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New Product Development: Pedometer Alarm Clock - Term Paper Example

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This term paper "New Product Development: Pedometer Alarm Clock" is about the new product. The invention is referred to as a pedometer alarm clock. It is an alarm clock with an in-built pedometer. The special function is that you must make the in-built pedometer be satisfied to turn off the bell…
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Extract of sample "New Product Development: Pedometer Alarm Clock"

New Product Development Table of Contents General Overview 2 The Product 4 Idea Generation Process 4 Concept Testing 5 The Product 6 Business Analysis 7 Cost 7 Sales Projections 8 Time to Market, Risks and Benefits 9 The Test Market 10 Launch plan. 11 Budget 15 The Budget 16 Expected Costs 16 Break Even Analysis 16 Conclusion 17 20 References 20 Introduction General Overview Nowadays, people have a lot of work to do. They work for a whole day; it is so tired that people can’t get up early as planned in most occasions. Therefore, the alarm clock is very important for workers. Similarly, students who stay up too late also need an alarm clock to enable them wake up and to go to school on time. However, some people would turn off the alarm clock and continue sleeping when they hear the alarm sound. As a result, many activities of the day are delayed because of poor timing. An individual who understands the meaning and significance of time value of money must be concerned by this. Every minute lost has a financial value attached unto it. This implies that the person and may be the entire organization are probable of losing a lot of resources just because of poor time management. My new product is aimed at addressing the issue that has been highlighted in the first paragraph. The invention is referred to as a pedometer alarm clock. It is an alarm clock with an in-built pedometer. There is no tangible evidence of any difference with the ordinary alarm clock. At the same time, their function is the same, but their effectiveness is what differs. Just like the ordinary watches, the alarm will ring exactly when the preset time is at hand. However, the special function is that you must make the in-built pedometer be satisfied to turn off the bell. This is because in this particular gadget, there is no button for turning off the alarm. Therefore, if an individual does not want to wake up, he or she will have to endure the noise being made by the alarm throughout the night or in the morning. This explains why this pedometer is very special. It is a part of the alarm clock. When the bell of the alarm clock rings, it is roused at the same time. At this moment, it is like a common pedometer to record the steps what you move, but the difference is that when it records ten steps, it will be reset and control the alarm clock to turn off the bell. Therefore, in other words, people need to move ten steps or jump ten times to turn off the pedometer alarm clock when it rings. We can imagine that a person wants to get up at the eight o’clock in the morning, and he sets the alarm clock for eight o’clock. When the pedometer alarm clock rings, he has to take it to move ten steps or jump ten times in order to stop the bell. The logic is that if an individual can manage to jump ten times in order to make it possible reset the pedometer in-built alarm, that person will be in a position to wake up at that time. While some people may not fully understand the significance of this devise, the people in business and in corporate world are in position to understand better this particular discovery. This is because these are people who can be able to calculate the amount of money they lose when they fail to meet the set timelines. Such failures lead to loss of opportunities from investors and other stakeholders that are critical to the success of the organization. Moreover, the current world economy is supported by many countries running a 24-hour economy. In such an economy, many people are handling two or even three jobs in order to afford decent living. As a result, they have to ensure that time management is up to date in order to meet the demands of all the employers. This plan has been designed to address the need that has been identified in a very unique manner. The invention focuses on the forecast into the future. While currently people are working very hard to achieve their objectives, the trend seems to continue. People will be expected to work even harder than they are doing to afford a sustainable living in the future. This innovation takes advantage of such trends to turn the idea into technology. The invention targets almost all members of the household. For instance, school-going children need such technology to manage time effectively. At the same time, household workers as well require this system to effectively discharge their duties. Similarly, the parents in a household ought to wake up early enough to discharge their various duties effectively. This clearly demonstrates that every person that is committed to managing time well is a potential customer and the target audience for that matter. This plan provides a detailed approach that is going to be adopted to ensure that the idea that has been identified can be translated into a product and marketed appropriately. The Product Idea Generation Process Just like any other business idea, this idea was generated from impending need in the society. Struggling with the issue of time management has been part of me since I was in Kindergarten. I was the kind of person that will put on the alarm, but keep on snoozing it till I realize I am late. While its impact may not have been felt during my times in school, I realized this trend could turn out to be alarming during my days in corporate world. I had heard numerous incidences of people who lost their jobs as a result of poor time management. At least I did not want to go through such a situation. From that time, I have been thinking over this issue on how to come up with the solution. I appreciate the fact that thinking is free of charge and therefore I didn’t have an excuse why I could not think. This somehow led me into the process of brainstorming. I had so many possibilities on how to come up with an invention that would enable people manage their times better, especially waking up. I took a lot of time thinking about the factors that have made the alarm clocks ineffective in assisting people to wake up. I based on the weaknesses of alarm to come up with a gadget with an in-built pedometer. Concept Testing The idea that was created in relation to this plan underwent testing as a way of evaluating its performance and possible feedback from consumers. The aim of the process of concept testing that was undertaken was to assess the effectiveness of this gadget in comparison. This is because this project is coming into the market as a better replacement of the ordinary alarm clocks for waking up. In doing that, a sample of individuals from different households was chosen in order to be used as specimens. The group was subdivided into two sub-groups. The first group was expected set their waking up time using the ordinary alarm while the other group was to use the pedometer in-built alarm. To ensure consistency in results of this study, all the people were subjected to the same kind of activities during the day to ensure that they are on the same level when they go to sleep. This is because too much activities makes individuals too tired and it may affect how they wake up. Therefore, the two groups were issued with the different kinds of alarm clocks, with one group using pedometer in-built alarm while the other one using the ordinary alarm clocks. The entire testing exercise was planned for two weeks. The real testing was undertaken twice in order to assess the consistency in terms of performance of the new innovation. This was aimed at ensuring that actually the results collected from the sample were a reflection of how the innovation is going to work. The two groups were consisting 10 members each. On the first day, the individuals were expected to wake up at 4 a.m. From the data that was collected, the group with the pedometer in-built alarm woke up latest by 4.15 a.m. On the other hand, there were only 5 members who managed to wake up at 4.15 a.m. During the second day of the experiment, there was little variance from the results that had been gathered earlier on. This clearly showed that indeed the new innovation is effective in assisting people wake up at the right time. After a successful concept testing, the way for prototyping had been prepared in relation to this product. The Product This indeed looks like just an ordinary watch. Inasmuch as we talk more about the in-built pedometer, we cannot ignore the fact that this is a watch. The issue of in-built pedometer is an addition that makes this particular watch unique. As earlier pointed out, the product will target all kinds of people in the society. This includes people in the corporate world as well as many other forms of employment. In addition, students are also a target in marketing this product. In real sense, this is a product of its kind. Indeed it is a completely new product on the market though it may appear like any other ordinary watch. The product has been designed with the domestic market in consideration. Nevertheless, the product will be marketed internationally when the level of acceptance has grown (Kopp, 2012). The manner in which this product will be received in the local market will determine the strategies that can be adopted in marketing this product beyond borders. The target segment of this product is generally the overall household. The overall design of the product gives it the ability to meet the needs of the user effectively. The design of this particular product has put into consideration the prevailing need in the market in line with time management. The product has undergone a successful testing period and from the results that were gathered, it is effective in helping people wake up at the targeted time. This is been further driven by the need for better time management in order to be sustainable in any given organization. The current trends in the world depict the need for people to be extremely good when it comes to time management. As the population of people continues growing, the level of competition for scarce resources increases. This demands that only the most innovative and creative people are able to survive. One of the things that will enable many to live sustainably is their ability to manage well their daily activities. This originates from the knowledge that time is money. Wasting a lot of time is therefore wasting monetary resources. Business Analysis Cost Cost is one of the most important factors that any business entity must consider before embarking on producing any product. This is a completely new product being produced and marketed by a new business. This can therefore be very tricky if not well handled. The focus is upon the amount of the initial investment and what the business is expected to do to recoup this amount. The business ought to take considerably short period to break even. In assessing costs, analytically, one would evaluate variable costs only after the overall costs have been considered (Makridakis, Wheelwright & Hyndman, 1997). The variable cost is very important as it can be used to set the price of the new commodity. Nevertheless, it is not very easy to arrive at such costs regarding the uniqueness of this product. The nature of this product makes it quite challenging to estimate the cost of production appropriately. One of the items that will require a lot of money is the manufacturing plant. The plant is expected to cost at least $2 million. In addition there are maintenance costs which are expected to be about $35,000 on annual basis. This is expected to be changing with time as the plant wears out. Another item for consideration is the required materials for manufacturing of this product. In overall, such materials are expected to cost $250,000 for the first year. As it has been clarified, this is a new business idea and most of the costs are just estimates. In addition to the above costs, there are administrative and overall expenditures which are estimated to be about $180,000 during the first year. Sales Projections Based on the fact that this is a new invention, the adoption of this product is the most important factor that has to be considered. The product is deemed to perform well on the market upon its launch. The product is targeted at all members of the household and this implies that the market potential is quite good. This product is expected to be launched on the market at the cost of $20. This is quite affordable comparing the fact that related products are retailing at over $35. The market is indeed quite promising based on the fact that this is a new product. During the first year of trading, the product is estimated to sale at least 100,000 units. If this is true, then the business will break even during the second year of trading. The sales volume is expected to grow steadily during the subsequent years of trading. At the end of the third year of trading, the business is expected to be selling over half a million units of these products. During that period, the business will be doing extremely well considering the fact that at that point the fixed costs will have reduced so much. The sales volume for the second year is expected to be very good based on a number of issues. The business has a plan of ensuring that research is carried out to put in place measures that will facilitate return purchasing trends. This will be achieved by putting in place some loyalty programs into place. These programs are concerned about the long term relationship with the customers (Michael & Xia , 2001). Such relationship is expected to be the pillar upon which sales volume of the business will be cemented. At the same time, the business is committed to designing the appropriate promotional activities that will stimulate demand for the products. This is very crucial considering the nature of the market and the overall environment. The product is deemed to benefit a lot from such programs especially during the first year of trading. This is the proper timing because of the phase of the product in its adoption process. Heavy marketing is expected to attract the early adopters who have the potential of determining the sales trend of the business. Time to Market, Risks and Benefits This is a completely new product on the market. It is likely to take a bit longer time for this product to diffuse into the market. For that to be a reality, the product must be heavily marketed. The business has planned a series of promotional activities to ensure that the product gains the required momentum on the market (Beeler, 2000). During the first six months, comprehensive advertisement and other promotional activities are lined up. The focus is to market the product during the first months of operation to ensure it has gained enough grounds. The TV commercials will be run intensively for the first six months (Scott & Gerald, 2004). The early adopters in this country happen to be the main focus point in relation to marketing strategies. In relation to risks, the product is faced with the risk of diverse nature. The product must have the most feasible ideas to ensure that it competes effectively in the market (Rao et al, 2004). One of the risks facing this business relates to failure. Just like any other product, it can be a failure if it was not well strategized. Poor strategizing may cause the business fail to break even. This implies that the product must have a concrete marketing plan to successfully penetrate the market. To reduce this kind of risk, the business must ensure that a thorough market research is undertaken. Such a research will provide the required information in designing the targeted product. Market research unveils the possible impediments that the business could face in marketing the new product. This is to mean that this business must invest in market research to ensure that sufficient information is gathered for decision making process (Jaworski, Kohli & Sahay, 2000). When the information that is provided above is put into consideration for decision making, the business has a bright future. Just as projected, the business is expected to do extremely well. The business is focused on capitalizing on the uniqueness of this product to exploit the market (Wiklund, Davidsson & Delmar, 2003). The benefits of this product will start manifesting well from the second year of operation. During that period, the business would have already attained the breakeven point. The profits are expected to increase steadily because of the reduction in the amount of fixed costs. During that period the fixed assets will be shrinking thus increasing the contribution margin. Therefore, the business has all the reasons to try out this invention and see performance of the product. The Test Market Any product that is manufactured for commercial purposes must first of all be tested. This is meant to find out how the actual market will respond to the new market. This testing for this product will take place even before the commercial adverts begin running on TVs. In most scenarios, the test market will provide some critical information about the product and the best way to market that product in the selected market (Cooper, Edgett & Kleinschmidt , 2002). This test also provides some information that may guide the company on the way forward in relation to improving some aspects of the product. Some of the aspects could include price. From the information, the marketing unit must know how to respond to the feedback from the market (Cooper, 2006). The last minute adjustment in this context means a lot for the product being marketed. To carry out the execution of this test market, specific regions must first all be chosen. The marketing unit ought to ensure that the regions chosen are representative of the entire target market. This is meant to ensure that when the product is finally tested, the outcome represents all the customers (Cooper, 2004). After the specific regions have been identified, the product will be market and sold at the same time to the consumers found in that market. During the testing period, the views of consumers and their overall feedback ought to be closely monitored. Launch plan. Taking the product into the market is very crucial for commercialization of any product is what determines the success or the failure of the product. We highly recognize that a successful launch is dependent on the approach and attention to detail and thus much attention is employed to ensure that it is a success (Stewart, 2002). This launch solely emphasizes on the timing and positioning of the launch with marketing and sales specialists being involved from the initial stages. Accountability and clear responsibilities among the launch teams are well defined. In the same case, the sales teams are sufficiently prepared to focus on the technical attributes of the new product. The following steps are going to be followed and adhered to: What is being launched is clear – the marketing department will drive the launch process so that there can be strategic market intelligence so as to have a clear solution tailored to the market’s needs. Who owns up - for the launch to be a success, the responsibilities will be clear throughout the process. The strong leadership from all departments will be present and transparent from all core functions such as sales, research and development and customer service. At the same case, there shall be a well laid formal governance structure and performance measurement systems that will mean that the business units incentives are not undermined from the launch process (Grime & Smith, 2005) How to execute the process – Time and available resources shall be adequately utilized, and at the same time, clarity on the purpose of critical activities will be obeyed so as to reduce the levels of risk in the process. What to launch – There will be an adequate preparation of a great sales force, and indirect channels where necessary so as to make this launch a success. We highly recognize that many emphases on the technical aspects of the product may undervalue the need of a balance of industry and functional knowledge, such as the sales skills so as to hit the target markets (Wood, 2000). Pedometer alarm clock Launch Strategy The strategy will have to satisfy the strategic emphasis, marketing emphasis and the organization emphasis (Jaworski, Kohli & Sahay, 2000). The managers of all the departments will have to be part and parcel of this development so that they can brainstorm on the most effective ways to launch the product. Pedometer alarm clock will be launched through the influence marketing process. This is due to the fact that, influencers play a very vital role in developing trust in a brand and this will eventually impact the product launch. Most people trust other people and mostly influencers. For influencer driven launch program, the following steps will be followed; 1. Starting early – for brand opinion forms equity, the influencer should be reached before their opinion hardens. 2. They will be fed with a lot of information regarding Pedometer alarm clock and this will be a good platform to use them as a research tool of possible to shape the marketing. 3. Saturate the target with influencers from multiple topics. The target market is the corporate, employed and students. This therefore means that, different strategies will have to be employed so as to reach all of them substantially, they include reaching the; Journalists and bloggers will be used Employees and executives Analysts and academics Politicians and governmental agency personnel We are going to ensure that; The team includes influential amplifiers to test product proposition and early designs Adhere to pre launch press converge from the most influential sources Use traditional media plan and other influential outlets Engage digital influencers to create lifestyle content all around the Pedometer alarm clock through blogs, video and images. Budget $ PR 4,000 Advertising 10,000 Digital and print media Trade Shows 4,000 Direct Marketing 3,000 Events 5,000 Sales Tools 8,000 Promotional items Web 2,000 Channel & Partner 3,000 The Budget Expected Costs Manufacturing plant = $2 million Maintenance costs = $ 35,000 Inventory = $ 250,000 Sales and marketing costs = $120,000 Other annual expenditures = $ 180,000 Total estimated costs = $2,585,000 Expected revenue: the main source of revenue for this business is from sales. Therefore, the revenue in this business is a function of sales. That is to imply that the more the number of units the higher the sales revenue. To calculate the expected revenue in this case will mean multiplying the projected annual sales by the unit price. The following is the calculation for the estimated revenue: Sales volume: at least 100,000 units in the first year of trading. The unit price is @40. The total revenue from this is $2 million. This implies that the business will have to run for more than one year to break even. Break Even Analysis Fixed Costs during the first year: $2 million + $35000 = 2,035,000 Sales volume at BEP = Fixed Costs/{1-(variable costs/actual sales)} 550,000/20,000,000 = 0.01325 1-0.0275 = 0.98625 BEP = 2,035,000/0.98625 = 2,063,371. This is the BEP in sales volume. This means that the business will have to sale products worth 2,063,371 in order to break even. From the information that has been computed, this business may not manage to break even during the first year. It is during the second year where the sales are expected to grow and the fixed costs will also be reducing. As a result, the business will be able to break even during the second financial year. Afterwards, the returns of the company seem very impressive and the business is likely to flourish a lot. Conclusion In the current world, time is very vital and therefore a very valued commodity, be it by the employers, employees or students. When a single moment is wasted, it is never recovered and it can cost the victim a lot. As noted, many activities of the day are delayed because of poor timing. An individual who understands the meaning and significance of time value of money must be concerned by this. Every minute lost has a financial value attached unto it. This implies that the person and may be the entire organization are probable of losing a lot of resources just because of poor time management. A Pedometer alarm clock is designed to give a solution to this predicament. Just like the ordinary watches, the alarm will ring exactly when the preset time is at hand. However, the special function is that you must make the in-built pedometer be satisfied to turn off the bell. This is because in this particular gadget, there is no button for turning off the alarm. Therefore, if an individual does not want to wake up, he or she will have to endure the noise being made by the alarm throughout the night or in the morning. This explains why this pedometer is very special. It is a part of the alarm clock. When the bell of the alarm clock rings, it is roused at the same time. At this moment, it is like a common pedometer to record the steps what you move, but the difference is that when it records ten steps, it will be reset and control the alarm clock to turn off the bell. Therefore, in other words, people need to move ten steps or jump ten times to turn off the pedometer alarm clock when it rings. When the pedometer alarm clock rings, he has to take it to move ten steps or jump ten times in order to stop the bell. The logic is that if an individual can manage to jump ten times in order to make it possible reset the pedometer in-built alarm, that person will be in a position to wake up at that time. People in business and in corporate world are in position to understand better this particular discovery for time is precious to them. This is because these are people who can be able to calculate the amount of money they lose when they fail to meet the set timelines. Such failures lead to loss of opportunities from investors and other stakeholders that are critical to the success of the organization. Additionally, the current world economy is supported by many countries running a 24-hour economy. In such an economy, many people are handling two or even three jobs in order to afford decent living. As a result, they have to ensure that time management is up to date in order to meet the demands of all the employers. This means that, there are chances whereby, many people cannot live without this gadget; especially those how value time. The product is expected to saturate the entire globe within a very short time. This is attributed to the promotional activities that will be employed to reach the target market and also venture into new markets. The quality of the product will never be compromised and this will give the product a competitive advantage. The pricing strategy is also considered without compromising on the quality and this will create more chances for the product to venture new markets. The product will be made available through various channels of distribution to make sure that it is available everywhere in the entire globe. Marketing strategies will be employed all over the world to ensure that, all people become aware of the existence of this vital product and also in enabling sustainable sales for the company. Information about the product will be made available at all times and in many places like in working places, schools and other social places where they can reach as many people as possible and within a very short period of time. Within a period of two years, it is expected that the product will have saturated the entire world and will be made available everywhere in the entire globe. References Beeler, A. (2000). ”Virtual ads grab more attention from markters. Advertising Age, vol. 71, iss. 23 , 93. Brennan, Michael J., Yihong Xia . (2001). “Assessing Asset Pricing Anomalies,” . Review ofFinancial Studies, 14(4), , 905–942. Cooper, R. (2006). Formula for Success. Marketing Management Magazine. American Marketing Association , 21-24. Cooper, R. (2004). New Products: What Separates the Winners from the Losers. Ch 1 in The PDMA Handbook of New Product Development, 2nd Edition. . New York, NY: John Wiley & Sons. Cooper, R.G., Edgett, S.J. and Kleinschmidt, E.J. . (2002). Portfolio Management for New Products, 2ndedition. New York, NY:: Perseus Publishing. Grime, I., & Smith, G. . (2005). The Impact of brand extension on brand personality: experimental evidence. European Journal of Marketing, 39(1/2), , 129–149. Jaworski, B,. J., Kohli, A.K., & Sahay, A. . (2000). Market Driven Versus Driving markets. Journal of the Academic of Marketing Science, 6(2) , 45-54. Jaworski, B,J., Kohli, A.K., & Sahay, A. (2000). Market Driven Versus Driving markets. Journal of the Academic of Marketing Science, 6(2), , 45-54. Kopp, E. (2012). Business Continuity Plan. New York: EK Publications. Makridakis, S; Wheelwright, S. & Hyndman, R. (1997). Forecasting: Methods and Applications. New Jersey: Wiley. Rao, V., R., Manoj, K., Agarwal, Denise D., . (2004). “How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?,”. Journal of Marketing, 68(4) , 126 141. Smith, Scott M. & Albaum, Gerald S. (2004). Fundamentals of Marketing. California: SAGE Publications. Stewart, K. S. (2002). . Formal business planning and small busines success: A survey of smallbusinesses with an international focus. Journal of American Academy of Business, 2(1), , 42-46. Wiklund, J., Davidsson, P., & Delmar, F. . (2003). What do they think and feel about growth? An expectancy-value approach to small business managers' attitudes toward growth. . Entrepreneurship: Theory and Practice, 27(3), , 247-270. Wood, L. (2000). Brands and brand equity: definition and management. Management decision, 38(9) , 662–669. Read More
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