Assignment

On
New Product Development

Submitted To,
Dr. Md. Kashedul Wahab Tuhin
Associate Professor
Department of Marketing
Jahangirnagar University.

Submitted By,
Durjoy Roy
Roll No. 1749
8th Batch
4th Year 1st Semester
Session: 2016 – 2017
Department of Marketing
Jahangirnagar University
Developing a New Product

For businesses to stay profitable, it is quintessential to develop new products or services they
offer along with the existing ones. But the odds of successful new launch are not always the best.
Thousands of offerings are being created regularly but only a few fulfill the target. Marketers
need to understand customers, competitors and overall market to create a product which will be
superior and deliver unique value to the consumers. A well-defined product concept is also key
here.

The service sector is the largest sector of the global economy in terms of value-added and is
especially important in more advanced economies. This sector includes a wide variety of tangible
and intangible services. As the opportunity is huge, I have decided to develop a product for the
service sector. The process is as follows:

1. IDEA GENERATION: The process starts with searching for ideas. There are
systematic ways to generate new product ideas such as interacting with employees,
involving consumers and outsiders for their input etc. I need to find gaps in the current
industry and generate ideas based on that as well.

A comprehensive SWOT analysis is required for identifying my strengths and weaknesses

and use my strengths as point of difference. After that, the current market is observed. With
the fast-paced development of technology, the service sector is leaning towards it.
Combining them both, I have generated a few ideas:

➢ Tutoring people from home (academic, art, freelancing etc.)

➢ Medicine & Drug delivery services
➢ Consulting doctor from home
➢ Online food and grocery shopping
➢ Elder companion and care provider
➢ Childcare and babysitting services
2. IDEA SCREENING: The next step in the new product development process is idea
screening. Idea screening means nothing else than filtering the ideas to pick out good ones.
In other words, all ideas generated are screened to spot good ones and drop poor ones as
soon as possible. While the purpose of idea generation was to create a large number of
ideas, the purpose of the succeeding stages is to reduce that number. The reason is that
product development costs rise greatly in later stages. Therefore, the company would like
to go ahead only with those product ideas that will turn into profitable products. Dropping
the poor ideas as soon as possible is, consequently, of crucial importance.

Some of my ideas are lucrative but will face fair share of competitors (Tutoring, Drug,
Food & Grocery Delivery) and others are simply not profitable enough in the current
context of Bangladesh (Babysitter/ Eldercare). But the online doctor visit is a feasible idea
which will enable patients to take consultation of doctors withing the comfort of home.
This will be an app and web-based service which will be called ‘VirtualDoc’.

3. CONCEPT DEVELOPMENT AND TESTING: In order to proceed with the

development process, the ideas have to developed into a concept. It is a detailed version of
the idea stated in meaningful terms. Now let’s discuss the two parts of the process:

Concept Development: I am going to develop an internet-based doctor consultation

system. This idea has passed the screening and needs to be developed into a concept. A
few alternative concepts have to be developed to choose the best one. Viable concepts for
this service are:
• Concept 1: Highly qualified doctors providing consultation to intricate to general
ailments.
• Concept 2: Moderately qualified doctors giving service with relatively lower fees.
• Concept 3: Fresh medical graduates and registered medics providing general
consultation for a minimal fee.

In the next stage, each concept is tested.

 Concept Testing: Concept testing is the process of presenting the product concept to the
consumers and getting their reaction. It could be done symbolically and physically. I will
test this prototype project physically by gathering a few medical students and connecting
them to my pilot app with patients coming to the hospital for general consultation. After
that I would get both party’s reaction, if they liked the idea and also whether they want to
see this project implemented in bigger scale or not.

4. MARKETING STRATEGY DEVELOPMENT: The next step is the marketing

strategy development. After doing the concept development and testing, we can move onto
formulating strategies.
The target market for ‘VirtualDoc’ will be initially the residents of Dhaka city and
gradually expending to whole Bangladesh. It will be easier for this type of product because
people can get the service within the comfort of their home, limiting unnecessary travel.
We will recruit fresh medical graduates who will get the opportunity to practice and gather
experience and also mid-level doctors whos’ fees are generally affordable by mass people.
I will use 80/20 principle here which means 80 percent of the fees will go to the doctors
and 20 percent commission will be deducted for maintenance and marketing purposes.
This 20% sum will be mainly used for advertising and acknowledging people that such
innovative service is available in Bangladesh. The first year of service, there are some costs
of recruiting doctors, build a reliable app and website and also making a payment gateway
system within the app. I estimate BDT 2 lacs will be enough for these purposes. After this,
a marketing budget of BDT 3 lacs will be required. Two third of this sum will go towards
tv, newspaper and billboard ads and the rest will go to online promotion.
I reckon, the system will sustain itself in the long run. The profit goals will be met and the
money in form of commission will maintain the service and also direct traffic to the app
and website.

5. BUSINESS ANALYSIS: After the marketing strategy is developed, the attractiveness

of the proposal needs to be evaluated. If the review of the sales, costs and profit projections
 for the new product satisfy the company’s objective then the product can be moved on to
the product development stage. As new information comes in, I have to improvise and
undergo revision and expansion.
Healthcare sector is of great value at the moment. The risk of not getting enough exposure
is very low. If a patient becomes satisfied with the service of the doctor, he will return
again. This is a frequently purchased service which means there will be repeat sells as well
as first time purchase.
The service will retain little profit. The most of the revenue will go toward informing more
people about the service. The leftover profit margin will be reinvested to the betterment of
the service. The goal is to get the service of top doctors of the country for part time or even
full-time within five-year timeframe when the system gets enough attention.

6. PRODUCT DEVELOPMENT: The new product development process goes on

with the actual product development. Up to this point, for many new product concepts,
there may exist only a word description, a drawing or perhaps a rough prototype. But if the
product concept passes the business test, it must be developed into a physical product to
ensure that the product idea can be turned into a workable market offering.
So, I will develop a prototype app and start a pilot program. A few fresh medical graduates
will be recruited for part time basis. Then I will monitor the functionality and feasibility of
the app. The doctors will be trained to use the app efficiently. There will also an in-built
medicine prescribing system. Patients can print out a copy of the prescription and in-voice
of the paid sum for the consultation purpose.

7. MARKET TESTING: In this stage, the service will be tested in realistic market
settings. It gives the marketer experience with marketing the product before going into full
introduction. In fact, it allows the company to test the product and its entire marketing
program, including targeting and positioning strategy, advertising, distributions, packaging
etc. before the full investment is made. After management is satisfied with functional and
psychological performance, the product is ready to be branded and go for a market test.
As for ‘VirtualDoc’, it will be launched in Dhaka city. I will recruit doctors from the capital
first and then gradually expand the reach to whole Bangladesh. Patients from all over the
 country will be able to visit the website and the app. Although the marketing function will
be limited to only to the capital at the beginning. A full marketing communication
campaign will be designed giving the service product a good exposure. Then the traffic in
the app and website will be monitored. There will also be a ‘VirtualDoc’ helpline number
which will be active 24/7 with registered medics. The number of calls in the helpline will
also be a good measurement for market testing.

8. COMMERCIALIZATION: Test marketing has given management the information

needed to make the final decision: launch or do not launch the new product. The final stage
in the new product development process is commercialization. Commercialization means
nothing else than introducing a new product into the market. At this point, the highest costs
are incurred. I have to rent an office space for helpline employees and a studio for full time
doctors who prefers to give consultation from the office.
The timing is also crucial. As a global pandemic is going on, people are more concerned
about their health than ever before. It will also be a plus point for patient as they don’t have
to travel to hospitals or clinics for general consultation limiting health risks.
A direct and full force marketing campaign will be initialized. It will include television,
print media ads, billboards, email marketing, brochures, social media and online
commercials.
Dhaka city is the most connected city in Bangladesh. Online services are well-known to
the residents of the city. So, it is selected as the base of the ‘VirtualDoc’ service operations.
Within the rollout markets, the company must target initial distribution and promotion to
the best prospect groups. Although the young generation is the most active in online
functions, my target market group will be of all ages.
This is a fairly new concept for Bangladesh. I will try to capture the attention of mainstream
media for a breakthrough and grab the attention of mass people.

In all of these steps of the new product development process, the most important focus is on
creating superior customer value. Only if I can bring some unique value with planned service
product, then it will get a chance to become a success in this everchanging market environment.