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Stage 8- Commercialization

The New Product Development Process

Stage 8- Commercialization

The New-Product Development Process (NDP) is outlined above by Kotler & Keller (2012).

Commercialization is the final stage of the NDP which takes place after a successful test marketing stage. During the commercialization stage, plans for full-scale manufacturing and marketing mix must be refined and completed, and budgets for the project must be prepared (Pride et al, 2011). The introduction of new products incur huge financial costs for an organisation and can take several years after the initial commercialization decision to be properly introduced (Mcdaniel et al, 2011). 

Commercialization incurs the company’s highest cost to date and the following factors needs to be considered (Kotler & Keller, 2012);

When? (Timing)

When a company has almost completed the development work on its new product, the company faces three choices;

1.      First entry- Enter the market first to lock up key distributors and customers

2.      Parallel entry- Coincide with the competitor’s entry.

3.      Late entry- Delay launch to learn the size of the market.

Where? (Geographic Strategy)

Companies select markets based on potential, local reputation and cost of communication media.

To Whom? (Target-Market Prospects)

The company needs to target initial distribution and promotion.

Example of Commercialization

In 2013, Slazenger launched their new range of cricket products in Halifax, England. Slazenger chose to launch their new products at ‘The Cricket Asylum’ in Halifax which is a specialist cricket shop, this allowed Slazenger to reach their fans and target market directly. By launching their products in a specialist cricket store, Slazenger managed to keep costs minimal as well as making sure that every customer visiting the store would be interested in cricket and therefore interested in Slazenger’s new products. 

The new products were launched in January 2013 which marked the start of a new cricket season with England playing test matches in India and also marked the start of an Ashes year therefore at this time, there is a high amount of interest in cricket and cricket equipment which will increase Slazenger’s sales and profit.

Commercialization of Quick Baseball

To commercialize Quick Baseball, I applied the following criteria to my new sports format (Kotler & Keller, 2012);

When: Quick Baseball will launch just before the start of the MLB season (February 2015). The launch will occur at this time because the target market will be aware of the upcoming baseball season so interest will be high.

Where: Quick Baseball will be launched in the USA, this is due to the large number of baseball players in the USA. (See Appendix B for Number of Baseball Players in the USA).

To Whom: The target market will be the viewers that currently watch MLB in the USA- Approx. 1.01billion people (Calcaterra, 2014).

How: I created a logo for my product at the product development stage of the NDP. Quick Baseball also passed the test marketing stage so now I am going to promote my product on social media and in Baseball magazines across the USA.

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References

Calcaterra, C. (2014). Comment of the Day: How many people really watch MLB games?. (online) Hardballtalk.nbcsports.com. Available at: http://hardballtalk.nbcsports.com/2011/09/15/comment-of-the-day-how-many-people-really-watch-mlb-games/ (Accessed 3 Feb. 2015).

Kotler, P. & Keller, K.L. (2012) Marketing Management. Global Edn. Harlow: Pearson Education.

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

Pride, W., Hughes, R. and Kapoor, J. (2011) Business. 11^th edn. United States: Western Cengage Learning.

Statista, (2015). Number of softball players & baseball players in the USA, 2014. [online] Available at: http://www.statista.com/statistics/227429/number-of-softball-players-and-baseball-players-usa/ [Accessed 3 Feb. 2015].

Appendix

Appendix A- Number of Baseball Players in the USA

(Statista, 2015)

Stage 7- Test Marketing

The New Product Development Process

Stage 7- Test Marketing

The New-Product Development Process (NDP) is outlined above by Kotler & Keller (2012).

After the product development process it is necessary to find out whether the new product is going to be accepted into the market or not (Beri, 2013). Test marketing is a controlled experiment, done in a limited but carefully selected part of the marketplace (Beri, 2013).

Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan (Evans & Berman, 1982). The purpose is to evaluate the product and pre-test marketing efforts in a real setting prior to full-scale introduction (Hiltz, 2001). The aim is to assess how large the market is and determine the reactions of consumers and resellers in an authentic setting. Most companies use test marketing to lessen the risk of product failure (Kazmi, 2007).

Test marketing is essentially an exercise in experimentation, where the market place is a laboratory. It also brings out that the predictability of sales or profit is the objective of test marketing (Beri, 2013).

Example of Test Marketing

The National Basketball Association (NBA) is the most watched men’s professional basketball league in the world. In 2015, the first NBA Global Games took place in London, where the New York Knicks played the Milwaukee Bucks in a regular season game. The NBA used this event to test the market in the UK as they eventually want to break into the UK market. An average of 151,500 people play basketball at least once a week, compared with more than 2.1million who play football (Sport England, 2013). Through this test marketing process, the NBA are able to estimate the profitability of future events in the UK and hopefully increase the number of people that play Basketball in the UK.

Test Marketing Quick Baseball

To test market Quick Baseball I am using a GANTT chart. A GANTT chart shows the key stages of a project and the duration of each as a bar chart (Martin, 2002). I have used a GANTT chart to enable me to identify the different marketing components and when I am going to implement these components (See Appendix A for Quick Baseball GANTT chart).

The main components I am focusing on are the 4p’s of the marketing mix;

·         Product (Research, Name, Logo, Profitability): Between January and May I researched Baseball and found a gap in the market for Quick Baseball. I then came up with the name ‘Quick Baseball’, logo (see Figure 1) and worked out how much profit it could potentially make (See Appendix B for Potential Profit).

·         Price (Distribution Channels): My distribution channel is direct to end users.

·         Place (Cost, Price): From May to June I worked out how much the format would cost and then set the product price.

·         Promotion (Publicity, Advertising, Tickets): To promote Quick Baseball I would advertise the format and tickets on social media and in relevant magazines such as ‘Baseball America’.

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References

Beri, G. (2013) Marketing Research. 5th edn. New Delhi: Tata McGraw-Hill.

Calcaterra, C. (2014). Comment of the Day: How many people really watch MLB games?. (online) Hardballtalk.nbcsports.com. Available at: http://hardballtalk.nbcsports.com/2011/09/15/comment-of-the-day-how-many-people-really-watch-mlb-games/ (Accessed 22 Jan. 2015).

Evans, J. & Berman, B. (1982) Marketing. New York: Macmillan.

Hiltz, M. (2001) The Marketers Handbook: A Checklist Approach. Markcheck Publishing.

Kazmi, S. (2007) Marketing Management; Text and Cases. India: Excel Books.

Kotler, P. & Keller, K.L. (2012) Marketing Management. Global Edn. Harlow: Pearson Education.

Martin, V. (2002) Managing Projects in Health and Social Care. London: Routledge.

Sportengland.org, (2013). Sport England - Active People Survey 7. [online] Available at: http://archive.sportengland.org/research/active_people_survey/active_people_survey_7.aspx [Accessed 27 Jan. 2015].

Appendix

Appendix A- Quick Baseball GANTT Chart

Key

	Indicates the 4 p’s of marketing.
	When the implementation of the components is going to occur.

Appendix B- Potential Profit

Target Market	Viewers of Major League Baseball (MLB)
Size of Target Market	Approx. 1.01billion people (Calcaterra, 2014)
Planned Price	Ticket price 40% cheaper that current prices for MLB. So to watch a MLB game at Boston it would cost $50. To watch a Quick Baseball game at Boston it would cost $20
Profit Goals	Aim to sell an average of 20,000 tickets a game (60 games will take place during the season) at average price of $15. Total profit at end of the season= $18,000,000

Stage 6- Product Development

The New Product Development Process

Stage 6- Product Development

The New-Product Development Process (NDP) is outlined above by Kotler & Keller (2012).

Product development occurs when a concept is converted into a physical offering or when the service is created (Beech & Chadwick, 2007). The product development stage of a new sports product/format is made up of numerous stages; product construction, packaging, branding, product positioning and attitude and usage testing. (Mullin et al, 2000).

The research and design department of an organisation aim to design a prototype that will satisfy potential target consumer needs, and one in which can be produced quickly and at budgeted costs (Kotler and Armstrong 2012).

The aim of the research and design department is to design a prototype that performs safely and is able to be produced within the budgeted manufacturing costs and also includes the following (Kotler & Keller, 2012):

·       -  Product Construction & Packaging Decisions

·         -Branding Decisions

·         -Product Positioning

·         -Attitude & Usage Testing

Example of Product Development

Cricket is a sport where attendance at games is decreasing. The traditional 5 day format (test match cricket) is becoming increasingly less popular for spectators. 40 over cricket is a relatively new format of cricket which has been developed to try and increase public interest in cricket. 

In this format each side has one innings and the aim is to set the highest score possible in just 40 overs. “It's the ideal amount of time to pack in plenty of action while also giving players a chance to construct innings and making for a better spectator experience.” (Crowe, 2014). 

The target market was of the younger population and families and it was positioned alongside T20 cricket as it shares the party atmosphere and friendly environment. 

Branding decisions such as the logo (see Figure 1) and the name of the format are simple and self-explanatory which suits its target market of the younger population.

Figure 1

Quick Baseball

To develop my new sport format- Quick Baseball, I will use the considerations outlined by (Kotler & Keller, 2012):

·        - Product Construction & Packaging Decisions; The cost will be minimal as Quick Baseball can be played with the same equipment and on the same field as regular baseball.

·       -  Branding Decisions; my new format will be called ‘Quick Baseball’ it will be played by MLB teams and tickets have to be purchased to watch Quick Baseball so it is exclusive. Also at this stage I have developed a logo for Quick Baseball (see Figure 2).

·         -Product Positioning; I will select a market segment and position the new format against competitors. (See Appendix A for Perceptual Map).

·         -Attitude Usage & Testing; My brand will perform differently to MLB because my target market is the younger population and these will be my frequent customers. I want them to have the perception that Quick Baseball is a quick, free-flowing game. Therefore customer needs will be different to MLB, I want to keep my customers satisfied by creating a party-like atmosphere which will keep them entertained.

Figure 2

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References

Anderson, J., Anderson, J., Romanowski, D., Kreinces, E. and Isaacson, B. (2014). Customer Usage & Attitudes « MMR Strategy Group. [online] Mmrstrategy.com. Available at: http://mmrstrategy.com/marketing-research/usage-and-attitude-studies/ [Accessed 11 Dec. 2014].

Beech, J.G. & Chadwick, S. (2007) The Marketing of Sport. Harlow: Prentice Hall

Crowe, M. (2014). [online] Available at: Cricinfo, (2014). Martin Crowe: Forty overs is one-day cricket's future. [online] Available at: http://www.espncricinfo.com/magazine/content/story/713821.html [Accessed 11 Dec. 2014]. [Accessed 11 Dec. 2014].

Kotler, P. & Keller, K.L. (2012) Marketing Management. Global Edn. Harlow: Pearson Education

Mullin, B., Hardy, S., Sutton, W. (2000) Sport Marketing. Illinois: Human Kinetics

Statista, (2014). Major U.S. sports leagues: average attendance 2013-2014 | Statistic. [online] Available at: http://www.statista.com/statistics/207458/per-game-attendance-of-major-us-sports-leagues/ [Accessed 11 Dec. 2014].

Appendix

Appendix A- Perceptual Map of Sport Attendance in the USA

My market segment will be very similar to MLB so I will be targeting the younger population as they attend MLB games more regularly that the older population as the perceptual map above shows.