Group 2 Assignment 1 From Idea Generation to Product PDF

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Marketing Management MKT300

Rhenisha Dawes 20142038 Shavel Dempster 20161872 Miguel Demetrius 20132185 Angella Dixon Barrett 20098396 Owen Duncan 20131166

Group Assignment 1: From Idea Generation to Product

Samuel Tesunbi UCC Online

Bsc. in Business Administration

November 13, 2018

New-Product Development Every business needs to innovate to stay ahead of the competition. If a company does not develop new products someone else will and this will result in loss of customers for the company. The consumer’s needs are ever changing and so is the offering by the seller. Innovations are inevitable. Improvements, enhancements, technological up gradation in the product or its process keep on happening and hence no business can continue to offer the same unchanged product; otherwise sales would decrease and profits will be reduced. The reasons why Pizza Organico decided to develop a new product is because consumer’s "needs and wants" change continuously and our business has to respond to these changes through their products. Otherwise our consumers will switch to competitor’s products. Pizza Organico intends to bring a healthier pizza that is all organic and fresh. This pizza will have less sugar, sodium, calories, fats and cholesterol when compared to our competitors.

Overcoming challenges in New Product Development There will always be challenges especially when there is a new product within the market. Developing a new product is expensive and sometimes risky for a company. At Pizza Organico we use three main strategy methods to overcome these challenges that assure our new product success. They are:  Unique because Pizza Organico is distinctive because the ingredients used are 100% organic. This creates a healthier alterative to the typical unhealthy pizza. Pizza Organico has a variety to suit each customer need from a wide selection of vegetarian or vegan pizza. Our pizza is made with whole wheat flour compared to the traditional white floured pizza. We offer endless option for topping to suit each person needs. Our pizza is an affordable option to a healthy lifestyle. With pizza in all shapes and sizes it caters for a great alternative to a quick family meal or a single quick bite.  Distinctive appeal with our pizza at Pizza Organico is targeted to reduce sugar, sodium, calories, fats and cholesterol by 13%, 20%, 5%, 21%, 4% respectively.  Communicating with our customer to hear their needs. Once we have listened to their needs we create a product to satisfy it and we receive feedback to then develop the issues to create a better product.

Budgeting for New Products In planning the launch of any new product, the company will need to identify the amount of money it will cost for creating these new products. In order to create a budget, Pizza Organico analyzes the phases of a launch and then plans accordingly until the product can sustain and pay for itself. These are the stages analyzed by Pizza Organico: 1. Development Phase- an estimated cost is derived for the development of the new product. This cost includes calculation of new payroll expenses, if any, that is if there will be a requirement for new workers to assist with making the product. The amount for training these employees will also be included as part of this cost. 2. Production Phase- in this stage the company estimates the cost of producing the actual product. In the case of our new vegan pizza, we calculate the cost of the new ingredients which will be used to create this product. There will be no

need for new equipment, therefore, in the production phase for the new vegan pizza we will estimate the cost of the ingredients that will be used in production. 3. Promotion Phase- this includes the marketing costs. The company will need to advertise and promote the new product; therefore, an estimated cost is calculated for marketing and promotion. These costs are derived from the marketing mix which the company decides and assign costs of each marketing element. 4. Contingency budget phase- this is a plan B budget that is included in our budgeting. This considers the performance of the new product. If the product performs better than was expected by the company, then we identify where the additional cash will come from for creating more than the budgeted amount for the product. The company in this case uses profits from sales to manufacture each additional pizza. If the product underperforms, the company also needs to identify cash to restructure the product in the areas which it did not deliver. For example, if there should be increased advertising then we would need to also budget for these unforeseen costs. Team Organization The new product development will rely heavily on bringing different disciplines to make sure the new product has the required functionality that will appeal to the target market. At Pizza Organico, teams are organized using the following strategies: 

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Collocation - the proximity of team members will provide tremendous benefits as it allows for interpersonal relationships which lead to timely communication of information. This facilitates less demanding infrastructural requirements as we would not need to meet physically (booking a meeting room et cetera) to discuss the new product being developed as this can be done through collocation of the team. Team leader - the team will then be appointed a leader to drive the new product development. The leader selected will act as a driver for the process, that is ensuring the team meets and at the required phase of the development so that the project can be completed in a timely manner. Planning - the team would then decide the targets, cost, schedule, customer requirements, and design targets and also to get the team to buy into this new product. Team building – this is where interpersonal dynamics that exist are recognized in order make the team process more effective. Different perspectives of team members help to enhances creativity and productivity. Empowerment and self-direction – supervisors and team leaders are then tasked with empowering the team. This is to ensure that team members believe in the new product even as they serve as individual employees.

Idea Generation Pizza Organico has been around for ten years and has attained one of the highest track records in producing healthy and affordable pizzas. We have an open mind as it relates to generate ideas; however, over the years we develop a standard method in which we generate ideas. Our strategy includes:  Idea generation where we generate ideas in a safe and welcoming environment. This allows us to develop idea and turn them into to successful products.

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Brain storming creates developmental space to add the detail into our new product by using the SWOT Analysis helps to identify the products strength and weakness and how it will affect the community whether it is an opportunity or threat. Product Issues allows us to communicate with stalk holder, some of which are: manufactures, sales help and retailers to have a wider knowledge of their thoughts on the product and make changes needed. Resolution is where we fix the issues surrounding the product or we benchmark study competition in the market see how well their products satisfy consumers and compare it to ours. Reviewing Research is where we take all the information used and completes the product and submits it to the market to see how well it develops and how successful it will be.

Idea Screening During screening ideas at Pizza Organico, the many ideas are reduced to smaller numbers and eventually to the one product concept, prototype product, processing method and advertising plan. Our screening begins qualitatively and gradually develops, as more information is obtained, to a quantitative evaluation of the predicted outcomes for the product, production, market and finance.The initial screening is carried out by our team with a simple pass/fail on the aim, constraints and other crucial factors. This may be done by one person but it is preferable to have representatives from different areas of our business. Once product descriptions are written it is important to involve the consumer. This usually involves focus groups initially, but as the number of products is reduced, consumer or market surveys on three to five products are carried out to give quantitative data on the acceptance and the predicted market potential. Our team members are also involved - again in groups or by a survey. It is often useful to have individual people from different areas of our business to score the product ideas on several factors, and then bring them together. This highlights any problems which could occur in further development. Checklist or probability techniques can be used. The final screening is of course is done by our top management team at the end of the first stage based on feasibility studies of the final product concept. Pizza Organico has selected a vegan pizza to bring to the market because more and more consumers are adapting to a new healthy life style and are asking for their needs to be met. Pizza Organico will provide a vegan pizza that has reduced sugar, sodium, calories, fats and cholesterol by 13%, 20%, 5%, 21%, 4% respectively. Our vegan pizza will have a variety of toppings that can be customized by consumers. The following toppings will be available: 

Zucchini, lemon, chili, feta and mint, tomato, vegan cheese, spinach, artichoke, onions, mushrooms, grilledeggplant, Green peppers, cauliflower, broccoli or peanuts.

Concept Development Our concept development involves coming up with a detailed description of the idea, explained from the perspective of the customer. Pizza Organico will use a combination of internal company information searching, customer marketing and customer discussion groups. The discussion will take the format of the consumer focus group, where about 30-60 consumers will be selected to take part in the discussion. Simple descriptions of the product idea will be given to them and will be allowed free rein in their discussion. This will allow our business to get feedback on customer

attitudes and behavior towards the product and identify their specific needs and wants and expectations of the product. The basic benefits expected from the discussions with customers will be categorized into four types: Customer Benefit Category

Description

Basic Product benefits

Includes physical characteristics such as size, shape, colour. Also, chemical compositions, sensory qualities, nutritional value and safety features. Price, value for money, ease of storage, use and disposal.

Package benefits

Use benefits

Convenience in buying and carrying, information on use, easy preparation, active presentation, recipes and nutritional information.

Psychological benefits

Includes prestige, fun and friendliness, aesthetics, healthiness.

Pizza Organico’s Benefits Matched Sizes vary: small, medium and large. Very attractive package. Pizza Organico’s products are safe for the entire family. Our vegan pizzas provide many health benefits. Customers are assured value for their money as the product is very healthy. The pizza is done to order and pre-done ingredients are stored in a refrigerator and are always fresh. Healthy ingredients are used, including wheat dough and vegetables for toppings. The product is packaged in a squared, recycled, multipurposed box which makes it easy to carry out of store. Pizza is a prestigious meal for families and especially children. Pizza Organico’s new product provides reduced sugar, sodium, calories, fats; it is a new way of having pizza.

Concept Testing Pizza Organico’s concept testing will help to assess our consumer’s reaction to a proposed product or service prior to introducing it to the market. Similarly, as with the concept development stage, the concept testing method to be used by Pizza Organico will be to incorporate groups of customers in the format of surveys with a group of potential users to rate statements relating to the concept. The statements relating to the concept includes:  Are they interested in a healthy pizza?  Do they like or dislike the idea of a healthy pizza?  How desirable do they find the pizza’s features?  What features are liked about the healthy pizza?  How well would the pizza do against regular pizza?  What price would range would the customer be comfortable with paying for this new healthy pizza?  What would they like to change about the product as is presented?

Pizza Organico’s Decision Making Process Our decision making process involves five main stages: 

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Problem Recognition- the need for a new healthier pizza was derived from the general need for a healthier environment in Jamaica and the global market at large. Pizza Organico sees this as an opportunity to capitalize on this new product as there is no dominant healthy pizza brand currently in the fast food market in Jamaica. Search process- the company in an effort to satisfy the needs of our customers, researches information based on current market situations and customer preferences. In order to gather relevant information market research is done through interactions with internal and external customers. Search engines are also used as that is a part of modern information search. Information from past records is also used as sources of information. For e.g. past offerings, similar product ideas which were not created. Evaluation of alternatives- After seeking out the needs and wants of the customers, the company will seek out the best product to satisfy these needs. Based on the market researches and other information gathered about customers feeling about this new Pizza the company will decide whether to create this product or to only continue with its other regular offerings of pizza. Make the decision- After considering all the risks, the decision is made of which alternative to select. This stage requires meetings between managers and team leaders in order to ensure that the best decision is being made. Evaluate the impact of the decision- Once the decision has been made, the goal of the company is to evaluate whether or not the customer need has been satisfied. Is it above or below the expectations? Marketing Strategy Development

The success of our new product into a market depends on a sound and feasible market strategy developed from information gained from the different elements of a market. After consumers have given their feedback on the concept test of the product and questions, the team must analyze the data to develop the marketing strategy for the activities before the launch of the product, the introduction of the product and the future of the good. Therefore, Pizza Organico’s marketing team understands the role that the preliminary three stage strategy plans for the new organic pizza (veggie pizza) we want to introduce to the market. We the marketing team must divide the market in segments and choose a target audience from the segmented market who we can provide this product to with an aim to build and develop a profitable relationship, and once this target group is identified positioning our product and brand in the minds of our consumer is utmost importance. Market segmentation Pizza Organico realizes that citizens of Jamaica are being more health conscious. Often times these individuals are disadvantaged and look over by fast food franchises, therefore, the introduction of the Pizza Organico veggie pizza will be welcome by these set of individuals who are striving to eat healthy and live longer and healthier. The marketing team is proposing to use a geo-psychographic segmentation. The country of Jamaica is segment already in parishes; most of the Pizza Organico outlets are in the Parish and city of Kingston; however, there are few outlets in other parishes. The team has observe the increase promotion of healthy eating and lifestyle; hence, the growth of walk and run competitions, surge in gym membership, workplace in the

corporate area giving their employees gym allowance and even the current Minister of Health The Honourable Dr. Christopher Tufton promoting and engaging in these activities. Persons in the Kingston region share a more similar view towards healthy living, their lifestyle (thinkers) and social class (Working and middle class) depicts the subject of healthy lifestyle. Target Market The marketing team sees it fit to launch the new organic pizza (veggie pizza) Kingston mainly at the major shopping centers where Pizza Organico are located. The team is aware and has evaluated the segment size and growth, furthermore, taking in consideration the structural attractiveness of the segmented area and Pizza Organico’s objectives and resource. Pizza Organico enjoys a strong presence in the chosen market segment, Kingston, we recognized the competition level our competitors Dominos, Pizza Hut and other Pizza companies. There are readily available healthier food choices that can be substituted for our organic pizza. The team analyzes the bargaining power of both buyers and suppliers, to ensure these factors are not too strong and cause any unfavorable consequences. The company’s objective is to sell more pizza, provide quality services and product and maintain the market leader status and continue grow. The marketing team is suggesting a differentiated marketing approach. This is where Pizza Organico would tailor-made different vegetable toppings with special sauce flavours to suit the taste of different consumer. The straight organic pizza is available to the vegetarian but those consumers who would like that sauce to give the pizza a tasty appetite can enjoy such mouthwatering experience. Positioning Considering the fact that positioning is the place the product occupies in consumers’ minds relative to competitors, Pizza Organico already possess some competitive advantage that can be utilize in positioning the organic pizza. Pizza Organico boast delivery time thirty minutes and less, also, in store orders are ready to be serve in the same time range and ability to produce and deliver a product faster and more efficiently than their competition. Due to the following advantages Pizza Organico will be able to provide:  Competitive prices that are still in line with their target group social class low income and middle class customers.  A healthier choice to health conscious consumer  Customers will an option to choose the type of vegetable topping they wish to order from (callaloo, mushroom, red and regular onion, sweet-yellow-red pepper, pak choy, zucchini, yellow squash etc). In addition, customers with taste preference can order sauce to give the organic pizza a delightful taste.  Most important, all vegetable are fresh and organic. Marketing Mix According to a writer, Jerome Bradley, “"Marketing mix is a concept used by business owners, marketing executives and operations managers to describe the essential elements of a marketing strategy. Traditionally, four Ps are associated with the marketing mix -- product, price, promotion and place.” Product Pizza Organico will focus more on this marketing mix, providing customers with quality Pizza, which result in value for money. This new launch organic pizza caters for the age group 40 and under with an aim of living and eat healthy. Pizza Organico analyses and response to our customer’s feedback, also, we observe the trends in the

regions we operate. Consequently, vegetarians and non-vegetarians who are on look to snack but do so healthier, Pizza Organico veggie pizza is the way to go. Price Our customers can rest a sure that our organic veggie pizza will be affordable, stay in a similar price range as the other pizza offer. This is possible due to the assembly line production and belt-driven pizza production oven we use to deliver to maximize on our production time. Place Our customers are able to purchase this pizza in the...