New Product Development poster presentation

Reference List

ASQ (2004) Decision Matrix. Available at: http://asq.org/learn-about-quality/decision-making-tools/overview/decision-matrix.html Last accessed 7/2/14.

Kotler, P., & Armstrong, G. (2012) Principles of Marketing. 14^th Edition. London: Pearson Education.

Phaal, R., Farrukh, C. J., & Probert, D. R. (2006). Technology management tools: concept, development and application. Technovation, Volume 26, Issue 3. Pp. 336-344.

Stark, J. (2011) Product life cycle management. Pp. 1-16. London: Springer.

Commercialisation

Commercialisation

Once a product going through the NPD process has been test marketed, the final stage for this product is commercialisation. Lamb et al (2010) defined commercialisation as the introduction of a new product to the market in relation to when the product will be delivered, where the product will be delivered, how the product will be delivered and to whom the product will be delivered to. Kotler & Keller (2012) further state that when a new sport product reaches the commercialisation phase, certain factors have to be considered, including:

·         Intensity of the distribution process  

·         Promotional mix – after taking into account the results of the test marketing phase

·         Production capabilities

·         Price considerations – taking into account costs, objectives and competitor’s actions

·         How long until the product will break even

·         Extra additional costs of commercialisation

Pride & Ferrel (2011) suggest that advertising and promotion is the most important part of the commercialisation process, however this can affect smaller firms as they may be unable to reach potential customers (Aarikka-Stenroos & Sandberg 2012). On the other hand, smaller firms may advertise on cheaper promotional streams that may contain niche markets that large firms may not be able to reach (Pride & Ferrel, 2011). Furthermore, Schnurr (2005) expresses looking at commercialisation with the process of risk assessment continually running simultaneously (Appendix A).

            This was seen in 2006 when RipCurl introduced the world’s first ever power heated wetsuit by working with the Australian Institute for Commercialisation to find new technologies and materials that could advance the wetsuit industry; in doing this they gained a competitive advantage over their rivals. The product was advertised and marketed effectively and is thought to have changed the nature of wetsuits forever (Australian Innovation, 2006). Commercialisation can be seen across the entire sport industry, with Slazenger also introducing their new cricket equipment products to market in 2013, by having famous cricketers endorse their products to boost their marketing campaign (Slazenger, 2013).

            In regards to the SB SpikeSwitch cricket spike idea that has come through the NPD process, commercialisation will be applied appropriately. The commercialisation ideas are as follows;

·         WHEN – Cricket is played through the summer, but training commences through the winter. Therefore, as my product is suited for both winter and summer, the product will be advertised and marketed from the beginning of November 2014, but the official launch date will be December 1^st 2014. This is because the whole of November will be the promotional month for the SpikeSwitch.

·         WHERE – The product will be sold in SportsDirect stores nationwide. Also, sales through various online cricket websites (E.g. Prodirectcricket.com) will sell the product as they can reach potential customers within the industry.

·         PROMOTION - The marketing campaign will see the product advertise through TV adverts, magazine advertisements (E.g. AllOutCricket) and posters (at various county grounds).

Distribution, production, promotion and price have all been considered regarding commercialisation but not break-even. Therefore a cash flow forecast has been created and shows that break-even will be achieved after 11 months (Appendix B).

Word Count 498.

Appendices

Appendix A

Appendix B

Reference List

Aarikka- Stenroos, L & Sandberg, B (2012).‘From new product development to commercialisation through networks’, Journal of business research. 65:2, pp. 198-206. Available at: http://jr3tv3gd5w.search.serialssolutions.com Last accessed 3^rd February 2014.

Australian Innovation Online. (2006) Australian Innovation. Rip Curl – Commercialisation of the first ever power heated wet suit. Available at: http://www.ausinnovation.org/articles/rip-curl-commercialisation-of-the-first-ever-power-heated-wet-suit.html Last accessed 3rd February 2014.

Kotler, P., & Keller, K. (2012) Marketing Management. Essex: Pearson Education. pp54-80.

Lamb, C. W., Hair Jr, J. F., & McDaniel, C. D. (2010) Essentials of marketing. Ohio: Cengage Learning.

Pride, W & Ferrel, O (2011). Marketing Express. 2^nd edn. USA: South Western Cengage Learning

Schnurr, K. (2005) ‘Making product commercialisation more successful’, Medical device technology. Volume 16, Issue 7. pp. 26. Available at: http://jr3tv3gd5w.search.serialssolutions.com Last accessed 3^rd February 2014.

Slazenger Online. (2013) V12. Overview. Available at: http://www.slazenger.com/v12.html Last accessed 3rd February 2014.

 

Test Marketing

Test Marketing

The penultimate stage of the NPD process is test marketing. Actual performance is observed as a new product/service is placed in one or more selected market(s) to analyse whether the product will be viable or not (Kotler & Keller, 2012). McDaniel, Lamb & Hair (2011) further back up this point by stating how introducing a new product into a limited market will gather the views of potential customers.

This stage allows developers of new products to introduce the product at a lower cost than that of first introduction, however, it still tests the entire marketing program on potential consumers, for example the positioning strategy, branding, distribution and advertising. Although, there are some flaws within test marketing as there are extra financial costs incurred with the introduction process and also competitors may take advantage due to this being a lengthy process (Kotler & Armstrong, 2012).

Within the sport industry, an example of this would be Body Armor’s chest protection pad that they had developed due to the product not being accepted to date (Professional Athletic Equipment Inc, 2013). There were certain issues with the product in regards to the high costs of getting all teams to wear a protective product and also there were doubts on whether the product would affect an athlete’s performance and/or mobility. Therefore, Body Armor was then tested at a variety of places, including Baseball youth teams and other universities. From the study it was derived that the product did not affect performance but actually improved it, this was due to the mentality of the athletes being more confident as they felt more protected and safe wearing the Body Armor. Scotland Food & Drink (2012) go on to suggest that market testing is essential in the New Product Development process and should be done not just in the sport industry but across all business industry.

In regards to the cricket spike idea (SB SpikeSwitch) that has come through previous stages of the NPD process, test marketing would be implied appropriately. The organisation that is SB SpikeSwitch would have to consider laws when test marketing the spike, such as intellectual property of the spike which suggests that upon entry into the market, patents, trademarks and other copyright material will protect the spike from being copied by competitors. Therefore, it is necessary to market test the product to the appropriate audience in order to gain a more specific view on the realistic use of the product.
During the late winter/early spring, when cricket training starts for all clubs nationwide, the spike will be taken to the top 20 universities in the UK to be tested on potential buyers in order to gain actual information on what people think of the product. The product will also be taken to every UK County’s cricket ‘hub’, where the best up and coming players in the country can test the product to grasp the feasibility of the spike.

Word Count 485.

Reference List

Kotler, P. & Armstrong, G. (2012) Principles of Marketing.14th Edition. London: Pearson Education.

Kotler, P., & Keller, K. (2012) Marketing Management. Essex: Pearson Education.

Mcdaniel, C.D, Lamb, C.W, & Hair J.F, (2011) Introduction to Marketing. 11th Edition. Ohio: South-Western Cengage Learning.

Professional Athletic Equipment Inc. (2013). Business Plan. Available at : http://wsj.miniplan.com/spv/3256/3.cfm#1030000. Last accessed 29th January 2014.

Scotland Food & Drink. (2012) How do I: conduct a test market? Available at: http://www.scotlandfoodanddrink.org/site/guide_doc/How-do-I-conduct-a-test-market-2.pdf Last accessed 29th January 2014.

Product Development

Product Development

The sixth stage of the NPD phase is product development. Kotler & Keller (2012) described product development as the construction of the physical form of an idea via the development of prototypes. This involves converting all of the characteristics, specifications and requirements discussed about in previous phases of the NPD process, into an actual materialistic product ready to be taken to market (Durmuşoğlu & Barczak, 2011). Also within product development, Kotler & Keller (2012) stated that there are four other aspects that need to be included in this phase, they are:

• Product construction decision – Materials, method, costs, sizes/colours
• Packaging – Materials, costs.
• Branding – Product name, logo, trademark protection, perceived image amongst consumers
• Positioning – Market segment and positioning in relation to competitors products

A sporting example of the phase of product development can be seen when Warrior were introducing their first ever football boot, the ‘Skreamer K-lite’. At Manchester City’s training camp in the Alps, 2012, captain Vincent Kompany was pictured wearing a pair of prototype Warrior football boots to train in (SoccerReviews, 2012). This shows how a developing new sport product first has to be tested for the reliability of the functioning of that product via the use of a prototype. Adidas also use the same method when producing a new football boot. Their new f50 product in 2014 proved to be extremely beneficial in terms of the materials, colours, name and logo involved (Adidas, 2014). This does not just occur in football boots however, as seen in 2013 when the new ‘Stair-rover’ skateboard was introduced. This was a previous improvement of an old version that had been updated via new materials, products and positioning; the skateboard had several prototypes before its final release (Gizmag, 2013).

In relation to the Cricket spike idea that has came through previous phases of the NPD process, relevant aspects of product development have been incorporated. They are as follows:
• Product construction:
Materials- Heel will be TPR-cradled to secure the boot around the foot for comfort and to stop loss of energy, Outer-sole made from compression-moulded EVA for ventilation, comfort, support and durability. Under-Sole will be rubber with metal spikes folding up/down.
Method/Costs- Product will be massed produced in a plant within Eastern Asia (Thailand, China) to ensure minimum costs. Cost per unit will be approximately £7.50 including labour, materials etc.
Size/Colours- Shoe will be available in sizes UK4-13. There will be 3 colours for the outer-design of the shoe; white, blue or red.
• Packaging
Materials- Shoe will be given in a black meshed bag. (see Appendix A for an example).
Costs- Meshed bag will cost approximately £0.30p per unit to produce.
• Branding
Name- SB SpikeSwitch
Logo- See appendix B.
Protection- The product will be fully patented and trademarked therefore none of the close competitors can produce anything similar.
Perceived image- Product will hope to be perceived as an innovative, reasonably-priced, problem solving solution that saves money in the long term.
• Product positioning
See appendix C for product positioning map.

Word Count 496.

Appendices 

Appendix A

Appendix B

*NB – This is a rough sketch of the logo and not the finalised version

Appendix Ci

 Appendix Cii

*Appendix Ci shows the product positioning of SB SpikeSwitch in comparison with it's relevant competitors. Appendix Cii shows where Sports Direct (the outlet in where my product will be sold) is viewed overall within the sports industry. These 2 diagrams prove - as they are positioned at similar positions to each other - that SB SpikeSwitch cricket spikes will be a perfect match to sell in Sports Direct stores nationwide.

Reference List

Adidas Online. (2014) Men’s adizero f50 TRX FG boots. Available at: http://www.adidas.co.uk/mens-adizero-f50-trx-fg-boots/F32789_580.html Last accessed 16th January 2014.

Durmuşoğlu, S. and Barczak, G. (2011). The use of information technology tools in new product development phases: Analysis of effects on new product innovativeness, quality, and market performance. Industrial Marketing Management. Volume 40, Issue 1. pp. 320-321.

Gizmag Online. (2013) Stair-descending skateboard hits Kickstarter. Available at: http://www.gizmag.com/stair-rover-skateboard-kickstarter/27981/ Last accessed 16th January 2014.

Kotler, P., & Keller, K. (2012) Marketing Management. Essex: Pearson Education.

SoccerReviews Online. (2012) Vincent Kompany Training in Warrior Sports Prototype Boot. Available at: http://soccerreviews.com/news/unreleased-warrior-sports-skreamer-klite/ Last accessed 16th January 2014.

Business Analysis

Business Analysis

The fifth stage of the NPD process is business analysis. This is where it is decided whether the product is actually technically feasible, whether the product has potential within the market and whether the product will create a genuine financial contribution (Tzokas et al. 2004).

        Kotler & Armstrong (2012) suggest that business analysis reviews certain key elements to ensure the NPD process can be ran effectively:

• Demand Projections - How the product sells in terms of the set price (elasticity of demand); the speed of the sales i.e. if the product is seasonal then determining the peak sales times and also how often the product will repurchased.

• Cost Projections - Analysing total costs alongside per unit costs; the start-up costs for a business alongside the on-going running costs; if the business can gain economies of scale leading to decreased costs and also considerations of the products’ break-even point. McDaniel et al. (2011) suggest that cost projections are essential because costs significantly rise once the product enters the product development phase.

• Competition – SWOT analysis of closest competitors and how an organisation’s product will differentiate in comparison to a competitor

• Investment required – Planning how much money will be needed for engineering, patent, development, testing and all promotional and distributional activities.

• Profitability – How long until the product will turn a profit; determining what the return on investment will be. A risk assessment should also be undertaken.

This was seen in ‘RA Concepts’ – a golf club manufacturer – in their business plan in
2012.  They took into account their competition within the golf club industry to construct forecast plans in regards to costs, demands and the required investment amount. The organisation drawn up forecasts on projected market share of the industry within its first 5 years; 2% projections for the American female market, 1.5% male and 0.5% juniors. Their price projections state that price will increase on an annual basis, allowing them to draw-up a sales forecast (Appendix A) (RA Concepts, 2012).

This is also seen in David Lloyd gym. Their aim is to deliver results to their stakeholders; therefore they research to determine projections on price, costs and demand. This has allowed them to become the UK’s market leader Health and fitness club provision (Customer Insight, 2011).

Regarding the Cricket Spike idea that has matured throughout the NPD process, business analysis has been undertaken. Demand projections shown that – due to the price being set relatively close to competitors prices – it will be extremely high when the product first comes to market. Demand will peak in January and April, when the winter training and summer playing season respectively begin. Analysis of costs, competitor’s action and the need for investment has allowed a cash flow forecast for Year 1 to be drawn up (Appendix B). This shows the product breaking even after 12 months, an ambitious but highly achievable projection.. After business analysis in regards to the cricket spike idea, it has therefore allowed the product to enhance further through the NPD process.

Word Count 497.

Appendices

Appendix A

Appendix B

Reference List

Customer Insight. (2011) Case study – David Lloyd leisure. Available at: http://www.customer-insight.co.uk/article/936 Last accessed 9th December 2013.

Kotler, P., & Armstrong, G. (2012) Principles of Marketing. 14th Edition. London: Pearson Education.

McDaniel, C. D., Lamb, C. W., & Hair, J. F. (2011) Introduction to marketing. 11th Edition. Ohio: South Western Cengage Learning.

RA Concepts, (2012) Golf Club Manufacturer Business Plan. Available at: http://www.bplans.com/golf_club_manufacturer_business_plan/executive_summary_fc.php#.UMYeioPtTwY Last accessed 9th December 2013.

Tzokas, N. Hultink. E& Hart, S. (2004). Navigating the new product development process. Industrial Marketing Management. 33 (7), pp. 619–626.

Marketing Strategy & Development

The fourth stage of the NPD process is marketing strategy and development. A marketing strategy is an organisation’s approach plan– long term or short term –to achieve its marketing objectives (Shankar et al., 2012). Kotler & Keller (2012) further state that a marketing strategy considers certain key elements:

. Target Market – In relation to how big the target market is, the structure of the market and the buying behaviours of the target market. The positioning of the product within potential consumers is also critical for a successful marketing strategy.

. Product – In terms of pricing, how the product will be distributed, how it will be promoted and the product’s positioning within its potential customers.

. Goals – The long term profit and sales goals in comparison with organisation’s projections over time. An organisation should also consider elements of the marketing mix when thinking of their long term goals and objectives.

            Barclay et al., (2012) suggest product development is the modification and enhancement of a new product idea’s characteristics in order to maximise benefits to a potential buyer. Synthany (2013) shown (Appendix A) their own new product development life cycle. This suggests the need for prototypes to be developed, allowing an organisation to then see the product’s manufacturing workability in order to then further develop the product.

          When a new golf GPS app- iGolf –was released, there was a significant marketing strategy that covered all of Kotler & Keller’s (2012) key elements. Their target market was golfers that owned a phone with built-in GPS systems in the US– a market approximately of 3.58 million people with a potential for growth as forecasts predict. The company that produced this app– L1 –aim to position themselves as producers of affordable, high-quality goods. This allowed them to gain significant market share over their less established competitors. iGolf was positioned as a premium, high-quality product, therefore making it affordable due to it’s significantly higher prices. Distribution was via electronic downloading and promotion occurred through social media, newsletters, websites, PR, merchandise shows and co-brandings. L1’s sales strategy of iGolf was to gain acceptance and allowance of all major US wireless companies for the distribution of the app through the app store.  Negotiations also took place with mobile network providers to include the app within their service plans. Free trials and customer service for the app were also induced as L1’s sales promotion technique (L1 Technologies Inc, No date stated).

          In regards to the cricket spike idea that has came through the previous phases of the NPD process, a relevant marketing strategy & development has been incorporated. Seen in Appendix B, the marketing strategy for the cricket spike idea incorporates all the elements of Kotler & Keller’s (2012) breakdown of marketing strategy.

  Development of the product has been seen through the production of prototypes which give a basic reflection as to the feasibility of the manufacturing process. This will therefore allow scope for the product to further enhance through the New Product Development process.

Word Count 496.

Appendices

Appendix A

 
Appendix B 

ELEMENT CRICKET SPIKE IDEA

TARGET MARKET Cricketers who train both indoors and outdoors throughout the year in the UK. Market size is roughly around 500,000 people (ECB, 2013) with that figure expected to grow due to the increasing popularity of 20/20 and The Ashes.

POSITIONING Medium-quality, extremely affordable, niche market product. As the product is new to market, the price would therefore be lower than existing spiked cricket shoes (Appendix C).

DISTRIBUTION The product will be distributed through external sources in major sports equipment shops in-store and online. The major shops to sell this product will be Sports Direct, Pro-Direct Cricket and CricketSupplies.com.

SALES PROMOTION This will occur through free trial runs of the cricket spike at selected county cricket clubs throughout the UK in which anyone can attend. This will also occur at the major cricket-playing universities throughout the UK. Advertisements through university newsletters and popular online cricket forums.

LONG RUN SALES STRATEGY As the cricket spike will be an infrequently purchased product (Appendix D), new customers will always need to be found to generate increasing sales. Therefore, the long-run sales strategy for the product is to break into the international market online and in international cricket stores. To increase the market share of the product, the aim is to get the product endorsed by 5 different international cricketers after the first 2 years, therefore allowing for increased prices due to the projected increase in demand.

Appendix C 

Appendix D

                                                                  Product Life Cycle Sales (Kotler & Keller, 2012) 

Reference List 

Barclay, I., Dann, Z., & Holroyd, P. (2012) New Product Development. Oxford: Heinemann.

ECB. (2013) Question and answers. Available at: http://www.ecb.co.uk/twelfthman/interactive/q-and-a/2841,2841,QA.html Last accessed 4th December 2013.

Kotler, P., & Keller, K. (2012) Marketing Management. Essex: Pearson Education. pp54-80.

L1 Technologies Inc. (No date stated) iGolf Marketing Plan. San Diego.

Shankar, V., Carpenter, G. S., Farley, J., & Hamilton, B. A. (2012) Handbook of marketing strategy. Cheltenham: Edward Elgar.

Synthany. (2013) Our Products. Available at: http://synanthysolutions.com/products.html# Last accessed 3rd December 2013.

Concept Development & Testing

Concept Development and Testing

The third stage of the NPD process is concept development and testing. Concept development is the ongoing, continuous approach of finding the most appropriate design for a new product. Multiple designs consist of different materials, technology and physical appearance in order to grasp what the key product elements are so that the most premium product can be brought to market (Armstrong et. al. 2009).  

Lamb et al. (2010) described concept testing has been described within concept development as the preliminary stage to evaluate and test the success of a new product before it is actually brought to market. The concept is presented to a potential customer through an image, a statement or a verbal description. The sports product, brand and category are also considered at this stage of the NPD process. Many questions are asked;

. Is there need for the product?

. Is there a gap in the market for the product?

. What are the benefits of this product in relation to that of a competitor?

. What is the perceived value of the product?

. What are the customers’ purchase intentions in relation to the occasion and frequency of the purchase?

This stage is crucial in the development of a new (sports) product.

            Concept development and testing is also seen within the sport industry when a new sports product is being brought to market. Nike implements CD&T when bringing a new footwear product to market. They gather a mixed group of dedicated athletes from a variety of different sports to give constructive feedback and criticism on the shoes they are testing. This is in order to produce only the finest, most desirable to bring to the sports footwear market (Nike 2013).  Also within the sport industry, The Human Performance Centre at London South Bank University wanted to bring their concept ‘youbreathe’ – a vibration-training device for the respiratory system. As their market is broad – from athletes to asthma sufferers – they had to apply concept development and testing in order to develop the most appropriate, customer-fitting product (LSBU, 2013).  

            In regards to the Cricket Spike idea that was brought through from the idea generation and screening phase, concept developments were created in order to test on the potential customers of the product. Three possible concepts of this are:

1)       Cricket trainer with a button on the sole that folds and unfolds the spike so that the athlete can have either a spiked trainer or general trainer.

2)      Cricket trainer with reeling system on the sole that folds and unfold the spike so that the athlete can have either a spiked trainer or general trainer.

3)      Cricket trainer with detachable spikes that can be taken off or put on by using a spike-remover device; allowing an athlete to have either a spike trainer or general trainer.

A concept scoring matrix was created after the concepts were tested by potential customers. This matrix discovered that concept 1 has the highest potential for success in the sport cricket marketplace.

	CONCEPT 1	CONCEPT 2	CONCEPT 3
EASE OF USE	5	2	3
TARGET MARKET (Size)	4	4	4
LOW NUMBER OF COMPETITORS	4	4	3
ENHANCING THE CRICKET SHOE MARKET	5	3	3
DEMAND	4	3	4
POTENTIAL PRODUCT GROWTH	5	2	3
TOTAL SCORE	27	18	20
RANK	1	2	3

N.B. 1 – Low, 5 – High.        

Word Count - 500.  

Reference List

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2009) Marketing: an introduction. Essex: Pearson Education.

Lamb, C. W., Hair Jr, J. F., & McDaniel, C. D. (2010) Essentials of marketing. Ohio: Cengage Learning.

London South Bank University (2013) Product testing and development. Available at: http://www1.lsbu.ac.uk/sports/hpc/technology.shtml Last accessed 25th November 2013.

Nike. (2013) Consumer affairs. Testing products for Nike. Available at: http://help-us.nikeinc.com/app/answers/detail/a_id/530 Last accessed 25th November 2013.