Test Marketing

The Business of Sport:w11007742

Stage:Test Marketing

Word Count: 498

Armstrong, Kotler, Harker, Brennan (2009) identify test marketing as the stage at which trial products or services are introduced into a real setting in order to determine the reactions of potential consumers of a product. This stage allows product developers to introduce the product at a lower cost than full introduction but still test the entire marketing program on target consumers such as the positioning strategy, advertising, distribution and branding. (McDaniel, Lamb & Hair, 2011). Organisations use test marketing as it allows them to monitor and evaluate how well their product will sell before introducing it product into the market.

Test marketing is very expensive and gives competitors an advantage by giving them time to study new products, this shows that test marketing doesn’t assure success. (Kotler & Armstrong, 2012). Test marketing allows businesses to receive feedback from customers about the product in relation to the marketing mix, this will help to ensure all aspects have been considered by utilising the feedback in order meet customer’s needs, ready for the final launch. (See appendix A)

Many Businesses undergo test marketing. For example Adidas tried out an energy drink in Japan designed in collaboration with Coca-Cola. If the population of Japan approved of the prodct then the the product would then be distributed worldwide (Fashion Net Asia, 2010).

Test marketing the ‘Deep Heat Support Bandage’ will identify if the product needs improving and whether or not the marketing campaigns are successful. (Pride& Ferrel 2011).   Using information from test marketing, product developers can refine products to make them more commercially viable before embarking on a widespread project launch (McDaniel et al, 2011).

The ‘Deep Heat Support Bandage’ will go through the test marketing stage by being released into a smaller market. The product will first be available for local injured athletes to buy at £15, where stimulated marketing will occur, allowing consumers to try out the product, providing the developers with feedback. If the tested price provides satisfactory results, these can be used to develop the commercial proposal to launch the product to larger retailers and begin online sales. This is an appropriate price due to direct competitors, less technical products available to buy for £10+.

When advertising the bandage a number of adverts will be posted around local sports clubs to promote the product to the locals to try and create brand recognition. This reduces costs during the testing stage. If results are positive and sales are creating revenue, the product will then be promoted via sporting/health and fitness magazines and appropriate online stores in order to increase sales.

In assumption that the product has been established as a brand and there are no product modifications during the test marketing, sales promotion techniques can be introduced. For example, 15% off the next purchase for all customers, this will help create a relationship with the customer in hope that they will be a guaranteed returning customer. The promotional pricing can be used to increase sales in the short term and long term, undercutting competitors. Regular emails can also be sent to the customers providing them with the latest information on the product and asking them for feedback, which will help maintain the relationship with the customer.

Appendix A – The Marketing Mix

A business needs to consider the marketing mix in order to meet their consumers' needs effectively. The idea of test marketing is to help gauge the reaction from the product and suggest ways it could be improved for the launch.

No one element of the marketing mix is more important than another – each element ideally supports the others. Firms modify each element in the marketing mix to establish an overall brand image and unique selling point that makes their products stand out from the competition. In relation to the bandage the unique selling point is the thermo-crystallisation sensation inside the bandage. 

References:

Armstrong, G., Kotler, P., Harker, M & Brennan, R (2009). Marketing and introduction. Harlow: Pearson Education Limited

BBC Bitesize (2013) The Marketing Mix. Available at: http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml (Accessed: 27^thJanuary 2013).

Fashion Net Asia (2010) Strategic Marketing - adidas and Coca-Cola team up to sell an energizer drink. Available at: http://www.fashionnetasia.com/en/IndustryNews/BusinessResources/Detail.html?id=1543 (Accessed: 27th January 2013).

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

Pride, W & Ferrel, O (2011). Marketing Express, 2^nd Edn. USA: South-Western Congage Learning.

Product Development

The Business of Sport: w11007742 

Stage: Product Development

Word count: 486

Armstrong, Kotler, Harker & Brennan (2009) state that product development is where the concept is developed into a tangible product allowing the design team to evaluate the products functionality and see if the product meets the consumer’s needs. The product development stage of a new sports product is made up of  sub stages; product construction, packaging, branding, product positioning and attitude and usage testing (Mullin, & Hardy & Sutton, 2000).

Product construction decisions need to be made to decide which materials are going to be used on the product. The Deep Heat Support Bandage will be constructed in the UK at the cheapest cost with a simple reusable design aiding to support and aid the consumers’ injury. The production stages of the bandage are computer design, the actual making of the bandage. (cutting, attaching and fastening and applying the thermal heat) All of which have a low construction price with each unit costing £10 with a selling price of £15, allowing for additional £5 profit. (See appendix A) The materials used to make the product will be of a better standard than competitors hence the large ‘jump in’ investment in order to compete with competitors such as the ‘Thermo Elbow Wrap’.

The packaging will be minimal as possible in order to be environmentally friendly, which will be low in cost. This will include a plastic wrapper to protect the bandage and a instructions leaflet providing information on how to apply the bandage, how it works and how to generate the heat menthol sensation inside the bandage. The cost of this is approximately 14p per unit. (See Appendix B)

The Bandage brand is accessible for any aged injured sports performer to access as it targets such a mass target audience. The bandage will be sold to local injured athletes to begin with, building up a good reputation and brand recognition before targeting larger retailers such as Sports Direct and other relevant stores such as ‘Fitness First and possibly chain stores such as Boots Health and Beauty. The brands unique selling point is the menthol heat through exothermic crystallization of supersaturated solutions generated inside the bandage. Trade mark protection will be in place (Armstrong et al 2009) to ensure legal protection to prevent potential competitors copying the idea.

Businesses use perceptual or positioning maps to help them develop a market positioning strategy for their product or service. The maps are based on the perception of the buyer, known as perceptual maps (Beech & Chadwick, 2007).Market segmentation and positioning is crucial as it allows the potential customers to be split into specific groups, showing where existing products and services are positioned in the market so that the firm can decide where is best to locate their product, enabling them to fill in the gap in the market, or by simply positing themselves near existing products in order to be a potential competitor in the market. (McDonald & Dunbar 2010) (See Appendix C)

Appendix A - Costs and Expenses

Appendix B: Packaging 

Clear Cellophane Gusset Bags

50 x 90 x 155

25 x 55

£5.66

£21.25

£37.77

£34.00

£28.33

 - £28.33/2000 = 0.14

References:

Armstrong, G., Kotler, P., Harker, M & Brennan, R (2009). Marketing and introduction. 8^th edn, Pearson education ltd: Harlow.

Beech, J., Chadwick, S. (2007) The Marketing of Sport

Buyometric. (2010). HoMedics Hot and Cold Therapy Elbow Wrap.Available: http://www.homedics.co.uk/uk/hot-and-cold-therapy-elbow-wrap.html. Last accessed 4th December 2012.

McDonald, M & Dunbar, I (2010). Market Segmentation: how to do it, and how to profit from it. 4^th edn [online], Goodfellow publishers.  Available at: http://lib.myilibrary.com/Open.aspx?id=289717  (Accessed 17/12/12).

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

 Poly bags Ltd (2012) Polybags. Available at: http://www.polybags.co.uk/shop/small-5-8-wide_c904.htm  (Accessed 17/12/12).