Product Innovation Project - Assignment Example

Running Head: Product Innovation Project Product Innovation Project Name Institution Date Product Innovation Project 1. Brief description of your innovation The new product innovation is a helmet with a Bye Bye Magpie. This product is different from the old helmet with zip ties. It is uses a device that sounds like an alarm or something similar to scare magpies off. It is an innovated helmet that has distinctive looks. It has a layer of cardboard fitted with an alarm system that acts as an anti magpie swooping device. This will help in preventing attacks from magpies. The helmet is also well ventilated with an appealing look to the targeted market. It is not heavy and it’s produced using an innovative technology. 2. Overview of the market/industry relevant to your innovation The targeted market is based on people who like biking in Australia. These people are prone to attacks from magpies and a helmet fitted with a device that sounds like an alarm will be able to scare magpies away. Cyclists are usually attached and injured by magpies. Others end up killed in traffic when trying to evade a swooping magpie. Wearing a helmet that has a scaring device fitted with an alarm system is effective in scaring against the birds. 3. Key attributes and advantages of the innovation in order to highlight the reasons of why you think your innovation has a good chance to succeed. The innovation of a helmet with a Bye Bye Magpie is attractive, it is well ventilated, its shield is adjustable, it is easy to clean and it has a simple exterior design and colors that are striking. This innovation has what it takes for a biking helmet that enables users to enjoy its aggressiveness and sheer style. It provides enough safety for cyclists who are prone to magpie attacks. This innovation will have an advantage in the market over the helmet with a zip tie. The reason is that, the helmet fitted with a zip tie does not have an attractive look, it is difficult to clean and above all, it is not safe for cyclists who are frequently exposed to magpie attacks. Use of zip ties is prone to damaging the helmet foam. The reason is that, a zip tie is usually a cosmetic item. 4. Possible key disadvantages/risk of the innovation The main disadvantages of this innovation is that people are already used with the the old helmet fitted with a zip tie and adopting a new product may take time. It is evident that, people are sometimes difficult to change to a new product due to loyalty and others are not aggressive enough to exploit new technology. Adding on that, the cost of the new innovation may be more expensive than the old one. The new product is produced using improved technology and has distinctive features that are more superior to the old one. Therefore, its price in the market will be higher than the old helmet. This may make customers deviate from buying the new innovation and prefer the old one. According to Fernandes & Paunov (2012), innovation is an important source of competitiveness but introduces new products to various risks. While innovating, product managers or companies should ensure that they are not involved in high market risk, there are few innovative competitors in the market try to have low prices that are competitive in the market and there is no high sales volatility. This will enable the product to compete effectively in the market. Q. 5. Market potential refers to the estimate of the amount of money that a company expects to earn on the product or service it plans to sell. According to ARAR model, the correctness of the estimate will always depend on the accuracy of the information and the assumptions that the company makes. Normally the market potential is dictated by the number of potential willing and able buyers for a given product. In order to arrive at the best estimate of the potential market the firm should define each of the following; market segment or the target market, geographical boundaries of the market, level of completion in the market, entire or the total size of the market, the size of the company’s market share, estimation of the average annual consumption in the product and the average selling price. These factors will help determine not only the potential market but also the expected market growth of the company. Market growth refers to the rise in the demand for a given product or service within a given time. This depends on the response of the consumers as far as the product is concerned. In most cases the response of the consumers on the product is determined by the price that the company charges for the product. Therefore the expected market growth can only be determined if the market potential is clearly defined or estimated. Estimating the potential market of a product or any company involves considering the entire market of that particular product and doing away with the sections of the possible market but do not apply. For example the web market is not the whole world but the people who have access to the web, who can read the website and have a credit card to order for a product via shipping. 6. Estimated costs of the innovation Due to its distinctive features and attractive look, the estimated cost of the innovation is three hundred and fifty dollars per piece. This price is a bit high than that of the old helmet fitted with zip ties. 7. Positioning of the innovation and identification of suitable target group(s) To position the innovation and identify a suitable target, the product managers target young people as the main group of customers for this innovation. The reason for targeting young people is that, most of the cyclists in Australia are young people between the age of fifteen and forty. Young people cycle in sports and at their free time for leisure. To effectively market the innovation to young people, the product managers shall use social media to extend the market. Smith (2013) argues that, social media is an effective method of establishing relationships with young people quickly and easily. Building relationships is an integral part of the sales process and the product managers will be able to see and understand what their prospects have to say about their brand. Using social media, product managers are able to see what the customers are saying about the competitors. As a great method of doing market research, social listening helps sales people easily understand the needs of customers. Social medial will not only help in generating social leads, it will also help the product managers to build deeper relationships with their customers that will drive them in purchasing the product again and again. 8. Market testing models To test the innovation, the product managers will use concept testing. This will involve using quantitative as well as qualitative methods to evaluate customer response to the product idea before introducing the innovation to the market. The product managers will use field surveys, personal interviews as well as focus groups and other quantitative methods to perform concept testing on the product innovation. Quantitative methods will involve customers first evaluating the concept idea and then evaluates the product by indicating their degree of purchasing intentions and likelihood of trial. As described by Elizabeth (2014), testing the market of a new product helps in gaining some insights that are important in understanding customer perceptions of the new innovation of a product of service. 9. Launching strategy Vukasovič (2012) notes that, the strategy used in launching a new product in the market is very important. The company has targets trade customers who stock helmets for resale and consumers who buy helmets for use. Success in launching a product will create awareness to consumers and encourage them to try it. To launch the innovation effectively, the product managers first ensured that the customers tried gain the support from the retail customers before the customers try the innovation. Retailers will be allowed to view the product first. This will help in their role of encouraging customers to pay a visit to their shops. Failure of the product to interest retailers, the cost of investment will not be achieved and they will not stock the product. The product managers will conduct one on one briefing with one hundred helmet retailers. This will help in building awareness as well as commitment to the launch. This will also enable the product managers to receive more orders for storing in the stores and selling before the launching date. The trade commitment will be reflected by display support levels that are high in the retail stores during the time of launch. Since it is a new product, launching will be done on one region of the country. This will serve the purpose of gauging the success of the product in the market before extending to other regions within the country at a later time. The brand is attractive enough “the Bye Bye Magpie” brand name is catchy enough to make consumers notice that it is a new and distinctive cycling helmet. The availability of the helmet all over the region will be done within one day. This will be done by the sales people of the company as well as the retailers. This will require stock distribution to be managed tightly. Moving more than twenty million helmets from the company stores to the retail stores a few days before the launch date is our target. 10. Marketing mix strategy (product, place, distribution and promotion) The product managers will use a marketing mix involving; Product – the main product is the Helmet with Bye Bye Magpie. It is produced using high quality material and technology. It has a device that sound like an alarm to scare magpies form attacking cyclists. It is a new product with distinctive features including; attractive colors, protective shield, a bird scaring device, ventilations and light in weight. Pricing Since the new product has distinctive features, its price is a bit higher than the old helmet fitted with zip ties. It goes for three hundred and fifty dollars in the market compared to the old one that goes for only two hundred dollars. Place The product will be distributed directly from the company to the retail stores. There will be no extended supply chains. This will help in reducing distribution costs and increasing profitability. Promotion This will involve integrating various marketing communications including ATL as well as BTL advertising and sales promotions. Since it is a new product in the market, brand awareness promotions will also be carried out. Promotions will be carried out considering the marketing and advertising budget. The purpose of promoting the new product is to target market segmentation as well as product positioning. 11. Possible competition (direct/indirect, e.g substitute products) The possible competition for the product is the use of advanced technology to produce more advanced anti magpie swooping devices. There are also other new designs of helmets that are being produced every day. Like the round bike helmet with cable ties. 12. Branding strategy The branding strategy that will be used is based on a design syndicate which solicits information from young cyclists, retailers and local heads. Feedback from cyclists is how the product evolves and gets more fun when cycling. The product managers will incorporate the use of high tech materials, light weight materials, well made website and a helmet design.They will use a helmet graphic designed with the words Bye Bye Magpie. The graphic is simple, strong and an iconic mark which is derived from the name of the product, Bye Bye Magpie Helmet. The words Bye Bye Magpie on the helmet graphic will make the brand unique among other brands. References Elizabeth, A. (2014). Concept Testing: Three Methods You Can Use to Predict a Product’s Success. Retrieved from http://www.instant.ly/blog/2014/07/concept-testing-three-methods-you-can-use-to-predict-a-products-success/ Fernandes, A. & Paunov, C. (2012). The Risks of Innovation: Are Innovating Firms Less Likely to Die? Smith, J. (2013). How To Use Social Media To Make Sales. Five Steps To Making Sales Through Social Media. Forbes. Vukasovič, T. (2012). Launching Of a New Product with the Brand Extension Strategy. Management, Knowledge and Learning International Conference. Retrieved from http://www.issbs.si/press/ISBN/978-961-6813-10-5/papers/ML12_039.pdfs Read More