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Executive Summary

Beauty is not only skin-deep. The first impression that affects a person

forever about an individual forms in only ten seconds and is mostly based on visual

impression of a person that includes his or her attire, personality, style and body

language. Women have been aware of using this first impression to their advantage

since thousands of years, almost by instinct. Women have used essences of flowers

to color their lips and have braided their hair in multitude of styles, curled them &

colored them in their attempts to look more and more beautiful and look young

forever!!!

Today, beauty industry is very well developed and organized with many

inventions and thousands of cosmetics as it tools and fulfill the dream of any

woman to look like a celebrity diva.

There are facials, manicure, pedicure, hair treatments and makeup that have

given a boost to the dream of ultimate beauty.

We have taken these aspects into consideration & identified the need in this

respect so as to come up with new product.

In this project report we have provided marketing mix for our New Product to

find out the viability of that product in the long run which will also help all of us to

acquire knowledge & enhance our analytical ability with respect to subject matter.

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New Product Development (NPD)

The term product is used frequently in marketing. Consumers purchase

different products which are useful & agreeable to them. A product can be defined

as a bundle of attributes that satisfies a customer demand. Anything which can

satisfy customers, made according to their needs, expectations & specifications can

be called as a product. It has utility & capacity to satisfy human needs & wants.

Improving & updating product lines is crucial for the success of any

organization. Failure for an organization to change could result in a decline in sales

and with competitors racing ahead.

The process of NPD is crucial one. Products go through the stages of their

lifecycle and will eventually have to be replaced with new & innovative one!!!!

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The product consists of 5 levels thereby distinguishing it’s utility value & differentiating from it’s

competitors :-

Customers will choose a product based on their perceived value of it.

Satisfaction is the degree to which the actual use of a product matches the

perceived value at the time of the purchase. A customer is satisfied only if the

actual value is the same or exceeds the perceived value.

 

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1) Core Benefit :-

It is the core or main need or want that consumers satisfy by consuming the product.

 

2) Generic Product :-

It’s a version of the product containing only those attributes or characteristics absolutely necessary for it to function.

 

3) Expected Product

It is the set of attributes or characteristics that buyers normally expect and agree to, when they purchase a product.

 

4) Augmented Product

It is inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors.

 

5) Potential Product

All the augmentations and transformations a product might undergo in the future. Potential product refers to development of new technology to enhance the product to provide new ways to satisfy customers. Companies that offer potential products invest a lot on research and development activities.

  Kotler noted that much competition takes place at the Augmented Product level rather than at the Core Benefit level or, as…..

“ New competition is not between what companies produce in their factories, but between what they add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value.”

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Effective Organizational Arrangements for New Product Development

 

An effective new product development organization starts with top

management. The amount of money spent on R & D is an important top

management decision related to new product development. Companies give the

responsibility for new product development to product mangers, or new-product

managers, or new-product committee, or new-product department, or new-product

venture teams. In general product managers may not be able to devote adequate

time to new products as they have to take care of existing products' marketing and

selling issues.

 

Managing the New Product Development Process

 

1) Idea generation

2) Idea screening

3) Concept development and testing

4) Marketing strategy development

5) Business analysis

6) Product development

7) Market testing

8) Commercialization

 

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1)Idea Generation :- 

In this stage of NPD, new & promising ideas are discovered for the

introduction of new product. Such ideas relate to new product required by large

majority of people. Discovery of new ideas is possible through study of problems.

A number of creative idea generating techniques can help individuals and groups

generate idea. Some of them are :-

Attribute listing

Need/Problem identification

Brain storming

2)Idea Screening :- 

The purpose of screening is to drop poor ideas as early as possible and allow

only promising ideas for further stage in the new product development process.

  There is likelihood of two opposite types of errors occurring in this process.

One, the drop error, results in dismissing a good idea. The other, the go-error,

results in moving a poor idea forward. Poor ideas result in product failures. 

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3)Concept Development and Testing :- 

A product concept is an elaborated version of the product idea and it is

expressed in meaningful consumer terms so that consumer can visualize the

product.

Concept testing involves an appropriate group of target consumers. 

4)New Product Marketing Strategy Development :-

  After the concept is finalized, marketing strategy needs to crystallized. At this

stage the marketing strategy is expressed in three parts.

The first part :- It describes the target market's size, structure, and behavior.

Product positioning is defined. The sales size, market share and profit goals

are expressed.

The second part :- The price and distribution strategy and the required

marketing budget  for the first year are specified.

The third part :- It describes marketing-mix strategy over time and

evolution of sales and profit.

 

5)Business Analysis :- 

At this stage, marketing department has finalized its market understanding and

converted it into sales revenues and related marketing costs. The next stage is

analysis of operating costs and profit analysis.

 

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6)Product Development :- 

If the business analysis clears the product, actual product development work is

given to the research and development department.

 

7) Test Marketing :-

  High investment/high-risk products, where the chance of failure is high must

be market tested. The cost of the market tests will be an insignificant percentage of

the total project cost.

 

 8)Commercialization :- 

Based on marketing, if the company decides  to manufacture, capacity

decisions are to be made. The timing of the launch, the geography of the initial

launch, the niche market within the target market and how to launch the product

become important decisions.

All these stages give clear cut idea to the marketer so as to back up themselves

to become competitive.

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Marketing Mix   

A planned mix of the controllable elements of a product's marketing plan

commonly termed as 4Ps: product, price, place, and promotion.

These four elements are adjusted until the right combination is found that

serves the needs of the prevailing consumers and prospective customers.

The marketing mix is often referred to as the '4 Ps', i.e. product, price, place

and promotion. To meet customers' needs a business must develop products &

services to satisfy them, charge the right price, get the goods to the right place, & it

must make the existence of the product known through promotion.

1) Product :-

Product must meet customer requirements. An important aspect is function -

products should do what they say, they can do and what they are expected to do.

It includes following :-

1) Product line & range

2) Style, shape, design, color, quality & other physical features of product

3) Packaging & labeling

4) Branding & Trademark given to product

5) Merchandising

6) Product innovation & new products

7) Warranties

8) Special features of product

9) Product related strategies.

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2)Price :-

Price needs to be relevant to the product/service & the market.

It includes following:-

1) Pricing policies

2) Discounts & concessions offered for capturing market

3) Terms of credit sale

4) Terms of delivery

5) Resale price maintenance

6) Pricing related strategy

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Pricing strategies

Pricing strategy is an important part of the marketing mix. The price of a

product should reflect its image and the need to give a consumer what they want.

There are a number of popular pricing techniques to choose from & few

of them are as follows :-

1. Cost-plus pricing :- A common way to make pricing decisions is to calculate

how much it costs to do a particular job or activity, and then add on a given

percentage as a return for the job or activity. This is sometimes known as mark-up.

2. Hour-based pricing :- Many small businesses are able to work out what their

typical costs are for every hour of work they do, e.g. for gardening, sign writing,

photography, etc. The business owner is then able to charge a standard rate per

hour.

3. Penetration pricing :- When a firm brings out a new product into a new or

existing market, it may feel that it needs to make a lot of sales very quickly in

order to establish itself and to make it possible to produce larger quantities. It may

therefore start off by offering the product at quite a low price. When market

penetration has been achieved, prices can be raised.

4. Skimming:- When company bring out a new product, they may be able to start

off by charging quite a high price. Some customers may want to be the first to buy

product because of the prestige of being seen with it, or because they want to be

associated with your product before anyone else.

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3) Place :-

Distribution is about making the products available to customers.

It includes following :-

Distribution channels

Market coverage

Specific channel members (wholesaler, retailer, agents etc. )

Warehousing

Distribution centers

Order processing

Transportation

Reverse logistics

For example :- McDonald's uses a franchising system enabling it to operate in a wide variety of geographical locations, and

Amway distributes through Independent Business Owners worldwide.

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4) Promotion :-

It is the process of communicating with customers. For marketing purposes,

communication of products and services contributes to the persuasion process to

encourage consumers to avail themselves of whatever is on offer. The key

processes involved in promotion, include:

Positioning - creating a distinctive image and character in customer’s mind

advertising - to inform and persuade the public

public relations activities used for cordial relation with dealers & consumers

sponsorship

Special promotions - e.g. buy one get one free.

____________________________________________________________

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- Freshen Up -

The Face refreshing Spray

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Reasons behind coming up with the concept of “Face Refreshing Spray-Freshen Up”

As we all know, there is only one product in the market which is exclusively

used for refreshing the face when we feel as if our face has become dull, sticky out

of sweating.

The product which is available for this purpose is Toning wipes i.e. wet flavored

tissue papers which costs Rs.45/- containing only 10 wipes and this is the smallest

pack available in this category of product.

1) But if we think from Indian peoples’ mentality point of view, we never get

the feeling that our face is being really washed after using such wet wipes to

clean the face.

2) Unless & until we use water exclusively for cleaning face & hands we never

get real feeling that we have washed it!!!This is true especially in case of

washing hands and that’s why even though there are instant sanitizers to

wash hands without using water & soap, we are not that used to prefer it.

3) As taking into consideration Indian food habits & personal hygiene care, we

always look for complete satisfaction thereby using even a little water out of

water bottle while travelling.

4) So attacking on this psychological mindset, we have come up with the

concept of Freshen Up-The face refreshing spray, simply to give feeling of

using liquid spray to keep the skin lively & rejuvenated.

5) Second approach behind introducing spray was that we wanted to think of

avoiding paper waste as it is there in case of wet tissue wipes.

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6) As purchasing 10 wipes only for Rs.45/- sounds expensive also so because

of this people are reluctant to purchase that product being in a need of that in

extremely sweaty conditions while travelling, working & when there is

electricity cut!!!!

7) So to tackle this problem & to come up with additional benefits of our

product, we have introduced Freshen Up-The Face Refreshing spray,

exclusively for girls & working women.

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STPD Analysis

1)Segmentation :-

We have segmented market for our Freshen Up spray on the basis of gender. We

have introduced this spray especially for college going girls & working women.

2)Targeting :-

The target market will be The metro city Mumbai as there is high concern for such

personal care products. So initially we target Western line of Mumbai especially

college going girls.

3)Positioning :-

For positioning we have decide the tagline …

Avoid Luxuries,

Buy Necessities @ 35/- !!!

This will be used in advertisements to introduce the trend and change the preconception that only branded beauty products can keep all females satisfied!!!

Even the pricing which we have discussed in Price “P”, would help us to position our Freshen Up spray just @ Rs.35/- which is lesser that prevailing wet tissue wipes which are available for Rs.45/- being the smallest pack having 10 wipes.

4)Differentiation:-

This particular aspect has been explained in Promotion & the reasons behind introduction of this spray.

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Competitive   Advantage

The differentiator between our company's abilities and those of our competitors -

-“ Why customers should go for our product rather than our competitors ???

”

What does our company do best? Or better yet, what can our company

potentially do better than any other company? That is our competitive advantage.

Sustaining our Advantage Over the Competition

Of course once we have identified your competitive advantages, we are not

done. It is not enough just to have an advantage over our competitors. For our

business to be great, it needs to weather competitive and environmental storms. We

have to be able to combat today's fierce market forces and uncertainty. In other

words, our competitive advantage needs to be sustainable and able to endure the

test of time for our company to be great.

“ Why? Because most advantages can be duplicated within a period of time. ”

Here are the hard and cold facts: Roughly 70 percent of all new products can be

duplicated within one year and 60 to 90 percent of process improvement (learning)

eventually diffuses to competitors. And everyone knows competing on price is

never sustainable.

To answer these questions, we have done analysis on the basis of 4 P’s of

marketing mix and at last we have come up with the conclusion proving…

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“ Why to buy our Freshen Up spray over others ???”

To prove our Product’s Competitive advantage, the Marketing Mix for Freshen Up spray has been given below:-

1) Product

What is Freshen Up –The refreshing spray ???

A refreshing, hydrating mist to use anywhere anytime!!!

Simply formulated with fragrant Herbal Extracts and Rosewater for a pleasant, pick me up for dehydrated, sticky and uncomfortable skin.

Spray the Freshen Up for a boost of hydration or spray on dry hair throughout the day.

Safe for all skin types.

Gentle, non-irritating just for Rs.35/- (25ml)

“Contents of Freshen Up”

Deionized Water, Aloe-Vera Extract, Herbal Extract, Rose Extract, Gardenia Extract, Propylene Glycol.

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Details of the contents used in manufacturing Freshen Up spray along with its scientific properties.

Deionized Water ???

Water free from all charged atoms or molecules (ions), used mainly in manufacture of water-based cleaning chemicals.

What is Gardenia ???

Gardenia is the fragrant white flowered tree having shiny leaves, one of the

frequently used herbs in Chinese medicine. Flowers have an intense bitter taste and

a relatively strong cold nature.

  Gardenia is bitter & cold & enters the heart, lung. Bitterness and cold may

clear heat and descend itching of skin which comes out of excessive sweating &

stickiness. Gardenia can gently and slowly direct heat downwards.

What is Propylene Glycol ???

Propylene glycol (PG) is a colorless, nearly odorless, syrupy liquid that is derived

from natural gas. It is used in dozens of products that you commonly use around

your house.

It is used in food – cake mixes, salad dressings, soft drinks, popcorn, food

colorings, fat-free ice cream and sour cream. It also protects food from freezing,

and helps as a preservative

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How the Freshen Up – The refreshing spray works ???

The Freshen Up contains active gardenia flower extract, rose extract, aloe extract & Propylene Glycol which have cooling properties.

Lightly mist over your face, neck and hair anytime to make your face & wipe off your face with handkerchief. It can also be used to rejuvenate hair giving extra shine.

“The 5 product levels of Freshen Up –The refreshing spray”

1)Core Benefit :-

The main use of Freshen Up spray is to keep the face lively & hydrated in

polluted city like Mumbai. It’s core usage is to keep the face rejuvenated &

pleasant especially when there is electricity cut off.

In extremely sweating conditions our face becomes sticky & we feel like our face

has become dull. So to rejuvenate & bring back the moisturizer of face, the

Freshen Up spray can be exclusively used. 

2) Generic Product :-

 Deionized Water, Aloe-Vera Extract, Herbal Extract, Rose Extract, Gardenia

Extract, Propylene Glycol all have cooling properties which will serve the main

purpose of our product being the Refreshing spray to rejuvenate the face during

excessive sweating & stickiness.

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3) Expected Product

This refers to psychological mindset of the customers who will expect our product

to work best for them whenever they will face the situation of sweating excessively

& whenever their face will become dull, sticky due to lack of proper air ventilation

while travelling, at the work place or else at home during electricity cut. 

4) Augmented Product

Well as mentioned earlier our Refreshing spray can be used for hair also to keep it

shiny & hydrated throughout the day. 

Secondly, it can also be used as a substitute to cleansing milk which is used in

facial process at the beginning of facial to clean the face & to make it ready for

further procedure of facial.

All these additional usages of our Freshen Up spray will help us to make our

product the “Multipurpose” one. This will help us to position our product as a

necessity product being used for personal grooming which is normally considered

as a luxurious benefit as far as beauty products are concerned. As using such

products in public normally attracts others attention!!!

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5) Potential Product

Well to talk about the potential benefits which customers may enjoy in our

products after it’s success of few years, will be in the form of extra usages of

Freshen Up spray.

From this perspective, we have thought of introducing it as a makeup setter

solution. So that our Freshen Up spray can also be used to set the makeup which is

required to be sprayed on the face to set the makeup once it is done.

This is our analysis related to 5 levels of our product “Freshen Up –The face

refreshing spray.

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2) Price

As we all know that price is the important factor when it comes to buy any

product. In case of New product it matters a lot because the first dilemma which

prospective customers get into is because he/she related that product with their

expected usage out of the product & if it appeals as a useful product, they think of

price. This is especially true in case of personal care products, which normally

comes under the category of luxurious products.

So if the price is set very high at the initial stage, the prospective customers will

get diverted from purchasing that particular new personal care product.

Therefore, in case of personal care products exclusively useful for face, the

prospective customers perceive it as a luxurious as it is normally said that….

“Ye sab products bohot mehenge hote hain”

This belief is because there are many well known cosmetics brands for beauty

products which had been charging high prices being globally recognized branded

products.

So remove this preconception about our product the Freshen Up spray & to

position as a necessity product, we have decided to adopt following 2 pricing

strategies:-

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1) Cost plus pricing :-

As per this type we will cover the average cost of production and marketing

cost to charge the final price for our Freshen Up spray. This will also include

certain percentage of profit behind every unit that will be getting sold.

we have decided our price in the following way:-

Final price = cost of production + marketing cost + amount of profit

= 25 (inclusive of r.m, mfg, packing, transportation)+ 8 approx + 2

Hence our final price of the spray will become Rs.35/-

__________________________________________________________________

Approximate calculation of Total expenditure & Profit to be earned

Approximate percentage behind manufacturing cost will be 71%10035

×251

=71 %

Approximate percentage of marketing cost will be 21%

10035

×81=21 %

Approximate percentage of profit will be 6 %

10035

×21=6 %

__________________________________________________________________

2) Psychological pricing:-

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Here we have taken into consideration the psychology of customers.

As normally in terms of personal care products related to beauty of the face

there is always a belief among girls & women that it is something which they can’t

afford.

As many a times even though they are aware that only branded beauty products

give best results, they are not able to purchase those branded beauty products just

because they are normally expensive one.

As it has become equation that

High price beauty product + Branded product = Best results in terms of

improved beauty!!!!

So to remove this preconception from their mind…we will be using the tagline in

contrary way in our TV advertisements…..

“Avoid luxury,Buy necessity @ 35/- ”

This will create a feeling among prospective buyers that….

This spray is the beginning to think about such products which an average

earning lady can also think of purchasing without thinking about her daily

expenses!!!!

We have taken into consideration these basic two approaches at the

introduction stage.

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Because we strongly feel that whenever a new a product or service comes into the market, people in general normally don’t think much about them. It is first because of high price and second because if it is not useful. Therefore they simply say …..

“Kuch bhi use nahi hain uss product ka” So advertising plays a vital role in this respect to persuade the customers and to

make them feel that……“No…this product can really become my necessity!!!!”

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3) Place

In simple words it refers to making the products & services available to

customers at the right place, time & price.

In brief, distribution channel is the route taken by goods on their journey from

the producer to the ultimate consumer.

We have selected 2 Distribution channels to make our Freshen Up spray available across Mumbai

1)Manufacturer Our own depots Retailers Consumers :-

In this type our focus will be on distributing our Freshen Up spray to medical

stores, ladies parlors, super markets with the help of our own distributers. As we

have assumed that we have been in the business of personal refreshing products

since many years under the company Feel Fresh. Thus we will be in a position to

distribute directly to retailers through our well known marketing representatives.

We will also distribute our facial spray to ladies parlors, where ladies easily

think about various new personal care beauty products while waiting at the parlors.

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2) Manufacturer Our own shops Consumer :-

Being in the business for so many years, we will also sell this spray directly to

customers.

For this we will setup small counters at the malls, multiplexes where people

also come just for having good time and that time they think about buying

such new products.

Apart from this, we will keep this product on the shelf of our own outlets of

Feel Fresh Company.

We will not follow any kind of door to door selling as many times in case of

personal care products it doesn’t work as people start perceiving it as a low

standard product by saying….

“Koi Dukan main inka product leta nahi isliye gharpe

aa jate hain Bechne!!!!”

and people do not entertain salesman at their door at all. This will help us to

maintain a kind of status for our Freshen Up spray rather than having their

negativity towards our product at the beginning itself.

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4) Promotion

It is the process of communicating with customers. For marketing purposes,

communication of products and services contributes to the persuasion process to

encourage consumers in positive way towards any product or service.

In the same way we will be positioning our Freshen Up spray in different ways

such as:-

1)TV Advertising :-

The main idea behind all the promotional tactics will be “A pull strategy”

where we will attempt to get customers for our facial spray by creating

advertisements appealing to customers’ psychology regarding usage of such kind

of products.

We will try to convey our product by emphasizing on the idea of….

“Converting yesterday’s Luxuries into Necessities”

Because till now whatsoever face refreshing products (i.e. only instant

refreshing wet tissue papers) are available in the market, they are quite expensive

& are purchased by only sophisticated class of people.

So changing this attitude will be our core concept of advertising and I think in

this case, the low price of our product will create a great role. So that at least

customers will go for a trial purchase which may afterwards inculcate interest

among them to become regular user!!!

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2) Facebook & Internet as a Promotion Method :-

Facebook & Internet is something which everyone seems to be using. A

Facebook presence is important for visibility and building relationships. Facebook

is a free marketing medium to build real relationships with existing and future

clients. We as a promotional tool for our spray can participate through individual

conversation such as a comment, like or messages.

Facebook & advertisemts as popup windows on internet will allow us to

showcase our brand Freshen Up, our work and interact with fans.

Now we may not want random people from all over the web becoming a fan

of or facial spray, after all it’s not like they are going to fly out for our spray

from anywhere.

But numbers do count.

So , we know it’s not a popularity contest but it doesn’t look good if our

facial has only 5 fans.

So we will welcome any fans we can get, as people will think we must have

a wonderful invention if we have hundreds of fans on Facebook and we will

become talk of the town!!!!

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3) Offer of Free aloe-Vera cool eye mask!!!!

Just to attract the customers we will introduce our facial spray along with our

company’s old product related to refreshment of eyes…i.e. Aloe-Vera cool eye

mask.

This will give them feeling of getting completely refreshed….which we can

also show in our advertisement & attack on their psychology…by saying

that Feel refreshed after bearing harsh summer!!!!!

Offering our old product aloe-Vera eye mask as a offer along with our Freshen

Up spray will help us to attract customers and this will also help us to give new life

to our old product aloe-Vera cool eye mask!!!

As at the introduction stage it is not only important to make the customers

aware about the new product but at the same time it is also very important to let

them know that what are the various ways through which they can think about the

newly introduced product instead of saying

“Ye products kharidna apne bass ki baat

nahi hain!!!!!!”

So to avoid such reaction, we have selected above promotional

strategies for Freshen Up spray!!!

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Conclusion

“Putting Competitive Advantage to the Test”

Now it is time to put our competitive advantage to the test. How do we when

we have developed a sustainable competitive advantage? Here are three criteria

that can help evaluate if we are on the right track :-

Customers must see a consistent difference between our product/service and

those of our competitor's.(currently wet tissue papers available at the

price of 45/- consisting only 10 wipes!!!! Which even sounds as

expensive). This difference needs to be obvious to our customers and it must

influence their purchasing decision.

Our competitive advantage must be difficult to imitate. We should avoid

falling into the incompetence trap.

For example – clearing out the purpose to use Freshen Up rather than using

wet tissue paper wipes.

So we can say that quantity wise our product of 25 ml just for Rs.35/- which

will also avoid paper waste as users can simply use their handkerchief and

need not have to think about throwing used tissue papers anywhere!!!!

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Secondly, Indian peoples’ mentality is still traditional one when it comes to

use personal hygiene products.

Unless & Until we get the real feeling that we have used WATER to clean

face or hand, we do not feel that we have actually washed it!!!!

AND….therefore instant sanitizers available in market to wash hands,

without using soap, are not so popular as we are not still used to prefer such

products to wash hands without using soap especially after lunch or

dinner!!!!This proves our reason behind introducing liquid rather than wet

tissue wipes for cleaning the face.

After considering entire analysis, we can say that in today’s ever changing

world it is very much important to be Out of the Box at the basic level only.Unless

& until we as a marketer are unique, we won’t be able to grab the attention of

masses.As every now & then different inventions are being taking place & to get

noticed out of it, is the fisrt & foremost requiremt.After thinking about these

findings , as a marketer it will be beneficial to think about further marketing plan.

Because if we are wrong at the root level, the entire marketing mix will

collapse thereby making no sense to New Product Development !!!

So keep yourself at the place of “CUSTOMER” & just

ask yourself….

“What’s there in it for me????”

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References

Marketing Management – N.G.Kale, M.Ahmed

Marketing Management –Philip Kotler

Special Study in Marketing – Romeo S. Mascarenhas

www.soundslike branding.com

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