A PROJECT

REPORT

ON

NEW PRODUCT

DEVELOPMENT SUBMITTED

BY

ACHAL

BHUSHAN KHESS

ANSHUL GUPTA

KUMAR MAKRAND BHASKER

NEHA JHA

MEGHA AGARWAL

PRAGYAN DAS

(SCHOOL OF MANAGEMENT KIIT UNIVERSITY (09-11 BATCH))

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OUR LOGO

“be AheAd”

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Cox

Is“Comfort

Occult Xtraordinary”

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ACKNOWLEDGEMENT

We would like to take this opportunity to express our deep

sense of gratitude to Mrs.Rakhi Dutta, Prof.(Marketing),KIIT

School of Management, Bhubaneswar, for her sincere

guidance and help extended to us during the project work .

She as a guide has constantly encouraged and inspired

us by her personal involvement, making the project a

success.

We are also grateful to the library authorities of KSOM for

providing us with the needed information during our

preparation of project work.

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Executive summary

we know that a person can be best described with his shoes. we have come up with a unique and simple product COX SHOES .These days in our hectic lives, we face a general problem of bad odour from a pair of shoes worn by us for long duration .People sitting close to us or in our nearby surrounding start getting irritated as well as they get bad smell that is more than difficult to bear up.So, to over come this problem we have come up with a solution for you – “COX SHOES”. Cox shoes avid range of fragrance pad gives the consumers a varied range to choose from. (the inner part of fragrance pad is so designed that it will fit only to COX shoes) Cox shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains. Additional materials like KELVAR has been used to enhance the quality. As this is a new product with new additional features of fragrance pad and acu pressure points in the sports shoes for the first time, so reasonable Price is set based largely on competitor’s price, by comparing quality, and features.Our product is compared with products in upper middle and lower middle category i.e. with Adidas, Nike, Action, Reebok etc… also As the product has special feature like acupressure points and fragrance pad it will be characterized by high level of perceived quality and features with price just high enough but not out of customer’s reach.Determinig all these factors

Price range of product: Rs1500.00 to 4000.00 is set. Promotion mix like

Advertising,Sales promotion,Direct marketing and public relation are used to build a brand image and increase the sales volume.Distribution channels like zero-level ,1level and 2 –level has been selected for the product to reach all the targeted segment.

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INTRODUCTION OF NEW PRODUCT

COX SHOES

“If your feet is in your shoes,You can steer yourself IN ANY DIRECTION You choose,You are on your own,and You know what

you know,you are the guy who ll decide where to go.”

And as we know that a person can be best described wih his shoes we have come up with a unique and simple product COX SHOES .These days in our hectic lives, we face a general problem of bad odour from a pair of shoes worn by us for long duration .People sitting close to us or in our nearby surrounding start getting irritated as well as they get bad smell that is more than difficult to bear up. So, to overcome this problem we have come up with a solution for you – “COX SHOES” with a special fragrance oriented pads ,so as to secrete a pleasing odour all the while schedule without being embarrassed.

Using this once will make a you a loyal believer of its advantages, which industry has never witnessed before.

Since our pads are replaceable, we are also providing two extra pads with our shoes free. Each pad can be used regularly for six months.

Since we are also targeting health and as it is said that “health is wealth” so we have come up with and added feature of our shoe that is there will be accupressure points, so that customer will be relieved from major health problems which come up due to stress and over exertion.

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Our shoe will also be available with different fragrances (mild & strong) accordingly.

WHY FOOT WEAR MARKET?

The Indian foot wear retail market is expected to grow at a CAGR of over 20% for the period spanning

from 2008 to 2011.

It is expected to increase in about 60% of the total raw materials of foot wear export by 2011 from over

38% in 2006-2008.

Presently the Indian footwear market is dominated by men’s foot wear market that accounts 58% of the

total Indian footwear retail market.

Entry and exit barriers are low.

ABOUT THE PRODUCT

COX shoes behave like an extension of the foot, which is a complex structure of bone, muscle and fatty tissues.

Cox shoes provide the user with a comfortableness and uniqueness to the maximum.

Cox shoes avid range of fragrance pad gives the consumers a varied range to choose from. (the inner part of fragrance pad is so designed that it will fit only to COX shoes)

The fragrance provided with the shoes will save the user from embarrassments arising from bad odour .

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Cox shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains.

Raw Materials used in shoes

To enhance performance, sophisticated shoe structures are employed which make use of viscous and elastic foam materials such as ethylene vinyl acetate (EVA) and polyurethane (PU). The use of viscous plastics in the heel area serves to absorb the impact forces during the initial ground contact, and provides the foot with a soft ‘cushioning’ effect.

Additional materials used:

1. KELVAR (Used to enhance the quality)

The Properties of KEVLAR.

KEVLAR is one of the most important manmade organic fibers ever developed. Because of its unique combination of properties it is used today in a wide variety of industrial applications. The fiber possesses a remarkable combination of properties that has led to its use in a variety of commercial products since the 1970's

Fibers of KEVLAR consist of long, interconnecting molecular chains produced from poly-paraphenylene terephthalamide.

General Features of KEVLAR:

· High Tensile Strength at Low Weight · Low Elongation to Break High Modulus (Structural Rigidity) · Low Electrical Conductivity · High Chemical Resistance · Low Thermal Shrinkage · High Toughness (Work-To-Break) · Excellent Dimensional Stability · High Cut Resistance

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· Flame Resistant, Self-Extinguishing

2.Material used in making of fragrance pad and acupressure point

Vegetable tanned sheepskin

Active carbon filter prevents odor

Slightly padded with latex foam

Fragrance

Breathable leather shoe liner protects the inside of shoes from dampness, bacteria causing odor.

Product attributes

Provides freshness to feet by its pleasant smell. Acupressure will act as a reliever of pain. Replacable fragrance and acupressure pad(the inner part of fragrance pad is so

designed that it will fit only to COX shoes) Pioneered in comfort Best for athletes Provides firmness to feet Style quotient also maintained Available in varied range of price and size with a warranty of 1 year.

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PRODUCT MIX FOR COX SHOES

PRODUCT MIX WIDTH

10

RUNNING

WITH FRANGANCE

WITH FRANGANCE PAD & ACU PRESSURE

SIZE -6 TO10

CRICKET ATHELETE TENNIS SOCCER

PRODUCT DEPTH =VARIANTS X SIZES

2 X 5 = 10

TARGETING

SEGMENTATION

Geographic

City: More focus on metro cities because people believe in trying innovative, new and better products.

Demographic:

Age: 14 years and above.

Gender: Male and female both.

Income: earning above Rs 20000 thousand P.M.

Occupation: Students, Athletes.

Psychographic:

Socio-economic: Upper-middle.

Lower-middle.

Life-style: Sport-oriented, outdoor oriented.

Behavioral:

Benefits: Quality, service, after sell service.

User status: Non user, potential user, first time user.

TARGETING11

1. Measurable: Size ,purchasing power ,characteristics of the segments2. Substantial: A segment should be largest possible homogeneous groups worth

going after with a tailored marketing program e.g.earning capacity 20,000p.m.

3. Accessible: Reach should be good.

4. Differentiation: People have different perception about different marketing mix. A business man and a sports person will have different feel about COX shoes.

5. Actionable: Effective programs can be formulated for attracting and serving the segments.

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TARGETING

POSITIONING

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UNAWARE AWARE

NOT TRIED TRIED

NEGATIVE OPINION

NEUTRAL POSITIVE OPINION

REPEATEDNOT YET REPEATED

REJECTED

LOYAL TO BRAND

LOYAL TO OTHER

SWITCHER

LIGHT USER REGULAR USER

HEAVY USER

TARGETING

Positioning through point of difference by presenting and highlighting the new attributes of cox shoes.

Relevance Feasibility Distinctiveness Believability Communicability Sustainability

PricingPricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, Quality of product.

Setting the price

As this is a new product with new additional features of fragrance pad and acu pressure points launching for the first time, so reasonable price should be set according to the following factor.

1. Selecting the price objective.2. Determine demand.3. Estimate cost.4. Analyzing competitors cost price and offers.5. Selecting price method.6. Final price

Selecting the price objective

Product quality leadership

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As the product has special feature like acupressure points and fragrance pad it will be characterized by high level of perceived quality and features with price just high enough but not out of customer’s reach.

Determining the demand

1. Product is distinctive because of its special feature in it (fragrance pad & acupressure), which makes it different from others.

2. Buyers less aware of substitute since there is no other player in the market with such features, so in respect of its features buyers will not get any substitute.

3. Expenditure is smaller part of the buyers total income .since the price of footwear is small part of the total income.

4. The product has more quality and exclusiveness. So according to this market for the product will be fewer prices sensitive and price can be kept a little higher than other products.

Estimating cost

The total cost depends on fixed and variable cost. it is important to know how cost vary with different levels of production ,and accordingly cost are estimated.

Economies of scale are used to minimize the cost in long run.

Analyzing competitor cost price and offer

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PRICE COMPARISON OF DIFFERENT BRANDS

BRANDSCategory(upper middle-lower middle)

PRICE RANGE PRODUCT RANGE

PUMA 1500-6500 RUNNING, CASUAL,SOCCER,CYCLE ,etc.

ADDIDAS 1500-4500 RUNNING, TENNIS,TRAINERS,BASKET BALL, etc.

NIKE 1700-5000 TRAINERS, FOOTBALL, RUNNING, GOLF, BASKET BALL etc…

REEBOK 1300-4000 WALKING, AEROBICS, RUNNING, BAKET BALL, etc..

ACTION 900-2800 CASUAL,SOCCER,CYCLE,RUNNING,etc…

BATA 1000-1700 Soccer,running,casual etc.

Since the product has added features and enhanced quality so the product will be perceived similar to product in upper middle and in lower middle category so the price of the product will be compared with Adidas, Nike and Reebok.

Selecting a price method

GOING RATE PRICING

Our product’s price is based largely on competitor’s price, by comparing quality, and features.

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Our product is compared with products in upper middle and lower middle category i.e. with Adidas, Nike, Action, Reebok etc…

SELECTING FINAL PRICE

Finally selecting the price additional factors like the impact of other marketing activities, company pricing policies, gain and risk sharing pricing are considered.

Raw Materials used in shoes

To enhance performance, sophisticated shoe structures are employed which make use of viscous and elastic foam materials such as ethylene vinyl acetate (EVA) and polyurethane (PU). The use of viscous plastics in the heel area serves to absorb the

impact forces during the initial ground contact, and provides the foot with a soft ‘cushioning’ effect.

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Additional materials used:1.KELVAR (Used to enhance the quality)2.Material used in making of fragrance pad and acupressure point

Vegetable tanned sheepskin

Active carbon filter prevents odor

Slightly padded with latex foam

Fragrance

Breatheable leather shoe liner protects the inside of shoes from dampness, bacteria causing odor .

Fixed cost + variable cost

Cost incurred in percentage

Low middle category

Upper middle category

Cost of materials 65% 780.00 2080.00

Cost of labor 15% 180.00 480.00

Other expenses 20% 240.00 640.00

Total cost 100% 1200.00 3200.00

Desired profit (25% on sales)

300 800.00

Required sale price 1500.00 4000.00

Price range of product : Rs1500.00 to 4000.00

Promotion

Marketing activity used to communicate to consumer about the organization its product, its activity and directly or indirectly expenditure.

Promotion mix18

Advertising

Sales promotion

Direct marketing public relation

Advertising : A paid form of non personal communication through media.

We are promoting our shoe as it provides.

-Nice fragrance

-acupressure point that help to control blood pressures.

As our logo & caption “we did it “which we have taken also suggest that we have created a product which is beneficial for the customer ,because no such shoes has been launched yet which have acupressure point and fragrance paid along with good quality.

Sales promotion

An activity or material that Offer a direct inducement to purchase .

We can do our sales promotion by:1. Sport sponsorship

By sponsoring local sports events.2. Event sponsorship

By sponsoring events like new year eve.3. Advertisement on wheels4. Contests

Contest like marathon race can be organized to build brand image and increase the sales volume.

5. Tying up with core companies having brand name and involved in making only sports accessories or associating with brand companies producing

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health care gadgets to get the benefits of their brand value and increase the sales volume .

6. Using print media Sport magazines Weekly magazines e.g. india today Health magazines Newspaper

7. Electronic media Adds on TV and internet Radio Bill boards.

Direct marketing public relation:

Public relation will be used to explain the benefits of cox shoes (like benefits of pleasant fragrance and acupressure points in shoes ).Direct marketing like internet and catalogs will be used to inform the targeted segments about the feature of the product and various models of the product.

DISTRIBUTION

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Distribution is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user.

DISTRIBUTION CHANNEL

Chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

CHANNELS

A number of alternate 'channels' of distribution may be available:

Distributor, who sells to retailers Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc.

There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors.

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CHANNEL LEVELS

Their are four channel levels by which a company can reach to consumers.

zero level channel

1- level channel

2- level channel

But we will be using only first three channel for our product distribution.

1. Zero level channels consist of a manufacturer selling directly to final consumer. we will be selling our shoes by

internet selling(by sending mails, by using sites such as e-bay ,amzon, alibaba.com).We will also sell our shoes

directly to various institutes and sports academy.

2. 1-level channels, In 1-level channel we use only one intermediary or distributor, who will supply goods to the

retailer and they will also provide feedback to the company about demand of consumers.

Exclusive showrooms can be used with wide coverage to cover different price points and target different segment

of customers, which will generate sales volume.

3. 2 -level channels contains two intermediaries selling to retailers through wholesaler and finally to customer

inorder to cover the maximum targeted segment .(Here benefits of influence of distributor is used)

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