Business Analysis – Blog 5

Business Analysis – Blog 5

 

 

Business Analysis is the fifth stage of the New Product Developments process; this stage of the process is when companies review the costs, such as start-up costs and continuing costs. Sales, such as the speed of sales and the seasonality of sales. Market share, such as strengths and weaknesses of competitors. And demand and profit projections of the new service or product concept to evaluate whether or not it fits the company’s overall objectives (Kotler and Armstrong, 2012). During this process companies also evaluate whether or not the new concept would benefit current consumers, what is the current national economic status and whether that would have an effect on sales and if the new concept would improve the image of the brand. (Lamb, Hair & McDaniel, 2011)

A real life sporting example of business analysis can be seen at RA Concepts, they are a company looking to secure start-up funding to produce and sell golf clubs. They aim to meet the ever growing demands for new technology in the golf industry by offering a new unique "D" style featherweight putter (RA concepts 2012). To help their bid to secure start-up funding they have made sales and profit projections to show that their business will be successful as the graph shows how much they expect they expect to make through sales, Gross Margin and Net Profit(Appendix A). They have also projected how much initial capital investment they require to start-up; this includes costs such as machinery and raw materials. RA Concepts project they would need a total of $126,000 investment, $15,150 would be spent on expenses, such as insurance and rent, the other $110,850 would be spent on assets such as the start-up inventory and long term assets (Appendix B).

When considering my Archball sports concept I will have to consider the start-up and continuing costs, the first cost I would come across would be the cost of patenting my concept, according to Thisismoney.co.uk, 2013 the average cost of patenting can be between £3,000 and £4,000. I would also encounter the costs of raw materials, production and marketing costs. Once I had projected all of those costs, it would give me a break-even amount, I would then project the sales of the concept including sales of the Archball board and the revenue created through facility hire. Once those figures are projected I can combine the two to project my margins, profit potential and time scale to break-even.

 

Bibliography

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

McDaniel, C.D. Lamb, C.W. & Hair J.F. (2011) Introduction to Marketing 11th Edn. 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#.UMYttXdZyUc (Accessed 8th December 2014)

This is Money, (2013). How to protect your small business idea. Available at: http://www.thisismoney.co.uk/money/smallbusiness/article-1585163/Protecting-patenting-small-business-idea.html [Accessed 8 Dec. 2014].

 

Appendix

A)

 

 

 

 

 

 

 

 

B)

 

 

 

 

 

 

 

 

Marketing Strategy and Development Blog 4 - W13017467

Marketing Strategy and Development Blog  4

Marketing strategy and development is stage number four is the new product development process. This stage of the process involves companies creating an initial marketing strategy with the product or service concept developed. Companies then set out an initial marketing statement that highlights the target market of the concept, the desired market share of the concept, the desire sales of the concept and the amount that the company aim to make from the concept (Kotler and Armstrong, 2012).Organisations also need to consider the size of the market and the market behaviour to direct the marketing strategy to help their concept be a commercial success (Mcdaniel, Hair and Lamb, 2011).

BskyB have had huge commercial success with their concept SKY+, however this success has not come from huge cash investment, it has come as a result of a good marketing strategy. BskyB launched SKY+ in July 2001, they did not advertise and market the concept because they knew that customers would expect SKY+ to work flawlessly but they knew that they would have some problems as it was a brand new concept and the first of its kind Until recently the service has purposely received only low key marketing support” (Mercer 2003). They therefore took a more cautious approach to allow them to receive feedback form the ‘early adopters’ category of the Rogers Adoption Curve(Appendix 1), before they gave the concept a high profile marketing campaign. BskyB identified that each category of the curve required a different marketing strategy, using this information they put together a marketing strategy to ensure maximum commercial success. In 2003 BskyB reduced the price of SKY+ from £300 to £199 and they had a major advertising campaign costing £20m. (Sky Press Release, 08/09/2003). BskyB also used celebrities as part of their marketing strategy to help raise the profile and awareness of the concept to the public, BskyB chose radio presenters as some of the celebrities they used and they also then when on to mention the concept on air, giving BskyB even more recognition..

To develop my marketing strategy for my concept I would use a Position Strategy Graph (Appendix 2) to help me plot my concept and create the an ideal price. I would then use a strategy similar to BskyB of not marketing the concept too much initially so that I can get some feedback from the early adopter which I may use to improve the concept. I would then invest in a marketing strategy to raise the profile of my concept, I would use well known footballers to help me create a TV advert from which I would also use still images to create poster campaigns and radio adverts. The advertisements would concentrate on the ‘Product’ section of the Marketing Mix (Learnmarketing.net, 2014. Appendix 3) to promote the sport and what it actually consists of as it is a brand new sport concept.

 

References

Baker, Michael and Hart, Susan (2007), Product Strategy and Management, Harlow: Pearson Education Limited.

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

Learnmarketing.net, (2014). Perceptual Maps/Positioning Maps. [online] Available at: http://www.learnmarketing.net/perceptualmaps.htm [Accessed 1 Dec. 2014].

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

Mercer, David (2003), “Can Sky Plus resolve its teething troubles?”, New Media Age. 1 May 2003, p.15.

Sky Press Release (2003), “BSkyB Sky+ Marketing Drive”. www.sky.com 08/09/2003

Appendix 1 Rogers Adoption Curve (Baker 2007)

 

 

 

 

 

 

 

 

 

Appendix 2 Position Strategy Graph

 

Appendix 3 Marketing Mix



 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Concept Development & Testing - Blog 3

Concept Development & Testing - Blog 3

Concept Development and Testing is the third stage in the new product development cycle. This stage is when companies test their new ideas, either products or services, before any prototype has been created. (Lamb,Hair,McDaniel, 2009).  The product or service concept development is a detailed description of the idea, in words easy to understand for the target market, to get that stage slight changes and altercations may be made to enhance the product or service. Whereas concept testing involves putting the developed concept idea to the target market and recording their response (Armstrong, Kotler, Harker, Brennan, 2009). Companies use the feedback they get from the target market to help aid the decision on which product or service they are going to continue developing. (Peng & Finn 2008).During concept testing companies often ask their target market questions such as, what is their perceived value of the concept? Meaning how much do they think it is worth to them, how much they would pay for it. Also questions like the typical purchasing frequency they could expect for their product?

Concept development and testing is happening right now in companies, for example FIFA tested their world cup ball with over 600 professional players and 30 teams in ten countries across three continents before the world cup in 2014. All of the balls FIFA produce are certified with a FIFA quality mark, this quality mark indicates to consumers that the ball is of top quality. (Quality.fifa.com, 2014)

Another sporting example of companies testing their products is Lycra Sport; Every Lycra Sport fabric style is tested to meet demanding standards for elongation, fit and recovery power. Lycra have created a graph to see record the results of their testing and only those products that fall within the desired results region of the graph are given the greenlight to continue with development. (Lycra.com, 2014) (See Graph - Appendix A) 

When I have developed my concept, Archball, I would test the concept by offering the idea to my target market. My target market is boys and girls aged between 13-21, I would ask my target market if the sport is easy to understand? I would also ask them if they would pay to play the sport with their money? How often they could see themselves playing the sport? Would they replace the sport they play now with my new sport concept? And reasons why they would or wouldn’t, and I would also ask them for any suggestions they think they will enhance the sport as a commercial business.

 

 

 

Appendix

 

A.

Refrences

Lamb, C., Hair, J. and McDaniel, C. (2009). Essentials of Marketing. 6th ed. Cengage Learning.

 

Lycra.com, (2014). LYCRA® SPORT fabric. [online] Available at: http://www.lycra.com/g_en/webpage.aspx?id=963 [Accessed 23 Nov. 2014].

 

Peng, L & Finn, A (2008). ‘Concept testing: the state of contemporary practice’, Marketing intelligence and planning. 26:6, pp. 649-674. Available at: http://www.emeraldinsight.com/journals.htm?articleid=1747079&show=abstract (Accessed: 23/11/2014).​

 

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 23 Nov. 2014].

 

 

 

Idea Screening - Blog 2

Idea Screening 

The first part of this blog is going to discus and define the concept of the term Idea Screening, the second part will go on to show how I have screened my ideas and what tools were used.

According to Law, 2009 idea screening is the process of “screening new-product ideas in order to identify and develop good ideas and drop poor ones as soon as possible”. McDaniel, Lamb and Hair, 2011 describe the process as a way to eliminate ideas that have been proposed by discarding ideas that don’t fit the organisations aims and goals. Whereas Kotler and Armstrong, 2012 suggest that Idea screening is only a basic filtering process but ensures large costs are avoided.

These definitions suggest that the process of idea screening is to filter out the ideas that don’t have the potential to work, the stage is important in the new product development process because it helps companies save lots of resources, most importantly time and money. If the company can cut down the number of ideas and focus all their resources and efforts into one idea it is more likely to be successful than if they try to split their resources of a number of ideas.

To screen ideas companies often set a range of criteria questions and score each idea in relation to the how they meet the criteria. These questions can be anything from, cost of production for the company? Size of the target market? Is it technically feasible to manufacture / provide?

These results can be easily compared and calculated using a decision making matrix, this helps to rank ideas clearly and helps to indicate the better business idea over the idea that people may favour originally as you can weight each criteria on what’s most important to the company. 

This video link shows how to make a decision making matrix on Excel https://www.youtube.com/watch?v=cy4cX34U87Y

I used this tool to help me decide on which idea I should chose and follow through with. I used the Criteria of cost to provide the service, Patentability of the new sport concept, Profit potential of the sport, the health and safety risk of playing the sport and the accessibility to the public. As you can see in Appendix (A) each category has been weighted between 1 and 3 which helps indicate the importance of each category score. Each idea is then scored 1-100 in each category and the matrix creates a weighted score and ranks the ideas highest to lowest.

The matrix has indicated to me that my Archball Idea is the best idea I have come up with and that it should be the most commercially successful out of the three.

Appendix

A

References

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

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

·       Law , J (2009) A Dictionary of Business and Management 5^th Edition, Oxford :Oxford University Press

Developing a new sport

Idea Generation

 

Idea generation is the process of creating, developing and communicating new ideas and concepts. There are many ways to create and develop new ideas; according to (Lamb, Hair & McDaniel, 2009) new ideas and concepts can come from a number of sources such as customers, employees, distributors, competitors, vendors and consultants. New ideas can be created through informal sessions with customers and employees and by surveying customers to see what they think could work. Many organisation use a model called Morphological Analysis, this is actually a group of models that share the same structure. The model breaks down a new idea into essential sub-concepts, this helps to analyses all the components that go into a new idea. New ideas are found by searching for a combination of attributes that do not yet exist. Some people argue that this model is too structured however it allows you to possible solutions to complex problems. This model was created by Fritz Zwicky in 1967. “http://www.diegm.uniud.it/create/Handbook/techniques/List/MorphoAnal.php”

A current example of idea generation in existence is the sport Futsal, this is a sport that has taken some framework from football and used that to create a new sport by changing some of the rules and regulations. Futsal is played on a hard court surface, the pitch is 20m x 40m, the goals are 2m x 3m, the baller is smaller than a regular football and heavier so that it doesn’t bounce as much, each team has only 5 players and one of whom is the goalkeeper, you are also allowed to roll-on-roll-off substitutes, there are two referees per game and an independent time keeper, the match has two halves however they only last twenty minutes and there is no offside rules. They have taken football and changed so many of the components that it is now a new idea and new sport of its own.

For this blog I have generated three of my own new sport ideas, the first idea is called Arch-Ball, the idea basically combines Archery and Football where instead of using a bow and arrow you use a small football with a furry surface similar to a tennis ball and a Velcro covered oversized Archery board. The second idea is Golf Premier League, this involves golfers representing regional clubs and they play games for points and have a league table and season as you do in Rugby, Football and basketball etc…  The final idea is veteran 5-aside football where retired professional players from each club play in an indoor mini-league with similar rules to futsal however they will play three 15 minute periods not two twenty minute periods.

 

References

Essentials of Marketing, Edition 6, Charles Lamb Joe Hair Carl McDaniel, 2009

http://www.diegm.uniud.it/create/Handbook/techniques/List/MorphoAnal.php

http://www.futsaluk.net/Futsal-the-Game