cyprus caffeinated bottled water newsletter

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CYPRUS NATURALLY CAFFEINATEDBOTTLEDWATER www.cypruswater.com

Cyprus WaterAn Introduction To...

Cyprus Naturally Caffeinated WaterCyprus is looking to introduce

naturally caffeinated bottled water. This

product would be marketed as an energy

drink towards consumers between the

ages of 18 and 24. However, Cypruss

naturally caffeinated water will not

contain additives, such as sugar or other

ingredients, often found in caffeinated

drinks. It will simply be pure water thatprovides an added benefit (energy) for

consumers. The purpose of our study is

to find out whether or not consumers

would prefer caffeinated water, with no

additives or sugars, to other caffeinated

beverages. We also would like to find out

if this product would launch well as a

possible brand extension.

We chose caffeinated water as our

product because we noticed more and

more college students consuming

caffeinated products, whether it is during

class or out having fun with their friends.

We also felt personally that energy drinks,

such as Monster and RockStar, were too

sugary and contained ingredients we do

not even know about. Since many

college students carry water bottles, and

we have noticed that many dining halls/

cafs sell bottled water; we felt that

providing refreshingly pure water with a

boost of energy would be convenient for

students. Cyprus Naturally Caffeinated

Water would be different from other

leading energy drinks containing tons of

sugar and calories in such that it would

be 100% water with natural caffeine and

no other additives.

Our plan was to first conduct

research by gathering information on the

beverage industry through secondary

data and utilizing sources such as,

Mediamark, DataMonitor, Euromonitor

International, and Marketline. Then, we

gained insight on consumers thoughts

and opinions about caffeinated water

through literature reviews, focus groups,

in-depth interviews, and brand party

exercises. After conducting focus groups

and in-depth interviews, we then used the

information given to us to outline possiblesurvey topics that will be used in the

survey design. We used our survey design

to gather information about consumers

use of caffeinated beverages and bottled

water. Finally, we used the information

provided for us through the surveys to

determine who would prefer naturally

caffeinated bottled water over those who

would not.

After conducting research, our goalswere to:

Determine if consumers would beinterested in caffeinated bottled water

Determine the best target market forour product

Decide which brand would be best topromote our product and

Whether or not caffeinated water

would work in a growing industry

We were able to use the research wehave done thus far in order to come to

conclusions in determining whether or

not Cyprus Caffeinated Water would be

successful within the growing beverage

industry.

CONTENTS

2.1

QUALITATIVE

PROCESS

Research findings including an

industry overview and info

from literature reviews, focus

groups, and in-depth

interviews.

2.2

Q & A

Personal insights from two

energy and functional drinkconsumers.

2.3

QUANTITATIVE

PROCESSResults from Cypruss

Caffeinated Water survey.

2.4

RECOMMENDATIONS

& CONCLUSIONSRecommendations and

conclusions regarding the

production of Cyprus

Caffeinated Bottled Water and

what it means for consumers.

CYPRUS NEWSLETTER ISSUE NO.1 SPRING 2010
http://www.cypruswater.com/http://www.cypruswater.com/


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Qualitative Process

Industry OverviewThe demand for functional drinks, like caffeinated

bottled water, is growing amongst more and more health

concerns such as child and adulthood obesity. [1] There

is a demand for healthier alternatives to sugary drinks

like Coke and Monster. [2][3]

The caffeinated bottled water Cyprus plans to

implement would only contain water and natural

caffeine. Consumers looking to hydrate with the added

boost of caffeine will find caffeinated bottled water a

better alternative to sugar or calorie-filled functional

drinks, like Aquafina FlavorSplash or Gatorade.

Most major beverage industry players have

expanded their business into functional water. Some

examples include Coca-Cola with the purchase of

Glaceau (the producer of Vitaminwater), and PepsiCo

with Propel. [4] The biggest producer of bottled water,

Nestle SA, has decided not to enter the functional water

category as executives and company experts feel the

category is an interesting market, but too niche. [5]

Companies not entering the market with a product

in the functional/energy segment, such as Nestle SA, are

missing an opportunity to earn tremendous revenue.

Nestle SA would be able to leverage a product line

extension of one of their bottled waters, such as Ice

Mountain, and introduce a caffeinated bottled water to a

large consumer base with ease.

Qualitative Process

Literature ReviewThe introduction of new energy drinks and

functional drinks, which is referred to as water that is

enhanced with flavors and additives, such as vitamins

and guarana, is astounding. With functional drinks

being brought to the market at a rapid rate, drink

producers are targeting specific demographics, instead of

trying to appeal to a mass consumer base, such as coffee

drinkers with the introduction of drinks such as Java

Monster and Starbucks Doubleshot. Another example

of companies having a very specific target market isBawls Guarana G33K B33r, which is targeted

specifically to gadget and technology fans.[6] Energy

drinks are able to continue growth by not staying

stagnate, and targeting new and untapped market niches

when introducing new products and line extensions.

ENERGY & FUNCTIONAL

DRINKSSOMETHING FOR EVERYONE The energy and functional drinks segment of the softdrink industry has exploded. Consumers can find a drinkthat matches the type of function theyre looking for,

their personality, activities they perform, or they may

choose a drink just because it has a cool name and

bottle design.

Energy and functional drink producers arecapitalizing on the quick-changing loyalties of the

consumers. Manufacturers are producing 5-10 new

products each every year, to keep up with changing

demand.

Energy drinks and functional drinks are the hottesttrend in the beverage world.



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Qualitative Process

In-Depth InterviewsThe in-depth interviews offered a lot

of insight into consumer behavior.

Narmar Doyle and Allison Devou both

confirmed the groups belief that women

would be more likely to choose

caffeinated water. Allison was very

excited about the prospect of a healthier

alternative to all the sugary products that

are currently on the market. The

interviews confirmed that very active,

educated, middle-to upper-class women

between the ages of 18 and 24 would be

the most likely to buy caffeinated water.

Rod Bartemeyers (General

Manager of Jewel Grocery) in-depth

interview provided insight into the

grocery business. This information will

be useful when deciding where to

promote and place a functional beverage

such as caffeinated water. A product such

as ours will not perform well in a grocery

setting, and we should consider focusing

more specifically on convenience stores

and gas stations.

Qualitative Process

Focus GroupOur focus group consisted mainly of

people who preferred water to caffeinated

products. While there were participants

that did consume caffeine, most of them

used it only out a perceived necessity,

such as staying awake in order to study,

etc. One very interesting point

mentioned during the focus group was

that consumers, specifically those of an

older generation, might view the product

as radical.

Participants encouraged the idea of

pursuing high-end carbonated and

caffeinated water. This would give the

feel of a soda or an energy drink while

staying true to the original product idea

of water plus natural caffeine. This idea

was considered, but ultimately thrown

out due to Cyprus theme of purity of

the product.

The focus group affirmed the

groups belief that this product would

perform best if marketed to a niche

market, specifically females between the

ages of 18 to 24.

Qualitative Process

Observations

The qualitative process consisted of

a literature review, a focus group that also

utilized the observation tactic of a brand

party, and three separate in-depth

interviews. Cyprus feels that based on

this qualitative research, this product

would perform best if introduced as a

brand extension, preferably by Nestle SA

(who has yet to tap into the functional

drink segment), and marketed as a niche

product to women between the ages of

18 and 24. Grocery stores will not be the

best pipeline to our consumers, and

convenience stores and gas stations would

be much more advantageous retailers to

pursue.The qualitative process derived two

important recommendations for the

survey design team: 1. Attempt to delve

further into demographics to validate our

conclusions. 2. Venture into branding and

product designs, trying to gauge

perceptions of different bottle designs.

These questions were used in the survey

design and data analysis.

FOCUS ONTHE FOCUS GROUP Utilizing Miami UniversitysFarmer School of Business focus

group rooms, Cyprus was able to

conduct and record a focus group

on caffeinated water.

The focus group participantsdiscussed caffeine usage, thoughts

on the current state of energy

drinks and bottled water, and

completed a Brand Party

exercise.

The insights the focus groupprovided for Cyprus were

invaluable. Without the focus

group participants, Cyprus would

not have been able to move

forward with their studies.

http://www.cypruswater.com/http://www.cypruswater.com/http://www.cypruswater.com/


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Q&APersonal Insights on Caffeinated Water

Narmar Doyle A personal friend of one of the Cyprus groupmembers, and was one of the most interesting focus groupparticipants. He was talkative and provided great feedback,so Cyprus decided to conduct an in-depth interview withhim.

In the focus group, you mentioned that you felt the

concept of a caffeinated water is radical. Can you

elaborate on this thought?

I feel like water is always considered to be cleansed of

impurities and although caffeine is not a mineral, nor is it

hazardous to public health, I believe it has a mildly negative

connotation. People drink water to be healthy and/or refresh

their bodes. They generally are not seeking any sort of energy

boost from the product. I am a person that does not consider

Vitaminwater to be water; instead I would categorize it as juice.

Would you be willing to try [Cyprus Caffeinated

Water]?

I would try the product as long as [it] does not have theslightest caffeine-like taste.

[We] have spoken personally about targeting this

product specifically to 18-24 year old, educated

women. Do you still feel this is the correct

demographic, and if so, why?

I believe both genders experience a lull in their workday

around 2:30 PM, however I also believe that being viewed as

classy is important to women. Cracking open an energy drink is

not very feminine and therefore opening a water bottle and still

receiving the energy boost would be appealing to women.

What are your final thoughts on [the caffeinated

water] idea?

As long as it looks like water and tastes like water, I think it

would be a good product.

Allison Devou A personal friend of one of the Cyprus groupmembers. While she did not participate in the focus group,Cyprus felt that her opinion would provide key insights intothe niche of consumers to which we plan to market ourproduct. Allison is a 19-year-old female that leads a veryactive lifestyle. She works out often, and is very concernedwith health.

How often do you drink bottled water?

I drink bottled water very often. I purchase a bottle every

two to three days and then refill the bottle. I like to drink it in

class or while Im working out.

Is there any particular reason that you choose bottled

water over other drinks?

I choose to drink water because it is pure. Theres nothing in

it, so I feel like it is a healthier choice than other products.

Do you consume caffeinated beverages? Is there a

reason you choose to?

Yes. I consume two or more caffeinated beverages a day. I

think that they really keep my mind sharp, and find them to be

helpful during studying and before working out.

If a company decided to begin producing water with

caffeine in it, what would your reaction be?

I would really enjoy the added benefit of the caffeine in

water. I would definitely buy a product that offered that. I love

trying new alternatives to what is already out there. My life is

pretty fast-paced, and its difficult to stay healthy but still get the

energy I need to keep up with everything I have going on. Also, I

would really like if it was carbonated like sparkling water.

http://www.cypruswater.com/http://www.cypruswater.com/http://www.cypruswater.com/


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Quantitative Process

Survey Development

Cypruss survey was divided into a

few different sections, focusing on

multiple topics the team thought were

most important to ask respondents. The

sections included:

Caffeine use

Energy drinks

Bottled water

Cyprus new product

caffeinated bottled water

The team grouped the questions in

this specific order so that we could

measure the perception of caffeine in

beverages and how effective it was at

providing an energy boost. We wanted to

know how often respondents were

consuming caffeinated beverages per

week.

General caffeine use questions were

followed by specific questions pertaining

to energy drinks and bottled water. The

survey then asked respondents what their

perception of Cyprus Naturally

Caffeinated Bottled Water was, as well as

their intention to buy our productcompared to other available caffeinated

products.

The survey questions also included

insights into what consumers were

looking for in a functional drink, (water

with benefits or additives, such as

guarana and sugar) as well as time of day

most consumers were likely to purchase

and consume the product.

Quantitative ProcessSurvey Critique &

Pre-Test

Our initial survey pre-test in class

did not go as well as we anticipated. The

class determined that the survey was

missing a few required question types,

such as a ranking scale, and they helped

us correct simple grammatical and ease-

of-use errors.

The biggest flaw the class found in

our survey was the lack of a product

description of Cyprus water. Not only

did we forget to describe why we were

conducting the survey, regarding caffeine

usage, but we forgot to describe our new

product all together. In addition, our

survey for the in class critique did not

include any questions regarding

perceptions or intention to purchase our

potential new product.

The critique/pre-test was a great

asset for our team as we went back to the

starting point for our survey and

redesigned quite a few questions. Certain

questions were converted to open-ended

questions, giving respondents more

possibilities for answers. We were able to

gain more of an insight into peoples uses,

habits, and possible interest in our new

product by not limiting their answer

options.

The final survey also included a

greater number of demographic

questions in order to help our team

gather information and make

interpretations with our data to allow us

to come to conclusions/

recommendations.


Sampling Plan

Our sampling population

consisted of college students at Miami

University. Our group observed that

college students constitute a large part of

the functional, energy drink, and bottled

water consumer population. Our

observations were also present in

numerous studies, indicating that

consumers in the 18-24-age bracket are

willing to try new products and stray from

traditional beverage options.A sample of

the students at Miami helped us make

inferences and conclusions about the total

age bracket population of universities

around the country.

The type of survey we conducted

was a convenience sample.Aconvenience sample was more practicalfor us to conduct, as it is a non-

probability procedure.With a non-probability sample, there is no objective

or scientific method in choosing our

sample, and with limited time and

resources, a convenience sample was the

most efficient and effective choice.

Conducting a convenience sample

led us to determine our sampling frame.In the interest of receiving a somewhatbetter representation, we sampled from

various locations on campus, including:

Will at a Miami University Student

Foundation meeting (Upham, March

30, 6:30 PM)

Jon at an Alpha Phi Omega fraternity

meeting (Shideler Hall, March 28, 7

PM)

June at the Miami Recreational Sports

Center lobby (March 29-April 2, 8 PM)

Christyna at a Dance Marathon

meeting (Shriver, March 31, 7 PM)

Jane in the Farmer School of Business

lobby (March 29, 1 PM)

Michelle at the Gross Center (North

Quad, March 31, 3:30 PM)

Each member in Cyprus planned on

collecting 40 surveys, giving us a sample

size total of 240. In addition, eachmember strived to collect, at the most

basic dichotomy, 20 male and 20 female

samples.



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Data Collection &

Coding

After reviewing our sampling plan

we realized it had a few deviations.

Originally we anticipated on collecting

240 surveys; fifty-percent of which would

be taken by females. However, when it

came to actually executing the plan, we

accumulated only 206 surveys, and only

200 of those were completely filled out

and usable. Also, 58% of the respondents

were female and 42% were male.

After running the data through theSAS program, we found that we needed

to collapse some of the independent

variable questions. Question sixteen was

the first component we collapsed; in fact,

we had to double collapse it. We

combined the School of Arts & Science

with Engineering & Applied Sciences

then joined those with Education/

Health/ Society & Fine Arts to make sure

the schools were represented equally

because 55% of the respondents

belonged to the Farmer School of

Business. We also had to collapse

question nineteen, which asked about the

respondents class rank. The graduate

students were combined into the seniors

and the freshmen were collapsed into the

sophomores. Once this was done the class

rank selections were about equal with

freshmen/sophomores equaling 32%,

juniors totaling 39% and Seniors/

graduates 29%. After collapsing the data

it was verified as being clean.

The SAS printouts provided us witha good picture of the demographics of

our respondents. Fifty-eight percent of

the survey takers were female and 68%

were upper class students. Also, about

58% of the respondents were between

the ages of 20 and 21 which may

correlate with the fact that most were

juniors and seniors. Fifty-five percent live

off campus and 45% have a major within

the Farmer School of Business. Below

are charts that would visually explain our

summary statistics:


Data Result Conclusions

Our statistical analysis shows that

gender does not affect students likelihood

to purchase caffeinated water over other

caffeinated drinks. However, off-campus

and business majors are more likely to be

willing to purchase caffeinated water over

other caffeinated drinks than on-campus

and other major students.

Our statistical analysis also

provided evidence that the degree to

which students believe caffeine provides

them with energy is not affected by class

standing. Also, class standing does not

influence students likelihood to be willing

to purchase caffeinated water over other

caffeinated drinks.


Data Result

RecommendationsThe results based on our statistical

analysis gave us significant information

about which market we should target

with caffeinated water, such as both males

and females who live off-campus and are

business major students. It also provided

an important point, showing that the

caffeinated water could be marketed to all

students, regardless of class standing.


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Cyprus Waters Future

Recommendations Based on our statistical analyses,we can say that we are 95% confident

that students likelihood to purchase

caffeinated water over other

caffeinated beverages is between 5.36

and 6.1 out of a scale of 10.

Therefore, Cyprus would implement

naturally caffeinated bottled water

considering the only other current

option of buying caffeinated water is

online. There have not been

advertisements for caffeinated water

online, thus people are not aware of

caffeinated water. If people were

actually aware of caffeinated water

there could be more people willing to

purchase the product. With this

being said, based on our research

Cyprus would target both males and

females between the ages of 18 and

24 who are Business majors, and live

off-campus. Cyprus recommends

teaming up with Nestle SA as a

brand extension considering they

have not entered the functional

bottled water market yet. If Nestle

agrees, Cyprus will continue with

implementation of the product by

running our product through test

markets.Limitations

Due to the fact that we were only

given a short amount of time to do

our research, there were a few

limitations. For example, we were

only able to gather information from

one college, thus only giving us a

sample of similar students. Since our

research was done for class, we did

not have any funding for research as

we most likely would when

conducting this type of research for a

company, therefore; we were not able

to gather surveys from other schools.

During our research we noticed that

Miami is not a very diverse school

which made it hard for us to gain a

variety of demographics. Also, we

noticed that most of the respondents

who took our survey were business

students which would explain why

about half of our demographics were

made up of business students.

Ideally, we should have aimed tomake our demographics equal (men

and women, and majors). We also

encountered time limitations when it

came to our focus group. We only

had time for one focus group on a

certain day, at a certain time. On the

day we had our focus group there

was a snow storm and some people

did not show up. Scheduling our

focus group in the morning made it

hard to gather people because many

of them had classes during our

scheduled time. Finally, we noticed

that people were not willing to

participate in taking our surveys since

they have already done everyone

elses surveys from other research

classes. They were overwhelmed by

the number of surveys that was

handed out during that time.

Directions for Future StudyIf we were to further research

our product we would introduce it to

a bigger audience, such as a more

diverse university and design a bottle

prototype to gauge consumers

responses.

CYPRUS

ORIGINSCyprus Water was created early

in 2010. The team came together

in their Marketing Research class

at the Farmer School of Business.

Under the guidance of their

Professor, Dr. Tim Greenelee, the

team moved away from their

initial research topic and idea of a

clear toaster, and came upon theidea of a naturally caffeinated

bottled water product., Cyprus

Water.

CYPRUS TEAMChristyna Genovese

Vice President - Qualitative

Analysis (Focus Groups/In-Depth

Interviews)

Will Longhini

Vice President - Qualitative

Analysis (Online Information

Search)

Michelle Oswalt

Vice President - Survey Design

Jon Evans

Vice President - Data Acquisition

June Jang

Vice President - QuantitativeAnalysis

Jane Nguyen

Vice President - Communications

Cyprus Water

2041 FSB, Miami University

Oxford, OH 45056



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Cyprus Water2041 Farmer School of Business

Miami University

Oxford, OH 45056

Dr. Tim Greenlee

3031 Farmer School of Business

Miami UniversityOxford, OH 45056

The People Behind Cyprus Research

References

[1] Innovations in Bottled Water: NPD Opportunities in

Flavored, Functional, Natural and Premium Waters. Business

Insights, Oct 2007.

[2] Beverage Industry, January 2010.

http://www.bevindustry.com/digitalmagazine/SWF/BI/

0110/0110.pdf

[3] Caffeine Content of Drinks. Energy Fiend.

http://www.energyfiend.com/the-caffeine-database.com

[4] The Rise of Functional Water. Beverage Daily, 2007.

http://www.beveragedaily.com/Market-Watch/The-rise-of-

functional-water

[5] Functional Water Struggles to Escape Niche Sectors.

Food & Drink.

http://www.foodanddrinkeurope.com/Consumer-Trends/

Functional-water-struggles-to-escape-niche-sectors

[6] Category Focus: Energy Drinks. Beverage Industry, 2008.

http://www.bevindustry.com/Articles/Article_Rotation/

BNP_GUID_9-5-2006_A_10000000000000406121.

CALENDAR:APRILComplete quantitative research

and provide recommendations

for future direction.

MAYFinalize bottle design.

JUNEIntroduce Cyprus Water to test

markets.

OCTOBERNationwide product roll-out.

http://www.bevindustry.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000406121http://www.bevindustry.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000406121http://www.bevindustry.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000406121http://www.bevindustry.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000406121http://www.foodanddrinkeurope.com/Consumer-Trends/Functional-water-struggles-to-escape-niche-sectorshttp://www.foodanddrinkeurope.com/Consumer-Trends/Functional-water-struggles-to-escape-niche-sectorshttp://www.foodanddrinkeurope.com/Consumer-Trends/Functional-water-struggles-to-escape-niche-sectorshttp://www.foodanddrinkeurope.com/Consumer-Trends/Functional-water-struggles-to-escape-niche-sectorshttp://www.beveragedaily.com/Market-Watch/The-rise-of-functional-waterhttp://www.beveragedaily.com/Market-Watch/The-rise-of-functional-waterhttp://www.beveragedaily.com/Market-Watch/The-rise-of-functional-waterhttp://www.beveragedaily.com/Market-Watch/The-rise-of-functional-waterhttp://www.energyfiend.com/the-caffeine-database.comhttp://www.energyfiend.com/the-caffeine-database.comhttp://www.bevindustry.com/digitalmagazine/SWF/BI/0110/0110.pdfhttp://www.bevindustry.com/digitalmagazine/SWF/BI/0110/0110.pdfhttp://www.bevindustry.com/digitalmagazine/SWF/BI/0110/0110.pdfhttp://www.bevindustry.com/digitalmagazine/SWF/BI/0110/0110.pdfhttp://www.bevindustry.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000406121

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