BUSINESS ANALYSIS

Once the marketing strategy and product concept has been decided, the magnetism of the product in the sport market is evaluated in the Business Analysis stage of the NPD process (Armstrong and Kotler, 2010). Lamb, Hair and McDaniel (2012) noted that a detailed breakdown of the costs of producing the new product is determined by estimating preliminary figures for demand, costs, sales and profitability. Also suggested that factors such as size of target market, nature of competition, investments and novelty of the product can affect the revenue projections.

In terms of sales, sales history of similar products and market surveys, also estimating the maximum and minimum sales in terms of risk assessment can aid in preparing a sales forecast. This can lead to figuring costs and profits of the product, including marketing, research and development, operations, accounting, and financial costs (Armstrong and Kotler, 2010). Lamb, Hair and Mcdaniel (2012) also pointed the importance of analyzing economic trends, and their impact on estimated sales which can be sensitive to fluctuations in the business cycle.  

Adidas Group Business Plan

An ideal example of a business plan would be of the Adidas Group (2010), which aspires to outperform total market growth in the sports market and development of its bottom line faster than its top line products thus, striving to lay a foundation for leadership in the sporting goods industry by outgrowing its major competitor by the year 2015. The Adidas Group targets an annual growth rate of 15% and reach operational margin of 11% sustainably by 2015. The group has strategic plans to make Adidas target competitive sports within its Sport Performance division, and towards sports lifestyle and fashion consumer within its Sport Style division, and Reebok to become the fitness and training brand for active and casual sports.This plan has growth initiatives within global sales, and efficiency projects which will incorporate all brands, sales channels, and function Adidas globally. 

New Product Business Plan

Sport England (2013) has invested 815,000 GBP to develop and sustain the game basketball and one of its approaches are IM Basketball. This approach aims to set an informal flexible format of the sport that requires a traditional court to be delivered to schools, colleges, universities. The desired product (dunk pad) could add as a customization to the traditional court for the set target market, which could be a break point for the product to enter the sport retail sector. This could influence the demand of the product in terms of distribution via online, retail stores, relationship marketing (such as eBay, Ideo, and amazon), private sales to Sport England' s strategy allocations, so on. With the British Basketball league (Wikipedia, 2013) functioning from September till April, should not effect the business of the new product with regard to seasonal factors. Basketball being an indoor game, keeps it amongst exceptions to be influenced by the weather.


As for the desired product (Dunk pad), forecasting market share for a new product is the biggest challenge (Lamb et al., 2012). In terms of sales, the cost of production could vary between 25-30 pounds per piece and cost price of the product could be between 40-55 pounds when it reaches the customer setting aside tax and distribution, thus, minimizing profits in order to increase sales and sustainability. As shown in the figure above, this could match the break even point. The cost of production and pricing strategy could be influenced through the involvement of Sport England. The advantage of being a new product in the market, can avoid the fear of competition in the game of basketball. This stage should help determine the marketing potential of new product ( Lamb et al., 2012).



References

Adidas Group (2010) Strategic Business Plan - 2015. Adidas Group. Retrieved December 12, 2013, from http://www.adidas-group.com/en/media/news-archive/press-releases/2010/adidas-group-presents-2015-strategic-business-plan/

Kotler, P., & Armstrong, G. (2010) New product development and product life cycle strategies. Principles of Sport Marketing (13 ed., pp. 286-289). New Jersey: Pearson.

Lamb, C. W., Hair, J. F., & McDaniel, C. (2012) Product decisions. MKTG (pp. 174-176). Mason: Cengage Learning.

Sport England (2013). 2013-17 Whole sport plan investments. Sport England. Retrieved December 13, 2013, from http://www.sportengland.org/our-work/national-work/national-governing-bodies/sports-we-invest-in/2013-17-whole-sport-plan-investments/

Wikipedia (2013). British Basketball League. Wikipedia. Retrieved December 13, 2013, from http://en.wikipedia.org/wiki/British_Basketball_League

MARKETING STRATEGY AND DEVELOPMENT

Marketing Strategy and Development is the fourth stage of the New Product Development (NPD) process. This stage designs a marketing strategy based on the product concept, which is used to market the desired product, and the main intention being to form profitable relationships between the business and customers. Armstrong et al., (2009) commented that businesses use market segmentation, target marketing, sales, price and positioning to decide the target market to launch the desired product. Beech & Chadwick (2007) mentioned the creation of product prototypes in this stage in order to determine manufacturing feasibility and to assure the further development of the product.

Businesses must develop a marketing strategy through a set of marketing tools used to get a response from a target market known as marketing mix. As shown in the diagram below, marketing mix consists of the 7 P's which is product, price, place, promotion, people, process and physical evidence (Armstrong et al., 2009).

                                               

                                                           

Marketing Mix Diagram 

As suggested by Woodrose (2004), pricing strategies for a product is essential to determine if the price needs to be cost orientated, competition orientated, or customer orientated, and strategies such as market skimming and marketing penetration is often used (cited in Armstrong et al., 2009). The target market for the desired product (dunk-pad) being amateur basketball athletes coincides with the current participation rate of basketball in the UK having 60% of participants between 16-19 of all gender groups compared to other sports (Sport England, 2009). The desired product could be low priced in order to sustain the product in a niche market, thus, low margin cost price and increased profits (Armstrong et al., 2009) in a period of time if successful.

                                                            

 Product Positioning Strategy

Product positioning strategies helps to place the product in the target market versus the competition as shown in the diagram above. Positioning strategies helps differentiate the product from the substitute products, this is often accomplished by focusing on the usage environment (e.g. specific for amateur basketball athletes), attributes of the product (e.g. increase effectiveness and fluency of slam dunks), price (e.g. discounts for students in schools and colleges), association with endorser (e.g. Allen Iverson : 1.83 m- athlete height and Dunk pad), competitive difference (e.g. athletic propulsion labs shoes), by specific use (e.g. basketball dunking styles), niche advantage (e.g. new product in market), and lifestyle (e.g. basketball enthusiasts) (Beech and Chadwick, 2013).

Beech and Chadwick (2013) suggest the importance of promotional strategies which help to communicate and share awareness with target market through sales promotions, advertising, online selling, sponsorship, and publicity. The desired product (dunk pad) could be promoted through such strategies, for example, Slam Dunk contests for amateur athletes at basketball half-time events, television shows, shopping malls, etc, which can help turn into a social game of its own. Finally, the chain of distribution of the product which is essential part of the marketing process. For example: the chain of distribution for the desired product (dunk pad) could be retail outlets such as JD sports, Sports Direct, Decathlon, etc, online stores, basketball events, and several other distribution methods.

                               The diagram above helps to determine the importance of the Dunk pad

References

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2009). Designing a customer driven marketing strategy and marketing mix. Marketing an Introduction (pp. 187-266). Essex: Pearson Education Limited.

Beech, J., & Chadwick, S. (2013). Sport Marketing. The Business of Sport Management (2 ed., pp. 187-201). Essex: Pearson Learning Limited.

Beech, J., & Chadwick, S. (2007). Moving sport marketing forwards. The Marketing of Sport (pp. 397-465). Essex: Pearson Education Limited.

England, S. (2007). Primary Offer Data Information Pack for Basketball. Active People Survey, 1, 1-10.

CONCEPT DEVELOPMENT AND TESTING

Concept Development and Testing

The new product idea that survives the Idea Screening stage, then moves to the next stage, i.e, Concept Development and Testing.  Kotler and Armstrong (2009) suggested that attractive ideas must be refined into testable product concepts. Product concept tests could be defined as the evaluation of a new concept idea, before a prototype is created.  The concepts are tested with a group of target consumers to find out if the concepts have a strong consumer appeal. This stage assesses preliminary figures for demand, cost, sales and profit probability with regard to the new product (Lamb, Hair and McDaniel, 2009).

There are a set of questions that should be analysed, which can help determine the profit probability of the product. Questions such as What is the likely demand of the product?, What is the risk of failure? Would the product enhance the image of the company's overall product mix? and so on (Charles, Hair and McDaniel, 2009). The answer to such questions will help the company decide the strongest marketability of the product (Kotler and Armstrong, 2009). 

Concept development stage in the New product development (NPD) process, in which product concept is developed into a physical product in order to ensure that the product idea can be turned into a workable market offering (Kotler and Armstrong, 2009). Lamb, Hair and McDaniel (2009) commented that the marketing of the product should begin at this stage with respect to the product's packaging, branding, labelling, and a map out of the promotion, price and distribution strategies.  

Examples of Concept Development and Testing would be:

The Fifa Quality concept tests for Footballs, which is a testing procedure used in order to assess the quality testing and certification of footballs to ensure global consistency in top match footballs. These footballs are tested under laboratory conditions, subjecting them to even tougher conditions than they will endure during the game to maintain the quality criteria set by Fifa. After the completion of the quality certification programme, the footballs are then approved to be manufactured and distributed. 

The marketing strategies of the footballs are then planned in the later stages of the New product development process (NPD) through various marketing affiliations of FIFA(2010). Thus, this completes the stage of concept development and testing stage of Fifa quality concept footballs.

Relating Concept Development and Training to Dunk Pad,

After the screening stage of the desired product (Dunk Pad), the product needs to be developed and tested to increase market profitability. The product as described earlier, is an initiation for amateur basketball athletes to improve their skills and efficiency to dunk in the game of basketball. As products like the Concept One Shoes by APL have been banned by the National Basketball Federation due to being an performance enhancing snickers (APL, 2011). This prevents the selected product (Dunk Pad) from facing any consequences of being disapproved as it is an training kit to guide amateurs to get the skill of dunking right which can improve the effectiveness of scoring, prevent rejections and motivation for an basketball athlete for any height to attempt to dunk.

This concept can be developed further by production of different colours, latest designer themes, materials and sizes which can attract customers from various backgrounds. This development can help increase sales as amateurs can have it in their backyards, public playgrounds, schools & universities, etc and could be used for various other purposes such as yoga mat, gymnastics and wrestling surfaces and household purposes once they get old.

This can be further developed through questionnaires and feedback forms. An approach can be made to communicate with the consumers and officials of local basketball clubs, professional training clubs, schools and universities, sports retailers,  etc to help develop the selected product to increase market profitability.

References

·         Kotler, P., & Armstrong, G. (2010). New product development and product life cycle strategies. Principles of Marketing (13th ed., pp. 282-296). New Jersey: Pearson.

·         Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). Developing and managing products. MKTG (pp. 171-178). Mason: South Western - Cengage learning.

·         Propulsion Labs. (2011). Magento - Open Source ecommerce. APL Basketball Shoes. Retrieved November 29, 2013, from http://www.athleticpropulsionlabs.com/concept1-blackgreen.html Copied to Clipboard!

·         FIFA. (2010). FIFA.com - Quality-Concept. FIFA.com - Quality-Concept. Retrieved November 29, 2013, from http://footballs.fifa.com/Quality-Concept

IDEA SCREENING

Idea Screening

Idea Screening is the second stage of the New Product Development (NPD) process, which helps to drop poor ideas and spot good ones in order to turn it into profitable products (Kotler et al., 2013). Decision making effectiveness at this stage is considered to play an important role in innovation success (Alam, 2003). Screening aims at evaluating new product ideas in order to eliminate those ideas that will probably not lead to successful new products and select ideas for further development that will have a substantial chance at success (Hammedi, Riel, Sasovova, 2011). An efficient screening process is executed in such a way that the activities use fewer resources while maintaining the same output quality, or yield a better output quality with the same level of input.

Examples of Idea Screening

Evo One Basketball

Evo One Basketball by Shooters Revolution is an innovative basketball installed with a micro- sensor technology which is designed to advance player performance and coach professional shooting mechanics. This company has spent years of knowledge and research into developing the world first dynamic basketball. Since 2010, they have prototyped and tested over 8 different models in order to release this product (Evo one, 2011). This product has been screened to be a revolutionary product in basketball but will it be a success at the market?


 Sweatband Headphones

These headphones have been designed to endure the intense demands of extreme sports. This product features leather ear pads, elastic sweat-absorbing headband, and interchangeable accent pieces which makes the accessories easy and affordable. This product is similar to customized products offered by Nike and Oakley, which brings out the questions, whether it will be the best option to make profit in the market?

Decision Matrix

The decision matrix assists to analyse to effectiveness of the desired products and whether or not the product should be introduced into the market. The matrix comprises of columns with the following headings: price, safety, durability, customer need, accessibility and size, raw score and the rankings. The rows on the left hand side contain the desired products and a score between 1-10 (10-highest).  

The first sport product is the Dunk Pad which helps amateur basketball players to dunk effortlessly, then the Football Puncher which is used to reduce man force as ball boys during football matches and lastly the Football App which helps customers access match passes at a touch on their smartphones.

The matrix suggests that Dunk Pad is the strongest product in the table because it scored highest in durability, customer need and accessibility and therefore would be taken to the next stage of the new product development process (NPD) .

References

Hammedi, W., van Riel, A. C., & Sasovova, Z. (2011). Antecedents and Consequences of Reflexivity in New Product Idea Screening. Product Development & Management Association, 28, 662-679.

New Idea Homepage. (2011). Sweatband Headphones. I New Idea Homepage. Retrieved November 22, 2013, from http://www.inewidea.com/2011/01/29/36365.html

Kickstarter. (2012). Evo One Basketball.Kickstarter. Retrieved November 21, 2013, from http://www.kickstarter.com/projects/shootersrev/evo-onetm-sensorized-basketball-performance-techno

Kotler, P., Armstrong, G., Harris, L. C., & Piercy, N. (2013). Principles of Sport Marketing (6th Ed.). Harlow: Pearson.

IDEA GENERATION

                                                               IDEA GENERATION

The figure above shows the overall process of the New Product Development (NPD). The process starts with idea generation where ideas are sourced regarding a new product. Idea Generation is defined as the process of creating or developing ideas which can be associated with business or organisations innovation to develop and create new ventures or products (Grandi & Grimaldi, 2005). This stage is necessary as it lays the foundation for all the other stages, guiding the overall process of product development.

Examples of existent sports product

Land Roller

An example of idea generation would be Land Roller’s angled wheel technology which outperforms inline skates with a decreased vibration, smoother ride and increased glide time. (Landroller, 2005)

Coasting Bicycle

Another example of idea generation would be Coasting bicycle design strategy for Shimano. The Coasting Bicycle has innovative components from Shimano enabling lower maintenance and increased comfort. (IDEO, 2006)

                                  

Pilates Allegro 2 Reformer

Last example for idea generation would be Pilates Allegro 2 Reformer which is designed by IDEO and manufactured by Balanced Body. The product has improved with greater functionality, adjustability and cost reduction modifications. (IDEO, 2011)

Ideas

Dunk Pad

This basically is a launch pad with shock absorption and cushion engraved on the surface of a basketball court under the basketball ring (Pivotal positions). This serves to help stabilize the foot and efficiently transfer energy created by the athlete towards the area of the launch pad that impacts vertical leap to help the athlete take a lay-up and dunk effortlessly. This can be used in coaching camps for kids and amateur basketball to help an athlete of any height to dunk in a basketball game giving fair advantage to every athlete.

Football Puncher

This is a mechanical machine that surrounds the advertisement boards in a football pitch that automatically throws out footballs at adjusted speed and angles as soon as a football is detected leaving the designated football pitch. Its main purpose is to provide the football to athletes in a football game in order to save time in a football game. It prevents the use of ball boys and crowd from interfering in a football game.

Ticket App

This technology can help fans to swipe the ticket barcode via their smartphones at the check point to get into the stadium instead of having to carry a ticket. This is a convenient way for season ticket holders and regular fans to visit the stadium at their convenience and not bothering about a ticket.

References  

Grandi., A & Grimaldi., R., (2005) Academics  organizational characteristics and the generation of successful business ideas. Journal of business venturing, vol 3 pp 821-845

IDEO (2006) Available at: http://www.ideo.com/work/shimano/.  Accessed on: 25th October 2013

IDEO (2011) Available at: http://www.ideo.com/work/allegro-pilates-reformer-redesign/. Accessed on: 31^st October 2013

Land Roller (2005) Available at: http://landroller.com/our-skates/. Accessed on: 29^th October 2013

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