Business sector
The sector I have chosen is consumer products sector. Reason for choosing this sector is its attractiveness in terms of introducing innovative products as consumer habits and styles change rapidly. With changes in lifestyles and introduction of easy-to-use products, this sector is gaining more and more attention. A major push in this sector comes from women who can be termed the largest customers of consumer products such as cosmetics. With the desire to look beautiful and young is increasing day by day, the potential of this sector is remarkable. Keeping this in mind I would choose to introduce cosmetics targeting females who want to look young and beautiful. My cosmetics would herbal products that keep skin fresh and alive. More specifically my product would be a herbal cream that cures pimples and gives skin a fresh look.
Methodology
The approach that I would use to pursue my goal would depend on the type of cosmetics I would be introducing. My plan to approach this project has following sequence
Use brainstorming sessions to generate ideas about introducing new products in consumer products sector
Conduct a quick SWOT analysis of each product that comes in my mind, select the product with greatest potential in terms of innovation and consumer segment
After deciding what product to introduce, come up a proper plan to develop and market my ideaproduct
Discuss the value proposition of the product and the target segment
Study the revenue sources and conduct cost analysis
Discuss the role of innovation in terms of introducing my product in a unique way
Use innovative marketing practices to market my product
As I mentioned, first I would be using brainstorming sessions. Take help from my mentor and reliable sources to help me in selecting the right idea and right product. It should be kept in mind that one needs to be innovative in terms of generating unique ideas that are attractive in terms of catering to a large segment or are capable of gaining and sustain customers. Once the value proposition of the product is decided, a proper plan for marketing the product and managing the growth or any upcoming uncertainties. Also, its important to keep in mind that innovation helps curb the negative results of uncertainties. Following innovation in all aspects of business helps reap unlimited profits in the long-term. This is, the focus of innovation has to be dynamic instead of being static so that innovations circle not only product innovations but also all functional areas of business. (Duin, 2008)
Customer segments and key characteristicsrelationships of consumers
The key segment is female customer which constitutes nearly half of the population. And almost every woman has the desire to look beautiful. Further segmentation of this group elaborates two main segments namely higher classupper middle class who generally constitute only the upper portion of population pyramid, and middle classlower middle class which constitute the most of the population pyramid and thus can be placed in the bottom.
I will be targeting my product specifically to middle class and lower middle class as these segments have less access to latest cosmetics and skin products due to cost factor. As I would be targeting this sector I need to take this factor in account that my target sector is very price sensitive and less brand loyal. That is, as price increases, choices of brands among customers also change rapidly. Here comes innovation and the difference between knowing and doing that can make the production method effective and eliminate unnecessary costs. The difference between knowing and doing is that we often dont incorporate in our business what we know. Reason for such attitude might be less belief in the usefulness of the knowledge that comes from secondary sources. But, as a student whose skills have been harnessed in innovation, I would focus on incorporating the knowledge I have developed from the course and also through primary sources. Innovation can lead to improvements in terms of technical advantages or through easy-to-use products and services. As my target consumers have the characteristic of being price sensitive and fewer brands loyal, I need to focus on offering a value proposition with a price tag that consumers are willing to pay. (Roland and Patrick. 2008)
Value proposition and positioning statement
Natural cream for you with herbal skin freshness to make you look young and beautiful
I have focused on the natural aspects of my product with the term herbal that creates the positive image of a pimple curing cream. Innovation in terms of design and labeling of the product can prove beneficial. (Duin, 2008)
Cost structure and revenue stream
Herbal products are not expensive to produce but require research to test the attributes of herbal leaves and roots. Revenue stream is expected to be healthy and continuous as the demand for such products is increasing significantly. Revenue stream is expected to come from saloons, beauty parlors and retailers.
Communication and distribution channels
The communication channels I would be using would be both direct and indirect channels. I would be using below-the-line marketing techniques to reach customer directly and through consumer relationships by referencing or word of-mouth. I would also use above-the-line marketing techniques for mass promotions. Following is the list of methods I would be using (Patrick, 2008)
Mobile phone advertising, TV ads
Sales force
Billboards
Direct mail
Referral method
Focus on building customers relationships with the help of satisfied customers. Staying in touch and listening to customers would act as a source of feedback for our product innovations.
The distribution channels would comprise of mass distributors, retailers, cosmetic shops, make-over saloons, beauty parlors etc.
Key partners, activities and resources
Key partners are
Dealers of herbal roots and leaves, researchers who would study the attributes
Distributors, retailers, saloon owners and make-over experts-distribution channel
Customers are also key partners as satisfied customers not only serve as referral but also provide feedback for product development
Key activities are
Product development and innovation activities
Making supply chain and distribution system effective by using dynamic sources of change so that we are capable of incorporating changing needs of customers into whole system
Promotions and marketing activities
Mass collaboration in order to integrate all functional areas
Promote integrative thinking in employees to promote innovations and creativity
Decentralize product development and innovations as the centralized method consumes more time and energy
Key resources include
Our human force, in my view, is the most important resource in terms of innovations and creativity
Product development resources
Marketing resources i.e. media
Role of intellectual property
It is very crucial to keep in mind that innovations and new product development should be protected though copyrights and patents so that no can imitate or steal our ideas. Without patents, competitors can mimic our strategies and product innovations. Thus, I would focus on protecting the intellectual properties through patents.
Conclusion
In conclusion, new product development requires innovation and creativity with integrating all functional areas. Introducing new products with unique selling propositions while targeting attractive segments to ensure healthy revenue streams can prove beneficial to a business or new start-up.
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