Factors Affecting Sales Volume Of Hubbard Foods Limited Products – A Study Conducted In New Zealand

Background

This study was conducted in New Zealand. Responses were sought from participants of different cities in the country on Hubbard Foods limited products. The cities from where responses were received are Auckland, Wellington, Christchurch, Dunedin, New Plymouth, Nelson and Hamilton. Hubbard Foods Limited is domiciled in the city of Auckland, the county’s largest city.

For purposes of this research, both primary and secondary sources of data collection were employed. Primary data was obtained from responses based on an online survey. For collecting the primary data questionnaires were administered online to voluntary respondents. Questions contained in the questionnaires were both open-ended and closed-ended. There was one open-ended question which wanted to find out the respondents’ breakfast preference. Nonetheless, not only primary data would suffice to answer the research question. Secondary data was also used. The secondary sources of data were;

• The Hubbard Foods Limited official website (Hubbard Foods Limited, 2018). This source provided information on Hubbard Foods Limited sales and the different production lines on the Hubbard Foods Limited production.
• The New Zealand Data Portal (New Zealand Government, 2018). This source provided information on area description and population characteristics distribution of New Zealand.

The data collected was both quantitative and qualitative. The research employed two quantitative techniques for purposes of data collection, analysis and reporting;

1. Survey

Survey was used for collecting primary data from respondents. The technique was conducted in the form of questionnaires issued in an online survey. Questionnaires were sent to the respondents’ emails in the form of Google forms. Respondents filled and submitted their responses.

An online survey was the most effective method of data collection from the Hubbard Foods Limited customers as it allowed respondents to submit responses at their own comfort. Online surveys are also cost effective contrary to physical data collection.

1. Quasi experimental technique

The technique was used for comparing the prices, product type, gender, market location and product promotion with sales of different products of Hubbard Foods Limited.

Online questionnaires were administered and a total of 1041 Hubbard Foods Limited customers provided responses for the online survey. An online survey was the most effective method of data collection from the Hubbard’s Foods Limited customers as it allowed respondents to submit responses at their own comfort and online surveys are also cost effective contrary to physical data collection.  

Of the 1041 respondents, 30 were randomly sampled and admitted into our study. Only 30 were sampled for ease of computability and analysis of our data.

The data collected was analyzed using different methods for descriptive statistics (mean, standard deviation, frequencies and cumulative percentages) and association between variables. Tools like pie charts, graphs, cross tabulation and percentages were used to report results.

Excel and SPSS were used for entry and analysis of data.

Data Collection Techniques

In this section data was analyzed and presented in a manner to be easily understood. The results and discussions are presented side by side for simplicity.

A total of 30 respondents from the online survey were sampled to participate in the study. Of the 30 sampled respondents, 15 of whom were female representing 50% and the other 15 male representing 50% of the sampled individuals.

Gender
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Female	15	50.0	50.0	50.0
Male	15	50.0	50.0	100.0
Total	30	100.0	100.0

In undertaking this study, the factors that were assessed to affect the sales volume of the company products are looked at below:

Various existing literature have depicted that sales volume of companies are affected by several factors. According to (Garry Auld, 2008), factors like product price, market location, marketing policies and product type affect the sale volumes of a product.

For purposes of this research the factors that affect sales volume of Hubbard Foods limited are discussed in detail.

Out of the many aspects that can influence a customer’s decision-making behavior, one of the major factors is gender. Men and women approach shopping with different motives, perspectives, rationales, and considerations.

There is a decade worth of scientific research on this subject, which shows that there are observable differences in how men and women behave as shoppers. It’s clear, men and women think differently about shopping and will approach the act of shopping online in different ways. This could be attributed to the difference between female and male brains.

Male motives for shopping appear to be more utilitarian, that is they shop for purposes of fulfilling needs whereas female shopping motives tend to be hedonic, that is they do shopping because they love it.

According to (Piercy, 2002) being male or female has different effects of product preference and frequency of purchasing products.

The cross tabulation for gender and frequency of purchasing items per week for our surveyed respondents is as shown below.

Crosstab
Count
	Frequency of purchasing items	Total
1-3 times per week	3-5 times per week	5-above per week
Gender	Female	5	5	5	15
Male	6	4	5	15
Total	11	9	10	30

Crosstab
Count
	Favourite_hubbards	Total
Bran	Cereal	Light and Right	Muesli	Outward bound	Porridge	Thank Goodness Gluten Free
Gender	Female	3	7	1	1	2	1	0	15
Male	3	2	1	2	3	3	1	15
Total	6	9	2	3	5	4	1	30

According to (Marsha L. Richins, 1992) consumers’ shopping efforts vary with respect to type of product. Consumers tend to be loyal to companies that provide their preferred type of products. The type of product that a company offers shall determine its market sales as some products tend to be more liked by consumers compared to others. For purposes of this study we examined 8 breakfast products offered by Hubbard Foods Limited and customers’ likeness for them.

Regarding the type of product that the customers purchase for breakfast from Hubbard Food Limited, 6 (20%) reported that Bran was their favorite breakfast product from Hubbard, 9 (30%) reported that they favored Cereal, 2 (6.7%) reported that they liked Light and Right, 3 (10%) reported a likeness for Muesli, 5 (16.7%) liked Outward bound, 4 (13.3%) liked porridge and only 1 (3.3%) reported a favoritism for Thank Goodness Gluten free. Therefore, Cereal was the most favored breakfast product, followed by Bran, followed by Muesli, followed by Outward bound, followed by Light and Right and the least favored breakfast product was Thank Goodness Gluten Free. These findings lead us to rejecting the null hypothesis that Hubbard sales are not affected by product type in favor of the alternative hypothesis that Hubbard sales are affected by product type.

Favourite_hubbards
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Bran	6	20.0	20.0	20.0
Cereal	9	30.0	30.0	50.0
Light and Right	2	6.7	6.7	56.7
Muesli	3	10.0	10.0	66.7
Outward bound	5	16.7	16.7	83.3
Porridge	4	13.3	13.3	96.7
Thank Goodness Gluten Free	1	3.3	3.3	100.0
Total	30	100.0	100.0

Data Analysis Methods

From the findings it can be depicted that majority of the customers purchase Cereal as their favorite breakfast from Hubbard implying that cereals have a good demand in the market relative to the other products produced by the company. This agrees with the thoughts of (Wang, 2015) that product type has an influence on product sales.

From the findings, we can conclude that indeed Hubbard sales are affected by product type. These findings agree with our alternative hypothesis and we thus reject the null hypothesis that Hubbard sales are not affected by the types of product sold at Hubbard Foods Limited.

Price optimization is one of the key factors to every business operation. A company can raise prices while improving sales volume at the same time. However, that sounds easy in theory than it is in practice as many companies utilize simple pricing policies. It is thought that affordable products tend to have more sales than costly products.

Previous literature suggests that price is the only marketing variable that directly generates income.

All businesses are established to achieve a certain level of profit to ensure return on investment. This profit can be obtained only if revenue generated, influenced by selling price of the product and quantity sold is greater than the cost of production and supply of the product (O.P., 2010).

Of the 30 sampled individuals, 18 representing 60%, reported that the products they purchased from Hubbard are affordable while 12 representing 40%, reported that the products are costly.

These results suggest that product affordability has an influence on sale volumes. This hypothesis can further be investigated by analyzing the relationship between product affordability and expenditure allocated to purchase products from Hubbard Foods Limited.

Price
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	affordable	18	60.0	60.0	60.0
costly	12	40.0	40.0	100.0
Total	30	100.0	100.0

The table and bar graph show the customers’ response on product affordability.

Favourite_hubbards * Price Cross tabulation
Count
	Price	Total
Affordable	costly
Favourite_hubbards	Bran	5	1	6
Cereal	5	4	9
Light and Right	1	1	2
Muesli	2	1	3
Outward bound	2	3	5
Porridge	2	2	4
Thank Goodness Gluten Free	1	0	1
Total	18	12	30

For those who had a favoritism towards Bran, 5 of 6 reported that the price was affordable, 5 of 9 for those who liked cereal said that the price was affordable, 1 of 2 of the Light and Right customers said that price was affordable, 2 of 3 of the Muesli customers reported affordability, 2 of 5 of the Outward bound product reported affordability, 2 of 4 of porridge buyers said that the product was affordable and the one Thank Goodness Gluten Free customer reported affordability.

A table on breakfast product affordability and breakfast expenditure is as shown below.

Price * Breakfast_expenditure Cross tabulation
Count
	Breakfast_expenditure	Total
130-150	150-above	50-70	80-120
Price	affordable	4	1	9	4	18
costly	1	3	4	4	12
Total	5	4	13	8	30

A market is a location where people regularly gather for the purchase and sale of provisions. Market location has a significant influence on firm’s profit margin and success. This might be due to availability and proximity of raw materials and labor, proximity to customers and competitors, infrastructure and transportation costs.

Results and Discussions

The product market location plays a vital role in the sales volume of the product. Products with their markets in large population set ups shall have high sales volume. In the contrary, set ups with low population shall have low demand to products hence low sale volumes as argued by (He, 2013).

Place or location is concerned with various methods of transportation and goods storage, then making them available to customers. Getting the right product to the right place at the right time is important in determining market demand for the product.  

To that effect, places far away from the location of manufacturing will experience low market supply as transportation and storage costs tend to be higher than for locations near to the source of manufacturing.

For the scope of this research, 43.3% of the respondents were from Auckland, Christchurch had 3.3% of the sampled respondents, Dunedin had 13.3%, Hamilton 6.7%, Nelson 3.3%, New Plymouth16.7% and Wellington had 10% of the sampled respondents. Auckland is the location where Hubbard Foods Limited is based. The frequencies of product purchase given certain locations shall be as represented in the cross tabulation that follow;

Location
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Auckland	13	43.3	43.3	43.3
Christchurch	1	3.3	3.3	46.7
Dunedin	4	13.3	13.3	60.0
Hamilton	2	6.7	6.7	66.7
Nelson	1	3.3	3.3	70.0
New Plymouth	5	16.7	16.7	86.7
Wellington	1	3.3	3.3	90.0
Wellingtone	3	10.0	10.0	100.0
Total	30	100.0	100.0

Location * Frequency Crosstabulation
Count
	Frequency	Total
1-3 times	3-5 times	5-above
Location	Auckland	5	3	5	13
Christchurch	1	0	0	1
Dunedin	1	2	1	4
Hamilton	1	0	1	2
Nelson	0	0	1	1
New Plymouth	2	1	2	5
Wellington	1	0	0	1
Wellingtone	0	3	0	3
Total	11	9	10	30

The frequencies for which participants responded to be purchasing products from Hubbard foods Limited differed from one city to another. Auckland had 5 respondents who purchased items items from Hubbard Food Limited 1-3 times,3 who purchased 3-5 times and 5 who purchased 5-above times per week, being the city that had the highest number of respondents. These frequencies are as depicted on the above cross-table.

These results agree with the alternative hypothesis that Hubbard sales are affected with market locations and we therefore reject the null hypothesis that sales are not affected by market location.

Consumer product preference refers to the consumers’ likeness or taste to some certain products. Consumer preferences are contingent to on the level of consumer ethnocentrism and preferences for different product categories from specific regional clusters (Slottje, 2009). The underlying foundation of demand, therefore, is a model of how consumers behave. The individual consumer has a set of preferences and values whose determination are outside the realm of economics. They are no doubt dependent upon culture, education, and individual tastes, among a plethora of other factors. The measure of these values in this model for a particular good is in terms of the real opportunity cost to the consumer who purchases and consumes the good. If an individual purchases a particular good, then the opportunity cost of that purchase is the forgone goods the consumer could have bought instead.

Favourite_breakfast * Favourite_hubbards Crosstabulation
Count
	Favourite_hubbards	Total
Bran	Cereal	Light and Right	Muesli	Outward bound	Porridge	Thank Goodness Gluten Free
Favourite_breakfast	Bran	6	0	0	0	0	0	0	6
Cereal	0	9	0	0	0	0	0	9
Light and Right	0	0	2	0	0	0	0	2
Muesli	0	0	0	3	0	0	0	3
Outward bound	0	0	0	0	5	0	0	5
Porridge	0	0	0	0	0	4	0	4
Thank Goodness Gluten Free	0	0	0	0	0	0	1	1
Total	6	9	2	3	5	4	1	30

Gender

The findings suggest that the respondents’ favourite breakfast was being supplied by Hubbard Foods limited. Therefore, there are significant variations in consumer responses on their product preference for breakfast.

It can therefore be concluded that product preference plays a big role in determining company sales. We reject the null hypothesis that consumer preference does not affect sales in favor of the alternative hypothesis that consumer preference affects Hubbard Foods Limited sales.

Promotion has been defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or promote an idea. The purpose of promotion is to reach the targeted consumers and persuade them to buy. 

Advertising can be used for promoting industrial products in order to reach inaccessible or unknown buying quotas. It also creates awareness among consumers and enhance the effectiveness of sales (Kochkina N., Estimation of the advertising effectiveness, 2009).

However, we were not able to investigate this factor during our research. More research should therefore be conducted to find out the relationship between product promotion and product sales.

Conclusion

The main objective of this study was to assess the factors influencing product sales volume. These factors were assessed based on the case study of Hubbard Foods Limited.  To achieve this objective both primary and secondary data were used for analysis. Based on the results from the research, the following conclusions can be made.

According to the findings of this research, product type has a huge influence on sales volume of products. Consumers have different product preferences. Products which have higher preference relative to others will have higher sales as consumers would like to consume products from which they will obtain a return for value.

It has also been highlighted that price plays an integral role towards sales of a company product. Variations do exist in the sales volume of different products. Consumers will always go for products from which they will derive satisfaction at least prices possible.

However, goods and services of ostentation are inversely related to price. The lower the price of these goods and services, the lower the demand. The higher the price for these products and services, the higher the market demand. Prices can be influenced by factors like cost of production, transportation and storage costs.

Moreover, market location has a role in determining sales volume of products. Consumers in some locations will have a high demand for certain products while low demand for others. Long distances from manufacturing sources increase costs of production which might increase product prices.

Frequency of Purchasing Items and Product Preference

A company that meets consumer product preferences will tend to sell large volumes of its products. Products that are so popular and meet the consumers’ needs will have high demand in the market whereas products that are new in the market will take time to convince and become preferred by consumers. Therefore, new products have low demand in the market leading to low sales.

Other factors that have been assessed in this study include product promotion through advertising. Advertising plays an integral part in imparting product knowledge to the consumer. Products which are advertised become popular and therefore improve their sales as argued by (Kochkina N., Estimation of the advertising effectiveness, 2009).

Based on the study findings and conclusions, the following recommendations shall suffice.

The company should conduct market research on product preference and consumer taste in order to produce goods that will increase their profit margins. Being specific on the products to deal in will minimize costs of production on a large variety of products. Also, product preference analysis will ensure that the products supplied to the consumers achieve high sales volume.

Product promotions should be employed in order to achieve sales targets. The company sales persons should get training on how to sell, approach existing and potential customers and on how to enhance their product awareness.

The company has to diversify its market in order to expand their market share. New markets have to be sought in order to have a wide coverage of the population to whom to sell their products.

References

Garry Auld, K. J. (2008). Factors Affecting Small Producer’s Local Food Sales. 1.

He, X. W. (2013). Export market location decision and performance. 32.

Kochkina N., S. A. (2009). Estimation of the advertising effectiveness. the methods of defining the customer loyalty, 6.

Kochkina N., S. A. (2009). Estimation of the advertising effectiveness. the methods of defining the customer loyalty, 6.

Marsha L. Richins, P. H. (1992). How Enduring and Situational Involvement Combine to Create Involvement Responses. Journal of Consumer Psychology, 11.

O.P., B. (2010). ADAPTATION OF BALL METHOD OF PRICING FOR DETERMINATION OF PRICE ON PRODUCTS WITH THE USE OF THE SECOND RAW MATERIAL. 4.

Piercy, N. F. (2002). A gender perspective on salesperson organizational citizenship behaviour, sales manager control strategy and sales unit effectiveness. 

Slottje, D. J. (2009). Quantifying Consumer Preferences. 3.

Wang, Z. G. (2015). Book cover Heuristic Production and Sale Policy for a Two-Product-Type Manufacturing System With Downward Substitution.