CalPure Market Research

13 December 2016

Agribusiness Marketing Research Methods

Market Research Team:

Shane Gillard, Matt Quontamatteo

Matt Emslie, Mitchell Woods

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Executive Summary

In recent years, concerns about the impacts of foods consumers eat on a daily basis have dramatically

changed. People seek local fresh goods to experience delicious healthy products. In today’s society

customers go the extra mile to connect with local family farms to share a positive experience in food.

With social, environmental, and health views changing, all of these variables alter the consumers buying

motives when selecting a product. CalPure's goal is to create healthy, versatile cooking oil they can share

with their family and friends. This research will help further develop CalPure’s marketing strategy based

on consumer trends and perceptions. The goal of this case study is to help CalPure make more informed

decisions when applying their marketing strategy towards their products.

CalPure strives to determine if consumers prefer their extra virgin avocado oil to be branded as a

“Product of California.” The research team outlined five key objectives to aid CalPure in its decision

process: (1) Does the California name add positive brand value with respect to a consumer’s preference

for specialty cooking oils? (2) Do consumers prefer a point of origin when purchasing avocado oil? (3)

How often do consumers know where their food products come from and do they prefer their food

grown locally. (4) Are consumers more inclined to shop online to purchase food products? (5) How much

more are consumers willing to pay for a 'California branded' bottle of avocado oil? A total of 668

respondents were surveyed through an online questionnaire via SurveyMonkey.com. In order to take

the survey respondents had to live in the United States.

Objective 1: The data shows us that a majority (55.6%) of respondents feel likely or very likely to

purchase California-made avocado oil products over products not made in California. California

respondents on average show a mean closer to the response “likely” than the “Neutral” option. Non-

California respondents feel a little less likely to purchase a California product with a mean closer to the

“neutral” response than “likely”. All respondents are slightly more likely to purchase a California brand

avocado oil, instead of a non-California brand. Californians are more susceptible to "California"

branding, but out-of-staters still have greater than a “neutral” favorability to the "California" name

when it comes to food branding. Testing shows, the “California Label” adds positive brand influence

towards consumers influenced by this label (%%).

Objective 2: Shows that 61% of people don’t have a preference of where the avocados are grown.

Thirty-nine percent of respondents do have a preference where the avocados are grown for food

products; 63% of these individuals prefer their avocados to be grown in California. People who have a

preference of where their avocado products are grown for cooking oil and other products are 80% more

likely to purchase an avocado product of California over a product of a different origin. The likeliness of

people purchasing a product with the origin of California is statistically greater than neutral. People with

the income level of $50,000 - $149,000 are willing to pay more for a California Product than people with

an income level of under $20,0000 and above $150,000.

Objective 3: 73% of respondents reported that they “Agree” or “Strongly Agree” to purchase products if

they are advertised as “Local Products.” A frequency ran indicated that specialized origin branding – like

locally products – is in demand. Over 70% of respondents who have a preference of where their avocado

products come from are “Likely” or “Very Likely” to check where their avocado products come from.

There was a 54.9% respondents that do have a preference where their avocados are grown and are

more likely to check where their avocado products – like oil – come from.

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Objective 4: Cal Pure should expand the selling of their products online, and look into advertising on

food related websites. CalPure may also want to consider advertising on Facebook ads, linking their

product to their Amazon page. A Chi Squared test was conducted to see if respondents would pay more

on Amazon for a food product with a “product of California” label, we found no relationship. If a

customer is willing to purchase food products off Amazon, they probably don’t care as much to where

the products are coming from. Amazon makes it easy for consumers to purchase items from across the

world, which takes away the locality from one’s purchasing decision.

Objective 5: The last test confirmed that a majority (over 88%) agreed that they are willing to pay no-

more than $13.99 for an 8.5fl oz. bottle of California-made avocado oil. The results also show that

people from California and the people not from California are willing to pay the same price for an 8.5fl

oz. bottle of California-made avocado oil. If CalPure chooses to include the California Label onto their

avocado oil a majority of consumers will be willing to pay a slightly higher price.

Recommendations:

Continue using a “Product of California” label, as it is associated with positive brand value.

Expand online Advertisements - “Facebook linking to Amazon.”

Emphasize on marketing their products as “local” as well as continue using their “Product of

California” label.

A majority (88%) of respondents agree that they are willing to pay no more than $13.99 for

an 8.5 fl oz. of California-made Extra Virgin Avocado Oil.

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Table of Contents

Introduction and Research Objectives ...................................................................................................... 5

Methodology ............................................................................................................................................. 8

Findings

Demographics ................................................................................................................................ 9

Objective 1 .................................................................................................................................... 11

Objective 2 .................................................................................................................................... 13

Objective 3 .................................................................................................................................... 16

Objective 4 .................................................................................................................................... 18

Objective 5 .................................................................................................................................... 20

Conclusions, Recommendations, and Limitations ................................................................................... 23

Works Cited ............................................................................................................................................. 26

Appendix .................................................................................................................................................. 27

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Introduction

Management Problem:

CalPure owners Michael and Erika Rutledge from Camarillo, California, wanted to find a healthy, tasty

and versatile cooking oil that they could use to make their favorite dishes for friends and family. In their

endeavor to search for a healthier alternative, they stopped using olive oil and began cooking with extra

virgin avocado oil. Yet, they quickly discovered it was difficult to find in stores and online - almost all of

the avocado oil on the market was refined and imported from other countries. In fact, they loved the oil

so much, they decided to focus their efforts on creating their own extra virgin avocado oil (Our Story).

Avocado consumption has been on the rise for the past 20 years, with a 3.4-pound increase in per capita

consumption (Agricultural Marketing Resource Center, 2013). This helped Michael and Erika with their

decision, and starting in 2016, they created a team and began building one of the first avocado cold-

pressing facilities in the United States. Since CalPure sources exceptional fruit from some of the best

avocado farmers in California, their Extra Virgin Avocado Oil is very high quality and unique - while every

bottle has a story to tell (Our Story). Currently, consumers are willing to pay $0.20 more for a California

origin avocado, however no research has been done on avocado oil specifically (Bosio, 2015, p. III).

Additionally, California is responsible for 90% of the total U.S. avocado production, and is quickly

becoming “America’s new favorite fruit” (Ferdman, 2015).

CalPure owners, Michael and Erika are seeking to have market research conducted in order to

determine if consumers prefer their extra virgin avocado oil to be branded as “Product of California,” to

meet current consumer demands. Overall, increasing brand associations such as a “Product of

California” label may play a key role in increasing their revenue.

Decision Alternatives:

The research collected for CalPure will focus on consumer perceptions on the point of origin for

avocados used to produce CalPure’s extra virgin avocado oil, and if CalPure should continue including a

“Product of California” label on the bottle. Further, other points of interest to research will include: if

California branding is perceived as a luxury good, if consumers are educated about avocado oil and its

health benefits, and if price points differ for California branded avocado oil vs non-California branded

avocado oil. Based on the research results, CalPure may or may not decide to continue putting “Product

of California” on their label. Additionally, if consumers view a California brand as a premium product,

then price points may need to be adjusted in order to reach the most effective profitability.

Furthermore, this research can be utilized to determine the effectiveness of a “Product of California”

label to be used for educational purposes. Since avocado oil is a relatively new concept, consumer

education is key in successfully marketing this product. The “Product of California” label could act as a

supplemental education tool, used to increase online presence - especially on Amazon - as well as

increase consumer awareness.

Problem Scope:

According to Mrs. Rutledge, the market for avocado oil is already strong in Asia and New Zealand. For

this reason, CalPure is currently utilizing Amazon Launchpad to test the overseas market for avocado oils

before fully expanding. They already have seen success in the Asian marketplace (specifically in South

Korea and Japan) and are currently trying to test the waters in Europe by distributing products in the

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U.K. with the help of the Amazon Launchpad platform. This makes the scope of the management

problem quite large due to their involvement in global markets, and increased interest from

international consumers. CalPure has slowly been getting their extra virgin avocado oil into retail

locations all over the United States as well. Brokers in the midwest United States have been working to

put product on shelves in various locations. There is also a possibility of a contract with Costco on the

horizon. Overall the problem scope is worldwide, as they sell their oils domestically and internationally.

The scope of the issue virtually expands as far as the California name is recognized by consumers.

The sole decision makers for CalPure's course of action are founders Michael and Erika Rutledge.

Research Purpose:

By understanding the effect of the California brand on consumer perception, CalPure will be able to

increase brand recognition, create brand loyalty, and ultimately increase sales by directing marketing

efforts to best fit the demands of their target market.

The specific research objectives of this study were as follows:

I. Does the California name add positive brand value with respect to a consumer’s preference for

specialty cooking oils?

II. Do consumers prefer a point of origin when purchasing avocado oil?

III. How often do consumers know where their food products come from and prefer food grown

locally?

IV. Are consumers more inclined to shop online to purchase food products?

V. How much more are consumers willing to pay for a 'California branded' bottle of avocado oil?

The following are hypothesized answers to the research objectives listed above:

I. Consumers like that the California name is associated with a "luxurious" feel, therefore

consumers will be willing to spend extra on a specialty cooking oil from California.

II. Consumers do prefer a point of origin when purchasing avocado oil. However, if our conducted

market research shows that consumers do not prefer a point of origin when purchasing avocado

oil, then CalPure would need to decide how to rebrand their current "Product of California"

bottle to still meet the desires and demands of their target market.

III. More often than not, consumers do not know where their food products come from. If the

market research findings show that many consumers are unaware of the origins of the food

products they purchase, then that would indicate that CalPure should focus more attention on

educating consumers with their promotional material. Additionally, “Localism” is extremely

important for certain consumers. These are individuals who care about the point of origin of

where their food comes from. This type of consumer has increased over the past decade, and

they will pay a premium price to buy local. For others, “localism” is important, but only if the

price is reasonable. This will can be utilized to analyze consumer segments, as well as

determining the best target market for CalPure’s extra virgin avocado oil.

IV. As a startup, CalPure found the Amazon Launchpad platform easy to use and is inexpensive

when compared to marketing products independently. If the market research goes to show that

consumers prefer purchasing luxury goods in stores, then CalPure would need to restructure

their entire marketing and business plans.

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V. Due to the "luxurious" connotations associated with a California branded product, consumers

are willing to pay 15% more for CalPure's Extra Virgin Avocado Oil, known as a "Product of

California.”

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Methodology

In order to effectively answer the established research objectives, a survey was created with questions

that were crafted to help provide answers. During development of the survey, a draft version of the

questionnaire was tested amongst Cal Poly, San Luis Obispo agribusiness students. Once completed,

students provided feedback and recommendations to the researchers. The pretesting process allowed

the researchers to reflect acknowledge the opportunities of improvement within the survey in the hopes

of reducing bias and gathering the most effective data. The final survey can be found in Appendix 6.

The questions in the final survey were crafted to directly answer the research objectives laid out above.

Research Objective 1, "Does the California name add positive brand value with respect to a consumer’s

preference for specialty cooking oils?" - was answered by survey questions 2, 3, 4, 13, 15, and 16.

Research Objective 2, "Do consumers prefer a point of origin when purchasing avocado oil?" - was

answered by survey questions 10 (b), 10 ( c), 12, 13, and 14. Research Objective 3, "How often do

consumers know where their food products come from and prefer food grown locally?" - was answered

by survey questions 10 (a), 10 (d), 10 (e), 11, and 15. Research Objective 4, "Are consumers more inclined

to shop online to purchase food products?" - was answered by survey questions 20, 21, 22, 24, and 25.

Research Objective 5, "How much more are consumers willing to pay for a 'California branded' bottle of

avocado oil?" - was answered by survey questions 18, and 19. Additionally, to gather demographic

data, survey questions 2, 3, 4, 26, 27, 28, 29, and 30.

CalPure's population of interest for its market research was United States citizens who purchase

groceries. Within this population, the sample frame included individuals of the population who have

direct access to the Internet as the survey instrument was distributed on various outlets through the

Internet. The sample frame focused around the social media outlet – Facebook, and email. Facebook

was utilized to target "friends" of researchers, and those who access the survey by means of Facebook

post "shares." Further, mass Facebook groups will be utilized, like "My Job Depends on Ag" with over

60,000 active members throughout the U.S. This process is known as non-probability convenience.

Further, emails were sent out to the researchers' networks, which include friends and family, and those

who get the survey forwarded to them, also known as the snowball effect.

Individuals within the sampling frame were contacted up to two times throughout the course of

collecting responses which was November 9th to November 27th, 2016. Due to the short time-frame and

limited access to our population, convenience sampling was utilized, also known as nonprobability

sampling. For this project convenience sampling is satisfactory, however it is important to note that this

does not give the best representation of our population of interest. The best way to get the most

accurate data would be to use stratified sampling.

After the data was collected, multiple analyses were conducted to compile useful findings to support the

research objectives. To start, various frequencies were completed in order to determine the general

demographic landscape of questionnaire respondents. Once the demographics of respondents was laid

out, the remaining data were used to analyze and answer the research objectives.

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Findings

Demographics

An online survey collected responses from 668 individuals, starting November 17th and ending

November 25th of 2016. Of those who responded, approximately 84% were female and 16% were male.

Roughly 25% of respondents were between the ages of 41 to 50, and 43% were between the ages 51 to

64. The majority of respondents (82%) primarily resided in California, with the remaining 18% were

respondents who lived outside of California, this can be viewed with more detail in Figure 1.

Additionally, over 61% of respondents reported living in a household with more than two family

members, with the remaining 39% only having one to two individuals living in the household. Over half

of all respondents (68%) reported having a household income over $100,000, and the remaining 32%

claimed to make less than $100,000 a year, before taxes. Finally, a great majority of those surveyed

reported their ethnicity as white at 88%, Hispanic or Latino at 6%, Asian at 4%, and the remaining 2.4%

where those who are of American Indian, African American, and Pacific Islander ethnic decent. Please

see Figure 1, and Tables 1 to 4 for more detail.

Table 1

Figure: 1 Figure: 2

10

Figure: 3

Figure: 4

Figure: 6

Figure: 5

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Objective 1: Does the California name add positive brand value with respect to a consumer’s

preference for specialty cooking oils?

The first research objective, which investigates the degree to which the California name adds positive

brand value, with respect to a consumer’s preference for specialty cooking oils. To begin we would first

determine the distribution of those who are likely to purchase avocado oil products in California, vs

Non-California by gathering the frequencies of respondents. The coding of our survey question is as

follows: (Very unlikely=1, Unlikely=2, Neutral=3, Likely=4, Very likely=5).

This data shows that the majority of all respondents (55.6%) agreed that they are either likely or very

likely to purchase California-made over non-California avocado oil, and an even higher percentage

(85.8%) are either indifferent, or likely to buy the California product when given the choice of one made

elsewhere. In Figure 7 above (comparing responses of CA residents and Non-CA residents) we can see

that there is a slight difference between Californians and non-Californians for this same question. To

truly determine if these differences between the results of California residents and non-California

residents are valid, we will need to run an independent samples t-test (Table 1). In this test we are

comparing the mean responses of the likelihood to purchase California-made avocado oil products,

across California residents and non-California residents. The results of this test determined that we will

reject the null hypothesis, meaning that there is a difference between the means of California and non-

California residents when it comes to their likeliness of purchasing California-made avocado oil products.

After identifying this result, it is clearer to see this fact by looking at the mean values of the results of CA

vs non-CA respondents. California residents on average answered 3.65 which is higher than the non-

Californian response of 3.17. The California respondent mean value is closer to the integer 4 (coded as

“likely”) than the non-California respondent mean value which is closer to the integer 3 (coded as

“neutral”). This information can be very useful to determine how far the reach is for the "California"

Figure: 7

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name, when it comes to specialty food product. Californians exhibited a slight bias, which was expected,

but non-Californian residents still had a mean value greater than 3.

To test if non-Californians are truly more likely than a "neutral" rating on their likelihood to purchase

California-made avocado oil rather than non-California made, we will run a one sample t-test (Table 2)

on the mean response of non-California respondents for this question against the neutral value of 3, to

see if the mean result if significantly different. Upon running our test, we found that we will reject the

null hypothesis, meaning the mean response of non-Californians for this question is statistically different

from neutral (3). Since the mean for the respondents is approximately 3.17, we know that it is greater

than our neutral value 3, and since our test determined that our mean is statistically different we know

that non-Californians are slightly more likely to purchase a California brand avocado oil, over a non-

California made brand. This finding adds more clarify to our understanding of the reach of the California

name in the branding of specialty food products. Overall, Californians are more susceptible to

"California" branding, but out-of-staters still slight favorability to the "California" name when it comes to

food branding.

In order to key in on a specific group whom may be more likely than others to purchase California-made

extra virgin avocado oil, our research team ran a chi-squared test within our cross tabulation (Table 3).

For this test to help us reach a conclusion we compared the variables regarding label preference and

respondent's likelihood of purchasing avocado oil made in California vs avocado oil made elsewhere.

Table: 1

Table: 2

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The result of our test was a rejection of the null hypothesis, meaning that there is a statistically

significant relationship between respondent's preference for a "product of California" label, and their

likelihood of purchasing California-made extra virgin avocado oil. From a practical sense this is letting us

know that placing a "product of California" label on the bottle of avocado oil will positively influence

consumer likelihood of purchase for the California-made product; hence adding positive brand value.

Managerially this finding is important because it shows the CalPure team the trade-off between

including/excluding the label, and consumer perception of the product. As we can see from the

crosstabs table if the label is included the majority of respondents influenced by this label will be

considered "likely" to purchase California-made avocado oil rather than non-California made. The

majority of respondents who are not influenced by the label are indifferent with respect to the

preference of purchasing California-made avocado oil.

Objective 2: Do consumers prefer a point of origin when purchasing avocado oil?

To find out if consumers prefer a point of origin when purchasing avocado oil, a series of tests and

summarization were conducted. First, a frequency report was conducted to find out If respondents

prefer a point of origin when purchasing avocado products (guacamole, cooking oils, etc.).

61% said they don’t have a preference when purchasing avocado products.

39% said yes, they do have a preference when purchasing avocado products.

Next, we took the sample of respondents who do have a preference of where the avocados are grown

and conducted count of frequencies. This pie graph shows us the location respondents have a

preference towards when purchasing products containing avocados. California has the highest amount

of responses with USA coming in second.

Table: 3

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We then placed a filter on the data. Selecting only the respondents who said “yes” they have a

preference when purchasing avocado products. We could clearly see that of the respondents who

answered yes in the question above, 80.7% are either “very likely” or “likely” to purchases avocado

products made in California verses not from California. This test was done out of 247 respondents who

do have a preference of a point of origin when purchasing avocado products.

80.7% feel either “very likely or likely” to purchases a product made in California.

Next, we removed the filter implemented above. Now the entire survey population (633 respondents)

will be tested. We ran a One-Sample T-Test to see the “likeliness of purchasing avocado oil products in

California verses not in California” was different from a test value of “3” Neutral. The results showed

that we reject the null hypothesis; this means the null is statistically different from the test value of “3”

2% 3.7%13.5%

42.6%38.1%

0

20

40

60

80

100

120

Likeliness of purchasing avocado product made in CA vs not

Very Unlikely Unlikely Neutral Likely Very Likely

California63%

Chile2%

Ecuador1%

Mexico7%

Peru1%

USA (other than California)

25%

No Preference1%

People who have a preference of origin where their avocados are grown for food products

Respondent Count : 247

Figure: 8

Figure: 9

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neutral. After looking into the results more we can see that the mean of respondents is 3.56. This shows

us that out of the entire sample.

Respondents feel slightly more inclined than neutral to purchase avocado oil made in

California verses not in California.

To find out more about customers we conduct a final test to look at what income levels are more likely

to purchase CA avocado products than not. To do this we compared the significant values of people who

make under $20,000 a year to four other income levels. Below there are 3 values in the “sig.” column

that have means below our test value of 0.1. At the bottom of the graph the “between all groups” row

shows us that among all income levels there is a significant difference.

People who make $50,000 – $149,999 before taxes are statically more likely to

purchase an avocado product made in CA vs not compared to people in the income

bracket of “Under 20,000”

$20,000 - $49,999 0.27338 0.136

$50,000 - $99,999 0.23779 0.006

$100,000 - $149,999 0.23140 0.041

$150,000+ 0.22751 0.185

0.013

ANOVA

Likeliness of purchasing avocado product made in

CA vs not. Compaired to income levels.

Std.error Sig.

Between a l l Groups

(I) In what range does your household

income fall, before taxes?

Under $20,000

Table: 4

Table: 5

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Summing up the to find out; “Do consumers prefer a point of origin when purchasing avocado oil?” Our

results show us that across the board people are slightly more inclined than neutral to purchase

avocado products made in California verses not in California. People who have a preference of where

their avocado products are grown for cooking and other products are 80% “likely or very likely” to

purchase an avocado product of California over a product of a different origin. Looking into the target

market, income brackets of $50,000 - $150,000 seems to have the most potential for marketing the

California product. This shows us that likeliness of people purchasing a product with the origin of

California is Statically greater than Neutral.

Objective 3: How often do consumers know where their food products come from and prefer food

grown locally?

To answer this research objective, multiple frequencies were conducted in order to determine

respondent preferences of locally grown food, and knowledge of where their food comes from. Our

results in Figure 10 shows us that approximately 73% of respondents "Agree" and "Strongly Agree" that

buying food produced locally is important to them. Further, 73% also reported that they "Agree" and

"Strongly Agree" to purchase products if they are advertised as "local products." However, only 48% of

respondents were not aware of how to seek out locally produced products, but still had an interest in

purchasing local products. Overall, these frequencies indicate that specialized origin branding – like

locally produced products - is being demanded from consumers.

Next, a frequency report was performed in order to determine if consumers have a preference of where

avocados are grown when purchasing avocados. According to our results, approximately 55% of

respondents do have a preference of where their avocados are grown when purchasing avocados. Next,

a filter was added to the data in order to only show the selected cases of respondents who reported a

Figure: 10

Figure: 12

Figure: 11

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“Yes" answer if they had a preference of where their avocados are grown. From there a frequency

report was conducted to determine how likely respondents were to check the location of where their

avocado products came from. Figure 13 reports that of the respondents who have a preference of

where their avocados are grown, over 70% are either "Likely" or "Very Likely" to check where their

avocado products come from prior to buying them. Please see the following Figures 14 for more detail.

Next, a paired samples test was performed in order to determine if there was a significant relationship

between checking the location of where avocado products (guacamole, cooking oil, etc.) originated

from, and if respondents have a preference of where the avocados used to make various avocado

products come from. According to our results, the p-value is less than 0.1, meaning that the null

hypothesis is rejected. Therefore, there is a significant relationship between checking the location of

where avocado products originated from, and if respondents have a preference of where the avocados

used to make various avocado products come from.

From a managerial standpoint all of the frequencies and the paired samples test could be significant in

determining if Cal Pure should still include the "Product of California" label on their Extra Virgin Avocado

Oil. These results tell us that our respondents prefer local products, a preference of where their

avocados are grown, and if respondents do have a preference, those respondents are more likely to

check where their avocado products – like oil – came from.

Figure: 13 Figure: 14

Table: 6

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Objective 4: Are consumers more inclined to shop online to purchase food products?

The fourth research objective aims to identify if consumers are more included to purchase food

products, like avocado oil, online. The first thing we did was run a frequency to see just how many

people actually would be willing to purchase food products off of Amazon. Here are the results:

Just a quick glance at this bar chart shows us that there are considerably more people who are willing to

purchase food off of Amazon than those who are not. This was good news for us, as the likelihood of

getting favorable results for this objective looks promising.

Getting into the nitty-gritty of the objective, we ran an independent sample t-test, which was conducted

in order to determine if there is a difference across the reasons for shopping online and if respondents

were willing to shop for food online. Because this is an independent sample t-test, the hypothesis of the

test is that there is no difference in the means between the two groups. For this test, the grouping

variable we used was if the respondents were willing to shop for food online, since it is a binary "yes/no"

question. The test variables we used were all based off of online shopping, and can be found in Table 7

below. These variables were all rated by the respondents on an interval rating scale from one to five.

After running the independent sample t-test across all of these variables, we found that every single one

of them are rejected, all with a sig (2-tailed) value of 0.000.

Figure: 15

Table: 7

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This means that for all the variables, we reject the hypothesis that there is no difference between the

mean of if the respondent is willing to shop for food online and the mean of each individual test

variable. Thus, if the respondent answers "yes" to if they are willing to shop for food online, they are

more likely to answer with an "Agree" or "Strongly Agree" answer to each of the test variables. Those

who are more inclined to shop online to purchase food products are more aware of the positives of

shopping online, and thus are more likely to come across CalPure's Extra Virgin Avocado Oil when

shopping for other products on the internet. This means that it would be beneficial for CalPure to

expand the selling of their product online, and to perhaps advertise their product on various food

related web pages.

After doing this, we wanted to see if those who are willing to purchase avocado products online are

more likely to purchase an avocado product made in California. In order to do this, we put a filter on the

variable "Would you be willing to purchase food products off of Amazon" to include only the "Yes"

answers. After adding the filter, we then ran a one-sample t-test (Table 8) with the hypothesis that there

is no difference between the mean of the variable and the value "3," which corresponds to a neutral

response.

Looking at the results, we see that with a sig. (2-tailed) value of 0.000, we reject the hypothesis that

there is no difference between the mean of the variable and a value of "3." This means that there is a

significant difference in the mean of the variable, 3.6362, and a neutral response, which implies that the

respondents who would be willing to purchase food products off of Amazon are more likely to answer

that they are "Likely" or "Very Likely" to purchase an avocado product made in California. This is good

news for CalPure, because as of right now the majority of their sales come from Amazon as they

currently do not sell their product in conventional brick and mortar stores. Therefore, they are more

likely to sell their product to those who are willing to purchase food products from Amazon, as CalPure

is a product of California. To increase sales, CalPure may want to consider an advertising campaign,

perhaps using Facebook ads, linking their product to their Amazon page.

Finally, a cross-tabulation with a Chi-square test was conducted in order to test the willingness to

purchase food items off the online retailer Amazon, and if a "Product of California" label would influence

purchasing habits. Since this is a cross-tabulation with a Chi-Square test, the hypothesis of the test is

Table: 8

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that there is no relationship between the variables of whether the respondent would or would not be

willing to purchase food products off of Amazon and if a "Product of California" label would influence

their purchasing decision. After running the test, we found that we failed to reject the hypothesis with a

P-value of .538, meaning that there is no relationship between the two variables tested.

Basically, the results are too similar to each other to be significant. This is an important result to include

as it concludes there is no significant difference in a respondent's answers if a product has a "product of

California" label on it for those who are vs. those who are not willing to purchase food products off of

Amazon. Looking into this, it is actually quite simple as to why this test returned us negative results. If

somebody is willing to purchase food products off of Amazon, they probably don't care all that much as

to where the products are coming from. One of the whole points of using Amazon is that it easily allows

you to purchase items from all over the world, which immediately takes away locality from one's

purchasing decision. Due to this, CalPure should not worry too much about making sure their Amazon

customers see the "Product of California" label in the picture, as it does not make a significant difference

in the purchasing decision.

Objective 5: How much more are consumers willing to pay for a 'California branded' bottle of

avocado oil?

Our fifth research objective is how much more are consumers willing to pay for a ‘California branded’

bottle of avocado oil. To determine this, we should first observe the monetary amount respondents are

willing to pay for an 8.5fl oz. bottle of California-made avocado oil by gathering the frequencies of those

who answered the corresponding question on the survey (See Figure 16 below).

Table: 9

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From our data we can extrapolate that a majority of all respondents (88%) as well as the majority of

non-CA respondents (91.5%) agreed that they are willing to pay no-more than $13.99 for an 8.5fl oz.

bottle of California-made avocado oil. To test the validity of our results we need to run an independent

samples t-test (Table 10). In our test we are going to compare the mean results between California and

non-California residents for his same question. Our test determined that we are going to fail to reject

the null hypothesis; meaning that we cannot assume that there is a difference between the means of CA

and non-CA residents for this question. This means that state of residence will not make a difference in

the monetary value a consumer is willing to pay for an 8.5fl oz. bottle of California-made avocado oil.

From a managerial sense these results are useful when determining price points within the state of

California and states outside of California. Since there is no statistical difference between the price CA

residents and non-CA residents are willing to pay, CalPure management does not have to worry about

adjusting price points for out-of-state consumers.

Figure: 16

Table: 10

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To take these finding a step further our research team carried out cross tabulations, as well as a chi-

squared test on the willingness to pay variable used above and the "product of California" label

influence (Refer to Table 11). The chi-squared test we ran on these two variables resulted in a rejection

of the null hypothesis, meaning that there is a statistically significant relationship between label

influence and respondent's willingness to pay for an 8.5fl oz. bottle of California-made extra virgin

avocado oil. This test is vital in focusing on our objective, and keying in on this specific relationship

between the price consumers are willing to pay and the label emphasizing the California point of origin

for the bottle of avocado oil. Similar to the finding in Objective 1, the inclusion of a "product of

California" label positively influences a consumer’s perception of the product. Looking at the test

performed for this objective specifically, our findings demonstrate the specific price ranges respondents

fall into. The majority of those who are influenced by the "product of California" label are willing to pay

somewhere between $8.00 - $10.99. Those who are not influenced by the California label primarily fell

into the next lower category of less than $8.00. The difference between these two monetary values

demonstrates a clear premium perception on the part of those who claim their purchase of specialty

cooking oils is influenced by the "product of California" label. From a managerial sense this means that

by including some indication of the California point of origin on the bottle of extra virgin avocado oil,

consumers whose purchasing habits of specialty oils are influenced by the California label will be willing

to pay a higher price than those not influenced.

Table: 11

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Conclusions, Recommendations, and Limitations

Based on our research, our market research team has put together a list of recommendations for the

management team at CalPure that follow our five aforementioned research objectives at the beginning

of our report.

The first research objective was to determine if the California name adds positive brand value with

respect to consumer's preference of specialty cooking oil. In our initial frequencies of responses for the

survey question tested in our first objective, it can be determined that Californians tend to associate

higher brand value to specialty cooking oils from their home state. Most of respondent answers ended

up falling between the categories "neutral" and "likely" with regard to their likelihood to purchase

California-made avocado oil. Although respondents from states other than California showed a more

indifferent view of how they perceived the "California" name associated with positive brand value,

further statistical testing proved that non-Californians are still slightly more likely to choose the

Californian brand of specialty cooking oils rather than one that came from a different area. This finding

is important because it shows management that the "California" name beyond California to other states

and still possesses a slightly superior brand image over specialty oils made elsewhere, in the eyes of

non-Californian consumers.

A majority of respondents do not have a preference where when purchasing avocado products. Of the

respondents who do have a preference they prefer California products the most with USA products

other than California the next best. Of the people who have a preference they are likely or very likely to

purchase products made in California over not in California. The entire sample size feels slightly more

inclined that neutral to purchase avocado oil made in California verse not in California. CalPure will see

the most beneficial advertising towards income levels $50,000 - $149,999 because they are statically

more likely to purchase a product of California. These findings show point of origin has a beneficial

impact on consumers; especially when its location is California.

CalPure grows all of the Avocado's used in their Avocado oil, locally in Oxnard, CA. Therefore, touching

on consumer's importance when purchasing locally grown products is important for this market

research. Research objective three, focuses on if consumers know where their food products originate

from, and if buying locally grown food is important to them. Our initial frequency reports indicated that

across all those who responded, buying food produced locally is important to them, respondents are

more likely to buy food if advertised as "local," and they would like to purchase more locally grown

products, however, respondents are not sure how to do so. More specifically, however, in terms of

having a preference of where consumer's avocados are grown, just over fifty percent of respondents did

have a preference. Within that fifty percent, the majority of respondents were more likely to check

where their avocado products – like avocado oil – originated from. Overall, our findings within this

research objective tell us that since consumers prefer locally produced products, CalPure should focus

their efforts on marketing their products as "local" as well as continuing using their "Product of

California" label.

For the fourth research objective, which was to see if consumers are more inclined to shop online for

food products, we ran three separate tests all against the variable of "Would you be willing to purchase

food products off of Amazon?" This was done because it is a categorical variable that directly correlates

to what the objective is specifying. Most of the tests gave us significant results; for instance, we found

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that if CalPure was to expand their online advertisements, they would have a greater chance of selling to

those who normally shop online, since these respondents know of the advantages of doing so.

Something that CalPure could do would be to run an advertisement showing how simple it is to

purchase their product online while also receiving a great, healthy alternative to other cooking oils. An

example for this could be CalPure comparing shopping for their Extra Virgin Avocado Oil to going to the

grocery store, but without the hassle of getting out of the house to do so. We also found out that

people who are willing to purchase food products off of Amazon are more likely than not to purchase an

avocado product made in California. Again, online advertisements seem to be the way to go for CalPure,

and going along with the previous example, they would want to include in their advertisements that

their product is a product of California. However, there was one result we gathered that gave us

negative results, but is important to include as a conclusion. We found that it is actually not important if

those who purchase CalPure's product online see the "Product of California" label or not. This is

important because if CalPure chose to include the "Product of California" label somewhere in their

online advertisements, it will only take up valuable time/space in those ads that could have different

information for their product. To summarize, it is important that online consumers know that CalPure is

a product of California, but it is not important for online consumers to visually see the "Product of

California" label.

Our fifth and final objective was to determine how much more consumers are willing to pay for a bottle

of 'California branded' avocado oil. From our initial frequency data summary of the variable "How much

would you be willing to pay for an 8.5 fl oz. bottle of Extra Virgin Avocado Oil that is made in California,"

we found that an overwhelming majority of respondents, regardless of home state, will pay no more

than $13.99 for an 8.5fl oz. bottle of California-made extra virgin avocado oil. Upon running statistical

tests on the mean results of Californians and non-Californians, we determined that there is statistically

no difference between the price they are willing to pay for the bottle of avocado oil. This means that

Californians and non-Californians perceive this 8.5 fl oz. bottle to be worth about the same dollar

amount. This is important information for CalPure management because it demonstrates that it is

unnecessary to have different pricing strategies when marketing to US consumers outside of California.

Limitations

One major limitation that we ran across was how much time we were allotted to doing this project.

From start to finish, we had just over nine weeks to work on it, which in the real world, with a real

market research company, it would not be surprising if it took months to give complete and definitive

results on the findings. Another limitation is the sample size. Even though we did gather the largest

sample size out of the entire class with 668 responses, it is still too small of a sample to call any of our

results clear-cut and absolute. To go along with the sample size, the method of survey administration

was not randomly chosen. Those who answered our survey either saw it from us posting it on different

Facebook pages or from emails sent out. And while we did get quite the broad range of respondents

ranging from coast to coast, it still does not compare to the resources a true market research company

has, allowing them to randomly sample from whatever population they so choose. The biases that we

came across from our respondents must also be mentioned. For some reason, over 83% of our

responses (496 respondents) were female, while just over 16% were male. Another bias we saw had to

do with age. Over 68% of our respondents were aged 41-64, which could skew some results, especially

the ones asking about purchasing things online. Location bias was also a big one, as more than 82% of

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the respondents currently reside in California, and they may have skewed their answers more favorably

towards CalPure as they are from California also.

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Works Cited

Agricultural Marketing Resource Center. Avocado Profile. Ag Marketing Resource Center, July 2013.

Web. 09 Oct. 2014.

Boriss, H., Brunke, H., & Kreith, M. (2016, May). Avocados. Retrieved October 16, 2016, from

http://www.agmrc.org/commodities-products/fruits/avocados/

Bosio, S. (2015). Examining Consumer Preferences Within the Avocado Industry: Does Point of Origin

Matter? (Unpublished master's thesis). California Polytechnic State University.

Ferdman, R. A. (2015, January 22). The rise of the avocado, America’s new favorite fruit. Retrieved

October 16, 2016, from http://www.WashingtonPost.com/news/wonk/wp/2015/01/22/the-

sudden-rise-of-the-avocado-americas-new-favorite-fruit

Jones, Keithly G., Agapi Somwaru, and James B. Whitaker. "Country of Origin Labeling: Evaluating the

Impacts on U.S. and World Markets." Agricultural and Resource Economics Review 38.3 (2009):

397-405. Web. 23 Oct. 2014.

Our Story. Retrieved October 16, 2016, from https://www.calpurefoods.com/pages/our-story

Shukla, Paurav. "Impact of Interpersonal Influences, Brand Origin and Brand Image on Luxury Purchase

Intentions: Measuring Interfunctional Interactions and a Cross- national

Comparison."ScienceDirect. 2016 Elsevier B.V., Apr. 2011. Web. 16 Oct. 2016.

Strašek, R. “Empirical testing of correlations between the effects of country-of-origin and consumer

perceptions.” World's Poultry Science Journal 66.0 (2010): 39-52. Web. 16 Oct. 2014.

The California Difference. Retrieved from www.californiaavocado.com/the-california-difference.

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Appendix

Appendix: 1

Appendix: 2

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Appendix: 3

Appendix: 4

Appendix: 5

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Appendix: 6

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