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MGMT 522: NEW PRODUCT DESIGN

Team Project: The New Coffee Flavored Jell-O

Feb. 23, 2012

1 Product analysis 2.Table of Contents 1.2 2.4 3.6 Objective ------------------------------------------------------------------------------------Market Selection --------------------------------------------------------------------------Positioning ----------------------------------------------------------------------------------Marketing Mix -----------------------------------------------------------------------------Market Research Methods/Survey Facts ---------------------------------------------Sales Forecast ------------------------------------------------------------------------------- 4.10 Exhibits --------------------------------------------------------------------------------------------.9 5.18 .5 3. Business Plan --------------------------------------------------------------------------------------.2 3.1 2.4 Idea Generation & Screening ----------------------------------------------------------Product Offering --------------------------------------------------------------------------Pros & Cons of New Product Launch -----------------------------------------------.3 3. Executive Summary -----------------------------------------------------------------------------.11-17 Reference ----------------------------------------------------------------------------------------------.Competition & Substitution ------------------------------------------------------------- 3.1 3.3 2. 2. Marketing Strategy 3. Engineering & Manufacturing Plan ------------------------------------------------------------.

Base on survey results. Jell-O gelatin dessert is known as ³America¶s Most Famous Dessert´. this new product has a purchase intension of 33% and the financial forecast indicates approximately 94 million in sales revenue. We found that Jell-O. ranging from 20 to 34 years old. the gelatin dessert monopoly . We propose Jell-O to launch the new coffee flavor targeted at young adults. 2. "JELL-O gelatin snacks are a good way to add fun and flavor to your day".1 Idea generation All our team members are Asians and had good experience in coffee flavored Jell-O (See Exhibit 1) which is originally from Japan. 2. half American people are coffee fans and they consume most coffee in the world. we developed a whole new coffee flavored Jell-O to offer our customers another choice to enjoy both coffee and Jell-O. Product Analysis The coffee flavored Jell-O is a brand new Jell-O which has the color and flavor of black coffee. It can be served as a dessert after meal or as a snack for fun for people who are interested in jelly and coffee. From our research. which means fun and flavor of coffee are desirable for American. Executive Summary With Jell-O's brand concept and slogan. Our current ideal product is serving as a refrigerated gel cup which is ready to eat.1. People believe that Jell-O can turn a childhood treat into adult indulgence.

provides various items but lack of coffee flavor. we believe the coffee flavored Jell-O has a potential market. developing a coffee flavored Jell-O has become our best option. we inspected our idea through three basic screens: consumer and product screening. Second. Therefore. the U.S. coffee flavored jelly is an existing product in Asia and it is an product extension for Jell-O. we found out that American loves coffee deeply. which means the new product is practical and feasible. company screening and financial screening. In addition. equivalent to 150 million people. According to coffee statistics. they have a brand new way to enjoy coffee and to obtain caffeine. Jell-O is well known and even called as ³America¶s most famous dessert´ and the brand name has a great reputation and stable market share. interviewees think combining coffee and Jell-O is creative and unique. That means. drink coffee. after researching. has an enormous coffee market and coffee is definitely one of the most popular drink in America. is listed as the eighth greatest coffee consumer.S. is the country which consumes most coffee in the world and on a per-capita basis. For example. Hence. the U. Exhibit 3A. According to our survey. For coffee consumers. 3B and 3C show some facts of coffee consumption in the United States.S. Jell-O is a brand lasted over . Idea Screening As shown in Exhibit 2. the product has great competitive advantage since the cost is low because Jell-O can utilize current facilities to produce coffee flavored Jell-O. First of all. Additionally. 50% of American. Regarding the product.in the United States. the U.

From our field taste test. the product extension reduces our risk and cost. For example. We purchased the necessary ingredients and started experimenting. our consumers have a variety of creative ways to enjoy it. in terms of sweetness. 79% think it was just right and 7% think it was too sweet. In addition to directly consume our coffee dessert. 2. Lastly. Many batches of different combination of factors listed above were created. Coffee flavor. Consistency/texture. which makes the coffee flavored Jell-O worth doing. There are primarily three primary features in our product offering: 1. pouring creamer or condensed milk. we derived that 81% of people enjoyed our offering. therefore we sought out to recreate the flavor from memory and will improvise along the way.2 Product Offering Our team members have all tasted coffee flavored gelatin desserts before. 2. We were able to finalize an preliminary prototype of our product that we think would field test well within our targeted customers (young adults 20 to 34). readjusted. 3. 9% of people found it too firm. adding into milkshake or milk tea are all tasty ways to experience . All these suggestions gave us good instructions to improve our product and finalize a best one. and 14% think it¶s not sweet enough. preserved/discarded (if it fails to satisfy the taste buds of the testers). Sweetness. and then produced again by keeping to the combination of elements that worked best. 10% of people found it too soft. prominent reputation and dominant market share. tasted.100 years and the company has great experience. garnishing the ice cream. resulting in great competitive.

thus. which also reduce the risks.4 Competition and substitution As of 2008. However. distribution network and facilities to produce coffee flavored Jell-O. it is also inevitable to face some hurdles when launch a new product. like pudding. is coffee flavored Jell-O is positioned as a dessert and a snack.1 Objective The objective is to launch a new coffee flavored Jell-O to the U.coffee flavored Jell-O.3 Pros and Cons of New Product Launch We are confident that our coffee flavored Jell-O can bring abundant advantages for Jell-O. a product line extension can save some costs since Jell-O can utilize the existing resources. other flavors are undoubtedly substitutions for coffee flavored Jell-O. 3. cakes. to young adult and adult who enjoy more coffee. Furthermore. other desserts and snacks. Jell-O sells over 158 products and had a dominant market share. fruits and ice creams are all coffee Jell-O¶s substitutions. Our competition will be some unnamed generic brands which offer low price products.S. In terms of substitution. Moreover. 2. Exhibit 4 indicates the pros and cons of launching coffee flavored Jell-O. Jell-O¶s original target customers. market as the next top . yogurt. Jell-O will benefit from this new product because it is able to extend its market from children. it is slightly inconvenient with the original brand image. However. Marketing Strategy 3. processes. 2.

We propose the following objectives for the first and second years of coffee Jell-O market entry: First-year objectives 1.2 Market Selection Because of the distinct coffee aroma and flavor. From these points we can detract that the traditional demography of Jell-O customers are not ones we are looking for with our new coffee flavored Jell-O. this product offering will not be targeted at kids. Achieve retail sales revenue of 94 M (See Exhibit 7) 3. we aim to offer this product to young adults living in urban metropolitan areas. Build scale in selected cities 2. we will not be adding alcohol into our products anytime soon. Retain 50% ACV 4.selling gelatin desert product targeted at young adult consumers (age 25-34) with a goal to expand the current existing Jell-O market and further grow its brand image. if ever. Achieve 50% awareness 4. Achieve a 2-3% sales growth the exception of Jell-O consumption in young adults in the general form of ³Jell-O shots´ by mixing alcohol into the recipe and served at parties. instead. let alone enjoying coffee flavored food products. Build scale nationally. But due to branding and regulation issues. Achieve 50% ACV 5. Jell-O in general has an image appeal that it is a ³kid¶s dessert´ with Second-year objectives 1. Hence we aim . Achieve above 50% awareness 3. To tag along with this idea is the fact that adults enjoy a ³spiced up´ recipe of Jell-O more for its functional purpose and the departure away from fruity flavors that has more appeal to kids. Kids in general do not drink coffee. 2. Parents will also be hesitant to buy something for their children¶s consumption if the food itself contains caffeine because of health concerns. Test market phase 3.

7%). and we were then able to extract the data and come up with a market estimate of 3.75 per pack of six cups. The income range does not seem relevant because at a priced of $2. We then conducted a field survey within the Krannert community as a sample to our target segments and tested for both purchase intention and product response. we can build on the adult¶s nostalgic feeling of eating Jell-O dessert as a kid with a more matured flavor such as coffee. 3. Thus by introducing the coffee flavored Jell-O.81 million households using awareness rate of 45% and ACV of 50%. which totals to roughly 51 million households. the continuation success of Jell-O will rely not only on the existing market segments targeting at kids but also the transition of Jell-O into something that adults also enjoy.3 Positioning Jell-O has long established the image of childhood dessert for Americans. Generally speaking anyone within the age range from 20 to 34 who drinks coffee and enjoy Jell-O desserts (with the exception of a few non-drinkers but Jell-O consumers) will be our target market. . With this offering. it is as casual a purchase as buying a case of soda. we could also target a proportion of people who does not drink coffee regularly but enjoy eating coffee flavored desserts. We obtained the demographic information in the United States for Young Adults age 20-34 living in urban metropolitan areas (urbanization rate of 86.to cater to young adults with coffee flavored Jell-O. The total effective sample size was 70. which has similar effects of drinking coffee but also is fun in the form of eating dessert.

3. We do not want to create consumer aversive reaction by pricing above. at the same time issue retail coupons to offer consumers incentive to try the new product.4% of people showed purchase intention at the current Jell-O price of $2. hence we will proceed with the existing pricing strategy. If market responds favorably. metropolitan cities using the existing sales channels such as supermarkets and wholesalers. which indicates that 71.5 Market Research Methods/ Survey facts In order to understand the reactions from potential customers toward our coffee Jell-O. we . Plans for introductory stage will bundle coffee flavor with current best sellers such as strawberry.3. Place The coffee flavored Jell-O will initially be introduced at selected major U. Price Based on our survey results. nor do we want to cannibalize the sales of existing products by pricing below this level. we will proceed to roll out the powder-mix retail box for deeper market penetration.4 Marketing Mix Product The current offering of coffee flavored Jell-O will be offered in the form of ready-to-eat retail pack of six cups.S. Promotion Jell-O will plan budget for new coffee flavored Jell-O advertising campaign.75 per pack of six.

1% trial rate (assume .8 packs (pack of 6) per year. the purchase intention results a 33. the Jell-O will use current distribution channels and allocate proper advertising budgets to promote this new product. 2012. We believe the participants in the survey fairly represent our target young adult market segment and we are confident that the coffee Jell-O will have high potential to become a successful product in the future.6 Sales Forecast The sales forecast (See Exhibit 7) of coffee Jell-O is based on the assumption that Jell-O will launch new coffee flavored product as product line extension. 3. sweetness. The goal of this survey is to understand the purchase indentation and some specific issues or topics for the product development (e. Moreover. According to our survey. 72% of participants indicated that they are interested in the coffee Jell-O (23% definitely buy.g.conducted a survey in Rawls Hall in Purdue University campus on March 13th. Our survey has 70 participants who are mostly graduate students with approximately age range 25 to 35 which match our target segment. 49% probably buy) and 76% of participants like the current product tastes. The survey is a face to face interview (See Exhibit 5 for the survey form) and the participants were served with coffee Jell-O. The repeat purchase has a result of 11. texture and coffee flavor). The major concern of the coffee Jell-O is that 37% of participants in our survey actually do not drink coffee. The overall results of the survey are favorable to the coffee Jell-O (See Exhibit 6). thus they will not buy any coffee flavor products.

and Payless).S.7% people live in the urban area. Since the Jell-O is a well-known brand in the U.S. Our target segment are young adults (age 20 to 34) who live in cities area and the target market is U. there are 59 million people who are 20 to 34 and 86. we expect that the new coffee Jell-O will generate 93..87 million in revenue for Jell-O. the total trial household is 3.75. to launch a new coffee flavor would require minimal . The total target households are 51. The coffee Jell-O would have different customer segment which targeted at young adults. 4. we assume a 75% awareness of existing products and 45% of awareness of the new coffee Jell-O and the ACV distribution of 50% given that the Jelly-O is available in most of distributors (e.g. Our survey shows that the repeat purchase would be 11. Given that the current 6 pack Jell-O sales at $2. Engineering & Manufacturing Plan The Jell-O plant in Mason City.81 million. Assuming Jell-O currently has sufficient or extra capacity at its manufacturing plant.2 million. Iowa is responsible for producing the entire supply of ready-to-eat Jell-O gelatin products. 30% probably buy will actually buy). With all the above information.8 per year. we consider that the new product will have positive NPV for the Jell-O. we expect the new product would bring in new customers for Jell-O and a minor cannibalization effect might happen. Base on the statistic data. Target.80% who definitely buy will actually buy. Since the new coffee Jell-O does not need additional capital investment and other new technology. we would set price equal to the current price to hold the current customers. Wal-Mart. In conclusion.

." Jell-O¶s continuing marketing and product research is the key to build up its brand image. to expand production facilities. further modify the product. Also. and develop more suitable strategy along with more accurate sales forecast. The only new raw material would be required is coffee. There would be no need to purchase new equipment. the world's third largest food and beverage company which also owns Maxwell House. Jell-O should be able to deliver this new flavor to existing distributors.S. and retailers through its current supply chain system without additional cost. before launching this new coffee flavor to the market. and Coffee Jell-O could be the next Jell-O top seller! . or to acquire new technologies. the supply of coffee should be easy to establish. We believe Jell-O can turn a childhood treat into adult indulgence. metropolitan cities in order to gather real data. product. Jell-O should complete a thorough concept. whole seller. Business Plan Jell-O gelatin dessert is known as ³America¶s Most Famous Dessert´ and has a campaign slogan "There's Always Room for Jell-O.capital expenditure. Since Jell-O is owned by Kraft Foods Inc. As usual. 5. its constant and consistent tweaks are the reasons why Jell-O is always fun and fresh. and market testing for Coffee Jell-O to determine consumers¶ responsiveness and their willingness to buy. We also propose Jell-O to test sell Coffee Jell-O in selected U. since this is a line extension.

e-importz.census.htm 7. 2007) 3. International Coffee Organization (ICO) .http://www.ico.polarismr.gov/cps/ 6.com/Support/specialty_coffee. Tool kit ± Is it real? Can we win? Is it worth doing? (Harvard Business Review . http://esa.asp 2.pdf 5.Dec.upenn.org/index. http://www.jellogallery. http://www. http://www. http://www.com/POV/bid/78786/Marketing-Research-Turns-Childhood-Treat-I nto-Adult-Indulgence .un.org/ 8.Reference: 1.edu/downloads/Rumbaut%20Komaie%20-%20Young%2 0Adults%20in%20US.org/unpd/wup/index.transad.htm 4. http://www.pop.