ASSIGNMENT PAPER -1

HINDUSTAN FOOD CASE STUDY

Name : S.SATHISH
Reg no : FX22039
Batch : PGPM FLEX 20-22
Subject : Stastistical methods for Decision
Making
Hindustan Foods – Case Study

Hindustan Foods, a leading manufacturer of food products, recorded sales of Rs. 445.6 crores of and
a net income of Rs.54.57 crores in 2003. The company manufactured fruit cakes, cookies, biscuits,
confectionary and a variety of other food products including baby foods. The domestic confectionary
market was loosely divided into seven categories: hard-boiled candies, toffees, eclairs, chewing gum,
bubble gum, mints & lozenges. Hard-boiled candies occupied the largest share of this market.
Hindustan foods did not have a presence in this segment. It manufactured and marketed toffees as ‘
tasty-bite’ toffees while in the chewing & bubble gum segment, it had a significant presence with its
‘Fresh Mint’ brand.

Hindustan Foods planned to enter the hard-boiled fruit candy segment under its Tasty Bite brand.
The objective was to gain significant presence & market share in a segment that was rapidly
growing. The company wanted to test three new flavors for the proposed candy, strawberry, apricot
& pineapple. Hindustan Foods also wanted to measure the impact of three different retail prices –
50 paise, 75 paise &re. 1/- for the three flavors.

The company selected 9 geographically separated stores as the test stores for the new flavors &
different price points. These stores were similar with respect to Hindistan Foods’ confectionary sales
& were located at neighborhoods that had similar demographic characteristics. Because each of the
three flavors was to be tested at each price, a total of nine different flavor – price combinations had
to be tested.

Hindustan Foods arranged for the delivery of the three new flavors across the stores. At the end of
four weeks, the company collected the unsold candy cases. It determined the number of cases sold
for each flavor at each price. With the data so determined, Hindustan Foods wanted to know if the
difference in sales was due to the difference in flavors & what effect the different prices had on
sales.

Hindustan Foods’ Experimental Results

Number of cases of New Flavours sold at Different Prices

Solution:
Question 1: If the Difference in Sales was due to difference in Flavors ?.

Data Given :
 Number of cases sold for Each Flavor and each price.
 Three Flavors are Strawberry ,Apricot,Pineapple and
Prices respectively Rs.50 paise,Rs.75 paise ,Rs.1 .00
Test Details :
we can use “ Chi –Square Test “
1.Discrete data
2.morethan 2 variable
Step 1:
Null Hypothesis
HO :O=E ( difference in sales was not due to the difference
in Flavors )

Step 2:
Alternate Hypothesis
H1 : Not as stated above (Difference in sales was due to the
difference in Flavors)

Step 3 :
Test Statistics
To calculate Chi Square Test for give data
Step : 4
To find Table value
-Level
Level of Significance value not given assume -5%
Degree of freedom: d
d.f = (r-1)(c-1) = (3-1)(3-1)
1) = 2*2=4
d
d.f = 4 LOS= 5% = 0.05
Since the Table value to be taken for 4.05
Chi Square Table:

Table value of Chi square for ( 4.05) = 9.488

Step :5
Decision :
Since the calculated value of Chi Square - 1.8086 is less
than table value of Chi Square (9.488), Accept HO
Step:6
Conclusion:
- Difference in sales was not due to difference in
Flavours
Solution:
Question 2: What Effect the different prices had on Sales?
Excel Calculation :

Conclusion:
r= -0.98 , Hence we concluded the difference in Price is
negative effort in sales.