Collision sense poster

Commercialisation

The last stage of new product development is the commercialisation stage, this involves finalising the identified concept, launching the product and interacting with potential stakeholders (Yeniyurt, Henke & Yalcinkaya, 2013). During this phase the products transition from the research and development team to an operating unit of the organisation will occur. Veryzer, 1998 states that during the commercialisation phase there should be a specific focus on analysing the results from the test market phase, adapting the marketing mix and then refining plans within the manufacturing and marketing of the product. Organisations at this stage need to decide when, where and who to market their product to in order to secure success upon release.

Its common during the commercialisation phase for excessive amounts of money to be spent on advertising, however our plans on reducing this cost allow for better production capabilities and potentially a quicker time period before profit, this will be achieved by making negotiations with television broadcasters and governing bodies prior to release of the product, therefore if a deal is secured with a broadcasting company, promotions such as advertising would be primarily led by the broadcasters, mainly through the use of advertisements on their channel’s as they will be using the collision sense technology to heighten the spectacle of the sports events they broadcast and thus increase regular viewers and subscriptions. Once the product has been released there will be a focus on negotiating the usage of the product in large sporting events such as the football world cup, this will help grow the brand as large events mean larger exposure to viewers which will create a bigger ‘hype’ about the product, therefore making it more desirable to other broadcasting companies, allowing expansion to take place.

An identified negative from prior stages is that with the product, organisation and technology all being new to the sports business a large corporation may find a partnership risky, therefore the product will come with a warranty, in addition an option of a no contract trial phase will be open for negotiation with potential partners.


Reference list

Yeniyurt, S., Henke Jr, J. W., & Yalcinkaya, G. (2013). A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes. Journal of the Academy of Marketing Science, 1-18.

Veryzer, R. W. (1998). Discontinuous innovation and the new product development process. Journal of product innovation management, 15(4), 304-321.

Test marketing

Test marketing is the seventh stage of the new product development process.  This stage highlights the strengths and weaknesses of the product; Kotler and Armstrong, 2010 state how this is specifically useful as evaluations are made from those of who the product is aimed at. Consequently the desired positioning strategies can be put in place.

Test marketing is important as it allows an organisation to observe actual consumer behaviour. An organisation will often select a geographical location to represent the intended market, in doing so the organisation can determine the reception of the product. As well as receiving feedback from the product itself this stage provides a chance to evaluate the effectiveness of the desired market strategy. Post test marketing an organisation can decide whether to modify the product/service to better suit the target audience (Dubiel and Ernst, 2012).

Adidas developed the micoach device in a closed environment through supplying elite players with micoach enabled football boots in training, which allowed them to gather feedback, here they identified that 'sharing' data via social media will increase sales as amateur players can compare their speed with professionals (Adidas group, 2013), this maybe a direction collision sense could take.

Willsey, (1999) states how test marketing can be expensive, time consuming and most importantly open to competitive sabotage Therefore Prior to testing the ‘collision sense’ it’s vital that measures such as patents, trademarks, design rights and non-disclosure agreements  are made in order to prevent copying of the product from competitors. The product will be tested in a number of contact sports to evaluate its reliability, accuracy and ease of wear for the athletes, as an athlete’s main focus is performance and therefore a device that hampers this will be poorly received and essentially the aims and objectives of the organisation will be unachievable.  Usually the price of a product is examined during test marketing, for collision sense an appropriate price will be researched with the target audience of broadcasting companies and regulatory bodies, therefore it’s important to identify the value such organisations believe collision sense can bring.

An aim for the collision sense product is for it to provide heightened spectator enjoyment on sports television channel’s therefore negotiating a ‘trial’ match with a broadcast company could be an effective move for the improvement of the product/service, whilst allowing the broadcast company a chance to evaluate the uses of the product.

Reference list

Adidas group, (2013) http://blog.adidas-group.com/2011/12/interactivity-at-adidas-a-new-level-of-engagement/
Dubiel, A., & Ernst, H. (2012). Success Factors of New Product Development for Emerging Markets. The PDMA Handbook of New Product Development, 100-114.

Kotler, P. J., & Armstrong, G. M. (2010). Principles of marketing. Pearson Education.

Willsey, L. (1999). Taking these 7 steps will help you launch a new product. Marketing News. 33 (7), 17.

Product development

Product development is the sixth phase of the traditional new product development process (Morrison, 2013). The product development stage is where previous agreed requirements and specification's are defined into a final design ready to be tested internally and by consumers in order to create a commercial ready ‘concrete product’ Perceptual maps can also be developed in this stage through customer feedback, this can aid the organisation's marketing program with brand positioning (Soares, Bastos, Gavazzo, Pereira, & Baptista, 2013)

Adidas’s development of the mi coach feature is an example of good sport product development. Adidas group, 2011 show how the features of the mi coach design were revolutionary in this particular field. Dogiamis & Vijayashanker, 2009 explain how Adidas evaluated the needed specifications for a sports GPS system, completing market research into the likes of Nike and there ‘Nike+’ device. After developing the product into a final design; adding more advanced features to compete with and reduce Nike’s market share; they tested the Mi coach internally and on athletes, which allowed Adidas to finalise the design into a 'concrete' product (Adidas group, 2011)

As established the product name will be ‘Collision sense’. In relation to the perceptual map (see appendix A) the product cost will be relatively high this is due to the need for a high level of quality (see appendix A), the need for high quality is due to two key factors: Firstly an accurate and precise measurement of force has to be consistent in order for the product to be successful and this requires advanced technology. Secondly the collision sense cell must be durable as it will be used in contact sports and thus the cost of the product will be relatively high and much higher than products closest to it in the current market i.e. Nike+ and Adidas micoach (see appendix B). Therefore the decided target market for the product is different to the likes of Adidas micoach whose aims were to appeal to the average consumer i.e. a Sunday league football player. The goal of collision sense however is to be an exclusive elite sport brand which provide’s a state of the art tool for broadcasting organisations and secondly to aid refereeing decisions, therefore after securing trademark protection collision sense can be promoted to large organisations such as ESPN, BT sport, Sky sports and FIFA with a focus on gaining profit through bulk sale. Meanwhile securing deals with large broadcasting organisations will promote the product and raise brand awareness.

To conclude, going forward the collision sense product will be a high cost high quality exclusive product aimed at improving elite sport and broadcasting capabilities.

Reference list:

Adidas group, (2011) http://blog.adidas-group.com/2011/12/interactivity-at-adidas-a-new-level-of-engagement/ Accessed: 20/1/14

Dogiamis, G., & Vijayashanker, N. (2009). Adidas: Sprinting Ahead of Nike. Chicago   

Morrison, A. M. (2013). Marketing and managing tourism destinations. Routledge.

Soares, D., Bastos, J., Gavazzo, D., Pereira, J. P., & Baptista, A. J. (2013). Lean Management Methods in Product Development: A Case Study. In Advances in Sustainable and Competitive Manufacturing Systems (pp. 1385-1399). Springer International Publishing.

Appendix A

Appendix B

Business analysis

Business Analysis

The fifth stage of new product development is business analysis.  Palepu & Healy (2008) state how this is the last stage before an organisation decide whether a product should be released into the market. This stage allows developers to identify whether the chosen product is possible, whether it has potential to grow in the current market and whether the product has the capability of returning a degree of financial return (Thomas & Maurice, 2011).  Barrios & Kenntoft (2008) imply the 5 components of business analysis:

-          Estimating cost

-          Sales forecasts

-          Profit projections

-          Risk Assessment

-          Market cannibalisation

Barrios & Kenntoft (2008) state how ineffectively evaluating products marketability and profitability often results in the product being quickly dismissed from the chosen market, which emphasises both the importance of this stage and the accuracy it must be done by.

In relation to the collision sense product I’ve decided to potentially add another platform to the product by having a Collision sense app. This would allow athletes to review performance after training and games from the speed a footballer kicked a shot to the force a boxer gave a punch. This platform allows athletes to share results and form a community.

Cost estimation

With the product being relatively innovative the closest competitor to the collision sense technology is Adidas’s Mi coach technology. The Mi coach is priced at £40 rrp, but production costs haven’t been presented from Adidas therefore determining the price of production will have to be determined on resource by resource basis (see appendix 1) Apple (2013) state how there is a 30% charge on profits made by an app, however the app is going to be free of charge when purchased with a collision sense unit, so there will only be a yearly charge for the app to be on the apple store. The initial yearly sales target is set at 30,000 units (see appendix 2) this is a relatively low target with products such as Nike’s nike+ being used by 4 million users (see appendix 1) however I feel that firstly Nike are a global brand and therefore the promotion becomes simultaneous as so many follow the brands innovations and trust the brand. Additionally the collision sense has a far higher rrp as a consequence of the expense in development and production. Finally the collision sense’s sales figures rely largely on the participation from targeted sponsors such as Sky sports, BT sport, as a large selling point for the brand is its portal it offers for television viewers with potential to add a heightened viewing experience with concepts such as ‘punch of the night’ or ‘tackle of the game’ In order to secure such deals there will be a large sum invested in promoting and pitching the product in order to interest both members of the public and large corporation’s.

Appendicies

Appendix 1.

	Hardware	Technology	Parameters monitored	Users
Nike +	Smart phone	Smart phone app	Distance travelled	4,000,000
	Foot pod	GPS	Speed data
	Wrist band	footswitch	Energy expenditure
			Altitude data
Adidas micoach	Smart phone	Smart phone app	Speed data	Unavailable
	Foot pod		Energy expenditure
	Wrist band	GPS Accelerometer Heart rate monitor	Altitude data
	Chest strap heart monitor		Heart rate data

Appendix 2.

Year 1 estimation

	Year 1	Year 1	Total
	Collision sense unit	Collision sense App
Production cost	£3.5 million (research and development)	£150,000
Selling price per unit	£200	£0.00
Maintenance/development and promotion cost	£500,000	£12,000
Initial sales forecast	30,000	30,000
Promotion team	£300,000
Total gross profit	£6,000,000	£0.00	£6,000,000
Total expenditure	£4,300,000	£162,000	£4,138,000
Total net profit	£1,700,000	-£162,000	£1,538,000

Reference list

Adidas, 2013: http://www.adidas.co.uk/micoach?grid=true  Accessed: 10/12/13

Apple, 2013: https://developer.apple.com/programs/ios/distribute.html Accessed:10/12/13

Barrios, L., & Kenntoft, J. (2008). The Business Analysis Process of New Product Development:-a study of small and medium size enterprises (Doctoral dissertation, Umeå University).

Lowe, S., & ÓLaighin, G. (2012). The age of the virtual trainer. Procedia Engineering, 34, 242-247.

Palepu, K. G., & Healy, P. M. (2008). Business analysis and valuation. CengageBrain. com.

Thomas, C. R., & Maurice, S. C. (2011). Managerial economics: Foundations of business analysis and strategy. McGraw-Hill/Irwin.

Market strategy and development

The next stage of new product development is the market strategy and development phase. Armstrong and Kotler (2012) explains how the focus of this stage is the marketers recognising the developmental products target market, what can be gained from the identified market, the process of developing a marketing mix and the management of the marketing program.  Armstrong and Kotler (2012) believe that in order to achieve market growth an effective market development process must be implemented, with a focus on identifying and developing new market segments for the organisations products, which coincides with previous stages of NPD that enable an organisation to produce effective ideas for a original/lucrative product. Consequently Armstrong and Kotler (2012) believe that an organisation should complete the stage using available tools and models in order to exploit the advantages in ever changing market.

As previously stated the collision sense technology product has a potential large target market size. In relation to Armstrong and Kotler (2012) the products originality is a positive as it can potentially create a new market in both sport entertainment and refereeing. However the success and size of the market will be largely affected by how well the product fits around the structure and behaviour of the consumers. These factors are largely dependent on the planned price for the product and how it will be promoted, with promotion being largely important within gaining inclusion in highly viewed television channels i.e. sky. However planning a set price for the product is hard at this particular point as the product is effectively in its own sports market and therefore comparisons can’t directly take place. However in a review from Phillips (2012) it shows how sky originally priced their product at a premium rate or £300 per year which is relatively expensive for a new product however phillips states how this created a premium feel to the brand and the exclusive content created a demand from consumers, therefore a similar approach can be taken with collision sense as it is exclusive and has no direct competitors. In order to gain a feel of the products positioning, a product positioning map can be used with an indication of the augmented and expected product (see appendix)

To conclude its vital that the product is promoted well to high status television company's as a primary consumer, as this is the most lucrative market. 

Appendix

(Triple A learning, 2012)

Reference list

Armstrong, G., and Kotler, P. (2012). Marketing. Edinburgh Gate: Pearsons Education Limited. 64-73.

Phillips (2012) C Innovation and new product development: Sky+, a mini case study

Triple A learning. (2012). Marketing. Available: http://www.gregglee.biz/ftp/student/Marketing/page_63.htm Last accessed: 4/12/13

Concept development and testing

The third stage of the new product design phase is concept development and testing. Ulrich, 2003 state  that testing a concept is vital in the products development, ensuring the product is suitable for the market, whilst allowing developers to alter the product to consumer’s needs. Kotler and Armstrong, 2012 also state that concept development involves developing a new product into alternate product concepts by finding out how appealing each concept is to the customer.

Concept testing

Lamb, Hair & McDaniel, 2009 explain concept testing as a test to evaluate a newly introduced idea, namely a product or service; examining the sellable and practical determining factors of the prototype before it is introduced. Lamb, Hair & McDaniel, 2009 carry on to state how It is a way of measuring the enthusiasm of the products target consumers, this can be measured through the  reaction to a picture, written statement, or verbal description of the products fundamental capabilities and purposes.

Lycra, 2008 used a group of consumers to test the lycra product range, consumers were given various Lycra compression garments to use in their designated sport and then scored the product:

“Consumer response to a LYCRA® SPORT fabric concept testing:

 • 60% Extreme/Very Interest

 • 56% Extremely/Very Believable

 • 37% Extremely/Very Different

 • 73% Would cost a lot or a little more”

Lycra (2008)

In terms of the product/service of ‘collision sense’ it’s success would be determined largely in the technical development of the product, as if developed effectively it has the potential to be a multi-market product, bringing with it an entertainment element that could vastly improve sports spectatorism, consequently attracting potential contracts from television broadcast company’s. Additionally the product can be used as a development tool for clubs and most importantly used to referee a safe and fair sporting environment. As a consequence of the products potential directions it would appear the product would score highly in terms of product, pricing and promotion.

An effective way of measuring the collision sense’s potential would be through the product positioning map (see appendix). The market map illustrates the range of “positions” that a product can take in a market based on two dimensions that are important to customer. Examples of those dimensions might be:

High price v low price

·         Basic quality v high quality

·         Necessity v luxury

·         Lo-tech v high-tech

Riley (2012)

Another way of researching the target ,markets opinion o the products potential would be through the use of questionnaires this would aid developers in deciding product information such as price, promotion, feasibility, usefulness,  participation, the target market, market need, frequency of purchase and suggestions for improvement (Carlile, 2002)

To conclude concept development and testing allows a developer to realise the level of need for a product, the interest from the target market and potential development possibilities to improve the products demand.

Appendix

Reference list

Carlile, P. R. (2002). A pragmatic view of knowledge and boundaries: Boundary objects in new product development. Organization science, 13(4), 442-455.

Kotler, P. and Armstrong, G. (2012) Principles of Marketing. 14th edn. Essex: Pearson Education Limited.

Pinnacle marketing & Lycra, 2008 http://www.lycra.com/g_en/webpage.aspx?id=963 Acessed:

24/11/2013

Riley, J. (2012). Brand Positioning & Market Mapping.

Ulrich, K. T. (2003). Product design and development. Tata McGraw-Hill Education.