New Product Development - Essay Example

New Product Development Table of Contents Table of Contents 2 Draft about the industry 3 Memo 4 Introduction 5 Business objectives6 Mission Statement 6 Vision Statement 7 Goals and Objectives of Sony’s Bravia Smart HMZ 7 Segmentation, Targeting and Positioning 8 Segmentation Strategy 8 Targeting Strategy 9 Positioning Strategy 10 Marketing Mix of Bravia Smart-HMZ 11 Product Mix 11 Promotion Mix 12 Place Mix 14 Price mix 14 Roles to be played by non-marketing departments 15 Conclusion 15 Appendices 17 References 18 Draft about the industry In UK and other developed countries, owning one or more cars in urban or densely populated areas is becoming increasingly impractical and difficult to manage. It is because, costs and practical troubles associated with car maintenance, insurance, refueling etc are comparatively very high in the UK. It was reported that car ownership in London has fallen from 0.78 cars per household in 2009 to 0.76 cars per household in 2010 (Datamonitor, 2015). Since there has been growing buzz about the shared economy in UK, car rental companies such as Zipcar has gained wider popularity and market potential in recent years (Timetric.com, 2015). Zipcar was the first rental company in the UK that offered hourly rates and defeated many traditional rental companies by offering customer-friendly services and unique systems of providing more than 1500 cars to customers at 24/7 for low hourly or daily rates. The car rental industry is one of the fastest growing industries in UK. In 2012, the car rental market has grown by 3 %, reaching a total value of over £1.2 billion. The growing demand for car rental from tourists is an important factor affecting this market (Angelis, 2013). Zipcar is based on a system of customer membership and hourly and daily rental schedules. Though remained far positive to competition and industry challenges, Zipcar faces fierce competition from those rental companies such as Avis, Budget, Dollar, Europcar and Hertz that offer car-rental for relatively longer duration up to six months. Zipcar continues to hold greater share of the car rental market in the UK mainly due to that it possesses a very vast networking of vehicles, advanced technology utilities, huge numbers of memberships reaching to 767,000, highly attractive parking spaces and many other conveniences to customers (Pino, 2012). Memo Zipcar is the world’s largest car club with highest numbers of networks operating in UK. Becoming a member for as low as £ 7 per month provides its customers with access to any car or van that they need when they really need it. Zipcar’s cars and vans are perfectly maintained to have zero hassles, troubles and expenses. Since people find it extremely difficult and expensive to own cars or vans in UK’s urban areas due to heavy costs incurred in insuring, maintaining and fuelling costs, they look for alternative options such as renting a car for their use. It is why Zipcar exists and continues to dominate the market. The company has greater opportunities since it has more than 767,000 registered members, 1500 different branded cars and vans and large networking of operations throughout UK with highly advanced parking facilities. The technology it uses is an additional advantage. It’s website www.zipcar.co.uk gives all the information to its customers about how to work with Zipcar’s systems. Once joined as the member, customer can choose his make and model from the great selection parked around his local area and get in to it to start driving. The company provides a zip-card and smartphone application for both Android and Apple with which customers can unlock cars by holding it against the card reader placed in the windscreen. The way its system works is an attraction, and it remains to be an opportunity for the company since it continues to attract more thousands of people. For the coming years, Zipcar Company will be able to further innovate and develop its existing vehicles, zip-cards and smartphone applications to make its cars operate driver-less, so that customer won’t need to go to cars parking areas, but rather, cars would reach to their office or home place. With this innovation and technology, Zipcar would revolutionize the way the car-rental market is functioning now. Introduction Within the last couple of years, wearable technology has grown to become one of the hottest tech-trends.  Few years ago, wearable technology and wearable products didn’t exist in any meaningful way for customers. Fast forward to 2015, wearable technology and its products are almost everywhere. Technology developers and industry experts are struggling to figure out where to focus their efforts. Some companies such Samsung and Apple developed wearable devices that can be used with smartphones, whereas some other companies came up with various other electronic devices. To garb better opportunities of this potential market, Sony comes with the idea of wearable TV that would certainly revolutionize the television market. In 2012, Sony introduced the first wearable 3D television, branded as Bravia HMZ T3. It was a head-mounted HD 3D personal display having twin screens. The most interesting features of this television were that it worked wirelessly, and it was wearable. Sony’s Bravia HMZ T3 included both 2D and 3D displays with virtual 7.1 surround sound piped from HDMI enabled devices of computers or smartphones (Bellamy, 2014). However, the device didn’t attract wider public due to its troubling weight and dimensions. The headset and battery pack weighed 320 grams and 210 grams each. Now, Sony comes with the same idea, but by overcoming previous issues of weight and dimension of the wearable device. Sony introduces Smart wearable TV that will be just like a spectacle with smart technology in-built. This will look merely like a spectacle, and therefore, customers will certainly feel proud to come out with this device and to watch television programs by using walls or other screens for HD display purpose. They can take their TV wherever they go. The device and its features can be controlled by using an android application from their smartphone or tablet PCs. By adjusting the micro lenses built inside the spectacle, customers will be able to use any surface for display. The lenses would also function as a projector with LED light. The dimension, zooming, streaming and distance between the person and the display can be adjusted from the android application. Sony’s innovation and technology would help the company develop smart-wearable spectacle with which customers can watch channel programs wirelessly, at any time and at anywhere. Sony will have to customize the products according to customers’ requirements such as sun-glass, short-sight or long-sight and other personalized requirements. This product will be branded as Bravia Smart-HMZ. Business objectives Mission Statement The mission of Bravia’s Smart-HMZ is to ‘create trends in the global market with innovative smart wearable television’. Sony’s Bravia Smart-HMZ will come in the form of a customizable smart spectacle with which customers can watch TV programs on wall or other possible surfaces. The mission statement that includes 11 words explains what and why elements of the business goals. Vision Statement The vision of Sony by introducing a new wearable TV is to ‘redesign TV market with wearable-trends’. Becoming a pioneer in the market would be a greater advantage to Sony as it positively affects brand loyalty, profitability and competitive advantage. It is because the pioneer in the market can set standards for later entrants, and therefore, the pioneer is always recalled by the customers (Tybout and Calder, 2010). With the designing and development of Bravia Smart-HMZ, Sony proposes to redesign the entire TV market by seizing the opportunity for wearable trends. The above stated vision statement involves Sony’s hope and desires to widely influence the global TV market (Napier, Rivers and Wagner, 2005). Goals and Objectives of Sony’s Bravia Smart HMZ The business goal of Bravia Smart-HMZ is to become a leading player in the market in making and marketing of smart wearable TVs by continually focusing on competitiveness and long-term profitability. Achieving profitability, competitiveness, sustainability and to become technology leader are the major long-term desires (Fiore, 2005), whereas it will focus on short term achievements with its business objectives. Business objectives of Bravia Smart-HMZ are:- To achieve break-even within the first year, after launching the product in May 2015 To foster innovation and to maintain adaptability with changing technology environments To maintain closer customer relationship through superior customer service and online-supports, To support people’s urge to go ahead with wearable trends, and To foster a culture ‘getting updated’ along with changes over technology, fashion, people’s desires and social systems. Segmentation, Targeting and Positioning Segmentation Strategy Setting a strategic marketing framework depends on segmenting the market. It is basically the process of identifying the right customers based on relevant criteria such as psychological, demographic, geographical and other factors (Bygrave and Zacharakis, 2010). Sony proposes to focus on the global market, and the customers to be targeted from across the world will be initially segmented according to distinctive segmentation variables that relate to customer’s needs. Segmentation variables are the characteristics of individuals, groups or organisations that are used to divide a market in to sub-segments (Pride and Ferrel, 2008). Sony has to segment the markets and target each segment according to the specific requirements of customers belonging to each segment, although it has to go for micro-marketing and mass customization as customers may need spectacle for various different purposes such as cooling glass or medical purposes such as long or short sight or other sight-related issues. Crawford and Benedetto (2008) described ‘benefit’ segmentation as the most appropriate ‘segmentation strategy’ for new product development. In the development of Bravia Smart-HMZ, Sony’s marketing team has conducted surveys among the potential customers and identified five basic segments based on benefits sought. People use TV regardless of their age, religion, region, culture, social or family systems, but the benefits they sought from TV varies. The general five benefits are 1) Entertainment, 2) Films, 3) Sports, 4) Children’s programs, and 5) Documentaries. See Appendix-1 for the illustration of customer segments based on the ‘benefits’ in the television industry. People who seek entertainment from watching television will be around 33 %, whereas people who watch films come nearly 22 % and sports nearly 18 %. People who use television for watching documentaries are 16 percent and children who watch children’s programs in television will be around 11 %. Sony expects almost same percentages of consumption among the basic five segments for its Bravia Smart-HMZ. Targeting Strategy Sony will adopt undifferentiated targeting strategy by following the mass-marketing philosophy, and thus the company will not make any differences in the product features between the five segments. Sony will use one marketing mix for the entire market (Lamb, Hair and McDaniel, 2011). By adopting this strategy, Sony assumes that all the different customers across different segments possess similar needs that can be met with a common marketing mix. For the entire segments, Sony will design a single marketing mix strategy, rather than designing different mixes. Basically, the Bravia Smart-HMZ has two uses; use of eye glass for eye-protection and its use as a wearable TV. The company would adopt undifferentiated targeting strategy for its use as a TV, but it will adopt mass-customization for its use of eyeglass that protects eye from dusts, sun, short or long-sight, eye diseases and so on. Crawford and Benedetto (2008) described that mass customization is the ultimate smallness and the ultimate building customer value. Advances in technology and communication and changes in the work processes have made mass customization more feasible for many products, mainly in the electronic and related sectors. Sony would like to arrange its web-portal, official android and other application etc to provide customers with facility of choosing their product for placing the orders. Customers will be able to select one out of many different options given for designing the glass-type. Eyeglasses are mainly used for correcting the vision, however, there hundreds of options among lenses to be chosen for the glass. Positioning Strategy Positioning is perhaps one of the most important business objectives of the brand communication. In the new product development phase, the marketing management has to communicate to the customers about why they should try the new product and this communication is very likely to get the brand positioned in their mind. Positioning of a newly developed and marketed product is entirely different from the positioning of an existing product. In the case of an existing product, the positioning strategy formulation involves identifying the competitors, determining how the competitors are perceived and evaluated, determining the competitor’s position, analyzing the existing and potential customers, selecting the position, and finally monitoring the positioning (Roberts and Berger, 1999). However, for the new product development, the positioning strategy formulation is mainly based on the communication to the customers about why they should try the new product. Sony’s Bravia wearable TV will be positioned as the first wearable television and a trend-maker in the market. Customers will be amazed with its experience and its unique stance in the field of Television technology. Marketing Mix of Bravia Smart-HMZ Marketing Mix strategy normally depends on the way customers are segmented and are targeted. Marketing mix is a set of tools and techniques that provide the basis of implementing the marketing plan (Beamish and Ashford, 2005). Marketing mix includes the very basic four marketing elements, namely product, price, place and promotion. Based on the coordination and the integration between these four components, the organisation assumes to develop marketing strategies, plans and tactics. At the very centre of the marketing mix is ‘customer’ since all the four basic components are planned and developed by considering the values to be offered to customers. See Appendix for the illustration of Marketing mix of Bravia Smart-HMZ (Appendices- 2). Product Mix Trend-Setter The most important features about Sony’s wearable TV is that it is very new in the market. Though Sony previously came to the market with the idea of wearable TV, the weight and dimensions of the head-mounted device was troubling customers, and Sony therefore couldn’t succeed in its marketing. To overcome its previous troubles, and to catch up the market back, Sony now came with the idea of wearable TV that is just like a spectacle. It will be a trend-setter in the market. Customers will feel proud with their spectacles that turn to work as TV in park, bus, airplane, towns or in their own private cars. Wearable TV One of the great trends of 2015 is ‘wearable’ technology. People are crazy to use watch, wallets, rings or bracelets that work as smartphone or other electronic devices (Norris, 2014). Sony proposes to launch its first Smart-TV in May 2015, and the company expects to be the market pioneer in wearable TV. Since it comes as a wearable, it is assumed that the company would certainly achieve huge sales in the first year itself to gain break-even within the first year, even though the investments in R&D and major other upfront investments are too big. Technology and Innovation The company has used advanced technology to integrate TV concepts with the eyeglass and projector use. Consumers will be able to use their specs for eye-protection or other medical purposes, along with the use of watching television. For turning it to be a TV, the lenses should work as projectors to the wall or other surfaces. It is the technology and innovation that helped Sony create a rewarding breakthrough in the business history. Brand Reputation Sony’s brand reputation and brand image explain why customers worldwide would accept Bravia Smart-HMZ. It will be unimaginable for many customers about how an eyeglass can work as a TV. ‘It is from Sony and it would work’ will be the brand concept customers will come across. Promotion Mix Integrated Marketing Communication Sony proposed to adopt Integrated Marketing Communication strategy, which is a marketing communication process that enables the firm to accelerate its returns by aligning communication objectives with marketing goals (Schultz and Schultz, 2004). With integrated Marketing Communication (IMC), Sony will coordinate and integrate among various promotional and advertising tools (Lamb, hair and McDaniel, 2008) by maintaining consistency in brand communications and by ensuring highest marketing communication synergy (Belch and Belch, 2007). Advertising, personal selling and other promotional tools that will be used by Sony for marketing Smart-HMZ are detailed below: Advertising Sony will set a considerable budget for newspaper as well as Television advertising. Social media also will be used for advertising the Bravia Smart-HMZ. Most importantly, television advertising will be helpful for the company to reach its brand messages to wider public. Television advertising will be one of the most critical components of Sony’s IMC strategy (Chitty, Barker, Valos and Shimp, 2011). Attributes of wearable, Trend-setter and technology are the major three considerations while developing the copy platforms for the advertising of Bravia Smart- HMZ. Consistency among the messages will be given greater importance (Rugimbana and Nwankwo, 2003). In order to ensure greater level of appeal among the customers, the marketing management will consider wordings such as ‘Wearable Smart TV’, or ‘the trend is now’ etc for its advertising. Personal Selling To make two-way communication for advertising the product more effective, the marketing management will be considering personal selling, with which the marketing executive will directly introduce the product to customers (Percy, 2014). Though it is a primary form of marketing communication, Sony proposed to use personal selling to initially spread the information about the wearable TVs. Social Media Marketing Social media sites will be used to communicate the product across the globe. Social media marketing is relatively cheaper, and far effective way of marketing communication. In recent years, social media marketing has been considered as one of the most effective forms of advertising (Zarrella, 2009). Place Mix Place mix in the marketing mix represents the way of distribution and sales. Sony will use own-websites and other portal for providing online sales along with customization facilities. Sony will adopt strategies to widen the sales across the globe, and the company will be able to adjust marketing strategies according to regional requirements across nations. Supply Chain and JIT Mass-customization requires effective supply chain strategies and Just-in-time manufacturing. Customers are provided with the facility of designing their own product, by selecting which specific eyeglass is required along with specific lens requirements. Since customers place orders according to their requirements, the company will have to design and develop the products according to the order. Under this JIT process of manufacturing, the products are made once the real demand for the goods are created, and therefore, inventory handling and additional costs incurred for the same can be eliminated. Price mix Sony will adopt penetration pricing strategy by fixing the price relatively lower in the beginning, and by gradually increasing the price once the company could hold a significant stance in the market. Market penetration pricing is considered by Sony because fixing a low initial price will create a new market hub for its product, and later to increase the profit potential once the market is well established (Hirschey, 2008). Seasonal discounts will be provided to the dealers in order to boost up sales in seasons. Roles to be played by non-marketing departments Departments such as finance, human resource management etc will play critical roles to bring success to the new product development and its marketing. R&D, for instance, is extremely important for the new product development. The finance management team has to make funds available for investing in the R&D. Similarly, the HR department has to make arrangements for providing training and developments and other progressive human capital investments to ensure that people perform well in the firm. Conclusion This paper is about new product development strategy based on the case example of Sony’s Bravia brand. This paper proposed wearable television that will be launched by Sony under the brand name Bravia Smart-HMZ IN May 2015. First part of the paper outlined brief description about the idea of wearable TV. Sony’s idea is to develop a wearable spectacle that will work as a TV and customers will be able to use anywhere at any time. The business objectives and mission and vision statements are detailed in the first section. The second part of the paper explained the STP strategy- Segmentation, Targeting and positioning strategy. Sony used benefit segmentation based on Entertainment, Films, Sports, Children’s’ programs and Documentaries. Sony will adopt undifferentiated targeting, and the positioning will be mainly based on marketing communication. The third section of the paper illustrated marketing mix strategy, and the four components namely product, price, promotion and place are explained in detail considering the value proposition of the customers. This paper suggested that the idea of wearable TV will be great for Sony for that ‘wearable’ electronic devices have become major trends in 2015. Appendices Appndix-1: Customer Segments in the Television Sector Appendix-2: Marketing Mix strategy of Bravia Smart-HMZ References Beamish, K and Ashford, R, 2005, Marketing Planning 06/09, Routledge Belch, G. E and Belch, M. 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