Use of Virtual Reality Test Store PDF

1
A Research Proposal on the Use of Virtual Reality Test Store to Observe the Customer
Behavioral Habits Fonterra Yoghurt
Student Name and Number
Date

2
1. Background and the Marketing Managerial Problem
1.1. Brand and Company Background Information
Fonterra Cooperative Group is the largest manufacturing company in New Zealand (D&B Hoovers, 2021)
and was ranked fifth globally (Frykberg, 2018). One of the products the Cooperative Group produces is
yoghurt. The Cooperative accounts for 25% of New Zealand’s exports as it exports 95% of its local dairy
production to more than 130 countries (Fonterra, 2021). This means that only 5% of the organizational
dairy products: yoghurt is consumed in New Zealand leaving the rest: 95% of the yoghurt products to
competing companies. Despite concentrating on yoghurt exportation, according to the 2020 financial
report, there was a decline in the gross profit between 2019 and 2020 by 7% (Fonterra, 2021). According
to Stock (2019), New Zealanders have complained of the excess sugar in the variety of yoghurt products
and with the withdrawal of the sugar. The withdrawal of sugar in the product could have led to increased
demand for the products especially on its most popular yoghurts: Fonterra's Primo, CalciYum and Fresh
& Fruity. On the contrary, the company is continually losing its aggregate production: from 96% in 2001
to 82% in 2017 (TCB, 2018). Therefore, it is vivid that Fonterra yoghurt varieties as much as they are
growing in popularity in other countries such as in the Asian, Latin American and OCEANIA regions
except for New Zealand which is the country to conduct the study. This builds the basis of the research
proposal of the managerial problem from a marketing perspective.
1.2. Marketing Managerial Problem
As stated before, the sugar reduction in the organizational yoghurt varieties did not yield any appeal to
New Zealand consumers. The problem seeks to understand the marketing management problem which is
leading top manufacturing company in New Zealand have yoghurt products that are less favourite among
the customers. Walking into the biggest and popular supermarkets such as New World, Countdown,
PAK'nSAVE, and Super Value, on the yoghurt shelves, one will note that Fonterra products are not
moving as much as the other brands as much as the company is the biggest dairy company in the country.
This means that there is a marketing managerial problem as reflected by the low market share in the

3
country and the high export of the organization’s dairy products. The product positioning, pricing, size,
branding, labelling, packaging and colour are the problems that the organization’s yoghurts are facing.
Consequentially, the company is continually losing customer appeal due to changes in the customers'
perception of the yoghurt products (Raza et al., 2019). A company has to pay attention to the emotional
and cognitive constructs. The emotional construct regards what customers think of a product when
deciding to purchase while the cognitive construct entails the motivation or demotivation when making a
purchasing decision (Allen & Goddard, 2012). The declining preference for yoghurt products depicts the
customers’ reaction to their emotional and cognitive constructs that leads to them choosing other brands
instead of Fonterra yoghurts.
2. Research Questions
This research proposal aims to establish the weaknesses or ineffectiveness of the Fonterra marketing
management strategy. The following research questions will guide the study.
 Does positioning, pricing, size, branding, labelling, and packaging colour determine the
consumers’ preference towards Fonterra yoghurts?
 What is the role of emotional and cognitive constructs in determining consumer purchasing
habits?
3. Research Design and Methods
3.1. Virtual Reality Test Store
The research methodology uses Virtual Reality (VR) to illustrate consumer shopping habits when it
comes to yoghurts. Virtual Reality according to Xi & Hamari (2021) refers to a technology that submits a
perceived reality which in this case will be used to replicate and create a consumer shopping experience.
Essentially, the VR test store based on Alcañiz, Bigné, & Guixeres (2019) will immerse the users into
virtual purchasing environments.