MKT421 New Product Development PDF
MKT421 New Product Development PDF
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EXECUTIVE SUMMARY........................................................................................................1
THE NEW PRODUCT PROCESS..........................................................................................2
1) New Product Strategy Development............................................................................2
Strengths......................................................................................................................... 2
Weaknesses.................................................................................................................... 2
Opportunities................................................................................................................... 2
Threats............................................................................................................................ 1
2) Idea Generation........................................................................................................... 2
a) Brainstorm products issue........................................................................................2
b) Research and development (R&D) process.............................................................2
c) Customer complaint records.....................................................................................2
d) Research.................................................................................................................. 3
3) Screening and Evaluating Ideas..................................................................................4
a) Internal Approach.....................................................................................................4
b) External Approach....................................................................................................5
4) Business Analysis........................................................................................................6
How will the product meet definite customer needs?.......................................................6
How will the product be a logical addition to the company’s product mix?.......................7
Will our product increase revenue by reaching new market segments?..........................8
5) Development: Prototype.............................................................................................9
6) Test Marketing...........................................................................................................10
7) Commercialization.....................................................................................................11
MARKETING STRATEGIES................................................................................................12
Identification of Target Market...........................................................................................12
a) Working people......................................................................................................12
b) Students or teenagers............................................................................................12
Product Strategies............................................................................................................ 13
a) Product Attributes...................................................................................................13
Price Strategies................................................................................................................14
Place................................................................................................................................. 15
Promotion......................................................................................................................... 16
a) Flyers..................................................................................................................... 16
b) Sign board.............................................................................................................. 16
c) Banner................................................................................................................... 17
d) Business Card........................................................................................................17
e) Social Media........................................................................................................... 17
EVALUATION AND CONTROL...........................................................................................18
EXECUTIVE SUMMARY
Glup Glup is a drinking water station business which consists of five to six members
for each franchise which hold important positions in the business such as Manager, Barista,
Cleaner and Rider for doing the delivery.
This business focuses on drinking water production in Malaysia. Energy drink is one
of the most favourite drinking water or appetisers that people need after having our meal or
after doing our daily routine. The light and taste give an opportunity to this energy drink to be
one of marketable products as people love simple things especially drinking water.
Moreover, the simple steps ingredient gives a lot of benefits to our company and we are so
highly confident that our market can be easily developed and spread in Malaysia. We
decided to make some innovation to our product to make it more attractive and interesting by
implying a water cup which consists of creativity and modern elements in this product.
Based on the objectives, we are venturing into the food and beverages industry.
Drinking water production has the potential of being a profitable business if it is done in a
unique war with large scale and systematically managed.
New product development plan is necessary for all entrepreneurs. It is prepared for a
group of people which are owners itself, bankers, suppliers, customers, and employees. This
plan is included in the New product development process in chapter which consists of
Developing new product and services.
We are planning to launch a new product that is still drinking water but specific to say
as an energy drink. This will be an addition to our current energy drink line up. We are
planning to put the new product name as Blue Butterfly Juice. Blue Butterfly Juice is based
on detox water that has many benefits to those who drink it such as can boost energy, lose
cholesterol, and prevent stress. We believed that we would be able to achieve business
goals with our new product.
THE NEW PRODUCT PROCESS
Strengths
Weaknesses
Opportunities
ii) Extension of Product Offerings: Glup Glup will expand product lines to
include a larger segment of the market with greater variation, and different
flavours.
Threats
i) Stiff Competition: Glup Glup faces competition from large businesses that
target niches with better but quality energy drinks. Glup Glup will lose its global
supremacy as the competition from these competitors significantly increases.
ii) Thriving Costs: From raising raw material prices to high marketing costs,
sustainability is undercut by ever-growing running costs.
2) Idea Generation
As we see, more than our customers ask for energy drinks that can boost
their energy. The younger millennials, who are willing to try, will definitely be
fascinated by a product and will consume new goods. Energy drinks help these
individuals because they are very busy and have a very demanding program,
because they produce energy and alleviate stress and discomfort. This energy
drink is also very active. In general, young people of this generation earn parental
benefits, but it is up to them to devote more time. Consumers who get low
subsidies cannot spend any money on these beverages, but consumers who get
moderate to strong subsidies will definitely purchase energy drinks. For young
adults, the same goes in. Unlike young adults, they may not be so experimentally
active on the market for new goods, but this energy drink would definitely be a
help to them, because they have already a hectic and exhausting life. These
people are going to work because they certainly have money to purchase the
stuff.
d) Research
i) Consumption: Kids, working people and sports athletes will consume our
energy drink. Pregnant women are not allowed to drink our product because it is
unhealthy for them. The reason our product is consumed is that our product
nourishes and handles you more quickly and regulates our sugar and calorie
consumption than all other liquid (except water).
ii) Lifestyle: Because our lifestyle is evolving every day, customers, in particular
young millennials 15 to 25 years of age, are affected by new goods on the
market. This age demographic has the means to purchase an exciting new
product. You still want to explore new goods on the market. There are few who do
not have the money to purchase the commodity but wish to have it. Consumers
aged between 25 and 35 have the ability and wealth to purchase and use our
commodity regardless of spending.
iii) Benefits: Our beverage is relatively excellent from other beverages as it has
no chemical taste and can be enjoyed by all ages from 11 years to older. It
includes caffeine, vitamins and minerals that balance our body's sugar content.
Our formula is like an apple on the eyes for sports stars and our product serves
like a booster of energy for them.
2) Screening and Evaluating Ideas
The third stage of the new product development process is the screening and evaluation
concept, which internally and externally tests new product concepts to remove those that
do not need more effort. Same goes to our company needing to clarify what the internal
and external approach that has to be considered to make sure our new product becomes
successful in the market.
a) Internal Approach
Internal approach is used to evaluate the technical feasibility of the proposal and
whether the idea meets the objectives defined in the new product strategy
development step. The specifications of how we plan to provide a product or
service to customers are determined by the technical feasibility. There is a factor
we have to consider in technical feasibility:
i) Materials
ii) Labour
iii) Transportation
b) External Approach
On top of that, because of our previous strategies which gave the tester to
our customer a good feedback and response, we decided to apply the same
strategies to our new upcoming flavour. Besides giving an approach to the new
upcoming flavour to our customer, they will start to talk about it and spread the
information about our new flavour. This will give an advantage to our business
and be seen as free marketing that will benefit us.
4) Business Analysis
Since they have their own taste habits, customers have plenty of needs.
Some of the customers want to taste sweet and some of them want to taste sour.
Being a client-focused company helps to better grasp and align products and
produce great value. In order to develop a strong customer base, the main point
of any organization should also be to recognize and satisfy customer needs.
In addition, we also carry out some research on our rivals whether this sort
of product has been produced. This form of drink has been launched by some of
the businesses, but they only use lemon and mint as their essential ingredients to
manufacture detox juice or tea. So, we want our business to stand out further and
give our consumers a special detox juice to try on. Our company also aims to
bring our consumers various flavours because lemon detox juices are popular in
the industry and the consumer already knows the product's flavour, so we want to
give them a special taste that they never heard of using a unique ingredient that
they never knew of the main ingredient's nature.
Finally, before we manufacture the product, our company even analyses our
key ingredients. This is because the butterfly-pea flower or "Bunga Telang" is not
known to all individuals and it is rare to locate individuals that even plant the
flower. So, this is our chance to let our customer know about this flower and what
its advantages are in detox juice. The advantages of this flower, for instance, are
that it will cleanse our immune system from all the toxic substances inside our
body. For clients who have trouble sleeping, it can also get rid of insomnia and
stress and it also provides our memory and brain with a lift.
How will the product be a logical addition to the company’s product mix?
The product mix is an item developed by the company to suit the customers'
needs. It is also an existing commodity that is kept on the inventory and in the
business for sale. Typically, a business offers various kinds of goods. Coca-Cola,
for instance, has in its range about 3500+ food names. These numerous brands
of products are classified as product lines as well. The product blend constitutes
a blend of all these product categories.
As our key product, our company advanced drink and we have already
created tons of items that fulfil our business nature. The next thing we are going
to introduce is matched to our company nature, which is also in the form of liquid,
and any time they are thirsty, it can be drunk. This drink is not only can quench
our consumer's appetite, but it also can provide advantages to our customers,
which is why our company is now selling to our consumers healthier drinks since
many people are now getting after-effects in the Covid-19 pandemic and these
days it is difficult to sustain body weight as well as our health. So, our company
gives a solution to stay healthy and active during this pandemic. The customer
also can gain lots of advantages in just one product.
Next, our business also gives our consumers various kinds of flavour from
our goods that we have previously made. This is because all our drinks usually
offer a sweet taste in our previous items, and some clients do not like sweet
drinks, particularly people who are older. Our company also provides a sour
flavour in the detox juices for those who love to drink sweet beverages and we
use peppermint in the liquid to give the sour and give our consumers a chill
sensation. According to the survey we have been given to our clients, we also try
to include ingredients to fit our client tastes. In order to make this product a big
success for our company, it is now easier to identify what the consumer needs.
Finally, this product gives our consumers an affordable price if they want to
purchase it. From our previous model line-up, this product provides lots of
reduced prices. This is one way to draw the interest of consumers and, while we
have just introduced the product, we still give our customers a better price to
purchase our goods because of the cost. Many businesses selling detox juices
sell their item in a well-done product and it has also been packed. But, in our
accessible kiosk, our company manufactures the detox juices on-the-spot and
that is why we sell our product at a cheaper price.
Since our company has been targeting a wide variety of consumers who can
appreciate our products, we are also targeting the same consumer niche for
these new products introduced, but we are currently exclusively able to use the
product for women. This is because the main ingredient we use has certain
advantages that can benefit women in different ways.
In this matter, we are certain and optimistic in our latest product that even
though we are entering a new target market, it will boost the company's sales.
The first explanation that our company will collect money is that the product we
sell is unique and distinct from our other line up. As we mentioned earlier, we
develop a sweet drink for our customers in our previous product, but we serve a
different kind of distinct flavour in the new product that is opposite to our oldest
product. It will also give consumers a good idea because many companies have
not used butterfly-pea as their key ingredient in detox juices, so it is easier for our
business to draw consumer interest because customers want to try out new
things that have never been created before.
Finally, our company is now selling a new product at a lower price than the
other rivals we offer. This would give consumers the chance to try fresh flavour
detox juices at a reasonable price. Not only is it inexpensive, but it can also offer
a taste that consumers cannot ignore and continue to buy more and more of our
drink. Instead of the product in the product mix, we still offer a lower price only for
this new product.
5) Development: Prototype
6) Test Marketing
Our company did not use three main kinds of test markets which are standard,
controlled and simulated. It is because these test markets are so time-consuming,
expensive and can alert competitors to our company’s plans. Instead of that, we are
using close feedback and online market testing as our market test for the new
product that we are going to launch which is "Blue Butterfly Juice”. This new product
has its own specialty, this product is different from all our existing products.
We are using close feedback as our first testing method. We will test the new
product by gaining feedback from friends and family about whether they will be
interested in purchasing our new product that has many benefits to gain especially
for health. Having those candid conversations with them is a great way to learn
whether there is an interest, and if there is, is it big enough to drive purchasing. This
type of feedback is relatively informal. It can be a discussion over a brainstorming
session, dinner, casual conversation or just a sit-down. The idea is not to gather any
super-conclusive data, just to see if there is potential to market the new product.
For the second testing method, we are using online market testing. The internet
is a vast network of resources that can help our company gain the insight that we
need to move forward with this new product idea. We are using online forums, online
social groups, and social media such as Facebook, Instagram, Twitter and more to
drop questions about our product idea to see if it is worth pursuing. Furthermore,
because of pandemic Covid-19. This method is the best to do market testing.
7) Commercialization
In conclusion, because many people prefer to eat a lot during this pandemic and
not all people have time to work out, this product is useful to be launched. Our
company offers a drink that includes a lot of nutritious ingredients, and even though
they are only at home, it is easier for our clients to stay healthy and fit.
MARKETING STRATEGIES
Target market refers to the area or a group of customers at which business aims
its products or services.
To ensure that marketing efforts fulfil customers' needs and wants as well as
increase profits, we have taken steps to identify and focus our effort on selected
groups of customers. This is to ensure that the marketing efforts taken are within our
scopes and capabilities of our business. With clearly defined customers, it is much
easier to determine where and how to market our products.
a) Working people
Our chosen location is basically a big town with a large number of population
and shows huge potential to develop. Besides that, our business is also located
near to the many working places, which is our primary target for working people
because energy drinks are always one of the choices for them. We have been
understanding that working people are more interested in energy drinks and easy
to get and go products such as Blue Butterfly Juice. Our taste and design of the
juice and its cup will attract them to make a purchase of our product. Plus, the
location of the shop is near to many offices and working places. So, most working
people are likely to visit a mall and this is our greatest opportunity for the
business.
b) Students or teenagers
Our secondary target will be the teenagers that live around our drinking
station. Many teenagers love energy drinks such as juice that come with a variety
colour and taste. They may come with their friends to make a purchase of juice in
our shop. If the students come to our shop after they finish school, they may visit
our shop to have juice. For the students who live in residential areas, they may
come to our shop by their own selves or with parents. This can be our secondary
main target market for our products.
Product Strategies
Glup Glup nature of business is to produce and sell drinking water. We sell many
types of drinking water such as Iced Tea, Fruit Drinks and Energy Drinks.
a) Product Attributes
i) Quality
Glup Glup will serve customers with high quality products since we will use
high quality ingredients to make our new upcoming flavour which is Blue
Butterfly Juice and contain many high-quality ingredients such as high-quality
ginger, lemon and bunga telang. Other than that, our Blue Butterfly Juice also
will have less sugar so that customers can reduce their sugar intake.
ii) Design
Each drinking water we served has a different design since this will attract the
customer. For example, we design our Blue Butterfly Juice with a slice of
lemon, asamboi and little bit colouring which is blue in colour to make our
product look more attractive.
The trade name of our business is “Glup Glup”. Glup Glup resonates with
business, legalities, and finance. Also, tolerance, idealism, and
humanitarianism. It tends to be a philanthropist. Drinking water stations refer
to the place for people to get fast serve drinking water.
iv) Packaging
We package our Blue Butterfly Juice in the bottle. The bottle only can fill 750
ml of water. Customers can get a different kind of flavour but the bottle that
we use will still have the same design as we want to maintain the business
concept.
v) Labelling
For labelling we will place a labelling at the centre of our packaging bottle.
This labelling is the logo of our business. Other than that, we will put a piece
of sticker that represents the flavour that customer purchase. As an example,
if the customer purchases Blue Butterfly Juice, the name of the flavour will
appear at that sticker with the information about bottle size and price. It will
make customers easier to recognize the flavour.
vi) Warranty
For warranty, since our Blue Butterfly Juice is perishable goods, it will not last
long more than three days. However, if after buying it, customers place it in
the refrigerator, it will last long for almost a week.
Price Strategies
Price is the value exchanged between the seller and the buyer in order for the buyer
to possess, use or experience the product or service offered. Most often, price is in
the form of monetary value paid by the buyer to obtain the product or service.
In Glup Glup, we are only adopting two strategies so far. Firstly, is status quo pricing.
This strategy is about charging a price close to the competitor’s price. It is about
utilizing a competitor’s price as a benchmark, rather than setting a price based on
company costs or customer value. The reason we choose this strategy is because it
is simplicity, the safest route to long-term survival for small firms. But this strategy
somewhat may ignore demand or cost. When it comes to competition-based pricing
strategy, the purchasing behaviour of customers is an important criterion. There are
three ways to price our product lower, higher or the same as competitors. We are
choosing to set the price below our competitors’ price. Below are the details on how
we decide the price of a cup of Blue Butterfly Juice.
Products/competitors Tealive Chattime Coolblog Glup Glup
(RM) (RM) (RM) (RM)
We decided to put a price for Blue Butterfly Juice as much as RM4.50 for
each cup. Because our new product is energy drink categories, we will put the price
for it as the same as other competitors' energy drink prices.
Place
Next, the target market of the business plays the important roles to determine
distribution strategy. Our selected branches- such as Terengganu, Selangor, Penang,
Kelantan, Pahang, and Kedah consist of 520,698 population making the business
easy to set up. Furthermore, the population which consists of more working people,
which is our primary target market, gives the business an opportunity to attract them
even though the target market is 5% of the population. Since the majority of the
population is Malay and Muslim, it gives the advantage to the business because
these customers concerned on the quality ad Halal Certificates of the product, which
our business have it.
The location of the business is inside the mall and rows of shops. As an
example, Petaling Jaya is one of the wettest cities in Malaysia. It is warm with an
average maximum of 30 degrees Celsius and receives heavy rainfall all year round.
The shop which is located inside the mall gives easy access to the customers to
come and visit the Glup Glup shop. This gives an opportunity to the business plus the
mall provided a lot of parking for the visitor. The mall is surrounded by a lot of
residential areas such as Seksyen 11 Kota Damansara where the residents easily
can go to our shop to make a purchase of energy drinks, fruit drinks and iced tea.
Promotion
Our business will be using a lot of methods and approaches to advertise our
product and service offered. This is very important since it has been seen that a good
promotional strategy may influence and increase a company’s income based on
several major companies that have already made an impact in the business industry.
The main objective of conducting a promotional strategy is to make sure that the
customers are well informed about our offer of our new products.
a) Flyers
We will provide the flyers and spread it around all branches of our company,
not to all of our branches because flyers are a mass media that easily disappear
from the distribution. In the flyers, the residents will be informed about the
location of the business, business number and the upcoming launched new
flavours that we will serve. From that, we hope that it will attract them to come
over to our shop since their homes are near to our branches. The flyers will be
printed at a cost of RM0.05 per unit and in quantity of 10,000 units.
b) Sign board
A big sign board will be displayed in front of our shop so that people who are
passing by will be alert and notice about the existence of our business. This
signboard will be designed attractively using bright colours so that our customers
are attracted and easy to read it.
c) Banner
We will be placing at least one banner at every branch of our company in this
early stage so that people will know and be informed about the upcoming new
flavour. The first banner will be displayed in front of the shop to promote the price
and the benefits of our upcoming Blue Butterfly Juice. The size of the banner is
about 9’x3’ and amounts to RM88 per banner.
d) Business Card
For our business card, we will be giving our contact number and address of
the shop so that it will be easier for our customer to keep it and contact us to
make an order for our product. This is one of the most effective ways to promote
our business. The price of the business card is RM 100 for 500 units.
e) Social Media
Besides that, we also take the opportunity to promote and sell our product all
over the country by using social media as a medium in expanding our business
opportunity. Plus, nowadays people always use gadgets in their daily life. We will
be using Instagram which teenagers always use and Facebook for the adults.
This can attract customers in large scale, and this can surely increase our
business profit. In our pages of social media, we will display our new product and
also give a customer’s feedback in order to gain trust and confidence in our
products and services.
EVALUATION AND CONTROL
Evaluation and control are an action of our company to make our products
keep relevant in the market. This is our future action in making our products
sustained and established in the market and comparable to other companies.
Sustaining and establishing in the future is not an easy thing, well-planned things
are very important for a company.