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Developing a New Product
Developing a New Product
Lecturer Department of Finance University of Dhaka Dhaka-1000
Monowar Hossain Abdul Asif Shazia Afrin Mehnaz Tabassum Sabbir Ahmed
14-008 14-064 14-100 14-160 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
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
Members’ Name Monowar Hossain Abdul Asif Shazia Afrin Mehnaz Tabassum Sabbir Ahmed BBA 14th Batch Sec- B Department of Finance University of Dhaka Roll 14-008 14-064 14-100 14-160 14-162
Table of Contents
1.1 1.2 1.3 1.4 1.5
Origin of the Study Objectives of the Study Methodology of the Study Scope of the Study Limitations of the Study
2.1 2.2 2.3 2.4
Company’s History Company’s Vision Company’s Mission Company’s Goal
3.1 3.2 3.3 3.4 3.5
Product Description Market Segmentation Market Targeting 3.3.1 Evaluating market segment 3.3.2 Selecting target market segment Differentiation and Positioning Market Mix 3.5.1 Product 3.5.2 Price 3.5.3 Place 3.5.4 Promotion Competitive Advantages and competitive strategy Business analysis and test marketing
Promotional Strategy Advertising
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 objectivesi. 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
“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
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 conscientious 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.
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 i. Age ii. Education iii. Generation iv. Income level i. Social class
i. User stage
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.
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.
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.
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 User’s status: As our product is completely new in the market so the user of our product will be First Time users.
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. 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, like2. Selecting Target Market Segments:
Undifferentiated (mass) Marketing
Differentiated (segmented) Marketing
Concentrated (niche) 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.
“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.
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
For Freedom Fighters Commandos, we would price the toy at TK. 250
For Freedom Fighters Heroes we would price the toy at TK. 200
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.
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.
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.
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:
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
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.
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.
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