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