w12012931 Assignment
Tuesday 11 February 2014
Thursday 6 February 2014
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
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.
Thursday 30 January 2014
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.
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.
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.
Thursday 23 January 2014
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
Thursday 12 December 2013
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.
AppendiciesAppendix 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
|
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: 10/12/13Apple, 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.
Thursday 5 December 2013
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
Triple A learning. (2012). Marketing. Available: http://www.gregglee.biz/ftp/student/Marketing/page_63.htm Last accessed: 4/12/13
Wednesday 27 November 2013
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.
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