A new product proposal letter is a letter that is prepared either by a department of an organization to present to the employer/manager of that organization or is prepared by an organization and is addressed to the potential investor/partner. In this letter, the addresser proposes a new product that has been developed by the addresser. The main purpose of this letter is to introduce the product, request the funds, and seek approval for its production from the relevant authority.
Due to the competitiveness of the current world as well as the rapidly changing demands of the customers, the companies must keep on introducing innovative products in the market. A new product may mean:
- A completely new and innovative product.
- A few changes in the features of the existing product.
- A product that is existing in the market but is new for the organization.
When a new product is developed, its proposal and feasibility report need to be presented to seek the consent of the higher authorities or to entice the investors. Once approved, only then, its production can start.
Therefore, to seek approval, and to convince about the high chances of the product’s success, the development team writes a proposal letter, either for the employer or the probable investor. It includes all the main details about the product, and the addressee can include additional information to make the proposal letter appealing. Nevertheless, generally, the following details are included in a new product proposal letter:
- Details of the addressee.
- Details of the addresser.
- The description and features of the new product.
- Target market.
- Market gap and probability of success.
- Financials, including costs, pricing, and profitability.
- Mention the attached documents.
- Request for acceptance.
- Salutations and signature.
The new product proposal letter sets the basis for whether the new product will be manufactured or not. If the proposal gets rejected, usually, the idea gets dropped. In the opposite scenario of approval, the employer or investor may seek further details to process the acceptance of the idea.
Sample Letter
Date
Name
Address
Dear Mr. Steven,
I am writing this proposal letter to explain about a new product that me, with my team, has developed. We are seeking your approval to start its production.
We have been doing our research and have found a gap in the market for a sewing machine, that can be used for commercial purposes, has high speed, and can manage a variety of custom designs. Many sorts of commercial machines are available in the market, but the customization aspects are limited. Through our new product, we can fill that gap, and allow the customers/clients to customize the machine in whatever way they want. This is going to cost them a bit more than the regular machines, but our surveys show (we are attaching the results) that our target market is willing to pay for it.
Here are a few of the main pertinent details:
- Target market: Organizations that have production units with a capacity of [X].
- The total cost of production of customized machines: $[X]
- Marketing expenses: $[X]
- Expected price per machine: $[X]
- Profit percentage: E%
- Expected time of production per machine: FFF days.
I have presented all the relevant details in this letter and have attached the relevant documents with it as well. We request your acceptance. If you perceive that this product can benefit our company, and need further details, kindly, contact at [X].
We hope you will approve this new product proposal so that we can start the processing.
Thank you. Looking forward to your positive response.
Regards,
Samantha John.
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