An Analysis of The Beverage Market

Question: Describe about An Analysis of The Beverage Market. Answer: Introduction This paper analyses the data collected from a survey carried out at La Trobe University. As a result, our aim is to try to understand the demand of beverages by students in the university. The survey was conducted on all the BUS1BAN students and they respondent to the survey questionnaire online. The paper then conducts an analysis of the data obtained according to the provided excel spreadsheet by simple random sampling procedure where the data from cells A3 to cell Z554 was selected and by going to Data, we selected sort by random number a step that changed the order of the responses recorded. 100 responses were selected for our working sample and copied on a different spreadsheet. Data Analysis Section A: Basic Analysis Out of the 100 samples selected for sampling, 90 of the students were local, and 10 are international students. Hence, 90% of the sample comprises local students, and 10% comprises of international students. According to the data collected, more students demand the beverages when their prices are lower. This brings us to a conclusion that, the less elevated the prices, the more the demand and as the prices decrease the demand becomes lower. Based on the random samples selected, more students have milk and water drinks (others) as their first preference meaning that this is the most popular beverage. On the other hand, most students have placed energy drinks as their last preference (5) hence making this the least popular beverage. The prices of the beverages tend to affect the preferences since students indicate that if the prices of the second preferences were lower than the first preference. According to the student responses, more students would change their first preferences to t he second best preference in case the price of the second preference was lower by 60% and with a notable change in the price of the second option by 25% less, fewer students are likely to change their first preference for the second. Hence, the higher the price difference, the more the shift to the cheaper beverage and vice versa. Section B: The behavior of local students versus the International Students There is no significant difference in the price to quantity relationship on the international students and the local students in the sample obtained. All the students would buy less when the prices are highest and buy more when the prices are lower. Some of the students buy more beverages when the prices are moderate and not very low. Most of the international students have tea/coffee as their first preference making this beverage the most popular while most students have energy drinks as their last preference hence making this beverage the least popular among the international students. The local students, on the other hand, have the least preference for energy drinks hence making this as the least popular beverage, and most of these students have water/milk (other) as their first preference hence making this the most popular beverage among the local students. The prices of the beverages influence the choices of the local students more than for the international students though most of the students from both groups would opt for the second preference if its price were lower than that of the first preference by a certain percentage (40% and 60% mostly). Both groups follow the law of demand that states that the most elevated the prices, the less the demand for the goods in question and the less elevated the prices, the higher the demand. Section C: Advance scenarios Since the population size is 100 students and it comprises of two samples (local and international students), the mean of the population is 50. There are 90 local students (x) and 10 international students (y). The interval estimate will be x50 and y Of the sample selected randomly, 14 students would have a soft drink (Coke, Pepsi, etc.) as their first preference out of the 100 students. Assuming that the student selected is x, then the interval estimate is x Of the fourteen students who chose soft drink as their first preference, 3 of them chose tea/coffee as their second preference. Hence, the interval estimate based on the mean of 14, if x 14% of the students chosen for the random sampling prefer soft drinks over the other beverages. The paper hypothesizes that more than 25% of the students at La Trobe prefer soft drinks. Hence, HO; there is no significant difference between the value hypothesized and the statistical value. HA; there is a significant difference between the hypothesized value and the statistical value. Following a normal distribution, the level of significance will be 1%, 5%, and 10% Degrees of freedom= 5-1= 4 Experiments degree of freedom; x2= (14-25)2/ 25 4.84 The P value is between 0.1 and 0.9 Hence, this means that the value is not below 0.1 hence we reject the hypothesis measured at a significant level of 1% and that of 5% and accept the one tested at 10% Suppose a total of 20,000 students (10000 local and 10000 international) attend La Trobe University every week. The university expects this number to increase by 25,000 next year (comprising of 10,000 local and 15,000 International students), then the preferred beverage for the international students will have an increased demand and so will the overall demand for the beverages. Since according to the results most international students prefer tea/coffee, the consumption of this beverage will be higher than for the rest of the beverages. Summary According to the data obtained from the simple random sampling, it is clear that the local students prefer water or milk, and this is the most popular beverage while the least preferred beverage among the local students is energy drinks. The international students also prefer energy drinks the least and mostly consume tea or coffee as their most popular beverage. On overall, all the students prefer energy drinks the least. All the students are likely to change their preferences according to the prices of the beverages since they are all driven by the law of demand which states that the demand is higher when the prices are low. Random sampling may have increased the accuracy, but there is the issue of less international students having been involved in the survey hence making their responses less reliable in the analysis unlike a large number of the local students interviewed.