Product Launch Strategy and Planning Brief: PBM Plastics

Case Study Selected 

PBM Plastics, Inc. is ranked among the leading plastic bottle suppliers and manufacturers in China. Founded in 2000, the company specializes in plastic HDPE bottles, spray bottles, water bottles, shampoo bottles, bottle liners, and bottle caps among others. The company’s key markets include the Middle East, Europe, North America, South East Asia, and Japan. One of the company’s key divisions also specializes in the manufacture of plastic products for feeding babies and newborns. The division gained success in the market after producing private-label preformed and disposable feeding bottle liners. The success resulted in the expansion of the feeding products to include aspirators and baby bottles as the key complementary products for the liners ( Yemen & Weiss 2013) . The traditional bottle liners that PBM Plastics produce are used for feeding newborns and babies by placing the liners inside a disposable bottle. Although the traditional bottle liners have gained significant popularity in the market, PBM faces extensive competition in the manufacture and supply of the liners, especially from Playtex, PBM Plastics’ main competitor ( Yemen & Weiss 2013) . Following the growing competition, PBM Plastics needs to expand its market share and enhance its competitive advantages by making improvements on the traditional bottle liner, which is regarded as the company’s popular product, and launch to the market the modified product, which presents additional advantages to the consumers. The proposed modified product is the expandable bottle liner, which would replace the traditional preformed non-expandable bottle liners. 

Rationale for selecting the Organization 

Several factors informed the selection of the BPM Plastics case, with the key reason being the existence of a growth opportunity in the company, which involves modifying the company’s popular product to enhance its competitive advantages. Further, the case is ideal because BPM Plastics markets its products from a global perspective, thus by enhancing the quality of its key product, the company would be providing greater value for the global consumers. The expandable liners present several new advantages to the consumers in addition to the traditional advantages of the preformed bottle liners, including the benefit that they are sterile ( Yemen & Weiss 2013) . Additionally, the expandable liners are capable of stretching, thus filling the bottle’s entire volume when filling the liner with the liquid since it is created with elastic material, unlike the traditional liners, which are smaller than their holding bottles and lack the capacity to expand. 

Moreover, the new product does not require the user to sterilize and wash the bottle every time one uses it, thus bringing convenience to the mothers by saving them energy and time. Further, the expandable bottle liners play a crucial role in protecting babies against health problems that are associated with gases entering the baby’s body by preventing air from getting into the child’s stomach, and therefore minimizing the discomfort that emanates from such health problems. In addition, the new product will help in solving a number of problems associated with the traditional bottle liners, including capacity. The traditional liners, due to their inability to expand, often fail to hold sufficient milk for a child, thus necessitating frequent refilling of the liners, which illustrates the need for BPM Plastics to improve on its current product to overcome the challenges associated with the traditional product and ensure that the changing of the market are effectively met. 

Problem or Opportunity 

The current version of PBM Plastics’ liners are made of a rigid and non-stretchable material, indicating that in order to increase the internal volume of the liners, a proportional increase in the bottle sizes and the liners is required. However, the proportional increase would result in larger bottles, which would be inconvenient to use, while at the same time increasing the product’s production costs. Hence, creating an expandable version of the product is the most ideal alterative for the company, since it facilitates the improvement of the current product to match the needs of the customers, which include the need for a bottle liner with a larger volume, as well as lowering or maintaining the current cost of producing the product. 

On the basis of the information presented on the case pertaining to PBM Plastics’ position in the market, the demand and capacity of the company’s products, the most suitable product development strategy to follow is the Ansoff Matrix, which proposes the concentration of efforts in the development of new products for the already existing markets (Kotler, 2017). Therefore, the company’s new product, the expandable bottle liners, would be more successful in the market since they are improvement to the company’s well-known brand, which presents the customers with improved qualities. Thus, it makes sense to propose the expandable liners to PBM Plastics since the product is closely associated with the existing product, which indicates that the new product matches the current needs of the customers, while refreshing the interest in the existing product by introducing new aspects of the product that create additional value to the customers.

Further, focusing on the production of the new product would play an essential role in protecting the business and the reputation of the company, which is facing a significant threat from the product shortages emanating from the company’s main supplier, StarPack. StarPack is facing managerial problems, which have affected the company’s ability to supply raw materials for producing the traditional bottle liners in full volume. Therefore, producing a new version of the current product using materials from other suppliers would be ideal to solve the shortage problem created by StarPack, and hence, the company’s business and reputation.

The Company’s Culture and Competitive Marketplace 

PBM Plastics Inc.’s culture entails prioritizing the needs and interests of its customers; hence, when developing a new product, the company first focuses on the value of the product and then the product costs ( Yemen & Weiss 2013) . The new product presents customers with additional value, since it has a larger volume compared to the traditional product, as well as the health benefits that emanate from the product’s ability to prevent the entry of air, which may cause health problems to the babies, thus satisfying the needs of the customers better than the traditional product. Moreover, the new product will strengthen the company’s position in the market and increase its revenues since it will present additional benefits to the consumers, which the currently available product from PBM Plastics and its competitors is not providing. Hence, the product matches both PBM Plastic’s culture and the company’s competitive market since it targets to meet the needs of the customers while ensuring low production costs, as well as enhancing the company’s position in the market by presenting new value to the market. 

Proposed Approach for Product development 

The product development strategy follows the principles outlined in the Ansoff Matrix. The Ansoff product and market growth matrix postulates that a firm’s growth effort depend on whether the firm markets existing or new products in the existing or new markets ( Roland Berger Strategy Consultants, 2013) . The matrix suggests four major growth strategies that focus on setting a firm’s business strategy, including market penetration, diversification, product development, and market development as illustrated below. 

Approach 1 

The market penetration growth strategy involves focusong on marketing a firm’s existing products in the already existing markets. The key objectives that the srategy aims to achieve include increasing or maintaining the curent products’ market share, which can be achieved through such strategies as personal selling, sales promotion, advertising, and pricing strategies among others. The second objective that the strategy aims to achieve involves restructuring the firm’s mature market through driving out competition by empoying such measures as aggressive promotional campaigns. Finally, the growth strategy aims at increasing the product’s usage by the existing customers as well as securing the dominance of the growth markets. The growth strategy’s key focus us on the customers that purchase from the competitors yet the share similar characteristics with the existing custometsv, the firms existing customes, and the customers sharing similar characteristics with the existing customers as well as need but they are bnot actually purchasing the product (Roland Berger Strategy Consultants, 2013). Thus, market penetration emphasizes on increasing market share through increased matketing promotions, enhancement of the offer through the creation of additional vaue for the customers, and the implementation of more effective marketing techniques.

Approach 2 

Market development, on the other hand, is a growth strategy that focuses on marketing a firm’s existing products to new markets. Firms approach the stategy through a number of ways, including targeting new geographical markets, implementing new product dimensions, such as packaging, price differention that targets to create new market segments or to attract new customers, and embracing new distribution channels. Although market developmet presents greater challenges that the marlet penetration strategies, firms can effectively implement the strategy by opening market segments that were previously excluded through such measures as pricing policies, establishing new distribution and marlketing channels, and penetrating new geographical markets by focusing on the regional, international, and national markets rather than just concentrating on the local markets.

Approach 3 

The third strategy, product development, involves introducing new products in the existing markets. The strategy often requires firms to create improved products, which are appealing to the existing markets. Product development is ideal in situations where a company’s product requires differentiation for it to remain competititive in the current market. Product development emphasizes on such factors as ensuring the firm’s product is the first in the market, innovation, research, and development, and keen analysis of the customers’ needs and their changing trends (Roland Berger Strategy Consultants, 2013). The main objectives of the product development strategy include replacing the existing product with an improved and better product, providing complementary items,which customers need to purchase before, after, or when purchasing the business’ main product, and selling other products demanded by the customers as one of the approaches for leveraging or strengthening the firm’s relationship with the customers as well as prodiding added convenience to the customers.

Approach 4 

Finally, the diversification strategy mainly focuses on marketing new products in new markets. The strategy is regarded as highly risky since it involves businesses venturing unknown markets that they have little or no experience. Diversification, is however, a highly effective strategic that is often implemented at three levels, including dversification in the related markets, the unrelated markets by utilizing the existing business c apabilities and resources, and diversifaction in the urelated markets requiing the use of new business capabilties and resources.

Discussion 

Based on the growth strategies presented in the Ansoff Matrix, the development of the expandable bottle lines will follow the diversification and the product development strategies. Product development will mainly focus on using innovating ideas, comprising of utilizing elastic material in the production of the liners rather than the traditional non-elastic material as the key raw material, so as to produce a new version of the firm’s main product that meets the changing needs of the comsumers as well as overcoming the advantages of the current product. Product development, in this case, not only focuses on presenting themarket with a new product but also overcoming competition from the growing plastics companies,which have also ventured in the production of the bottle liners. However, unlike other firms, which are yet to begin producing elastic bottle liners that are larger in volume and also save on production costs, PBM Plastics needs to ensure that it is the first to introduce the improved product into the market, if the company is to gain a competitive advantage over its key competition. Hence, extensive market research is crucial in establishing the needs of the market as well as the most appropriate markets to market the improved product for optimum gains for the company.

On the other hand, the diversification strategy is critical after the production of the improved product, since it mainly involves the actual marketing of the product in the market. PBM Plastics is facing significant competion from other plastics companies, particularly Playtex. Diversification in this case focuses on selling the improved product in both the existing and new markets. The existing market demonstrates a high demand for an improved product that is fairly priced, and one with a larger volume. Hence, the improved product is ideal for the existing market, which demonstrates a change in the product’s preference. On the other hand, selling the product in new markets is ideal for PBM Plastics, which is seeking to stay ahead of competition as well as increase the company’s product’s market share. Diversification into the unrelated markets will focus on the markets where the existing capabilities and resources of the company can be utilized as well as unrelated markets where the company needs to apply new capabilities and resources. 

The unrelated markets where existing capabilities and resources include the existing local and international markets, where the company has already established the required supply and marketing infrastructure required to reach its customers. Moreover, such markets will include the new target customers found in such markets, where the company only requires to engage in product promotions that seek to inform the potential customers of the company’s new products, and the value that the product provides to the customers. Further, the promotions would be seeking to influence the competitors’ customers who possess similar needs and characteristics with BPM Plastics’ customers to start purchasing the company’s improved product, which possesses more advantages compared to the product that the competitors are currently offering. On the other hand, the diversification strategy will focus on the markets that demonstrate potential, but the company requires to invest in capabilities and resources, since the company has not invested in the markets before. Such markets include new international and regional markets where BPM Plastics has not ventured before but demonstrate potential to help the company to achieve its growth objectives, which comprise of attaining a larger market share for its products. Such markets require huge infrastructural investments to facilitate the supply and marketing of the product in the new markets, which is critical in ensuring that the company expands the market share for its products and stay ahead of competition. 

Project Methodology 

The introduction of a new product in a given market requires proper implementation of relevant methodologies that aids in the success of the product. Development methodologies refer to a number of processes implemented by the engineering team within a company in order to ensure proper building of the new product being introduced in the market. The most appropriate product methodology that suits PBM Plastics in the product development process is agile methodology. Agile methodology undertakes the iterative approach whereby the process of product development is undertaken in a collaborative environment. The methodology focuses on the production of high quality software that helps in meeting the needs of the stakeholders based on the cost effective and timely features. The implementation of the agile methodology is relevant in the given company as it will assist the production teams to capitalize on the completion of the most important processes relating to product development. The product methodology relevant for this case requires having the ability to cater for risks that are associated with new product development in order to overcome the negative effects that are associated with the changes. The incorporation of the project methodology with a Gantt chart that utilizes the Project Buffer tool found in the Critical Chain approach (Leach, 1999).

The Buffer management or the Critical chain management is a technique in project management that involves introducing key original ideas to add on the generally accepted and well-known resource constrained principles of agile methodology. The approach introduces the buffering idea in project management, rather than executing activities individually, which further helps to ensure that the set project deadlines are met. Hence, the approach is regarded as a new and effective approach in ensuring better project control, which is achieved via feeding and project buffer management. The approach also plays am essential role in ensuring that the project deliverables are achieved since incorporating the buffers into the project schedule helps in creating a project baseline schedule that is buffered, and which can act as a performance measuring tool, in addition to providing dashboards that require constant monitoring for purposes of triggering corrective action ( Vanhoucke, 2012 ). The buffer management project methodology approach comprises of six main steps, including establishing the aggressive estimates, creating the as late as possible, commonly known as the ALAP, schedule, identifying the critical chain, establishing the suitable buffer positions, establishing the ideal buffer sizes, and incorporating the buffers into the schedules respectively.

Project Planning 

Project planning using the Gantt’s bar chart is considered the best approach since it provides a clear visual two-dimensional graphic representation of the project’s schedule. Moreover, to help in preventing delays in the project implementation process, project time buffers are added to the expected duration of the project (Larson, 2017). The Gantt chart for the project development is presented as follows;

The Gantt chart illustrates the product deployment process into the existing PBM Plastics’ facility. The initial stage involves conducting an extensive market research, which is further followed by receiving a proposal for acquiring the technology required in the production of the expandable bottle liners. Further, a business case comprising of a technical assessment, competitive analysis, a business plan creation, and a financial analysis is completed. A product in-house testing is conducted simultaneously with the completion of the business case, which is crucial in testing the safety and effectiveness of the product. A focus group in engaged in the testing process, and it therefore provides the initial feedback on the safety and effectiveness of the new product. The inventor’s patent is then purchased once good results are obtained from the focus group. The development of the operation process then starts, and it comprises of the purchase of equipment, personnel training, and an additional machine is also put into operation to facilitate the production of the new expandable bottle liners. The final stages of the deployment plan include the review of the product’s market performance and the product market launch process.

References

Kotler P.T. & Armstrong G. (2017). Principles of Marketing. 17th global edition. Pearson. 71 , 281-289. 

Larson E.W. & Gray C.F. (2017). Project Management: The Managerial Process . 7 th Edition. McGraw-Hill Education. 179, 295-298. 

Leach, L. P. (1999). Critical chain project management improves project performance.  Project Management Journal, 30 (2), 39–51. 

Roland Berger Strategy Consultants (2013). Best practices in new product development. Using effective methods to boost success. University of Brandenburg. Retrieved from https://www.google.by/url?sa=t&rct=j&q=&esrc=s&source=web&cd =5&cad=rja&uact=8&ved=0ahUKEwjio9_x1-DXAhWhE5oKHfmHB2oQFghLMAQ &url=https%3A%2F%2Fwww.rolandberger.com%2Fpublications%2Fpublication_pdf %2Froland_berger_best_practices_in_new_product_development_1.pdf&usg=AOvVaw18nGc6OOtUlLIUC5dFt95Y

Vanhoucke, M. (2012).  Project management with dynamic scheduling : baseline scheduling, risk analysis and project control . Berlin New York: Springer. 

Yemen G. & Weiss E.N. (2013). ADAM BURKE AND PBM PLASTICS: MESSAGE IN A BOTTLE. Darden Business Publishing. 1, 5.