Stage 4- Marketing Strategy & Development

The New Product Development Process

Stage 4- Marketing Strategy & Development

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

 Marketing strategy can be defined in terms of the product and the customer focus. On the dimension of product focus, “a company can concentrate on developing products that are essentially variations of existing products- product modifications, or it can focus on products that fall outside the established product line- product diversifications.” (Hart & Baker, 1996, p. 136). The second dimension of marketing strategy is customer focus. “If new products are primarily aimed at getting new customers, the strategy is offensive. If they are mainly directed toward trying existing customers closer to the company, the strategy is defensive.” (Nystrom, 1977).

Kotler & Keller (2012) break the marketing strategy components down into three parts;

1.      Identify the target market, size of the target market, its structure and behaviour; the products positioning strategy including its sales positioning and market share.

2.      Outline the product’s planned price, distribution and promotion strategy for the first year.

3.      Describe the long-run sales and marketing mix strategy of the product over time.

Examples of Marketing Strategy and Development

iGolf is a mobile golf GPS application. L1 technologies Inc. are the company behind iGolf. 

Marketing Manager- Anthony Zazo has developed a marketing plan for iGolf. 

This has broken the marketing strategy components down into three parts as outlined above by Kotler & Keller.

1.      iGolf’s target market is golfers in the USA who currently own GPS-enabled mobile devices. The current market size and potential for iGolf Mobile is approxiamately 6.643million people in USA. The size of this market is approximately $3.58m. Anthony Zazo outlined that L1 aimed to position themselves as a company that introduce affordable, high quality products and solutions.

2.      iGolf was promoted through newsletters, social media, public relations, merchandise shows and their own website. The planned price is higher that all 14 competitors because it is a premium product. iGolf has been distributed electronically via downloads to consumer’s mobile devices.

3.      “L1’s sales strategy will entail gaining acceptance and distribution for the application through the mobile ‘store’ of all major wireless companies in the United States.” (Zazo, 2003).

Quick Baseball

See table below for my new sport format- Quick Baseball. Quick Baseball is a shortened format of Baseball which will hopefully be played by all 30 teams in the MLB.

Target Market	Viewers of Major League Baseball (MLB)
Size of Target Market	Approx. 1.01billion people (Calcaterra, 2014) This is the number of viewers that watched the MLB in 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

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 Dec. 2014).

Hart, S. J. and Baker, M. J. (1996) New Product Development , Hart , S. (ed.). London: The Dryden Press.

Nyström, H. (1977) Market Strategy and Market Structure: Learning and Adaptation in Market Relations.

Zazo, A (2003). “iGolf Mobile Marketing Plan”. Available at: https://elp.northumbria.ac.uk/bbcswebdav/pid-3405259-dt-content-rid2754417_2/courses/2013YL_SP0568BNN01/iGolf.pdf. (Accessed 3 Dec. 2014)

Stage 3- Concept Development & Testing

The New Product Development Process

Stage 3- Concept Development & Testing

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

Concept Development & Testing is the stage that comes after the Idea Screening process. “Concept test is a test to evaluate new sports product idea, usually before any prototype has been created”. (Lamb, Hair & McDaniel, 2009). Concept testing takes place during the concept-development phase. “It is intended to glean something of customers’ opinions about the product idea before very much investment has been committed.” (Trott, 2004, p. 185).

Concept development is the process of “turning an idea into a recognizable product concept, with attributes and market position identified.” (Hart & Baker, 1996, p. 156). Hart and Baker go on to say; “this process is an explicit assessment of customer needs to appraise market potential and an explicit assessment of technical requirements.”

Examples of Concept development & testing

Concept development and testing is used by various sport organisations. An example of this is when the ICC tested the possibility of introducing day/night test matches. Cricket Australia chief executive James Sutherland said “The aim of this is to try to make Test cricket more accessible for fans.” (BBS Sport, 2014). 

The ICC decided to test this by introducing modified equipment such as a pink ball and the use of floodlights as soon as the umpires decide the light quality is too low. It was thought that the pink ball would be easier than the original red ball for the batsmen to see when the floodlights are on. However when asked about the pink kookaburra ball, ACA chief executive Paul Marsh said "the overwhelming majority of players believe the pink Kookaburra ball isn't yet ready for test cricket.” (www.auscricket.com.au) As a result of this the ICC are continuing to trial this concept.

FIFA also used concept testing to test the Adidas Brazuca match ball. The ball went through a rigorous testing procedure for two and a half years and came through with flying colours. “It was tested by over 600 professional players and 30 teams in ten countries across three continents, making the brazuca the most tested ball in adidas’ history.” (Quality.fifa.com, 2014) As a result the ball was awarded the highest FIFA quality mark, FIFA APPROVED.

Quick Baseball

To test Quick Baseball my new concept I will conduct qualitative research with customers.

This research will help me understand customer’s needs so that I can come up with ideas for products that meet those needs. I will consider the following questions;

• Is the sports product or service idea [format] easy to understand?
• Are there distinct benefits over those sports products & services [formats] currently on the market?
• Are the claims about this sports product/service [format] believable?
• Would you buy this sports product/service [format]?
• Would you replace your current brand with this sports products/service [format]?
• Who would use the sports product/service [format]?

 References

BBC Sport, (2014). First day-night Test planned for 2015. [online] Available at: http://www.bbc.co.uk/sport/0/cricket/28085871 [Accessed 26 Nov. 2014].

DailyTelegraph, (2014). Day-night Tests: Tasmania’s Ed Cowan backs concept but has doubts about pink ball. [online] Available at: http://www.dailytelegraph.com.au/sport/cricket/daynight-tests-tasmanias-ed-cowan-backs-concept-but-has-doubts-about-pink-ball/story-fni2fnmo-1227124026530?nk=4eb8bffa5758ab147a3ba4b4cf272fd0 [Accessed 26 Nov. 2014].

Hart, S. J. and Baker, M. J. (1996) New Product Development , Hart , S. (ed.). London: The Dryden Press.

Pride , W. M. and Ferrell, O. C. (2013) Foundations of Marketing. 5th edn. South-Western: Erin Joyner.

Quality.fifa.com, (2014). adidas brazuca – tried and tested - FIFA Quality Programme. [online] Available at: http://quality.fifa.com/en/Footballs/Football-facts/adidas-brazuca--tried-and-tested/ [Accessed 26 Nov. 2014].

Trott, P. (2004) Innovation Management and New Product Development (2nd Edition). United Kingdom: Financial Times/ Prentice Hall.

Uk.reuters.com, (2014). Cricket-Players unconvinced by pink ball for day-night tests. [online] Available at: http://uk.reuters.com/article/2014/07/01/cricket-australia-night-tests-idUKL4N0PC20W20140701 [Accessed 26 Nov. 2014].

Stage 2- Idea Screening

The New Product Development Process

Stage 2- Idea Screening

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

Idea Screening is the stage that comes after the Idea Generation process. “Idea screening is a process, formal or informal, through which you evaluate a product or service idea to determine if it’s worth the time and money to develop further”. (Hooker & Monas 2008, p.189).

Lots of ideas are generated in the idea generation process so the idea screening process is required to filter those ideas and the ideas that pass through the filter are the ideas which are relevant and most likely to succeed. This process saves a lot of time by not going into the development of every single idea but only the relevant ideas.

“The initial screening of a new product idea is critically important. Risky projects (i.e., those with high probabilities of failure) need to be eliminated early before significant investments are made and opportunity costs incurred.” (Calantone, Benedetto & Schmidt 1999, p.65).

Examples of Idea Screening

Ideas can be screened by using various tools. Heinz have worked with In Sites Consulting to develop their own Idea Screening Tool (See Appendix A). This tool “incorporates contemporary marketing thinking in the KPI selection and utilizes Innovation Power and Purchase Power as tools to predict the potential of new ideas across categories, countries and projects. The Innovation Power as a composite score, integrating all KPIs, allows having a single score to evaluate an idea on” (Goderis 2014). 

By using this tool Heinz have been able to screen all ideas and they know which the good ideas are after using this tool as the score will indicate the likelihood of the idea being successful.

Sports organizations such as Nike and Adidas could use a Radar tool (See Appendix B) to screen their ideas. For example Nike or Adidas could use this tool to determine which sort of material would be more suitable to create a waterproof running trainer. They would list types of fabric along the outside of the graph and then score them out of 10 using cost, practicality, comfort, risk of breaking and weight as decision factors.

Decision Matrix

A decision matrix “helps to evaluate competing solutions against a weighted set of customer-oriented criteria, ensuring the most important factors carry additional weight in the final decision, reducing the probability of biasness during screening” (Velaction, 2012).

Benefits of using a Decision Matrix include;

·         Customer Focused; concepts are evaluated against customer-oriented criteria.

·         Reduced development time; using a structured approach develops a common vision and language for the design team.

·         Better group decision making; the decision is more likely to be based on objective criteria.

·         Documentation of the decision process; the method provides its own documentation.

Below is a decision matrix I created. I came up with some decision factors which I could rank and rate each idea against. (See Appendix C for Explanation of Decision Matrix Ratings). The idea with the highest score was Quick Baseball, I am going to develop this idea. 

498 Words

References

Calantone, R.J., Benedetto, A.D. & Schmidt, J.B. (1999) ‘Using the Analytic Hierarchy Process in New Product Screening’, Journal of Product Innovation Management, 16(1), pp. 65.

Goderis , T., 2014. Heinz Idea Screening. InSites Consulting. Available at: www.insites-consulting.com/cases/heinz-idea-screening/ (Accessed November 17, 2014).

Hooker, R. & Monas, S., (2008). Shoestring Venture: The Startup Bible, New York.

Launch Excel, (2014). Decision Matrix Download Page. (online) Available at: http://www.launchexcel.com/resources/decision-matrix/decision-matrix-download-page/ (Accessed 19 Nov. 2014).

Velaction (2012) Decision Matrix Template. (online) Available at: http://www.velaction.com/decision-matrix-template/ (Accessed on: 19 Nov.2014).

Appedix

Appendix A- Heinz Idea Screening Tool

Appendix B- Example of a Radar Diagram

Appendix C- Explanation of Decision Matrix Ratings

Using a decision matrix template on excel I came up with 7 different decision factors and ranked them 1-7. 1 being the most important decision factor and 7 being the least important. I then weighted the decision factors. The least important factor was weighted 1.0 and the most important factor was weighted 3.0. See below for rank and weight for each decision making factor.

Rank	Decision Factors	Weight
7	Risk of Injury- How high is the risk of injury?	1.0
6	Existing & Potential Competition- How much competition is there?	1.3
5	Size of Market- How big is the target market?	1.6
4	Cost- Upfront costs and ongoing costs.	1.9
3	Enjoyment- How much will the idea be enjoyed?	2.0
2	Practicality- How practical is the idea?	2.5
1	Profit Potential- How much profit is the idea likely to make?	3.0

Stage 1- Idea Generation

The New-Product Development Process

Stage 1: Idea Generation

The New-Product Development Process (Kotler & Keller, 2012)

The New-Product Development Process (NDP) is outlined above by Kotler & Keller (2012). Idea generation is the first stage of this process and therefore it lays the foundation for the model, without completing this stage, you would not be able to progress through the model. Idea generation is the process of generating and developing new ideas.

Idea generation includes three different processes; innovation, development and actualization. Innovation is the process of inventing the idea, development is the process of developing that idea further and actualization is the process of making the idea real.

Ideas can be generated in numerous ways such as; customers, employees, distributors, competitors, vendors, research & development and consultants (Lamb, Hair & MacDaniel, 2009). Ideas can be created with techniques such as; attribute listing, morphological analysis, reverse assumption analysis, new contexts and mind mapping (Kotler, 2009).

Examples of Idea Generation

Twenty20 cricket was created by the ECB (2003), it is a short format of cricket. The original format of cricket is the ‘Test Match’. Test matches can last up to 5 days with each side batting twice. Even though the matches last up to 5 days, there can still be no result. To bring more excitement into cricket Twenty20 was introduced, this is where 2 teams bat once (each innings lasts around 90 minutes) and the match is over in 3 hours. Twenty20 also includes brightly coloured kits (instead of the all-white strips worn for test matches) and includes music into the game whenever there is a boundary or wicket which creates a party atmosphere for the audience and players to enjoy.

Slacklining is the art of walking along a one inch wide nylon webbing. It was created by two climbers, Adam Grosowsky and Jeff Ellington (1980). Slacklining has been adapted from circus style tight rope walking.

Ideas

I have come up with a few ideas to develop sport and physical activity. My aim is to replicate the success of the 2 ideas listed above (Twenty20 and Slacklining).

Golf for beginners. Aim is to make golf easier for beginners, this is an introduction into golf. Replace golf balls with tennis balls and increase the head size of the golf club making the ball easier to hit. Involve objects to play around (windmills, tunnels, bridges), similar to crazy golf to make the game fun.

Quick Baseball. Aim is to reduce the amount of time it takes complete a baseball game. Create a party atmosphere with jam packed action.

Dual Rugby. Incorporate both codes of rugby into 1 game. In the first half you play Rugby Union and the second half you play Rugby League. This would be a new sport and would have the benefits of both forms of rugby in on game.

Sprinter. An event similar to triathlon but with sprint events only. 4 races; 400m, 200m, 100m and 60m. Would determine the fastest runner and would be great to watch.

Test

Test