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 products 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.

1.4 Scope
1

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.
3. Due to lack of work experience, there is a chance of having some mistakes in the report.
2

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.

Chapter 2
3

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.

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

Product Price

: 250 ml for Tk. 12

Liter

500 ml for Tk. 20

1 liter for Tk. 40

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.

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
7

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.

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. Thats why it is important to identify the market needs. Our
first consideration is to provide the best product to its customers. Thats 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

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.

10

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

11

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
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 companys
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 competitors 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.
12

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 markettesting 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:

13

We have future plans to hold seminars, commit social development, supporting social activities, to
arrange cultural functions and mobile game shows for publicity purpose.

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

14

The board of directors will be responsible for the recruiting activities. Recruiting will be done through
written tests followed by interviews.

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

15

Second Year (2017)

4500000

5000000

1700000

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

Year 1

Year 2

For
1

Liter

Item

Year 3

Year 4

Year 5

16

Total Sales

60000000

68000000

80000000

96000000

100000000

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

Expected Sales for 5 Years

7000000
6000000
5000000
4000000
250 ml. Bottle
3000000
2000000
1000000
0
1st

500 ml. bottle

2nd

3rd

1 Litre bottle

4th

5th

Year

Chapter 7
Conclusion

17

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. Thats 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 its high nutritive value. Our product is completely natural and it has no
harmful effect for the health,
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.

Bibliography
1. Kotler, Philip, Gary Armstrong, Prafulla Y. Agnihotri & Ehsan ul Haque, Principle of Marketing, 13th
Edition. (United States of America: 1997)Prentic Hall, Inc,

18

2. Husted, S. W., D. L. Varable, J.R.Lowry, Pro. Of Mordern Marketing, Allyn & Bacon,; 89,USA.
3.Nunzia Carbonara, Gianni Schiuma, The new product development process within industrial districts:
a cognitive approach, International Journal of Product Development 1, No 1, September , 2004
4. Rodney McAdam, Denis Leonard, Reengineering based inquiry into innovation in the front end of
new product and service development processes, International Journal of Product Development 1, No 1,
September , 2004
5. Roland Helm, Armin Scholl, Laura Manthey, Michael Steil,Measuring customer preferences in new
product development: comparing compositional and decompositional methods, International Journal of
Product Development 1, No 1, September , 2004
6. www.learnmarketing.com

19