Bachelor of Commerce (Special) Degree Program

2nd Year

PRODUCT DEVELOPMENT PLAN

FOR
THE BRAND “NELLI SENSE”
(Submitted on: 07/05/2009)

Executive Report
On
Marketing Management
22054

Prepared by

INDIAN HILLS PLC

Faculty of Commerce and Management

Department of Commerce and Financial Management
University of Kelaniya

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 Group Members

1. N.W.K.H.M.S. Chandrasekera CM/2006/015

2. R.Dalugoda CM/2006/022

3. D.M.S.N.W.Dissanayake CM/2006/033

4. N.Fernando CM/2006/043

5. N.D.N.Harshajith CM/2006/049

6. M.M.S.T.S Mannapperuma CM/2006/097

7. M.P.Niroshan CM/2006/107

8. B.T.V.Peris CM/2006/112

9. S.A.N.K.Subasinghe CM/2006/155

10.P.V.Kasunsirs CM/2006/171

Content

1. Executive Summary

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 2. Introduction
2.1 About the Company
2.2 Product & production process
2.3 Product Attributes
3. Strategic marketing planning process
3.1 Situational Analysis
3.2 SWOT Analysis
3.3 Marketing Objectives
3.4 Forecast market potential
3.5 Generate marketing strategies
3.6 Assumption & Contingency plan
3.7 Marketing mix program
3.8 Budget Resources
3.9 Time Scale
3.10 Implement the plan
3.11 Measure & control
4. Product Segmentation
5. New Product Development Strategies
6. Market Development Strategies
7. Summary & Conclusion

1. Executive Summary

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In this modern world, the demand for natural products has increased significantly
compared to last few decades since there are lesser products in the market which are
manufactured based on natural raw materials. Specially, when it comes to soft drinks and
energetic drinks, the general public has the conception that almost all of them are
artificial. Recent market surveys conducted by researchers show that 90% of the public
bear the opinion that the soft & energetic drinks in the market are artificial other than few
which they exclude from that category.

The product that we are launching to Sri Lankan market in the near future is manufactured
based on 100% natural ingredients by Indian Hills Limited
which is a reputed company in India for manufacturing of natural products. Further we
present it to Sri Lankans to an affordable price of Rs. 25 which is very much lower than
the existing products of same type. We are able to do so because our mother Company is
running with the concept of economies of scales and through it we are able to give that
benefit to our customers.

The ingredients, the container, the colour everything in our product are based on the
customers’ requirements. We carried out poster campaigns at the initial stage of our
promotion period and subsequently we shifted to paper advertising and TV advertising to
familiarize the product to Sri Lankans. We had a good respond from our customers to our
Advertising campaigns as well as pre advertising promotions.

The results of our campaigns show that we have moved to the ideal market to launch our
product and we are confident that Sri Lankans will warmly welcome our product.

2. Introduction
2.1 About our Company

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 Our mother Company Indian Hills Limited which is the largest natural products
manufacturer in India owns 90% of the natural products market in India. It is the mother
company of Europe Hills, US Hills and ASIA Hills which are the multi platinum profit
making companies in natural products. 35% of shares of Indian Hills is owned by the
Indian governments, 10% by general public where the rest of the part is owned by private
investors.

Indian Hills is popular in manufacturing natural cosmetics, beverages, energetic food and
consumables and some of its world famous products are Indiana, Beauti, Cocala, Riders.
The nelli drink introduced to Sri Lanka is already in Indian market but in different colour ,
name and contains but for our new product we made some modifications to be suited to
Sri Lankan market.

About our product

Our product ‘Nelli Sense’ is a 100% natural product which comes under the brand names
of Indian Hills. Its ingredients to produce 500 liters are as follows,

ingredients quantity
 Add water 380 kg
 Sugar 60 kg
 Nelli concentrate 60 kg
 Citric acid 0.702 kg
0.450 kg
 Nelli flavour
0.227 kg
 Salt
0.200 kg
 Ascorbic acid 0.150 kg
 stabilizer 0.033 kg
 Coloring

Production process is shown below,

2.2 Production Process

Stabilizer (Sugar with hot Bitter Lemon Concentrate

Put hot water (100 0c) using
water) regulator.
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 300 liter 4 mixing tanks
at 90 0C temperature

Reduce temperature to 400C

Transfer this to mixing

Tank 500 liter.

Pasteurize to 620 C

Termize (keep the temperature

at 30C for 40 mints)

Add Citric Acid, Viatmins (Ascobic Transfer to storage tank

Acid) & Natural Fauoursflavours and keep at 30C

Transfer to filling
machines.

Pack in to Tetropack

Final product (At 18-200c

temperature, Weight 215g
&200ml Pack)

2.3 Product Attributes

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One of the most important requirements of a product is that it must fulfill a need or
want.
a. One of the most important requirements of our product is that fulfills our
consumers’ needs or wants. [Environmental healthy product, 100% natural, The
company produce the product while covering Green Marketing :-(being good to
environment while satisfying customers)
• Factors to emphasize Green Marketing concept.
 Our customers are demanding.
 Government environmental legislations of Sri Lanka.
 To increase satisfaction of our employees.
 Our company’s own existence.
 For increase corporate image, regards to the company.
b. Sufficient profit margin is another crucial attribute that our product has.
c. Increase the perceived value of your product

• What customers think our product should cost, or more specifically, what
value they think it has to them and what they would be willing to pay for it.

d. Improving perceived value

Here are the eight ways to improve the perceived value of our product.

1. Emphasize quality

2. Display success stories

3. Tell of our top quality customer service

4. Stress convenience

5. Improve the design of our product's packaging and labeling

6. Distinguish our product from competitor's product and tell why our is best

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 7. Develop our unique selling proposition.

8. And if you are selling this product from your website, make sure your
website is nicely designed, easy to use, and typo-free.

3. Marketing Planning Process

Mission statement Company Audit

Macro Environment
(PEST)

Situational Analysis

SWOT Analysis

Marketing Objectives

Feed Back
Forecast market potential

Generate marketing strategies

Assumption & Contingency Plan

Prepare detailed marketing Mix program

Budget resource including staffing

Agree-Time Scale

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 Implement the plan Measure & Control

Steps follow to develop the market strategies.

3.1 Situational Analysis

 In theoretically the situational analysis are can be defined as the Current
situation of the company. These analysis consist in two inputs, we can
interpret it in this in following way,

Situational Analysis

Macro Environment
The Company Audit
( PEST / SLEPT)

 Sociological and Technological macro environmental factors have in the

situational analysis.

 Our company follows the green marketing theory such as the, Developing
environmental friendly products. Company’s product is a Tetra pack
product (using Tetra pack filling machine technology) while being an
environmental friendly product. Under CSR the company hope to enhance
social welfare as well the company credit one rupee for each packet selling
to Api Wenuwen Api Fund.

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  Under situational analysis number of very short statements use made in
respect of each of the PEST+C+L sub-divisions.

3.2 SWOT Analysis.

According to our Research and Development staff report we identified
there are several Strength and Weaknesses in the internal as well as
Opportunities and Threats externally of the company. Those are as follows,

 Strengths of the Product

 Using the world’s best technology to manufacture the product.
Normally we use the Tetra pack filling machine technology.
 We have highly skilled Indian and Sri Lankan specialists for lab
experiments and also in top management.
 The company has developed a stable market condition in India
while undergoing good marketing strategies.

 Weaknesses of the product.

 The main drawback is the company and products both are newly
launcher to Sri Lankan market.

 Opportunities of the product.

 There is no such competitor in the Sri Lankan market to the
product.
 We can get highly skilled employees at low price in Sri Lankan
market & we can be implemented them.

 Threats of the product.

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  The main threat is strike Government legislation in Sri Lanka.
 We have to import all the inputs and machine spare parts to Sri
Lanka so we have to paid high taxes.
 There no such Natural Energy drinks In Sri Lankan market so we
have to adopt customers in special way.

3.3 Marketing Objectives.

 The short term objective of the company is to catch 10% market
share in the total market before in year 2010.
 Also get the awareness of customers and adopt them to product.

3.4 Forecast market potential,

According to the R & D report our forecasting monthly sales in
introducing stage is with in 5000-6000 packets per month. We hope
this will increase to 25000 in after one year from introducing. It is
the 25% of total market share.

3.5 Generate market potential,

3.6 Assumption and Contingency planning,

3.7 Detailed marketing mix programmed,

According to the market mixing program there are four component in
marketing mix those are,
 Product
In production introduce stage we talked about the production
process. There are major Attributes in the product,
 This product is 100% Environmental healthy product.
 Also this product use 100% natural ingredients
 This product is mainly use the ayurwedic bitter lemon so we
identified this as an ayurwedic product.

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  Pricing Methods
Normally we are using market penetration strategy to estimate the selling
price. The price will below the total cost because we can easily catch the
market share and get awareness of the customers. According to our
Standard cost card we give it in covering for variable cost. Also we look at
existing products. According to our cost card we had incur Rs23/= per
pack. So we decided to launch product to market at Rs25/=
 Place
The ideal places that we identified to produce this product Colombo,
Kandy, Gampaha & Galle. Because of these districts peoples are very
much aware about the energy drinks.
 Promotion Methods
We are doing huge campaign in promotion stage; before we enter in to the
market we use some pre campaign method using froe Printing and
Electronic media. After launch new product we advertise it in bill boards,
electronic media & some selling promotions, such as free samples,
competition and contests.

3.8 Budget Resources and Staffing.

3.9 Time Scale.

This can show that in a Gant chart

2008 2009

May June July Aug Sep Oct Nov Dec Jan Feb March April

Advertising

Sales Promo:

Demonstration

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Other Costs

3.10 Implement the Plan

Now the company implements the plan with in the pre determined budget,
resources, parameters and along the time scale that has been agreed.

3.11 Measure and Control.

The company pays attention to frequent measure and control strategies to
sustainable quality of the product.

4. Segmentation Basis of Nelli Sense.

As a profit focus your Company it is certain face that due to financial and resource
constrain we couldn’t target entire market space which is available. There for strategic
decision makers alone with the marketing expertise decided to offer our product to highest
profitable target ordinance. To select the most suitable segmentation we involved in
following techniques and mythologize.
1. A retail Audit
2. Focus group results
3. Sales force feedback survey
4. Online quest nary
5. A.C nelson research agency finding
The suitable segmentation selection process transmit the following results

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 A.C Nilson Focus
A Retail Sales Force Online
Research Agency Group
Audit Feedback Questioning
Finding Result

Individuals Urban Age 15

- 30 (Male /Female) 45 60 50 35 40

Individual Rural Age 15

- 30 (Male /Female) 30 50 35 15 25

Mature Consumers
Including 45+ 15 35 10 20 15

60

50
FEED BACK(NO OF CONSUMERS)

40

30 Individuals Urban Age 15 - 30 (Male

/Female)
20 Individual Rural Age 15 - 30 (Male
/Female)

10 Mature Consumers Including 45+

0
A Retail Sales Force A.C Nilson Forcus Online
Audit Feedback Research Group Questioning
Agency Result
Finding
SEGMAN SELECTION CRITERIA

From the feedback obtain through the surveys suggested us that our profitable segmented
target audience probably would be, Individuals who are in urban areas aged with 15-30
both male & female. Our selected segment & product computability with the target
segment.
1. Urban younger crowd move value given on status symbols. Since our product
position as an up market Icon it symbolizes the required status factors.
2. Lack of energy drink product for competitive price in the current market space.
3. Emerging health conciseness among the younger crowd

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 4. Younger audience more involved in instant energy required activities (Ex:
Athletics, gym workouts)
5. Market extensive search on ‘a sure a product’ that gives refreshment health
substitutes with instant energy gaining.

Expected Profit & Sales for Nelli Sense at Target Segment

700
EXPECTED PROFIT & SALES
600
600
500
420
SALES & PROFIT (IN MILL)

400
300 SALES
255
200
195 180 PROFIT
120 120
100 65 40
15 15 25
0
-20
-100 -65
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NO
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MONTH

5. Product Development Strategies.

1. Idea Generation.

Our company’s notion of the marketing orientation is to; the company should look our
customers first (through marketing research) before embarking upon New Product
Development.

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 Company’s Idea Generation was done based on following researches,
• Questionnaires
Observing a wide distribution of questionnaires, the company was able to identify
various conclusions with regards to the desired product.
One of the main objectives of our product was, will the product attract the youth? Or,
will it attract elders? Our observation was, the product will attract by the youth.85% of
observations hold that attitude.
And the questionnaire was distributed among schools as well. 80% of the observations
helped to identify the product as a packet, not as a bottle.
Around 90% of the target audience was likely to be the product as an energy drink.
Mostly sports persons are hold those attitudes as well.
One of the highlighting questions of our questionnaire was, do they like to be the product
as an artificial product? Or they likely to be the product as a natural product? Their
response for that question was highly attractive and highly responsive. Ultimately the
observation was the Product should be a natural product.
Obviously our innovation is 100% natural product. 95% of the responds was likely to be
the product as a natural product.

Brainstorming session’s implemented by product development team was a highly

successful event.
Venture team results were in a considerable stage.

2. Screening.
In the stage of two, company went through three main questions. Always the marketing
team emphasize that the New Product Development process should run under a
systematic procedure.

1. Is there a real consumer need?

Under this the company wishes to gain a potential market share, where using product
attributes. The main attribute of the product is that the ingredients of the product are

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100% natural. On the other hand the company has captured a huge amount of market
share in India, where the product was established at the beginning.

2 Does the company have enough resources and technical competence to

produce the product?
Large scale of labor force.
Management :- 600
Laborers :- 5300

High technology using to manufacture the product. (This was discussed under
production process)
Quality of the products is verified by the qualified Indian specialists on regular basis
and when Nelli Sense was introduced to Sri lanka the suitability was verified by the
State Pharmaceutical corporation of Sri Lanka.

3 Is potential market large enough to gain profits?

Hopefully the company wishes to capture high market share, because existing product
in the market will be defeated by our 100% natural innovative product.

3. Business Analysis.

Demand is estimated together with cost and profitability. The unit price was assigned
based on the following cost structure.
Tetra pack 7.75
Ingredients 7.50
Labor 4.75
Overhead 3.00
Total cost 23.00
Profit 2.00
Selling price 25.00

4. Product Development.

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 On this stage the company tries to maximize risk and isolate potentially valuable
new product ideas.
Develop a Prototype product in order to confirm its market potential.
In terms of product suitability and performance the company hopes to get
customer feedback as well.
If the product is successful the product is go ahead with product launch.

5. Test Marketing

Objective of the company at this stage: - To investigate the appropriateness of

proposed marketing and tactics.
Company’s penultimate stage to emphasize to check on whether the product can
be marketed appropriately or not.
Our product is a FMCG (Fast Moving Consumer Good), before going to national
level our company went through test marketing, implementing test town
promotions. (Gampaha, Colombo,Galle, Kandy)

6. Commercialization.

Ultimately, the company wishes to go ahead with commercialization stage while

observing following points.

Launch the product

If above stages are successful the company pay attention to the initial product
launch. The one and only competitors product price is Rs.30. But our company’s
best fitting technology was able to label the price at Rs25.

Produce and place advertisements and other promotions

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 Product’s promotional campaigns that were held so far caught the attention of
public in a larger scale. Through our promotional campaigns we were able to
attract new customers which the existing product failed.

Our parent company was able to reserve 10million Sri Lankan rupees to place
advertisements and other promotions. Obviously that systematic procedure was
able to successful.

6. Market development strategies.

• Pricing strategy.

The company’s product is a FMCG. Therefore the company implemented a

Penetration pricing strategy that the management identified. Market penetration
occurs when a company enters/penetrates a market with current products. The best
way to achieve this is by gaining competitors' customers. Other ways include
attracting non-users of our product or convincing current clients to use more of our
product (by advertising etc)

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 • Ansoff matrix

Ansoff matrix developed to help firms recognize if there was any advantage of entering a
market.

Nelli Sense

The product is new to the market. The product should place where in the existing market.
The box shows where is our product is situated.

7. Summary and conclusion

The product Nelli Sense is an innovative product to Sri Lanka, which the company
hope to capture a considerable market share as well. The company identified there is
only one competitor in the market. Our questionnaire observations were able to find
out various relevant information about our targeted consumer buying behavior. We are
using benchmark strategies as well. That will help to develop our potential market
share and profitability in the near future.

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.

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