PIU Product Survey Report (final)

Product Survey

Horizon Institute of Global Development Power

July-August 2015

Objective

PIU product survey aims at obtaining first hand information of Chinese ice cream consumers’ perceptions and

behaviors, as well as customers’ feedback toward PIU gelato in terms of taste, flavor, and price.

Methodology

Questionnaire survey: a research instrument consisting of a series of questions and other prompts for the

purpose of gathering information from respondents.

In-depth interview: a qualitative research method to allow a wealth of detail and high accuracy on the

insights into how people think and feel.

Focus group meeting: a meeting guided by a professional moderator, who conducts an open discussion

between participants on a relevant topic based on the outline made in advance.

Time Period & Quantity

July 10th – July 16th

Questionnaire survey: 186 In-depth interview: 10 Focus group meeting: 3 2

Objective & Methodology

Horizon-All Rights Reserved

3

Contents


4

1. Executive Summary

Product

Customers prefer PIU gelato to ice cream.

Both fresh fruit and milk based gelato are favorable, with great market potential in fruity flavors.

Suggested price per gelato scoop is 21.6 Yuan – 26.5 Yuan, with room to increase the rate.

Brand

Key elements of PIU gelato: natural, fresh, healthy, delicious, and authentic.

Education is highly needed to improve customers’ knowledge of gelato.

Customers think gelato is healthier and it tastes better than American ice cream.

Store & Location

Specialty gelato shops located in shopping areas & walking streets attract largest customer flow. Horizon-All Rights Reserved

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1. Executive Summary

Service

Both in-store and delivery services need to be done in a short period of time.

O2O service needs to be easy and convenient to customers.

Marketing

New media & Mobile internet (e.g. Wechat) is the most effective marketing channel.

Buy 1 get 1 free & discount are the most attractive promotions to customers.

Target Customers

Female are target individual customers and target group customers include family (mid-aged parents with

juvenile children), Youth friends/schoolmates and couples.


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Contents


2.1.1 Flavor

• A3

7

4.36(N=45) 4.32

(N=31)4.18

(N=57) 4.09(N=32)

3.84(N=39) 3.67

(N=39) 3.55(N=33)

3.52(N=46) 3.43

(N=44) 3.36(N=22)

3

4

5

Mango Vanilla Chocolate Tiramisu Peach Pistachio Strawberry Hazlenut Raspberry Cherry

Flavor Rankings

Notes: Flavors are ranked from scale 1 to 5. 1 is the least favorable, and 5 is the most favorable.

Most flavors are well accepted (ranked 3.5+). Mango, vanilla and chocolate are the most favorable.


• D1D2D3

8

21-25 Yuan34%

16-20 Yuan29%

11-15 Yuan16%

Below 10 Yuan12%

26-30 Yuan8%

30 Yuan and Above1%

Preferred Price per Gelato Scoop (N=162)

Notes:• Target customers are those who are willing to pay 15+ Yuan for one gelato scoop. • Empirical evidence suggests the reasonable price of one product given by consumers is always lower than its fair market value.

Average preferred price per gelato scoop given by target customers is 21.6 Yuan.


2.1.2 Pricing

• D1D2D3

9

30 Yuan41%

20 Yuan18%

25 Yuan16%

I Don't Care About the Price, If It's Tasty

I'll Buy It14%

15 Yuan11%

10 Yuan 0%

Maximum Price per Gelato Scoop (N=160)

Notes: Final pricing shall be fixed between the preferred price and the acceptable price.

Maximum price per gelato scoop is 26.5+ Yuan.


2.1.2 Pricing

• D1D2D3

10

21-30 Yuan46%

31-40 Yuan15%

11-20 Yuan15%

41-50 Yuan14%

50 Yuan7%

0-10 Yuan3%

Spending on Ice Cream per Purchase (N=163)

Average spending on gelato/ice cream per purchase is 29.2 Yuan.

Notes: Based on the preferred price given by customers, the average consumption of gelato is 1.4 scoop per customer per purchase.


2.1.2 Pricing

11

I Have Heard of It, but I Don’t Know

Much 49%

I Have Some Knowledge of It.

35%

Never Heard of7%

I Haven't Paid Any Attention to It

7%Very Familiar

2%

Knowledge of Gelato (N=168)

Most customers know little of gelato. Education is highly needed.

Notes: Only 2% of customers claim they are very familiar with gelato.


2.1.3 Brand Awareness

12

Customers like gelato, especially for texture and its hand-made process.

Soft Texture, 59%

Hand-made, 47%

Authentic, 36%

Well Selected Materials, 26%

Expensive, 18%

Fresh, 17%Low Calories, 15%

No Additives, 8%

Inexpensive, 3%

0%

30%

60%

Impression of Gelato (N=155)



13

More Delicate Texture

62%

Healthier Raw Materials

23%

More Flavors4%

More Fresh4%

No Difference3%

Less Additives3% Other

1%

Gelato Vs. American Ice Cream (N=159)

Gelato is more favorable than American ice cream because its texture and raw materials.



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Contents


15

Sugar and calories are top health concerns of ice cream consumers.

Too Sweet, 49%

High in Calories, 42%

Delicious, 41%

Various Flavors, 41%

Icy, 39%

Portion is too Small, 10%

Not Healthy, 2%

0%

30%

60%

Current Impression of Ice Cream (N=168)


2.2.1 Expectation & Demand

16

Customers wish ice cream to be “natural”, “healthy”, and “delicious”.

Less Additives, 55%Low-fat/Healthy, 47%

Good Taste, 45%Various Flavors, 38%

Reasonable Price, 32%

Fresh Fruit, 22%

Famous Brand, 12%

Sophisticated Process, 9%

0%

30%

60%

Expectation of Ice Cream (N=168)


2.2.1 Expectation & Demand

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2.2.2 Consumer Behaviors


18

Ice cream is consumed mainly when customers go shopping or social events.

In Hot Weather, 44% When Shopping & Walking Around, 43%

When Wathcing a Movie or Television,

34%

With Friends at Dinner Time, 33%

Whenever, 32%On a Date, 29%

When There is a Promotion, 5%

0%

25%

50%

Circumstances Under Which Customers Buy Ice Cream (N=167)


I. Circumstances

19

Group consumption is an important characteristic of Chinese consumers.

Friends, 77%

Couples, 45%

Children, 31%

Colleagues, 26%

Schoolmates, 22%

With Other Family Members, 21%

0%

40%

80%

Who Consumers Share Ice Cream With (N=159)


I. Circumstances

20

Customers prefer eating in when they visit ice cream stores. Sitting arrangement needs to be considered.

Eating in Store68%

Walk and Eat29%

Take Out 3%

How Ice Cream is Prefered (N=165)


I. Circumstances

21

Average preferred waiting time for made-to-order gelato is less than 10 minutes.

5-10 minutes48%

Less than 5 minutes31%

11-20 minutes8%

Don’t want to wait7%

Don't care about the time6%

More than 20 minutes1%

Preferred Waiting Time for Made-to-Order Gelato in Store (N=169)


I. Circumstances

22

50% of customers wish to have drinks & snacks with gelato. Coffee and pastries are the most popular.

Biscuits and Waffles, 67%

Coffee, 35%

Water, 15%

Fruit Juice, 15%

Chocolate, 15%

Carbonated Drinks, 11%

Milk, 8%Tea/Cha, 8%

Liquor, 3%

0%

40%

80%

Drinks & Snacks with Gelato (N=84)


I. Circumstances

23



24

Ice cream is frequently bought in ice cream shops and restaurant places.

Notes: Customers prefer indoor places (e.g. malls) to purchase ice cream in the winter.

Ice cream shops, 70%

Restaurants, Cafes, Fast Food,

Bakeries, 49%

Convenience Stores, 38%

Malls, 31% Supermarkets, 27%

0%

40%

80%

Where Ice Cream is Bought In the Summer (N=165)


II. Access

25

Most customers are interested in gelato Online-to-Offline service with convenient pick-up locations.

Notes: O2O service: purchase online and pick up in store.

Willig if it is convenient

57%

Willing to try35%

Not Interested8%

Interest in Gelato Online Purchase & In-store Pick-up (N=167)


II. Access

26

The majority of customers prefer small package (500 g and less) of gelato take-out.

Notes: Only 4% of customer will buy large package (1.5 kg and above).

300 g50%

500 g29%

1 Kg17%

1.5 Kg2%

Above1.5 Kg2%

Preferred Size of the Take-out Package (N=167)


II. Access

27

Average preferred waiting time for gelato delivery is 24 minutes.

21-30 minutes30%

Less than 10 minutes

24%

11-20 minutes19%

31 minutes - 1 hour19%

Don't care about the time

6%

1-2 hours2%

Preferred Waiting Time For Gelato Delivery (N=165)


II. Access

28



29

The majority of customers purchase ice cream 2-3 times a week in summer time.

Notes: 77% of customers purchase ice cream in the winter, but much less frequently.

2-3 Times40%

Once31%

5 Times or More15%

Less than once9%

4-5 times5%

Average Number of Times One Buys Ice Cream in the Summer per Week (N=168)


III. Frequency

30

Notes: Only 27% of customers will purchase ice cream in the supermarket.

Less than Once38%

Once38%

2-3 Times17%

5 Times or More5%

4-5 Times2%

How Frequent One Buys Ice Cream in the Supermarket (N=42)

Supermarket is not a popular place for customers to purchase ice cream.


III. Frequency

31



32

Wechat is the most effective channel through which customers receive information.

Wechat, 49%

Word of Mouth, 42%

Urban Spoon, 38%

Brand Activities , 37%

TV, 27%

Weibo, 14%

Newspaper/Magazine, 13%

Website, 4%Video Website, 4%

Forum, 1%0%

30%

60%

Ice Cream Information Through Different Channels (N=162)


IV. Information Channels

33



34

Buy 1 Get 1 Free & Discount is most attractive promotions to ice cream customers.

Buy 1 Get 1 Free45%

Discount28%

Coupons9%

Lottery Promotion 6%

Free Gift6%

Not interested in Promotions,If it's tasty I'll Buy It

6%

Marketing Promotions That Are Most Attractive (N=161)


V. Promotions

35

2.2.3 Target Group Positioning


36

50%

36%

42%

54%

Male

Female


Too Sweet Delicious

46%

60%

39%

50%

Male

Female


Low-fat/Healthy Less Additives

Most Female customers think current ice cream products are more sweet than delicious.Female customers have higher expectation of “healthy” and “natural” ice cream.


I. Gender Difference

37

26.90%

37.00%

23.10%

38.90%

36.50%

25.90%

Male

Female

Circumstances Under Which Customers Buy Ice Cream (N=160)

On a Date With Friends at Dinner Time When Wathcing a Movie or Television

Female customers buy ice cream on diversified social circumstances, while male customers are less active in ice cream consumption, except on the dating occasion.


I. Gender Difference

38



39

55.60%

25.00%

12.50%

15.20%

22.20%

10.00%

18.80%

54.30%

22.20%

65.00%

56.30%

41.30%

Under Age 18

Age 19-25

Age 26-30

Age 31-50

Who Consumers Share Ice Cream With (N=109)

Couple Childrens Schoolmates

Mid-aged share ice cream with their children. Youth share ice cream with their significant others. Juveniles under age 18 share ice cream with their schoolmates.


II. Age Difference

40

16.70%

18.20%

57.10%

26.70%

50.00%

9.10%

14.30%

13.30%

33.30%

72.70%

52.40%

86.70%

Under Age 18

Age 19-25

Age 26-30

Age 31-50

Drinks & Snacks with Gelato (N=53)

Biscuits&Waffles Chocolate Coffee

Mid-aged and Youth age 19-25 would like pastry with gelato. Youth age 26-30 would like both pastry and coffee with gelato. Juveniles under age 18 would like sweet, e.g. chocolate with gelato.


II. Age Difference

41



42

83%

65%

27%

38%

38%

0%

12%

32%

53%

50%

17%

29%

50%

54%

56%

Junior high school or under

High school / technical school

Junior College

Undergraduate

Graduate or above


Too Sweet High in Calories Delicious

The higher the education is, more health concerns are.


III. Educational Level

43

Notes: Customers with different education levels share equal concern regarding the additives in ice cream.

67%

29%

18%

32%

31%

67%

41%

64%

58%

50%

33%

24%

46%

51%

50%

Junior high school or under

High school / technical school

Junior College

Undergraduate

Graduate or above


Low-fat/Healthy Less Additives Reasonable Price

Middle-class are willing to pay higher price for healthier ice cream.


III. Educational Level

44



45

45.00%

49%

55%

89%

84%

63%

73%

64%

I live alone

Couple

Couple w/ Children(Kindergarten)

Couples w/ Children (ElementarySchool)

Couples w/ Children (Junoir HighSchool)

Couples w/ Children (High School)

Couples w/ Children (Adult)

3 Generations

Where Ice Cream is Bought (N=155)

Malls

Convenience Stores

Supermarkets

Ice cream shops

Restaurants, Cafes,Fast Food, Bakeries

Couples with Juvenile children are regular customers of ice cream shops.


IV. Family Situation

46

Target Customers

Female

Active Consumer

Middle-Class

Good Spending Power

Acknowledge PIU

Brand Concept Individuals Groups

Family share gelato on previous and happy moments

Friends share gelato at social events, e.g., party, dinning-out, watching movie/TV

Couples share gelato on the romance dates

Family (Mid-age parents+ Juvenile children)

Friends/Schoolmates

Couples

Branding activities shall focus on female, middle-class consumers and typical social groups.


Horizon Institute of Global Development Power (hi-GDP)

Horizon Research Consultancy Group

Add: 8F East End Plaza, Building 1, No. 24 Jiuxianqiao Middle

Road, Chaoyang District, Beijing China 100015

TEL: 010- 53896000

FAX: 010- 53896000

www.horizon-china.com

THE END.THANKS!

THE ENDTHANK YOU

Horizon-All Rights Reserved 47

http://www.horizon-china.com/

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PIU Product Survey Report (final)

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