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Vittel SA of France is a water bottling company considering setting up Vittel Liban and needs market information to assess the feasibility and profitability of
Vittel SA of France is a water bottling company considering setting up Vittel Liban and needs market information to assess the feasibility and profitability of the project. A key to this assessment for Vittel is the current water consumption in Lebanon and projected demand into the future. Vittel wants to use the information for deciding whether to build a bottling plant. Vittel has heard that this consumption (Soha, Sannine, etc.) is about 3,000,000,000 liters per year, plus or minus 200,000,000 liters and the numbers come from IpsoFacto market research firm. IpsoFacto prepared a market study of water consumption in the Levant (Lebanon, Syria) in June-2020 offering yearly 5 projections 2021 to 2025. The report also contains the estimates of market shares of current producers (Soha, Sannine, etc.) now and into the future. The study is based upon a 2020 survey of sample households. Ipso Facto offers the report to Vittel for US$50,000. Assume that the cost of setting up a new water bottling plant in Lebanon is approximately $5,000,000. [In general, we can assume information that is within +/- 10% of the actual value is considered reasonably accurate. Also, for new ventures projects of this type, cost of acquiring market data should not exceed 2.5% of total venture costs. It can be presumed that the venture from start to operational status will take 1 year (this is a simplification). Your CEO asks you to determine if the market study offered by IpsoFacto is worth buying. Lets' assess the market study on each of the five characteristics of good information--via Kroenke's list. Then, Lets' make a recommendation (on IpsoFacto market research offer) to your manager and justify your decision-either "buy" or "do not buy" based on your assessment of 5 quality characteristics. [We want to remember we are aiming to be close to reality--in real life information quality is always less than ideal. Also, lets' assume typical senior market research professional rates are around $100,000/person-year in our region (including overhead) and given the poor status of market data, a report like this can take one person-year to prepare if it is done on a contract basis.]
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