Product Development Strategies BACHELOR OF ENGINEERING (HONS) IN Electrical & Electronics Engineering A330MED – Product Development Strategies COURSEWORK II Students Names: A.V Thushara: 4559762 M.K.K.R Mawella: 4559751 Lecturer : Mr. Chris Kariyawasam Submitted on : 30/05/2012 Word count excluding appendix - 5245 1 | Page A330MED
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Product Development Strategies
BACHELOR OF ENGINEERING (HONS)
IN
Electrical & Electronics Engineering
A330MED – Product Development Strategies
COURSEWORK II
Students Names: A.V Thushara: 4559762
M.K.K.R Mawella: 4559751
Lecturer : Mr. Chris Kariyawasam
Submitted on : 30/05/2012
Word count excluding appendix - 5245
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Declaration of originality
This report is our work and has not been copied in part or in whole from any other source where
duly acknowledged. As such, all use of previously published work (from books, Journals,
magazines, Internet sources) has been acknowledged within the main report to the list of
references at the end of the assignment report. This report is submitted in partial fulfillment of
requirements of the award of Bachelor of Engineering (Hons) in Electrical & Electronics
Engineering.
Copyright Acknowledgement
The joined copyright of this assignment report belongs to the Auston Institute of Management
Ceylon Ltd., Colombo 03, Sri Lanka, The Coventry University, Coventry, United Kingdom, and
us. (A.V Thushara & M.K.K.R Mawella)
Students Names: Date: 30/05/2012
A.V Thushara ………………………
M.K.K.R Mawella ………………………
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Acknowledgement
First we would like to thank our parents for their guidance and financial support, for the help in
studies and its success. We would specially like to thank Mr. Chris Kariyawasam (BBA (hons),
MBA, MCIM, CPM (Asia Pacific) for his support and guidance to understand the subjects and help
he has given us to complete this write-up. We would like to thank librarian for letting us to
borrow subject related books and magazines, and furthermore our group specially would like to
thank Mr. Malith Lowe for providing us internal marketing data of Sri Lanka Telecom Mobitel
PLC.
This report would not be successful without support of the Institute itself, so we would like to
thank the staff of the Auston Institute of Management Ceylon Ltd. May Tipple Gem Bless you
all!
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Abstract
Since the mobile network industry has been sophisticated with the introduction of high speed
internet services competition has been doubling on a daily basis. Even through Mobitel was the
first to launch 3.5Mb HSPA, internet technology to Sri Lanka in 2002 now the same technology
and similar sort of technology is being used by competitors to offer an equal service to the
customer and new customers are requiring a further speed much sophisticated internet service
as it had become a part of day today life of a typical human being.
During the time when 3.5Mb HSPA internet service was launch for the very first time there
wasn’t a gap between the growth level of internet service and demand level for high speed
internet but according to the most recent researches it has been proven that, there is a gap has
been created due to the high expectation of customer. Consequently the completion has now
stared emerging stronger than ever before which simultaneously creates a new high speed
internet service through which customers can experience browsing internet at a 28.1 Mbps.
Since competitors such as Dialog, Etisalate and Airtel have the capability of making use of this
opportunity it’s better to be reactive rather than being protective after competition exploits the
available opportunity. This opportunity provides Mobitel with an extraordinary market growth as
the need for a speedier internet service has started to bloom now. The existing 3,5Mb HSPA
technology is the principle strength and the tool available for Mobitel to kick off the competition.
Thus the following report looks at the introduction of new 28.1Mb HSPA technology to the
existing internet market through a thorough evaluation of the strategies to used and resources
such as finance, human and other physical resources which would be required to successfully
launch the new service whilst identifying the key factors of barriers which may cause to the
3.1 The role of marketing planning process.............................................................................29
3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet.....................................................................................................................................32
3.3 Utilization of segmentation, targeting and positioning and their importance......................36
3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them.......................................................................................................40
The tactical plan and promotional plans will be implemented by using the existing 3 marketing
functions namely pre-paid, post-paid and M4 along with newly recruited personal who are
specialized in IT and engineering. There will be no changes in the positions of brand or
marketing managers thus control and monitoring of distribution and marketing activities will be
taken care by regional and territory managers with the support of top level management.
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3.0 Marketing planning process
Marketing is based on the concept that an organization should identify the consumers’ needs
and wants and then provide products or services accordingly to a satisfactory level. Failure to
understand could result in a disaster for the organization. Marketing is a relevant discipline for
all organizations, regardless of the business. (Kotler 2007)
The importance of segmentation, targeting and positioning strategies would be evaluated for the
successful implementation of the revised marketing plan of 28.1MB HSPA whilst being aware of
the barriers that may be deter the marketing planning and implementation process. Ultimately
the required tools to mitigate the barriers would be evaluated for success.
3.1 The role of marketing planning process
Marketing planning is process which is comprised of several stages which may vary from
company to company depending upon the objectives and capabilities. Mobitel usually follows
the basic steps on a marketing depicted below.
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The above structure is key advantages for the successful implementation of the marketing plan
which was formed on a conceptual basis.
The defined marketing planning process enables Mobitel to better manage day to day business
activities through the criteria depicted below.
Defines the market
Marketing planning process firstly obtains information regarding to industry and
market which is comprised of competitors, customers, trends and growing
markets as well as changes in both external and internal environment.
Information obtained would then enable Mobitel to indentify key strengths, which
can be exerted to exploit the opportunities created by gaps.
This definition helps Mobitel to be clear of the following criteria.
Where the Mobitel is now?
Where the Mobitel wants to be in the future?
How does the Mobitel get there?
And how does the Mobitel ensures its arrival?
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The clear understanding of above elements would ultimately tempt Mobitel to come up with new
SMART objectives and strategies so as to exploit the opportunities emerged. In order for the
company to successfully make it, marketing planning process is used since plays the following
significant roles in addition to the above role.
Sets up the direction and the focus of the organization.
The marketing planning incorporates both mission and vision of the company and
present and future directions of Mobitel. Having set them only the stated objectives and
strategies will be focused with the intension of coming up with a well tuned tactical plan.
Tool to communicate the purposes and the future needs of the organization
Mobitel is responsible to convey its new changes namely the launch of M4 broadband
service to relevant stakeholders whilst the organization clearly shows its ethical and
cultural consideration. This produces the background to objectives of the company in a
socially acceptable manner.
Acts as operational framework
Frame sets out plans for each aspect of the strategies to be used when achieving the
stated objectives whilst outlining the strategies. Also identifies required resources such
as time, budgets, physical resources, human resource etc for the successful
implementation of plan.
Helps to allocate budget and resources
Cost of each stage of the plan will be monitored for the effective allocation of budgets
which helps to reach objectives with no exceeding budgets and resources will be
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managed in order to omit delays and inefficiencies which may emerge though out the
plan implementation.
A mechanism to measure performance
Monitoring and controlling tools of marketing plan helps to measure the performance of
M4 plan throughout the entire implementation. This is useful to evaluate overall
performance and identify areas where what went wrong and what really caused the
unlimited effect.
According to McDonalds 2007 the overall purpose of marketing and its principal focus is
the identification and the creation of a competitive advantage. As it’s defined by
McDonald, Mobitel had the same need of marketing planning for a variety reason such as
follows,
The speed of technological alterations
As a technology oriented company Mobitel always watchful of alterations made today’s
technology since technology has been the key fact their competitive advantage.
Marketing planning process facilitated Mobitel to identify alteration has been occurring
over the last few years in Sri Lanka telecommunication industry.
To raise the competiveness and also for the marketing people to identify the sources of
competitive advantages.
Having identified the changes in technology then leads the company to develop a competitive
advantage which will grow the business in return. Researches carried out to identity the
changes happening in the market helped to come up with a break through idea of new service
establishment.
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3.2 Importance of undertaking a marketing audit for the successful launch of M4 broad band internet
Marketing audit is a comprehensive, systematic, independent and periodic examination of a
company’s, marketing environment, objective, strategies and activities with a view to
determining problem areas and opportunities and recommending a plan of action to improve the
company’s performance. (Kotler & Armstrong 2005)
The main 3 purpose carrying out an audit is to,
Identify the organization current market position.
Understand the environment opportunities and trends
Clarify the organization ability to cope with environmental demands
(Wilson & Gillgon 2005)
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The audit facilitated Mobitel to identify where the company is at present and this is the
basis upon which it can decide where it desire to head in the future. The audit which was
carried out for the implementation of M4 is as below,
The above systematic process enabled Mobitel to obtain a huge amount of information relevant
to the specific business need. In order to successfully launch M4 internet service a thorough
understanding of the external and internal environments were required and that was fulfilled
successfully.
Since the market is dynamic tools such as PESTEL, porters’ five forces and SWOT were
used to identify the key issues and opportunities that could be exploited.
Very firstly Mobitel need to analyze the most influential factors in the external
environment over which the company has no control. The audit of the macro
environment was done under PESTEL frame work,
The study of the macro environment facilitated the company to identify the most influencing
factors which may affect the M4 launch. Especially the political exercises relevant to
telecommunication were very essential as a failure to adopt the internal process in accordance
with the external factors might result in a severe financial lose as well as reputation lose.
Information obtained from both Macro and Micro environment enabled the Mobitel to
identify the market trends, market gaps and opportunities as well as the growth and the
profitability of the market.
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Micro audit obtained information relevant to the industry, customers, competitors and
suppliers which in turn helped Mobitel to come up with smart objective and great
strategies to the successful launch of M4.
Information may be utilized throughout the entire planning and implementation of the M4
plan. Basically the analysis was done focusing on men, money, materials, machinery
and minutes. The adequacy of resource formed the foundation for the commencement of
the plan also to better manage internal teams engaged in the plan.
Also audit was useful to form a clear picture of the effeteness of the product and service
portfolio of the company which defined how well each product in the market.
Strategic audit was able to identify the necessary strategy for the successful
implementation of the M4 plan whilst fine tuning the marketing mix.
Thus it’s evident that the audit is must for the successful implementation of the
marketing plan because of the following key advantages,
Frequent audit gives strength to planning process and indirectly it enables Mobitel to
stay ahead of the competition.
As the marketing environment is rapidly changing Mobitel needs to have structure in
place in advance so an audit gives the way for a company to build up the necessary
structure.
It creates the opportunity to identify the problems at an early opportunity before affecting
the entire business process of the company.
Even though there are several advantages in carrying out an audit there were certain
unfavorable issues faced by Mobitel research and development groups. Those factors have
potential of deterring the audit process and destructing the entire marketing planning process.
Those factors are depicted below,
Time was one of the key issues face in term of gathering information.
(When obtaining information in northern and eastern markets R&D group had to stay
therefore nearly 2 weeks)
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The increasing speed and turbulence of the business environment results in
timeliness.
(By the time the audit gets complicated the information gathered might be out dated and
re obtaining information will take time and cost)
A significant cost had to be incurred.
(The expenses of R&D groups, transportation, accommodation cost etc had to incur
during the period)
Inter-departmental coordination difficulties.
Finance department was reluctant to allocate budgets for audit as it was quite high
therefore a problem was raised between marketing and finance
The most critical issue was the completion of audit within the given time of period.
3.3 Utilization of segmentation, targeting and positioning and their importance
Before the most appropriate strategy is developed its necessary to determine both cooperate
objectives and the corporate objectives of the company. Thus having identified the below criteria
only the marketing strategy would be developed.
Mission and the vision of the company and the corporate strategies.
Opportunities and capabilities of Mobitel.
Marco and Micro environment should be scanned for information regarding to customer
and competitors.
According to the strategies report the corporate strategy is to differentiate the company in a
broad marker context by practicing new product development as it’s a less risky strategy
relatively to market development and diversification. In order to best support the strategic
approach segmentation, targeting and positioning strategy as depicted below.
3.3.1 Segmentation
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Segmentation is the process of dividing a total market on some criteria into several groups
consisting of homogenous customer so as to enable the marker to approach each segment with
specially designed marketing mix.
As the definition implies this process helps Mobitel to lunch new M4 service with the advantages
which ease stepping into targeting approach.
Segmentation could be done on a demographical basis which comprises factors such as
age, income, profession, education.
Mobitel basically segments the entire market based on age, income, profession and
education as these segments are showing a signification growth and a high potential for
high speed internet which ultimately results in high profitability.
Segmentation is also done on the basis of Geographic’s which is primarily done within a
country, provincially and state wise or with a foreign market.
Since the core strategy is catering to existing market with a new product, the entire
island will be considered as a segment.
Segmentation for M4 will also be done on the basis or usage of pattern
Consumers are classified as heavy users and light users as well as brand loyal users
and switchers who enable the company to fine tune the marketing mix in terms of
catering to each area.
Psychographic and life style are also another major segment basis which enables the
marketing team to better understand the interests, activities, attitudes and behaviors of
customer through psychographics.
Segmentation gives a clear understanding of the difference that exist between
customers groups to which Mobitel caters and hoping to cater which help the company
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to first target particular segments and fine tune marketing mix so as to satisfy each
segment perfectly
It also exposes the gaps in the market. It shows groups that are not being satisfied with
the available products and even the groups which are looking for something new.
Segmentation facilitates to retain the customer by catering beyond the expectation with
specialism since it’s very costly to recruit new customer that retaining existing customer
this really helps company to market it service as it focuses on the existing market.
Ultimately segmentation assists the marketing team to estimate sales and profitability by
analyzing each segment separately.
Thus the new M4 broadband service can be successfully implemented as its well justify by the
segmentation process which makes the investment secure.
3.3.2 Targeting
Having segmented the marketing the next step is to decide which of these segments the
company wishes to focus on for its marketing purposes. The selection of segments and
targeting would be done based upon dimensions identified by Kotler
Measurable
Accessible
Sizable
Profitable
Based on above criteria there are basically 4 possible strategies to be utilized.
Concentrated marketing
Differentiated marketing
Undifferentiated marketing
Niche marketing
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Since Mobitel expects to cater to more than one segment differently Differentiated marketing
approach will be used.
Laptop and PC users will be target based on their profession and income. Elements of
the marketing mix such as prices and promotions will vary from other marketing mic
targeted at following groups.
University students will be a primary target as distance learning programs and online
programs being developed. The prices and promotional mix varies catering to these
targets.
Private sector and government sector employees will be targeted as its vary much
easier as most of the government servants use Mobitel per-paid packages.
Thus all segments stated in strategic report will be targeted as all require the benefits of
convenience through speed and quality.
3.3.3 Positioning
According to Kotler et al 1999
A product positioning is the way the product is defined by consumers on important attributes the
place the product occupies in consumers mind relative to competing products.
The main purpose of positioning is achieving a competitive advantage over the company’s rivals
which can be perceived by the customer and successful positioning can be done by balancing
the needs of the customers with the available resources.
In terms of positioning there are several factors which can grow the brand in consumers’
mindset.
Credence
Attributes such as speed convenience and reliability used to create a position is the market thus
the product is placed in target groups minds as a distinctive product.
Consistency
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The attributes offered such as quality, speed, convenience and reliability will be consistence
through the marketing mix used for each target group.
Competitiveness
The product must offer benefits that are not offered by any other competitors in the market thus
the product is placed in target groups minds as a distinctive product.
Clarity
Clear positioning is an issue which means the product has to act as it says Mobitel will position
its new internet service in mindset of customer as the premier 28.1Mbps internet service
provider in Sri Lanka as well as in south Asia which provides the highest speed and the highest
reach at the lowest price.
3.4 Potential issues that may be encountered in implementation of the marketing plan and proposals to address them
The most difficult part is implementation of the plan. It’s easy to do planning of strategies
relatively to implementation. Therefore there are 3 key areas that are essential for Mobitel for
implementation of M4 marketing plan.
Communicating the marketing plan across the organization
Specifying the required resources, finance personal and time
Changes to the organizational structure and culture.
There are several issues that may be encountered during the implementation of the M4 plan
which in turn may course destruction.
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4.0 Conclusion
As the above write-up implies in order for Mobitel to successfully launch its new services to the
existing market its vitally necessary to have gone through a well established marketing planning
process which crates clear picture of market situation and the exact cause of actions which may
be used to successfully execute the marketing plan. But in order to have established a better
plan a successful audit is necessary because that’s what exhibits the available gaps which may
be made us. With a well established strategy like STP Mobitel may gain an extra advantage to
be more successful in new service launch because strategies will indicate more opportunities
while preceding through the plan to have it done better way also it will create a futher
sophisticated competitive advantage to the company. Being aware of barriers will be vety
substantial as they could deter the process of marketing plan. Therefore in order for Mobitel to
successfully implement the marketing plan solutions will be needed to overcome the barriers
which will lead the company to the highest competitive level.
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5.0 List of References
Lanka Business Report (2011) Sri Lanka telephones overtake population: Central Bank [online] available from <http://www.lbr.lk/fullstory.php?nid=201105251731037359> [25 April 2012].
Telecommunications Regulatory Commission of Sri Lanka (2011) Statistical Overview [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012].
Annual Report (2009) Sri Lanka Telecom PLC. (page 55)
Inforsrilanka.net (2011) Mobitel 4G Lite [online] available from <http://www.trc.gov.lk/information/statistics.html> [25 April 2012]
Pelsmacker, De P. (2004) Marketing communications. London: Pearson Education.
Kotler, P. & Armstrong, G. (2008) Principles of Marketing. New Jersey: Prentice-Hall Inc.
Phil, M. & Graham, H. (2009) The Marketing Planning Process. London: Elsevier.
Kotler, P. & Keller, K. (2011) Marketing Management. New Jersey: Prentice-Hall Inc.
Ulrich, T. & Eppinger, D. (2012) Product Design and Development. New Delhi: Tata McGraw-Hill Ltd.
Information and Communication Technology Agency (ICTA) (2010) Sri Lanka Mobile Market [online] available from <http://www.icta.lk/en/e-sri-lanka.html> [11 May 2012]