Conceive any absolutely new product that could be commercially viable

By

dprshi

INTRODUCTION

New product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process: one involves the idea generation, product design, and detail engineering; the other involves market research and marketing analysis.

In our rapidly changing and highly competitive markets, a successful new product launch is thought by many to be the key to business growth and profitability. The problem developing a successful new product is not a shortage of ideas, but rather the expense in producing and marketing new products without any guarantee of success.

Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.

About Olay

Olay is a product that is produced and manufactured by the well known company Oil of Olay. It is a line that was developed by Oil of Olay and it is the newest anti-aging products from this company. To most consumers, Olay is better known as a maker of general skin health products such as moisturizers,cleanser,etc.

Olay Products

Presently there are 15 products that are available under the Olay Definity line products range. The names of these products are:

Olay Anti-Aging UV Moisturizer + Sheer Illuminating Coverage,Olay Sun Protective Lotion with SPF 15,2 types of Olay Deep Penetrating Foaming,Olay Moisturizer,Olay Definity Intense Hydrating Cream,Olay Night Anti-Spot Treatment,Olay Definity Night Restorative Sleep Cream,Olay Definity Self Repair Serum,Olay Deep Penetrating Foaming UV Moisturizer,Olay Illuminating Cream Cleanser,

Olay Illuminating Eye Treatment,Olay Penetrating Mousse Cleanser,Olay Definity Pore Redefining Scrub.

While Oil of Olay is a commonly known brand, it also appears to have nothing more than common ingredients in its wrinkle fighters. Although it may be considered to be innovative to combine something that provides instant results along with something that will be good for long lasting results, it doesn't do any good to do this if there is no proof that it can work. Not only that, but this product has more sun block in it than is necessary. This would be okay if they were trying to sell sunscreen, but there is more proof available for the sun block ingredients than there is for the anti-wrinkle agents that are included in this product. We feel that most women would probably like a little more proof before they decide to purchase this product.

SWOT AnalysisManaging the marketing function begins with a complete analysis of the company‘s situation. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues.Strengths: -Strengths include internal capabilities that may help a company reach its objectives. The strengths of olay anti-aging soap are: This product is the only anti-aging soap in the market. We have a Latest soap manufacturing technology. distributors are the famous retail stores of the city. price is very suitable as compared to our product, none of which offer the same bundle of features, which gives us an edgewith price-conscious customers.

W eaknesses : -Weakness include internal limitations that may interfere with a company‘s ability to achieve its objectives.

Limited investment No variety in the product.

Opportunities: -Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage. New distribution channels can be used To explore international market. Product development will offer many new opportunities.

T hreats : -Current and emerging external factors may challenge the company’s performance. The entrance of new competitors in the market. Substitute anti-aging creams are available in market.

Existing companies like ponds have strong brand image in the minds of customers. High custom duties on raw material import. High interest rates and taxes in country.

Idea Generation

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods may also be used to get an insight into new product lines or product features.

In today’s world women are very much conscious about their looks. They want to look younger and beautiful. Thus anti-aging products has gained popularity in these days though the products are high priced but it is considered as fast-moving products. The famous brands are olay anti-aging and ponds age miracle. Working women has to follow a busy schedule so it is tough for them to maintain their skin, some they forgot to use lotions and day & nights creams. So the idea has been generated to launch an anti-aging soap.

Idea Screening

It is an anti-aging soap whose main feature is that it removes wrinkles on skin; it also cleanses the skin and makes its color bright. We are mainly targeting Ladies above 35 years of age of higher middle class but our product is for all age of women. Olay willposition the brand from the positioning statement “Be Young Again”. It will enter the market with heavy advertisement through hoardings, TVC’s, etc.The primary objective is to attain 5% of market share and to achieve more than 20,000 tones of sale in first six months. Price of the soap is Rs. 110 per unit. As there is no major competitor of anti-aging soap but some anti aging creams are the competitors, so its main objective is to capture the market by satisfying the customers.

Concept Development and Testing

The organisation may have come across what they believe to be a feasible idea, however, the idea needs to be taken to the target audience. What do they think about the idea? Will it be practical and feasible? Will it offer the benefit that the organisation hopes it will? or have they overlooked certain issues? Note the idea and concept is taken to the target audience not a working prototype at this stage.

ObjectivesThe main objectives are: Primary market objective is to achieve more than 20,000 tones of sale. To capture 5% of the market share initially. To attract of our customers. To create interest among customers.Olay will attain the objectives by strong marketing that includes heavy advertisement TVC’s, hoardings, teaser’s etc. It not compromise on quality and try to satisfy our target customers. Although we it is possible to face loses in the beginning but we will maintain our Quality to capture the market.First Year Objectives: -During the initial year in the market, our objectives are to build awareness among customers about our soap, heavy expanses will be made on advertising to attract the customers. We are aiming for a 5% share of the market in the first year. Also work on reducing cost by at least 5%.Second year objective: -Our second year objectives are to maintain heavy advertisement to keep attracting new customers. Make our quality even better to earn customers loyalty and to introduce new variety in anti-aging soap. We are also to achieve a 7% of market share and to reduce cost by 10%.IssuesThere are various issues that are to be tackled to launch new product, these issues include:Economic condition:Current economic conditions of our country are not satisfactory. We are facing economic crisis due to our weak fiscal policy. This

situation will effect our attainment.

Competitive situation:Competitive situation shows how much our competitors are strong and we also analyze their 4P’s because without it no productcan be succeeded in market. The marketing strategies of competitor are a big issue.

High Duties /taxes :The Government imposes high custom duty on raw materials. So company purchase high cost imported raw material to provide high quality products to the customers.

Market Strategy Development-

Market StrategyMarket Segmentation: -: Demographic basis that is on the basis:· Age - Above 35· Income Level – 30,000 and above· Gender - Females· Social status – High middle class

Market Targeting: -Olay have used “Segmented marketing” while targeting our customers.Our target markets according to the demographics are: Middle aged women of more than 35 years age of higher middle class. As our product removes wrinkles that are formed on the skin of middle aged women.

Also geographically our target customers are: People residing in cities. Initially we are targeting customers in India.

Positioning: -A positioning built on meaningful differences, supported by appropriate strategy and implementation, can help the company build competitive advantage.Olay positioning the product in the minds of people by the sloganand logo that reflects youth, as it makes the skin wrinkle free likethe skin of young people

“Be Young Again”

Pricing strategy: -Pricing is the most important factor in our marketing mix. Our pricing strategy will be such that is fair to the customers, as our objective is to attain customer loyalty.Olay anti-aging soap is being introduced at a price of Rs. 110including all taxes. Initially “Value based pricing approach” will be used for the evaluation of price.

These prices reflect a strategy of:1. Market penetration pricing.2. Delivering maximum satisfaction by giving affordable price.

Distribution Strategy: -At launching our product our channel strategy is to use “Selective distribution” at different places and marketing through well known stores and outlets within India only, We will also give special trade discounts for retailer that place volume order.We are using “Indirect marketing channel” for the distribution of our product which is a “Conventional distribution” channel. Our marketing channel involves the following intermediaries: The company will transport its goods to the retailer who will distributethem to customers. They will also gather research information for us.

Product: -Introducing a convenience product that is a high quality anti-aging soap in the market with the name of “Olay anti aging soap”. We are using “licensed branding”. Although there are various substitute in the form of cream in the market but there is nomajor competitor of our product.Features:

· The core benefit of our product is that it removes wrinkles of skin. · Additional benefits are that it makes the complexion fair. · It cleanses the skin. · Ideal for all skin types. · Heals skin · Tightens the skin pores · Soften the skin · Removes black heads

Olay will continue to set new trends as a true leader, creating aspiration and exploring new expressions of beauty in future. Building the olay brand is an integral part of our product strategy. The brand and logo will be displayed on the product and its packaging is packed in attractive wrapper with different colors and designs.

Business Analysis:

Budgeting Olay has unique formula of anti aging. We are launching our new product with the capital of Rs 10, 000,000/-. We set this budget after analyzing the other anti aging brands of country. After the process of budgets setting we are able to set the price of our soap which is Rs110/piece. Cost price of our product is Rs 48/- after including the taxes andprofits our customers will be able to buy our product just in Rs 110/- This price is very affordable to the market of anti aging conscious people. This price is lower than our competitors. Our Company is providing a Quality anti aging soap in a reasonable price.

· Advertisement ExpensesAdvertisement is the most important and effective tools for launching a product in the market. So we set a heavy budget of Rs 35,00,000/- for advertisement, which includes different ways of advertisement includes; T.V.C’s Teasers Hoardings Magazines

· Manufacturing expensesManufacturing expenses costs Rs 960, 000/- includes costs of imported chemicals and other soap raw materials.

· Packing expensesIt has calculated our packing expenses in our 1st six month plan for Rs 40,000/- which includes packing of soap in an attractive box and in cartons for delivery at distribution channels.· Labeling & designing expensesLabeling and designing department is making attractive and beautiful designs of packing covers and soaps which cost us for Rs40,000/- for our six months planning. This design of cover box and shape of soap will attract our customers which ultimately benefits ourcompany.· TransportationTransportation expenses include the carriage of raw materials from suppliers and delivery of inventory to the retailers. It cost us Rs120,000/- which can easily fulfils needs of our transportation.· Distribution expensesOlay select the top stores and retailers of city for our distribution includes We also hires places and corners in metro an macro cash n carry and in some public places like Airport, At there our representatives will sell our products and defines the core benefits of our products to our customers. This whole process of distribution will cost us Rs 900,000\- which is an enough budget for distribution.

Control Evaluating the results of marketing strategy and plan through closely monitor quality and customer services satisfaction. Our managers built public relations to anticipate problems with various public, handle complaints, deal with media and built the cooperateimage. After that we are able to react quickly and correctly any problem that may occurs. We are also developing contingency plan to address fast moving environmental changes such as new technology and new competition in the market. For reviewing our plan we have to take feedback from our customers, dealers, and retailers and after that wediagnose that where the problem is and solve this problem with the proper solution and planning. We will keep continues check on the cost of our product. And will continuously research to analyze the market to maintain low costagainst the competitors.

Product Development:

THE HIDDEN FACT

The whole range of products of OLAY is generally of cream and lotion based, creams and lotions are mostly trusted for providing long term effects.The success story of OLAY is widely accepted in every respect. OLAY has brought about a revolution in the world of anti-ageing products and still is going strong and seem to continue to spread their magic.Keep all these things in mind , at the very beginning we must check out the following facts and figures.A survey conducted by OLAY has revealed that:Every 6 women out of 10 women* uses OLAY anti-ageing products.But when the study is confined to India and sub-continent, the findings says that only 3 women out of 10 women* uses OLAY anti-ageing products.The usage of OLAY anti-ageing products in almost half in India in respect to the rest.

(* women above 35 years of age )(survey conducted by Olay Market Study & Research team, 2007)

The fact is transparent that the usage and sale of OLAY anti-ageing products is relatively very less in India and sub-continent. Still we must accept the fact that OLAY is doing a wonderful job in the market.

The most spontaneous reaction to the above fact is;WHAT IS THE REASON BEHIND IT ?

The following considerations may support that fact. They are :

The climate of India and sub-continent is generally tropical climate. The similar climate prevails almost through out the mentioned region. The seasons are dominated by summers. Some regions are hot, and some regions are very hot. Few hill stations can be considered as exceptions. And where it is predominantly hot and humid there we should not expect any sort of cream and lotion based product to do outstandingly good business.

To support this statement the following fact is presented ;

A research was conducted by Ponds on usage of any sort of skin creams or lotions in summers and winters. The research was done in India.Here is the finding;

Winter: November to March.Summer: April to October.

According to this finding it can be very firmly said that the use of creams and lotions fall by a huge margin in summers than in winters. From this study we can get an inference that the usage of creams and lotions do fall by a large margin in the hot and humid summers.So we can draw the inference to somewhat conclude that hot climate does not support the usage of creams , and thus the fact of usage of OLAY cream based product being relatively less successful in India and sub-continent is being supported to an extent.

Time factor : The usage of creams and lotions is considered to be very time consuming.

The generation of an idea: Keeping in mind the above possible reasons and problems, what is planned is to develop a new product under the umbrella of OLAY anti-ageing products.It would be a soap aimed to fight against ageing – OLAY ANTI-AGEING SOAP !!

The new product is very much prospective in fighting the the above mentioned reasons.

Test Marketing

Test marketing means testing the product within a specific area. The product will be launched within a particular region so the marketing mix strategy can be monitored and if needed, be modified before national launch. Test marketing has been conducted through the following survey.

Questionnaire of the survey:

Name :Age : Location :Occupation :

1. What is your age

a. 25-30b. 30-35c. 5+

2. Do you have age wrinkles in your facial skin?

a. Yes b. Noc. Never realized

3. Are you worried about your age wrinkles affecting your looks?

a. Very much botheredb. Bothered a bitc. Not at all bothered

4. Do you prefer using creams and lotions in the summers ?

a. Yesb. No

5. Are you using any anti ageing product? If yes then mention the product name.

a. Yes . ______________b. No ( if no then end the survey)

6. Are you getting the expected result from using the product?

a. Yes b. No

7. What do you like about the product?

…………………………………………………………………………….

8. What do you don’t like about the product? ……………………………………………………………………………..

9. What innovations/developments do you in that product?

………………………………………………………………………………

10. Would you like to use an anti ageing soap ?

a. Yesb. Noc. May bed. No chance

CommercializationMarketing communication Process: -Marketing communication is an integral part of product strategy.Entering the market with high advertisement of our product in order to create a strong image of olay soap in the mind of our target customers.The aim of the product will set our total promotional budget on the “Objective andTask method”. Our objective is to attract the customers towards our product and we will use excessive advertising to achieve this goal.We will use different advertising tools to advertise our product, whichinclude: T.V.C’s

Teasers Hoardings Magazines NewspapersWe are using “Pull promotion mix strategy” to attract our customers as we are new in the market. we are initially launching our product in India. Our commercial will be played after every 30 minutes on the channels. In newspapers we are targeting The telegraph, Times of India. The Statesman andThe Hindu and all regional papers We are also advertising on hoardings at various main spots inIndia specially metropolitan cities

Marketing ResearchMarketing research managers interact with customers to define problems and identify the information needed to resolve them our research manager designed research projects prepare questionnaires and samples analysis data prepare reports and present their findings and recommendations to management he must understand statisticsconsumer behavior psychology and sociology.

Using research we are identifying the specific feature and benefits that are target market segment values. Feedback from market tests surveys and focused groups will help us to develop the Olay soap. We are also measuring and analyzing customer, attitude towards competing brands and products. Brand awareness research will help us to determine theeffectiveness and efficacy of our messages and media. Finally we will use customer satisfaction studies to gauge market reaction.