St.

Mary’s University College

Faculty of Business
Department of Marketing Management

Assessing the New Product Development Practice of

Family Milk

By :
Yemiserach Tesfaye

June,2010
SMUC
Addis Ababa
 ASSESSING THE NEW PRODUCT DEVELOPMENT PRACTICE OF
FAMILY MILK

A SINIOR ESSAY SUBMITTED TO THE DEPARTMENT OF

MARKETING MANAGEMENT BUSINESS FACULITY.

ST. MARY’S UNIVERSITY COLLEGE

IN PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR THE

DEGREE OF BACHELOR OF ARTS IN MARKETING MANAGEMENT.

JULY ,2010
SMUC
ADDISABABA

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 [Link] UNIVERSITY COLLEGE

ASSESSING THE NEW PRODUCT DEVELOPMENT PRACTICE OF

FAMILY MILK

BY:
YEMISERACH TESFAYE

FACULITY OF BUSINESS
DEPARTMENT OF MARKETING MANAGEMENT

APPROVED BY THE COMMITTEE OF EXIMINERS

________________________ _________________
Department Head Signature
________________________ __________________
Advisor Signature
________________________ __________________
Examiner Signature
________________________ __________________
Examiner Signature

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 Acknowledgement

I would like to thank my advisor Ato Beshir Shemsu for his support and guidance , the
next appreciation goes to my best friend Ato Legesse Alemayehu for his great support
while doing my research and lastly my family who always been with me& uplifts my
spirit. May God bless you all.

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 Table of content
CHAPTER ONE
[Link] ...............................................................................................1
Background of the Study ................................................................................................ 1
1.2 Statement of the problem .......................................................................................... 2
[Link] question…………………………………………………………………..2
1.4 Objectives of the study.............................................................................................. 3
1.5 significance of the study ........................................................................................... 3
1.6 Delimitation of the study .......................................................................................... 3
1.7 Research Design and methodology ........................................................................... 4
1.8. Organization of the Study ........................................................................................ 5
CHAPTER TWO
2. REVIEW OF RELATED LITERATURE .................................................6
2.1. Meaning and Definition of Product ......................................................................... 6
2.2. Product Classification .............................................................................................. 7
2.3. Product Level ........................................................................................................... 9
2.4. Product Attributes .................................................................................................... 9
2.5. Product Strategies .................................................................................................. 11
2.6. Product Life Cycle Strategies ................................................................................ 12
2.7. Product Support Services ....................................................................................... 15
2.8. Differentiation ........................................................................................................ 15
2.9. Branding................................................................................................................. 16
2.10. Package ................................................................................................................ 16
2.11. Labeling ............................................................................................................... 17
2.12. New Product......................................................................................................... 17
2.13. New Product Strategy .......................................................................................... 17
2.14. Stages in the Development Process ..................................................................... 18
[Link] Product Adoption And Diffusion ................................................................. 22
[Link] for New product Failure ......................................................................... 24
[Link] Reaction To New Product Introduction ........................................... 28
CHAPTER THREE
[Link] Presentation Analysis and Interpretation…….. ............................... 29
3.1 General characteristics of the respondents .............................................................. 29
3.2 Analysis of the findings of the study ...................................................................... 28
CHAPTER FOUR
[Link], Conclusions and Recommendations ........................................39
4.1 Summaries…........................................................................................................... 39
4.2Conclusions ...........................................................................................42
4.3Recommendations..................................................................................43

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 CHAPTER ONE
1. Introduction
1.1. Background of the Study
New product development is a major component of the firm’s product
policy. It is not enough if existing product lines are appraised property,
products are positioned effectively and brand decisions taken wisely. For
higher level of growth firm has to look beyond its existing products.
(Ramanswamy, 2002:334)
In an age of scientific and technological advancements, change is
everywhere phenomenon. Change in food habits, change in comforts and
conveniences of life, change in social customs and habits, change in
expectations and requirements. Any business has to be alert about these
changes taken place in its environments. People always seek better
things-better product and services, more conveniences in product, more
fashion and more value for money. A business firm has to respond to
these dynamic requirements and these responses take the shape of new
products and new services. Through such responses, the firm updates
itself and stays closer to consumer. (Ramaswamy, 2002:334)

M.B.P.L.C is a family owned business established in 2006 G.C. engaged

in collecting, pasteurizing and processing milk and other milk products.
M.B.P.L.C was founded by eight family members. It’s initial capital of 18
million birr. The company is located at Nefas -Silk Lafto Sub-city, Kebele
15. After purchasing machineries and installation, it started production
of pasteurized milk, different types of cheeses and butter. The company
offers 13 product lines and uses a brand name called Family Milk.
(Based on a preliminary interview and observation).
New product can be broadly classified in to two groups. The first
classification states that new product can be arising out of technological
innovations. And the second classification states that new products

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arising out of market –oriented modification. The first approach includes
intrinsically new products having a new functional utility. And the
second approach includes products that come out of market- oriented
innovations on existing products. These are essentially new versions of
existing products, the newness may be due to some modification in the
ingredients used, or some changes in design, the addition of new feature,
a change of package, etc. the newness may also be due to repositioning
of the existing product, or finding new use for the existing product, or
offering the existing product with new sales appeal to new market
segment.
M.B.P.L.C (Family Milk) follows the second approach that is new product
arising out of market-oriented modification.

1.2 Statement of the problem

According to (Kumar, 2001:79) product planning and development is an
important function of the marketing department of any concern following
consumer orientation. It includes a number of decisions, namely, what to
manufacture or buy, how to have its packaging, how to fix its price and
how to sell it.
To be the most preferable in the customer’s choice and to compete in the
milk market, Family milk has been going through some difficulties. The
first problem is the failure to follow the formal stages of new product
development stages from idea generation to commercialization. And the
second problem is the company fails to conduct marketing research
regarding the taste, nutritional value(ingredients), odor, and packaging of
its product in relation to customer needs and wants.(based on
observation)
1.3. Research question
The student researcher addresses a particular study and this study deals
with the following research questions:

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How far does the company conduct new product development
process?

What is the relationship between odor and customer preference?

What has the company done to improve the product’s (milk) taste?

What is the challenge to develop new product to the company?

1.4. Objectives of the study

The general objective of the study is to asses the new product
development activity of M.B.P.L.C (Family Milk). Beside the general
objective, the study has the following specific objectives:
A. To asses whether the company conducts the new product
development process or not.
B. To identify the relationship between odor and customer
preference.
C. To investigate whether any effort is made to develop the taste of
the milk.
D. To determine the challenge of developing new product.

1.5 significance of the study

The student researcher truly believes that the study will contribute a lot
to [Link]. /Family milk/ in accomplishing its objectives regarding new
product development. Moreover, the research will help for other
researchers who want to conduct further studies on similar areas. In
addition to this, the research paper also serves as a partial fulfillment of
the Bachelor of Arts for the student researcher.

1.6 Delimitation of the study

Family milk delivers its milk products and pasteurized milk to super
markets, retail shops, governmental and non-governmental organizations
found in Addis Ababa, Debrezeit, Mojo and Nazareth. This study
delimited to Bole and Megenagna area supermarkets found in Addis

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Ababa where customers, at large are concentrated. The research focused
on customers, and the marketing manager of the case company.

1.7 Research Design and methodology

1.7.1. Research Method: This section states the research method to be
used for the study. To achieve the research objectives the student
researcher used a descriptive research method.
1.7.2. Population and sampling Frame.
Population: the student researcher included customers and marketing
manager of the company as a population.
Sampling Frame: The student researcher took 200 respondents from the
total customers, and 1 respondent from marketing department of the
case company.
Sampling Technique.
The student researcher used non-probability sampling technique
specifically convenient sampling technique as a result of undefined
number of customers in the market.
1.7.3. Types of data to be collected
In this study primary& secondary data were used for the research.
1.7.4. Methods of Data Collection

The primary data was collected through interview from the marketing
manager of the company and questionnaire mainly with customers.
Secondary data was collected from relevant company documents,
journals and books.

1.7.5. Methods of Data Analysis

In this study, both quantitative & qualitative data analysis techniques

were used by the student researcher. Descriptive statistical techniques,
measures of central tendency were used to analyze quantitative data.

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1.8. Organization of the Study
The research paper includes the following chapters.

Chapter One: focuses on the background of the study, background of

the organization, statement of the problem, objectives of the study, the
scope of the study and significance of the study.

Chapter Two: discuses about the theoretical issues on the subject

matter.

Chapter Three: the student researcher analyzes and interprets the data.

Chapter Four: this chapter includes summary, conclusion and

recommendations of the researcher findings.

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 CHAPTER TWO

2. REVIEW OF RELATED LITERATURE

2.1. Meaning and Definition of Product

A product is anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need.
Products include more than just tangible goods. Broadly defined,
products include physical objects, services, events, persons, places,
organizations, ideas, or mixes of these entities (Kotler, 2006:233).

According to Kumar, (2002:2) a product is something which is offered to

customers to satisfy their needs or wants – physical and/or
psychological. Thus, a product must be able to delivery physical as well
as psychological satisfaction and its features, quality, style, brand (name
and image), size, packaging, warranties etc. should be accordingly
designed.

The product is almost always a combination of tangibles and intangible

benefits.

The product is a bundle of satisfaction that customer buys. It provide a

solution to a customers problems (Saxena 2006:234).

A new product is any product which is perceived by the customer as

being new. This could involve repositioning of existing products or
offering the existing products at low prices or making improvements. In
the existing product, or adding new product items to the existing product
line or for that matter, taking up a product line which is totally new to
the organization or new to the world (Saxena (2006:272).

According to Grover (2003:162) strategic marketers must carry product

development to cater to the changing needs of the customers. New
product development is vital to the continual survival and growth of the

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organization. The competence required is continuous tracking of
customer needs and product development for those needs.

2.2. Product Classification

Products and services fall into two broad classes based on the types of
consumers that use them – consumer products and industrial products.

Broadly defined, products also include other marketable entities such as

experience, organizations, persons, places, and ideas(Kotler2006:234).
2.2.1. Consumer Products

Consumer products are products and services bought by final consumer

for personal consumption. Marketers usually classify these products as
services for there based on how consumers go about buying them.
Consumer products include convenience products, shopping products,
specialty products and unsought products ( Kotler 2006:234).

[Link]. Convenience Products

According to Monga and Shalini (2003:240) convenience products are

consumer products and services that customer usually buys frequently
immediately, and with minimum of comparison as buying effort.
Convenience products are usually low priced, ad marketers placed them
in many locations to make them readily available when customers need
them.

[Link]. Shopping Products

Shopping products are less frequently purchased consumer products ad

services. That customers compare carefully on suitability’s quality price
ad style. When buying shopping products and services, consumers spend
much time ad effort in gathering information and making comparison.
Shopping products, markets usually distribute their products through
fewer outlets but provide deeper sales support to help customers in their
comparison effort (Kotler, 2006:236).

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[Link]. Specialty Products

According to Kotler (2006:236), specialty products are consumer

products and services with unique characteristics or brand identification
for which a significant group of buyers is willing to make a special
purpose effort. Buyers normally do not compare specialty products. They
invest only the time needed to reach dealers carrying the wanted
products.

[Link]. Unsought Products

Unsought products are unknown to the potential customers or they are

known products that customers do not actively seek. New products come
under this category till customers come to know about them through
advertising or personal selling. Unsought products are needed by
customers but they do not like to think about them and do not want to
spend money on them (Kumar 2006:175).

2.2.2. Industrial Product

As to Kotler industrial products are those purchased for further

processing or for use in conducting a business. Thus, the distinction
between a consumer product and an industrial product is based on the
purpose for which the product is bought (Kotler, 2006:236).

The other authors Berkowitz and et al stated that, major characteristics

of industrial goods is that their sales are often the result of derived
demand; that is, sales of industrial products frequently result from the
sale of consumer goods. Industrial goods are classified not only on the
attributes the consumer uses but also on how. The item is to be used.
Thus, industrial products may be classified as production or support
goods.

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2.3. Product Level
Product planners need to think about products and services on three
levels – core benefit, Actual product and augmented product. The most
basic level is the core benefit, which addresses the question what is the
buyer really buying? When designing products, marketers must first
define the core, problem-solving benefits or services those consumers
seen.(Kotler, 2006:234).

At the second level, product planner must turn the core benefit into an
actual product. They need to develop product ad service features, design
a quality level, a brand name, and packaging (Kotler, 2006:234).

The same author stated that, consumer see products as complex bundles
of benefits that satisfy their needs. When developing products, marketers
first must identify the core consumer needs. The product will satisfy.
They must then design the actual product and find ways to augment it in
order to create the bundle of benefits that will provide the most satisfying
customer experience.

2.4. Product Attributes

According to Kotler (2006:239), developing a product or service involves
defining the benefits that it will offer. These benefits are communicated
and delivered by product attributes such as quality, features ad style and
design.

2.4.1. Product Quality

Product quality has two dimensions, level and consistency. Thus, in

developing a product, the marketer must first choose a quality level that
will support the products position in the target market. Here, product
quality means performance quality – the ability of a product to perform
its functions. Beyond quality level, high quality also can mean high levels
of quality consistency, here, and product quality means conformance

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quality – free from defects and consistency in delivering a targeted level of
performance (Kotler 2006:241).

2.4.2. Product Features

A product can be offered with varying features. Features are a

competitive tool for differentiating the company’s product from
competitors’ products. Being the first producer to introduce a needed
and valued new feature is one of the most effective ways to compete. How
can a company identify new features and decide which ones to add to its
product? The company should periodically survey buyers who have used
the product and ask these questions. How do you like the product?
Which specific features of the product do you like most? Which features
could we add to improve the product? The answer provides the company
with a rich list of feature ideas. The company can then assess each
features value to customers versus its cost to the company. Features that
customers value little in relation to costs should be dropped; those that
customers value highly in relation to costs should be added
(Kotler, 2006:242).
2.4.3. Product Style and Design

Kotler stated that product style ad design is another way to add

customer value. Design is a larger concept than style. Style simply
describes the appearance of a product. Styles can be eye catching or
yawn producing. A sensational style may grab attention and produce
pleasing aesthetics, but it does not necessarily make the product perform
better. Unlike style, design is more than skin deep-it goes to the very
heart of a product. Good design contributes to products usefulness as
well as to its looks. The author also added “product designers should
think less about product attributes and technical specifications and
more about how customers will use and benefit from the product. Good

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design can improve product or service performance, cut costs and crate
strong competitive advantage in the target market (Kotler, 2006:243).

2.5. Product Strategies

There are broad categories of product strategies involved in planning and
deciding the product offered. It includes product mix, and product life
cycle strategies (Walker, 2004:235).

2.5.1. Product Mix Strategies

A product mix is the set of all products offered, for sale by a company.
And the structure of a product mix has both breadth and depth. Its
breadth is measured by the number of product lines carried, its depth by
the variety of sizes, colors, and models offered within each product line
(Etzel, 2004:237).

[Link]. Product-Mix expansion

According to Etzel (2004:239), product mix expansion is accomplished by

increasing the depth with in a particular line and/or the number of lines
a firm offers to customers. When a company adds a similar item to an
existing product line with the same brand name, this is termed as line
extension.

There are many reasons for line extensions. The main one is that the firm
wants to appeal to more market segments by offering a wider range of
choices for a particular product. Another way to expand the product mix,
referred to as mix extension, is to add a new product line to the
company’s present assortment.

[Link]. Product-Mix Contraction

Product-mix contraction is carried out either by eliminating an entire line

or by simplifying the assortment with in a line. Thinner and/or shorter
product lines or mixes can weed out low profit and unprofitable

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products. The intended result of product mix contraction is higher profits
from fewer products (Etzel 2004:241).

[Link]. Alteration of Existing Products

As Etzel stated, “Rather than developing a completely new product,

management might do well to take a fresh look at the organization’s
existing products. Often improving an establishing product, termed
product alteration, can be more profitable ad less risky than developing
completely new one (Etzel 2004:240).”

[Link]. Trading Up and Trading Down

The product strategies of trading up and trading down involve a change

in product positioning and an expansion of the product line. Trading up
means adding a higher-price product to a line in order to attract a
broader market and also, the seller intends that the new products
prestige will help the sale of its existing lower – price products. On the
other hand, trading down means adding lower-price product to a
company’s product line. The firm expects that people who cannot afford
the original higher price product or who see it as too expensive will buy
the new lower price one. The lower price product carries some of the
status and some of the other more substantive benefits of the higher –
price item (Etzel 2004:240).

2.6. Product Life Cycle Strategies

According to Berkowitz and et al the concept of the product life cycle
describes the stages a new product goes through in the market place.
Introduction, growth, maturity and decline (Berkowitz 2000:314).
Another author describes product life cycle, is a model that illustrates
the stages through which a typical product passes over time. It tracks
the sales and profitability of a product as it moves from introduction,
through growth and maturity, to decline. It is also well-accepted

15
framework for structuring marketing channels design related to each life
cycle stage ( Bowersox 1992:179).

2.6.1. Introduction

In introductory stages, new products generally meet with some

resistance in distribution channels. Manufacturers that desire intensive
market coverage may be unable to accomplish that objective, as
middlemen resist additions to their product assortments (Bowersox
1992:179).
The other author Berkowitz, States “introduction stage of a life cycle
occurs when a product is first introduced to its intended target market.
During this period, sales grow slowing, ad profit is minimal. The lack of
profits often the result of large investment costs in product development.”

2.6.2. Growth

The second stage of the product life cycle, growth, is characterized by

rapid increase in sales. It is in this stage competitors appear. The result
of more competitors and more aggressive pricing is that profit usually
pears during the growth stage. On the other hand product sales in the
growth stage grow at an increasing rate because of new people trying or
using the product and a growing proportion of repeat purchasers –
people who tried the product, went satisfied, and bought again. Changes
start to appear in the product during the growth stage. To help
differentiate a company’s brand from those of its competitors, an
improved version or new features are added to the original design and
product proliferation occurs (Kotler, 2006:293).

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2.6.3. Maturity

At some point, a product sales growth will slow down, and the product
will enter a maturity stage. This maturity stage normally lasts longer
than the previous stages, and it poses strong challenges to marketing
management. Most products are in the maturity stage of the life cycle,
and therefore most of marketing management deals with the mature
product.

The slowdown in sales growth results in many producers with many

procedures with many products to sell. In turn, this overcapacity leads to
greater competition. Competitors begin making down pricing increasing
their advertising and sales promotions, and upping their RFD budgets to
find better versions of the product. These steps lead to a drop in profit.
Some of the weaker competitors start dropping out, and the industry
eventually contains only well-established competitors.

Although many products in the mature stage appear to remain

unchanged for long periods, most successful ones are actually evolving to
meet changing consumer needs (Kotler, 2006:293).

2.6.4. Decline

According to Ramaswamy, in the decline stage, sales begin to fall. The

demand for the product shrinks, probably due to new and functionality
advanced products becoming available in the market, or the market
becoming apathetic to the product. In any case, prices and margins get
depressed; total sales and profits diminish. Some firms at this stage may
try to link up the sale of these products with some other premium
products. They have developed and thus try to stretch the life of the
declining product. Firms do perceive at this stage the impending total
decline and prepare. For the gradual phasing out of the product.
Successful firms quite often keep new products ready in queue to fill the

17
vacuum created by the decline of existing products
(Ramaswamy 2002:351).

The other author states that, as new and improved products are
launched which more easily meet the customers’ needs, the sale of the
product will move into the decline stage. During the stage sales will
gradually fall, as will the profits, and therefore little or no money will be
spent on promotion. The decision of the marketing ad product manager
is whether to maintain the product with little or no expenditure, or
whether to eliminate it (Watkins, 2006:14).

2.7. Product Support Services

As per Kotler (2006:246) stated, customer service is another element of
product strategy. A company’s offer usually includes some support
services, which can be a minor or a major part of the total offering.
According to the same authors there are steps to assess the value of
current services. The first step is to survey customers periodically to
assess the value of current services and to obtain ideas for new ones.
Once the company has assessed the value of various support services to
customers, it must next assess the costs of providing these services. It
can then develop a package of service that will both delight customers
and yield profits to the company.

2.8. Differentiation
One company’s product is distinguished from that of its competitors by
giving customers more value and greater perceived benefits than they
could obtain elsewhere. Differentiation can be on the basis of both
objective and subjective dimensions. When these differentiating factors
clearly give a significant advantage over competitors, they can be used
effectively in the firm’s product positioning statements. A differentiation

18
strategy based on dimensions that are important to customers offers an
effective way to create value (Anderson 2000:77).

As per Kotler, differentiation occurs when the company concentrates on

creating a highly differentiated product line and marketing program so
that it comes across as the class leader in the industry. Most customers
would prefer to own this brand if its price is not too high (Kotler and
Armstrong, 2006:534).

2.9. Branding
Branding is a process by which companies distinguish their product
offering from the competition. By developing a distinctive name,
packaging and design, a brand is created. Some brands are supported by
logos. By developing an individual identify, branding permits customers
to develop associations with the brand and eases the purchase. Decision,
here the marketing task is to ensure that they are positive and inline
with the chosen positioning objectives. (Jobber, 2001:229)

In favor of Pati strong brand are important to both marketers and

customers. These are wanted by marketers as they provide relatively
higher return on sales, have higher loyalty than their weaker
competitors, provide opportunities for brand extension, have better
leverage with trade, can bounce back after a mistake and recover fast
from aggressive price promotion by its competitors (Pati 2002:190).

2.10. Package
According to Kotler, packaging involves designing and producing the
container or wrapper for a product. The package includes a products
primary container. It may also include a secondary package that is
thrown away when the product is about to be used. And finally, it can
include a shipping package necessary to store, identify, and ship the

19
product. The same author also stated that, traditionally, the primary
function of the package was to contain and protect the product. In recent
times, however, numerous factors have made packaging an important
marketing tool. Increased competition and clutter or retail store shelves
means that packages must now perform many sales task-from attracting
attention, to describing the product, to making the sale (Kotler
2006:244).

2.11. Labeling

Labels may range from single tags attached to products to complex

graphics that are part of the package. They perform several functions. At
the very least, the label identifies the product or brand. The level might
also describe several things about the product. Who made it, when it was
made, its contents, how it is to be used, and how to use it safely. Finally,
the label might promote the product through attractive graphics
(Kotler 2006:245).

2.12. New Product

Kotler defined new product, a good, service or idea that is perceived by
some potential customers as new.

Other authors try to distinct new products into three categories, the first
one as they stated products that are really innovative-truly unique. Any
new product in this category satisfies a real need that is not being
satisfied at the time it is introduced. The second category is,
replacements that are significantly different from existing products in
terms of form, function, and most important benefits provided. And the
last category is imitative products that are new to a particular company
but not new to the market. In another situation, a firm may simply want
to capture part of an existing market with a “me too” products. To

20
maximize company wide sales, makers of cold and cough remedies
routinely introduce imitative products, some of which compete with
nearly identical product from the same company (Etzel 2004:218).

2.13. New Product Strategy

To achieve strong sales and healthy profits, every producer of business
goods or consumer goods should have an explicit strategy with respect to
developing and evaluating new products. The same author also states
new product strategy, a statement identifying the role a new product is
expected to play in achieving corporate and marketing goals. For
example, a new product might be designed to protect market share, meet
a specific return-on-investment goal, or establish a position in a new
market. Or a new products role might be to maintain the company’s
reputation for innovation or social responsibility. A new product strategy
can also help a firm avoid the problem of having numerous products
under development but few actually becoming ready for the market. The
priorities in the strategy can be used to determine which prospective
products should receive special attention, which should go on the “book
burner”, and which should be scrapped (Etzel , 2004:220).

2.14. Stages in the Development Process

As to Etzel the development process is Guided by a company’s new
product strategy, a new product is best developed though a series of six
stages-idea generation, screening of ideas, business analysis, prototype
development, market tests and commercialization. And author Berkowitz
has identified them as seven stages by including new product strategy
development. The other author Kotler developed eight series of stages
namely–idea generation, idea screening, concept development and
testing, marketing strategy, business analysis, product development, test
marketing, and commercialization.

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2.14.1. Idea Generation

Developing a poor of concepts for new products or idea generation, must

build on the previous stage’s results. New product ideas are generated by
consumers, employees, basic research and development and competitors
(Berkowitz et al 2000:299).

And Kotler states that new product development starts with idea
generation–the systematic search for new product ideas. A company
typically has to generate many ideas in order to find a few good ones. The
author points out major sources of new product ideas include internal
sources and external sources such as customers, competitors,
distributes, and suppliers and others (Kotler 2006:276).

2.14.2. Idea Screening

At this stage, new product ideas are evaluated to determine which ones
warrant further study. Typically, a management team relies on its
experience and judgment, rather than on market or competitive data, to
screen the pool of ideas (Etzel, 2004:222).

Kotler states idea screening as the first idea – reducing stage which helps
spot good ideas and drop poor ones as soon as possible.

2.14.3. Concept Development and Testing

An attractive idea must be developed in to a product concept. It is

important to distinguish between a product idea, a product concept, and
a product image. A product idea is an idea for a possible product that the
company can see itself offering to the market. A product concept is a
detailed version of the idea stated in meaningful consumer terms. A
product image is the way consumers perceive an actual or potential
product.

Concept testing calls for testing new product concepts with groups of
target consumers. The concepts may be presented to consumers

22
symbolically or physically. For some concept tests, a word or picture
description might be sufficient. However a more concrete and physical
presentation of the concept will increase the reliability of the concept test
(Kotler 2006:280).

2.14.4. Marketing Strategy Development

The next step is marketing strategy development, designing an initial

marketing strategy for introducing the product to the market. The
marketing strategy statement consists of three parts. The first part
describes the target market. The planned product positioning; and the
sales, market share and profit goals for the first few years. The second
part of marketing strategy statement outlines the product’s planned
price, distribution, and marketing budget for the first year. And the third
part of the marketing strategy statement describes the planned long run
sales, profit goals, and marketing mix strategy (Kotler,2006:283).

2.14.5. Business Analysis

As per Birkowitz, business analysis involves specifying the features of the

product and the marketing strategy needed to commercialize it and
making necessary financial projections. This is the last check point
before significant capital is invested in creating a prototype of the
product. As an important aspect of the business analysis, the proposed
new product is studied to determine whether it can be protected with a
patent or copy right. An attractive new product proposal is one in which
the technology, product, or brand cannot easily be copied (Birkwitz,
2000:302).

2.14.6. Product Development

It is developing the product concept into a physical product in order to

ensure that the product idea can be turned into a workable product. The
R& D department will develop and test one or more physical versions of

23
the product concept. R&D hopes to design a prototype that will satisfy
and excite consumers and that can be produced quickly and at budgeted
costs. Developing a successful prototype can take days, weeks, months,
or even years. Often, products undergo rigorous tests to make sure that
they perform safely and effectively, or that consumers will find value in
them (Kotler,2006:283).

[Link] Marketing

As per Kotler (2006:285) states test marketing, the stage at which the
product and marketing program are introduced in to more realistic
market settings. Test marketing gives the marketer experience with
marketing the product before going to the great expense of full
introduction. It lasts the advertising, distribution, icing, branding and
packaging and budget levels. When using test marketing consumer
products companies usually choose one of the three approaches the first
is standard test marketing using standard test markets, the company
finds a small number of representative test cities, conducts a full
marketing campaign in these cities and uses store audits, consumer and
distributor surveys, and other measures to gauge product performance.
The results are used to forecast national sales and profits, discover
potential product problems, and fine-tune the marketing program. The
second approach is controlled test markets consists of several research
firms keep controlled panels of stores that have agreed to carry new
products for a fee.
The third approach is simulated test markets, companies can also test
new product in a simulated shopping environment. The company of
research firm shows ads and promotions for a variety of products,
including the new product being tested, to a sample of consumer. It gives
consumer a small amount of money and invites them to a real or
laboratory store where they may keep the money or use it to buy items.

24
The researches note how many consumers buy the new product and
competing brands (Kotler, 2006:286).

[Link]

Test marketing gives management the information needed to make a final

decision about whether to launch the new product. If the company goes
ahead with commercialization introducing the new product in to the
market it will face high cost (Kotler,2006:287).

2.15. New Product Adoption And Diffusion

The livelihood of achieving success with a new product, especially a
really innovation product is increased if management understands the
adoption and diffusion processes for that product. Once again, we stress
that organizations is the set of successive decisions an individual person
or organization makes before accepting an innovation. Diffusion of a new
product is the process by which an innovation spreads through out a
social system over time (Etzel 2004:225).

2.15.1. Stages in the Adoption Process

Consumer goes through five stages in the process of adopting a new

product:

Awareness: The consumer becomes aware of the new product, but lacks
information about it.

Interest: The consumer seeks information about the new product.

Evaluation: The consumer considers whether trying the new product
make sense.

Trial: The consumer tries the new product on a small scale to improve
his or her estimate of its value.

Adoption: The consumer decides to make full and regular use of the new
product (Kotler, 2006:160)

25
2.15.2. Adopter Categories

Some people will adopt an innovation soon after it is introduced. Other

will delay before accepting a new product, and still others may never
adopt it. Research has identified five innovation adopter categories,
based on when in the life of a product individuals adopt a given
innovation (Etzel 2004:225).

Innovators: Representing about 3% of the market, innovators are

venturesome customers who are the first to adopt an innovation. In
relation to later adopters, innovators are likely to be younger, have
higher social status, and be in better financial shape. Innovator also
tends to have broad social relationships involving various groups of
people in more then one community. They are likely total more on non
personal sources of information, such as advertising, rather than on
sales people or other personal sources (Etzel 2004:226).

Early Adopter: Comprising about 13% of the market, early adopters

purchase a new product after innovators but sooner than other
consumers unlike innovators, who have broad involvements outside a
local community, early adopters tend to be involved socially within a
local community. Early adopters are greatly respected in their social
system; in fact other people are interested in and influenced by their
opinions (Etzel 2004:226).

Early Majority:- Representing about 34% of the market, includes more

deliberate consumer who accept an innovation just before the “average”
adopter in a social system. This group is a bit above average in social
and economic measures. Consumers in the early majority group rely
quite a bit on ads, sales people, and contact with early adopter (Etzel
2004:226).

Late Majority: The late majority, another 34% of the market, is a

skeptical group of consumers who usually adopt an innovation to save

26
money or in response to social pressure from their peers. They rely on
members of the early and late majorities as sources of information.
Advertising and personal selling are less effective with this group than is
word-of-mouth communication (Etzel 2004:227).

Laggards:- are consumer who are bound by tradition and, hence, are
last to adopt an innovation. They comprise about 16% of the market.
Laggards are suspicious of innovations and innovators; they wonder why
anyone would pay a lot for a new kind of safety device for example by the
time laggards adopt something new, it may already have been discarded
by the innovators in favor of a newer concept. Laggards typically are
older and usually are at the low end of the social and economic scales
(Etzel 2004: 227).

[Link] for New product Failure

As per Kotler there are several reasons for new product failure. Although
an idea may be good, the market size may have been over estimated.
Perhaps the actual product was not designed as well as it should have
been. Or maybe it was incorrectly positioned in the market, price too
high, or advertised poorly. A high –level executive might push a favorite
idea despite poor marketing research findings. Sometimes the costs of
product development are higher than expected, and sometimes
competitors fight back harder than expected (Kotler 2004:240).
And according to Doyle,(2002:197), he states that; there have been
numerous studies of the success rates of new products. All of them
suggest that most new products fail to achieve a reasonable return for
the business. The failure rate is high for consumer products. This high
and rising failure rate has three implications for management. First, new
product development needs to be carefully planned. Second, since many
or most, new product ideas will be weeded out before the
commercialization stage, management need to stimulate a large pool of

27
potential new products from which a few winners may energy. Finally,
as risk taking, and consequently the acceptance of new product failure,
is fundamental to the innovation process, management must look for
ways to reduce the cost of these failures.

[Link] Reaction To New Product Introduction

New product launches may be in response to new product entries by
competitors. Research suggests that when confronted with a new
product entry by a competitor, incumbent firms should respond unlikely
with a limited set of marketing mix elements. Mangers should rapidly
decide which ones (product, promotion, price, and place) are likely to
have the most impact and concentrate their efforts on them. (David
Jobber 2001:300). The same another also states that competitor’s
reaction times to the introduction of a new product have been found to
depend on four factors. First, response is faster in high growth markets.
Given the importance of such markets, competitors will feel the need to
take fast action in response held by the introducing firm and its
competitors. Response time is slower when the introducing firm has
higher market share. Third, response time is faster in markets
characterized by frequent product. Finally, it is not surprising to find
that response time is related to the time needed to develop the new
product.

28
 CHAPTER THREE

Data Presentation Analysis and Interpretation

This chapter deals with the representation, analysis and interpretation of
data gathered from customers of Family milk. These data were obtained
through questionnaires and interviews. The questionnaires were
distributed to family milk customers and interviews are held with family
milk marketing manager. Among the product customers who are found
in the supermarket 200 customers were selected as sample respondents.
Thus 200 copies of questionnaires containing both open ended and close
ended questions were distributed to family milk customers. And the rate
of return for he questionnaires were 93.35% that means out of the total
200 questionnaires distributed 187 questionnaires were filled and
returned back.

3.1 General characteristics of the respondents

Table 1 shows the general characteristics of respondents which include
sex, age, educational background and occupational distribution.

29
Table 1 General characteristic of the respondents
No Item Respondents
Number Percentage
1. Sex
A. Female 120 64.17%
B. Male 67 35.83%
Total 187 100%
2. Age
A. 18-28 36 19.25%
B. 29-39 79 42.24%
C. 40-50 59 31.55%
D. Above 50 13 6.95%
Total 187 100%
3. Educational
background 8 4.28%
A. Primary 18 9.26%
B. Secondary 65 34.76%
C. Certificate 84 44.92%
D. Diploma 12 6.42%
E. Degree - -
F. Other, please
specify
Total 187 100%
4 Occupation
A. Office work 60 32.1%
B. Field work 10 5.35%
C. Business person 20 10.69%
D. Other, please 91 51.87%
specify
Total 187 100%
As it is shown on item number 1 the sex distribution of the respondents
are 120 females which covers 64.17% of the total respondents and 67
35.83% were male. Item number 2 indicates the age group of the
respondents. Out of 187 respondents 36(19.25%) are the age group
between 18-28, 79(42.24%) of respondents are age group between 29-39,
the rest 59(31.55%) and 13(6.95%) of the total respondents lie on the age
group of 40-50 and above 50 respectively. Item number 3 reveals the
educational background of the respondents, 8(4.28%) of the respondents
are primary level, 18(9.26%) of them are secondary level, 65(34.76%) of

30
the respondents are certificate and the rest 84(44.92%) and 12(6.42%)
have diploma and first degree respectively. In item number 4 shows the
respondents occupation, out of 187 respondents 60(32.1%) are office
workers, 10(5.35%) are field workers, 20(10.69%) are business people
and the majority 97(51.87%) of the total respondents are housewives.

3.2 Analysis of the findings of the study

This research study tries to investigate family milks capability towards
new product development from both customers as well as from
employee’s point of view. Accordingly various questions were posed to
sample respondents mainly related with new product development,
feedback, compliant handling mechanisms of family milks product and
quality related issues.
Thus in this section Reponses from customer and company marketing
manager are presented, analyzed and interpreted as follows.

31
3.2.1 Responses of customer of family milk.
Table 2. Customer general response toward the company’s product.
No Item Respondents
Number Percentage
1. For how long have you consume
family milk?
A. < 1 year 35 18.72%
B. 1 year 30 16.04%
C. 2 years 91 48.66%
D. 3 years 17 9.04%
E. 4 years 14 7.49%
Total 187 100%
2. Have you ever used milk other
than family milk?
A. Yes 182 97.33%
B. No 5 2.67%
Total 187 100%
3. If you have used other milk
product then how do you
compare family milk with other
milks?
A. Very high 7 3.74%
B. High 111 59.36%
C. Medium 58 33.69%
D. Low 6 3.21%
E. Very low - -
Total 182 100%
On question number 1 respondents were asked for how long they have
consumed Family milk out of 187 respondents 35(18.72%) have
consumed less than a year, 30(16.04%) have consumed for a year and
91(48.66%), 17(9.09%) and 14(7.49%) of the respondent have consumed
Family milk for 2, 3 and 4 years respectively. From the above
presentation, majority of consumers have used Family milk these two
years. The next question was if they have ever consumed milk other than
Family milk, 182(97.33%) of the total respondent were consumed other
milk than Family milk. The last 5(2.67%) did not consume other than
Family milk. The last question was if respondents used other milk

32
product how they compare the quality of Family milk with that of
competitors.

3.2.2 Customers towards Family milk product.

Table 3
No Item Respondents
Number Percentage
1. Do you think family milk
product is easily accessible?
A. Yes 84 44.92%
B. No 103 55.08%
Total 187 100%
In item number 1 question was raised for the respondents about the
accessibility of family milk, out of 187, 84(44.92%) replied yes where as
103 (55.08%) of the respondents replied no from this we can understand
that the company need to work more on accessibility of its product to
customers easily.

33
3.2.3 Family milk product quality
Table 4 Product quality compared to other milk products.

No Item Respondents
Number Percentage
1. What comes in your mind
primarily when you think or see
Family milks product?
A. Its quality 46 24.6%
B. Its taste 25 13.3%
C. Its natural odor 89 47.59%
D. Its price 27 14.44%
E. Other, please specify - -
Total 187 100%
2. Family milk product quality
compared to other milk?
A. Very high - -
B. High 7 3.74%
C. Medium 111 59.36%
D. Low 63 33.69%
E. Very low 6 3.21%
Total 187 100%

As shown on the above table, 89(47.59%) comes in their mind product’s

odor, 46 (24.6%) products quality, 27 (14.44%) its price and 25(13.37%)
respondents that its taste comes in their mind when ever they think or
see family milks product. Regarding Products quality compared to other
milk, 111(59.36%) rates medium, 63(33.69%) rates as low, 7(3.74%) and
6(3.21%) rated high and very low respectively.

34
3.2.4 Customers Evaluation Related with the product offered.
Table 5. Customer’s perspective towards Family milk products
No Item Respondents
Number Percentage
1. Which characteristics makes
family milk product unique or
different? 25 13.37%
A. Price 9 4.8%
B. Good taste 89 47.59%
C. Natural odor 58 31.02%
D. Fat content 6 3.21%
E. Other, please specify
Total 187 100%
2. How do you evaluate the
product capacity meeting with
your need? - -
A. Very high 11 5.88%
B. High 72 38.5%
C. Medium 104 55.6%
D. Low - -
E. Very low
Total 187 100%
3. Packaging quality
A. Very high - -
B. High 70 37.43%
C. Medium 113 60.43%
D. Low 4 2.14%
E. Very low - -

Total 182 100%

4 Product quality
A. Very high - -
B. High 13 6.95%
C. Medium 70 37.43%
D. Low 104 55.61%
E. Very low - -
Total 187 100%
As shown in the above table, characteristics makes Family milk product
unique or differentiate, 89(47.59%) of the total respondent agreed that its
natural odor makes it unique and 58(31.02%) agreed that its fat content
make it unique and the rest 25(13.37%), 9(4.8%) and 6(3.21%) agreed

35
that price, good taste and nothing makes it unique respectively. For the
same question about the uniqueness of the product the company’s
marketing manager replied on the interview that the uniqueness of the
Family milk product is its freshness, pure natural cow milk, no
preservatives are added except pasteurization. And the marketing
manager added Family milk is known for its fast delivery service. The
question regarding evaluating the product capacity meeting with their
need; the respondents rated as 104(55.6%) low, 72(38.5%) medium, and
11(5.88%) rated as high. The two extremes (very high and very low) were
not chosen. Question regarding package quality out of 187 respondents,
113(60.43%) rated as medium, 70(37.43%) high and 4(2.14%) low. Here
also the two extremes very high and very low were not selected. The last
question was regarding product of quality, 104(55.61%) agreed that the
product has low quality because it doesn’t keep its consistency.
Regarding question raised for marketing manager of the company about
meeting customers need, the marketing manager replied we can not say
100% we meet our customers need as it is young on its establishment
but works hard to strive for excellence.
For the question regarding package quality, since it is a major
component on sensitive products like milk, majority of the respondents
113(60.43%) replied medium, 70(37.43%) high and 4(2.14%) low. The
package doesn’t get a rank of very high quality and very low as well. With
this perspective the marketing manager agrees that the packaging
problem was a raised from the country’s foreign currency problem forced
the company to use local or domestic made packaging which is of poor
quality. Due to this inconsistency on packaging has been shown.

36
 3.2.5 Relative attributes of the product and customer services
Table 6 Relatives attributes of the product
No Item Respondents
Number Percentage
1. Taste of the product?
A. Very high -
B. High 5 2.67%
C. Medium 60 32.09%
D. Low 122 65.24%
E. Very low - -
Total 187 100%
2. Natural odor
A. Very high 13 6.95%
B. High 43 22.99%
C. Medium 50 26.74%
D. Low 74 39.57%
E. Very low 7 3.74%
Total 187 100%
3. Fat content
A. Very high 22 11.76%
B. High 85 45.45%
C. Medium 66 35.29%
D. Low 14 7.49%
E. Very low - -
Total 187 100%

According to 122(65.24%) of the total respondents the taste of the product is

rated as low. And 60(32.09%) of the respondent replied as medium and only
5(2.67%) of the total respondent agreed that the product taste is high or
suited to their preference. On item number 2 question related to its natural
odor preference of the respondents replied that 13(6.95%) rated as very
high, 43(22.99%) high, 50(26.74%) as medium, 74(39.57%) responded that
its odor is not their preference and 7(3.74%) replied very low, respondents
who really do not prefer the natural odor. On item number 3 the fat content
of the product, out of 187 respondents, 22(11.76%) replied as very high,
85(45.45%) rated its fat content as low. The respondents did not give very
low for its fat content. The marketing management of the company

37
responded regarding the product’s taste, odor and fat contents as follows
respectively. The taste of the product is arise from its pureness of milk and
the company collects milk from different farmers association and the
association is again collecting milk from its members(farmers). Those
farmers feed different kinds of food. The odor arises from its natural scent of
milk or a proof of not using any preservatives to avoid the odor. Its fat
content is always the same based on the standard 2.7 but due to the
difference of food those cows eat the milk thickness varies and due to this
customers may feel that the product’s fat content varies but the standard is
2.7 per half liter package is always constant.

38
3.2.6 Family milks feedback handling practice
Table 7. Compliant handling mechanisms of Family milk?
No Item Respondents
Number Percentage
1. Have you ever had any compliant or
idea to generate on the company’s
product?
A. Yes 94 50.27%
B. No 93 49.73%

Total 187 100%

2. If “yes’” to the above question have
you ever communicate your
compliant to Family milk?
A. Yes 61 64.89%
B. No 33 35.11%
Total 94 100%
3. If “yes” to whom did you complain?
A. To the manager 11 18.03%
B. To sales people 50 81.97%
C. Suggestion box - -
D. To compliant holding - -
department
Total 61 100%
4. What was your compliant about the
product? 27 44.26%
A. Freshness 15 24.59%
B. Odor 9 14.75%
C. Taste 5 8.2%
D. Fat content 5 8.2%
E. Other, please specify
Total 61 100%

It is easily observable from the above table that 94 (80.27%) of the total
respondent have complaint or idea generate on company’s product where
as almost half of the respondent did not raise any complaint or idea to
generate on the company’s product. Out of these 94 respondents, about
61(64.89%) have able to communicate their complaint with Family milk.
where as, 33(35.11%) of the total 94 respondents did not communicate

39
with the company. For those who have been able to communicate which
comprises of 61 respondents, 11(18.03%) give their complaint to the
manager and 50 (81.97%) give their complaint to the salespeople.

Concerning feedback handling practice of the company the marketing

manager replied that whenever there is complaint from customer try to
correct the problem but there is no complaint handling department and
no suggestion box has been placed for those silent customers.

On item number 4, for the respondents who have been able to

communicate to the company, 27 (44.26%) complain about products
freshness, 15(24.59%) complained its odor, 9 (14.75%), 5(8.2%) and
5(8.2%) complained about taste, fat content and package respectively.

3.2.7 Customer attitude towards Family milk’s product.

Table 8. Customer response towards product improvement.

No Item Respondents
Number Percentage
1. How you even seen, heard or
experience any product improvement
since you become consumer of family
milk?
A. Yes 24 12.83%
B. No 146 78.07%
c. I don’t know 17 9.09%
Total 187 100%

Table 8 reveals customers response towards product improvement since

they became customer of the product. Majority of the respondents,
146(78.07%) did not see, heard or experience any product improvement.
where as, 24(12.83%) replied the have seen improvement regarding
packaging and the rest 17(9.09%) said they don’t know.

40
3.2.8. Customers response towards Family milk product
modification.
Table 9. Customer response towards the company’s product
modification that can lead to new product development.
No Item Respondents
Number Percentage
1. What do you want from the company
to incorporate for you on the product
development or modifying existing
product?
A. It’s odor 42 22.46%
B. It’s taste 103 55.08%
C. Variety on its fat content 10 5.35%
D. Variety on its size 20 10.7%
E. Other please specify 12 6.41%
Total 187 100%

As item number 1 depicts that for question on the need of the customers
to incorporate on product development or modifying existing product.
Out of 187 respondents the majority 103 (5.35%) replied its taste, 42
(22.46%) replied its odor, 10(5.35%) replied they need variety on its fat
content, 20 (10.7%) replied that they need variety on its size and the rest
12 (6.14%) need different packages.
The marketing manager replied on this aspect as follows, when Family
milk started its operation it started with advanced technology which
needed a lot of investment but helps it to compete well in the sector. But
now there are different agro industries which enters to the market with
more advanced technology now the problem is technology becoming
dynamics now a days in order to come with new product the company
needs lots of investment and different packages. The package is imported
from abroad and the packaging companies do not give the company the
necessary price list due to Family milk’s limited production capacity,
since it costs the packaging companies a lot to transportation.

41
 Chapter Four

Summary, Conclusions and Recommendations

This chapter summarizes the main findings of the study’s presents
conclusions drawn from the findings and forwards recommendations
based on the conclusions provided.

4.1 Summaries
Concerning the general characteristics of respondents’ sex, age,
educational background and occupation were considered from this
finding. Females 120(64.17%) taken the majority, where as most of the
respondents were the age between 29-39 the educational background of
respondents 84(44.92%) holds diploma and the occupation of
respondents, 97(51.87%) were house wives.

In relation to customers response towards the company’s product most

of the respondents 91(48.66%) consume Family milk for 2 years. Majority
of the respondents have used other products and 111(60.99%) rate
Family milk compared to other milks as medium,58(31.87%)rate as low
and 7(3.85%) and 6(3.29%) rated Family milk as high and very low
respectively.

Regarding accessibility of the product 103(55.08%) of the respondents do

not think Family milk is easily accessible and the rest 84(44.92%)
thought Family milk is easily accessible.

In relation to Family milk’s product quality compared to other milk

products 111(59.36%) of them replied medium, 63(33.69%) replied low,
7(3.74%) of the respondents replied high and 6(3.21%) of the
respondents replied very low. Regarding their response on what do they

42
think of when they think or see Family milk product 89(47.59%) replied
that they remember products odor, 46(24.5%) replied as its quality,
27(14.44%) replied its price and the rest 25(3.37%) replied its taste.

Regarding the unique characteristics of the product, respondents give

their response, as 89(47.59%) agreed that its natural odor makes the
product unique, 58(31.02%) agreed that the products fat content is the
uniqueness, 25(13.37%) its price, 9(4.8%) agreed that products good
taste and 6(3.21%) replied nothing makes it unique.

In relation to customer evaluation on the product capacity with their

need 104(55.6%) respondents rated as low, 72(38.5%) medium, and
11(5.88%) rated as high.
Concerning the package quality, 113(60.43%) agreed that the package
quality is medium, 70(37.43%) agreed it has a high quality and the rest
agreed that products package is of low quality.

Regarding the product quality, 104(55.61%) replied the product has of

low quality, 70(37.43%) replied the product has medium quality and only
13(6.95%) replied the product has a high quality.

Concerning with the relative attributes of the product it incorporates

taste, natural odor, and fat content. Majority of respondents agreed that
the taste of the product is poor, 60(32.09%) said its taste is medium,
only 5 (2.67%) likes the taste and rated high. In addition to its taste,
about 74(39.57%) of respondents do not like the odor of the milk,
50(26.74%) gives medium, 43(22.99%) liked the natural odor of the milk,
13(6.95%) liked the odor very much and gives it very high and 7(3.74%)
do not like the odor and rated as very low. Lastly, the fat content of the
milk, 85(45.45%) gives it very high, 66(35.29%) medium and 22(11.76%)
gives it the fat content very high.

43
In relation to complaint or feed back handling of Family milk, 94(50.27%)
respondents had complaint on company’s product and 93(49.73%) didn’t
and 61(64.89%) of respondents were able to communicate to Family
milk, of those 61 respondents, 11(18.03%) of respondents were able to
communicate with the manager, and 50(81.97%) of respondents
communicated with the sales people, 27(44.26%) of the respondents
complaint was freshness of the milk, 15(24.59%) odor was their
complaint, 9(14.75%) taste of the milk was their complaint, where as
5(8.2%) of them complained about its fat content and 5(8.2%) package of
the milk was the compliant.

In relation to customers response towards product improvement 146

(78.07%) replied they have not seen, heard or experience any product
improvement since they became customer of the company’s product,
24(12.83%) noticed there was improvement regarding package and
17(9.09%) them don’t know whether the company made product
improvements or not.

And finally, concerning product modification 103(55.08%) wants the

company to focus more on product’s taste, 42(22.46%) needs a change
on product’s odor, where as 20(10.7%) needs variety on it’s packaging
size, 12(6.41%) need different package in addition to the current package
and 10(5.35%)wants the company to produce variety on its fat content
which comprises of full cream milk, normal milk (2.7 fat) and skimmed
milk (0 fat).

44
 [Link]
Depending on the findings above the following conclusions are drawn.

• Family milk is producing milk below the customer need and want.
• As revealed from the study the milk product is of low quality
which dose not incorporates the expectation of customers wants.
• Even though family milk insists on selling natural odor milk
majority of the customer did not like the taste and odor of the
product.
• According to the study, customers’ need a Varity in the size of
packaging, which helps them t o buy the amount they specifically
want and no wastage will be accorded.
• Customers look for healthy or diet food which does not contain fat
and need full cream milk for their infants.
• Family milk does not have compliant handling department and the
absence of this department may keep customers far from
communicating to the company and one of the major importance of
customer is their feedback.

45
 [Link]
Depend on the findings the following recommendations are forwarded by
student researcher.

• The company should give due consideration on improving taste and

odor of the milk by acquiring its own farm, the company can maintain
consistency and uniformity of the product.
• The company should consider adopting latest technologies in order to
maintain product quality and to be competitive in the market.
• Company should establish a research and development department to
exhaustively follow the needs, wants, tastes and preferences of
customers. R&D should bring out modified or new products in terms of
packaging, Fat content, and odor free milk.
• The company should make market research periodically. Not only when
there is a problem occurred but also to know the potential customer of
the product and when new product is released to the market.
• In relation to company’s compliant handling, the company should
prepare appropriate compliant handling mechanisms for its customers
like suggestion box, toll free line to customers to call for their
suggestion or compliant. This would increases customers bond with the
company and whenever they see improvements to their complaints they
develop belongingness to the company.
• Customers do not need always the same amount of milk. In order to
give variety on its package, the company should start packing in
different size and different packaging.
• The consumption pattern of customers has always been changing. And
the company has only a package which can hold 0.5 liter of milk a
piece. Accordingly customer need more than 0.5 liter milk, they are
compelled to buy other package of milk. The customer want package
that can hold variety of milk contents level like 0.25 liter, 1 liter, 2
liters, etc. Consequently, the company should fulfill the demand of
customer by conferring alternative product.

46
 • In relation to formal stages of new product development, the company
should establish research and development department to be a leader in
the industry and focuses on what customers are really looking for, even
if the market is a bit challenging for new products customers will be
attracted when they find what they really want.
• A company who engaged in producing or processing needs a
research and development department which could work hand in
hand with marketing department to observe what is going on
competitions side, technological advancement, product
innovations to cope with the marketing environment.
.

47
 Bibliography
Anderson and Vincze (2000). Strategic Marketing Management. 1st ed.
Houghton Mofflin company, U.S.A.
Berkowitz etal (2000). Marketing. 6th ed. McGraw-Hill companies. Inc.
United States.
Bowersox and M.B. Cooper, (2004). Strategic Marketing Channel
Management. 2nd ed, Tata Mc-Graw-Hill Ed. New Delhi.
Charley Watkins (2006). Marketing: Sales and Customer Service. 1sted.
A.I.T.B.S publishers. New Delhi: India.
David Jobber (2001). Principles and Practice of Marketing. 3rd ed.
McGraw-Hill, U.K.
Debashis Pati (2002). Branding, 1st ed. Machmillan India Ltd, India.
Etzel etal (2004). Marketing. New Delhi, Tata McGraw-Hill ed.
Kotler and G. Armstrong (2006). Principles of Marketing. 11th ed, New
Delhi: Prentice-hall, Inc, of India Private Limited.
Kotler (1999). Kotler on Marketing. Simon & Schuster Uk Ltd Great
Britain.
Kotler and Keller (2006). Marketing Management. 12th ed prentice, hall
of India Private Limited, India.
Kumar and A.k. Ghosh (2003). Marketing and Sales Management. J.L.
Kumar for Anmol Publications Pvt. Ltd New Delhi: India.
Kumar and N. Meenakashi (2002). Marketing Management. 1st ed New
Delhi: Vikas publishing house Pvt Ltd.
Kumar and R. Mittal, (2002). Production Management. 1st ed, New
Delhi: J.L Kumar for Anmol Publication Pvt. Ltd.
Philip Kotler (2000). Marketing Management. 10th ed Prentice, Hall of
India Private Limited, India.
Saxena (2006). Marketing Management. 3rded. Tata McGraw-Hill
Publishing Co. Ltd. New Delhi.

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51
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52
 St. Mary’s University College
Business faculty
Department of Marketing Management

Questionnaires to be filled by Family Milk customers.

This questionnaire is prepared by a student researcher prospective
graduate of year 2010 in the field of Marketing Management, to collect
information for the partial fulfillment of a senior essay. And the main
objective of this questionnaire is to evaluate the new product strategy of
Family Milk. Therefore you are requested to fill this questionnaire
honestly and with due care because the correctness of the answer will
have paramount importance for the outcome of the research.
Thank you in advance for your sincerely cooperation.
General instructions
• Its’ not necessary to write your name
• For the question asked below please put “” mark for the answer you
choose and write your idea on the provided space
Part I general characteristics of respondents.
1. Sex
A. female B. male
2. Age

53
 A. 18-28 B. 29-39 C.40-50 D. above50
3. Educational background
A. primary school B. high school C. certificate
D. diploma E. degree
F. other please specify _______________
4. Occupation
A. Office B. Filed work C. Business person
D. Other, please specify
Part ii Questioner related with the product
1. For how long have you used (consume) Family Milk?
A. < 1 year B. 1 year C.2 years
D. 3 years E. 4 years
2. Have you ever consume milk other than Family product?
A. yes B. No
3. If you have consumed other milk products, how do you compare the quality
of Family Milk?
A. very high B. high C. medium
D. low E. very low
4. Have you ever seen, heard or experience any product improvement since
you become consumer of Family Milk?
A. Yes B. No C. I don’t know
5. If “yes” in which aspect of the product have you experience product
development?____________________________________________
6. Which characteristics makes Family Milk’s product unique or
differentiate?
A. price B. Good taste C. Natural odor
D. Fat content E. Other please specify__________
7. What do you want from the company to incorporate for you on the product
development or modifying existing product?

54
A. its odor B. its taste
C. variety on its fat content D. variety on its size
E. Other please specify
8. Do you think Family Milk’s product is easily accessible?
A. yes B. No
9. If “No” please justify your answer

10. What comes in your mind when you think or see Family Milks product?
A. Its quality B. Its taste C. Its odor D. Price
E. Other, please specify_________________________________

11. Have you ever had any compliant or idea to generate on the company’s
product?
A. yes B. No

12. If “yes” to the above question have you ever communicate your company’s
product?
A. yes B. No
13. If “yes” to whom did you complain?
A. To the manager B. To Sales people C. Suggestion box
D. Compliant handling department _________________________
14. What was your complain about the product?
A. freshness B. odor C. taste D. fat content
E. other please specify ______________
15. Do you think Family Milk product offer matches with your preference
with below mentioned factors?
[Link] high medium low V-low
A. Good taste

55
B. Natural odor
C. Fat content
D. Quality
E. Package quality
F. Delivery service
G. Returning sour milk
H. Availability
I. Compliant handling
J. Total capability of
Meeting your need
16. In general if you have idea on the new product development practice of
the company please write your comment?________________________________

56
 St. Mary’s university college
Faculty of Business
Department of marketing Management

Interview forwarded to he marketing manager/

1. What are the systems to be used to develop new product?
2. Who is responsible to design and materialize new product?
3. How and when does the company conduct market survey for its product
development?
4. What are the problems encountered in developing new product or modifying
existing product?
5. To what extent your company goes to conduct technological advancement?
6. What factors to be considered in producing and offering a new product to a
market?
7. What strategies do you primarily follow in new product offering?
8. How do you collect feedback from the consumer of your product?
9. Do you think that your company product offer to meet with consumers
expectation?
10. What do you think is the uniqueness of your product?
11. Do you have research and development department?
12. If “yes” what is its capability?

57
 13. How do you handle consumer compliant?

THE CANDIDATE’S DECLARATION

I, the undersigned, declare that this senior essay / project is my original work. Prepared
under the guidance of ________________
All sources of materials used for the manuscript have been dully acknowledged.

Name
Signature
Place of submission: St. Mary’s university college
Department Marketing Management
Date of submission: 22, June 2010

ADVISOR’S DECLARATION

This paper has been submitted for examination with my approval as the university
college advisor.

Name: ______________
Signature: _____________
Date: ________________

58
59