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Marketing Plan of a New Product:

ANGEL Baby Perfume

United International University


Marketing Management Term Paper On New Product Level Planning Submitted To
Prof. Dr. Mijanur Rahman Course Instructor School of Business MBA Program

Submitted By
Bipasha Das ID: 112 113 041 Sec: A, MBA Program Date Of Submission: September 3, 2012

September 03, 2012 Prof. Dr. Mijanur Rahman Course Instructor School of Business MBA Program United International University

Dear Sir: Submission of Report

This is a great pleasure for me that I have the opportunity to submit the report. I have tried my level best to put in meticulous effort for the preparation of this report. Any shortcomings may arise. I will wholeheartedly welcome any clarification and suggestion about any view and conception circulated through this report.

Sincerely, ______________ Bipasha Das

Executive Summary
Bright Company Ltd. is one of the esteemed and reputed new cosmetics business houses in Bangladesh. It has crossed one year of operation. Bright Company Ltd has endured turbulences of the last one year and has been able to renovate itself from a small trading company into a leading diversified business house. This is, indeed, a target, which Bright Company Ltd has achieved with trust, support and commitment of all stakeholders, past and present, most significantly to its customers.

Bright Company Ltd. is preparing to launch a new Angel baby perfume, a totally new perfume baby product market. Assume our main competitors are Lux, Dove, Rexona, Nivea and others, They are dominating these cosmetics market. But we are ready to compete because our offering combines exclusive features at a value-added price. We are targeting specific segments in the consumer and new business market, taking advantage of opportunities indicated by high demand for easy-to-use. Our product only for child aged (5-15) .They will be attract to our product because its innovative.

Launching a new baby perfume product is very difficult for other existing products. To take place in the very competitive market, a well-planned marketing strategy is necessary. Marketing plan by which the business unit hopes to achieve its marketing objectives through marketing strategy: market segmentation, targeting, and position. By marketing strategy, the company designs a marketing mix made up of factors under its control- Product, Price, Place and Promotion. To find the best marketing plan, the company engages in marketing analysis, planning, and implementation control. Marketing plan results in making effective market position of a new product. In this assignment, I have tried my level of best to explore a new product marketing plan through practical implication.

Table of Content

Page No.
Situation Analysis ............. 06 07 16

The New Product Development Process Marketing Strategy

Business Analysis
SWOT Analysis Strength Weakness Opportunities Threats


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19 19 19 19 19

Financial Analysis Break Even Analysis

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Others Factors
Micro Environment Macro Environment

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... .

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Conclusion

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1.0: Situation Analysis

1.1: Market Summary


Bright Company Ltd. (BCL) founded 12months ago by 10 entrepreneurs, is about to enter perfume market dominated by Lux, Dove, Rexona, Nivea and others. Overall economic condition of our country has increased the possibility of introducing better product in the market. All of the perfume company produce common type perfume but BCL produces a extraordinary type of perfume only for babies which is first ever in our country. The estimated size of the total perfume market is Tk. 42,00,00,000 with 60% growth within expected 5 years. To gain market share in this environment, BCL must carefully distribute the product to the targeted customers.

1.1.1: Market Description


Angels baby perfume market consists of consumer and business users who need to conveniently store, communicate and exchange information. Specific segments being targeted during the first year include Upper-middle class, upper-class and middle-lower class people use perfume and their child always curious to use perfume. Sometimes they use their elders product which will be very dangerous for their sensitive skins. To avoid from using these perfume we are specially launch a unique perfume item in our country market which will suitable for their sensitivity specially for 5 -15 years child.

1.2 Product Review


Our new innovative products Angel baby perfumes ingredients are Water, polysorbate 20, Hydrogenated Castor Oil, Fragrance, Sodium Benzoate, Phenoxyethanol, Propylene Glecol, EDTA, Blue 1, Simethicone, Violet 2. Our new innovative product, the AngeL baby perfume offers the following benefits: o o o o o o AngeL baby perfume will refresh our babys body. We specially made it for our babys which is alcohol free. It contains jasmine flavor and special ingredients which work best and attract child mind. A long lasting perfume which keep cool babies body for 10 hours. AngeL baby perfume cares for babys soft skins. Little more price for much more quality.

Though our product is a new addition in baby product market, we have not any direct competitors. But consumers are habituate with generally using for keep cool their babies body with elders perfume. So we think our major competitors in the market are Lux, Dove, Rexona, Nivea and others. And we also believe that as our product is specially for child, our quality of product is high so we can competitively attain this market as far as. Having say that beautiful and pleasant it is.

2.0: The New-Product Development Process

2.1 Idea Generation:


Idea generation means the systematic search for new product ideas. New product ideas include internal sources and external sources. We get idea from these two sources. Our sources are: Internal sources: Sales representative Researchers Senior executives External sources Customers Competitors Different baby product category

2.2: Idea screening:


Idea screening means screening new product idea in order to spot good ideas and drop poor ones as soon as possible. We have generated several ideas those are Shaving cream with aftershave, Shampoo with shower gel, baby toothpaste, Sun screen and fairness cream, and baby perfume. We screen out Baby perfume as our selective innovative product.

2.3: Concept developing and testing:


2.3.1: Concept developing:
Product concept is mainly based on the product idea-a possible product the company is going to offer to the market. In product concept the detailed idea about the product is stated to the development term. We screen out Baby perfume as our selective innovative product. We consider some reason to select Baby perfume. Market size: In Bangladesh there is a large baby product market. We select baby perfume based on this large baby product market. A new product in baby market: There is no specific for babies. So, our AngeL baby perfume is a new addition in baby product market. Development time and cost: It will take low time and cost to development of the product. High rate of return: Though it is a new product for baby and it contains a large market so, we are expecting the rate of return of this product will high.

2.3.2: Concept testing:


Concept testing thus tests the new product concepts with a group of target consumer to find out whether the concept has a strong appeal. For tasting our concept we develop a questioner and survey it among sample target customer. After collected feedback from them we analyze their opinion, through this process we test our concept.

Survey
Number of People: - We have survey almost 20 persons who provided their genuine views about the new product development Baby perfume. Where we survey: - We have had survey in urban area to the House wife, Service Holder, and other occupation people also. Number of question: - We have included 8 questions in our survey, the questions were close format.

Research Question

We are researcher and developer of Bright Company Ltd. (BCL). We are doing a research on New product development Baby Perfume. We request you to help us by giving your truthful answers.

Fill up the following about yourself (Use Tick Mark only)

We are surveying following these areas:

Gender: Male Question Asked: Parent Area: Urban area

Female

Children

(Please answer one option from each question)

Q.1: Common perfume product is appropriate for your babys body Do you agree with this opinion? A. B. C. D. E. Strongly agree Agree Neutral Disagree Strongly disagree

Q.2: Babies body remains soft after using common perfume. Do you think that? A. Strongly agree B. Agree C. Neutral D. Disagree E. Strongly disagree

Q.3: Are you satisfied with using common perfume which using your elders? A. B. C. D. Yes No Neutral Others

Q.4: Do you feel that Special perfume is needed to keep cool your body ? A. B. C. D. Strongly feel Feel Neutral Dont feel

Q.5: Do you want alcohol free ingredients with this baby perfume? A. Yes, I want B. Neutral C. No, I dont want Q.6: Which sizes are you prefer for this baby perfume? A. B. C. D. 250 gm 500 gm 1000 gm Other (Please Specify) ..

Q.7: If this product is available market, will you purchase it? A. Yes, ready to buy now B. Yes, but after considering a demo product C. No, not this time (Thank you very much for your kind cooperation)

Data Analysis
Quest. for Parent: Q.1: Common perfume is appropriate for your babys body Do you agree with this opinion?

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Answer offer Strongly agree Agree Neutral Disagree Strongly disagree

Number of response 0 2 5 7 6

On % 0 10 25 35 30

0% 30%

10% 25%

35% Strongly agree Disagree Agree Strongly disagree Neutral

Interpretation: - After asking this question (35%) people answer that they are disagree with this statement, (30%) answer that they are strongly disagree, (25%) answer as neutral. On the other hand only (10%) people are agreed with this statement. Analysis: - We understand through their answer that, most of people think that, common perfume is not appropriate for their babys body.

Q.2: Babies body remains soft after using common perfume. Do you think that?

Answer offer Strongly agree Agree Neutral Disagree Strongly disagree

Number of response 0 2 3 13 2

On % 0 10 15 65 10

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10%

0%

10% 15%

65% Strongly agree Disagree Agree Strongly disagree Neutral

Interpretation: - After asking this question most of people that are about (65%) answer that they are disagree with this statement, (15%) answer as neutral, (10%) answer that they are strongly disagree, on the other hand (10%) answer that they are just agree. Analysis: - We understand through their answer that, most of people think that, babies body are not remain soft by using common perfume. Quest.for Child: Q.3: Are you satisfied with using common perfume which using your elders?

Answer offer Yes No Neutral Other

Number of response 1 13 6 0

On % 5 65 30 0

0% 5% 30%

65%

Yes

No

Neutral

Other

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Interpretation: - We survey a question among childrens that Are you satisfied using common perfume which using your elder? Most of them (65%) answer that, they are not satisfied. Another (30%) answer as neutral. Other (5%) answer as yes they are satisfied. Analysis: - After getting answer from them we can say that, most of the child are not satisfied with using their elders perfume.

Q.4: Do you feel that Special perfume is needed to keep cool your body ?

Answer offer Strong feel Feel Neutral Dont feel

Number of response 6 13 1 0

On % 30 65 5 0

5% 0% 30%

65%

Strong feel

Feel

Neutral

Dont feel

Interpretation: - On the basis of this question most of children (65%) answer that they are feel special perfume is needed to keep cool their body. Other childs (30%) said that they are strongly feel. Another child (5%) answer as neutral.

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Analysis: - We come to know from their answer that most of the child in our country feel special perfume is needed to refreshing their body.

Quest for Parent: Q.5: Do you want alcohol free ingredients with this baby perfume?

Answer offer Yes, I want Neutral No, I dont want

Number of response 20 0 0

On % 100 0 0

100%

Yes, I want

Neutral

No, I dont want

Interpretation: - This is the question where all parent answer the same. All of parent answer that yes, they want alcohol free. Analysis: - We say through their answer that as babys skins is more sensitive, so that most of people think alcohol freeness is essential with baby perfume.

Q.6: Which sizes are you prefer for this baby perfume? Answer offer 100 ml. 200 ml. 300 ml. Other Number of response 4 11 4 1 On % 20 55 20 5

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5% 20%

20%

250 g

500 g

55% 1000 g

Other

Interpretation: - On the basic of this question most of people (55%) answer that 200gml.will be perfect. Other people (20%) said that prefer 100ml, another (20%) prefer 300ml.and remaining (5%) answer as other. Analysis: - We come to know from their answer that most people prefer 200ml. size for this perfume. Another people prefer 100ml. and also 300ml. So we think 100ml, 200ml, 300ml. will be product size as preferred by parent.

Q.7: If this product is available market, will you purchase it? Answer offer Yes, ready to buy now Yes, but after considering a demo product No, not this time Number of response 10 10 0 On % 50 50 0

0 50% 50%

Yes, ready to buy now Yes, but after considering a demo product No, not this time

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Interpretation: - We asked to parent that, if this product is available market, will you purchase it? (50%) answer that yes, ready to buy now, another (50%) said that yes, but after considering a demo product. Analysis: - By analyzing there answer we can said that, half of our target market we can capture without any demo product. But to capture another half of market we need demo product.

3.0 Marketing Strategy


3.1 Mission
AngeLs marketing strategy is based on a positioning of product differentiation. Our primary consumer target is middle class to upper middle class to upper high class people. Then our target will be to persuade people to spend little extra for babys protection by purchasing our product. Our strategy is to make some opinion leader to introduce the product and we want to have the positive word of mouth advertisement for our product. Our secondary target market will be the business firms like the lower middle class to low class. Our next target will be to produce more high quality product to attack the rich firms by providing them a product of more price with more quality.

3.2 Positioning
Using product differentiation, we are positioning the AngeL baby perfume the most effective fragrance with antiseptic ingredients. We will focus on mainly on the effectiveness of the perfume along with the sweet smell. Our positioning statement will be Where fragrance and refreshing is matter. You will be happy by the sweet smell of a unique Jasmine flavor. We try our best to keep your babies body and create refreshing. We will send this statement to the targeted customers. Our target customer zone will cover all the customers. Those who use LUX, REXONA and DOVE are concerned about high price and those use other perfumes are concerned about their

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performance. So, the customers can switch if they get a combined offer of service quality, price, antiseptic and new fragrance which stays longer in babys body than any other common perfume which is not suitable for them. We hope that our customers will prefer the product over the competitors product. We will have totally different and most attractive packaging process.

3.3 Target Market


Our target markets are separated into three segments. The segments are Upper-class, Upper-middle class and middle-lower class. The segment details are as follows3.3.1 Upper-class: - Upper-class is a portion of the population. According to our marketing investigators, Upper-class is the major consumer of perfume. They like different kind of perfume and their babies always very much curious to use it. So we are predicting that after launching the product they will buy this product immediately. 3.3.2 Upper-middle class: - There is a large portion of the population occupied by uppermiddle class people. They are our one of the potential customer to serve. 3.3.3 Middle-lower class: - Middle-lower class is another portion of the population. Middle-lower class is most careful and sophisticated consumer but most concern about the price and the quality. So, targeting the middle-lower class is also one of our effective decisions.

3.4 Marketing Objectives


Our objective is to introduce new innovative product in the market and make profit by satisfying our customers best. We have set a challenging objective of reaching the break even point in one year which is tough but not impossible. If the company can work efficiently and effectively in the market we are very much likely reach our objective. We have another objective of having good brand equity in the market. In the future we want launch few products in the market and want to take the advantage of launching new product under a good brand name.

3.5 Financial Objectives


AngeL baby perfume will be introduced at Tk. 420 estimated retail price per unit. We expect to lower the price after 6 months when our employee will be more skilled. When we will expand our product line then we will be able to reduce the cost as well. At the very beginning, we want to go for 2,00,000pcs perfume production and selling price is to be Tk. 420 per 200ml. container.

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3.6 Marketing Mix


Our marketing mix for the new product Angel baby perfume is as follows:

3.6.1 Product
Our product will enable our customers to have a different experience to test in using perfume. They will be able to differentiate our product in quality which is unique in the baby product market. They will not be able to feel the same way for the other perfume in the market.

3.6.2 Pricing
In the current market of Bangladesh, there are a number of perfume products exist. Through the market research we have revealed that most of these products price is Tk350. According to our cost and benefit we set our product price is Tk. 420. Reason of high price the product is innovative.

3.6.3 Place:
For initial stage we will set sales agents and distributors in several districts. They will provide the product to the whole seller and retailer, so that our product will available to the target consumer.

3.6.4 Promotion:
The most successful advertising and promotion has been through the following: Newspaper Advertisement: The Prothom-Alo, The Janokantho, The Jugantor, The Daily Star, The Independent, The Daily Samakal, The Daily Noia Digonto, The Manobjomin etc. Television Advertisement: - Channel I, ETV, BTV, NTV, ATN Bangla, Chanel 1, R TV etc. Radio: - Bangladesh Beter, Radio Furti, Radio Today, Radio Amar etc. Leaflets: - distribution about the product in different areas.

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4.0 Business analysis

4.1 SWOT Analysis


The Research and Development (R&D) department found some major strength and weakness for the new product Angel baby perfume of the company. According to the R&D department the SWOT analysis of the product is described below.-

4.1.1 Strengths
Strong relationships with suppliers that offer credit arrangements, flexibility and response for any new product of our company. Alcohol free perfume first ever our country. Excellent, stable and trained staff for customer service. Skilled employee in marketing department for the promoting the product. Totally new feature in the baby product industry. We have total quality management for our product. Strong merchandising and product presentation. Good relationship with companys suppliers, partners and customers. High quality machineries and raw materials.

4.1.2 Weaknesses
New environment for the company as because first time lunching product in the market. Lack community support so far because we have not had any formal and informal communication with any political leader of the community. Less product classification

4.1.3 Opportunities
Product diversification: Baby soap, Baby shampoo, Baby foods, Kids game, Kids fashion house, kids education care etc. Create new market: Export in to foreign market Producing consumer and toiletries goods One stop service: Home delivery, Customer care, Online order

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4.1.4 Threats
Other competitors of common perfume companies have a high market share in the perfume market. This company may be able to become threat for us by introducing new product like ours. Economic, political and technological factors of the country may be threatening for our product.

5.0 Financials Analysis


5.1 Break Even Analysis
Variable Cost (Per Unit) Direct Material Direct Labor Indirect Material Indirect Labor Fixed Cost (Total) Expected Unit Sales Manufacturing Cost Sales & Promotion (Per Unit) Total Cost (Per Unit) 260 150 60 30 20 1,00,00,000 2,00, 000 310 30 340

Manufacturing Cost =Variable Cost + (Fixed Costs/Unit Sales) =260 + (1,00,00,000 / 2,00,000) = Tk. 310 Per Unit At the very beginning, we want to go for 2,00,000pcs production and selling price is to be tk 420 per 200ml.

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Fixed Cost Break Even Volume = Unit Selling Price Unit Variable Cost 1,00,00,000 = 420-260 = Break even sales = = 62,500 Units 62,500 Units x Tk.420 Tk.2,62,50,000

BEP Showing in Graph:

Figure3.7: Break-even Chart of Angel Perfume

Price(tk.)

TR

3,00,00,000 2,62,50,000 2,50,00,000


2,00,00,000 1,50,00,000 1,00,00,000 50,00,000 62,500 40,000 60,000 80,000 Quantity (Units)

TC

(Break Even Point)

FC

20,000

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5.2 Sales Forecast


We are forecasting to sale out product mainly on direct sales through dealers. We assume that our growth rate will increase directly through direct sellings. Our dealers will sale it to the buyer, from the buyer it will go the retailers, and finally our product will go to the final customers. Since it is an internet age if there is any buyer wants to get out product through internet than another strategy will grow for that side.

6.0: Other factors


6.1 Keys to Success
The key to success of this product are Maintaining gross margin of 40% at the first year. Creating position in customer mind that, it will make a sweet smell. Experienced and eye catching advertisement on most of the areas of the country. Proper channel distribution. Proper Customer Relationship Management (CRM). Proper Supply Chain Management (SCM) Online News and Advertisement.

6.2 Critical Issues


As the product is new and innovative in the baby product market, the company has to consider some critical issues, which are as follows The products sales growth will be slow for first seven months in the very first year of their operation. Thus the company has to hold the products position for first 7 month, which is admirable. Though we target baby as our target customer, so it may take several time to take position in parents mind. As the product is new in the market, it will take too much time to stay in the heart of the consumer and the beginning consumers will be innovators. Thus attractive and effective marketing will be needed to attract, grow, and retain the customers. The marketing objectives will be to create product awareness and trial.

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The company must use heavy sales promotion to entice trial that is matter of investing huge amount of money. The products cost per customer will be high, as the product is lunching initially.

6.3 Environment
Micro and Macro environment is going to affect the success of AngeL baby perfume

6.3.1 Micro Environment


The components of micro environment such as Companys customers, suppliers, competitors, Marketing intermediaries, employees, public, and partners have great influence in success of the product. So, the company will has to maintain its CRM (Customer Relationship Management), PRM (Partner Relationship Management), ERM (Enterprise Resource Management), SCM (Supply Chain Management) and KM (Knowledge Management) effectively.

6.3.2 Macro Environment


The larger societal forces demographic, economic, natural, technological, political, and cultural forces will have effect on the success of Angel baby perfume Demography If the population sizes in Dhaka city increases then the product will in high demand. Economic - If peoples income increases then everybody will have the ability to buy our product for their sweet babies. National economic health - The product will do better if the national economy becomes recovered. But on the other hand, if the national economy becomes weaker, the product may found itself in a critical situation. Technological If our company can take new technology very fast comparing with others then obviously our company will take the advantage of creating new product and market opportunities.

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6.3.3 Political situation:


If the government looses their rules and regulation such as inspiring less income tax then our company can easily generate profit and can serve more customers. Beside political situation may have a bad impact on the product, if the situation is not in a fair position.

B Conclusion

In conclusion we can see that, the product the company is going to launch has a bright future in its market. As the product is innovative, the consumers are going to appreciate it. And according to the R&D (Research and Development) department this product will be a strong product mix for our company and once our AngeL baby perfume will reach to the hand of every of our targeted customers.

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