Term Paper

On

Principal of marketing

Stages of new product development processStages of new product development process

In

“Jaul”.

Term paperOn

Principal of marketing (MKT241)

Submitted To

Jannatul Ferdoushy

Lecturer of School of Business

Submitted By

Ashraf Uddin 07510041Sk Ashfaqur Rahman 08530014Imran Hossain 10510562Farhana Jesmin 10510589

University of Information Technology & SciencesDate of Submission: 23/04/2012

Letter of Transmittal

23th April 2012

Jannatul Ferdoushy

Lecturer

Department of Business Administration

University of Information Technology & Sciences.

Submission of a Report on: Stages of new product development processStages of new product development process.

Dear Madam,

This is our pleasure to accomplish the Project Work (MKT- 241) and submit the report on “Stages of newStages of new

product development processproduct development process.” We prepared the report on the basis of the Study in Stages of new productStages of new product

development processdevelopment process. This report is prepared on the basis of both primary and secondary data. Primary

data was collected by questioning the concerned people of the company during the period of the working

hour; while secondary data was collected from various printed documents like annual report of the

company. Although the main purpose of the report is to Stages of new product development processStages of new product development process. We

would like to express our gratitude to you for your tiresome effort for us which provided the opportunity

to complete this project.

Thank you

For your kind consideration.

Yours Sincerely,

On behalf of the group

Sk ashfaqur rahman

Acknowledgement

At the very outset we want to congratulate our honorable course teacher Jannatul Ferdoushy to give us the

task of preparing a Feasibility Plan of Stages of new product development processStages of new product development process. It has been a great

honor for us to take part in such a prestigious opportunity. Priceless suggestion, constant guidance, advice

and very feasible help throughout the project work which smooth the completion of this project. To entire

staff without whose interest and co-operation we could not have produced this study. At last once again

we like to praise those persons whoever comprehends this proposal, with the name of Almighty.

Executive Summary

We want to market Green Coconut Water. We have prepared this feasibility plan on that basis.

We have assigned a name for the product as “Jaul”. Since the raw materials are very much available in

our country, we have decided to give the product an indigenous image.

Jaul is a kind of soft drink that provides the consumers with processed green coconut water in

bottles. For the marketing purpose of the product we have decided to launch three product lines. The Jaul

would be launched in the market at 250 ml. 500 ml. and 1 Litre bottle.

We have set a reasonable price for the product so that all kinds of people can afford to buy this

soft drink. We have followed the Target Costing pricing approach. We would gain a competitive

advantage, as this is a first hit in the market.

We have targeted a huge market segment for the product. Bangladesh is a large populated

country. Lots of people are looking for such a product. Green Coconuts are not available all the time. For

example: a person walking on the street. Suddenly he feels thirsty. Now if he wishes to drink green

coconut water he cannot find it easily. It is not always found in the right place at the right time. If we

launch our product in the market, a person willing to drink green coconut water can have it from a nearby

shop. At present this is not possible. Our target market includes health conscious people, sick people,

sportspersons & many other consumers, which we have segmented from the Demographical,

Geographical, Psycho graphical & Behavioral point of view.

Since this is a soft drink, once the product is well promoted, this product will be sold well. The

consumer can then use this drink to even in dinner or lunch. A person going to see a sick relative in a

hospital may buy this product instead of the real green coconut, as it is very convenient for carrying. We

will also use an attractive packaging process that will encourage some people to even taste the product for

the first time. If they get to like it, then the product might become favorable as it is natural & does contain

nutritional value.

Table of Content1.0 Product Description…………………………………………………………… 01

1.1 Product Portrayal………………………………………………………… 01

1.2 Product Profile…………………………………………………………… 02

2.0 Market Research and Analysis……………………………………………… 03

2.1 Market Description..................................................................................... 032.2 Market Segmentation and Targeting.......................................................... 03

2.3 Competitive Analysis.................................................................................. 06

3.0 Market Plan………............................................................................................. 10

3.1 Pricing Strategies........................................................................................ 10

3.2 Promotional Strategies……………………………………………............ 15

3.3 Distribution Channel…………………………………………………….. 163.4 Services and Warranties............................................................................. 16

4.0 Manufacturing and operations…………………………………………….... 17

4.1 Locations..................................................................................................... 174.2 Human Resource......................................................................................... 17

4.3 Technological Aspects…………………………………………………… 17

5.0 Financial analysis and Documentation………………………………………… 18

5.1 Sales Forecasting …………………………………………………………… 185.2 Profit and Loss Projection ………………………………………………… 19

Appendix ………………………………………………………………………….... 20

1. Product Description

1.1 Product Portrayal

‘Jaul’ is a product that serve different segment of customer. The product is green coconut water,

which is unique in the current market. The green coconut water will be processed and sold in glass

bottle of convenient sizes of 250 ml, 500 ml and 1 liter. The green coconut water will be very much

refreshing and provide great support to the sick and health conscious people. Our target market is very

large with different segments. Our expected sales are very high. The development cost is tk.2.5 million

approx.

1.2 Product Profile

Name of the Product : Jaul

Type of Product : Green Coconut Water

Ingredients : Pure natural green coconut water,

Sugar, mineral salts, vitamins C.

Container : Stylish glass bottle

Container size : 250 ml, 500 ml, 1 Litre

Product Price : 250 ml for Tk. 12

500 ml for Tk. 18

1 litre for Tk. 38

Estimated Durability : 12 Months from date of manufactured

Machinery used : Advanced technology imported from

USA, UK and Netherlands.

Brand Slogan : Coola Coola… Always Refreshing

2. Market Research and Analysis

Our company wants to develop and introduce a new Product. So, we have gathered information

through in-depth interviews. We made a survey of the market to have a clear idea about our market, our

customer demand, needs and wants. This information helps us to know about the current market and

prospects of our new product.

2.1 Market Description

Bangladesh is a country of about 150 million people.. The total market size of the soft drink

industry is about 20 million and day by day it is increasing. We have a spread nationwide market of

different convenient product. People are nowadays very much concerned about the market and product

conditions. So we have a growing prospect of customers of “Jaul”. Among the population we worked out

few segments of customers who will prefer our product most.

2.2 Market Segmentation and Targeting

Market Segments

We have observed and analyzed the market and based on the nature of the market we segmented

the market in the following sectors:

Geographic Segmentation:

Sylhet

Rajshahi

Khulna & Barishal

Chittagong

Dhaka

Demographics:

Individuals

Family

Sportsman

Business buyer

Psychographics:

Higher class

Higher mid class

Middle class

Behavioral:

Sick people

Health conscious

Sophisticated who take the new product from the market

Target market and projections:

Analyzing all the segments, we decided our target market according to our product category. The

target customers of “Jaul” are sick people, health conscious people, sportsmen and tourists. The company

decided to charge Tk. 12 for 250 ml bottles, Tk. 18 for 500 ml bottles and Tk. 38 for 1 Litre bottles, if we

consider price versus taste received then we can see that taste received is more in value. Therefore

charging the mentioned prices are justified. The following graph gives a clear idea of our target market. Target Market:

1. Health Conscious - 32%

2. Sick people - 43%

3. Tourist - 3%

4. General people - 22%

Target Market

32%

43%

3%22%

Health Conscious

Sick People

Tourist

Others

We separate our target market into four different segment based on their geographic, demographic,

psychographic and behavioral characteristics.

I. Health conscious: Health conscious people basically the sports person are one of our largest

target markets. In this segment, we get a lot of potential customer. One third of our total

population is young. This is a significant number that we have to concern about them and provide

product, which is fit for them. About 5 million people of this total number are health conscious.

They spend about Tk. 500 in a month in average.

II. Sick people: Sick people are one of our major considerations. More than 1 million children suffer

from diarrhea that needs liquid food. Not only child but also the adult might suffer from those

types of problems.

III. Tourists: Every year a huge number of tourists visit Bangladesh. We want to provide them with

“Jaul”.

IV. General Customers: Besides the above segments, the general customers will acquire a

significant portion of our target market.

Market Needs:

“Jaul” wants to satisfy its customers need. That’s why it is important to identify the market needs.

Our first consideration is to provide the best product to its customers. That’s why we offer three different

sizes of bottle with different prices for its different segment of customers.

250 ml : The lowest price for the rural mid social class and individuals.

500 ml : Its target the sick people and tourist

1 litre : For a small family.

2.3 Competitive Analysis

The Soft drink industry is very much competitive. Many soft drink companies have acquired a

significant portion of the market. But the unique features of “Jaul” will take it far beyond the reach of the

competitor. Because, no one has yet thought about selling green coconut water in such a specialized way.

To evaluate our prospect of “Jaul” in the current market, we have analyzed the market situation in various

ways. Following are some demonstration of the analysis:

2.3.1 SWOT analysis:

The product existence in the future is depending on its strengths, weakness, opportunities and

threats analysis:

Strengths:

1. Available input materials

2. Low production cost

3. Technological and marketing knowledge

4. Strong distribution channel

5.Easy manufacturing process

6. Reasonable price

Weaknesses:

1. It is easy to copy the idea by others

2. Taste differ from the natural green coconut water

3. Green coconut water cannot be preserved for longer period

Opportunities:

1. Monopoly market

2. Large market

3. High demand

4. Might have a chance to get subsidies by Govt. to export

Threats:

1. High competition in future by copying the idea

2. Entrance of new product

3. Alternatives are avoidable in some segment

4. Uncertainty of launching a new product.

2.3.2 Competitor Analysis

The major soft drinks and juice companies of current market are:

Pran Groups

Starship

Uro Cola

RC Cola

Coca cola

Pepsi

Acme

Danish

Foreign Products etc.

Distinct Competency:

These companies can try to entrance our market by launching new product lines to compete us.

Yet, we have distinct competitive advantage. That is our product is still brand new. The other companies

will take sometimes to enter into the market. Till then we can have a monopoly market condition. The

other advantage that we have is lower price. We will sell products in reasonably lower price than other

competitors do.

Strategies against competitors:

To compete with the major competitors we can adopt the following measures:

Providing the best service to create high customer satisfaction

Reasonable and acceptable pricing

Promising and providing top quality product

Launching highly effective mass promotional activities

Continuous innovation and modification of the products

Creating and maintaining long term customer relationship

Creating “Brand Loyalty” among the target consumers

3. Market Plan

Pricing Strategies

We have decided to set a reasonable price for our product when we will develop it. We

considered many factors in setting the pricing policy. We will describe a six-step procedure:

3.1.1. Setting the pricing objectives:

Our company has decided where it wants to position its market offering. We have chosen our

objective to maximize market share. We believe that a higher sales volume will lead to lower unit costs

and higher long-run profit. We have set the lower price because we assume that the market is price

sensitive. Our overall objective is to capture the maximum market share by setting lower price.

3.1.2. Determining Demand:

Each price will lead to different level of demand and therefore have a different impact on

company’s marketing objectives.

3.1.3. Estimating costs:

We have estimated the cost and want to charge a price that covers the cost of production,

distribution and selling the product, including a fair return for its effort and risk.

3.1.4. Types of cost and level of production:

There are two types of cost: a) fixed and b) variable. In our new product development project

fixed cost is 2, 00, 00,000 taka. Fixed cost includes- machinery, monthly bills, and salaries of employees

and so on, regardless of output.

There are some variable costs like-cost of bottle, packaging and so on. These costs tend to be

constant per unit production. We have estimated that per unit variable cost is Tk. 6.3 for 250 ml, Tk. 12.6

for 500 ml and Tk. 24.4 for 1 litre.

3.1.5. Analyzing competitor’s costs, prices and offer:

We have analyzed our competitors’ price and found that Pran charges tk.10 for 250 ml bottle,

Starship charges tk. 12 for 250 ml Pac.

3.1.6. Selecting a pricing method:

We have chosen the target costing method to set price for our product; pricing that starts with an

ideal selling price based on customer considerations, then target cost will ensure that the price is met.

Promotional Strategies:

To acquire a strong position in the market, we need to give special emphasis on effective

promotional activities. In order to get the maximum market share we will have to use all four tools of

marketing promotion. Specially, advertising through mass media will support us a lot.

3.2.1 Advertising:

We initially will give more emphasis on paper ads and TV commercials. Because, advertising

through these media is the most effective way to reach the customers and position our product in their

mind. We are anticipating that this will have a massive impact on the teenagers and other enthusiasts. Few

neon signs and bill boards of “Jaul” also can be set up in some core points of the city. We hope to reach

75% of our customers through effective advertising.

3.2.2 Personal Selling:

Though personal selling skill is not that much effective for convenient products like “Jaul”, we

will inspire and train the sales persons of the retail stores to convince people to buy our product when

they will come to buy any drinks item. The sales persons will inform the consumers about the cool

refreshing taste of “Jaul” and about the nutritious aspects. We hope that will play a significant role to

increase our sales.

3.2.3 Promotional Tools:

We have also planned to apply some promotional tools. Initially for sometimes we will distribute

our product at 50% discount just make our new product familiar with the customers. This will be the

market-testing period for our product. Later, we may apply the strategy of giving gifts, lucky coupons,

tour tickets depending on the market and competitive situations.

3.2.4 Public Relations:

We have future plans to hold seminars, commit social development, supporting social activities,

to arrange cultural functions and mobile game shows for publicity purpose.

3.3 Distribution Channel

In the initial stage, we will distribute the products with our sole distribution channel. When our

market will spread out, we will distribute our products through dealers. We will set our own outlets in few

core market positions. When we will go for mass marketing, we will supply our product nationwide

through dealers. Our dealers will take the products to every district of the country. “Jaul” will be available

in all retail stores of the country.

3.4 Services and warranties

As we are targeting to the top most customer satisfaction and building long-term customer

relationships, there is no alternative for us rather than providing top quality service. Giving the customers

timely and instant quality service is our primary concern. We even planned to open few customer service

centers where will response to customers’ interactions. We will collect information, suggestions, ideas

and opinions of the customers through these centers and will innovate and modify our product

accordingly. We also will change any defected product.

4. Manufacturing and Operations

4.1 Locations

We will set our manufacturing and other working areas in convenient locations. We will prefer

the locations to set up our manufacturing firms, warehouses and inventories in different core business

points of the country where it will be easier to both collect the raw materials and transport the final goods

to the market.

4.2 Human Resource

The board of directors will be responsible for the recruiting activities. Recruiting will be done

through written tests followed by interviews.

4.3 Technological Aspects

To create and innovate new quality products we need to use advanced technology. We need high

tech machineries imported from the foreign countries. Not to mention, skilled people to operate them. We

have already studied all the technical aspects and prepared a list of instruments and their costs. The

machinery will be collected when required.

5. Financial Analysis and Documentation

5.1 Sales Forecasting

The following Table and graph show our expected sales for the coming five years:

Expected Sales(Per year)

250 ml. Bottle 500 ml. bottle 1 Litre bottle

First Year 4000000 4500000 1500000

Second Year 4500000 5000000 1700000

Third Year 5500000 5800000 2000000

Fourth Year 6000000 6500000 2400000

Fifth Year 6300000 6700000 2500000

5.2 Profit and Loss Projection

For 250 ml.

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 44440000 49995000 61105000 66660000 69993000

Total Cost (45200000) (48350000) (54650000) (57800000) (59690000)

Total Profit (760000) 1645000 6455000 8860000 10303000

Tax 40% --- 658000 2582000 3544000 4121200

Net Profit (760000) 987000 3873000 5316000 6181800

For 500 ml.

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 75015000 83350000 96686000 108355000 111689000

Total Cost (76700000) (83000000) (93080000) (101900000) (104420000)

Total Profit (1685000) 350000 3606000 6455000 7269000

Tax 40% --- (140000) (1442400) (2582000) (2907600)

Net Profit (1685000) 210000 2163600 3873000 4361400

For 1 Litre

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 54000000 61200000 72000000 86400000 90000000

Total Cost (56600000) (61480000) (68800000) (78560000) (81000000)

Total Profit (2600000) (280000) 3200000 7840000 9000000

Tax 40% --- --- (1280000) (3136000) (3600000)

Net Profit (2600000) (280000) 1920000 4704000 5400000

Appendix

Reference

1. Principal of Marketing

Author: Philip Kotler

Edition: 11th Edition

2. Internet

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