Commercialisation

Commercialisation

Commercialisation is simply defined by Kotler and Armstrong (2012) as the process of actually bringing a new product to market. It is the concluding stage in the NPD process. Lamb, Hair & McDaniel (2009) state that commercialisation is the process putting several tasks in motion: ordering product materials and equipment, starting production, building inventories, shipping the product to field distribution points, plus announcing and advertising the product to the customers.

One main element of commercialisation is the marketing mix which consists of advertising, sales promotion, public relations, personal selling and direct marketing which helps organisations to promote their products and services (Hughes & Fill, 2007). This stage of the NPD process is the most expensive stage as it requires the mass manufacture of the product and a large marketing campaign to the get product into the public domain (Kotler and Keller, 2012).

Examples

One sporting example of the commercialisation stage being implemented is in the case of Slazenger (2012) who launched their new products, the V100 and the V12 bat at a popular and successful cricket store, Cricket Asylum, in Halifax. As part of the commercialisation process Slazenger have created a full product range based around the bats, they advertise them using YouTube videos and also by the sponsorship deals they have with major players such as Jacques Kalis of South Africa. Slazenger (2012) focus on the technology the claim to have implemented in both bats including shock reduction, grip technology, TAS inserts to increase shot stability, and taper toe to improve stance. This is part of their strategy to make their products seem more advanced than the products of competitors.

Another sporting example of the commercialisation stage is Adidas’ adipure 360 training shoe targeted at ‘top’ male and female athletes (Adidas, 2011). The benefits are unrestricted foot movement and flexibility as emphasised with the implementation of individual toe slots. The trainer is marketed within the ‘Performance Essential Collection’ and is manufactured and distributed through a fully integrated never-out-of-stock business model.

My Product – The Cone King

Aspects of the commercialisation of ‘The Cone King’ rely on the results of the test marketing and other market research. If the product launch was successful in the target cities of Leeds, Newcastle and Birmingham then a similar strategy of local advertisement and direct selling would be adopted. The website for the cone king would be fully operational for online purchasing and targeted online adverts would be used based on consumer searches on google and other websites. This would mean that only people with an interest in sports products and coaching would see the adverts for my product and therefore money would not be wasted from the limited marketing budget. The same design and colours would be kept and used throughout any future product range as it makes the product distinguishable and these colours and designs would also be used on any advertisement and packaging. 

Whilst this product is launching into a highly competitive market it will succeed due to the innovative nature of the product and the targeted marketing campaign aimed at grassroots coaches who wish to better their performance.

References

Adidas. (2011). Group Management Report. Available: http://www.adidas-group.com/en/investorrelations/assets/agm/2012/LB_2011.pdf. Last accessed 01/02/2013. (Accessed on: 05/02/2014)

Hughes, G & Fill, C. (2007) ‘Redefining the nature and format of the marketing communications mix’, The marketing review, 7(1), pp.45.

Kotler, P. and Armstrong, G. (2012). Principles of Marketing.14th ed. London: Pearson.

Kotler, P. Keller, K. (2012) A Framework for Marketing Management. 5th Ed. International Ed. Pearson Education Limited, Harlow.

Lamb, C., Hair, J. and McDaniel C (2009) Marketing. 11^th ed. Stamford: Cengage Learning.

Mu, J & Di Benedetto, A. (2011) ‘Strategic orientations and new product commercialization: mediator, moderator and interplay’,R&D Management, 41(4), pp.337-359.

Slazenger (2012) Slazenger 2013 Product Launch [online] Available at: https://www.youtube.com/watch?v=es7cZ0k_nL0 (Accessed on: 05/02/2014)

Test Marketing

Test Marketing 

Test marketing is the process of testing the proposed marketing program in a realistic setting before releasing the product to the full target market (Kotler and Armstrong, 2012). According to Silk and Urban (1978) this stage of the NPD cycle is used in order to expose problems in the marketing strategy that otherwise would be undetected. The product is introduced to a limited market of potential customers in order to establish the desire for the product in real terms using the proposed marketing strategy in a number of test cities for a designated period of time (McDaniel, Lamb & Hair, 2011). The factors that an organization must consider for test marketing are: how many test cities, which cities, how long to test, what information to collect and what action to take.

Decisions on the above factors will be based on how the organization feels it can best represent the larger market using smaller markets and how long the organisation feel they need to for. There are now organizations, such as the ‘Pretesting Group’, that carry out test marketing for other businesses and carry out the process of “Real world simulation” for them (Pretesting Group, 2013a).

Examples in the Industry

One example of Test Marketing can be seen by Adidas who launched a new interactive, electronic store front to it’s Nuremberg store in 2012 which allowed customers to link up their mobile device in order to select and display products on the front of the Adidas Store and allowed them to purchase products (Digital Signage, 2012). This idea was linked with social media and users were able to ‘like’ and ‘share’ the products they had selected and their location using the large screen. The idea was that if this screen was a success at their flagship store in Nuremberg then it would be rolled out across other Adidas stores.

The Pretesting Group (2013b) are a company dedicated to carrying out Test Marketing for other organisations, their website lists a number of large corporations who have used their services. The website has a number of case studies for the real life processes they have carried out including testing for a new version of skin cream, which resulted in a 14% increase in sales for the company, and a case study on their involvement in the market launch of a new cookie which was successfully launched due to their involvement; this shows the benefits of test marketing.

My Test Marketing Strategy

My product will be launched in 3 UK cities in order to determine demand for the product and the effectiveness of the marketing strategy. The Cone King will be marketed to coaches in Leeds, Newcastle and Birmingham as these are all large cities with a high demand for grassroots football and have a large football following professionally. I have chosen not to launch the product in London initially as it is very large and it would be hard to establish what I wanted to without a very large and expensive strategy. I will market the product directly to coaches through the Local FA’s and use online marketing through email and the products website. I will also use local newspapers and sporting magazines to directly target the local population.

References

Digital Signage, (2012) “Adidas Concept Store – Neurenbuerg” Available at: http://digitalsignageuniverse.typepad.com/digital_signage_universe/2012/10/adidas-neo-concept-store-testing-interactive-digital-signage-storefront-with-smartphones.html (Accessed: 29/01/14)

Kotler, P. and Armstrong, G. (2012). Principles of Marketing.14th ed. London: Pearson.

McDaniel, C. Lamb, C. and Hair, J. (2011). Introduction to Marketing. 11th ed. Cengage

Learning.

Pretesting Group. (2013a). Real World Simulation. [online]. Available at: http://www.pretesting.com/who-we-are/differences/real-world-simulation/ Accessed: (29/01/14)

Pretesting Group. (2013b). Who We Are. [online]. Available at: http://www.pretesting.com/who-we-are/clients/# Accessed: (29/01/14)

Silk, A. J., & Urban, G. L. (1978). Pre-test-market evaluation of new packaged goods: A model and measurement methodology. Journal of Marketing Research, 171-191.

Product Development Blog

What is it?

The product development stage helps convert a business idea, a product or a service, into a physical offering that can be manufactured and sold by the organisation (Beech & Chadwick, 2007). According to Mullin, Hardy and Sutton (2000) the product development stage made up of these sub stages:

·         Product Construction & Packaging Decisions: Decisions on materials, production options, plant capacity, alternative sizes & colours, functions performed.

·         Branding Decisions: Name of product, logo, exclusivity, trademark protection and image sought, which will be elaborated in market testing.

·         Product Positioning: Establish target market and relative position in the market compared to competitors.

·         Attitude & usage testing: Tests to establish consumers’ perceptions and satisfaction, and conducting rigorous functional and customer tests before products enter the market place.

Examples

Warrior Football - Warrior recently entered the football market having previously only been involved in Ice Hockey and a few other sports as described by Perkins (2012. P.65). They chose to position themselves as a direct competitor to Nike and Adidas by sponsoring Liverpool FC and high profile players like Vincent Kompany. Their branded boots have a distinctive style which makes them stand out on the field in comparison with other boots and this was likely part of their product development strategy. 

Adidas F50 -  Another example of product development is the Adidas F50 adiZero III football boots (Adidas 2013), which use a 'Sprint Skin' technology which makes them lighter and therefore more desireable to the user. These boots may costs Adidas slightly more to develop and manufacture but it allows Adidas to charge a higher retail price (£160) due to the perceptions of the customer being heightened when they read about this technology or see professionals wearing the boots.

My product- Cone King

Construction and packaging – I have gone for a strong bright orange, plastic product which can be easily mass-produced and stands out. The trigger system will drop the cones when pressed and will work using wires down the pole.

Branding- The name “Cone King” as the word king symbolises quality and power and suggests my product is the best. The logo is bright and catchy in order to attract attention in a crowded and competitive industry. It is orange, like the actual product, because this colour is often used for training products as it is easy to see and stands out.

Product Positioning – My product will initially be marketed as a relatively luxury item, compared to other basic training products. However due to its relative low cost it will be accessible to all and as stated in the business analysis it will be marketed at grassroots clubs, through sponsorship deals with professional teams. The perceptual map shows the products positioning relative to other training products in terms of luxury and target market. It has a similar positioning to agility poles.

Attitude and Usage testing -   In lab testing of the prototype on durability and functionality before passing it on to a tester team that will test the Cone King in everyday coaching conditions. The stand will be further refined before market testing for consumer perceptions on different designs and packaging options.

Reference list

Adidas, (2013) Adidas F50 Adizero. Available at: http://www.adidas.co.uk/mens-f50-adizero-trx-fg-boots/D67203_590.html

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

Mullin, B., Hardy, S., Sutton, W. (2000) Sport Marketing 3rd edition

Perkins, B.  (2012). Vincent Kompany Training in Warrior Sports Prototype Boot. Soccer Reviews. 12th July. Available at: http://soccerreviews.com/news/unreleased-warrior-sports-skreamer-klite/