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Introduction
Business and innovation usually go hand in hand. Businesses across the world are constantly coming up with new products in order to increase their income base, make profits and, above all, satisfy their customers needs. However, not all innovations succeed in competitive markets. Consequently, marketing is very important for the success of a new product (Barczak, 2014). There has to be the right process to be followed for a new product to effectively enter and claim a share of the market. This process is usually referred to as new product development (NPD).
The following is my business plan for a new product known as blue ocean Walkman, which I intend to use to make the product penetrate the market. The plan sets the scene and explores the product. Other important aspects of marketing, like business analysis, test market, budget, launch, and the future of the product are also discussed in this plan.
Overview
Blue ocean Walkman is a colourful waterproof Walkman capable of working well under deep water of up to two meters. It has a long-life battery and produces high-quality sound. In addition, the Walkman has a new security feature that uses a SIM card as a tracker when a person is in danger. Therefore, besides it being an entertainment product that can be used underwater or elsewhere, it is also a security gadget. Even with these additional features, the product goes for the same price as its predecessor, making it very affordable.
The Industry
The Walkman has been in the industry since 1979. It has since then undergone several modifications to suit the customer tastes and preferences such as adding AM/FM receivers, bass boost and auto-reverse (Haire, 2009). According to Haire, there are over 300 different models of the Walkman all over the world, one of the latest models being the WM-FX290 from Sony, which was released in the US in 2002. Haire adds that the Walkman, as a product, has made more than 200 million sales since its entry in the industry in 1979.
The Marketplace
Customers have specific specifications and quality standards, which they look out for when purchasing a product. Our customers are an important part of the enterprise. As such, their satisfaction means continuous cash flow in the company. Our firm aims to invest in customer relations and quality delivery in order to maintain existing customers while attracting new ones as well. Bianco (n.d) discusses two types of customers, which our business must satisfy for it to survival in the market. These are:
Wholesale customers
These customers buy the Walkman in large quantities for resale. They form a substantial part of the target market due to their preference for a single reliable vendor. Wholesale customers hail from various locations across the world. Our company aims to capitalize on wholesale customers since they have a high purchasing power and they also buy on a regular basis.
Retail customers
These are customers who buy products in small quantities for individual consumption. The company also aims to reach individual customers by opening retail outlets in various locations.
Competitors
Just like any other business, our product also has competitors. The main competitor of the blue ocean Walkman is the Apple iPod, which is stylish, as illustrated in Fig. 1. According to Apple iPod price list (n.d.), the iPod is affordable and has gained popularity over the years. This gives it a competitive advantage over the blue ocean Walkman since it already has an established client base since it.
The Product
Description and Specifications
The product is a Sony waterproof Walkman, which has been branded the blue ocean Walkman. The Walkman works just like the normal Walkman; you connect it to a music source, put it in your ears and listen to the music. Unlike the other models, this Walkman allows you to enjoy your music even when you are in the swimming pool. In addition to this, the Walkman has a SIM card, which is used to track the user wherever he/she may be. This is only for security purposes as the user can ask for help and easily get rescued when in danger.
The product can be used by all music lovers and has an advantage over the other models of Walkman in that it is waterproof and can also assist in seeking help when one is in danger. For these reasons, I recommend this product for music lovers because they will get to listen to their favourite music wherever they go, even underwater. Besides, they will be able to seek help when in danger or even get tracked and rescued should people with malicious motives decide to kidnap them. Let the cost be the least of their worry as we are offering this unique product at a very affordable price.
Idea Generation Process
The innovation of the blue ocean Walkman was guided by the need to blend entertainment with safety. People desire to enjoy listening to their favourite music during relaxing moments such as swimming sessions and beach moments in which water may act as a hindrance. At the same time, people will always want to be assured of their safety whenever they are out and about. As such, the blue ocean Walkman is not only waterproof but also has a SIM card, which can be used as a tracker to locate the user whenever he/she is in danger.
The product was thus designed to save lives, but also entertain users at the same time. The product borrows from the gym, whereby a duress alarm is worn by members during sessions. The alarm is used to call for help in case there is an emergency (Frenderick & Kuratko, 2010). This product has the same technology hence very good for people who have health problems since they will always be able to call for help whenever an emergency arises. For example, when someone suffers a heart attack in the pool, he/she can easily use the mp3 to call for help.
Concept Testing
Product modification or upgrade tests of the already existing Walkman will be used to test the concept. It will be modified to make it waterproof, and the SIM card added for emergency use. The new product will then be released into the market, but with close monitoring to find out customer responses that will then be used to make necessary adjustments if need be (Edwin, 2013).
Business Analysis
Alliances
The blue ocean Walkman is a modification of the old Sony Walkman, which is illustrated in Fig. 2 (Sony, 2014). As such, the firm will form an alliance with Sony Company to develop and market this product. The two companies will sign a contract to work together to produce a sophisticated Walkman, which will look like the product illustrated in Fig. 3.
Time
This product mainly targets the young generation. Therefore, it will be good to launch it during the summer holidays when students are at home with a lot of time at their disposal, which they usually use to engage in any form of entertainment. Besides, the weather during this time favours water sporting activities. This will allow customers to test the product and if they find it to be good to recommend it to their friends. In this regard, the blue ocean Walkman will be launched during the June-August season for countries in the northern hemisphere and December-February season for countries in the southern hemisphere (Novak, 2014).
Risks
Just like any other new product, the blue ocean Walkman also faces some risks, which the firm has to address for the product to penetrate and conquer the market. These risks are outlined by (Trott, 2012) as follows:
Industry risks
The music industry is already well advanced with many music amplifiers being manufactured every now and again. The products might substitute our product and might be preferred over our product due to customer tastes and preferences. Blue ocean Walkman is unique and has a security tracker as an additional feature. This will be our major cutting-edge over the stiff competition in the industry.
Marketing risks
Local media stations charge very high advertisement rate and the use of billboards is very expensive, but their significance in marketing cannot be underestimated. Besides, internet marketing would have wide geographical coverage, but it will be too expensive to have an outstanding place on the internet. Nevertheless, we will use the free areas of the internet as a starting point, but this will only reach out to a few people. We, however, believe that the product will market itself as most customers are likely to recommend it to their friends, given its unique features.
Operations risks
Since this is an original venture, its profitability cannot be pre-determined. We have also not institutionalized any best way to operate the product in the market. We intend to put the product on a trial basis for the first month, and then use our market experience to decide on the best way to operate.
Financing risks
Businesses depend on loans to operate. However, most banks have suspended the provision of loans to startups for the moment (Fleming, 2014). We may fail to get the capital that we require to develop and launch this product if the situation continues.
Benefits
This blue ocean Walkman will offer three key benefits to its users. First, it will give its users the rare opportunity to listen to music while underwater. Second, the gadget will help in reducing dangers in case of any disaster and emergency. Three, the product will be available at the same price as regular ones in the market making it even cheaper given its additional features.
Estimated Size and Potential of the Market
The blue ocean Walkman will be very appealing to almost everyone. The biggest share of its market will be people who are interested in water activities. However, people who do not swim can buy the product especially if they feel the need to beef up their security while going around their day to day business.
Cost to Produce
It will cost us approximately $ 50 to produce one blue ocean Walkman. However, this figure might come down when the calculation is made for bulk orders because there will be the advantage of mass production (Duffy, 2010). The potentials production costs are analysed in detail in appendix 1.
Anticipated Returns
Since this new Walkman will be sold at the same price as ordinary Walkman, the income will be the same as what companies like Sony get for every waterproof Walkman, which has many similarities with the blue ocean Walkman. Each product will go for approximately $89, which is the price of Sonys waterproof Walkman (Sony, 2014b). A detailed analysis of the expected returns and potential for growth is presented in appendices 2 and 3. From the analysis, it will be likely to break even by the end of the first month.
Test Market
According to Hennessey (2008), market testing involves testing different market scenarios to guide the selection of the most promising scenario. We will do this by developing a prototype of the product, which will be shown to customers. Exhibitions and trade shows will be a great place to start with as people are always looking for new things in the market. The market price will then be determined based on market performance of the prototype. Thereafter, we will take the real product to the customers and ask them to buy it. At the same time, we will be making comparisons with other products in the market. After all this, we will have an idea of how the product will fair in the market against its competitors.
Brand Strategy
This product has three key strengths, which are: a) listening to music under water; b) ability to reduce the danger in case of any disaster or emergency and; c) the product is available at the same price as regular ones in the market
But it also has some weaknesses such as: a) It is a single product that people can easily do without since there are so many other similar devices in the market and; b) the profit margins that will be realized from this product are limited since the cost of production is too high. There will be the need for large-scale production and sale for the product to gain more profits.
With the full knowledge of these details, I believe this product will have a competitive edge over its competitors since we already know where to improve on for the product to do better and what harness to make it stand out in the market (Hollensen, 2013).
How Will the Product be Managed Effectively?
We will use an evaluation mechanism as a follow-up of our marketing plan. This will involve both quantitative and qualitative evaluation techniques. While formative evaluation will involve how happy consumers are with our marketing strategies and the subsequent market share and loyalty, which will be indicated by the loyalty cards, quantitative evaluation will look at the relationship between the sales turnover and the subsequent profit (net and gross) and financial soundness of the business computed from the financial ratios (Monasterio, 2014).
Packaging Considerations
The product will be packaged in a unique manner using plastic containers filled with water as illustrated in Fig. 4. The gadget will then be immersed in the water and tightly closed and sealed. This packaging approach is a way to proving to the potential buyers that product is actually waterproof. The packaging is hoped to attract customers as this is quite unusual way of packaging.
Launch
This product will be launched to the youngsters because they form the largest group of music listeners who use a Walkman. A free teenagers beach party, dabbed the launch of the blue ocean Walkman, will be organized to launch the product. This will be during the summer holidays when all the students are at home and can attend the party. There are many water activities during this time, which will give customers the opportunity to test their new devices. The launch will be used to create awareness of the new product.
Thereafter, the following promotional plan will be used:
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Placing advertisements about the blue ocean Walkman on TV
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Periodically placing advertisements on magazines
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Placing advertisement on at least one billboard
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Marketing the product in the internet
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Sponsoring water-related sports and using them as forums for marketing the product
Conclusion
The blue ocean Walkman has a colourful design, high quality sound, long life battery and works well under the water (waterproof) of up to two meters. This unique product is specifically designed with new feature, a SIM card, which can be used as a tracker to locate the user when he/she is in danger. This is what makes this product different from other mp3 sound players. They are available at the same price as the regular Walkman hence there is no excuse for not getting one. The future of the blue ocean Walkman is bright as it is likely to have a major market share and make a lot of profits compared to its competitors.
Appendices: Budget
Appendix 1: Marketing Costs-2015 Marketing Plan
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Client: SONY
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Product: Blue Ocean Walkman
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Contact: Customer Inserts Name
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Target Audience: Students, mostly in the USAAppendix 2: Revenue- Cost Summary
Appendix 3: Growth Projections
References
Apple iPod prices- October 2008 (n.d.). Web.
Barczak, G. (2014). Product development and innovation management. Journal of Product Development and Innovation Management, 31(4), 640-641.
Bianco, D.P. (n.d). Channels of distribution. In Jane A. Malonis (Ed.). Encyclopaedia of business (2nd ed.) (pp. 120-123). Detroit, Mich: Gale Group.
Duffy. J. (2010). R.I.P Sony Walkman (Snr). BBC News Magazine.
Edwin, D. (2013). Concept testing.
Fleming, S. (2014). Bank of England sets out plans for failing lenders. Politics and Policy. Web.
Frenderick, H. & Kuratko, D. (2010). Entrepreneurship: Theory, process, practice (2nd ed.). Sydeny, Australia: Cengage Learning Australia.
Haire, M. (2009). A brief history of the Walkman. Web.
Hennessey. R. (2008). Market testing.
Hollensen, S. (2013). Emerald insight. Journal of Business Strategy, 34, 25-35.
MKT 3600 Assignment 1: New product development [ppt] (2014). Customer inserts institution affiliation.
Monasterio, P. R. (2014). Using advanced analytics to optimize B2B sales force strategies.
Novak, M. (2014). The summer solstice. Retrieved October 24, 2014 from m.almanac.com/content/first-day-summer-solstice.
Sony (2014a). Sony mp3 player. Web.
Sony (2014b). Sony Walkman NWZW273 4GB waterproof sports mp3 player. Web.
Trott, P. (2012). Innovation management and new product development (5th ed.). Harlow, England: Prentice Hall.
Order from us for quality, customized work in due time of your choice.