Professional Documents
Culture Documents
"Jaul" New Product Concept
"Jaul" New Product Concept
"Jaul" New Product Concept
We want to market Green Coconut Water. We have prepared this feasibility plan
on that basis. We have assigned a name for the product as “Jaul”. Since the raw
materials are very much available in our country, we have decided to give the
product an indigenous image.
Jaul is a kind of soft drink that provides the consumers with processed green
coconut water in bottles. For the marketing purpose of the product we have
decided to launch three product lines. The Jaul would be launched in the market
at 250 ml. 500 ml. and 1 Litre bottle.
We have set a reasonable price for the product so that all kinds of people can
afford to buy this soft drink. We have followed the Target Costing pricing
approach. We would gain a competitive advantage, as this is a first hit in the
market.
We have targeted a huge market segment for the product. Bangladesh is a large
populated country. Lots of people are looking for such a product. Green Coconuts
are not available all the time. For example: a person walking on the street.
Suddenly he feels thirsty. Now if he wishes to drink green coconut water he cannot
find it easily. It is not always found in the right place at the right time. If we launch
our product in the market, a person willing to drink green coconut water can have
it from a nearby shop. At present this is not possible. Our target market
includes health conscious people, sick people, sportsperson & many other
consumers, which we have segmented from
the Demographical, Geographical, Psycho graphical & Behavioral point of
view.
For 250mls the break-even point is at 4158004 Units. That means if we sale
4158004 Units a year, we will make neither profit nor loss. So to make profit we
have to create a market demand in such a way so that more than 4158004 Units
are sold every year. Obviously the unit cost will eventually come down because of
the law of Marginal Cost. Then the break-even point will also come down. But that
is from the long run perspective. So initially we might suffer loss but ultimately we
would earn enough profit. The consumers will first taste the product by consuming
the 250ml bottles. So we might gain a short run profit from that.
For 500mls the break-even point is 4914004.914 units per year. So we have to sell
more than 4914004.914 units to earn profit. We know that after the product is well
promoted, people will eventually consume more of 500mls, as pet bottles are more
in demand. The price is such that people will turn to the 500mls because we are
providing them at lowest possible market price.
For 1 Litre bottles we have a different plan. We know many people are not going
to consume the 1 Litre package. So we have assigned more profit on them per
unit. Our target is to sell less quantity of products but achieving higher profit. For 1
Litre bottles we have estimated the break-even point at 1724137.931 bottles per
year. As we can see, we have prepared the selling price in such a way so that, to
be in a profit earning zone we have to sell least amount of units comparing the
other 2 product lines.
New Product
1. Product Description
‘Jaul’ is a product that serve different segment of customer. The product is green
coconut water, which is unique in the current market. The green coconut water will
be processed and sold in glass bottle of convenient sizes of 250 ml, 500 ml
and 1 liter. The green coconut water will be very much refreshing and provide
great support to the sick and
health conscious people. Our target market is very large with different segments.
Our expected sales are very high. The development cost is tk.2.5 million approx.
Our company wants to develop and introduce a new Product. So, we have
gathered information through in-depth interviews. We made a survey of the market
to have a clear idea about our market, our customer demand, needs and wants.
This information helps us to know about the current market and prospects of our
new product.
Bangladesh is a country of about 150 million people.. The total market size of the
soft drink industry is about 20 million and day by day it is increasing. We have a
spread nationwide market of different convenient product. People are nowadays
very much concerned about the market and product conditions. So we have a
growing prospect of customers of “Jaul”. Among the population we worked out few
segments of customers who will prefer our product most.
Market Segments
We have observed and analyzed the market and based on the nature of the market
we segmented the market in the following sectors:
Geographic Segmentation:
Sylhet
Rajshahi
Khulna & Barishal
Chittagong
Dhaka
Demographics:
Individuals
Family
Sportsman
Business buyer
Psycho graphics:
Higher class
Higher mid class
Middle class
Behavioral:
Sick people
Health conscious
Sophisticated who take the new product from the market
Analyzing all the segments, we decided our target market according to our product
category. The target customers of “Jaul” are sick people, health conscious people,
sportsmen and tourists. The company decided to charge Tk. 12 for 250 ml bottles,
Tk. 18 for 500 ml bottles and Tk. 38 for 1 Litre bottles, if we consider price versus
taste received then we can see that taste received is more in value. Therefore
charging the mentioned prices are justified. The following graph gives a clear idea
of our target market.
Target Market:
Tourist – 3%
We separate our target market into four different segment based on their
geographic, demographic, psychographic and behavioral characteristics.
Health conscious: Health conscious people basically the sports person are one
of our largest target market. In this segment, we get a lot of potential customer.
One third of our total population is young. This is a significant number that we have
to concern about them and provide product, which is fit for them. About 5 million
people of this total number are health conscious. They spend about Tk. 500 in a
month in average.
Sick people: Sick people are one of our major considerations. More than 1 million
children suffer from diarrhoea that need liquid food. Not only child but also the adult
might suffer from those types of problems.
General Customers: Besides the above segments, the general customers will
acquire a significant portion of our target market.
Market Needs:
“Jaul” wants to satisfy its customers need. That’s why it is important to identify the
market needs. Our first consideration is to provide the best product to its
customers. That’s why we offer three different sizes of bottle with different prices
for its different segment of customers.
250 ml: The lowest price for the rural mid social class and individuals.
The Soft drink industry is very much competitive. Many soft drink companies have
acquired a significant portion of the market. But the unique features of “Jaul” will
take it far beyond the reach of the competitor. Because, no one has yet thought
about selling green coconut water in such a specialized way. To evaluate our
prospect of “Jaul” in the current market, we have analyzed the market situation in
various ways. Following are some demonstration of the analysis:
Strengths:
Reasonable price
Weaknesses:
Opportunities:
1.Monopoly market
2.Large market
3.High demand
Threats:
The major soft drinks and juice companies of current market are:
Pran Groups
Starship
Uro Cola
RC Cola
Coca cola
Pepsi
Acme
Danish
Foreign Products etc.
Distinct Competency:
These companies can try to entrance our market by launching new product lines
to compete us. Yet, we have distinct competitive advantage. That is our product is
still brand new. The other companies will take sometimes to enter into the market.
Till then we can have a monopoly market condition. The other advantage that we
have is lower price. We will sell products in reasonably lower price then other
competitors do.
To compete with the major competitors we can adopt the following measures:
3. Market Plan
Pricing Strategies
We have decided to set a reasonable price for our product when we will develop
it. We considered many factors in setting the pricing policy. We will describe a six-
step procedure:
Our company has decided where it wants to position its market offering. We have
chosen our objective to maximize market share. We believe that a higher sales
volume will lead to lower unit costs and higher long-run profit. We have set the
lower price because we assume that the market is price sensitive. Our overall
objective is to capture the maximum market share by setting lower price.
Each price will lead to different level of demand and therefore have a different
impact on company’s marketing objectives.
We have estimated the cost and want to charge a price that covers the cost of
production, distribution and selling the product, including a fair return for its effort
and risk.
There are two types of cost: a) fixed and b) variable. In our new product
development project fixed cost is 2,00,00,000 taka. Fixed cost includes-
machinery, monthly bills, and salaries of employees and so on, regardless of
output.
There are some variable costs like-cost of bottle, packaging and so on. These
costs tend to be constant per unit production. We have estimated that per unit
variable cost is Tk. 6.3 for 250 ml, Tk. 12.6 for 500 ml and Tk. 24.4 for 1 litre.
We have chosen the target costing method to set price for our product; pricing that
starts with an ideal selling price based on customer considerations, then target
cost will ensure that the price is met.
Promotional Strategies:
3.2.1 Advertising:
We initially will give more emphasis on paper ads and TV commercials. Because,
advertising through these media is the most effective way to reach the customers
and position our product in their mind. We are anticipating that this will have a
massive impact on the teenagers and other enthusiasts. Few neon signs and bill
boards of “Jaul” also can be set up in some core points of the city. We hope to
reach 75% of our customers through effective advertising.
Though personal selling skill is not that much effective for convenient products like
“Jaul”, we will inspire and train the sales persons of the retail stores to convince
people to buy our product when they will come to buy any drinks item. The sales
persons will inform the consumers about the cool refreshing taste of “Jaul” and
about the nutritious aspects. We hope that will play a significant role to increase
our sales.
We have also planned to apply some promotional tools. Initially for sometimes we
will distribute our product at 50% discount just make our new product familiar with
the customers. This will be the market-testing period for our product. Later, we may
apply the strategy of giving gifts, lucky coupons, tour tickets depending on the
market and competitive situations.
Public Relations:
We have future plans to hold seminars, commit social development, supporting
social activities, to arrange cultural functions and mobile game shows for publicity
purpose.
Distribution Channel
In the initial stage, we will distribute the products with our sole distribution channel.
When our market will spread out, we will distribute our products through dealers.
We will set our own outlets in few core market positions. When we will go for mass
marketing, we will supply our product nationwide through dealers. Our dealers will
take the products to every district of the country. “Jaul” will be available in all retail
stores of the country.
As we are targeting to the top most customer satisfaction and building long-term
customer relationships, there is no alternative for us rather than providing top
quality service. Giving the customers timely and instant quality service is our
primary concern. We even planned to open few customer service centers where
will response to customers’ interactions. We will collect information, suggestions,
ideas and opinions of the customers through these centers and will innovate and
modify our product accordingly. We also will change any defected product.
4.1 Locations
We will set our manufacturing and other working areas in convenient locations. We
will prefer the locations to set up our manufacturing firms, warehouses and
inventories in different core business points of the country where it will be easier
to both collect the raw materials and transport the final goods to the market.
The board of directors will be responsible for the recruiting activities. Recruiting will
be done through written tests followed by interviews.
To create and innovate new quality products we need to use advanced technology.
We need high tech machineries imported from the foreign countries. Not to
mention, skilled people to operate them. We have already studied all the technical
aspects and prepared a list of instruments and their costs. The machinery will be
collected when required.
6. Financial Analysis and Documentation
The following Table and graph show our expected sales for the coming five years:
Expected Sales(Per year) 250 ml. Bottle 500 ml. bottle 1 Litre bottle
For 1 Litre