The Development and Launch of a New Product - Business Plan Example

Business work i. Executive Summary The business plan would focus on the entire activities related to the development and launch of a new product. The product developed in this study is an energy health drink which would be launched in the market of UK. This particular product was chosen owing to its growing popularity in the determined market. The plan would provide an evident idea regarding the product, the business environment of the industry and the competitors, the targeted market and an estimation of the budget which would be needed for the entire involved activities. An estimation of the sales forecast for the product has also been provided which would help to ascertain the feasibility of the product. Table of Contents i. Executive Summary 2 Table of Contents 3 ii. Aims & Objectives 4 iii. The Business Environment 4 iv. The Product Description 8 v. The Marketing Area 8 Marketing Segmentation & Target Market 8 vi. Financial Area 10 References 12 ii. Aims & Objectives The basic purpose of the developed business plan would be to structure a framework of marketing for the newly developed product which is an energy health drink. This marketing framework would prove advantageous for the company as it would provide a support to the strategic business objectives of the company in the market of United Kingdom (UK). The plan would aim to successfully launch the new product in the market which would also entail the marketing and positioning plans. These plans would assist the company to appropriately place the product in the market by targeting the suitable customers. Therefore, it could be stated that the chief purpose of the plan would be to effectively launch the new product in the UK market along with creating a target customer for it which would ensure the sales of the product (Blackwell, 2004). iii. The Business Environment The business environment in which the health drink is intended to be launched relates to the UK food and beverage industry. Hereby, in order to analyse the industry and its current competitive stance, the Diamond Model by Michael Porter will be used. Source: (Lessard, 2003) Factor Conditions The food and beverage industry of the UK constitutes of around 470,000 people as was recorded in the year 2008. This immense number of human resources contributes to the efficiency of the industry along with its size (East Midlands Development Agency, 2008). Furthermore, with the steady but continuous growth in the manufacturing and agricultural sector, the flow of raw materials can also be noted as quite substantial to fuel up the competition in the industry along with satisfying the demand amid the traders of food and drinks in the UK (Office for National Statistics, 2011). It is worth mentioning in this context that due to the increasing values rendered to the sustainability issues, not only by the agricultural industry, but also by the food and beverage industry as a whole, the companies operating in this structure needs to focus on acquiring efficient and highly skilled labourers with sufficient knowledge in the field of technology along with retail and infrastructural issues (Institute for Manufacturing, 2010). Demand Conditions The demand conditions in the industry can be witnessed to rise rapidly with the increasing number of population, especially amid the young and the middle age-group of England and Wales region. Conversely, it should also be mentioned that the income disparity in the economy is witnessed to increase which certainly causes a negative impact over the demand conditions in the industry (Jin & et. al., 2011). In lieu of this certain feature, the industry’s contribution to the overall output of the manufacturing sector in the UK is also considered to be rising substantially at an average growth rate of 0.2% (Office for National Statistics, 2011). However, the contribution by the industry in the manufacturing sector growth rate over the past 12 months period was recorded to be negative which in turn depicts that even though the industry is witnessing stable but increasing demand in the consumer market, it is likely that a few noteworthy obstacles persist in other segments (Myers, 2012). Supportive and Related Industries The food and drink industry in the UK operates collaboratively with various other industries. Apart from the agriculture industries, the food and drink industry is also related to the technology industry, catering industry, retail and distribution industry along with the wholesale industry (Institute for Manufacturing, 2010). The interconnected structure of the industry can be well observed from the diagram below. Source: (Institute for Manufacturing, 2010) However, it is worth mentioning that due to its interconnected nature, the food and drink industry had to witness significant challenges in terms of the recent global financial turmoil such as reduction in investments, fluctuations in the currency rates and inflationary affects (Institute for Manufacturing, 2010). Firm Structure, Strategy and Rivalry With effects of the industry configurations, the firms operating in the food and drinking sector is currently facing massive challenges to cope up with the growing demand of the consumer market. For instance, with slackening investments and increasing demand, the firms need to overcome the challenge of maintaining a balance between the supply and demand cycles. Sustainability issues regarding quality and quantity has also emerged to be a crucial challenge for the firms in this industry. From an overall point of view, the lowering investment rate followed by legal barriers influence the industry to be concentrated by characteristics to an extent which in turn depicts that the rivalry amid firms shall be in a stable position to allow a new entrant (Foresight: The Future of Food and Farming, 2011). iv. The Product Description Reviewing the current industry trends, the product intended to be launched in the UK market will be a fruit drink with non-carbonated ingredients. Hence, in its initial launch the product will focus on attaining a substantial reputation as a healthy fruit drink. Furthermore, as the current social inclination is observed to grow consciousness regarding health issues such as obesity, this drink will act as a nutrient intended to attract the customers between the teenage and middle age-group (Triggle, 2011). Moreover, focusing on the income disparity currently existing in the industry, the drink will be launched at a lower price range than other available brands in the similar category. This will not only assist in attracting a mass population, but shall also be beneficial in gaining customer satisfaction in the long run. Notably, the fruit drink will be served to the customers at a variety of flavours with due consideration to the quality aspects. v. The Marketing Area Marketing Segmentation & Target Market The newly developed product would be a ready-to-drink bottled health drink which is being planned to be introduced in the sector of functional drinks. The product has been developed by taking into concern both the social as well as the physiological requirements of the customers. It would intend to satisfy the physiological requirements which implies to the nutritional and the hydrating value. In the similar context, it would even intend to focus on fulfilling the social requirements entailing the viewpoint of a healthy and social drink with a feeling of fitting into the peer buyer groups (Brethauer, 2002). It is considered to be immensely significant to develop a proper segmentation plan for the market as it helps in gaining business and popularity for the product when aimed at the appropriate age group. The market of functional drinks in the UK has been observed to be quite popular and strong and is still left unexplored to a certain extent (Research and Markets, 2008). The company needs to make the most of it and try to target the young teenage group as they have been found to be quite fond of the health drinks. Along with aiming at the teenage group the company also needs to focus their product on the people associated with the field of sports. The drink needs to be marketed by highlighting its Unique Selling Proposition (USP) which is the factor of energy booster. The uniqueness of the product should range from the quality to nutritional value to price as well as taste (Brethauer, 2002). The drink would not only satisfy the thirst but also enable the people consuming it to gain energy along with the help of the nutritional elements present in the drink. Once the product gains popularity among the young age group and children the company should start focusing on the middle age crowd as well. It is important to know that while developing a marketing plan, the focus should be on the consumer and not on the product. The classification of the target market or the segmentation is also considered to be vital as this would define the group of people to whom the product would be catered to (Truex, 2011). vi. Financial Area The launch of a new product would also entail the requirement of a financial plan as it would aid in evaluating the financial objectives for the company which would occur at various stages involved in the process of developing and launching a fresh product. An appropriate financial plan would help the company to make certain that the exact sum of capital is available for the reason of meeting up to the different expenses (Sinha, 2008). The development and launch of a new product i.e. the energy health drink would entail quite a few significant amounts of expenses in the initial stages. The company would need to first devote a considerable amount of capital for the purpose of research and development which would be necessary for deciding on the kind of product which is intended to be developed. Once the product has been decided on, then the expenses related to the manufacturing of the product would be taken into concern. After the product has been manufactured, the methods of marketing and promoting the product need to be ascertained according to which a financial budget would be prepared. In the initial phase the marketing and promotional activities for the product need to be done extensively which would involve huge expenses. This would be necessary to reach out to the target market which would ensure the sales of the product. Once the product has been marketed and promoted effectively and it gains popularity then there would be dip in the marketing and the promotional costs. An estimate of the expenses related to the development and launch has been provided below along with the expected sales. Marketing Strategies Expenses in Pounds (£) Product Development & Launch: Research & Development 222,750 Manufacturing Expenses 166,900 Product Launch 308,530 Public Relations 83,700 TOTAL 781,880 Advertisement: Television 30 seconds airing during Noon-time shows (For 6 months) 12,163 Prime-time shows (For 6 months) 21,590 Billboards 12,197 Magazines Full Page 12,676 Posters 7,042.5 TOTAL 74,768.5 Road Shows & Campaigns 7,042 Press Release 5,634 Events & Sponsorships 20,422.5 Sales Promotion 26,056 Total Expenses 915,803 Sales Forecast 936,778 Expected Profit 20,975 References Blackwell, E., 2004. How to Prepare a Business Plan. Kogan Page Publishers. Brethauer, D., 2002. New Product Development and Delivery. AMACOM. East Midlands Development Agency, 2008. Cutting out Waste in Food and Drink: A Resource Efficiency Strategy for the East Midlands Food Industry. Food Processing Faraday Partnership. Foresight: The Future of Food and Farming, 2011. Final Project Report. The Government Office for Science, London. Institute for Manufacturing, 2010. Value of Food & Drink Manufacturing To the UK. Report to the FDF: University of Cambridge. Jin, W. & et. al., 2011. Poverty and Inequality in the UK: 2011. Institute for Fiscal Studies. Lessard, D. R., 2003. Frameworks for Global Strategic Analysis. Journal of Strategic Management Education, Vol. 1, Iss. 1. Myers, M., 2012. Economic Review - January 2012. Office for National Statistics. [Online] Available at: http://www.ons.gov.uk/ons/dcp171766_254181.pdf [Accessed February 08, 2012]. Office for National Statistics, 2011. Estimates of Centenarians in the UK. Population Estimates by Age and Sex. [Online] Available at: http://www.ons.gov.uk/ons/dcp171780_233627.pdf [Accessed February 08, 2012]. Research and Markets, 2008. UK Health Drinks Market. Description. [Online] Available at: http://www.researchandmarkets.com/reports/607885/uk_health_drinks_market.pdf [Accessed February 09, 2012]. Sinha, M., 2008. Financial Planning: A Ready Reckoner. Tata McGraw-Hill Education. Triggle, N., 2011. Global Governments Must Get Tough On Obesity. BBC. [Online] Available at: http://www.bbc.co.uk/news/health-14669203 [Accessed February 08, 2012]. Truex, L., 2011. How to Make a Marketing Plan For a New Product. Business. [Online] Available at: http://smallbusiness.chron.com/make-marketing-plan-new-product-3236.html [Accessed February 09, 2012]. Read More