a study on new product development with tata nano and comparitive study on maruti 800
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DESCRIPTIONrevised project on new product development with tata nano and comparitive study with maruti 800
PREFACEThis is the specialization project on a study on new product development for Tata Nano along with a comparative study between Tata Nano and Maruti 800. The objective of this study is to gain knowledge about how Tata brought this new product i.e., Nano up to the development stage and finally going to launch it on 23rd of March. The project was assigned by Dipti Mam (co-coordinator) ordinator). During the project I researched on how Tata developed Nano costing Rs 1 lakh and what will be its effects. This study also includes comparison between Tata Nano and Maruti800. A survey was also done for understanding preferences. Thus, this study is based on new product development in marketing for Tata Nano.1
ACKNOWLEDGEMENTI am thankful to SNDT University and Gandhi Mahila College and specially BMS department who provided me with the opportunity for carrying out the study. I would also like to acknowledge my sincere thanks to our co-ordinator Dipti Mam. Under their valuable guidance, constant interest and encouragement, who have devoted her ever-precious time from their busy schedule and helped me in completing the project. Her co-operation was not only useful for this project but will be a constant source of inspiration for me in the future. I express gratitude to various faculty members especially Sandeep Sir for his valuable
guidance which was a good learning experience in order to make my efforts successful. Special, continual assistance while
collecting the data was provided by the respondents. I wish to acknowledge my special thanks to them for their help and cooperation in order to complete this project. I am also thankful to those who have helped me intellectually in preparation of this project directly or indirectly. I am deeply indebted to the various sources of information from relevant sites from internet and books which helped me a lot in my study and helped me to learn a lot.
Table of contents:Sr. No. subject 1 Objective of research 2 Methodology of research Pg. No 5 6
Introduction to the subject new product 3 development 7 4 Introduction to Tata Nano 5 Tata Nano and new product development 6 Some myths about Nano 19 25 44
Comparison between Nano and Maruti 7 800 49 8 Data collection method 9 Analysis of data collection 10 Various charts 11 Some feedback about Nano 12 Conclusion 56 60 60 67 70
Research objectiveso To study about how a new product- Tata Nano was developed based on marketing theory of new product development. o To study about what made possible for Tata to develop and produce a car for just Rs. One lakh. o To study the objectives and target customers of Tatas one lakh car o To study and compare between Tata Nano and Maruti 800o
To study on customers buying behavior and preferences and views about Tata Nano and Maruti 800 by various methods of data collection.
RESEARCH METHODOLOGYo Research methodology deals with the various methods of research. The purpose of the research methodology is to describe the research procedure used in the research. o Research methodology helps in carrying out the project report in by analyzing the various research findings methods. collected through the data collection
Introduction To New Product DevelopmentMeaning Of Product:E.g.:- milk, computer, shoes, service after sales, railway services etc. a product can be divided into two categories o Tangible goods o Intangible goods Tangible products are known as goods that can be touched, felt and seen. E.g.:- computer, mobile phone etc Intangible products are known as services that cannot be touched and seen as the customer can feel and experience only after utilizing it. E.g.:- service after sales
New Product Development:A product can be considered new under the following situations: New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of existing products Repositioning Cost reductions
Stages Of New Product DevelopmentBefore the introduction of a product into the market, it goes through several stages of development. These stages are known as stages of new product development. It includes the following:
Idea Generation:Companies seek new ideas to enhance the performance of the existing products and to innovate new ideas. This stage is called idea generation stage. There are many sources for idea generation. It may be from customers, dealers etc. Employees throughout the company can also be a source of idea. Toyota claims that its employees submit two million ideas annually over 85% of which are implemented.
researching competitors products and services. They can find out what the customers like or dislike about their competitors products. Ideas can also come from investors. External research, surveys industrial publications research and development etc. But the main source of idea generation is the customers by their grievances and complains and feedback. However, although ideas can flow from many sources, it is not feasible to implement all the ideas generated due to lack of time and capital.
Idea ScreeningThe main purpose of idea generation is to collect a larger number of ideas. However, not all ideas can be commercially viable. Therefore, the companies filter the less viable ideas with the help of systematic process. Companies can use various parameters to screen the ideas such as market size, technical capabilities, potential competition etc.
Addressing the following issues will also help the companies to analysis the attractiveness of ideas. Whether the product idea match the existing products of the company. The degree to which the new product can cannibalize product. Companys ability to produce and market the product. Buying behavior and the probable the sale of the existing
changes in the environment. While screening the ideas, an
organization may commit two types or errors. Drop error where the firm rejects a very good idea. Cro error where a company selects a poor idea.11
Concept Testing And Development:All ideas that survive in the process of screening will be studied in details. They will be developed into mature products. At this stage, the idea is submitted for the external evaluation to get a feedback from the market. It helps a firm are organization to collect important information like customers initial reactions towards the product development. During this stage, new product idea is described in the form of one or more benefit that is then presented to a sample of potential customers for their reactions.
Marketing Strategy:Following a successful concept test, the new product manager will develop a preliminary strategy plan
for introducing new product in the market. The plan consists of three parts. The first part describes the target market size, structure and behavior for the first few years. The year. The third part of marketing strategy plan describes the long run sales and profit goals and the marketing mix strategy over time. second part outlines the planned price
distribution strategy and marketing budget for the 1st
Business Analyses.After management develops the product
concept and market strategy, it can evaluate the business attractiveness. Business analyses are the first in-depth financial evaluation of new product to be developed. Here management needs to prepare sales cost and profit projections to determine whether they satisfy company objectives. If they do, then concept can move to the development stage. SOWT analysis will be conducted at13
this stage by the organization. It following:
Total sales estimation:These are the sum of estimated first- time sales, replacement sales and repeat sales. Its method depends upon whether the product is one time purchase(an engagement ring), an infrequently purchased products like toaster, auto mobile etc. or a frequently purchased products like consumer and industrial non durables.
Estimation costs and profits.The R&D, manufacturing, marketing and financial departments estimates the costs. The profitability of the new product is estimated through various financial tools. The simplest technique is the breakeven analysis in which the management estimates how many units of the product the company would have to sell to break even with the given price and cost structure. If the management believes that sales could easily reach the break even14
number, it is likely to move the project into development stage.
Product DevelopmentIn this stage, detailed technical analysis is conducted to know whether the product produced at costs is low enough to make the final price attractive to the customer. Here a working model or a prototype is developed to disclose all tangible and intangible attributes of the product. A product protocol is prepared which is a detailed downiest containing the important attributes that are expected in the product. Once the protocol has been developed, product. it is handed over to the research the development department to develop the prototype of the
Test Marketing:The test marketing is the stage where the product is introduced in a few selected cities. During this stage, the company has to fate the following expense: High advertisement High manufacturing cost. High distribution cost etc. For testing the product, marketer needs to make the decision on the following issues. The no. of cities in which the product is to be tested. Geographic location of the