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