Project on

Course 324: Entrepreneurship Development

Feasibility Planning of
A New Product

Executive Summary
We want to market Green Coconut Water. We have prepared this
feasibility plan on that basis. We have assigned a name for the product as
Jaul. Since the raw materials are very much available in our country, we
have decided to give the product an indigenous image.
Jaul is a kind of soft drink that provides the consumers with
processed green coconut water in bottles. For the marketing purpose of the
product we have decided to launch three product lines. The Jaul would be
launched in the market at 250 ml. 500 ml. and 1 Litre bottle.
We have set a reasonable price for the product so that all kinds of
people can afford to buy this soft drink. We have followed the Target
Costing pricing approach. We would gain a competitive advantage, as this is
a first hit in the market.
Our target is to maximize profit by providing maximum satisfaction to
the consumers. We will use the Societal Marketing Concept, which holds
that achieving organizational goals depends on how well the marketers
identify the needs, wants & interests and deliver the desired satisfaction
more effectively & efficiently than do competitors in a way that maintains or
improves the consumers & societys well being. We are using the natural
resources for manufacturing this product. This is very good for the health of
the people & it is also quite refreshing for the summer season.

We have targeted a huge market segment for the product. Bangladesh

is a large populated country. Lots of people are looking for such a product.
Green Coconuts are not available all the time. For example: a person
walking on the street. Suddenly he feels thirsty. Now if he wishes to drink
green coconut water he cannot find it easily. It is not always found in the
right place at the right time. If we launch our product in the market, a person
willing to drink green coconut water can have it from a nearby shop. At
present this is not possible. Our target market includes health conscious
people, sick people, sportspersons & many other consumers, which we
have segmented from the Demographical, Geographical, Psycho
graphical & Behavioral point of view.
Since this is a soft drink, once the product is well promoted, this
product will be sold well. The consumer can then use this drink to even in
dinner or lunch. A person going to see a sick relative in a hospital may buy
this product instead of the real green coconut, as it is very convenient for
carrying. We will also use an attractive packaging process that will
encourage some people to even taste the product for the first time. If they get
to like it, then the product might become favorable as it is natural & does
contain nutritional value.

We are not experts on anything. But we have certainly gone through

an in-depth marketing research policy that provided us with all the
information required for launching a new product.
The qualities of our team members are very dynamic. We are always
on the look out for opportunities that can both be profitable at the short run
& long run. As we are students of Marketing, we have lots of creativity. We
have gone through some theoretical explanation. This will help us
eventually.

We have prepared a financial documentation for this feasibility plan

of a new product. As we are introducing the product in three categories at
250 ml, 500 ml and 1 Litre bottles, we have prepared the Break-EvenAnalysis for each of the product line. We have prepared the feasibility plan
for five-year basis.
For 250mls the break-even point is at 4158004 Units. That means if
we sale 4158004 Units a year, we will make neither profit nor loss. So to
make profit we have to create a market demand in such a way so that more
than 4158004 Units are sold every year. Obviously the unit cost will
eventually come down because of the law of Marginal Cost. Then the breakeven point will also come down. But that is from the long run perspective.
So initially we might suffer loss but ultimately we would earn enough profit.
The consumers will first taste the product by consuming the 250ml bottles.
So we might gain a short run profit from that.
For 500mls the break-even point is 4914004.914 units per year. So we
have to sell more than 4914004.914 units to earn profit. We know that after
the product is well promoted, people will eventually consume more of
500mls, as pet bottles are more in demand. The price is such that people will
turn to the 500mls because we are providing them at lowest possible market
price.
For 1 Litre bottles we have a different plan. We know many people
are not going to consume the 1 Litre package. So we have assigned more
profit on them per unit. Our target is to sell less quantity of products but
achieving higher profit. For 1 Litre bottles we have estimated the break-even
point at 1724137.931 bottles per year. As we can see, we have prepared the
selling price in such a way so that, to be in a profit earning zone we have to
sell least amount of units comparing the other 2 product lines.

We have given an elaborate discussion on financial summary at the

later stage of the feasibility plan. We have followed the Target Costing
Pricing Policy; which means an ideal price is set first based on customer
considerations, then target costs will ensure that the price is met. We decided
the market price before. Then we calculated the estimated unit price & fixed
price. Then we decided how much profit margin is possible on each of the
product line. We have assigned three different profit margins for three
product lines. This price setting is based on the current market research.

Table of Content
1.0

Product Description

01

Product Portrayal
Product Profile

01
02

1.1
1.2
2.0

Market Research and Analysis

2.1
2.2
2.3

3.0

Market Description..................................................................................... 03
Market Segmentation and Targeting.......................................................... 03
Competitive Analysis.................................................................................. 06

Market Plan............................................................................................. 10
3.1
3.2
3.3
3.4

4.0

03

Pricing Strategies........................................................................................
Promotional Strategies............
Distribution Channel..
Services and Warranties.............................................................................

Manufacturing and operations....

4.1
4.2
4.3

10
15
16
16
17

Locations..................................................................................................... 17
Human Resource......................................................................................... 17
Technological Aspects 17

Entrepreneurial Team

18

Entrepreneurs
Management Orientation

18
18

Financial analysis and Documentation.

19

Sales Forecasting
Profit and Loss Projection

19
20

Appendix ....

21

5.0

5.1
5.2
6.0

6.1
6.2

1. Product Description
1.1 Product Portrayal
Jaul is a product that serve different segment of customer. The
product is green coconut water, which is unique in the current market. The
green coconut water will be processed and sold in glass bottle of
convenient sizes of 250 ml, 500 ml and 1 liter. The green coconut water will
be very much refreshing and provide great support to the sick and health
conscious people. Our target market is very large with different segments.
Our expected sales are very high. The development cost is tk.2.5 million
approx.

1.2

Product Profile
Name of the Product

: Jaul

Type of Product

: Green Coconut Water

Ingredients

: Pure natural green coconut water,

Sugar, mineral salts, vitamins C.

Container

: Stylish glass bottle

Container size

: 250 ml, 500 ml, 1 Litre

Product Price

: 250 ml for Tk. 12

500 ml for Tk. 18
1 litre for Tk. 38

Estimated Durability

: 12 Months from date of

manufactured

Machinery used

: Advanced technology imported from

USA, UK and Netherlands.

Brand Slogan

: Coola Coola Always Refreshing

Product Logo

2. Market Research and Analysis

Our company wants to develop and introduce a new Product. So, we
have gathered information through in-depth interviews. We made a survey of
the market to have a clear idea about our market, our customer demand,
needs and wants. This information helps us to know about the current market
and prospects of our new product.

2.1 Market Description

Bangladesh is a country of about 150 million people.. The total
market size of the soft drink industry is about 20 million and day by day it is
increasing. We have a spread nationwide market of different convenient
product. People are nowadays very much concerned about the market and
product conditions. So we have a growing prospect of customers of Jaul.
Among the population we worked out few segments of customers who will
prefer our product most.

2.2 Market Segmentation and Targeting

Market Segments
We have observed and analyzed the market and based on the nature of
the market we segmented the market in the following sectors:

Geographic Segmentation:

Sylhet
Rajshahi
Khulna & Barishal
Chittagong
Dhaka

Demographics:

Individuals
Family
Sportsman
Business buyer

Psychographics:

Higher class
Higher mid class
Middle class
Behavioral:

Sick people
Health conscious
Sophisticated who take the new product from the market

Target market and projections:

Analyzing all the segments, we decided our target market according to
our product category. The target customers of Jaul are sick people, health
conscious people, sportsmen and tourists. The company decided to charge

Tk. 12 for 250 ml bottles, Tk. 18 for 500 ml bottles and Tk. 38 for 1 Litre
bottles, if we consider price versus taste received then we can see that taste
received is more in value. Therefore charging the mentioned prices are
justified. The following graph gives a clear idea of our target market.

Target Market:
1.
2.
3.
4.

Health Conscious - 32%

Sick people - 43%
Tourist - 3%
General people - 22%

Target Market
Health Conscious
Sick People

32%

Tourist
Others

43%
22%

3%

We separate our target market into four different segment based on

their geographic, demographic, psychographic and behavioral
characteristics.
I. Health conscious: Health conscious people basically the sports
person are one of our largest target market. In this segment, we get a
lot of potential customer. One third of our total population is young.
This is a significant number that we have to concern about them and

provide product, which is fit for them. About 5 million people of this
total number are health conscious. They spend about Tk. 500 in a
month in average.
II. Sick people: Sick people are one of our major considerations. More
than 1 million children suffer from diarrhoea that need liquid food.
Not only child but also the adult might suffer from those types of
problems.
III. Tourists: Every year a huge number of tourists visit Bangladesh. We
want to provide them with Jaul.

IV. General Customers: Besides the above segments, the general

customers will acquire a significant portion of our target market.

Market Needs:
Jaul wants to satisfy its customers need. Thats why it is important
to identify the market needs. Our first consideration is to provide the best
product to its customers. Thats why we offer three different sizes of bottle
with different prices for its different segment of customers.
250 ml
500 ml
1 litre

: The lowest price for the rural mid social class and individuals.
: Its target the sick people and tourist
: For a small family.

2.3 Competitive Analysis

The Soft drink industry is very much competitive. Many soft drink
companies have acquired a significant portion of the market. But the unique

features of Jaul will take it far beyond the reach of the competitor.
Because, no one has yet thought about selling green coconut water in such a
specialized way. To evaluate our prospect of Jaul in the current market,
we have analyzed the market situation in various ways. Following are some
demonstration of the analysis:

2.3.1 SWOT analysis:

The product existence in the future is depending on its strengths,
weakness, opportunities and threats analysis:
Strengths:
1.
2.
3.
4.
5.
6.

Available input materials

Low production cost
Technological and marketing knowledge
Strong distribution channel
Easy manufacturing process
Reasonable price

Weaknesses:
1. It is easy to copy the idea by others
2. Taste differ from the natural green coconut water
3. Green coconut water cannot be preserved for longer period
Opportunities:
1.
2.
3.
4.

Monopoly market
Large market
High demand
Might have a chance to get subsidies by Govt. to export

Threats:

1. High competition in future by copying the idea

2. Entrance of new product
3. Alternatives are avoidable in some segment
4. Uncertainty of launching a new product.

2.3.2 Competitor Analysis

The major soft drinks and juice companies of current market are:

Pran Groups
Starship
Uro Cola
RC Cola
Coca cola
Pepsi
Acme
Danish
Foreign Products etc.

Distinct Competency:
These companies can try to entrance our market by launching new
product lines to compete us. Yet, we have distinct competitive advantage.
That is our product is still brand new. The other companies will take
sometimes to enter into the market. Till then we can have a monopoly
market condition. The other advantage that we have is lower price. We will
sell products in reasonably lower price then other competitors do.

Strategies against competitors:

To compete with the major competitors we can adopt the following
measures:
Providing the best service to create high customer
satisfaction
Reasonable and acceptable pricing
Promising and providing top quality product
Launching highly effective mass promotional activities
Continuous innovation and modification of the products
Creating and maintaining long term customer relationship
Creating Brand Loyalty among the target consumers

3. Market Plan
Pricing Strategies
We have decided to set a reasonable price for our product when we
will develop it. We considered many factors in setting the pricing policy. We
will describe a six-step procedure:

3.1.1. Setting the pricing objectives:

Our company has decided where it wants to position its market
offering. We have chosen our objective to maximize market share. We
believe that a higher sales volume will lead to lower unit costs and higher
long-run profit. We have set the lower price because we assume that the
market is price sensitive. Our overall objective is to capture the maximum
market share by setting lower price.

3.1.2. Determining Demand:

Each price will lead to different level of demand and therefore have a
different impact on companys marketing objectives.

3.1.3. Estimating costs:

We have estimated the cost and want to charge a price that covers the
cost of production, distribution and selling the product, including a fair
return for its effort and risk.

3.1.4. Types of cost and level of production:

There are two types of cost: a) fixed and b) variable. In our new
product development project fixed cost is 2,00,00,000 taka. Fixed cost
includes- machinery, monthly bills, and salaries of employees and so on,
regardless of output.
There are some variable costs like-cost of bottle, packaging and so on.
These costs tend to be constant per unit production. We have estimated that
per unit variable cost is Tk. 6.3 for 250 ml, Tk. 12.6 for 500 ml and Tk. 24.4
for 1 litre.

3.1.5. Analyzing competitors costs, prices and offer:

We have analyzed our competitors price and found that Pran charges
tk.10 for 250 ml bottle, Starship charges tk. 12 for 250 ml Pac.

3.1.6. Selecting a pricing method:

We have chosen the target costing method to set price for our product;
pricing that starts with an ideal selling price based on customer
considerations, then target cost will ensure that the price is met.

Promotional Strategies:
To acquire a strong position in the market, we need to give special
emphasis on effective promotional activities. In order to get the maximum
market share we will have to use all four tools of marketing promotion.
Specially, advertising through mass media will support us a lot.

3.2.1 Advertising:
We initially will give more emphasis on paper ads and TV
commercials. Because, advertising through these media is the most effective
way to reach the customers and position our product in their mind. We are
anticipating that this will have a massive impact on the teenagers and other
enthusiasts. Few neon signs and bill boards of Jaul also can be set up in
some core points of the city. We hope to reach 75% of our customers
through effective advertising.

3.2.2 Personal Selling:

Though personal selling skill is not that much effective for convenient
products like Jaul, we will inspire and train the sales persons of the retail
stores to convince people to buy our product when they will come to buy
any drinks item. The sales persons will inform the consumers about the cool
refreshing taste of Jaul and about the nutritious aspects. We hope that will
play a significant role to increase our sales.

3.2.3 Promotional Tools:

We have also planned to apply some promotional tools. Initially for

sometimes we will distribute our product at 50% discount just make our new
product familiar with the customers. This will be the market-testing period
for our product. Later, we may apply the strategy of giving gifts, lucky
coupons, tour tickets depending on the market and competitive situations.

3.2.4 Public Relations:

We have future plans to hold seminars, commit social development,
supporting social activities, to arrange cultural functions and mobile game
shows for publicity purpose.

3.3 Distribution Channel

In the initial stage, we will distribute the products with our sole
distribution channel. When our market will spread out, we will distribute our
products through dealers. We will set our own outlets in few core market
positions. When we will go for mass marketing, we will supply our product
nationwide through dealers. Our dealers will take the products to every
district of the country. Jaul will be available in all retail stores of the
country.

3.4 Services and warranties

As we are targeting to the top most customer satisfaction and building
long-term customer relationships, there is no alternative for us rather than
providing top quality service. Giving the customers timely and instant
quality service is our primary concern. We even planned to open few
customer service centers where will response to customers interactions. We

will collect information, suggestions, ideas and opinions of the customers

through these centers and will innovate and modify our product accordingly.
We also will change any defected product.

4. Manufacturing and Operations

4.1 Locations
We will set our manufacturing and other working areas in convenient
locations. We will prefer the locations to set up our manufacturing firms,
warehouses and inventories in different core business points of the country
where it will be easier to both collect the raw materials and transport the
final goods to the market.

4.2 Human Resource

The board of directors will be responsible for the recruiting activities.
Recruiting will be done through written tests followed by interviews.

4.3 Technological Aspects

To create and innovate new quality products we need to use advanced
technology. We need high tech machineries imported from the foreign
countries. Not to mention, skilled people to operate them. We have already
studied all the technical aspects and prepared a list of instruments and their
costs. The machinery will be collected when required.

5. Entrepreneurial Team
5.1 Entrepreneurs
The entrepreneurial members are:

Tanvir Ahmed Chowdhury

Rezwana Hossain
Faisal Ahmed
Mehejabin Azam
Md. Mafizul Islam
Shibli Sadiq Ahmed

5.2 Management Orientation

Chairman &
President

Managing
Director

Executive

Director
Finance

Director
Manufacturing

Director Sales

Director
Marketing

Manager

Manager

Manager

Manager

Executive

Executive

Executive

Executive

Executive

Executive

Executive

6. Financial Analysis and Documentation

6.1 Sales Forecasting
The following Table and graph show our expected sales for the coming five
years:
Expected Sales
(Per year)

250 ml. Bottle

500 ml.
bottle

1 Litre bottle

First Year

4000000

4500000

1500000

Second Year

4500000

5000000

1700000

Third Year

5500000

5800000

2000000

Fourth Year

6000000

6500000

2400000

5 6700000
Years

2500000

Sales for
Fifth YearExpected6300000
8000000
6000000

250 ml. Bottle

4000000

500 ml. bottle

1 Litre bottle

2000000
0
1st 2nd 3rd 4th 5th
Year

6.2 Profit and Loss Projection

For 250 ml.
Item
Year 1
Year 2
Year 3
Year 4
Year 5
Total Sales 44440000
49995000
61105000
66660000
69993000
Total Cost (45200000) (48350000) (54650000) (57800000) (59690000)
Total Profit (760000)
1645000
6455000
8860000
10303000
Tax 40%
--658000
2582000
3544000
4121200
Net Profit
(760000)
987000
3873000
5316000
6181800
For 500 ml.

Item

Year 1

Year 2

Year 3

Year 4

Year 5

Total Sales

75015000

83350000

96686000

108355000

111689000

Total Cost

(76700000)

(83000000)

(93080000)

(101900000)

(104420000)

Total Profit

(1685000)

350000

3606000

6455000

7269000

Tax 40%

---

(140000)

(1442400)

(2582000)

(2907600)

Net Profit

(1685000)

210000

2163600

3873000

4361400

For 1 Litre
Item
Year 1
Year 2
Year 3
Year 4
Year 5
Total Sales 54000000 61200000 72000000 86400000 90000000
Total Cost (56600000) (61480000) (68800000) (78560000) (81000000)
Total
(2600000)
(280000)
3200000
7840000
9000000

Profit
Tax 40%
Net Profit

--(2600000)

--(280000)

(1280000)
1920000

(3136000)
4704000

Appendix
Reference
1. Entrepreneurship: New Venture Creation
Author:
Edition:

David H. Holt
2002 Print

2. Entrepreneurship Development
Author:
Edition:

Hisrich and Peter

5th Edition

3. Internet

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(3600000)
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