Business analysis
Business analysis is
defined by Kotler and Armstrong (2012) as a review of potential sales, costs
and estimated profit from a new sports product/service. If the product is
judged to be financially viable it can then be moved on to the next stage of
the cycle, product development.
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The Golf Club (2010)
by RA Concepts used a business analysis to consider the stages discussed above.
The organisation goes into great detail as to the potential demand for their
product, especially with females, the targets for sales of their product and
the future profitability. They state that they aim to provide 1% of the US
market for Golf Putters and they aim to increase net profit to a stable and
healthy level by the end of year 2. They aim to do this by targeting the female
market as they believe the product they provide will appeal to females as it is
customisable, lightweight and can be manufactured and delivered in just 3
days.
The image below
shows a graph of how the organisation predicts it will be in profit by month 5
of operations. This is based on projections estimating that RA Concepts will be
able to control 2% of the female market and 1% of the overall market within the
first year.
With regards to my product, The Cone
King a business analysis shows that the demand for my product will be limited
at first as it is not considered a necessity, more a luxury, this would lead to
a high initial price but limited sales and therefore the profitability in its
first year would be low. As the product got more exposure, through the
marketing strategies such as sponsorship with high profile teams, more
grassroots coaches would take on board the product with the aim of attaining
10% of the overall market by the end of the 3rd year of trading.
According to a recent survey (Sport England,
2013), there are 1.8million people participating weekly in football alone, this
shows the size of the target market and suggests that to even secure a small
percentage of this market would be potentially profitable. This is a realistic
aim as the similar products that already exist do not have the functionality of
mine and therefore this is superior, for only a slight increase in price. This
means that coaches will be willing to pay the higher price in order to improve
their coaching experience.
Reference list
Armstrong, G. Kotler, P. Harker, M. & Brennan, R. (2009) Marketing an Introduction. 1st Edn. Essex: Pearson Education Limited.
Kotler, P. and Armstrong, G. (2012). Principles of Marketing. England: Pearson Education Limited.
Sport England. (2013). Who plays sport? Available at: http://www.sportengland.org/research/who-plays-sport/
The Golf Club. (2010) Golf club manufacturer. Available at: http://www.bplans.com/golf_club_manufacturer_business_plan/market_analysis_summary_fc.php#.Uqmo1vRdWSo
Reference list
Armstrong, G. Kotler, P. Harker, M. & Brennan, R. (2009) Marketing an Introduction. 1st Edn. Essex: Pearson Education Limited.
The Golf Club. (2010) Golf club manufacturer. Available at: http://www.bplans.com/golf_club_manufacturer_business_plan/market_analysis_summary_fc.php#.Uqmo1vRdWSo
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