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Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

MART 306 Concept Developments, Evaluation and Testing Executive summary: Fishpond is currently the largest online book store and market leader in NZ. It has experienced substantial growth in the last three years due to increased consumer demand of online purchasing and changes in technology. Fishpond is continuously looking to increase their market share and profits by providing new innovative services and an extensive range of products.

When conducting market research, we have found that there is a gap in the market which has not yet been secured by Fishpond and which we are eager to develop. This is a fast growing, profitable and easily accessible market. Online purchases have increased by 14% from 2006 with over 40% of individuals making at least one purchase online. Furthermore, trends in the United States have shown an increase in e-book sales of 207% in the first half of 2010.

Textbook sales are increasing proportionally to the increased student population enrolling in tertiary education every year. This is due to the weak job market and a population bulge of 18 to 19 year old students moving from secondary education. Our research indicates that textbooks are proving to be too expensive for students, and the monopoly dictated by the retailers result in regular yearly price increases. Furthermore, our research indicates that students are finding that textbooks are not always available when they need them, and are heavy and awkward to carry around. Textbooks also have a limited usage/value for money, as it is rare for students to make use of every chapter in the textbooks. Our solution is to expand Fishpond’s services to include e-textbook sales so that it can attract the student market by providing them with a service which would clearly satisfy their needs, and make tertiary education easier and more affordable for them. In this report we propose that Fishpond provides a service which allows students from all universities and polytechnics around NZ to purchase their textbooks online at a much cheaper price than purchasing conventional textbooks. This service would allow students to purchase the textbooks they need and download


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

them to a laptop, iPad, and any other electronic device with the capability of displaying ebooks. Students would also be able to access their e-textbooks from anywhere where internet access is available, and would have the option to pay per chapter if desired. The e-textbooks would include a unique programme which allows users to highlight important points, make notes, and place virtual book marks in the e-textbooks just as they would when reading a conventional textbook.

We plan to launch this new e-textbook service through an aggressive promotional campaign around universities and polytechnics. We recommend the use of unique, “out of the square” promotional stalls during orientation weeks which would offer limited time discount offers to encourage trial of the new service, as well as the use of posters, flyers, social networking, and word of mouth as part of an ongoing marketing campaign. This implementation of this service has the opportunity to significantly increase Fishpond’s market share and overall sales in NZ now and possibly in Australia in the future. The set up costs are very low due to Fishpond already possessing most of the resources required, and the rise of cloud computing technologies. However, we believe the rewards will be huge and this is an opportunity not to be missed.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Introduction/ Fishpond Company profile: Fishpond is an Australian and New Zealand online store selling books, music, and movies. Fishpond’s mission is to build the people of Australasia a local online store of a world-class standard, a place where they are proud to shop online. Fishpond was started by Daniel Robertson at his home in January 2004. He believed that Australians and New Zealanders were missing out on the convenience, selection and prices of online shops present overseas. The big international players had ignored this part of the world because the market is too small and local traditional retailers didn't want to risk a large investment online. Daniel decided to take up the challenge and is now working hard to bring the people of Australasia a quality and convenient online shopping experience. After quickly outgrowing the Robertson household, the company moved to a warehouse near the Airport where Daniel is now the CEO. The warehouse was chosen in order to be closer to the Airport, as many books come from overseas and this reduces shipping times. Their warehouse is also near major postal centers to enable faster, more efficient delivery. There is currently a team of fifty people working for the company with staff located across Auckland, Christchurch, Melbourne and Perth. The company also employs software developers in Auckland and Christchurch. The current product range consists of: Books CDs DVDs Games Toys


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Other services include: The company launch of 'Sell Yours,' in 2005. This system allows public users to sell their own products through Fishpond's high traffic site.

'Cash Rewards'. Fishpond's loyalty program, whereby users are given account credits for writing product reviews and using the 'Sell Yours' program. These account credits can be applied to future purchases.

Product innovation charter: Strengths: Fishpond is currently the market leader in New Zealand’s online bookstore and delivery industry. By offering lower prices in comparison to normal retail charges, Fishpond is actively positioning the company as an easy to use online shopping center which offers quick delivery with a wide variety of products (mainly books) along with the lowest price. They are located right beside the airport cutting shipping prices down for their customers. Fishpond has also improved its website since its launch. The website is very simplistic and effortless to use and navigate, customers can create their own account and track their orders online and purchase using a wide selection of credit cards or Pay-Pal. Being New Zealand’s biggest online book store, Fishpond never fails to provide the books requested, encouraging consumers to repeat purchase. All of these factors combined have gained Fishpond many loyal customers and will see the company to further preserve its position as the market leader in the online bookstore industry. Weaknesses: Although Fishpond is currently the market leader in New Zealand, it faces strong competitive pressure from businesses offering similar services internationally who have greater resources and capacity to leverage in comparison to Fishpond, such as Amazon.com. Being a relatively young company, Fishpond is still developing its organizational structure


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

and other market processes leaving less time to focus on new product development and research. Unlike many other global companies in competition with Fishpond, they do not have as much experience to draw upon for new operations, thus each move has to be taken with caution and intensively monitored to ensure the desired results are achieved. This factor also interlocks with the fact that Fishpond does not have as much cash flow as its global competitors and therefore cannot afford to take as greater risks on intellectual development as the global brands can, thus limiting their current growth index. Although online shopping has been very popular for some time, people are still generally more inclined to purchase books from stores, making it difficult for Fishpond to translate their added values to consumers. This makes major chains such as Whitcoulls and Paper Plus part of Fishponds competitors. Opportunities: Being a young company Fishpond has the opportunity to choose which market demographic focus should be placed on for future development and expansion. With the rise of new technologies that cater to downloading books online such as the iPad, the Tablet and the increase in laptop purchases for personal use, Fishpond has the opportunity to ride with this technology and tap into the electronic book market. There is a strong technological trend towards the growth of these personal electronics, thus it is assumed that the market will only increase opportunities for Fishpond in which to exploit the rise in online purchasing. Further analysis of recent economic and social trends have also indicated that there is a rise in demand for text books as more people are now enrolled into secondary education. On top of this the cost of living has significantly risen due to the recent recession and economic state affecting purchasing behaviors to favor products with lower prices. Fishpond now has the opportunity to utilize these factors to create a product or service which gives consumers the added value of convenience and price, to increase growth and further tap into sub markets of online shopping whilst remaining the market leader in New Zealand. Threats: The main threat that Fishpond faces is the fact that intellectual property, especially online software or services, can be easily copied. Having strong competition from global brands


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

also makes Fishpond vulnerable to having its ideas and products imitated. These global competitors will have greater resources than Fishpond, allowing them to develop the copied ideas on a bigger scale, which could give them the potential to overtake Fishpond in the future Fishpond has built a strong brand identity in New Zealand since its opening in 2004.As previously mentioned, it is currently New Zealand’s largest online book store offering a diverse range of products, however the marketplace is changing due to movements in technological advancements; traditional ways of selling and communicating are not reaching customers as effectively as they have in the past. In order to solidify Fishpond’s market position and retain its market share in New Zealand, Fishpond needs to innovate to stay ahead of the competition and gain the majority share of the market. This is crucial for the survival and growth of Fishpond. A fresh, new and innovative product will secure a more focused target market, build brand awareness, and increase market share.

Focus: Fishpond’s core competencies include quality services, on time, delivery and the ability to cater to a wide range of customers. In order to obtain the desired growth, these competencies will need to be transformed into new and innovative products which will satisfy the needs of new, more specific markets. According to the situation analysis above, two important factors need to be taken into account during the idea generation process for Fishpond’s next innovative product: Technology drivers: Fishpond is committed to providing the newest technology available, which will make the process of online purchasing easy and efficient. Due to the rise of new technology such as ‘iPads’ and the ‘Tablet’, there is now a gap in the market for new innovations which will cater to this shift in technology. Market drivers: Demand for easy and efficient ways of purchasing books online is increasing with the rise of consumers who are under time constraints and thus are unable to walk into shops and search for the books they desire. Consumers are increasingly expecting


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

the delivery of their products to be swift due to their busy life styles. Prolonged shipping times and product damage due to shipping and handling can be exceptionally stressful.

Goals and objectives: The objective of this new innovation is to secure a focused target market and increase awareness of the Fishpond brand. Our goal is to increase market share in New Zealand and Australia. Financially, our aim is to generate one million dollars by the end of the third financial year. Growth will be measured by revenue and through the number of new customers that Fishpond attracts to their website. A 15% increase in customer base by the end of the first year is desired.

Guidelines This service must run out of the current fishpond website and must be achievable with the current resources fishpond has at their disposal. The desired outcome is to become first-tomarket by having a state of the art online service which will cater to the market gap provided by the shift in technology. Due to the tight financial budget, an adaptive strategy will be used. This service must be developed successfully within a year, and adapted into the target market in order gain a majority of the market and to prevent competitors from emulating the idea. Fishpond is also advised to have consistent product integrity for the new innovation. The product must be consistent with current themes and be strongly associated with the Fishpond brand.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Market and Trend analysis: The increased use of the internet has played a major role in the growth of sales within the online book market. In 2008, global sales of online books equated to 41% of the most popular purchases online, followed by shoes/clothing at 36 %.( Ecommerce, 2009). Oceania and Australia have some 21.3 million internet users (Giles, 2010). Moreover, in New Zealand individual usage has increased to 80% (2009) of respondents using the internet in the last twelve months, from 69% in 2006 (Statisitcs NZ, 2009). Online purchases of fifteen year olds and up have also increased 14% from 2006, with over 40% of individuals making at least one purchase online. (Statistics NZ, 2009). See Appendix: Fig .1 for graph. One area that is set to grow substantially within the online book market is e-books. Despite some worries of the negative effects on printed books, e-book sales have risen rapidly worldwide. According to the American publishing association, e-book sales have increased 207% in the first half of this year in the US (Mehmood, 2010). With the introduction of more products on the market to read the e-books, such as the I-Pad, Amazon’s Kindle and Barnes and Noble’s Nook, sales have increased further. In New Zealand the E-Book market is still very small. However, there are groups such as the NZ Book Publishers Association, who can work alongside events like the Digital Forum and provide networking and support for local publishers. The forum aims to have 1000 digitalized books in 2010, being made available under license to the education sector, libraries, and booksellers. (www.stuff.co.nz) There have been some efforts to formulate the different areas of the E-book industry. Shatzkin has classified four main areas. Hardware and reading devices. Ie The Kindle. Software/platforms. File formats Ebook retailers.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

The last category has created some discussion and concerns about what margins will be offered to retailers. Google announced in 2009 that they would expect retailers’ to accept and set prices recommended by the publishers. The publishers’ will also hold a lot of power because the need for distributors will diminish over time. It could be forecasted that retailers will just work directly with the publishers for the e- book rights, cutting out this part of the distribution channel altogether (Skatzkin, 2009). Furthermore, there are some issues regarding ownership. Google offers a service where the ebook is streamed to your computer. The downside for the consumer is that when you finish your session, you will not be able to access the file again. Nevertheless, this is a positive step for concerns about piracy. The other option is being sent a downloadable file which you own outright. Digital rights management (DRM) and the use of encryption will have to be factored into development to ensure protection for all stakeholders. (Taylor, 2009) The adoption rate for technologies in New Zealand is relatively slow compared to other developed countries. It is predicted that it will take about five years for the early adopter niche market to extend to mainstream acceptance. (The Press, 2009) There are a number of factors that will need to be in place for the technology to develop. Firstly there must be gadgets on the market priced reasonably to read the e-books. Secondly, there must be systems for publishers and retailers to store, and distribute the e-books in a standardized format, and thirdly, there must be channels established to distribute the e-books. In New Zealand, it would be more efficient and effective if this service was supplied locally with local competition creating a more innovative environment (Taylor, 2009). Two other markets that could fall into our company’s portfolio are the university and textbook markets. There are 469, 107 students enrolled in higher education in New Zealand, where 33 % of this total are enrolled at university. (Statistics NZ, 2009) The New Zealand tertiary sector also increased it student numbers in 2009. This was mainly due to the weak employment market and a population bulge of 18 to 19 year old students moving from secondary education. There was also an increase in the percentage of international students attending New Zealand tertiary institutions, growing 9% in 2009, and forecasted to increase a further 8 % in 2010. (Eduacationcounts.govt.nz, 2010).


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

The academic textbook market in New Zealand at a glance would seem to be a profitable business, with online companies such as Book Goblin, The Nile, Academy Books and Textbook.com all offering new and used textbooks for sale to students. There are also the major retail textbook specialists who are stakeholders in the market, such as the University Book Shop (UBS) and to a lesser extent the RED group retail, a division of Whitcoulls, who sell textbooks to university campuses throughout New Zealand. The average price of a text book is approximately $120 NZD. (Investing businessweek.com, 2010)

Market Opportunity Identification Our market analysis has highlighted some potential growth areas that our company is eager to develop. These include the online book market, and more specifically, the emerging e-book sales market. These areas are forecasted to grow substantially for a number of attributing factors. Firstly, the increased usage of the internet by New Zealanders, faster broad band connections (wireless) and consumers making more purchases online. Secondly, there are more supporting technologies available for purchase on the market, such as the Kindle Reader, and Apple I-Pad, that facilitate the consumer’s ability to read electronic books. There are also brand new cutting edge technologies, such as the E-ink display, that are currently in the early stages of development by Sony. E-books could be seen as the way of the future, being able to store numerous e-books on a totally mobile gadget, and having the freedom to read them anywhere you want. In New Zealand the E-book industry is still relatively small, but has huge growth potential. One key factor that we identify as being a necessary market driver is the number of related supporting industries. These include the New Zealand Book Publishers Association, and the Digital Publishing Forum, who will help speed up the process of getting the technology to the commercial market. There are two potential target markets for e-books; the consumers who just want to read casually for a short period of time, or the more in depth readers who will read longer texts. Our company wants to develop both markets, but have a stronger orientation to the later, as it will apply more to the readers at tertiary institutions.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

We believe there is potential for this technology to cross over into the tertiary education sector. There has been an increase of students attending New Zealand universities, due to the poor job market and the burgeoning population of secondary students moving into tertiary education. Within this market, textbooks are widely used for learning; however, prices still remain high due to the costs of publishing, distribution and the margins imposed by the retailers.

Idea generation: Bothersome Techniques Student Problems

How frequently the problem occurs (A) Textbooks are expensive 95% Textbook are heavy and 85% awkward to carry around Textbooks have small 50% resale value Textbooks are not always 30% available when needed Limit of places which sell 98% textbooks Textbooks are continually 70% updated Limited usage/value for 85% money of textbooks

How AxB=C bothersome it is (B) 75% 0.71 60% 0.51 30%

0.15

70%

0.21

15%

0.15

25%

0.18

55%

0.47

First of all, we decided to list a number of key student problems. Being students ourselves, these problems were identified quickly. We identified how often these problems occur, and how bothersome they are when they do occur. After conducting this activity, it became clear that four common problems existed (highlighted above).


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Gap Analysis Affordability High

Secondhand Bookstores

Trademe / eBay

Amazon

Availability High

Low

Privately Owned Textbook Stores Bookstore Chains e.g. Whitcoulls

University Bookstores

Low


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

After conducting a gap analysis using the two key factors, affordability and availability, it became clear that there is a gap in the market which could be very profitable. That is, highly affordable and available text books. Businesses such as university bookshops have pretty good availability, but do charge a high price due to the physical costs of the textbooks, maintaining the stores etc‌ Websites such as Trademe, eBay and Amazon all sell textbooks at reasonably affordable prices, but have a low availability of textbooks.

De Bono’s Six Thinking Hats Brainstorming: Start up competing bookstore with print when you buy service (Cheaper)

Online book club

E-book download store on current website or separate website Online library Buy out university bookshop

Book swap service

Green Hat (Creativity)

Online learning

Free e-book with textbook purchase Online book server

Book rentals Mini books

Textbooks are hard to transport

*Figures Section*

Increase in online competition

Revised textbooks (important info only)

Do something in conjunction with university

Increase demand for e-books and e-book devices

White Hat (Facts and Figures)

Decline in the economy = less disposable income

Rise in number of students and textbook purchases

The blue, yellow, black, and red hats were also

used

during

the

brainstorming

process in order to identify and select the Textbooks are expensive for students

Decline in the economy, leading to less disposable income

best ideas.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Product concept statements: 1. Online e-book download service This is an online service extension to the current Fishpond website which allows users to purchase, download, and view electronic copies of textbooks. Users can create an account which allows them to search for and purchase any textbooks they may require. These textbooks can then be downloaded to electronic devices such as laptops, e-readers, or iPads. Users can also view the textbooks they have purchased from anywhere online using their Fishpond login. The e-book purchase will include unique software which allows users to highlight important information, make notes, and place virtual bookmarks in the e-books, just as they would with conventional textbooks. The retail price of an etextbook will be approximately just over half of the standard retail price of the equivalent hard copy textbook. All of Fishpond’s standard methods of payment can be used to purchase the e-textbooks.

2. Online textbook purchasing service This is an online service extension to the current Fishpond website which allows users to purchase hard copy textbooks online. Textbooks can be purchased online by anyone who can access the website using standard methods of payment. The textbooks are then shipped to customers via Fishpond’s normal distribution channels. The prices of the textbooks would all retail at approximately 10% less.

3. Online textbook swap service This is an online extension to the current Fishpond website which allows users to trade/swap textbooks with other users. Users will be able to create a trading account which allows them to both put their book online for sale, or to purchase textbooks put up by other trading users. This will be done through a points system where people earn points by selling their textbooks online in an auction fashion; these points can then be used to bid on other participants’ items. This service will be free to consumers and is


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

designed to increase traffic to the website and increase sales through promotions to these customers.

4. Online book rental service This is an online service extension to the current Fishpond website which will allow users to rent books from the website similar to a library. The user will need to create a lending account, which will allow them to choose a book from the selection available to rent. The book will then be shipped to the customer who can read the book and then return it after a month of use. The customer will pay a yearly fee of $50 to have an account and will also have to pay for the shipping of any books they rent.

5. Online learning service This is an online extension to the current fishpond website where customers can access online tutorials about varying computer operations and online functions. This separate website will be called ‘Fishpond Learning’ and will contain easy to follow instructions, videos and examples on a variety of computer topics such as how to make a PowerPoint presentation, how to create an online blog, and how to purchase products online. This website will be free to consumers and will earn money for the company through adverts on the website for both Fishpond and other businesses.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

The Full Screen

Factor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Technical difficulty Unique features Equipment process Likely competitive cost Likely quality Likely speed to market $ Investment needed Legal issues Market volatility Target customers Degree of unmet need Likelihood of fulfilling need Likely market share Competition to be faced Probable product life Promotion requirements Sales force requirements Global applications Strategic fit Probable revenue Likely profit

Scale 1 2 Very difficult None Have all Well above Below others 2 years or more Over 20 million Major Erratic Perfect strangers None/satisfied Very low

Score

Weight

4 4 3 4 4 3 4 2 3 3 4 4

4 3 4 3 4 4 3 3 2 1 4 5

Weighted Score 16 12 12 12 16 12 12 6 6 3 16 20

Number 1 Weak

3 2

2 2

6 4

Less than a year No experience

> 10 years Very familiar

5 3

4 3

20 9

No experience

Very familiar

3

4

12

Fits global Perfect fit Zillions ROI >40%

2 4 3 4

2 3 3 4

4 12 9 16

3

Tenth at best Intense

Only national Total misfit Limited Break even at best

4

5 Easy High Have none Well below Leadership Under 6 months Under 20K None in sight Stable Close High Very high

TOTAL:

235

These are the results from the full screen for our online e-book service idea. We conducted similar full screens for each of our product concepts. The scores were as follows: Online textbook purchasing service (hard copy) Online book swap service Online book rental services Online learning service

151 186 154 185


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Sales forecasting/Financial analysis: Market size: 469,107 people enrolled in higher education increasing by 1% per year (Ministry of Education, 2009).

2010 = 473,798 2011 = 478,537 2012 = 483,321 x 2.5% = 12,084 2013 = 488,155 x 7.5% = 36,612 2014 = 493,036 x 12% = 59,164 2015 = 497,966 x 16% = 79,675 2016 = 502,946 x 20% = 100,590


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Example of Simplified Financial Analysis for Non-Accountants! Sales

Explanation

Potential Buying Units

Total population in geographical areaX% who are target market

Awareness Trial Availability Repeat

Estimated, dependent on promotional spend (adjust for year 2 and 3) Estimated, based on concept testing X% adoption (prior experience) Estimate, based on % of retail outlets likely to stock the product Estimate, based on consumer survey

Initial trial, units sold Repeat purchases Total purchases

Year 1

Year 2

Year 3

483,321

488155

493036

25% 30% 95% 40%

35% 40% 95% 50%

45% 50% 95% 60%

B5XB7XB8XB9 B12X0.5 - assuming 80% on average will buy one repeat/year

13,775 5510

32,462 16231

63,232 37939

B12+B13

19,285

48,693

101,171

57854 90.00 76.50

146080 90.00 76.50

303513 90.00 76.50

Revenue Units sold Retail price Avg Retail less GST

B15 x 3 books on average Retail price less 15% GST: Multiply by 8/9(=0.8888)

Gross Revenue/Unit Total Gross Revenue Variable Costs Payment of publishers Total Variable costs Fixed Costs Server costs (Cloud computing) Market research Advertising and promotion Website set up labour costs Website maintanance Extra overheads

76.50 76.50 76.50 4,425,794.56 11,175,149.36 23,218,741.56

30% of gross revenue B37XB15

Based on yearly fee + hourly rate (increasing in size every year)

Based on $80 p/hr x 10 people for 15 days working 7 hours p/d Based on 2 workers paid $40 p/hr (Continuous)

22.95 1,327,738.37

22.95 3,352,544.81

22.95 6,965,622.47

1,436.12 5,000.00 30,000.00 84,000.00 145,600.00 5,000.00

2,872.24 2,500.00 15,000.00

5,744.48 2,000.00 10,000.00

145,600.00 5,000.00

145,600.00 5,000.00

Total Fixed Costs Total Fixed plus Variable Total Costs per Unit

B47+B38 B48XB15

271,036.12 1,598,774.49 82.90

170,972.24 3,523,517.05 72.36

168,344.48 7,133,966.95 70.51

Total Gross Profit/Unit Total Gross Profit Contribution Margin Break-even

B25-B49 B51XB15 B25-B37 B47/B53

-6.40 -370,528.90 53.55 5,061.37

4.14 604,598.22 53.55 3,192.76

5.99 1,816,840.72 53.55 3,143.69


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Product Protocol 1. Target Market Ultimate: 20% of the total New Zealand Tertiary Student Population Intermediate: Lecturers and Tutors. 2. Product positioning A convenient, affordable way for students to purchase and download e-textbooks from www.fishpond.co.nz at a lower cost to that of conventional textbooks. 3. Product attributes This service must allow students to purchase their textbooks online and download them direct to their laptops, iPads and or E-readers. Purchase of e-textbooks must be easy to use and readily accessible This service must allow students to access their textbooks online from any computer. This service must be more affordable than conventionally purchasing a textbook

4. Competitive comparison This service is the first national online textbook service available within New Zealand. Competitive factors which still remain however include the conventional textbook stores, other global online stores and the second hand market for textbooks. 5. Augmentation dimensions The additional service providing users with the option to pay per view as opposed to paying to download the entire text. Quality assurance that the e-text has been obtained from an authorized publisher and that the digital rights have been secured. The assurance of step by step instructions provided on the website to assist in the downloading and payment process.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

6. Timing We would like the service to be available as soon as possible. Set up of service will take Approximately 12 months. Thus the service will be ready for operation by early 2012. 7. Marketing Requirements Promotional activity would be emphasized during orientation weeks at all Tertiary Institutions throughout New Zealand. Examples of promotional activities during this time include having a stall set up during market days and at orientation events handing out giveaways and fliers. First year university students must be focused upon as a target market and promotional fliers and material must be included in their orientation packs which they receive upon arrival to university. Will need to employ a sales force for these time periods. Advertisements must be placed regularly in tertiary magazines in order to gain and maintain awareness Promotional posters must be placed in areas within Universities which have a high level of thoroughfare. E.g. Food Courts, Notice boards etc.

8. Financial Requirements: Development and introduction losses will not exceed $295,529. Break-even is expected to occur within the second year of operation. Ultimately, this service must achieve a 3-year net profit of $1,839,340,72.

9. Production requirements: Once service is established must always be available Quality standards must be met, without exception


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

10. Regulatory requirements: Regulations for this service will be acquired mainly from publishing restrictions. Thus it is essential that all copyrights are approved prior to the launch of this service. Furthermore digital rights management will also need to be implemented correctly. 11. Corperate strategy requirements: For this service our corporate strategy is national which will allow us to target the student population within New Zealand. We believe that within this target market there is a high proportion of early adopters (Rogers) who will utilize this service. We seek to provide an efficient, high quality service that will support our market leadership and will be viewed as innovative in comparison to our more conventional competitors.

12. Potholes: A major potential pothole for this service is that such technology is not going to be readily accepted. Publishers will have the power to dictate the prices of the e-textbooks which will affect our online retail margins There may be resistance from more conventional minded consumers who do not see a need for such technology.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Products launch planning For the launch of the new Fishpond e-book service, we plan to have an aggressive promotional campaign in the first year which will involve the following: Promotional stalls at all of the main University’s in NZ including Massey, Otago, Lincoln, Canterbury, Waikato and Victoria. The stalls will be highly visible and will be in the same colours as the fishpond website. There will be three laptops with internet access at the stalls and four staff including a fishpond fish mascot. The staff will be dressed in the fishpond theme colours. Students who are interested will be shown the new e-book system and have the opportunity to purchase their textbooks through the new system on site with the help of staff. If students decide to do this, they will receive one ebook for free and be able to leave with their e-books on a memory stick and a new account which they can access when they get home. They will also have the opportunity to go into a draw to win an Ipad.

Some promotional flyers will be placed in free orientation week packs for students, on wall planers, and in student diaries at universities and polytechnics. Flyers will also be placed in welcome packs at halls of residence. These flyers will include information about how much cheaper e-books are, the key benefits, and how to purchase them.

Big posters will be strategically placed around universities and polytechnics. These posters will include clearly visible information about how much cheaper e-books are, the key benefits, and how to purchase them.

We will also have a fishpond FaceBook page solely dedicated to the new e-book service. Students will be able to post ideas on how to make the service better, post comments about textbooks which they would like to be able to download etc‌ The FaceBook page will include similar information as to what is featured on the posters and in flyers but in more detail. Frequently asked questions will also be featured on the FaceBook page.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

We hope to create a word of mouth buzz through all of these promotional activities. Students who are satisfied with our services will recommend it to their friends, and lecturers who think our service is valuable will recommend it to students when they talk about required textbooks for the courses they teach.


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

References Benedetto, A, D & Crawford, M. New Products Management. 9th McGraw-Hill, 2008 New York. http://www.daemonsbooks.com/2010/08/09/ebook-vs-regular-book-pricing Taylor, M. Retrieved from http://digitalpublishing.org.nz/

http://www.ebizq.net/blogs/enterprise/2009/08/what_does_cloud_computing_actu.ph http://www.educationcounts.govt.nz/statistics/tertiary_education/participation. Retrieved 24/09.2010)www.eduacationcounts.govt.nz

http://www.fishpond.co.nz/about_us.php (Fishpond website) About us + for photos http://www.google.com/trends?q=online+books&geo=nzl&sa=N. Shatzkin, M. E book complexity: good news for publishers. June 3rd, 2009. Retrieved from http://www.idealog.com/blog/ebook-complexity-good-news-for-publishers http://investing.businessweek.com/research/stocks/private/snapshot http://www.internetworldstats.com www.stats.govt.nz Independent Author, The Press. E books in New Zealand. www.stuff.co.nz

Mehmood, F. E book Sales Rise rapidly, yet to find place in charts on Fri, 07/23/2010 – retrieved from. www.topnews.ae.com


Fishpond New Product Concept Development Michael Wauters, Anita Cannon, Simon Warton, Henry Medary, Emily Pang

Appendix


Innovation and New Product Development Report