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New Product Plan (Mushroom Chips)

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The New Product Plan


Regal Company’s
(Mushroom Chips)

Made in Bangladesh

Term Paper On

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Introduction to Marketing
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The New product Plan

Submitted To:

Sharmin Akter
Lecturer, School of Business
United International University

Submitted By:

Subject: Introduction to Marketing


Section: D

Group Members: (Orchid)

Nancy Christina Sinha (leader)


ID# 111072174
Md.saeeduzzaman
ID# 111072131
Md. Mahbub Morshed Sobhany
ID# 111072028
Nuria Hoque Bristy
ID# 111063133
Addur Rahaman
ID# 111072114

United International University


(UIU)

April 12, 2009

Student’s Declaration
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We Nancy Christina Sinha, Md.saeeduzzaman,Md. Mahbub Morshed, Nuria Hoque


Bristy, Addur Rahaman students of United International University are declaring that
this report titled “The New Product plan” has been prepared only for the fulfillment
of one of the curse requirements of the course Introduction to Marketing. It has not
been prepared for any other purpose like awarding, reproduce or investigation for any
other authorities. So, any one can take assistance only for academic purpose.

(On behalf of the group)


Nancy Christina Sinha
Id no. 111 072174
School of Business
United International University

April 12, 2009


Sharmin Akter
Lecturer, School of Business

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United International University

Subject: Submission of the Term Paper on the New Product Plan.

Dear Madam,
We the students of BBA are submitting our term paper on “The New Product Plan on Regal
Company (mushroom chips)”. It gives us pleasure to inform you that we have completed
our term paper under your kind direct supervision.

Now, we have placed our term paper before you for your kind approval. We hope that our
term paper will please you.

Sincerely yours,

__________________ _________________
Nancy Christina Sinha Md. Mahbub Morshed Sobhany
ID # 111 072174 ID# 111072028

__________________ __________________
Md.saeeduzzaman Nuria Hoque Bristy
ID# 111072131 ID# 111063133

______________
Addur Rahaman
ID# 111072114

Acknowledgement

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This study is the conclusion of the term paper undertaken by Introduction to
Marketing, course instructor, Sharmin Akter, United International University, for
the spring students to enhancement the experience and knowledge gather from a
particular field.

We are grateful to our course teacher Sharmin Akter, Lecturer of United


International University, for her guidelines to this study.

All the group members were worked equally to fulfill the term paper works and did
all types of research activities for collecting the information related with our term
paper.

Table of Contents

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CONTENTS Page
NO.
Executive Summary 1
Introduction 02
Chapter 1.0: Current Market Analysis 03
1.1: Market analysis 03
1.2: price 04
1.3: sales 04
1.4: Gross Margin 04
1.5: Profit 04
1.6: Distribution 04
1.7: Major competitors 05
Chapter 2.0: Threats and opportunities analysis 06
Chapter 3.0: Objectives and Issues 06
Chapter 4.0: Marketing strategy 07
4.1: Market segmentation 07
4.2.: Target Market 07
4. 3..Positioning 07
4..4: Differentiation 07
4.5: SWOT Analysis 07
4.6: Marketing Mix 09
4.6.1: product 09
4.6.2: price 10
4.6.3:promotion 11
4.6.4: place 11
Chapter 5: Action Program 13

Chapter 6: Budget 14

Chapter 7: Controls: 15

References 16

EXCECUTIVE SMUMMARY

Vision: “We want to be Asian Number One Chips Company.”

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Mission: “We want to be number one chips company in Bangladesh and create
strong relationship with our supplier and ensure our customers’ health security by
providing more nutrition.”

Brand Name: Regal Company


Product Name: Mushroom chips

We are dividing the total new product plan into 7 chapters.1st chapter, includes the
market segmentation, market review and distribution, competitors’ background. We
discussed about our sale will be done into 6 division town side areas. We want to
produce 960000 of products in our first step of production. Profit will be earned
within 2 years. Our current market analysis is like product demand, makert
segmentation (age, class), and competitor’s position on market.

2nd chapter, we discussed about threats and opportunities that our product have like if
the government changes politics then it will be easy to access the product to the
market. To achieve our goal, we match the opportunities with our goal and
minimizing our threats.

3rd we included our financial and marketing objectives like development and research
activities, how to increase our customers satisfaction level, what percentage our
production will increase etc.

4th we discussed about total marketing strategy .it contains customers driven market
strategy like market segmentation, target market, positioning ,marketing expenditure
level, marketing mix (product ,price,plac,promotional activities ) and also how each
response to the threats and opportunities and critical issues spelled out earlier in the
plan.

5th action program is included in this .when our product will be launched, who will be
done, how much will cost every thing mention on this like our advertisement plan on
April, may, June.

6th chapter, our overall budget program like per unit of cost, fixed cost, variable cost,
total production units etc.

7th chapter, the controlling process, we mentioaned hear how t control our overall
marketing strategy like we will hire a market auditory to give suggestion how to
improve our plan and operational activities.

INTRODUCTION

Origin of the Report

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As we are doing Introduction to marketing, our course instructor Sharmin Akter has
instructed us to prepare a paper on the new product plan.

Purpose

• To get a clear concept how to make the new product plan


• To acquire knowledge how to make mission, vision, marketing mix etc.

Limitations
1. We did not collect the current information related with our product.
2. We had to give lot of times to collect information about competitors, market
situation because enough information not available.

RESEARCH METHODOLOGY

 Secondary :

 Internet: www.google.com , www.wekipidia .com, Source:


thedailystar.net

 Other: Collected information from marketing report, magazines,


running newspaper.

Chapter 1:00 Current Market Analysis

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1.1: The Market Analysis
We know, the market means potential customers of a product or service. Bangladesh
is a highly populated country. The birth rate is very high .As a result the children rate
is also very high.
We are not producing our product not only for children but also for teenagers, young
generation. So our total target market is very large. Market demands of market will
also increasing as much we can position in our customers mind.

Chips demand by age

500000

400000

300000

200000 Demand

100000

0
5 to12 12 to18 18 to 24 24 to
others

(All this figure are estimated depending on class and age to have an idea about
demand on chips on this variables)
This is our target market. We want to target children as well as young people of
middle and higher class of people. We are not eliminating lower class people but first
we want to
Create demand for our product then we will try to reduce our product price and serve
to all class of people.

1.2: Price:

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Two price levels are set for launching our product one for family size and one for
kidz size.

1.3: Sales:
We want to produce 960000 of products in our first step of production. Depending on
increasing demand rate, we will increase our production rate over a month. Every
year, we will increase our 10% of production. We will observe the sales and
satisfaction levels of our customers through our sales representatives.
Our Product will sale only in Urban and town side areas of Bangladesh, that’s why
we are not distributing and sales product in rural areas because our price level is bit
high.
After increasing our product demand and sales, we will try to reduce our cost of
production. As a result, we reduce our product price and distributed in rural areas in
Bangladesh.

1.4: Gross margin:


We have a grate competition in our market.1st year; we want to create huge demand
by good quality advertisement and promotional activities to create position in our
customers mind. As a result, we expected low gross margin for 1st year, it will be just
cover the fixed asset. 2nd year, we will try to sale more and more and reduce the cost
of goods sold. It will increase our gross margin.

1.5: Profit:
We expected earning profit within 2 years. Before that we will try to cover our fixes
costs and make break event points of sales.

1.6: Distribution review:


Factory Warehouse Divisional warehouse Salesman
Retailer Customer
• Our factory situated at Tongi in Gazipur. After producing our products it will
store in our own warehouse Mirpur.
• From this warehouse products are distributed 6 divisions by our own transport
and then storing these goods in divisional warehouse.
• Then our trained salesman distributes our products in the market to the
retailer.
• And finally retailers sell it to the ultimate customer.

1.7: Major Competitors:


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1. Product: Cheese Ball


:: Product Code: CB
:: Product Description:

CHEESE BALL is an extruded product made from corn and rice and coated with
rich cheese powder. It is superb in taste and something to be enjoyed all the time.
Ingredients: Corn, Rice, Salt, Vegetable Oil, Cheese Powder & Seasoning.
2.

Company Name: Meridian Foods Ltd.


Business Type: Manufacturer, Trading Company
Product/Services: Chips, Chocolate, Sauce
Customers: All person
Total Annual Sales
Below US$1 Million
Volume:
Export Percentage: 1% - 10%
Total Annual Purchase
Below US$1 Million
Volume:
3.

:: Product: Mr. Twist


:: Product Code: MT
:: Product Description:
Mr. TWIST is especially attractive to youngsters. This potato based snack has a
certain amount of modified or native starch to give it a beautiful twisty shape and
fine texture. Available with tomato paprika flavor.
Ingredients: Potato Powder, Modified Potato starch, Native Potato starch,
Refined Vegetable Oil and seasoning.
4.

:: Product: Potato Crackers


:: Product Code: PC
:: Product Description:
POTATO CRACKERS is a very popular snack prepared with combination of
wheat, starch together with potato. It is a light, crispy snack and less oily. It has an
average food value and is available with spicy tomato flavor.
Ingredients: Potato Powder, Potato Starch, Wheat flour, Refined Vegetable Oil and
Seasoning.

Chapter 2: Threats and opportunities analysis

Opportunities and threats are external factors. For example, an opportunity could
be a developing distribution channel such as the Internet, or changing consumer

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lifestyles that potentially increase demand for a company's products. A threat could
be a new competitor in an important existing market or a technological change that
makes existing products potentially obsolete.
Opportunity:

It’s an available product but of the new version of taste and quality create a
new change of the customer taste.

For the technological changes and advances it’s easier to give any information
and promotional activities to know the product popularity to the people.

If the government changes politics then it will be easy to access the product to
the market.

Availability of the raw materials is increasing day by day which is help to


produce more products.

Threats:

If government is increase the taxes and the political issues are not favor then it
will be the threats for the company.

The product may not be accepted to the people then it will be the great threats
for the company.

The product competitor rate is very high that’s why sometimes we are facing
many competing problem, which can be a threats of the company.

Company establishment rules and regulation is strict that’s why sometimes to


take any easy decisions are create complicated situations.

Chapter 3: Objectives and issues

Marketing Objectives:

1. We want to be no.1 Chips Company in Bangladesh.


2. After one month, we are collecting our sales review and satisfaction level of
our customers.
3. Diversification in our product line.
4. We want to create social value for position in customers mind.

Financial objectives:

1. Marinating a significant research and development budget.


2. Double profit will be earned within 3 years.

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3. Increasing production level each month by 1 %
4. Investing more in Cultivation Of mushrooms.
5. Establish 3 Big factory for producing large amount of product

Chapter 4: Marketing Strategy:

4.1 Market segmentation:


Geographic: divisions and district town side areas such as Dhaka, chittagoan,
Rajshahi, Sylhet, Barishal, Khulna .Dhaka – (gazipur district -town side)

Demographic: Age-5-12, 12-18, 18-24, 24 to others and higher class, middle class of
people.

Product related: 1.regular customers 3.nagetive customers


2. Irregular Customers

4.2: Target market:


1. Children 3. People Middle class and higher class
2. Young people 4.urban areas people

4.3: Positioning: To children, young people, chips customers who are seeking for
delicious taste with nutrition .Mushroom chips contains mushroom that gives you
taste with good nutrition because it has the highest level of Protein-15.53%, Fat-20%,
Saturated fat-1.42%, Carbohidrated-2.45%, Sugar-2.40%, Energy-100gm, Colastrol-
0%, Sodiam-.64%

4.4: Differentiation: Mushrooms are good sources nutrition and this is our main
ingredients.

4.5: SWOT analysis is an important tool for auditing the overall strategic position of
a business and its environment. SWOT is an abbreviation for Strengths, Weaknesses,
Opportunities and Threats

Strength: Weakness:
Technological skills New company
Distribution channels Absence of importer skills
Product quality Unreliable product
Value delivery network Financial problem

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Opportunity: Threats:
Changing customer taste Changes in government
Technological advances politics
Changes in government Acceptance the product
politics Competitor rate high
Availability of raw materials Strict rules and regulation

Strength:

Without any touch of hand the product is made because of development of


technological skills.

There are another strength of the company is distribution channels. Our


distribution channel is very strong; relation of the supplier and resellers is very strong.

The product quality is more high comparative to the other competitors,


because our main ingredients is Mushroom which is totally new flavor and taste and
also work against for the cancer.

Because of our good relationship with supplier, reseller and for the good
transportation facility our sale will be definitely increases. Our value delivery
network is in strong position. We are having good relationships with our suppliers for
a longer period of time.

Weakness:

Although the company is new, it has not established a brand or images in the
market place this is the weakness for the product popularity.

Because of the new product and company importer skills are absence here
that’s why we can’t includes any internal facilities.

For the first time the mushroom is exit in the market that’s why people can’t
properly reliable to the product quality.

Financial problem is another weakness of the company like what will be the
price Cost and investment.

Quality of the Mushroom is not up to mark.

(Opportunities and threat are discussed earlier)

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Adjustment of opportunities and threat:


The usefulness of SWOT analysis is not limited to profit-seeking organizations.
SWOT analysis may be used in any decision-making situation when a desired
objective has been defined. If the raw materials are available to the market then the
cost of the raw materials will be reduced then we can produce more product in
minimum price, and if the government politics are favor then the supply of the
product and the transportation cost will be reduced. These products have new taste
and a new ingredient which is changes the customer taste. We have to overcome the
threats. If the product is not the accepted to the peoples, then we have to increase our
promotional activities to attract the peoples and create more differentiations better
then our competitors.

4.6: Marketing mix:

Marketing mix consist of four basic things which is known as “four Ps”: product,
price, place, promotion under the consideration of our product (Mushroom Chips)
These four Ps are specified as
4.6.1: Product:

The Mushroom chips, including all the features described in the product review
section. The product is verified in two ways, first by the size 1) Kidz 2) Family and
second by the taste of the product 1) Tomato flavor 2) Potato flavor 3) Hot & Spicy
flavor.

Mushroom Chips (Burke)


Recipe By : Cooking with David Burke
Serving Size : 4 Preparation Time :0:00
Categories :
Amount Measure Ingredient -- Preparation Method
-------- ------------ --------------------------------
1 pound large white mushrooms
OR portobello mushrooms
2 cups clarified butter
OR vegetable oil
coarse salt
OR kosher salt -- to taste

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Quality that we are first assure in our product. It is highly reached by Protein-
15.53%, Fat-20%,Saturated fat-1.42%, Carbohidrated-2.45%, Sugar-2.40%, Energy-
100gm, Colastrol-0%, Sodiam-.64%, which is very much essential for specially kids
and young age people. Each and every process of the production is done by
automatic machine.

Design is the factor that will often give a company its competitive edge. It is the
totality of features that affect how a product looks and functions in term of customer
requirements. Feature leads to the materials which are used in production for making
the product. ‘

Regal industries used Mushroom powder, Mushroom starch, and Wheat flour,
Refine vegetable oil, Seasoning and Potato powder for the potato flavor, Tomato
powder for tomato flavor and Chili powder for the hot & spice flavor.
The top management of the Regal Industries has decided to give a brand name to
there new product as “Mushroom Chips”.

Packaging which gives an extra attractiveness to any particular product for “Regal
Mushroom Chips” three types of packaging will be done Red color for the tomato
flavor, Yellow color for the potato flavor, and Green color for the hot & spicy flavor.
The whole packaging process will be done without any kind of hand touch in an
automatic machine.

4.6.2: Price:
“The Regal mushroom chips” will be introduced at tk.14 wholesale and tk.15
estimated retail price per unite of medium size and tk.24 wholesale and tk.25 retail
price per unite of family size product. We expect to lower the price of packets within
few months. Because of the first time at market the company would like to give some
discount to the retailers which will make them some profit. The company are also
giving some credit terms facilities to there wholesaler and retailers.

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4.6.3: Promotion
The management of Regal Industries has budgeted tk.1, 80,000.00 for there
advertising and promotion activities for per month. As a new product in the market it
needs huge amount of advertising and promotion activities to tell the consumer about
the product and its features. For that reason management decide to go for more fancy
advertise in Television, Radio, Billboards, and Web site and in News paper.

The policy makers has decide to offer different types of popular cartoon and super
hero characters stickers and tutus with per packet of Regal Mushroom chips for
Childs and purchase intensive to the wholesaler and retail for sell promotion. By
organizing Charity concert, Open concert, Sports tournament, Reality shows etc;
Regal Industries would like to build a good relation whit people in near future.

4.6.4: Place:
At the very beginning Regal Mushroom Chips will distribute to the town area of 6
divisions across the country with companies own transport system. By considering
the future demand it has planned to distribute in the whole country area.
For unexpected future demand it always kept sufficient amount of inventories in its
own warehouse.

Marketing Organization

Chief marketing officer holds overall responsibility of all the companies marketing
activities. Company has also three top level manager for advertisement department ,
sales department and promotion department .And under sales manager company has
six divisional sales manager .They are responsible for divisional sales increasing.

Marketing Organization
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Ms.Nancy Christina
Chief Marketing Officer

Ms.Bristi Rani Md.Abdur Rahaman Md.,Hasan


Advertising Sales manager Mahamud,Promo
Manager tion Manager

Md. Azad, Reasonal Sales


manager. Dhaka

Ms. Sayla Zaman ,


Reasonal Sales manager,
Barisal.

Md. Jahidul Islam, Reasonal


Sales manager, Khulna

Mr. Rafique Khan, Reasonal


sales manager, Rajshahi.

Ms. Sabrina Azam, Reasonal


Sales manager, Sylet.

Md. saley uddin , Reasonal


Sales manager, Chittagong

Chapter 5: Action Program

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Our company “Regal Company” will be introduced in May 2009. Following are
summaries of the action programs we will during the first three months to achieve our
stated objective.
April: We will initiate a Tk 300000 trade sales promotion campaigns to educate
retailers and generate excitement for the product launch in May. We will exhibit
electronic trade show, provide mini pack sample to the selected customer. Our
promotion manager is responsible for this work
May: We will start an integrated print, radio and media advertisement targeting
consumers. This advertisement will show our products differentiation from other
competitor. Advertisements also show our products feature to the ultimate customer.
Our Advertisement manager is responsible for those works.
June: As the multimedia campaigns continue, we will add consumer’s sales
promotion techniques such as giving scratch card and lottery etc. Our sales
manager is responsible for this type of sales increasing techniques.
Chapter 6: Budget
In this section we make expected budget of sales and cost monthly and yearly. We
count break even point unit sales. We also present our expected sales revenue and
profit. Our product per unit cost is 13.5 Tk. And wholesale price is 14 Tk. And
Maximum retail price is 15 Tk..
Expected Sales Budget
Division Monthly Yearly
Unit Cartoon Unit Cartoon
Dhaka 5,00,000 5,000 60,00,000 60,000
Chittagong 2,00,000 2,000 24,00,000 24,000
Barisal 70,000 700 8,40,000 8,400
Sylet 80,000 800 9,60,000 9,600
Rajshai 50,000 500 6,00,000 6,000
Khulna 60,000 600 7,20,000 7,200
Total 9,60,000 1,15,20,000
Expected Cost Budget

Type of Cost Monthly(TK) Yearly(Tk)


Variable 1,10,40,000 13,24,80,000

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Fixed 20,00,000 2,40,00,000
Total 1,30,40,000 15,64,80,000

Per Unit Cost

Per unit Cost = (Fixed cost + Variable cost)


Unit Production

(2, 40, 00,000 + 13, 24, and 80,000)

1, 15, 20,000

= 13.5 Tk.

Break-even Unit Sales (Yearly)

Per Unit Sales 14 Tk.

Per Unit Variable Cost 11.5Tk

Per Unit Contribution 2.5Tk.


Fixed expense
Now, B E S in Unit =
Per Unit Contribution

2, 40, 00,000
=
2.5

= 96, 00,000 unit.

Expected Revenue (Yearly)

Sales (1, 15, 20,000* 14) 16, 12, 80,000

Variable Cost 13, 24, 80,000

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Revenue 2, 88, 00,000

Expected Profit (Yearly)

Revenue 2, 88, 00,000

(-) Fixed expense 2, 40, 00,000

Profit 48, 00,000

Chapter 7: Controls:

The controlling process: In the control Process, we will compare our total result
with the expected things that we are mentioned. If there is mistake s then take
necessary steps to control the overall process.
There will be two way of controlling. One is operational control and second one is
strategic control.

Operational control: If any changes occurred to our production process, then it will
be done by operational control.

Strategic control: If any changes occurred into strategic plan than it will be done by
strategic control.

Market Audit: We will hire a market audit or researcher to evaluate our marketing
plan and give advices how to improve in operational control, strategic plan, others
plans

References:
1.http://trade.coa.gov.tw/showProduct.do?
isTemp=false&rid=2465&lang=e&showMenu=true
2. http://www.recipesource.com/fgv/vegetables/mushrooms/00/rec0053.html

3. http://www.malaysiabest.net/2006/03/06/snacks-mushroom-chips/
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4. http://ihor5.freeyellow.com/mushchip.html

5. http://banglapedia.search.com.bd/HT/M_0416.htm

6. http://www.mushroomlovers.com/Health.htm

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