LAUNCHING A NEW PRODUCT

UNIVERSITY OF

LAUNCHING A NEW PRODUCT

Presented To: Sir Muhammad Naeem Ashraf

Presented By:

Faisal Bashir MBA.Fianace 1632-309063

Rana

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Table of Contents:
Serial # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Particulars Acknowledgements Important Words Introduction Literature Review UK Soup Market Analysis Competitor Analysis Marketing Objectives Communication Objectives Promotion Media Planning CRM plan Control and Evaluation Budget overview Conclusion

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Preface Preface
All of the group members had a great experience while making this kind of project. It was very difficult for us to make such kind of project because we had never made any project in this form. There was a lot of burden on us while making this project due to less availability of time. But we start working on project with the name of AllahAnd at the end of the project we realize that it will help us alot in our project and our future career

We were expected to make this project according to the terms and condition, which were communicated to us by our instructor Mr. Muhammad Naeem Ashraf give the professional look to the project by avoiding mistakes. And to insert the main outlines in the project..

With the help of Allah, all the group members have made a lot of effort to meet the above mentioned expectations. We work on all the outlines which were communicated to us. And presenting this project of such nature for the first time in this university.

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Acknowledgemen t
Thanks to Allah for providing us the strength, courage, direction and skills to learn, acquire knowledge and the ability to accept and meet challenges. Secondly we would like to thank our instructor Mr. Muhammad Naeem Ashraf, who have helped in all those stages where we were facing difficulties & problems. And provided his assistance to us in the form of advice and suggestions. whose encouragement, guidance and support from the initial to the final level enabled us to develop an understanding of the project. Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the project.

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Important Words
We have named the soup as Mimosa The slogan we have selected is Stay well with Mimosa Type of soup we have decided is Chilled Fresh (premium) Three varieties we suggest are Mixed Vegetable, Tomato & Basil and Chicken

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1. Introduction
Bringing a new product in to the market is a challenging task. We have to do lot of home work and market research to set a plan, where we want to go, how we want to go there and at last to evaluate, are we there? It sounds simple enough, but in reality it is not a straight forward job. Many new product ideas are conceived every now and than- never to be born because they are not properly introduced to market. To successfully launch new product or service with the efficient use of the available budget, it's essential to focus exclusively on the prospects we believe are most likely to purchase from us. These may be customers who are currently buying something similar and will appreciate the additional features our new product provides.

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2. Literature Review:
Launching a new product is involved with the successful market entry. Urban and Hauser, (1993) stated that new product launch often requires the largest commitment in time, money, and managerial resources. Hultink and Hart (1998) proposed that, new products with high levels of advantage should be launched with higher levels of marketing expenditures, and with a higher proportion being aimed at the trade. The breadth of the product line, pricing decisions, and distribution intensity were the key elements described by Biggadike (1979) and Lambkin (1988) for their studies of market entry. The research by Hultink et al. (1997) dealing more specifically with new product launch, showed that at the tactical level of the launch, the key decision areas essentially consist of the 4Ps. Hart and Tzokas (2000) stated that, Price of a new product, at the time of launch, is an element integral to its appeal (or lack of appeal), the price reflects its competitive positioning and for consumers it may be a measure of the product's quality. Pricing strategy for new products, described by Choffray and Lilien (1984; 1986), and showed that penetration pricing might be necessary from the outset. PR, advertising, sales promotion and personal selling as major tools for communicating the new product to the market (Hart and Tzokas, 2000). Lambkin (1988) suggested that total advertising expenditures have been shown to have an impact on performance in the market entry. The study of Cooper (1984) and Yoon and Lilien (1985) showed that the market with a high potential growth having few competitors are more often the target markets for successful new products. Craig and Hart, (1992) Montoya-Weiss and Calantone, (1994) showed that product advantage as an important explanatory variable in new product success. A successful product launching involves brand positioning. Doyle (1992) mentioned that branding can only be successful if built on clear product differentiations and advantages.

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3. UK Soup Market Analysis

Snacking and convenience are the major drivers of the UK soup sector. The trend of less formal eating occasions, favoring the light lunch and grazing have all influenced new product developments (NPDs). Soups are categorized under three different types as: 1. Dried soup 2. Ambient wet soup and 3. Chilled fresh soup UK soup market is growing day by day at pace and reached a value of 462m in 2007 (Table 1) (Mintel, 2008). In 2008, sales of soups continued to increase being positioned as an easy and quick meal option (Retail World, 2009). Chilled soup achieved the strongest growth in the market by 7% to reach 111m. Ambient sector also showed a positive growth of 4% reaching 275m. On the other hand sales of dried soup declined by just over 1% in 2007 reaching 76 million.

Type of Soup Ambient wet Dried Chilled Fresh Total

2003 (m) 249 87 77 413

2005 (m) 260 81 94 435

2007 (m) 275 76 111 462

Table 1: Different types of soup market (Mintel, April 2008)

Type Ambient Wet Chilled Dried

Increase 4% 7% -1%

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Table 2: Table: % Change in sales UK soup market 2006 to 2007 (Mintel, 2008 April)

Adding value drives modest growth (Bainbridge, 2008). Mintel (2008) estimated that UK retail value of fresh chilled soup will be 128m by 2009, and the sales value will reach to 161m by 2013. The same report stated that increase in sales between 2003 to 2008 was 55% and it will be 35% between 2008 to 2013. The reason behind this fact is chilled soup market is getting matured.

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4. Competitor Analysis: Mintel (2008) reported a slowing down sales in the total UK soup market in 2006. However, the renewed focus from ambient manufacturers on healthy eating, especially the introduction of more filling meal soups and the rising demand for higher value fresh soups have all combined to stimulate growth. We have recommended Master food to launch the Chilled Fresh Soup because,

The chilled soup sector has continued to enjoy the highest growth (7%) between 2006 and 2007 as consumers have traded up to higher-value, premium soup (Table 2). It is the most promising segment to grow. The sector has benefited from the increasing trend towards fresh food in general. Growth in sales of chilled soup has also been boosted by strong NPD activity.

The Biggest player in the chilled soup market is the New Covent Garden followed by the own label brands (Table 3). Brand New Covent Garden Duchy Originals Simply Organic Heinz Baxters Others Own Label Total 2003 (m) 33 4 2 38 77 2005 (m) 43 1 2 6 3 39 94 2007 (m) 55 3 3 1 1 3 45 111

`Table 3: Chilled soup manufacturers brand shares, 2003-07

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Mintel (2008, May) reported some remarkable activities by competitors as,

A high-profile launch in 2007, the introduction of fresh soup from Heinz as part of its Farmers Market range. The brand undercuts New Covent Gardens standard price of around 2.00 by 70p. Organic fresh soup launched by Yorkshire Provender in 2007, using seasonal British-grown vegetables. The company likens its products to fruit smoothies in that they use no preservatives, thickeners or stabilisers. Tesco used the strategy of targeting the health-conscious consumers with the offer of fresh soup under its Healthy Living and Light Choice labels. It introduced single-serve 300g tubs for those who wanted the added convenience of eating out of the container, such as workbased consumers.

Prices vary with the wide range of product varieties and manufactures. We have studied the competitors prices and suggested a suitable price range for the new premium range soup of Master food (Table 4). Brand New Covent Garden Tesco and Sainsbury Waitrose Master Food Vegetable 1.59 - 2.19 1.19 -1.89 1.99 - 2.19 1.85 2.49 Tomato & Basil 1.29 - 2.10 1.10 - 1.85 1.85- 2.30 1.30 1.90 Chicken 2.19 - 2.49 2.29 - 2.49 2.19 - 2.99 1.99 - 2 .80

Table 4: Competitors www.mysupermarket.co.uk)

price

analysis

(Source:

5. Marketing objectives: We have set a core marketing objective as, 1. Obtaining 15% of the chilled soup Market (around 20m) by Sep 2010 and 2. Set up an efficient distribution strategy.

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5.1 We recommend master foods to use only existing outlets with the superstores across the UK, because as this is a premium product requires a consistence cold chain corner shops or convenient stores would not be a good idea to sell the product.

6. Communication objectives:
1. To reach 80% of the target audience trough appropriate media planning. 2. Positioning the product through strong brand awareness and 3. Building a strong consumer relationship. 6.1 Product positioning: The soup will be positioned as, a. Healthy option* b. Convenient** and c. Beat the busy life * The healthy option ideas about the product we would try to implant in customers mind will be1. Less salt 2. Less fat 3. No artificial ingredients 4. Use of fresh British ingredients

** For convenience we recommend Master foods to add a spoon with every soup.

7. Promotion:
We have designed several promotional activities including both pull and push strategies. 7.1 The pull strategy we recommend is to distribute 60,000 free samples of (250g) among the potential customers to create awareness during the key launch period (Appendix-XII). Some 75,000 consumers were given with samples by Baxters' soups in 2006 (Orelly, 2006). 7.2 To encourage the retailers (Push strategy) we have designed the commission (Sept 09 to April 10) as (Appendix: XII),

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a. Lucrative sales commission during the sales promotion weeks which makes a substantial amount of 0.54m. b. Incentive on sale (0.86m)

9. Media planning:
We have planned to use both above the line and below the line tools. 9.1Below the line: Normally sales offers for the customers are given in the month of March and April. Offers given by the some of the competitors in March-April 2008 were: New Covent Garden: 2 for 3.00 and even 3 for 4 Tesco Healthy Living Soup 4 for 2, save 24p Heinz Cream of Chicken 2 for 3.00, save 1.72 Sainsburys Winter Warmer Vegetable save 33% was 1.49, now 99p. Marks & Spencer chilled soup buy one get second half price.

We have made the Promotion plan as: 1. Save 20% offer (from 3rd week Sept to 1st week Nov) 2. Save 10% offer (3rd week Mar to Easter) Besides well be offering 10 Free great Holiday packages for two to encourage the customers: 1. Goa (India): 5 Days 2. Solomon Island: 4 Days 3. Canary Island: 4 Days 9.2 Above the line: According to Mantel (2008), soup manufacturers spending trend on the media has been dominated by the TV followed by the print media and out door accordingly in 2007 (Table-7). Media TV Press 2003 () 3,096,8 53 371,761 2004 () 5,394,523 890,159 2005 () 4,621,033 1,390.800 2006 () 2,502,7 56 1,053,8 35 2007 () 3,256,2 14 1,099,0 34

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Outdoor Radio Direct mail

703,074 886,382 -

1,187,183 1,165,120 11,228

381,759 302,912 -

112,617 -

647,092 49,357 -

Table 6: Main monitored media advertising expenditure on soup, by type of media, 2003-07 We have carefully selected the media vehicles with corresponding schedules to serve the purpose best. TV: To advertise the soup Mimosa we have selected ITV1 specially targeting the female consumers. Special emphasis has been given on the Christmas and Easter season (Appendix- I). ITV1 has a huge viewer of approximately 50m, of which 24m are ABC1 (Appendix-IX). Newspaper: Daily Mail, The Times and Metro have been selected as these have a wide circulation of 2.0m, 0.5m and 3.2m accordingly (Appendix-II). For the day of product launch and 3rd week of December there will be full page colour advertisements in all these three news papers. Schedules have been designed in such a way to cover the whole product launch period (Appendix-XI). Magazine: Hello and Sainsburys magazines were selected. Hello is specially for female consumers which have a readership of 2.0m of which 58% is ABC1. On the other hand Sainsburys magazine has a circulation of 3.9m (Appendix-X). Advertisement has been emphasized in the month of December mainly (Appendix-III). Underground: Three million passengers travelling through the network every day, Tube advertising is a very effective way of getting a message to our audience. Nine interchange stations have been selected under commuter pack and entertain pack to get the maximum audience (Appendix-IV). National Rail: Ten major National Rail network Land Marks across the country have been selected for the campaign (Appendix-V). Billboard: 160 billboards consisting both National Network and Main City Network have been selected across the UK (Appendix-VI). Bus: Buses are the most seen medium in town. There is little other advertising in town centres, so buses catch the attention of almost 29 million consumers. 90% of UK adults living with in five minutes of a bus route. 260 buses have been selected with different advertisement format across the country (Appendix-VII). Online: Online advertising is now an important component of some of the most successful product launching and branding campaigns. It now reaches 61% of the UKs population thats 28.7 million people. We have planned
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to use both Yahoo and Google for this campaign (Appendix-VIII). Around 50% of the UK population is using yahoo and 64% of them are ABC1. On the other hand Google leads the search site pack and maintains its place at the top for a second year , with Yahoo close behind (Media Week, 2008). Yahoo advertisements are Banner Panel and Mail Banner where as Google will be using Search Engine Option. Online campaign will be for the whole period except for the January month.

10. Customer Relationship Management Plan:

Lawrence (2002) stated about CRM as The Myth is CRM is about information technology and the Reality is Customer relationship management is a comprehensive business strategy. It is very important for successful business to maintain good and efficient customer relationship. We have developed wonderful idea for CRM. During the whole period of product launch there will be ten great free holiday offers for the customers to participate. The cod number underneath the label of every soup can be sent to the Master foods through internet (www.masterfoods.....) or SMS (000111..) or free phone (08000). The information given by the customer can be used to send them different offers at different times (with their prior consent) to maintain a good CRM.

11. Evaluation and control:

We have designed a frame work to get feed back from the target audience by direct field data collection. Effectiveness of the promotion will be measured by the sales volume as well. Depending on the performance of different media vehicles and promotional activities we shall reset the course if required during the promotion period.

12. Budget Overview:

The planned spending of the allocated budget is very efficient in terms of successful marketing communication.

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Fig 1: Budget break down

Name of the Media TV Print media Out Door Online Promotion Others Total

Cost 809,000 670,000 1,538,000 485,000 940,000 558,000 5,000,000

Fig 2: Overall Spending

13. Conclusion:
The Integrated Marketing Communication Strategy we have designed for Master foods will bring a great success. We believe that Mimosa will be able to acquire a strong position in the chilled food sector in the UK. In future Mimosa will be a synonym for Soup.

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Reference: Bainbridge, J. (2008), Consumers take comfort. Marketing. Oct 29, Haymarket Business Publications Ltd. London: pp. 30-32. Biggadike, E.R (1979), Corporate Diversification: Entry, Strategy and Performance, Harvard University Press, Cambridge, MA, Choffray, J.M, Lilien, G.L (1984), Strategies behind the successful industrial product launch, Business Marketing, pp.82-95. Choffray, J.M, Lilien, G.L (1986), A decision-support system for evaluating sales prospects and launch strategies for new products, Industrial Marketing Management, Vol. 15 pp.75-85. Cooper, R.G (1984), How new product strategies impact on performance, Journal of Product Innovation Management, Vol. 1 No.1, pp.5-18. Craig, A, Hart, S (1992), "Where to now in new product development research?", European Journal of Marketing, Vol. 26 (11), pp.3-49. Hultink, E.J, Robben, H (1995), Measuring new product success: the difference that time makes, Journal of Product Innovation Management, Vol. 12 pp.392-405. Hart, S. and Tzokas, N. (2000 ), New product launch ``mix'' in growth and mature product markets, Benchmarking: An International Journal, Vol. 7(5), pp. 389-405, MCB University Press, 1463-5771. Hultink E. J. and Hart, S. (1998), The worlds path to the better mousetrap: myth or reality? An empirical investigation into the launch strategies of high and low advantage new products, European Journal of Innovation Management, Vol.1 (3), pp. 106122 MCB University Press ISSN 14601060. Lambkin, M (1988), Order of entry and performance in new markets, Strategic Management Journal, Vol. 9, pp.127-40. Media Week (2008), Google way ahead in December search figures, Feb 12. Montoya-Weiss, M.M, Calantone, R.G (1994), Determinants of new product performance: a review and a meta-analysis, Journal of Product Innovation Management, Vol. (5), pp.397-417. Lawrence A. C. (2002), exploding some myths about customer relationship management, Managing Service Quality, Vol. 12 (5), pp 271-277 Orelly, G. (2006), Promotions & Incentives, News: Campaign, Haymarket Business Publications Ltd., London: Nov/Dec, 2006. pg. 5,

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Retail World (2009), Ready-to-serve soups drive market, Feb 2-Feb 13, 2009. Vol. 62 (2), pg. 24. Urban, G.L., Carter, T., Gaskin, S., Mucha, Z. (1986), Market share rewards to pioneering brands: an empirical analysis and strategic implications, Management Science, Vol. 32 (6), pp.645-59. Yoon, E, Lilien, G.L (1985), New industrial product performance: the effect of market characteristics and strategy, Journal of Product Innovation Management, Vol. 3 pp.134-44.

Web links:

http://uk.media.yahoo.com/advertisingonline/index.html www.cbsoutdoor.co.uk (http://www.cbsoutdoor.co.uk/web/Ourproducts/London-Underground.htm) www.google.com www.jcdecaux.co.uk www.metro.co.uk www.mysupermarket.co.uk www.mysupermarket.co.uk www.thedailymail.co.uk www.thetimes.co.uk www.yahoo.com

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