1. Evaluating a Product Line Extension Opportunity
Blue Apron
Evaluating a Product Line Extension Opportunity
Team 3

2. Executive Summary
Objective: Use exploratory research and survey data to recommend a potential product line extension opportunity into specialty meals for Blue Apron
Focus Group 1
Survey 2
Analysis 3
6 participants
Did not plan on using Blue Apron
Lack of interest in specialty meals due to variety limitations
96 respondents
Observed responses representative of target
Only a few respondents were likely to purchase
Chi-Squared, Independent Sample T-test, Regressions
Dietary restrictions did not necessarily lead to likelihood of purchase or higher WTP
The results from our exploratory and quantitative research do not support Blue Apron running a pilot specialty meal line extension until further research has been conducted

3. Focus Group findings drove survey development
Takeaways
Goal: insights on usage situations
Tested 4 main hypotheses
6 homogenous participants from ages based on target market
Used a guide to gauge perceived benefits/drawbacks of Blue Apron
Identified 5 different usage occasions for Blue Apron
Found that healthiness and caloric control were important attributes for meals
The dietary restrictions (specialty meals) category proved to have the most interest, had the fewest drawbacks, and allowed for a potential price premium
The thread analysis confirmed potential around our initial recommendation of specialty meals, which drove our survey development and analysis

4. Survey data allowed for a fact-based approach
Thread Analysis
Survey Goals
Used the thread analysis to find most opportune usage occasions
Survey Development
Decided on survey goals to support or refute initial hypotheses and recommendations
Responses
Developed 15 questions with data types structured for further data analysis
Survey Analysis
Received 96 responses, 83% of which were from the age group (primary target)
Ran an initial analysis on survey data based on how respondents answered each of the 15 questions
Survey revealed that the average WTP for a specialty meal was very similar to current Blue Apron prices despite specialty ingredients and niche offerings

5. Additional survey analysis using quantitative tools further confirmed the lack of market opportunity
Sample Quality
Market Segmentation
Expansion Opportunity
Ran 2 Chi-Squared Goodness of fit tests
Found that observed gender ratio and household size were not statistically different from expected
Believed gender and household size could impact survey responses
Ran multiple independent sample t-tests to understand if demographics drove responses
Ran regressions to understand if any demographics correlated with likelihood to purchase or WTP
Found no statistically significant relationships
Created a variable based on response to dietary restrictions
Ran tests using that variable to understand if it drove attitudes towards Blue Apron specialty meals
Found that dietary restrictions didn’t necessarily increase likelihood of purchase or WTP for Blue Apron specialty meals

6. Final Recommendation Focus Group Survey Analysis
The results from our research do not support developing specialty meals to appeal to dietary restrictions. Therefore, we recommend a no-go because (1) the market is not large enough; (2) there is not enough overall interest; and (3) there isn’t evidence to support a price premium.
Additional Research:
Segment respondents by urban vs. non-urban
More specific ideas in a refined focus group
Conjoint analysis to understand WTP
Simulated Test Market Study
Participants considered alternative options to Blue Apron
Blue Apron should refine its current product offerings before expanding into new products
Focus
Group
Solidified hypothesis that customers are not willing to pay premiums for Blue Apron’s specialty meal delivery service
Low Calorie and Low Carbohydrate show best potential
Survey
The results from our research do not support developing specialty meals to appeal to specific customer segments. Therefore, we recommended a no-go. The primary reasons for this decision are that 1) the market is not large enough 2) there is not enough overall interest and 3) there isn’t a high enough willingness to pay. From our focus group, we learned that participants considered alternative options to Blue Apron. Given this and the additional insights mentioned earlier, we were led to believe that Blue Apron should refine their current product offerings before expanding into new products. The survey solidified our hypothesis that customers weren’t willing to pay for the Blue Apron meal delivery service, whether specialty meals were offered or not. We also found that the demand for specialty meals was not very high. Our additional analysis confirmed that specialty meal offerings didn’t make a person more likely to desire a Blue Apron meal nor did it make a person willing to pay more for it.
Analysis
Confirmed that specialty meal offerings didn’t make consumers more likely to purchase a meal or have a higher willingness to pay