Foundations of Market Intelligence: New England Soup Company

Foundations of Market Intelligence: New England Soup Company

Using the data provided in Appendix A, our team believes that the New England Soup Company should lower its MSRP and increase the margins for distributors in order to compete with the Cape Cod and Fisherman’s Delight. According to the appendix, Kolander’s canned soups have had a higher price range than Cape Cod and Fisherman’s Delight products by anywhere from one to four cents. Along with this, the percentage of stores carrying Kolander has declined while Cape Cod and Fisherman’s Delight store presence has increased steadily. The retail price range of Kolander is higher at all time, which might be related to more discount activities at shops for Kolander’s to maintain customers. These trends lead us to believe that the competition’s price advantage is swaying customers away from Kolander. Having said this, we are still skeptical of the data because prices are given in ranges of prices. Because of this, we cannot directly compare the prices of the competitors. For example, if the data is skewed to the right, most stores could sell the chowder around 47 cents and only a few to sell them at 54 cents. So if we want to confirm a strategy of cutting price, we need more information about retail price distribution, mode, mean and so on.

Our team does not find, however, the research firm’s study of creaminess to be accurate in its approach. Therefore, we are unable to offer the New England Soup Company a specific recommendation as far as which product (regular, creamy or extra creamy) to produce more or less of. Based on the research findings, Kolander should try to find more research about customer’s preferences using different tests. First, a population size of 200 is insufficient and may not accurately represent the preferences of the the entire New England area. A bigger sample size is necessary (for a population of ~10,000,000 adults, a sample size of 400 subjects is required to achieve 95% significance). Second, each subject ranked each of the five different soups three times. The results only show a single ranking for each subject. Averaging the rankings may result in inaccurate findings. Third, because the data is based on an ordinal scale, finding the averages is an inaccurate way to order the preferences. We have no information on how much better or how much worse each of the soups compare to each other. And we don’t know whether the difference between each two neighboring preference level. Because of this, it is impossible to assess the population preference of the five different types of chowder soups solely based on this research. Additionally, it is possible that the subjects’ evaluations of the different chowders became “imprecise” during the second and third blind tastings; we wonder if the chowders would have all started to taste the same.