Term Paper

on

Developing a New Product

Term Paper
 on
Developing a New Product

Submitted to:
Mokhlesur Rahman
Lecturer
Department of Finance
University of Dhaka
Dhaka-1000

Submitted by:
Group 7

Name Roll
Monowar Hossain 14-008
Abdul Asif 14-064
Shazia Afrin 14-100
Mehnaz Tabassum 14-160
Sabbir Ahmed 14-162

BBA 14th Batch

Sec- B
Department of Finance
University of Dhaka University

Date of Submission: April 15,2009

Letter of Transmittal
April 15, 2009

Mokhlesur Rahman
Lecturer
Department of Finance
University of Dhaka
Dhaka-1000

Subject: Submission of Term Paper

Dear Sir,

It gives us immense pleasure to submit the report on “Developing a New Product” as a

requirement of the regular BBA course of the Department of Finance, University of Dhaka.

Apart from the academic knowledge gained this report and preparation of report has given us the
opportunity to acquaint ourselves with the idea of generating a new product. We believe that the
experience we have acquired from this study will be an invaluable asset in our lives.

It expresses our gratitude to you for providing us the opportunity to learn about product idea
generating, idea developing, segmentation, promotion and many more. In spite of various
shortcomings, we have been devoted to find out the core information from different aspects. We
hope you will appreciate our Endeavour and find the report up to your expectation.

It has to be mentioned further that without your expert advice and guidance and the contribution
of all group members it would not have been possible to complete this term paper. We will be
pleased to answer any sort of query you may have regarding this report.

Thanking you

Group 7

Members’ Name Roll

Monowar Hossain 14-008
Abdul Asif 14-064
Shazia Afrin 14-100
Mehnaz Tabassum 14-160
Sabbir Ahmed 14-162

BBA 14th Batch

Sec- B
Department of Finance
University of Dhaka

Table of Contents
Chapter 1 Introduction

1.1 Origin of the Study

1.2 Objectives of the Study
1.3 Methodology of the Study
1.4 Scope of the Study
1.5 Limitations of the Study

Chapter 2 Company Profile

2.1 Company’s History

2.2 Company’s Vision
2.3 Company’s Mission
2.4 Company’s Goal

Chapter 3 Product Profile

3.1 Product Description

3.2 Market Segmentation
3.3 Market Targeting
3.3.1 Evaluating market segment
3.3.2 Selecting target market segment
3.4 Differentiation and Positioning
3.5 Market Mix
3.5.1 Product
3.5.2 Price
3.5.3 Place
3.5.4 Promotion
3.6 Competitive Advantages and competitive strategy
3.7 Business analysis and test marketing

Chapter 4 Product Promotion

4.1 Promotional Strategy

4.2 Advertising

Conclusion
Bibliography
 Chapter ONE

INTRODUCTION

Origin of the Study

One of the unavoidable aspects of modern business studies is

exposure to the practical experience. And the purpose of business
studies is to make the students wind up their imagination and to be
innovative in this field. As a part of our course F-204, Principles of
Marketing, we were assigned to submit a report on the topic
“Developing a New Product”. It endowed us with opportunities to
experience a new challenge. Through this report, we all experienced
the activities of an Entrepreneur.

We were assigned to generate a new product in Bangladesh. For this,

we have chosen to make a new company by ourselves, hypothetically.

This report has been prepared as the course requirement of the BBA
program. We, hope that this report will provide a clear insight on the
activities on developing a new product, generating new idea, the
performance, prospect and future opportunities of this new company.

Objectives of the Study

The main objective of the report is concentrated on generating new

idea of a product. This report also focuses on entrepreneurship
developing new opportunities in this new sector.
Overall, this study is to be conducted to fulfill the following objectives-
i. To generate new idea
ii. To develop the new product
iii. To evaluate this new sector of investment
iv. To make new opportunities for marketers and entrepreneur

Methodology of the Study

The information of this study has been collected from other

international toy companies. This Secondary Data has been collected
from the company brochures, web sites and paper documents.
Primary data has been collected from different shop owners by
investigating directly.

Scope of the Study

We feel fortunate to have the opportunity on work on this report.

Though we have created our own organization, we had inspired by
other existing organizations. We had worked on different International
Toy Companies and that helped us a lot to follow the concept of our
country and relevant information about toy manufacturing in
Bangladesh, we were unable to gather more information. Because of
relevant data and information, the scope of study this specific area
was very limited.
Limitations of the Study

♦ Difficulty in gathering relevant data from the local market

♦ Non-availability of some preceding and latest data.
♦ It was not possible to consider all variables sufficiently
♦ Lack of local information sources
♦ Limited experience and expertise
 Chapter TOW

COMPANY PROFILE

Company Profile

Company Background

“Toy Fantasy” commenced its journey on 5th February, 2009, as

the first Toy Manufacturing Company with national collaboration
and the partner of Kathy Kidz Wear Ltd. Technical assistance was
provided by ‘LEGO’ toy company, the top most toy company in
USA.
The company we establish with a vision of a new Bangladesh. As
there were no toy companies in Bangladesh right now, the
pioneers of this company found this specific sector very much
interesting and innovative. The partner company was very
interested about this new project.

Vision of “Toy Fantasy”

Toy is the model of one’s imaginative and creative mind. Toy’s

just do not make a child happy it also helps the child to dream, to
learn, to make new things. ”Toy Fantasy” company has vision to
change the Bangladesh, to make a difference in the lives of
young Bangladeshis.
“Toy Fantasy” company is at their first step of the journey. This
toy soldiers which are representing the Seven National Heroes.
They were so normal human beings; when they were born. But
they are not actually so normal, so ordinary. They fought for our
mother land and sacrificed their lives. So, ordinary person
becomes a hero through his death.

They are our national heroes; with no extraordinary power. But

they are they guardian angles of us.

To make our young kids informed about these HEROES and over
liberation war- is the vision of the company. Because we believe,
if the kids can be related to these toy soldiers, they would love to
hear the stories about our glorious past. And they would learn to
love their country from an early age. This will make them related
and moved from the core.

Mission of “Toy Fantasy”

 To make the new generation of our country informed about

our glorious past.
 To give the kids a wonderful place to be their elves.
 To deliver our massage about Liberation War.
 To enhance their knowledge.
 To make the kids happy and delightful.
 To help them to be creative and thoughtful.

Goal of “Toy Fantasy”

 Development of this new sector
 Development of new products
 Achieving the highest level in the market.
 Developing kids oriented products and market
 Chapter THREE

PROCUCT PROFILE

Product Description

The Current informed Bangladesh often faces a dilemma in an

effort to make the future nation builders more aware of their
cultural heritage and past. The 1971 War of Liberation is a
bloody, yet glorified mark in our history and it is our con-
scientious responsibility to make the generations of tomorrow
aptly informed about it.

With this view, our company has developed a new product. A

set of seven plastic toys. Resemble of our seven national
heroes.
 Market Segmentation
In our project, first we have segmented the market using
appropriate variables. The variables used for this project are:

Geographic segmentation i. On the basis of districts

ii. on the basis of cities
iii. on the basis of zonal
division
Demographic segmentation i. Age
ii. Education
iii. Generation
iv. Income level
Physiographic segmentation i. Social class

Behavioral segmentation i. User stage

• Geographic Segmentation
It is dividing a market into different geographic units
such as nations, states, regions, countries, cities or
neighborhoods.
As we are the first toy producing company in our country
we have targeted the main cities and metropolis for our
product.

• Demographic Segmentation
When any marketer divides a market into groups on
variables like age, gender, family size, family cycle,
income level, occupation, education, religion, race,
generation and nationality. We have used some of these
variables to segment out market.
 i. Age- As we are producing toys for children and our toys are
not only toys; also teaches them about the history of our liberation
war. So we have targeted children of 6-10 years old who are able to
read and understand and also school going.
ii. Education- As we are producing products for kids, which tells
about liberation war, we are focusing on kids who go to schools and
read in Grade 1- Grade 4. Because children within this range plays
with toys and also knows about our Liberation war.
iii. Generation- The generations we are concerned about are the
young generations who have been born after Liberation War. These
generations are the third generation after 1971.

• Physiographic Segmentation
We have segmented the market with the help of some
physiographic variables like;
Social Class: our main focus is on the-
♦ Middle class
♦ Upper middle class
♦ Lower upper class
♦ Upper class

• Behavioral Segmentation
User’s status: As our product is completely new in the
market so the user of our product will be First Time
users.

Market Targeting

1. Evaluating Market Segments:

Market segmentation reveals the firm’s market segment
opportunities. All firms must evaluate the various segments
and decides how many and which segment it can serve best.
In evaluating market segments any organization or firm must
took all these 3 factors:
• Segment size and growth
• Segment structural attractiveness
• Object and resources
 We have examined all these factors collected information
about the expected probability for various segments.

2. Selecting Target Market Segments:

Target Market consists at a set of buyers who share common
needs or characteristics that a company decides to serve.
Market targeting can be carried out several levels, like-

Undifferentiated Differentiated
Concentrated
(mass) Marketing (segmented)
(niche) Marketing
Marketing

We have selected concentrated marketing which a firm goes

after a large share of one or a few segments or niches.
As our company is completely new and have noel limited
resources we have targeted this, because we think through
concentrated marketing, we can market more effectively by
fine-tuning our products, price and programs to the needs of
carefully defined segments. We have targeted our product
toward only consumers that we can serve best and most
profitably.

Differentiation and Positioning

After deciding which segments of the market it would
target, company must decide on a value positioning on
how the new product will create differentiated value for
targeted segments and what positions it wants to occupy
in those segments.

Product’s positioning-
“It is the way the product is defined by
consumers on important attributes- the place the
product occupies in consumers minds relative to
competing products.”
 • For our product we have emphasized both on
the product differentiation and product Positioning. We
made our product in such a way that it can crate
differentiated value for customers and can acquire and
retain a position in consumers mind relative to
competing products. For this we have followed some
strategy. We have also followed the three steps of
differentiation and positioning task:

1. Identifying a set of possible customer value

differences that provide competitive
advantages upon which to build a position
2. Choosing the right competitive advantage
3. Selecting an over all positing strategy

In our categorized product “Freedom Fighters Commandos

“ensured the product quality,
Where “Freedom Fighter Heroes” offers low price.
By differentiating the toy above categories Freedom Fighters
will make a position in Juniors and their parents mind.

Market Mix
1. Product
The product, the" Freedom Fighters”, Action Figure Toy, is
such a product that should add value to a buyer’s life. It should
also add utility, and meet the wants and needs of targeted
consumers. The product should be unique and different from all
similar products that are already available on the market. The
strategy is to differentiate the product’s design and packaging,
which in return will cause this Action Figure Toy to stand out. .
According to the target market Freedom Fighters will be
segmented as follows:
 Freedom Fighters Commandos
 Freedom Fighters Heroes

2. Price
For Freedom Fighters Commandos, we would price the toy
at TK. 250
 For Freedom Fighters Heroes we would price the toy at TK.
200

3. Place
The most important part of marketing is how our product will
get from the seller to the buyer. Many products go through a
channel of distribution, which involves manufacturers,
wholesalers, retailers, and consumers. The distribution strategy
proposed for the " Freedom Fighters”, Action Figure Toy, is
through the large retailer stores, toy shops, departmental
stores like Agora and Nandan.

4. Promotion
Product promotion is communication spread through
advertising, publicity, and sales promotion. “Freedom
Fighters”, Action Figure Toy would advertise their products by
using commercial, magazine ads, which are to be placed before
schools, amusement parks, residential and commercial areas
like Dahnmondi, Motilhil, Farmgate, Banani, Gulshan etc, in
billboards, and the sides of buses. Advertising would also be
done to promote new products, remind consumers of existing
products, and also promote the image of the company at hand.

Competitive Strategy
An advantage over competitors gained by offering
consumers greater value either through lower prices or by
providing more benefits that justify higher prices.

A company can differentiate and position itself as providing

superior value and it gains competitive advantage. An alert
company can find ways to differentiate itself at every
customer contact point. A company can differentiate itself
and its market offer along the lines of product, services,
channels, people or image.

We have selected product differentiation strategy. Our

product is differentiated by
 features
 performance
 style
 design
 The toy we are producing is different from the other toys. It
will provide superior value to the customers. In our country
our toy is first that will tell us about our glorious liberation
war and our freedom fighters. As not every difference makes
a good differentiator, our product is different from other in
such a way that each difference has the potential to create
customer benefit.

 The difference will deliver a high valued benefit to

target customer.
 Competitors don’t offer the difference.
 The difference is communicable and visible to the
buyer.
 Competitors can not easily copy the difference.
 Buyers can afford to pay for the difference.
 Company can introduce the difference profitability.

Business Analysis and Test Marketing

Business Analysis means a review of sales, costs and profit
projections for a new product to find out whether the product
satisfies the company’s objectives. There are three stages in
business analysis;
1. Product Development
2. Test Marketing
3. Commercialization

Test Marketing

As we have developed our product we should go for a test

marketing to find out whether the product is fulfilling our
objectives.
There are three types of test marketing process, like-
 Standard Test marketing
 Controlled Test Marketing
 Simulated Test Marketing
We should go for a Simulated Test Marketing. Because for a new
product its the best way to judge the customers choice.
The process:
In a store we placed different types of toys of different
companies. And some of our employees were there to observe.
We picked randomly some consumers, children, parents and
teenagers to do the examination. There were 100 peoples in the
room. Around 60% of the children was amused of our product.
Around 40% parents loved the idea and teenagers thought it was
great.
So this shows that our product will be appreciated by the
customers.

Chapter FOUR
 PRODUCT
PROMOTION

Promoti
onal Strategy
As we are starting a new manufacturing company we have to go
through heavy promotional activities. We have decided and made
a plan strategically. We have segmented our whole promotional
activities into two parts:
1. Caravan campaigning
2. Advertising in different media

1. Caravan Campaigning:

Caravan is a way to deliver the massage to people by moving one

place to another. This type of promotion or activities involves
showing documentary, acting, singing, displaying posters and
films etc.
For our promotional activities we decided to go for caravan
campaigning in the main 5 districts. We would do the campaign
in the cities and would try to deliver the idea of our product.
 Chart of our Promotional Zone:

Rajshahi Chittagong

Khulna Dhaka

Sylhet Barisal

Campaigning Process-
 Campaigning in Schools:
It will include short film show or documentary show among
the children.
Some game shoes among the children.
Hand over some of our toys to them.

 Campaigning in Shopping Malls:

Shopping Malls like Basundhara City or Jamuna Future Park
will be our target places also.
Models of our toys will be displayed over there.

 Campaigning in Theme Parks:

Theme Parks like Fantasy Kingdom and Nandan are such
places where kids love to go. As we are producing toys;
theme park would be a great place.
There will be models and booth. This will provide information
as well as our products.

2. Advertising in different media:

Advertising means to inform the consumers about any new
product. It helps the product to be familiar to the consumer
group. For a new company aggressive marketing is important for
market penetration.
As a new manufacturing company we are going to advertise our
product in the Print and Electronic media. There will be-

 TV commercials
 Bill-Board advertising
 Adds in news papers

Advertising
Any paid form of non personal presentation and promotion of
ideas, goods or services by an identified sponsor are called
Advertising.
For making a way for a new product- Advertising is must. And
advertise plays a vital role in the promotion.
Marketing management must take four important decisions
when developing an advertising program:
1. Setting advertising objective
2. Setting the advertising budget
3. Developing advertising strategy
4. Evaluating advertising campaigns
Here we are going to discuss about our Advertising Object and
Advertising Budget.
• Advertising Objective
Objective Setting is a specific communication task to
be accomplished with a specific target audience
during a specific period of time.
As we are launching a new product and our company
is new in business our Advertising Objective is
“Informative Objective”, because-
 Used heavily because we are introducing a new
category
  Informing the market about this new product
 Explaining how the product works
 Explaining whom the products for
• Budget Setting
After determining the advertising objectives, the next
thing is to set the advertising budget for each product.
For a new product typically need large advertising
budgets to build awareness and gain consumer trial.
We are assuming our promotional budget will be
around 50lakh. And at the primary level profit will be
less. This financing will be done from Bank Loans.

Conclusion
By placing the product next to an existing company’s product,
consumers may not see the benefits of switching, and could continue
to prefer using the existing product rather than even considering trying
the new one. But by placing the new product next to a competitor’s
product, it may lead to the consumer questioning which product is
better, hopefully causing the consumer to try the new product, over its
competing product.
We hope the grand success of “Freedom Fighters”, action figure
toy by formulating the above strategies in a coordinating way.
Bibliography

Kotler, Phillip and Armstrong, Gray, 2008, Principles of Marketing

Tull, S. Donalds and Hawkins, I. Del, 2002, Marketing Research
www.weikipedea .com.
www.lego
www.toyrus.com
www.wal-mart.com