Individual Product Development

Individual Product Development

Order Description

Your portfolio will provide evidence that you have understood and applied marketing theory and used external data to inform your analysis. By developing a new product in an allocated category, you will be exposed to all aspects of the marketing mix. Your work will be based on a mixture of analysis and interpretation of external data sources, in-class work on each task and application of marketing principles discussed in class.

FACULTY OF BUSINESS AND LAW

Marketing Principles
BM4502
Individual Portfolio Structure Guidelines

September 2014

Opening Statement : What is Marketing ? (300 words)
Before you embark on this assignment, reflect on what the marketing discipline means to you ?

Task 1 : Market and Business Analysis (800 words)
PEST Analysis for your allocated market category.

Within this market, which company are you going to choose ?

Suggested mission statement and key objectives

Market Data : Volume and value of the market, market share, growth figures.

Task 1 : Reflection on Theory
Referring to your class notes and course text book, please outline 1) the main marketing theories used with this work and 2) how you have used them

How did you use external data to inform your recommendations ?

Task 2 Segmentation, Targeting and Positioning (800 words)
Using external data sources, identify the different customer segments which exist within your market category

2.  Identify the key competitors and produce a perceptual map for your market

Task 2 : Reflection on Theory
Referring to your class notes and course text book, please outline 1) the main marketing theories used with this work and 2) how you have used them

how did you use external data to inform your recommendations ?

Task 3 : Field Research : Store Audit (800 words)
Identify one store which sells a good range of your company’s products (supermarket, high street store, retail park )  and then research the following:
The Key Brands on Display. Discuss shelf positioning, packaging, what makes the product stand out on the shelf (use photos to back up)

What are the prices of each product?

Identify examples of in store promotion with pictures to back up

Once you have identified this, please then identify other promotional messages which drive customers to store e.g. TV ads, social media activity, newspaper/magazine ads, outdoor advertising,

Task 3 : Reflection on Theory
Refering to your class notes and course text book, please outline 1) the main marketing theories used with this work and 2) how you have used them N.B You will probably need to complete this later once you have completed the theory work in class.

How did you use external data to inform your recommendations ?

Task 4 :  Designing the Product (800 words)
Describe the new product you are going to launch for your company. You will need to cover : brand name, product characteristics, USP, packaging and the basic marketing mix (price, place and promotional recommendations). Identify predicted market share, sales and profit targets using the profit and loss spreadsheet below.

Decide on a basic profit and loss for your new brand using the spreadsheet and explanatory notes below

BUDGET YEAR 1

Note:  Only cells in red are entered in this model

Explanatory notes
Market Size – Year 0 -IN VOLUMES    500,000    A
Market Growth Rate     3%    B

Year 1
Market Size -Year 1    515,000    D
Target Market Share    5%    C

REVENUE
Sales (units)    25,750    E
Price    £40    F
Sales (value)    £1,030,000    G

COSTS
Fixed Costs    £20,000    H
Variable Costs per unit    £13.00    I
Total Manufacturing costs per unit    £13.78    J
Total Manufacturing costs     354,750    K

Gross Margin in value    675250    L
Gross Margin in %    66%    M

MARKETING COSTS
Launch Costs    £40,000    N
Advertising Costs    £200,000    P
Distribution Costs    £12,875    Q
Other Promotional Costs     £20,000    R

Profit Before Interest & Tax (PBIT)    £402,375    S

Explanatory Notes
A    Establish Market Size using secondary
research sources in most recent year as possible (year 0)

B    Establish Growth Rate (per annum)  using secondary research plus own assumptions based on
nature of competition , customer type , market structure ,
spend at launch, pricing and distribution strategy .

C    Establish Market Share by considering your strategic objectives (market leader ,niche market ,
market challenger, market follower). Consider your market environment , and dynamics of the
market –
are you entering a growth market, a mature market?

D    Market size Y1 = market size year 0 x yearly growth rate

E    Sales Units= market size x %market share

F    Price =trade /retailer price taken from your pricing
recommendations

G    Sales Value=sales units x price

H    Make hypothesis /best guess

I    Make hypothesis /best guess based on common sense , and RSP of product

J    variable cost per unit + fixed costs/number of units

K    Total cost per unit x number of units sold in year 1

L    Total sales – total manufacturing costs

M    Gross margin in value/ sales in value

N    Launch one-off costs to cover activities such as launch press
conference , samples for sales force ,trade presentation material , etc…
Estimate /best guess

P    Cost of production of advert (estimate) + media plan budget ( calculate with number of pages or
billboards or TV spots x cost per pages/billboard/sport , etc…).To detail .

Q    Either a fixed cost ( estimate ) or calculate a cost per unti ( for ex, 50p per unit)

R    Promotional costs excluding advertising and launch .Mainly Sales promotion cost .Ex cost for a
trial price offer or a sampling program .
To estimate using common sense and data available from secondary research .

S    Gross margin less all marketing costs

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