Real life Case Study – Distributor’s Business in Tanzania

Mr. John from ABC Ltd, Tanzania is an exclusive distributor of JJ India Ltd since last 20 years in Tanzania.

JJ India Ltd. is a well-known and established brand in the field of industrial consumables. Mr. John have been doing a decent business with JJ India Ltd, Importing industrial consumables from JJ India Ltd to Tanzania and selling it to his customers. His business with JJ India Ltd have been grown in decent pace, He has introduced various new products from JJ India Ltd to Tanzania market and grown the business successfully.

Mr. John is operating with a decent gross margin of 25% in his market since last few years (Till the year 2015), which is very lucrative to stay into the business.

Tanzanian Currency (TZS) have been devalued against US Dollar (USD) from year 2015 to 2016 by 30 %. (From 1700 TZS per USD in 2015 to 2200 TZS per USD in 2016) . Therefore Mr John’s import prices have gone up.

With higher manufacturing cost JJ India Ltd. was not able to pass on the extra discount to ABC Ltd to make Mr. John stable into the business.

New product development

   In business and engineering, new product development (NPD) is the complete process of bringing a new product to market.

New product development is described in the literature as the transformation of a market opportunity into a product available for sale and it can be tangible or intangible. A good understanding of customer needs and wants, the competitive environment and the nature of the market represent the top required factors for the success of a new product. Cost, time and quality are the main variables that drive the customer needs. Aimed at these three variables, companies develop continuous practices and strategies to better satisfy the customer requirements and increase their market share by a regular development of new products. The use of best practices and the elimination of barriers to communication are the main concerns for the management of NPD process.

There have been a number of approaches proposed for analyzing and responding to the marketing challenges of new product development. Two of these are the eight stages process of Koen and a process known as the fuzzy front end.

A.      The eight stages