New product development Plan :

Organic Laundry Detergent

A Digital Space Demonstrative Report: New product development

Table of Contents

The purpose of this presentation,

is to serve as an example to

potential clients of development

action plan for a new product

development Plano.

This Presentation is about

Organic Laundry Detergent.

Business Evaluation:

● Product

● Staffing/ Management

● Marketing/ Sales

● Channels of Distribution

● Manufacturing/Operations

● Finance

● Competitive Analysis

● Marketing Intelligence

● Legal/ Customs

● Culture

Purpose

Business Evaluation

Product: Organic Laundry Detergent

● Detergent will come in both

powder and liquid forms

● Will be sourced from

completely organic materials

● “Clean” brand series of

organic detergent products

● Focus group to determine

the best Russian names for

product variants

Staffing and Management

● Hope to set up shop in low cost,

central city such as Nizhny

Novgorod or Voronezh

● Recruit locals looking for good pay

and steady work in the area

● Use Russian JV partner to organize

plant management

● Retain outside Western CPG

experts to help with strategic

management

Marketing and Sales

● Build marketing and sales team (Partnership with United Trading System)

● Intelligent lead generation

● Optimized sales-coverage model

● Digital buying/fulfillment

Channels of Distribution

1. Direct Channel ( Online )

PRODUCER -> RETAILER -> CONSUMERS

Self Service sales and distribution system

1. Distributor channel (UTS)

PRODUCER -> DISTRIBUTOR -> RETAILER -> CONSUMER

Manufacturing and Operations

- Manufacture in Russia

- Use high quality blender process and organic/safe ingredients

- Carefully plan alliance to combine our management with their employees

- Consider contracts, manuals, and training in the plant to ensure clear

communication and high standards of production.

Finance

● A joint venture between US and Russian CPG

firms ideal

● 30M USD total needed, 15.3M commitment

from Russian partner (51% of total) and the

remainder from US (49% total)

● US CPG partner provides 80% of US-owned

portion’s funding (39.2% of total)

● Remainder (9.8% of total) comes from bank

debt and partner equity contributions, paid debt

becomes equity stake

● Funds to secure plant, hire/train labor,

distribution setup, advertising campaign

Financing Illustrated

Proforma

Comparable CPG

Firms

Net Income/Revenue

15.08% 16.44% 13.72%

Average Profit

Margin: 15.08%

Loan of 2.2M at 8% interest

for 30 Years requires

~193K in Annual Payments

At 40M in Annual Revenue, Net Income Distributions at a

Profit Margin of 15.08% looks like:

6.032M in Profit

9.8% (591K) distributed to Bank Debt and Our Team

Bank receives 193K per Year

Our Team receives 398K per Year

At 100M in Annual Revenue, our team receives 1.30M per

Year

All stemming from an Initial Equity

Investment of 750K

Competitive Analysis

● Around half of all consumer goods

sold in Russia are local brands

● Procter & Gamble and Henkel

have the biggest market share

● Nefis Cosmetics is the largest

Russian brand

● Information scarce, but seems that

there are few to no organic

laundry detergent producers in

marketplace

Marketing Intelligence

Marketing Intelligence – Market Analysis

●Strategy

- Online-Retail, Large Sized marts and Local Distributors.

●Market Share

- 10% of $26B

●Market Size

- Powder detergents, accounting for 41% of the total

market.

- Liquid Detergents accounting for 59% of the total

market.

Marketing Intelligence – Customer Research

●Customer Feedback

- Get Customer Review and Feedback from Ulmart.ru, Ozon.ru,

and KupiVIP.

- Send Survey to Customers.

●Market Segmentation

- Target Customers – Young families with children and One-

person

households living in major cities.

●Customer Preferences

- Strong Clean Power, Environment Friendly,

and Less Water Usage

Marketing Intelligence – Competitor Intelligence

●Technology Trends

– More people want detergents made from organic ingredients, and

competitors have not yet released products for organic detergents

in Russia.

●Manufacturing

– Product manufacturing is an efficient way to manufacture in Russia.

●Pricing

– In order to compete with the leading companies in the market using

the brand power to peel off, we want to sell laundry

detergent with cleaning power, environmental friendly

at a higher price than normal brands.

Marketing Intelligence – Product Intelligence

● Key Product Concerns

1)Russia Payment System

– No Universal system and most of product purchased in

cash deal.

2) Weak Product Brand Power

3) No brand in Powder Detergent

● Brand Loyalty – Free trial Promotion

● Brand Awareness – Direct and Online Advertising.

Legal/Customs/Barriers

The Parliament: State Duma (lower house) , Council of the Federation (upper house)

Council of the Federation - customs

the Russian state consumer protection agency, Rospotrebnadzor including U.S.-based

Colgate-Palmolive, Procter & Gamble, and Clorox, and Germany's Werner & Mertz and Henkel

-- revealed high levels of toxic ingredients”

“dangerous, foreign product” label

Cultural and Social

- 2015 Russia banned western detergent companies that used harmful

chemicals.

- The Russian people were left with few high quality alternatives

- Our organic product exceeds Russian government standards, is 51% owned

by a Russian company, and fills a hole in the market by being the only

organic product available.

Спасиба / THANK YOU