New Product Development

New Product Development

            Idea Generation Stage:

What we first of all looked at was the competitors’ products to try to get some ideas about exactly what today’s markets demand and offer. Then we held up a small consumer focus groups to discover why certain (few ‘consumer goods’ mentioned to that group) products are purchased? What ingredients or elements are most commonly used in them, what they like and/or dislike about these products, and how they would like to have them improved or replaced with other alternatives. Another focus group session regarding Retailers was also conducted. This helped establishing the basis of discovering why certain products and/or category of products have a quicker turnaround time then others.

A preliminary research involving a secondary study; of the existing market, the brands available by market players and the ones offered by Sara Lee was done. The study revealed that there are certain areas which are left untouched our less exploited by many of the companies, and even if they are being offered, there is enough potential for new companies to fully exploit the market. Sara Lee Corporation also enjoys an advantage due to the company name as a famous brand itself reflecting quality, innovation, hygienic and exclusiveness.

 Observational research of the consumers, there buying patterns, income levels and changing attitudes towards products, the increasing hygiene conscious culture, the shift from products to brands, the certain un-offered items that could yield handsome returns were also taken under consideration. These complimented with a brainstorming session, revealed the following potential products to be prospects of being added to Sara Lee Corporation’s product lines.

Product A: Sugar cane packaged drink (Beverages)

Product B: Chocolate coated biscuit sticks (Bakery)

Product C: Apple juice (Beverages)

Product D: Sea Foods (Meat)

Product E: Face Scrub (Body Care)

Idea Screening:

After establishing these five alternatives, let us see how they fit in to different area of the screening matrix to slash out all except the one best product that will actually proceed to become a reality as part of the product line of Sara Lee Corporation.

Following is the screening Matrix which will evaluate each product on the basis of 4 dimension and their respective weights.

Screening Matrix:

WeightScoreRatingProduct A(1)(2)(1 x 2)Uniqueness/Superiority.452High Performance to Cost Ration.34.51.35Lack of Competition.23.5.7Company Fit.14.5.45Total Rating Product A4.5Product BUniqueness/Superiority.431.2High Performance to Cost Ration.33.51.05Lack of Competition.21.2Company Fit.13.5.35Total Rating Product B2.8Product CUniqueness/Superiority.42.51High Performance to Cost Ration.33.9Lack of Competition.21.5.3Company Fit.13.3Total Rating Product C2.5Product DUniqueness/Superiority.42.8High Performance to Cost Ration.32.6Lack of Competition.22.4Company Fit.13.3Total Rating Product D2.1Product EUniqueness/Superiority.42.51High Performance to Cost Ration.33.9Lack of Competition.22.4Company Fit.13.3Total Rating Product E2.6

Concept Development and Testing:

After finalizing the idea for the product through the screening matrix, the resulting product that won the lead was the sugar cane drink.  We as the new product development team of the Sara Lee Corporation will have to take that idea out in the market again and present it to our target customers and/or consumer and distributers and retail outlets that would eventually be selling our new product. We will evaluate what these people think about this new drink being introduced by our company. We will analyze if the drink as a product is actually filling in some loop-hole or existing gap in the market. We will then try putting ourselves into the place of our customers, consumers and retailers and will try to derive the perceived benefit of the new product and how it compliments the existing products or brands; we will also see how it can give competition to close substitutes and how can it potentially replace many other similar drinks. Any feasible ideas and suggestions that were gathered through analysis and feedback will actually have to be taken into serious consideration and evaluated justly.

This phase of concept testing will also include test marketing within a certain are which is feasible to operate in for this sake. Some considerations to be kept in mind while test marketing the drink are that the area or sample chosen for test marketing our new drink should be reflecting the demographics and preferences of our actual target market.

Marketing Strategy:

After the drink has passed the concept testing phase now my team will decide the marketing strategy for the drink. The strategy should be predominantly complying with the general practices of Sara Lee Corporation to yield symmetric result basis for the sake of product comparison on corporate level. The marketing strategy will obviously be including a marketing mix for the drink, the positioning strategy it will take within the market. The segmentation tactic it will adopt and so on.

Our product will have a price falling in the range in which all the other juices and beverages offered lie. The target consumers would be hygiene conscious people from all ages who are shifting from soft drinks to fresh juices to have a good health.

Business Analysis:

The new drink has the potential to capitalize a market of around $100 million in a year and would enjoy growth in sales because people are now shifting from soft and dizzy drinks and given a choice, they prefer a fruit juice/ drink rather than having a Pepsi or a Coke. We expect to earn 8-10% of profit on the units sold which would also increase in both ratio and value in the following years. The sugar cane drink is likely to have a significant share within all the beverages Sara Lee Corporation in a short span of time. In fact some of the company’s products can become its direct competitors and may loose their markets to the drink being a new product and also due to change in preferences of the target consumers. The initial introduction of the product will begin from it being available in specific states. This will be followed by a country-wide launch of the drink with maximum availability in all regions within the time of six months to a year. Summers are obviously the best season to launch the product, since it feels good to have it on a sunny day. The supply chain would be actively managed for all regions according to their whether ad the prevailing demand. This would reduce the chance of stockpiling with regional vendors yielding them unable to sell all and hence pay in full to the company. So active supply chain would be managed and this will guide the production schedules of the drinks to be supplied to all regions throughout the country.

References

Trott Paul (2008) Innovation Management and New Product Development: Prentice Hall.Annacchino Marc (2003) New Product Development: from Initial Idea to Product Management: Butterworth-Heinemann.SAP (2006) New Product Development & Introduction: SAP White Papers.Mital Anil, Desai Anoop, Subramanian Anand & Mital Aashi (2007) Product Development: A Structured Approach to Design and Manufacture: Butterworth-Heinemann.Clark Kim B. & Fujimoto Takahiro (1991) Product Development Performance: Strategy, Organization, and Management in the World Auto Industry: Harvard Business School Press.Business Wire () Sara Lee Corporation Reports Record Sales and Increased Earnings per Share. Retrieved 11October, 2008, from Bnet Web site: www.findarticles.com