Product Launch Plan - Essay Example

Wholesome Muffins: Product Launch Expenses Wholesome Muffins is opening its first shops in British Columbia, Canada and in the United s to provide a healthier alternative to doughnuts and a cheaper alternative to Starbucks’ expensive muffins and cakes. This part of the paper will provide the budget for the product launch in Houlton, Maine, which is a new market in Canada, and in the United States. The primary function encountered in a product launch is the cost needed to sensitize people about the new product.

These costs can be broken down into four main subgroups; communications costs, promotion costs, advertising costs and public relations costs. The table below details the breakdown of the costs mentioned and the total budget expected for the product launch. Wholesome Muffins Product Launch Expenses Estimated Cost per Unit Estimated Quantity Estimated Subtotal Estimated Quantity Estimated Subtotal Estimated Quantity Estimated Subtotal 2012 2013 2014 Communications Radio: Paid Advertisements $400.

00 16 $6,400.00 14 $5,600.00 21 $8,400.00 Website $370.00 2 $740.00 2 $740.00 3 $1,110.00 Total $7,140.00 $6,340.00 $9,510.00 Promotions Free Muffins at charity events $0.49 4,000 $1,960.00 2000 $980.00 3000 $1,470.00 Rewards programs: Free Muffins $0.49 2,000 $980.00 1000 $490.00 1500 $735.00 Survey Muffins $0.49 4,000 $1,960.

00 1000 $490.00 1500 $735.00 Total $4,900.00 $1,960.00 $2,940.00 Advertising Agency Contract Brochures $0.16 4,000 $640.00 1000 $160.00 1500 $240.00 Radio $300.00 8 $2,400.00 8 $2,400.00 12 $3,600.00 Newspapers $220.00 8 $1,760.00 8 $1,760.00 12 $2,640.00 Social Media Sites $480.00 2 $960.00 1 $480.00 1.5 $720.00 Bus Sides $350.00 4 $1,400.

00 3 $1,050.00 4.5 $1,575.00 Total $7,160.00 $5,850.00 $8,775.00 Public Relations Charity Events $800.00 4 $3,200.00 4 $3,200.00 Sponsorships $400.00 4 $1,600.00 6 $2,400.00 Total $4,800.00 $5,600.00 $0.00 Other Expenses Labor $200.00 2 $400.00 4 $800.00 6 $1,200.00 Utilities 300 3 $900.00 3 $900.00 4.5 $1,350.00 Ingredients 400 4 $1,600.00 4 $1,600.00 6 $2,400.00 Rent $150.00 3 $450.00 5 $750.00 7.5 $1,125.

00 Taxes $90.00 3 $270.00 4 $360.00 6 $540.00 Admin Costs $500.00 3 $1,500.00 4 $2,000.00 6 $3,000.00 Salaries and Wages $800.00 3 $2,400.00 4 $3,200.00 6 $4,800.00 Insurance $200.00 1 $200.00 2 $400.00 3 $600.00 Total $7,720.00 $10,010.00 $15,015.00 As already stated, the product launch expenses will be manly made up of the marketing costs needed to sensitize the market about the muffins. The costs above are based on the fact that there are other muffins in the market, but Wholesome Muffins are way cheaper than the competitors.

This means that the launchers will have to inform the market of the products before producing and selling it. Wholesome Muffins: Marketing Research Whenever a new product is launched into the market, it is imperative that the producers understand the market that is being entered and the chance of success in these markets. This is mainly achieved through conducting effective market research that details the factors that promote the product in the market and the factors like competition that will have an impact on the product.

From the market research conducted, it is evident that Wholesome Muffins will be a success in the new market. Marketing research conducted includes: Site selection Demographics Population of the city and surrounding cities Age brackets of estimated customers Targeted area Income The first factor in the market research is the sustainability of the market once the product is launched. It is understood that the people in the new market have a love for muffins, which, coupled with a high disposable income and low supply chain costs, make the market viable.

From an analysis of the competitive factors, it is evident that Wholesome Muffins will be competitively advantaged. This is due to the fact that the competitors offer similar products but at a higher price and with fewer alternatives for different groups of customers. For example, Wholesome Muffins are priced at an average price; neither too low as to stifle income nor too high as to lose customers. The other factor that promotes the entry into the new market is the fact that the muffins line is not a new product line; it is just an expansion into a similar market.

This means that the producers already have mapped out costs. Coupled with the fact that there are other players in the new market already, the legal and other barriers to entry are low. In addition, Wholesome Muffins conducted a small sample survey of the Marketing Class in Kapolei, Hawaii to understand customer preferences and their price elasticity. The survey results are indicated in the table below: Additional Survey Preference Carrot Cake 5 Donut 1 Muffin 3 Deciding Factor Sight 1 Texture 1 Color 1 Smell 0 Other 6 Healthier Product Carrot Cake 6 Muffin 3 More enjoyed Carrot Cake 6 Muffin 3 Higher price Carrot Cake 6 Muffin 3 Price difference 0.1 4 0.2 0.3 1 0.4 1 0.

5 3 Office preference Carrot Cake 2 Muffin 3 Donut 4 Sex M 5 F 4 31-34 3 39-42 2 43-46 3 47-50 51-54 1 From the survey conducted, it is evident that more individuals prefer carrot cakes to muffins, but when they need to take a snack to an official place, they would prefer to take the donuts. However, they would prefer to pay more for the carrot cakes, albeit by not more than 10 cents.