and Regional Food...... 38

3.5  New Product Marketing...... 42

3.6  Cluster Analysis...... 44

4.0  Methodology...... 51

4.1  Introduction...... 51

4.2  Use of Secondary Data...... 51

4.3  Qualitative Research Methods...... 52

4.4  Quantitative Research Methods...... 52

4.4.1  Questionnaire Design...... 52

4.4.2  Data Collection...... 55

4.5  Cluster Analysis...... 56

4.5.1  Clustering Techniques...... 56

4.5.2  Optimisation Techniques...... 57

4.5.3  Applications of Cluster Analysis...... 57

4.5.4  Problems with Cluster Analysis...... 58

4.5.5  Summary...... 58

4.6  Data Analysis...... 59

4.6.1  Questionnaire Response...... 60

4.6.2  Segmentation of Sample...... 60

4.6.3  Sample Size...... 60

5.0  Results...... 61

5.1  Descriptive Analysis...... 62

5.2  Cluster Analysis...... 84

5.2.1  Crosstabs Analysis...... 84

5.2.2  Crosstabs Testing Summary...... 94

5.2.3  Final cluster centres...... 95

5.2.4  Cluster responses Summary...... 96

5.2.5  Cluster Profiles...... 102

5.3  Cluster Summary and recommendations...... 103

6.0  Discussion...... 106

6.1  Introduction...... 106

6.2  Summary of Key Results...... 106

6.3  Fulfilment of Objectives...... 108

7.0  Conclusion...... 110

7 

7.1  Limitations of the study...... 110

7.2  Suggestions for Future Research...... 110

7.2.1  Improving Response Rate...... 110

7.2.2  Additional Questions...... 110

7.2.3  Multi-Dimensional Scaling...... 111

7.2.4  Focus Groups...... 111

7.3  Hypothesis...... 112

8.0  Study References...... 113

9.0  Appendices...... 118

SPSS Output

SPSS Cluster Output

Survey Monkey Summary

Executive Summary for Tanfield Food

Social Networking Group

1.0  Introduction

This chapter provides an overview of the rationale for the study as well as its aims and objectives. It gives a synopsis of the research design and outlines the structure of the dissertation.

1.1  Reasons for study

In 2006, Karl Christensen gave an interesting lecture about The Tanfield Food Group and in particular the Look What We Found! brand, this started my initial interest in the company and prompted me to begin trying various products within the range, all of which I was very impressed with. Two years later in another lecture Sharon Kuznesof asked the students, ‘Who has heard of Look What We Found products?’ Only one person raised their hand, I thought: ‘Surely far more students would be interested in this type of quality convenience food?’ and here an idea was born. The main reason for this study is to find out if students are a missed opportunity for ambient food producers such as The Tanfield Food Group and if possible, attempt to cluster the student market with preferred meal types of the ‘ideal’ student clusters.

It made sense to conduct research about the group which is easily accessible, making it easier to get respondents, focus group members and obtain students opinions throughout the research. The researchers’ particular passion is food with an intention of working within the food sector after graduation, so it seemed the obvious choice. The research methods and analytical technique modules studied in stages 2 and 3 of the BSc Marketing programme were of particular interest, and it was decided to involve these where possible. The study was aimed at trying to segment the student group to find a potential market for this type of high quality convenience food.

After an extensive search of literature relating to this topic, articles were found which could assist this research, and a gap was found in not only segmenting students by their shopping preferences but including more detailed questions and including the range of meals offered by The Tanfield Food Group through the Look What We Found! brand.

1.1.1  Hypothesis

It is expected that the research will identify various segments of student food consumers, from the researchers experience and having the benefit of belonging to the student group in which is being studied, he expects to find a handful of student segments, some which can be proposed and recommended to The Tanfield Food Group as being potential targets for ambient foods, while identifying some students group that would be unlikely customers for high quality ambient food products. It is hoped that these clusters can be formed, and that through the creation of an in-depth questionnaire these clusters can even be determined by their preferred meal choice. It is hoped that at least one cluster can be identified for recommendation to The Tanfield Food Group that is appropriately sized and suggests there is potential for marketing towards students.

1.2  Aims and Objectives

1.2.1  Aims

1.  This research project aims to investigate the most important factors influencing Newcastle University students’ purchasing decisions regarding convenience food, in particular ambient foods, identifying the different consumer segments which exist for their products.

2.  Make marketing recommendations based on the findings of this report.

1.2.2  Objectives

The objectives of the study are listed below:

·  Provide a market overview for the Convenience Meal and Soup Market in the UK, to establish the reasoning behind the increasing consumption of convenience food and in particular ambient foods, giving strategic marketing implications based on the findings.

·  Give a detailed analysis of the vital factors of the key literature considered to be most important in shopping behaviour, student consumers, British/regional food and new product marketing and suggested analytical methods.

·  Based on literature recommendations, conduct a questionnaire to obtain student responses, segment the sample into groups which share common characteristics, based on attitudes towards food and consumption of convenience food.

·  Provide recommendations for The Tanfield Food Group which can improve the effectiveness of marketing to students. Identify the key segments that exist for the products and recommend marketing strategies to improve consumption.

1.3 Research Design

Qualitative: Using in-depth interviews to gain background information and understanding and also to facilitate questionnaire design.

Quantitative: Survey of student attitudes towards convenience food shopping and preferred food attributes, descriptive and cluster analysis.

1.4 Structure

The report is structured into five main chapters, each of which serves to develop the understanding of the factors affecting the consumption of ambient foods.

The following chapter, ‘Market Review’ consists of secondary research, which was the initial exploration of convenience foods, in particular the Look What We Found! brand and its position as a new ambient food concept within the market. This chapter is key for the justification of the study, in order to appeal to new markets, but also informs the reader of its exact position within the convenience meals and soup market.

The subsequent chapter ‘The Literature Review’ consists of secondary research, the main subjects are split into five topics. Such research also served to supplement existing knowledge concerning measuring student’s attitudes and this additional knowledge aided the design phase of the project. The research identified key factors which helped formulate the survey.

Chapter 4 ‘Methodology’ provides a detailed explanation of and justification for the methodology and data analysis techniques employed in the context of the original research objectives. The chapter also emphasises the limitations of the methodology used, with particular reference to sample size and survey method.

Chapter 5 ‘Results’ presents the results of the factor and cluster analysis of the survey data collected, whilst interpreting the significance of the findings, and the marketing implications of these findings; these are of use mainly to the ambient food producer, The Tanfield Food Group, in particular its Look What We Found! brand. But the results are of use to supermarkets, smaller convenience stores and other ambient food producers in determining the market potential of the produce.

The final chapters 6 & 7 ‘Discussion and Conclusions’ provide a summary of the most important findings of the research, whilst evaluating the market potential of the products. The content of these chapters is directly related to evaluating the fulfilment of the original objectives.

2.0  Market Review

2.1  Challenges within the Market

The main problem that The Tanfield Food Group face is changing the image of ambient food. Many consumers have a negative predisposition when it comes to purchasing this type of meal, not traditionally renowned for freshness or nutritional quality.

The challenge they face is that although consumers are as busy as ever, they are more conscious about healthy eating and quality. Ready meals have been criticised over the fat, salt and additive content, and this has stalled a long period of strong and sustained growth. Increased TV and press coverage has sparked an interest from consumers with cooking and the provenance of ingredients, championed by celebrity chefs such as Jamie Oliver and Hugh Fearnley-Whittingstall.

Tanfield Food Group have recently increased promotion of their products through TV campaigns and using direct marketing through emails to target niche consumers in what has usually been seen as an under promoted market. Moving away from typical perceptions of ambient foods to become associated with high end food products but with all the advantages of the positive characteristics of ambient foods. It seems they want to position themselves as a hybrid of ultra-convenience with slow cooked luxury.

Importantly, ambient convenience food has not previously been seen as gourmet food, however The Tanfield Food Group use the finest natural ingredients from small artisan producers, developing a product with superior ingredients which they hope will appeal to consumers with an interest in food culture.