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Assignment

On

Marketing management

New product development process


In
“Jaul”.

Executive Summary

I want to market Green Coconut Water. I have prepared this feasibility plan on that basis.
I have assigned a name for the product as “Jaul”. Since the raw materials are very much
available in our country, I 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 I have decided to
launch three product lines. The Jaul would be launched in the market at 250 ml. 500 ml.
and 1 Litre bottle.
I have set a reasonable price for the product so that all kinds of people can
afford to buy this soft drink. I have followed the Target Costing pricing approach. I
would gain a competitive advantage, as this is a first hit in the market.
I 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 I 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 I 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 Content

1.0 Product Description……………………………………………………………


01
1.1 Product Portrayal………………………………………………………… 01
1.2 Product Profile…………………………………………………………… 02

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

2.1 Market Description..................................................................................... 03


2.2 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…………………………………………………….. 16
3.4 Services and Warranties............................................................................. 16

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

4.1 Locations..................................................................................................... 17
4.2 Human Resource......................................................................................... 17
4.3 Technological Aspects…………………………………………………… 17

5.0 Financial analysis and


Documentation………………………………………… 18
5.1 Sales Forecasting 18
……………………………………………………………
5.2 Profit and Loss Projection 19
…………………………………………………

Appendix ……………………………………………………………… 20

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, I have gathered
information through in-depth interviews. I 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. I have a spread
nationwide market of different convenient product. People are nowadays very much
concerned about the market and product conditions. So I have a growing prospect of
customers of “Jaul”. Among the population I worked out few segments of customers who
will prefer our product most.

2.2 Market Segmentation and Targeting

Market Segments

I have observed and analyzed the market and based on the nature of the market. I
segmented the market in the following sectors:

Geographic Segmentation:

 Sylhet
 Rajshahi
 Khulna & Barishal
 Chittagong
 Rangpur
 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, I 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 I consider price versus taste received
then I 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%
I 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, I 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. I 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 I 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, I 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, I 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 I can
have a monopoly market condition. The other advantage that I have is lower price. I will
sell products in reasonably lower price than other competitors do.

Strategies against competitors:

To compete with the major competitors I 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

I have decided to set a reasonable price for our product when I will develop it. I
considered many factors in setting the pricing policy. I 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. I have
chosen our objective to maximize market share. I believe that a higher sales volume will
lead to lower unit costs and higher long-run profit. I have set the lower price because I
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:

I 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. I 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:

I 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:

I 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, I need to give special emphasis on


effective promotional activities. In order to get the maximum market share I will have to
use all four tools of marketing promotion. Specially, advertising through mass media will
support us a lot.

3.2.1 Advertising:

I 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. I 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. I 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”, I 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. I hope that will play a significant role to increase our sales.

3.2.3 Promotional Tools:

I have also planned to apply some promotional tools. Initially for sometimes I 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, I may apply the
strategy of giving gifts, lucky coupons, tour tickets depending on the market and
competitive situations.

3.2.4 Public Relations:

I have future plans to hold seminars, commit social development, supporting


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

4. Distribution Channel

In the initial stage, I will distribute the products with our sole distribution channel.
When our market will spread out, I will distribute our products through dealers. I will set
our own outlets in few core market positions. When I will go for mass marketing, I 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.
Services and warranties

As I 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. I
even planned to open few customer service centers where will response to customers’
interactions. I will collect information, suggestions, ideas and opinions of the customers
through these centers and will innovate and modify our product accordingly. I also will
change any defected product.

4. Manufacturing and Operations

4.1 Locations

I will set our manufacturing and other working areas in convenient locations. I 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 I need to use advanced technology. I
need high tech machineries imported from the foreign countries. Not to mention, skilled
people to operate them. I 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
250 ml. Bottle 500 ml. bottle 1 Litre bottle
(Per year)

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


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