New Product Development Process Final Report PDF

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this will help to understand how to launch a new product in the market. the steps in product development is discussed here on a new product....

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United International University Assignment On New Product Development Process Course code - MTK 2320

Submitted To Dr. Seyama Sultana Associate Professor

Submitted By Nusrat Jahan Tamanna

111 171 222

Md Rakibul Hassan

111 171 124

Nela Akter

111 171 145

Siam Hossain

111 183 075

Saief Hossain

111 161 025

Date of Submission: 27th May, 2021

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Table of Content Contents Table of Content ........................................................................................................................................... ii Acknowledgement ....................................................................................................................................... 1 Introduction................................................................................................................................................. 2 The New Product Development Process ................................................................................................... 3 Idea Generation........................................................................................................................................... 4 Internal Idea Source .................................................................................................................................. 4 External Idea Source .............................................................................................................................. 5 Idea Screening ............................................................................................................................................. 6 Product Price:............................................................................................................................................ 6 Development Time and Cost: ................................................................................................................... 6 Manufacturing Cost: ................................................................................................................................. 6 Rate of return: ........................................................................................................................................... 6 Concept Development and Testing ............................................................................................................ 7 Marketing Strategy ..................................................................................................................................... 9 Plan Product Position:............................................................................................................................... 9 Marketing Mix & Share: ........................................................................................................................... 9 Business Analysis of New Products ......................................................................................................... 11 Estimate product price: ........................................................................................................................... 11 Identify product’s market potential:........................................................................................................ 11 Forecast sales volume: ............................................................................................................................ 11 Identify break-even point: ....................................................................................................................... 11 Determine minimum sale price: .............................................................................................................. 11 Product development .................................................................................................................................. 11 Test Marketing .......................................................................................................................................... 12 Advertising strategy: ............................................................................................................................... 13 Distribution strategy: .............................................................................................................................. 13 Pricing strategy: ...................................................................................................................................... 13 Branding: ................................................................................................................................................ 13 Packaging:............................................................................................................................................... 14 Budget levels:.......................................................................................................................................... 14

iii Commercialization .................................................................................................................................... 15 Summary/Conclusion ............................................................................................................................... 16

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Acknowledgement All praise to Allah! We would like to convey our thanks to all our group members. For their cooperation and group work we complete this report. The endeavor and strain undertaken by those cannot be left without recognition. First of all, we are immensely grateful to our respective Course Teacher, Dr. Seyama Sultana Professor, School of Business, United International University for her guidance, valuable & thoughtful comments, and suggesting. We are very grateful to you for give me inspiriting and encouragement throughout our study. Your untiring patience & attention to detail enable us to complete this report & get it into its present form. However, all its limitations are considered. Finally, our sincere gratitude goes to our friends & classmates who helped us whenever we needed. Despite our sincere efforts, there may appear some shortfalls in the report. We apologize for any such unintentional errors. Truly yours, Nusrat Jahan Tamanna

111 171 222

Md Rakibul Hassan

111 171 124

Nela Akter

111 171 145

Siam Hossain

111 183 075

Saief Hossain

111 161 025

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Introduction In today’s market cautious planning and a good product strategy are essential to succeed in the market. Companies everywhere are competing more than ever to develop new and unique products and gain a higher position in the market. Companies develop a high number of new products every year. Most of these products fail to secure economic advantages and end up being just another high cost for the company. The purpose of this report is to develop a product development and launch process for Company “COCONUT BLISS”, finished supplier of product made out of coconut, such as coconut cooking oil, coconut milk and coconut bottled water. COCONUT BLISS is a young company that creates innovative products for the industry. Our Products are new in market extracted from coconut in the most natural way possible with maintained hygiene. The products are not only made with the motive of making profit but for the benefit of people and market and society. Developing new unique products that offer several benefits to the customers is the goal of the company. New products are very essential for the corporate success. Innovation is a must if you want to continue competing in the market. However, the new product development is one of the riskiest processes that require focus and high investments. Several studies have been done in the successful product launch cases, and success drivers have been discovered. Corporations are using a structured idea to launch process which help them manage implementing these success drivers and reduce the risk of product launch fail. At our company it would be very beneficial to take the successful factors and organize in a structured product development and launch process which would reduce significantly the risk of a product launch fail. The new developed product launch process should include each step that should be taken when developing new products.

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The New Product Development Process Companies always face a problem in development a new product. For this reason, the new product development process helps them to understand how to develop a new product. To successfully develop a new product company must understand their customers, markets, and competitors. There are eight major steps in new product development and they are given bellow.

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Idea Generation The product we choose are based on coconut. We choose 3 products which can be make out of coconut. Those are – Coconut Bottled Water,

Coconut Milk,

Coconut Cooking Oil.

These products will be made in organic way. A new product development starts with idea generation. And we start our product development with this. We used the both sources in idea generation.

Internal Idea Source By using R&D we gather idea about this product. And by using the brain of our company’s own people we choose this product.

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External Idea Source Customers are the first priority in our external idea source. And these products are popular to the customer. Basically, people make this product at their home by their own and it’s time seeking. If the customers get this product readymade then it will make their daily life easier. And these information’s were gathered from the customer who bought coconut to make these products at their home. Competitors are also a big factor. And good thing is these products don’t have any competitors in Bangladesh. So, it will be very easy task to grab the market. Distributors and Suppliers are also played a very important role in designing the product. Distributors of coconut gave use the information about the customers problem that making the product at home is time consuming and if they could get these as readymade then it will be awesome. Crowdsourcing is also a way to gather idea about the product. And by crowdsourcing we designed our products.

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Idea Screening It’s a stage where ideas get reduces. It helps to select good ideas and drop the bad ideas as soon as possible. Our executives also made some estimation on which we can decide to choose the ideas or not. Those are given bellow.

Market Size: The market size of our chosen product is huge. Basically, in the city area people will seek for this product. In the village area people don’t willing to spend money on these products.

Product Price: The price of our chosen products is cheap. For water a coconut’s price is 80tk where we set the Coconut Bottle water price is 45tk for 500ml bottle. We set the price for Coconut Milk is 90tk for 400ml. and the price for Coconut Cooking Oil is 450tk for 1ltr.

Development Time and Cost: If our product is required huge amount of time and money definitely it may possible that it will not be profitable for us. That means we have focus on products price of time and money and if we do that, we will have to earn profit our business.

Manufacturing Cost: Not only all other cost but also, we have to focus on manufacturing cost. Because if our manufacturing of raw material products price is high then our product will be less produce and we are not much profitable.

Rate of return: we will focus on who are the before production in market and focus on consumer rate of return will be high that’s why they launched their product. If we follow our competitor then we will decide our price level for launched the product. By this information we decide to keep the idea of these product.

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Concept Development and Testing In this stage we should develop the concept and we should also test the concept among the target consumers about populations and sample. Real physical product we are not produce at this stage, rater we can create image of products for consumer better understand.

Here is our product sample. For concept development and testing 3 steps given in below. 1. Product ideas should be converted into product concept – that means product given should be given here – •

For coconut bottled water we use – Curbs 7 grams, Fiber 3 grams, protein 5 grams, Vitamin C 12% of the RDI, Magnesium 10% of the RDI, Manganese 13% of the RDI, potassium 11% of RDI, Sodium 11% of the RDI, Calcium 3% of the RDI.

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For coconut Milk bottled we use - Calories 525, Fat 50 grams, Protein 6 grams, Carbs 12 grams, Fiber 5 grams, vitamin C 10% of the RDI, Iron 22% of the RDI, Potassium 15% of the RDI, Magnesium 20% of the RDI, Manganese 100% of the RDI.

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For coconut cooking oil we use – 80% Saturated fat, Lauric acid 40%, Myristic acid 15%, Caprylic acid 9%, Palmitic acid 8%, Calories 255, Fat 55 grams, Protein 4 grams.

2. Concept Testing – here we should select the sample very cautiously for well representative population. Example: - If my target will be private university students suppose (UIU). I’m taking some students from UIU as sample for testing coconut bottled water, coconut milk and some students stay in UIU hostel students they try coconut

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cooking oil. After testing the product, they will give review of those products. This way we are going to check by target consumer and then our concept testing will success. 3. After concept testing, we identify coconut bottled water and milk those products ideas basically like by consumer and it seems very appealing to the consumers. After identify consumer needs, wants, demands we will have to work on the farther stages. On the other hand, if any product concept is not like by the target consumer definitely the product itself will not like by the target consumer.

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Marketing Strategy In a product launch process, the company's mission and objectives are defined by the company since the beginning of product planning. The goal of Marketing is to create value for the customers and ensure a profitable relationship with the customers. To accomplish this, a marketing strategy is necessary. The marketing strategy defines which is the group of the customers company will serve and how will it be served to this customer group. COCONUT BLISS’S marketing strategy is based on positioning of the product in the mind of consumers. Providing high quality products to the customers. We will distribute our product on mass level to that we can maximize the profitability. A market segment consists of a group of customers which have similar needs and respond very similarly to the marketing activities. The marketing target involves the analyzing of each market and selecting one or more segments as potential customers.

Plan Product Position: Furthermore, positioning as a place which companies occupy in the customers mind to distinguish their products from the competitors. In the positioning of our company COCONUT BLISS, the customer value differentiations and the advantages of the products towards the customers are very important. COCONUT BLISS promises better value than the competitor, it is a must to deliver those values. This process is reached through the differentiation of the market offering to create greater customer value in the market.

Marketing Mix & Share: After defining the marketing strategy, the company should prepare the marketing mix and share. The marketing mix is the most important set of marketing tools which companies can use to influence the demand of the customers for its products. This set of tools is collected into a group called the four P´s of marketing. The four P´s stand for product, place, price and promotion. Product is the article which has been developed by a company or manufacturer which desires to sell it to the customer. Product is the main competing item of the company and it is considered to be the heart of marketing mix. If a product does not fulfil the customer needs, or satisfaction, the price, promotion and place will not be able to achieve the marketing target. Our price of the product defines the value of the product to the customer. It is the most important factor which influences the marketing. Price can be determined by several factors such as; product manufacturing cost, market share, target customers, type of the product etc.

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First year pricing strategies and promotion: Our pricing strategies for the product are for total cost which includes customer services and other expenses. Pricing strategies usually changes as the product passes through its life cycle. The price should be set at moderate level in order to attract a large number of buyers and to gain large market share. Promotion is all about defining the way how the company will communicate with the customers. The core message is delivered to the customers via defined promotion tools used in sales and marketing. Promotional activities help to differentiate the product from competitors, and create a good relationship with the customers. Place is considered as distribution channel which is used to deliver the products to customers. However, the type of product, which a company offers, influence the way how it should be distributed.

Distribution and sales profit goals: Before launching a new product, it is important to understand which media preferences the target customers have. By using the right media, a company can use more effective ways in promoting the new products into the market. The factors that influence the company’s decision should firstly be decided in a research where customer's media preferences are listed. Then, company should consider the available resources to implement each listed media. The industry in which the company is operating and the position of the company in the industry, are two other important factors which influence the decision on which media channel should be used. Sales promotion is one of the most important success factors that affect the success of a product launch. Sales promotion is made through motivation activities, which encourage the customers to purchase a product or a service. For better, effective results, sales promotion activities are combined with personal selling which is another important promotion tool is used in in a successful product launch. Sales professionals on today's market are not the one that tries to push or take advantage of the customer but the one that listen to their needs and help to finding the solutions. Our company has put in what the people would love and want pure taste of coconut and benefits without any chemicals. Moreover, the sales team need to be very prepared before confronting the customers and presenting the new products. The confidence on the product can influence in the reliability and image of the product in the eyes of the customer.

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Business Analysis of New Products A new product idea that survives the screening stage of new product development requires a more sophisticated and detailed business analysis. A business analysis helps to determine the costs involved in proposed NPD, and forecast the profits that may make from the product in future financial years. The costs of developing a product are substantial. Business analysis will also help to eliminate inappropriate ideas and avoid unnecessary costs. The company has a great idea, the marketing strategy seems feasible, but will the product be financially worthwhile in the long run. The business analysis stage looks more deeply into the Cash flow the product could generate, what the cost will be, likely market share and the expected life of the product. Carry out the following steps to assess the viability of our new product: