Chapter 1

Introduction

1.1 Origin of the report

Recently Education is also in the age of competition .So the procedures and standards of teaching are

upgraded by different universities and institution in our country .In respect to that Report or Term paper is

mandatory for every course in MBA program, offered by Bangladesh University of Professionals (BUP).

In this respect our honorable course instructor has assigned us the report “New Product Development” So

we have prepared this term paper.

1.2 Objectives of the report

The main purpose of this report is to know about the process of new product development and other

purpose with related this process.

However, the objectives of this report can be summarized in the following:

The main objective of this report is to understand the process of new product development.

To observe the market policy and market place in Bangladesh.

What is the present status of market in Bangladesh?

To understand the practical idea about market.

Finding and developing new-product and ideas.

Knowing the stages of the product life cycle.

Understanding how marketing strategies change during the product’s life cycle.

Learning the steps in the new -product development process.

To understand about new product development strategy.

1.3 Purpose

Our term paper has some purpose along with marketing plan for the new product ‘Cocua’. There are some

other purposes of this report as well.

To get a clear concept about marketing plan,

To get an overall idea about the Marketing Research,

To find out the role of target market,

To marking the problems for placing a new product in a market.

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1.4 Scope

This study makes an attempt to cover within its scope almost all the significant aspects of New Product

development. It gives us an opportunity to do a team work where we all can show our personal views,

ideas, creativities and etc.

1.5 Methodology of the study

To prepare the report we have to collect both primary and secondary data. The following sources have

been used for the purpose of collecting the data.

1.5.1 Primary Data:

* The market environment of Bangladesh.

* Face to face conversation of the officers.

* Face to face conversation with farmers.

* Interviews with agriculture researcher.

* Expert opinion.

* Discussion with the faculty members of the Department.

* Exposure on different desks of the other beverage company.

1.5.2 Secondary Data:

* Sample copy of marketing plan.

* Report of the Bangladesh agriculture institute.

* Relevant book, newspapers, journals, website and various study reports.

* Website of agriculture.

1.6 Limitations of the study

Although we have completed our report on new product development- ‘Cocua’, the study report is not out

of limitation due to some scope of opportunity. We faced some limitations of the study which are given in

the below:-

1. There is lacking of updated information.

2. Some relevant information has not been found.

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3. Due to lack of work experience, there is a chance of having some mistakes in the report.

4. Lack of adequate knowledge about the quality value of the product.

5. We could not properly use our time for completing our report, although we were given huge time by our course teacher.6. We could not collect much information about this.

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Chapter 2

Product Description

2.1 Product Portrayal

‘Cocua’ 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.

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2.2 Product Profile

Name of the Product : Cocua

Type of Product : Green Coconut Water

Ingredients : Pure natural green

coconut water,

Sugar, mineral salts,

vitamins C.

Container : Stylish glass bottle

Container size : 250 ml, 500 ml, 1 Liter

Product Price : 250 ml for Tk. 12

500 ml for Tk. 20

1 liter for Tk. 40

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Estimated Durability : 12 Months from date of manufactured

Machinery used : Advanced technology imported from

USA, UK and Netherlands.

Brand Slogan : Cocua … Ever Refreshing

Chapter 3

Market Research and Analysis

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.

3.1 Market Description

Bangladesh is a country of about 160 million people. The total market size of the soft drink industry is

about 25 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.

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So we have a growing prospect of customers of “Cocua”. Among the population we worked out few

segments of customers who will prefer our product most.

3.2 Market Segmentation and Targeting

3.2.1 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 & Rangpur

Khulna

Barishal

Chittagong

Dhaka

Demographics:

Individuals

Family

Sportsman

Business buyer

Psychographics:

Higher class

Higher mid class

Middle class

Behavioral:

Sick people

Health conscious

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Target Market

32%

43%

3%22%

Health Conscious

Sick People

Tourist

Others

Sophisticated who take the new product from the market

3.2.2 Target market and projections

Analyzing all the segments, we decided our target market according to our product category. The target

customers of “Cocua” are sick people, health conscious people, sportsmen and tourists. The company

decided to charge Tk. 12 for 250 ml bottles, Tk. 20 for 500 ml bottles and Tk. 40 for 1 Liter bottles, if we

consider price versus taste received then we can see that taste received is more in value. Therefore

charging the mentioned prices is justified. The following graph gives a clear idea of our target market.

Target Market

1. Health Conscious - 32%

2. Sick people - 43%

3. Tourist - 3%

4. General people - 22%

We separate our target market into four different segment based on their geographic, demographic,

psychographic and behavioral characteristics.

I. Health conscious: Health conscious people basically the sports person are one of our largest

target markets. 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.

II. Sick people: Sick people are one of our major considerations. More than 1 million children suffer

from diarrhea that needs liquid food. Not only child but also the adult might suffer from those

types of problems.

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III. Tourists: Every year a huge number of tourists visit Bangladesh. We want to provide them with

“Cocua”.

IV. General Customers: Besides the above segments, the general customers will acquire a

significant portion of our target market.

Market Needs

“Cocua” 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.

500 ml : Its target is the sick people and tourist

1 liter : For a small family.

3.3 Competitive Analysis

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 “Cocua” will take it far beyond the reach of the

competitor. Because of no one has yet thought about selling green coconut water in such a specialized

way. To evaluate our prospect of “Cocua” in the current market, we have analyzed the market situation in

various ways. Following are some demonstration of the analysis:

3.3.1 SWOT analysis

The product existence in the future is depending on its strengths, weakness, opportunities and threats

analysis:

Strengths:

1. Available input materials

2. Low production cost

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3. Technological and marketing knowledge

4. Strong distribution channel

5. Easy manufacturing process

6. Reasonable price

Weaknesses:

1. It is easy to copy the idea by others

2. Taste differ from the natural green coconut water

3. Green coconut water cannot be preserved for longer period

Opportunities:

1. Monopoly market

2. Large market

3. High demand

4. Might have a chance to get subsidies by Govt. to export

Threats:

1. High competition in future by copying the idea

2. Entrance of new product

3. Alternatives are avoidable in some segment

4. Uncertainty of launching a new product.

3.3.2 Competitor Analysis

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.

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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 than other

competitors do.

Strategies against competitors

To compete with the major competitors we can adopt the following measures:

Providing the best service to create high customer satisfaction

Reasonable and acceptable pricing

Promising and providing top quality product

Launching highly effective mass promotional activities

Continuous innovation and modification of the products

Creating and maintaining long term customer relationship

Creating “Brand Loyalty” among the target consumers

Chapter 4

Market Plan

4.1 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:

4.1.1. Setting the pricing objectives

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

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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.

4.1.2. Determining Demand

Each price will lead to different level of demand and therefore have a different impact on company’s

marketing objectives.

4.1.3. Estimating costs

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.

4.1.4. Types of cost and level of production

There are two types of cost: a) fixed and b) variable. In our new product development project fixed cost is

20,000,000 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 liter.

4.1.5. Analyzing competitor’s costs, prices and offer

We have analyzed our competitors’ price and found that Pran charges tk 15 for 250 ml bottle, Starship

charges tk. 20 for 250 ml Pac.

4.1.6. Selecting a pricing method

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.

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4.2 Promotional Strategies

To acquire a strong position in the market, we need to give special emphasis on effective promotional

activities. In order to get the maximum market share we will have to use all four tools of marketing

promotion. Specially, advertising through mass media will support us a lot.

4.2.1 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 “Cocua” also can be set up in some core points of the city. We hope to reach 75%

of our customers through effective advertising. Moreover through the use of internet & different social

networking sites we can advertise the product to a large extent.

4.2.2 Personal Selling:

Personal selling skill is not that much effective for convenient products like “Cocua”. 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

“Cocua” and about the nutritious aspects. We hope that will play a significant role to increase our sales.

4.2.3 Promotional Tools:

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.

4.2.4 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.

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4.3 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. “Cocua” will be available in all

retail stores of the country.

4.4 Services and warranties

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.

Chapter 5

Manufacturing and Operations

5.1 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.

5.2 Human Resource

The board of directors will be responsible for the recruiting activities. Recruiting will be done through

written tests followed by interviews.

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5.3 Technological Aspects

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.

Chapter 6

Financial Analysis and Documentation

6.1 Sales Forecasting

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

First Year (2016) 4000000 4500000 1500000

Second Year (2017) 4500000 5000000 1700000

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Third Year (2018) 5500000 5800000 2000000

Fourth Year (2019) 6000000 6500000 2400000

Fifth Year (2010) 6300000 6700000 2500000

6.2 Profit and Loss Projection

For 250 ml.

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 48000000 54000000 66000000 72000000 75600000

Total Cost (45200000) (48350000) (54650000) (57800000) (59690000)

Total Profit 2800000 5650000 11350000 14200000 15910000

Tax 40% (1120000) (2260000) (4540000) (5680000) 6364000

Net Profit 1680000 3390000 6810000 8520000 9546000

For 500 ml.

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 90000000 100000000 116000000 130000000 134000000

Total Cost (76700000) (83000000) (93080000) (101900000) (104420000)

Total Profit 13300000 17000000 22920000 28100000 29580000

Tax 40% (5320000) (6800000) (9168000) (11240000) (11832000)

Net Profit 7980000 10200000 13752000 16860000 17748000

For 1 Liter

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total Sales 60000000 68000000 80000000 96000000 100000000

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Total Cost (56600000) (61480000) (68800000) (78560000) (81000000)

Total Profit (34000000) 6520000 11200000 17440000 19000000

Tax 40% (13600000) (2608000) (4480000) (6976000) (7600000)

Net Profit 20400000 3912000 6720000 10464000 11400000

Chapter 7

Conclusion

Ours is a manufacturing company and it is a profit making business organization. So we developed a new

product idea of “Cocua”.

Every person and organization has some responsibilities to the nation and the country. Having these

responsibilities we thought of such kind of product which would be a useful product for the targeted

consumers and profitable for the company. That’s why from many ideas we have selected the idea of

“Cocua” made from coconut water.

Mass people (our targeted consumers) can use it as an alternative of drinking water which causes huge

demand among them considering it’s high nutritive value. Our product is completely natural and it has no

harmful effect for the health,

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1st 2nd 3rd 4th 5th0

2000000

4000000

6000000

8000000

Expected Sales for 5 Years

250 ml. Bottle

500 ml. bottle

1 Litre bottle

Year

So, we can say that “Cocua” is a unique product featuring distinctive taste, flavor and quality by which

we can earn a huge profit and fulfill the public demand to a large extent.

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new product and service development processes”, International Journal of Product Development 1, No 1,

September , 2004

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product development: comparing compositional and decompositional methods”, International Journal of

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