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1 Introduction
Over the past decade the technological innovations have reached very exciting and unbelievably realistic
heights that couldnt have been foreseen in the past. Amongst many of such useful and desired innovation
is the iVo. What is it? Well if you look closely at the computer and its value added accessories which have
helped mankind easily carrying out several useful tasks such as printing out documents, scanning, editing
videos, graphics and so on and so forth, the iVo brings to you a whole new perspective.
The technology industry in Sri Lanka has emerged considerably over the past few years and with the
introduction of the iVo we believe we can capture the recognitions of millions over the world.
The primary focus and aim in composing this report is to provide the management of Soft Logic with a clear
and effective development plan that would help in the approval of this exciting and new product invention
which is in collaboration with their company vision and goals.
This report will include the idea screening, which provides different feasible products that were considered
before deciding on the final most demanding and effective product, the iVo. It was followed by an in-depth
market analysis for this product along with the business analysis. Test marketing will be carried out with a
clear informative program to both give an idea to the potential consumers as well as to get a feedback on
the probable demand for and acceptance of the product. Upon realization, the commercialization and
launch of the iVo would take place. The final and most influentially vital aspect, the future prospective
directions would then be identified.
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The device is portable and user friendly which can be taken every where you travel
One of the special added feature in the device is the ability translate one language into another.
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There are various technologies that should be used to process input data. In order to comply with the latest
technologies, the product should use the best technologies in terms of a good quality product; therefore
one of the techniques used in speech processing is VAD (Voice Activity Detection). (Cook, 2002) This
enables the hardware device to translate the speech into a coding format and thus detect the entire
speech. The performance of this system is determined by the accuracy and speed of this device. The
accuracy is usually rated using Word Error Rate (WER) where as the speed is measured by the use of real
time factor. (Cook, 2002)
In order to supply software and hardware equipments needed for the voice recognition system, Evertek
Computer Corporation was selected. This was selected in order to provide a quality product to the market
as this company sells quality deals at aggressively low prices. This is a worldwide trader of computer
accessories and equipments. The company was formed in 1990 and has worked for almost nineteen years
in the industry. (Evertek Corporation, 2009) Evertek Corporation is a main supplier of software and
hardware accessories to top companies such as IBM.
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3 Idea Screening
The idea screening process is the first filtering process in the new product development process. This is a
very important step as it decides whether the product is in line with or in consistent with the organisations
goals, objectives and values. The main concentration was to develop a new product to the market
according to the capital as of hand now and to develop a more of a local product which also might have the
potential to move in to been a foreign product. Another factor which affected was the products life
expectancy in the years to come and whether there is a potential target market to accept the product.
Therefore depending on the highlighted factors the screening of ideas began under the following criteria;
Competition
Following are the new products which our company has come up with and the idea screening process of
each of the individual items;
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This product was rejected since it was too simple and customers are actually not facing an issue or a
problem for our company to come up with such a new product. our company thought that it was no point in
investing in a butter stick as the research and development will be costly but the profits generated by this
product will not be beneficial to the organization.
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list after the idea screening process as it was also not aligned with the organizations goals, objectives and
values.
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4 Concept Testing
In order to carry out the concept testing, questionnaires were distributed to the potential target market. The
number of total questionnaires distributed is 150 among which 27 were rejected due to errors and rest of
the 123 questionnaires were taken into consideration for the results.
As a result of the analysis of the questionnaires the following results were found out;
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o But comparatively there is a reasonable level of potential customers using a voice recorder
in all age groups.
Among the target customers the majority of usage is by the students amounting to 59%.
o Surprisingly the next majority of users were under the category of other where theyve
specified jobs like travel consultants / tour guides and secretaries /assistants. This gave us
a different set of target customers whom can be targeted for our new product.
o Specifically among students females mostly use voice recorder in comparison with the
males.
The current problems customers face in using a voice recorder would be;
o Unable to store 52%
o Voice clarity 26%
o Reach 13%
o Other - Transferring 9%
o It seems that customers are not so concerned or worried about translation in a voice
recorder.
Hence, it gives a clear idea about the areas we should focus in our new product and it seems that adding
the attribute of translation is of no use as they do not give immense importance for that.
When questioned about our new product iVo 60% of the respondents were absolutely ready to
use it and rest of the 40% were willing to try it at least once.
o It is a positive impact that none of them said NO to try our new product. This shows that
the market reaction to our new product iVo is very much positive.
When considering the benefits for which the customers are willing to buy the product it can be
ranked as follows;
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16 and above
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Issues with clarity, storing, reach and transferring to computers in the current products
Should be aware of the gaps in understanding the impact of Research limitations and assumptions
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o MP3
Portability and user friendly is not their biggest concern but benefits.
5 Market Analysis
5.1 Market for iVo
5.1.1 Market Size Actual & Potential
Actual market size is the total amount in the population who will purchase iVo. The markets we intend to
attract include professionals such as journalists, students, doctors, lawyers, managers etc. During the
expansion of our product, we intend to market our product to other technological companies such as Abans
etc. This will assist to bring about a higher customer base. In the long term, we intend to expand our
business to other countries which will assist to bring about greater growth and profits.
Currently the market size is quite small where we target only the population in Colombo. But we intend to
widen the market size by targeting all the other regions around Sri Lanka and also to expand internationally.
5.1.2 Market Growth
Since our product is new to the world, we have no direct competitors and therefore we have the first mover
advantage. Even though the voice recorders in the market are our indirect competitors by emphasising on
the added features we give to our customers which provides them more value for money will beat the
competition we might possibly have through current voice recorders in the market. Hence, there is high
potential in the market for a product like iVo to grow. As long as we have the patent rights the market
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growth will be slow and steady where iVo will be stabilized. Hence, in time to come when the competitors
start entering the market the competition will be really intensifying which will give rise to higher market
growth. This will lead to iVo becoming a star in the market striving continuously to retain its market position.
5.1.3 Market Trends
It is clear that the world has developed a great deal. In the past, student and professionals used books in
order to record data. With time, computers, voice recorders and other technological advancements have
developed. We believe that this product to reduce the time and effort taken to listen to a voice recorder as
the material can be printed. This will assist the user to read faster and highlight key areas. Therefore we
believe that our product is following market the trend.
Having in concern our product concept we intend to become the trend setters in the market in terms of
breaking the norm that services cannot be stored. We create a new lifestyle among our target market
through which we segment them. This will be of great advantage for a technological company like ours as
the world is moving fast with the growth of technology.
From our market analysis it is clear that our product does not have direct competitors. When considering
indirect competitors, they include voice recorders, personal computers from companies such as IBM
computers, Nano computers, Microsoft etc. (Anon,2010) Since our product has a forced relationship, it can
be easily copied by competitors in Sri Lanka as well as overseas especially in countries such as China .
Within Sri Lanka our main competitors are PC house, Unity plaza, E wiz etc.
5.2.2 Customers
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Customers are the core determinants of the success or failure of a business. Therefore it is necessary for
us to understand that the customer is king. We hope to provide our customers a product with a high quality,
capacity and reliability. The main focus of our product is to provide customers a with a user friendly and
convenient product.
B2B & B2C
Our promotional campaign will introduce our product to local companies in Sri Lanka. They could provide
our products to the senior executives and management within their organizations which will assist them to
save time and increase productivity. Local companies would also be given incentives and information.
Direct sales to consumers will be made through special orders, in store purchases and sales promotions.
5.2.3 Suppliers
Suppliers are an important aspect to every organization. They assist to provide cost advantages through
low cost strategies and economies of scale which assist to bring about higher profit margins. Our
permanent supplier is Evertek Computer Corporation as the company sells quality material at aggressively
low prices. The company is a worldwide trader of computer accessories and equipment and has been in
the industry for 19 years. (Evertek, 2009) We chose this company as the sole supplier of raw materials due
to its high dependability, cost advantages and quality products. An extended credit period of 30 days was
also provided by the company.
User friendliness
The device is portable and user friendly which can be taken every where you travel
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Consistent increase in potential customers as people over 16 will realize the benefits of owning the
iVo.
Can be used as a multi-purpose product such as the benefit of the inbuilt camera
5.3.2 Weaknesses
5.3.3 Opportunities
Potential to increase more value adding functions according to the market changes and customer
requirements in the future
5.3.4 Threats
Difficult economic conditions in the market such as recession and inflation would affect the sales of
the iVo and the purchasing power of customers.
Price wars may occur and make it difficult to achieve economies of scale
Since its a high end product, when patent rights are over competitors can copy the product with low
quality and price which will diminish the image and value of the high end brand
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As the government seems to be in a more stabilized position in the country it will be a good opportunity for
us to introduce new products to the industry as there is more freedom for people to move around in and out
of Colombo as to the countys situation. Due to this, more people will enter Colombo especially foreign
customers. Hence, our company has the potential of developing a new product as it will be profitable.
Another disadvantageous factor would be during the election time there will be less media space for the
product to be advertised as it will be crowded with media political advertising campaigns. During this time
creating awareness of the product and making the brand to be a top of the mind brand will be complex.
5.4.2 Economic
When considering the external factors this is the most critical factor that a company should keep in mind.
As the world is coming out of the economic crisis (recession) and people are settling back in their jobs and
also after the political stability in Sri Lanka there are likely to be more job opportunities for the people who
have lost jobs during the recession as our product is a more technical product our company needs more
human labour to get the product in order. (Jayawardena, 2009) As our product is a more exclusive product
the long term growth in Sri Lanka should be there as the disposable income rises the customers have the
opportunity to go to a variety of stores such as soft logic to purchase our product.
5.4.3 Social
Our product will be very useful as all this time we could only record a voice but no proof in writing.
Therefore the IVO voice recorder is very useful to our target markets to record verbal communication
anywhere and then take a print out in writing within no time. This way the people can lessen the hazel of
carrying out the voice recorder which can only be listened and get the new IVO where a print of what has
been verbally mentioned can be taken out as a print out.
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5.4.4 Technological
As to expand our target market and have a bigger market share in the industry we must use the technology
such as internet and other communication networks to create awareness within the customers. Use of
technology will help the business better as we can get things done faster. Maintaining a creative and
attractive website will also be helpful as customers would visit often and purchase the products online to
their convenience. With the rapid growth of globalization it is difficult to conduct business without the use of
technology. Also regular emails should be sent to potential customers about the IVO to get the feedback on
how the product can be more developed according to their preferences.
6 Business Analysis
6.1 Financial Analysis
6.1.1 Initial Investment
Machinery
Vehicles
Office Furniture and Equipments
Launch
Total
Van
Lorry
Total
Cost
Rs.
12050000
8725000
5750000
11000000
37525000
Quantity
2
1
Total
5150000
3575000
8725000
51750
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Software Developer
Systems Analyst
Project Manager
Total
414000
207000
230000
902750
Total
Type
Software Development Staf
Factory Workers
Microphone
Speech recognition
Software
Portable Hardware
device/plastic
Sound card
Half Sheet (A1) Small size
USB cable
Ink cartridge
(Small) - Black
Battery Charger
Rechargeable
Battery
VRS device holder
CD Rom
Memory Chip
Accuracy detection
software
Speed detection
software
Steel required for
the device
Text formatting
Production
cost per unit
Cost of production
for 500 units
Nos.
2
Price
of a
unit
Rs.
2300
Rs.
2300
Rs.
1150000
8000
2000
1000000
1 Kg
20
20
10000
400
400
200000
1 Kg
50
50
25000
100
100
50000
100
100
50000
1500
1500
750000
800
800
400000
1
1
1
750
100
8000
750
100
4000
375000
50000
2000000
9000
6000
3000000
2300
2300
1150000
50 g
11
11
5500
5000
3500
1750000
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software
Total
23931
11965500
6.1.3 Projected Cash flow Statement for the first three years
Inflows
Capital
Sales
2010
Rs.
2011
Rs.
2012
Rs.
400000
00
325000
00
422500
00
528125
00
Total Inflows
Outflows
Fixed Asset
Purchases
Purchases
Carriage Inwards
Direct Labour
725000
00
422500
00
528125
00
135250
00
253250
00
300000
111205
00
278575
00
300000
113985
13
306432
50
300000
116834
75
60000
480000
480000
420000
66000
528000
504000
441000
72600
580800
529200
463050
Administrative
Expenses
R&D
Rent
Electricity
Telephone
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Maintenance
Other Expenses
Marketing and
Promotional
Expenses
Distribution
Expenses
Insurance
Expenses
Total Outflows
240000
252000
277200
475000
400000
360000
100000
50000
20000
100000
100000
100000
Cashflow
Balance at the
beginning
Balance at the end
526255
00
418970
13
450295
75
198745
00
352987
.5
198745
00
202274
88
778292
5
352988
198745
00
813591
2
Revenue
Cost of Sales
Gross Profit
Expenses
Administrative
Expenses
Marketing and
Promotional
Expenses
2010
Rs.
32500000
(255860
00)
6914000
168000
0
475000
2011
Rs.
42250000
(2686530
0)
1538470
0
179100
0
400000
19
2012
Rs.
52812500
(2820856
5)
2460393
5
19228
50
36000
0
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Distribution
Expenses
Insurance
100000
50000
20000
100000
100000
10000
0
Total
Profit before
tax
Tax (35%)
Net Profit
(2355000
)
4559000
(1595650
)
2963350
(2341000)
(2402850)
1304370
0
(4565295)
2220108
5
(7770380)
8478405
1443070
5
23931
23931
Total
11120500
60000
480000
420000
480000
240000
475000
100000
100000
13475500
Fixed Costs
Direct Labour
R&D
Rent
Telephone
Electricity
Maintenance
Marketing and Promotion
Distribution
Insurance
65000
23931
41069
13475500
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328 units
%
7%
21%
36%
6.1.6.3Payback Period
Year
0
2010
2011
2012
Payback Period
Cashflow
-40000000
19874500
20227488
8135912
Cum. CF
-40000000
-20125500
101988
8237900
1.99 years
6.1.6.4NPV Analysis
Year
Cashflow
DCF @ 5%
40000000
19874500
20227488
8135912
2010
2011
2012
21
0.952
0.907
0.864
NPV
Present
Value
-40000000
18928095
18346927
7028107
4303130
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7.2%
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In the mere future after the launch and when our patent rights are over there is a greater possibility where
competitors can copy the product and enter the markets which will be harmful for the market share and the
profitability of our product iVo. As there are neither direct competitors nor a strong player in the market
there will be no barriers to entry. Due to this, the profits could reduce for our company and its best to come
up with strategies to prevent it in the future.
6.2.2 Threat of substitutes - LOW
As iVo helps the target market to record as a voice recorder and then instantly take a print out of the oral
words in writing there are no substitutes in the market for iVo and the threat of substitutes will be low and
this will not lead to a decrease in the profitability for our company.
6.2.3 Bargaining power of suppliers - HIGH
As we plan on existing for a long time period we hope to build a long term trust and relationship with our
suppliers. Since the copyrights of the softwares we are using for the production of our product lies with
Microsoft who is our main supplier their bargaining power would be high. Quite similarly other raw materials
for the production are from Evertek. Though raw materials are widely available in order to protect the
concept behind the product well be having agreement with Evertek particularly. Therefore, this hinders our
bargaining power over the suppliers.
The bargaining power of customers will decrease as there are no other competitor brands available in the
market. The profits can be increased when the brand name is established and made well aware as a top of
the mind brands in the customers minds. With the initial development of the product it will be in the
introduction and growth stage of the product life cycle and the bargaining power of customers will be higher
when providing the innovators and early adaptors to try out the product.
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As this is a totally new concept to the market and as there is no competitor for our product we can capture
high market share and profits in the industry. Even though there are indirect competitors such as the voice
recorder, it cannot harm the market share and profits of iVo as it has a special feature which basic voice
recorders dont contain.
7 Product testing
Product testing assists to assess whether the promised benefits are satisfied by the actual product. .
Therefore in order to assess the potential buyers opinion of actual products, the test should be realistic,
sensitive and valid. In order to be realistic we gave questionnaires to potential buyers within the natural
environment in such places as majestic city, Unity Plaza, the BT store and Crescat. We also produced the
product for the sample of our target market to try out and asked potential consumers to evaluate the
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product based on its features. In order to better understand how consumers perceive the product against
competitors as well as customer sensitivity, focus groups were conducted. We found our product to be valid
as many consumers rated the product high due to its perceived benefits. During this process since wanted
to find out if the product was user friendly or not we did not offer much guidance except for the products
basic operations. We also used beta testing as our staff has been familiarized with the product and
therefore to get valid information we chose this method.
8 Test Marketing
The aim of test marketing is to test the marketing mix of our product iVo. During the product launch a roll
out strategy will be incorporated. Therefore, a test market was carried out due to this reason. This assisted
us to understand the launch as well as the commercialization process and the amendments required in
order to improve the final plan. Test marketing assisted us to understand the expected sales in order for us
to break even as well as the importance of the marketing mix.
Our test market consisted of males (55%) and females (45%) of journalists, lawyers, doctors, students and
other professionals within the Colombo area. Factors tested included storing, voice clarity, reach and
transferability
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9 Commercialization
The final stage in the new product development process is commercialization, the decision to market a
product. The importance of having a proper product mix is crucial for a vehicle to be commercialized,
especially to target for the first time. If this is done correctly, we can capture our potential customers;
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consumers will know about our product specifications, value added services and so on. All promotion
strategy, price strategy, distribution strategy and even the product strategy should be carefully organized,
also they are discussed below.
9.1 Product
As mentioned previously under the Total Product section, with the aid of our companys technological
expertise we take pride in introducing a voice recognition system for the first time ever in the Sri Lankan
market and will make people experience this product at an affordable price with the latest and the most
advanced technologies in the world thus will enhance reduce stress in writing or typing a report. The
product itself and the box is a unique design which is transparent on one side and bear different theme
colours which are targeted at different customer segments and would also delivered with different
accessories packs. This colour combination is a unique blend which is very attractive and has the ability to
draw the shoppers eye to the product.
9.2 Price
As the voice recognition system is been introducing for the first time in Sri Lanka we have the advantage in
setting our price decisions. We offer products that are of high quality and have the latest technologies
embedded in the products. Therefore by setting a Market-skimming pricing strategy, we believe that we will
gain better revenues. Since we are targeting to a small segment, and there is no other availability of this
product the pricing strategy will make fewer but more profitable sales to the company. Thus the average
price of the product would be Rs. 65 000.
9.3 Place
There are 101 soft logic branches island-wide. We will be distributing this product across our branches in
the initially targeted geographical region which is the western province. The product is set to distribute
directly to the end user. Based on the response of the customers, we will continue to distribute the product
through our main dealer IBM.
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9.4 Promotions
According to (Belch & Belch, 2004), a basic tool used to accomplish an organizations communication
objectives are often referred to as the promotional mix. Many organizations at present use elements/
promotion tools such as advertising, direct marketing, internet marketing, sales promotions, public relations
and personal selling to communicate with the consumers. Thus to get the message through we will use a
variety of promotional tools.
Event marketing
We are planning to have our launching ceremony as a cocktail event inviting all the Board of Directors,
Media as well as the innovators of our product. The basic idea of a cocktail is to incorporate all possible
stakeholders of our products which will be the best way to introduce our product to. Hence, we want it to be
semi-formal as an event. Therefore this launching ceremony in terms of a cocktail is also one of the best
ways to promote our product. This will be effective as an event marketing tool where we can easily reach
the market and the satisfied audience of this event will be a source for positive word of mouth.
We will be developing our core positioning message The Easy Way - First time ever in Sri Lanka - A voice
recognition system No more manual typing, with instant print-outs, to differentiate our product from
competitors. In order to do so, we will be using Sunday Observer, Daily news, Sunday Times, The Island,
as the local news paper to advertise as these papers are assumed as the most viewed papers by
customers. In addition, business Magazines such as LMD, Business today will be using to publish.
Sales Brochures
Sales brochures will be distributed among the day to day customers and visitors of our showrooms.
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Sending direct mails to our customer contact mail addresses will be a method of promoting the product. We
already maintain a record of our customers contacts as & when a transaction takes place. Therefore by
directly mailing to these contacts we believe we can promote the product. Also, there are many Sri Lankans
who browse the internet very often. Pop up advertisements can be published in a number of selected web
sites in order to make this group of people aware of the product.
Mass Media
This will include TV as well as radio stations. As for TV advertisements, channels such as ETV, MTV and
ART TV and for Radio advertisements, Yes FM and E- FM will be used.
10 The Launch
iVo team will be considering following a Roll-out strategy instead of market penetration, as the product itself
is relatively not easy to imitate, since we are planning to get patents, also relatively high in cost and the
price is also relatively high in the market. We also enjoy a sustainable competitive advantage in the form of
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a completely novel concept and there is no direct threat of competitor reaction; this too qualifies the use of
the waterfall (roll-out) strategy. The launch will includes the event marketing plan to see why, who, when,
where and what to be launch and the promotional plan of the new product.
What
This basically refers to the contents of the particular event. If the content of an event goes hand in hand
with the desires of the audience, the event is more likely to be a successful one and vice versa. The event
content must be pre determined by the organizers in order to fulfil the campaign objectives.
As our initial point of showing our colours we hope to launch with a tremendous party, not in the form of
quantity, but rather in quality. The main objective of the launch is not only to create awareness; also mainly
to earn the good will of the invitees are they are not only part of our target audience the innovators, but they
are prominent entrepreneurs and socialites forming the main part of the Colombo elite. This means that
networking with them would gain iVo an abundance of advantages. Thus a cocktail party will be organized
targeting corporate clients mostly from the technological Industry.
10.1.2
Who
The launch would primarily target the trend setters of the exclusive organizations in Colombo. This would
include the innovators who acquire added value from popularizes a trend or from being the first to do
something. This would also include the board of directors of our company, higher management teams of the
leading technological (software providers) and telecommunication organizations in Sri Lanka as well as well
as some predominantly selected individuals to represent the target market (well known journalists, well
performed senior students from universities, etc.).
10.1.3
When
We decided the best date for the event would be 24th of September, Friday 2010. It will be held from
7.30pm till 11.30 pm. Friday was selected because during interviews with our clients they mentioned that
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weekends tend to be busier and has been scheduled for their formal meetings and personal events. Hence,
Friday night will give them the ease of mind to enjoy and get involved in the event.
10.1.4
Where
The launch will be held at the Mount Lavinia Hotel, The Terrace. We chose this place as this was
Designated by Newsweek magazine as one of the "World's best gathering places", and can enjoy the
enchanting experience of dining under the stars, seduced by a soft tropical breeze, while lounging by the
pool. This place is renowned for its food, hospitality of the service and the prestige, the attributes our target
segment is very much concerned with.
10.1.5
Why
This posts the question, Why should the people attend the particular event, spending their time and
money? The answer to this question must be provided in a way in which, it would convey and convince the
audience, the key benefits which could be obtained by attending the event. The answer to this question
would be, the audience will witness the launch of a totally new, unique and a beneficial technological
product, which present itself as a well known but technologically improved product for Sri Lankans, to easily
get use of the product.
11 Budget
Cost
Rs.
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Nominal
100000
50000
23931
500000
TV Ad
Radio Skit
Magazines
Direct Mails
Sales Brochures
Sales Promotions
Launching Ceremony
Machinery
Vehicles
Office Furniture and Equipments
Salaries
Raw Materials
Total Cost
200000
50000
40000
10000
75000
100000
11000000
12050000
8725000
5750000
11120500
11965500
61759931
12 Future Direction
The future direction of any organization is important and therefore must be thought of and planned well
ahead. iVo have mapped out a path way in order to expand our potential. The Research and Development
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team of iVo will continuously obtain feed-back from customers and will eliminate all the loop holes in our
product to become successful once we enter into the other regional markets.
Furthermore, we will be looking forward to add many more features and customize the product to match
individual preferences. This will become an added benefit which we are planning to provide our customers
where they can visit our web-site and provide us with the details and we will make the products according
to their preferences.
Once the local market is matured and becomes saturated we will be moving towards gaining international
market share as well which will be again can considered as an approachable.
13 Conclusion
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NPD - Part 2
The past years have been the era for technological innovations which took people to the heights of
excitement where everything was made easy and quick. In todays world, technology is the knack of so
arranging the world that we don't have to experience it. In a technologically well to-do era for
companies to survive in the business world it is necessary for organizations to continuously cope up with
the growing trends in the market in terms of technology. Hence, in order to compete and position yourself in
the market, it is vital for business ventures to continuously be innovative and produce eye catching, yet
problem solving and useful products to the market.
As Softlogic Tradings is a leading technological company in Sri Lanka, in terms of survival and stabilization
in the market they are in the process of new product development through technological newness. The
following report is the first part of the new product development process of one such potential and possible
successful innovation the company has come up with to introduce in the market. The rationale behind this
innovation is to be thriving among its competitors thus gaining a good reputation to the company.
It is a detailed plan for the new product iVo which will be a technologically advanced product that will detain
spoken words and sounds and transfer into a machine readable format which will capture the market in Sri
Lanka by benefiting many groups of people. As we have already submitted the first part of the report the
second part would consist of areas such as idea screening, concept testing, business analysis,
development, product testing, test marketing and commercialization which include the launch as well.
Never before in history has innovation offered promise of so much to so many in so short a time. But we
are one among the extra ordinary who are ready to stun you by our innovations.
14 References
34
NPD - Part 2
Anon. (2010). Information communication technologies. Retrieved 07 12, 2010, from Sri Lanka
export development board: http://www.apng.org/museum/pdf/e-srilanka.pdf
Cook, S., 2002, Speech recognition How to web site [online], Available from:
http://www.faqs.org/docs/Linux-HOWTO/Speech-Recognition-HOWTO.html [Accessed date 5th
December 2008]
Jayawardena. (2009, 3 31). Parliament of the democratic socialist republic of Sri Lanka. Retrieved
9 1, 2010, from inlandrevenue:
http://www.inlandrevenue.gov.lk/publications/Acts/VAT/VATActNo15(E)2009.pdf
35
NPD - Part 2
15 Appendices
15.1 Main supplier for raw material
In order to supply software and hardware equipment needed for the voice recognition system, Evertek
Computer Corporation was selected. This was selected in order to provide a quality product to the market
as this company sells quality deals at aggressively low prices. This is a worldwide trader of computer
accessories and equipment. The company was formed in 1990 and has worked for almost nineteen years
in the industry. Evertek Corporation is a main supplier of software and hard ware accessories to top
companies such as IBM.
Industry Analysis
The industry of information and communication technology (ICT) is highly competitive in Sri Lanka. Sri
Lanka has the highest literacy rate in the south Asian region which is 92 percent of the total population.
(Refer appendix 3) There are many IT skilled labour forces available in the country. According to previous
statistics it has found that there are approximately 1375 IT personnel passing out from public universities
and institutions while approximately 4000 personnel pass out from private institutions. Presently there are
about 75 software development companies in the country. The estimated exports of software and related
services of Sri Lanka has amount to US $ 70 million. This shows that the industry is growing rapidly. The
peoples knowledge about the IT industry is immense. As people have a better knowledge of the industry,
their knowledge of selecting the best quality, durable products in the market also have increased. Factors
most effecting in this industry would be Price, quality, reliability, customer service, post purchase services.
Even though there are many branded companies in the market, with the increase of our brand name and
popularity thus by being the first to market, we have a unique opportunity to brand ourselves with the
product.
Competitive comparison and competitive edge
Our main competitors in the industry are IBM computers, Microsoft, Nano computers and PC house. Since
this product is the first to the market, there is no competition among these companies for this particular
product. Therefore there is no doubt in gaining benefit from a competitive advantage over our competitors
in the industry.
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NPD - Part 2
Cost of Production
Direct Labour
Utilities
Total
2010
Rs.
11965500
11120500
2500000
25586000
% increase
15.2.2
2011
Rs.
12563775
11398513
27857500
26865300
5%
2012
Rs.
13191964
11683475
30643250
28208565
5%
Target Employees
No. of employees
Professionals
Doctors
Engineers
Lawyers
Managers
Accountants
Secretaries
Other professionals
15255
8963
14560
12630
18523
4633
90000
4600
State Universities
Private Universities
Other Organizations
Total
956000
490000
560250
2175414
Journalists
Students
35%
761395
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15.2.3
Year
Sales Demand
(Rs.)
2010
2011
2012
15.2.4
% increase in sales
demand
32500000
42250000
52812500
30%
25%
Cost of equipment
Direct Labour
Utilities
Total Production Cost
Profit mark up (25%)
23931
22241
5000
51172
12793
63965
65000
TV Ad
Radio Skit
Magazines
Direct Mails
Sales Brochures
Sales Promotions
Total Expense
2010
200000
50000
40000
10000
75000
100000
475000
38
Cost (Rs.)
2011
150000
50000
30000
10000
60000
100000
400000
2012
150000
45000
30000
10000
50000
75000
360000
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15.2.6
R&D
Rent
Telephone Charges
Electricity
Maintenance
Total
5000
40000
35000
40000
20000
140000
39
2010
Rs.
60000
480000
420000
480000
240000
1680000
Per annum
2011
Rs.
66000
528000
441000
504000
252000
1791000
2012
Rs.
72600
580800
463050
529200
277200
1922850
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41
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26 40 years
40 60 years
61 and above
2. Gender
Male
Female
Rs 26,000 Rs 40,000
4. Occupation
Journalists
Lawyers
Doctors
Students
Sinhala
Tamil
No
Weekly
Monthly
Rarely
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NPD - Part 2
10. Any problem you come across during the use of a voice recorder?
Voice clarity
Reach
Storing
Translation
If other, specify:..
11. Will you prefer using our Voice Recognition System where you can print what you record?
Yes
I would try
No
For which one or more of the benefits of the product are you willing to buy the product? (Ex: a,b,c,d,e,f,g)
13. The maximum price you are willing to pay for a product like the Voice Recognition System?
10 000 15 000
15 000 20 000
20 000 25 000
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Excellent
15.4.1
Good OK
Not worth it
Product Testing
1. Age
16- 25 years
26 40 years
40 60 years
61 and above
2. Gender
Male
Female
Rs 26,000 Rs 40,000
Rs 41,000 Rs 60,000
Lawyers
Doctors
Students
Sinhala
Tamil
NPD - Part 2
Yes
No
Weekly
Monthly
Rarely
No
10. Any problem you come across during the use of iVo?
Voice clarity
Reach
Storing
Translation
If other, specify:..
11. The benefits of the product are as follows;
For which one or more of the benefits of the product are you willing to buy the product? (Ex: a,b,c,d,e,f,g)
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NPD - Part 2
Yes
No
If other, specify:..
13. Overall, how will you rate iVo?
Excellent
Good OK
Not worth it
This is a price quotation for steel in India. Therefore Sri Lankan stainless steel prices will be three times of
the price in India.
47
NPD - Part 2
- Rs. 72
Stainless steel 1 Kg in SL
- Rs. 216
- Rs. 2.16
- Rs. 10.8 = 11
Sound cards
USB Cables
Battery charger
Rechargeable battery
Memory Chip
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Sri Lankas ranking in the Ease of doing Business in the south Asian region
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Table of Contents
1
Introduction.........................................................................................................................................1
Idea Screening.....................................................................................................................................4
3.1
3.2
Butter stick...................................................................................................................................4
3.3
3.4
Remote pram................................................................................................................................5
3.5
3.6
Ring phone...................................................................................................................................5
3.7
3.8
Concept Testing...................................................................................................................................7
4.1
4.2
4.3
Market Analysis.................................................................................................................................11
5.1
5.1.1
5.1.2
Market Growth...................................................................................................................11
5.1.3
Market Trends....................................................................................................................11
5.2
5.2.1
Competitors........................................................................................................................12
5.2.2
Customers..........................................................................................................................12
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NPD - Part 2
5.2.3
5.3
Suppliers............................................................................................................................13
SWOT Analysis.........................................................................................................................13
5.3.1
Strengths............................................................................................................................13
5.3.2
Weaknesses........................................................................................................................13
5.3.3
Opportunities.....................................................................................................................14
5.3.4
Threats...............................................................................................................................14
5.4
PEST Analysis...........................................................................................................................14
5.4.1
Political..............................................................................................................................14
5.4.2
Economic...........................................................................................................................15
5.4.3
Social.................................................................................................................................15
5.4.4
Technological.....................................................................................................................15
Business Analysis..............................................................................................................................16
6.1
Financial Analysis......................................................................................................................16
6.1.1
Initial Investment...............................................................................................................16
6.1.2
Initial Cost.........................................................................................................................16
6.1.3
6.1.4
6.1.5
6.1.6
Ratio Analysis....................................................................................................................20
6.2
Risk Assessment........................................................................................................................22
6.2.1
6.2.2
6.2.3
6.2.4
6.2.5
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Product testing...................................................................................................................................24
Test Marketing...................................................................................................................................24
Results from Test marketing and Questionnaires.......................................................................24
8.2
8.1
Commercialization.............................................................................................................................26
9.1
Product.......................................................................................................................................26
9.2
Price...........................................................................................................................................26
9.3
Place..........................................................................................................................................27
9.4
Promotions.................................................................................................................................27
10
The Launch....................................................................................................................................29
10.1
10.1.1
What................................................................................................................................29
10.1.2
Who.................................................................................................................................29
10.1.3
When...............................................................................................................................30
10.1.4
Where..............................................................................................................................30
10.1.5
Why.................................................................................................................................30
11
Budget...........................................................................................................................................31
12
Future Direction.............................................................................................................................32
13
Conclusion.....................................................................................................................................33
14
References.....................................................................................................................................34
15
Appendices....................................................................................................................................35
15.1
15.2
15.2.1
15.2.2
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15.2.3
15.2.4
15.2.5
15.2.6
15.3
15.4
15.4.1
Product Testing..................................................................................................................44
15.5
Price Quotations.........................................................................................................................46
15.6
55