New Product Development

Principles of Marketing
INTRODUCTION:
Bangladesh is a small and developing country
beset with multiple problems. There are various problems existing
in our country like as education, health, food, communication etc.
Diabetes is one of them. It is a burning problem now-a-days. The
number of diabetes patients is on the rise due to a serious drop in
the discipline needed to lead a healthy life. Experts said that the
number of diabetes patients in Bangladesh would cross one core
by 2030.Erica Roy Khetran, country director of the Helen Keller
International Bangladesh (HKIB), said: There are currently more
than 3.4 million people with diabetes in Bangladesh. For this
burning problem we try to make an exceptional product to all kinds
of consumers especially who has diabetes. We developed a sugarfree,
health
promoting
product
aimed
to
health
conscious
individually as the target market. Research has showed that eating

diet high in sugar and refined foods can lead to increase body
cholesterol and obesity due to increase in the anabolic hormone
insulin. Our new product is "WHITE FOREST. Its 100% pure,
natural and milk based product. Our product containing huge
amount of protein that needs for all kinds of consumers. Basically
milk product has become increasingly popular and gradually
moved into the mainstream market. So we developed a sugar-free
milk based product for all kinds of consumers especially diabetes
patient.
For obtaining new product there are two ways one
is through acquisition i.e., buying a whole company, a patent, or a
license to produce someone elses product. The other is through
new product development. As our assignment is on through new
product development. We cannot use the first way.
New Product Development
Page | 1
NEW PRODUCT:
We have developed a new product and that is white
forest less sugar, tastes higher. Different types of sandesh are
available in the market. But the people who have diabetes cannot
eat such type of sandesh. Apart from this, there many health
conscious people who usually prefer to eat less sweet. We have
targeted those types of people for the marketing of our home
made sandesh. Although we have found various types of sandesh
in the market. Our home made sugar free sandesh is totally
different from those. We have tried to contain some exceptional
element to make this product.
PRODUCT PORTRAYAL:
White forest is a product that serves target customers
such as diabetes and health conscious customers. The product
khir sondesh which is unique in the current market. The white
forest will be possessed and sold in box of convenient size of 500
ml. The white forest will be very much delicious and great support
to the target customers. Our target market is large with different
segments.
PRODUCT PROFILE:
Name of product: White Forest.
Type of product: Khir Sandesh.
Ingredients: pure milk, diabetes free sugar.
Box size: 500 ml.
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Product price: 500 ml for 120 tk.

Estimated durability: 20 days from date of manufactured.
FEATURES:
1. This is sugar free sandesh.
2. It is ideal for persons suffering from diabetes or caloric
conscious individual.
3. It is delicious.
4. It does not contain any harmful elements.
TARGET CUSTOMERS:
As we are going to launch sugar free sandesh so our
target customers are those people who have diabetes and the
people who are health conscious.
BENEFITS:
1. Higher taste with less sugar.
2. Look attractive.
3. Available for all customers.
4. Tastes sweet but less calories.
5. It is hygienic.
STEPS FOR DEVELOPING NEW PRODUCT:
We have followed several steps for developing this
sandesh. The steps are:
Idea generating
Idea screening
Concept development and testing
Marketing strategy development
Business analysis
Product development
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Test marketing
Commercialization
IDEA GENERATING:
At the outset of developing new product, we have to
generate several ideas. The ideas that are generated by our
members are banana chips, chicken kabab, pickle, water melon,
pasting masala, coconut laddo and sandesh etc. we have
generated this ideas with our own effort and looking the
competitors products that are existed in the market.
IDEA SCREENING:
In the stage of idea generation, we have found many ideas.
Then we have screened those ideas for finding out an attractive
idea. Idea screening is necessary for any organization. Because it
will help to reduce risk for the development of a product. If ideas
are not properly screened, the product development cost will rise
in the later stage. For idea screening we have followed the R.W.W
(real, win, worth.) new product screening framework.
CONCEPT DEVELOPMENT AND TESTING:
After the completion of idea screening, we have
developed the concept of making sugar free sandesh. Then we
have tested our product concept with target customers. We have
performed following concept test through this questions:
Do you understand the concept of sugar free sandesh.

Do you believe its claim?
What are the benefits of this sandesh compared with others?
What are the benefits of this sandesh compared with others?
What is your suggestion regarding this product?
Would you buy such a product?
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MERKETING STRATEGY DEVELOPMENT:

When our product concept is developed and tested with
target consumers then we have developed an initial marketing
strategy. At first we have determined our total marketing budget.
In this case we have followed affordable method. We have
selected only Camilla district to launch our product at the
beginning. We can convince our targeted customer by personal
selling. We can also collect phone number and e-mail address from
our customers for direct marketing. We can adopt informative
advertising technique through using our local newspapers to
inform the customers. Customers can visit our e-mail address a
mishtimukhcou@gmail.com.
BRANDING:
Since branding creates an image of a product, we have
given special attention to select the brand name. The brand name
of our product is MISHTI MUKH. The brand name will help our
customers to get idea about this product.
PACKAGING:
In the previous time packaging was considered only for
the safety of the product. But now a days
packaging plays an
important role for attracting customers. We have tried our best to

make our products packaging attractive.
LABELLING:
Labeling describes about the product like- who made the
product, where the product was made, its contents etc. Since
labeling can bring negative concerns about product, we have
given importance for the labeling of our product.
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PROMOTION MIX STRATAGIES:

Although there are two promotion mix strategies
like pull strategy and push strategy, we have considered pull
strategy. At first we will convince our target customers to create
demand for our product. When they will be convinced and plays
order to dealers or retailers then we will deliver our product to the
dealers.
The flow of pull marketing strategy is given below:
Retailer and
wholesalers
Producer
Consumers
ddddjhjh
PRICE STRATAGIES:
We have to decide to set a reasonable price for our product
when we will develop it. We considered many factors in setting the
price policy. We will describe procedures:
1. Setting the price objectives.
2. Determining demand.
3. Estimating costs.
4. Types of cost and level of production.
5. Selecting a pricing method.
PRICE DETERMINATION:
There are two methods for price determination
like cost based pricing and value based pricing. We have
considered cost based pricing to determine our products price.
The diagram of cost based pricing is given below:
Cost-based pricing:
Design a good product.
Determine
product cost.
Set price based

on cost
Convincing
buyers of
producing value.
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The monthly fixed cost is- 30,000

The variable cost is- 175 (per kg)
Expected sales-1000 kg (monthly)
Per kg cost= variable cost +
= 175 +
costs
expected sales
30000
1000 = 205
We want to earn 17% mark up on production cost, so the selling

price is 240 tk per kg.
BREAKEVEN VOLUME:
The breakeven volume=
cost
pricevariable cost
30000
= 240175
= 462 kg
If we want to make profit we must sell more than 462 tk kg per
month.
BUSINESS ANALYSIS:
After deciding the product concept, marketing
strategy and related cost, then we have analyzed our business
attractiveness of this product. We have analyzed sales, costs and
profit projections to find out whether they satisfy the business
objectives.
PRODUCT DEVELOPMENT:
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After completion business analysis, we have

developed the product concept into a physical product. It will help
us to ensure that the product idea can be turned into workable
market offering.
TEST MARKETING:
We have gain experience about our product by test
marketing before going the great expense of full introduction.
Large businesses spend a lot for test marketing. As our business is
small, we dont have to spend as much as required for large
business. Test marketing helps us to make decision whether we
will introduce our product in the market or not. By testing
marketing we have got positive response from our customers and
that is why we have decided to introduce this product in the
market.
COMMERCIALIZATION:
In this stage we are going to introduce our product
in the market. There are various types of cost have been incurred
in this stage like build or rent a manufacturing facility and
promotional cost.
PROMOTIONAL ANALYSIS:
To acquire a strong position in the market, we need to
give special emphasis on effective promotional activities. In order
to get the maximum benefits we will have to use marketing
promotion.
ADVERTISING:
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We initially will give more emphasis on paper ads and

TV commercials. Because, advertising through this media is the
most effective way to reach the customers and position our
product in their mind. We used informative advertising to
introduced a new product. At first we want to inform consumers of
the image quality and convenience benefits of new product.
Barriers to Entry:
Like every business ours also has some barriers which might hamper our plan
of starting a Sweet Shop , but like all entrepreneurs we are ready to take risks
and overcome the barriers as much as possible. According to us the following
points given below are the entry to barriers:
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SWOT
ANALYSIS
Page | 10
The product existence in the future is depending on its

strengths, weakness, opportunities and threats analysis.
Strength:
1. Available input materials.
2. Easy manufacturing process.
3. Reasonable price.
4. Emphasis on marketing and advertising strategies.
Weakness:
1. Unawareness of our brand among customers.
2. It is easy to copy the idea by others.
3. Lack of product knowledge.
Threats:
1. High competition in future by copying the idea.
2. Entrance of new product.
3. Threat of substitutes.
4. Uncertainty of launching a new product.
Page | 11
PORTERS FIVE FORCES MODEL:

PORTERS FIVE FORCES
PORTERS FIVE FORCES
Threat of new
competitors
entering the
industry
Bargaining power of
the industrys
suppliers
Rivalry among
current competitors
in the industry
Bargaining power of
the industrys
customers
Threat of
substitutes
produced by other
industries
The nature of the competitive condition existing in an industry can provide

useful information in assessing its future. Michael porter has written
extensively on the issue of competitive strategy which involves the search for
a competitive position in an industry. The factors areThreat of new entrants.
Bargaining power of buyers.
Bargaining power of suppliers.
Rivalry between existing competitors.
Threat of substitute product or services.
1 Bargaining power of suppliers: There are a lot of Sweets producing

companies in Bangladesh. In case of MISHTY MUKH raw materials for the
product can be attained from a number of suppliers and consequently the
bargaining power of the suppliers are less. It is obviously a positive signal for
the company.
2 Bargaining power of buyers: As MISHTY MUKH is going to produce the
WHITEFOREST KHIR SONDESH as a first mover; there is a little scope for the
Page | 12
buyer to bargain. So the farm can charge as much amount as possible that is
acceptable to the buyers and profitable for the firm.
3 Threat of substitutes:There are no alternative products that can be
substituted for WHITEFOREST KHIR SONDESH as it is an innovative product
provide by MISHTY MUKH. So the substitution effect on the price of the
product is zero.
4 Threat of new entrants: As there is a demand for the WHITEFOREST KHIR
SONDESH in the market, there are possibilities that new firms will come to
create competition. The presence of new firms can lower the price and grab
the market share from the M/S Shuvro and co.
5 Rivalry among existing firms: There is no alternative firm in the market.
So there is no rivalry among the market at present for the products.
Page | 13

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Principles of Marketing

individually as the target market. Research has showed that eating