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BAC21 Group Research Project: The Market for Soft Drinks at USC Assessment Answer

BAC21 Group Research Project


Project Title: The market for soft drinks at USC

USC is a large university attended by thousands of students every day on week days. The purpose of this project is to understand the students’ soft drinks market at the university. The market for drinks is measured in terms of 375ml cans. This type of project requires the students to demonstrate their ability to select a sample, analyse the data collected and prepare a written report of their analysis. Since it was impossible to interview every student visiting the university last semester, the subject coordinator proposed that only BAC21 students should be interviewed.

What should you do?

  1. Form a group of 4-5 students for the project.
  2. The Lecturer has exported the anonymous responses to an Excel file. Your project group will be expected to select a random sample of 100 responses for analysis.
  3. Analyze the survey sample you have selected for your group. The best way to do this will be to convene a meeting after class every week and discuss how you could apply the analytical techniques covered in your classes so far on the survey data.
  4. Submit the following:

A group report of around 800 to 1000 words. This is to be handed to your teacher in your second class of week 11. The report must respond to the specific questions asked in a report format.

Introduction

Provide a brief introduction to what this assignment is about and how was your sample selected?

Data Analysis

This section must answer to the following specific questions

  1. What proportions of the students in your sample are local and what proportion are international?
  2. What is the relationship between price and average quantity consumed by students?
  3. What are the most popular and least popular soft drinks among students?
  4. How loyal are students to their brand? (Do students change their preference when they receive a 25% or 40% discount on their preferred drink?)
  5. How does the demand (price-quantity relationship) of international students differ from that of local students?
  6. What are the most and least popular drinks among local students? How does this compare with the preferences of the international student?
  7. How likely is it that the student will choose soft drink (Pepsi, Coke etc.) as their first preference? Provide 95% confident interval estimates and interpret your results.

Summary (20% marks):

Provide a quick summary of the main results from your analysis of the data and critically evaluate the validity of the sample data.

Answer

BAC21
Introduction

The provided case study is for USC University where a survey is being conducted to understand popularity of various beverages, particularly soft drinks. The market for drinks is measured in terms of 375ml cans.

The case study provides survey result for 200 respondents who are all BAC21 students visiting the campus.

The study required to select a random sample of 100 respondents and perform data analysis for the same. Hence, ‘RANDBETWEEN’ function was used with values of 1 till 200 to select respondents. However, since this function keeps changing values every time, first time result was frozen and sorted from smallest to largest. The repetitions were replaced with nearby respondents not already on the list. This way, a random sample of 100 respondents was created for purpose of further data analysis.  

Data Analysis

Q1: What proportions of the students in your sample are local and what proportion are international? 

Proportion of local and international students

From the graph above, it can be seen that the sample is comprised of 5% international students and 95% local or domestic students. It can be seen from the chart above that international students form a very small proportion of the sample.

Q2: What is the relationship between price and average quantity consumed by students? 

relationship between price and average quantity consumed

The survey result provided various hypothetical price points and asked students to provide their average consumption at those price points. This data was utilized for this section. Various hypothetical price points ranging from $0.50 till $5.00 were used and average consumption of 100 students at each price point was used for the other axis. It can be seen from above line chart that there is an inverse relationship between the price of the beverage and average consumption units.

Q3: What are the most popular and least popular soft drinks among students? 

popularity of beverages

The survey result provided various beverages and asked students to provide their average consumption for each of those beverages. This data was utilized for this section. Various beverages, namely Soft drinks, Fruit Juice, Tea/Coffee, Energy Drinks and Others, were used and average consumption of 100 students for each beverage was used for the other axis. It can be seen from the above bar graph that ‘Other’ is the most popular beverage and it comprises of water, milk drinks etc. The least popular drink is the ‘Energy drinks’. The respective average consumption is 21.5 units and 0.6 units, indicating clear choices of students.

Q4: How loyal are students to their brand? (Do students change their preference when they receive a 25% or 40% discount on their preferred drink?) 

Change in preference if second preferred beverage is cheaper by:
25% as compared to first preference21
40% as compared to first preference49

It can be seen that 21% of students are willing to change to second preferred beverage if it is 25% cheaper than the first preference while remaining 79% are still loyal. 

However, when the second preference is 40% cheaper, loyalty takes a further hit where 49% are willing to switch to second preference and only 51% remain loyal. 

Hence, loyalty keeps declining as the price differential becomes deeper.

Q5: How does the demand (price-quantity relationship) of international students differ from that of local students? 

price vs consumption relationship

The survey result provided various hypothetical price points and asked students to provide their average consumption at those price points. This data was utilized for this section. Various hypothetical price points ranging from $0.50 till $5.00 were used and average consumption of international and local students at each price point was used for the other axis. It can be seen from above line chart that there is an inverse relationship between the price of the beverage and average consumption units for both type of students. Another pattern is that the average consumption of international students is much lesser than the local students but the gap keeps reducing as the price/unit increases such that consumption becomes almost same at $5.00/unit price point..

Q6: What are the most and least popular drinks among local students? How does this compare with the preferences of the international student? 

popularity of beverages

The survey result provided various beverages and asked students to provide their average consumption for each of those beverages. This data was utilized for this section. Various beverages, namely Soft drinks, Fruit Juice, Tea/Coffee, Energy Drinks and Others, were used and average consumption of international and local students for each beverage was used for the other axis. It can be seen from the above bar graph that ‘Other’ is the most popular beverage and it comprises of water, milk drinks etc. The least popular drink is the ‘Energy drinks’. This holds true for both international and local students.

Q7: How likely is it that the student will choose soft drink (Pepsi, Coke etc.) as their first preference? Provide 95% confident interval estimates and interpret your results. 

The frequency of Soft drinks being selected as first preference is 16 out of 100. Hence, the frequency of Soft drinks NOT being selected as first preference is 84 out of 100:

PreferenceNumberFrequency
Coke/Pepsi160.16
Not Coke/Pepsi840.84

To construct 95% confidence interval,

α = 0.05, α/2 = 0.025

n = 100

^ ^ = 16%

^ ^ + Z0.025 = √^ * (1-^)/n = 0.16 +1.96

= 0.16 + √0.16 * (1-0.16)/100

= 0.16 + 0.0367

= [0.197, 0.123]

At 95% confidence level, the interval estimate that student will choose soft drink (pepsi etc.) as first preference lies between 12.3% and 19.7%.

Summary

As seen above, a sample of 100 respondents from BAC21 who visited USC campus last semester was analysed. It was found that the majority are local students with international students being as low as 5% of sample population. Further, all the students depicted similar inverse relationship between the price of beverage and average consumption although international student’s average consumption number was lesser than that of local students. Unanimously, both type of student like ‘Other’ beverages and ‘Energy drinks’ are the least popular. 

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