Tesco Vacuum Cleaner: A New Product and Service Development Report

This report provides a comprehensive analysis of a new product and service development initiative for Tesco, focusing on a vacuum cleaner designed for household use. It begins with an industry and competitive analysis using Porter's Five Forces, evaluating the threats of new entrants, bargaining power of buyers and suppliers, availability of substitutes, and competitive rivalry within the retail industry. The report then delves into market analysis, employing STP (Segmentation, Targeting, and Positioning) to identify and reach potential customers. The concept generation phase explores the idea behind the vacuum cleaner, emphasizing its relevance to current health and cleanliness concerns, followed by concept development and testing. Operational requirements for manufacturing the vacuum cleaner are outlined, and a bricks-and-mortar business model is suggested for distribution through both online and offline channels. The report concludes by highlighting the challenges and competitive landscape associated with launching new products and services.

New Product and
Service Development

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK ..............................................................................................................................................3
Industry and competitive analysis...............................................................................................3
Market analysis...........................................................................................................................4
Concept generation......................................................................................................................5
Concept evaluation......................................................................................................................7
Operational requirements ...........................................................................................................7
Business model............................................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERNCES:..................................................................................................................................9
Books and Journals:....................................................................................................................9

INTRODUCTION
The report aims to prepare a new product and service for the organisation success. Every
business has its existence as per their product and service they sell into market. This concept
require proper planning, finalising and collecting resources, raising funds and look for product
innovation and market competition. Therefore, an organisation require proper planning and
strategy to develop product which is feasible into market and will be competitive for customer
satisfaction. This report is going to prepare new product for the retail organisation I.e Tesco. It is
the largest supermarket store which is established in London, UK (Borgianni, 2018). The
company has diversified range of products and brings new innovation in the market. The
company wants to develop relevant product for household purpose which gives a convenient
service in cleaning. The report will present industry and market analysis of retail industry
through applying relevant models. Also, there will be discussion of relevant business model.
MAIN BODY
TASK
Industry and competitive analysis
Retail industry is the most growing sector in the UK. This industry is very well versed
with innovation and technology which give rise to new products and services across the world.
The industry is known for the daily use of goods which satisfy most of the demands of customer.
Industry and market plays vital role in the success of business product and services. There is
requirement to know each of the market player and competition. In order to make new product
for Tesco, a vacuum cleaner which will be beneficial for various purpose like cleaning,
polishing, recycling waste and helps in sanitising. The industry competition will be described
below:
Porter's five forces
This model is useful to analyse the industry competition. It provide the internal findings
of business environment which may affect the growth and potential of the company. There are a
lot of market uncertainties which could impact on the new product of Tesco. These crucial forces
are described below:
Threat of new entry: this market force emphasize on the threat of new entry on the retail
industry. As the industry as much competition and restriction free entry and exit. There are

opportunity for new market player which has high impact on the industry. Tesco has moderate
threat of this force due to having global brand name and retained customer base. The company
could get success in new product as they provide value and worth.
Bargaining power of buyers: as per this market force, consumers have high bargaining
power by taking same product for the different price range. When there are large number of
players selling same product in retail industry, customer could bargain to get it in low price
(Pugna, Potra, and Negrea,, 2020). Therefore, the industry has high threat of customer
bargaining power whereas, tesco have moderate impact of it. The company has quality range of
product at reasonable price range which does not effect the demand of customer.
Bargaining power of suppliers: The supplier are the crucial player of business. When
industry have shortage of resources, the suppliers will be able to charge high price due to less
availability of materials. Retail industry has its opposite impact due to having vast amount of
resources. Suppliers have low bargaining power in this context. Tesco could easily cover its cost
by talking suppliers in minimum prices as well as having large number of suppliers.
Availability of substitutes: It is also an impactful force in the industry. Availability of
substitutes gives choices and option to the customer for shifting their demand for the next best
alternative. Retail industry has high power due to availability of easily substitutes product. Tesco
also has high impact of this factor. Therefore, the product and service must be feasible and
unique as compare to others.
Competitive rivalry: as per this market force, competition is highly raising in every
industry which impact on the business profitability. Retail industry is surrounded with vast
competitive rivals who have captured large market segments. Tesco has past reputable goodwill
and customer trust which may overcome this factor by preparing necessary strategies. These
rivals are the strong players for Tesco such as Asda, Walmart which could capture large market.
Market analysis
An organisation sells their product and service in the market. It has different types of
customers and their values that needs to be consider by the company. The market of retail
industry is widely growing and consumers are becoming more particular in choosing products.
Due to the Covid-19 protocols and awareness, people mainly shifting towards more of healthy
and clean environment to be safe in the current complex environment. Therefore, businesses are
producing products by keeping in mind the current market situation and taking relevant actions

which would not be loss for company. The current idea for new product of Tesco is to serve
great products for the health and cleanliness at home. The new Vacuum cleaner will have much
capacity to kill germs and grab minimal wastage from floor (Ellram, , Tate, and Choi, 2020).
Also, it has an automatic feature of sanitisation that create a great impact to stay away from
germs and harmful viruses.
Tesco needs to target market as per different segments to sell the new product effectively into
market.
STP analysis
Segmentation: This factor is all about segmenting the market as per different behaviour,
attitude and other demographical and physiological changes. The organisation needs to segment
people to divide them in categories which will be easy to reach large people. Tesco will segment
the customer as per their age and demographical regions. The company will come up with new
product in the UK market at first and above the age group of 20. It will help the company to
attract and retain customer by fulfilling their needs.
Targeting: this factor helps in targeting the most potential customer which will
contribute for the long term success of the company. Targeting is the crucial factor which require
more focus on the long term customer (Panizzon, Vidor, and Camargo, 2021). The Tesco will
target on the basis of income level. Mainly they will look for middle and high class customers to
provide quality services for all the individuals.
Positioning: This factor shows the position of the brand in the market. It plays crucial
role in positioning reputable and trustworthy image in the eyes of customers. Positioning helps in
ascertaining growth to make success in the new product and service. Tesco will position its new
product through social media marketing and creating awareness among people about health and
sanitisation.
Concept generation
Generation of the concept for the new product is all about producing an idea which is
new or existing into market with some innovative and unique concept. New products are made
by organisation to meet with the changing demands of the customer by prevailing change into
the market. It gives rise to design or re-designs the products to work as per the marketing
strategies(Yu, and Sangiorgi, 2018). The concept of idea generation is based on market factor
and competition. The concept of producing new vacuum cleaner in Tesco is derived by the

current need of marketing towards much concern about health and cleanliness. Proper cleaning
and sanitising become crucial for each and every individual to be aware from any harmful
substances which may lead to serious causes and diseases. Therefore, this market requirement
could be fulfil by launching new product which will be easy to use and promote reliability for
many household women.
The new product is developed through NPD process:
Idea generation: This stage is the most vital for the business to look for the idea to build
new product or service. There are many ideas that may arise from many ways and it is not
required to be sound proof or ready to implement. Therefore, Tesco has come up with the idea of
bring use of technology on an effective way.
Idea screening: At this stage, the business or product manager will identify the most
potential idea that would match with organisation resource and customer needs. They will aside
most effective ideas to be taken care of (Haukipuro, and Arhippainen, 2019). Therefore, the
Tesco has an effective idea and conducted market research which shows the relevance of idea to
launch the new vacuum cleaner which will give best use in the situation of Covid-19.
Concept development and testing: at this stage, before moving towards the practical
implementation of the idea, it is required to analyse the concept properly by analysing its pain
points, competitive analysis and major product features. The tesco needs to consider the value
preposition of the new product. The customer will react positively towards the new product
strategy of the company as it is the most essential need into the current situation. It will solve the
problems of spending much time in cleaning homes which will become easy with the new
vacuum cleaner with innovative features.
Market strategy: The market strategy includes the decision of product, price, place and
promotion. The vacuum cleaner will be the most demanding product in the market. As every
household or working women need to keep concern about health and safety. So that, this product
would be worth using and less time taking to manage time for other activities. The price will be
maintained through competitive pricing strategy and offers or discounts will be part of it.
Product development: this concept is required to develop the product through MVP and
analysing the prototype. This process leads to regulate among all the stakeholders in which the
whole product portfolio will be agreed by the key people of the company. The designs and
features will be agreed and prepared with the stakeholders to eliminate any defects and mistakes

Concept evaluation
The process of concept evaluation is all about screening and testing the idea in the
market. The Tesco has invested in launching new vacuum cleaner with innovative an features.
The product testing cloud be done through various model. The most suitable model for this
concept testing is Comparison testing (Gürbüz, 2018). As per this model, the company need to
first analyse and get aware about the customer questions and responses through testing. This will
show the accurate results of the responses and the company will be able to distinguish between
every response to make the changes according to it.
Operational requirements
The operational requirements to make the new vacuum cleaner in tesco require various
aspects. The company needs to involve machinery and new software in the product which
perform autonomic function. These tasks will be carry out through preparing design for the
cleaners, get these designs agreed by the experts and change will be made. Then come the stage
of development of products in factory. Once the product gets developed it will be keep for
testing in the logistics and marketing manager will be ready to promote this product on social
media. After the final outcome of the product, it will be available in every Tesco store of UK.
Business model
Business model is the concept of undertaking various functions and activities in order to
deliver effective product and service into market. There are various types of business model
which is effective and build with its major building blocks (Dias, and Lages, 2021). Therefore,
the bricks and motor is much necessary business model in today's competitive market. This
model will help the Tesco to regulate its new product across online and offline channels. The
company will sell through Tesco stores as well as websites to reach among large customer base.
CONCLUSION
The report has concluded that, new product and services are the most crucial portfolio for
organisation. Launching new products leads to come up with many challenges and competitive
analysis. Therefore, the report has provided all the market analysis through applying industry
competencies. Also, there is discussion of business model and concept generation.

REFERNCES:
Books and Journals:
Borgianni, Y., 2018. Verifying dynamic Kano's model to support new product/service
development. Journal of Industrial Engineering and Management (JIEM), 11(3), pp.569-
587.
Pugna, A.P., Potra, S.A. and Negrea, R., 2020. A strategic decision making tool for new product
and service design. Management Decision.
Ellram, L.M., Tate, W.L. and Choi, T.Y., 2020. The conflicted role of purchasing in new product
development costing. Journal of Supply Chain Management, 56(1), pp.3-32.
Yu, E. and Sangiorgi, D., 2018. Service design as an approach to implement the value cocreation
perspective in new service development. Journal of Service Research, 21(1), pp.40-58.
Haukipuro, L. and Arhippainen, L., 2019, November. Guidelines for Facilitating User-Centric
Product and Service Development in an Open Innovation Environment. In 2019 25th
Conference of Open Innovations Association (FRUCT) (pp. 123-130). IEEE.
Gürbüz, E., 2018. Theory of new product development and its applications. Marketing, pp.57-75.
Dias, A.L. and Lages, L.F., 2021. Measuring market-sensing capabilities for new product
development success. Journal of Small Business and Enterprise Development.
Panizzon, M., Vidor, G. and Camargo, M.E., 2021. Cross-cutting best practices for new product
development (NPD) in turbulent environments: the effects of integration and co-
creation. Innovation & Management Review.