The market demand of Chechil cheese in Bloemfontein
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Date
2014-11
Authors
Lambrechts, Hendrik Adam Albertyn
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
Innovation is the only undisputed catalyst for growth and wealth creation over the
long term. However, launching a new product entails significant risk for established
as well as new businesses. In order to minimise some of these risks, demand
forecasts are necessary to construct the commercial elements of the business (or
product line), create revenue models, predict profits and cash flows, judge
feasibility, define suitable pricing structures and levels, and quantify financing
requirements. This study determined demand for Chechil cheese as a new product
in Bloemfontein in order to guide future decisions during the new product
development and launch process.
Demand was measured according to three criteria. First, respondents were asked to
what degree they liked or disliked the product on a five point scale. Second,
respondents' reactions are substantiated by determining whether they would
recommend the product to a friend, colleague or relative. Last, price sensitivity was
measured by determining each respondent’s likelihood to purchase 100g of the
product at R30, R45 and R60. It was found that the overwhelming majority of
respondents indicated that they liked the product and that they would recommend it
to a friend, colleague or relative. Respondents indicated inelastic demand between
the R30 and R45 price points and elastic demand between R45 and R60.
Findings from this study could be used in conjunction with further internal analysis
of the business' supply curve in order to establish the optimal price point to launch
the new product.
Description
Keywords
Dissertation (MBA (Business Administration))--University of the Free State, 2014, Marketing research, Consumer behavior, Snack food industry -- South Africa -- Bloemfontein, Cheese industry