Principles of Marketing: New Product Development

UNIVERSITY OF THE PUNJAB GUJRANWALA CAMPUS â€Å"Principles of Marketing† â€Å"MARKETING PROJECT† â€Å"New Product Development† Submitted to: â€Å"Prof. Hafiz Ihsan-ur-Rehman† Submitted By: Usman Khalid Mc09023 Umar Farooq Mc09002 Faraz Raza Mc09040 M. Usman Mc09026 Jahangir Badar Mc09061 Ahmad Khayyam Mc09035 PROJECT CONTENTS 1. Segmentation & Target Marketing (Characteristics: How Product fit with T. M. ) 2. Product Ideas ,Screening, Concept Development & Testing. 3. Demand Estimation 4. Marketing Mix 1) Product 2) Price 3) Placement ) Promotion (Print, Radio & T V ads. ) 5) 5. Cost Estimation Variable costFixed cost P. U. P. U. 6. Plant Cost Segmentation & Target Marketing Segmentation: â€Å"Dividing a market into smaller groups with distinct needs characteristics or behaviors who might require separate product or marketing mix† Geographic Segmentation: We considered the Punjab as a whole market for our Product and divide the Punjab on the basis of cities e. g. Gujranwala, Lahore, Gujrat. We divide the GRW market on zone basis i. e. Satellite town, Model town, Urdu bazaar, People colony etc. Demographic Segmentation: (on the family size basis) Now we divide the selected urdu Bazar market on the basis of family size. A family whose has ten members need a wiper after six months or replacement of rubber is necessary after three or four months. Target Market: Our product is consumer product and basically for household. Our Targeted Market is Urdu Bazar in which we supply the wip wiper on different shops for sale. Our Targeted Customers are families in which there are five or more family members. Targeted market How wip wiper fit with the Target Market? Our Product Wip wiper is fit with the Targeted market of urdu Bazar because it is a household item and is purchased by the family people. And in Urdu Bazar of Gujranwala people come for purchase of different household items and our product wip wiper has additional quality of water supply so our Stall of product will attract the people and people will buy it due to its additional features. And there are also potential buyers of wiper that purchased the wiper after six months we can also convert these buyer on our product. Our product is consumer product. It is the need of every house and we are providing additional facility in this product i. e. water supply. In the selected targeted market, there will be many customers of product â€Å"WIP WIPPER† So its better market for our product New Product Development â€Å"New Product Development process consist of ideas generation, ideas screening, concept development and testing, business analysis, test market, commercialization and launching the new product in the targeted market. We discuss the four these things relating to our Product of wipe wiper. Now the detailed information of these is under: IDEAS GENERATION Following are the New Product ideas are generated by our Group members. Which are as follows: 1) Create such type of machine, that convert any blood group into required blood group. Just like we want â€Å"O Negative† and we have â€Å"A Positive† then machine will help us to convert our available blood group of â€Å"A Positive† into required â€Å"O Negative† blood group. 2) NOKIA mobile company should create that type of mobile in which translator facility is included. This Mobile Phone will give advantage to the people who are not able to speak different type of languages. ) There should be a wiper with additional qualities of water supply, detergent supply and cleaning the dust smoothly. Due to this product the work of women will be less and they have only to manage the wiper with water supply. 4) PlayStation gaming company should to create that type of glasses in which there is facility of watching television and playing different ty pe of games. This type of glasses will provide advantage to the people to watch different types of movies, program and play different type of exciting games during traveling. ) PHILIPS Company should develop remote control system for switching off the TUBE LIGHT when required without movement of the person. 6) Replacement of petrol tank into CNG tank in order to use the CNG instead of petrol in Motorcycles. It will be beneficial to save the petrol and to control the pollution in the environment because CNG is less costly as compared to petrol. 7) GFC fan company should develop that type of ceiling fans that are running with the help of SOLAR system without using electricity. And that fan should use separately its own SOLAR system. ) DOLCE and GABBANA wrist watch company should create that type of wrist watches in which Willkie Talkie facility is included. That gives advantage to the people for communicating with each others within a specific distance. 9) PEPSI company should make Ic e Cream products just like FEAST, CORNATO and OTHER similar Ice Creams that gives advantage to the PEPSI company for creating more market share. 10) HONDA motors should make that type of brake system in cars that immediately stop the cars from accidental events. Before any type of accident. 1) There should be a chip which are fix in front of the vehicles and by which the people can pay the TOOL TAX by prepaid accounts. That system will solve the traffic problems. 12) Use of internal device (Bluetooth) in CPU for data sharing IDEA SCREENING â€Å"Idea Screening means screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible†. Next step of new product development process is idea screening in which most suitable ideas with possibilities to develop the new product are selected. Following are the three ideas which are selected by us for new product development. After further verification and availability of resources we will select one of them for actual product development. 1) PHILIPS Company should develop remote control system for switching off the TUBE LIGHT when required without movement of the person. 2) There should be a wiper with additional qualities of water supply, detergent supply and cleaning the dust smoothly. Due to this product the work of women will be less and they have only to manage the wiper with water supply. 3) Use of internal device (Bluetooth) in CPU for data sharing Selected Idea for Project After screening ideas, we are going to develop a wiper with additional qualities of water supply, detergent supply and cleaning the dust smoothly. Due to this product the work of women will be less and they have only to manage the wiper with water supply. As this product will provide the much benefits to the people and there is need for such type of product in the society that will facilitate the women in their working, so there will be many customers for this product. So, our selected idea is the development of the wiper with water supply. CONCEPT DEVELOPMENT & TESTING The idea of wipe wiper with additional quality of water supply and supply of detergent for washing and cleaning rooms So, There is no need to separately handle the water pipe and other equipment for washing the rooms and places of houses and offices. This is the concept of the product that might facilitate the cleaning of offices and houses. By observation of time, Group thinking is to develop this idea into actual product. We have discussed the idea of wipe wiper with many people and we have listen favorable words for our product and the potential buyers are agree to buy the new product, if we offer for sale. After satisfying the test market we are in a position to develop the â€Å"WIP WIPPER† Demand Estimation In Gujranwala, there are 2200000 people and when we divide the Gujranwala population on 10 (Average family members in a family) i. e. 2200000/10 =220000 We received 220000 families and there is a need of a wiper after six month or there is need for replacement of rubber. So, we conclude according to above estimation that the demand for our product in Gujranwala will be 220000 or more or less wiper at the start of the business and there will be a decrease in the demand after one month. e considered that our demand will be 220000/6=36666 For expansion of business, we have to go in other cities and for proper running of business, this demand is not sufficient. This Business has attractiveness due to its expanding market. Marketing Mix â€Å"The set of all controllable tactical marketing tools i. e Product, Price, Place and Promotion that the firm blends to produce the respons e it wants in the target market. † Following are the elements of Marketing Mix: PRODUCT Any thing that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. LEVELS OF PRODUCT Before actual Product, we have to think on the three levels of the product. The more basic level of the product is the core benefit of the product. The second level of the product is actual product level and the last level of the product is to define the product at the augmented level of the product. Now we examine these levels relating to â€Å"WIPE WIPER†. 1:-CORE BENEFIT â€Å"Cleaning in minimum time. † 2:-ACTUAL PRODUCT: Now we turn the core benefit of cleaning in minimum time into actual product and define the product at this level. 1. NAME OF PRODUCT: Wipe wiper 2. FEATURES: Additional water supply of detergent, minimum time consumption, independently replaceable rubber. 3. DESIGN: Rubber of wiper will be in different colors, flexible handle pipe attachment. 4. QUALITY LEVEL: Use of high quality rubber and drying with in minimum time. 5. PACKAGING: It will be in simple packing. 6. BRAND NAME: â€Å"WIPE WIPER† 3:-AUGMENTED LEVEL 1. Facility for replacement of rubber. 2. Warranty within 2 months Product Inputs Following are the main elements which are used to produced the â€Å"WIPE WIPER†. These are 1. WIPER Rubber 2. Steel Sheet 3. Pipe of 4 Feet 4. Ball Wall 5. Spray Paint 6. Rubber Nails . 1 Piece of Nozzle PROCESS OF PRODUCTION Bend steel sheet to capture wiper rubber and then drill the sheet to capture rubber after that prepare wiper pipe and place ball wall and nozzle on it and made supply of water into wiper rubber then fitting and last step is colouring. PACKAGING: It will be in simple packing. LABELING There will only the name of t he brand of the wip wiper in the labeling at the front of the product . PRICING FOR THE NEW PRODUCT â€Å" The amount of money that a consumer has to pay to obtain the product. † Two strategies are used for setting prices for the New product. ? PRICE PENETRATION PRICE SKIMMING Price Penetration: Setting a low price for a new product in order to attract a large number of buyers and a large market share. Price Skimming: Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales. Pricing Strategy for our Product We select penetration pricing because there are enough competition in market. Our product is convenient product. It has certain features which are not available in the market such as water supply, detergent supply etc PLACEMENT OF THE â€Å"WIP WIPPER† We will use indirect marketing channel in the Gujranwala in which product is supplied to the retailer and then to the final user because the targeted market is short and within the city and easily manageable. But when we decide to launch the product outside the city means in an other city Lahore then we use indirect marketing channel (that will be vertical marketing channel) in which we will provide the product to the Distributor and then retailer and finally to the end user LOCAL MARKET OUTSIDE CITY MARKET Cost Estimation We are going to produced 1000 units of wipe wiper. Fixed cost estimation for this purpose is as follow: FIXED COST Plant cost 200000 Estimated life of plant is 10 year so 200000/10=20000 And 20000/12=1667 And1667/1000 so 1. 67 per unit Land cost 10000 per month so 10000/1000=10 so 10 is the per unit land cost. Advertisement Cost25*1000=25000 TOTAL COST |Variable Cost per Unit |= |323 | |Fixed Cost per Unit |= |11. 67 | | |= |334. 7 | |Advertising cost |= |25 | |Total Cost |= |359. 67 | Product PriceRs. 425 TOTAL VARIABLE COST For this the estimated variable product cost is under: |Items |Items name |Cost of input |Total cost | |No. |Per unit | | |1. |WIPER Rubber |50 |50*1000=50000 | |2. |Steel Sheet |30 |30*1000=30000 | | |6/8INCH of pipe 4 Feet |60 |60*1000=60000 | |3. | | | |4. |Ball Wall |100 |100*1000=100000 | |5. |Rubber Nails |5 |5*1000=5000 | |6. |Nozzle |10 |10*1000=10000 | |7. |colour |20 |20*1000=20000 | |8 |Wielding exp. 30 |30*1000=30000 | |9. |Labor cost |10 |10*1000=10000 | |10. |Electricity |3 |3*1000=3000 | |11. | gass |5 |5*1000=5000 | | |Total Cost |323 |323000 | Requirement for human force Labor: 4 skilled people are required for operating Plant and for distribution and sale, we are available. Requirement of Running Capital For proper running of Business there is approximately 500000 rupees are required. ———————– Gujranwala Satellite town Model town Urdu Bazar People colony Satellite town Model town Urdu Bazar People colony MANUFACTURER MANUFACTURER RETAILER Distributer CUSTOMER RETAILER CUSTOMER