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Stage 8 - Commercialisation

Stage 8

Commercialisation

The final stage of the new product development process is the commercialisation stage. It is defined in the Dictionary of Sports Studies (2014) as when ‘financial profit, becomes the underlying economic basis of sports organization’, therefore this shows that the commercialisation stage is about creating a plan for bringing your product/format to market to gain financial profit. The way the product is marketed is vital and there the ‘four p’s’ in the marketing mix (appendix A) are very important. They are price, product, place and promotion and it is crucial to consider all four of these if your product/format will be successful. The commercialisation stage has the potential to be very expensive, however, if done efficiently the organisation will see the benefits after this stage when the product is successful.

An example of where commercialisation has taken place and has been successful to an extent is the NatWest T20 Blast in the UK. With the introduction of this new competition format the ECB were trying to get more people watching their competition both at home and in the crowd. Firstly, they changed the name of the competition from the Friends Life T20 to the NatWest T20 Blast to attract more people. They also changed when the games were played and the majority of games were played on a Friday which was an attempt to encourage more families to watch. As Dobell (2014) states, ‘overall attendance will pass 700,000 for the first time in its 12-year history’ therefore showing that this commercialisation of the new competition was successful. Another technique they used was to create a fantasy team competition similar to that of fantasy football. This meant that people could not only go to watch the matches, they could also be a virtual manager of a team, and this would create interest throughout the competition highlighted in the attendance figures.

To commercialise R1 Racing the ‘four P’s’ in the marketing mix (Appendix A) will be used, which are: price, product, place and promotion. The product is the R1 Racing season that will be held. The aim of the early years of the competition is to run along the F1 season therefore an extra ten pounds will be added to the ticket price for the day the event is held. The place will be at the various F1 events held in Europe for the first year and then expand season on season. The promotion stage will be the most of the four areas for R1 Racing, because if it is going to grow into massive spectator sport a fan base needs to be established straight away. The aim is to negotiate a deal with a broadcasting channel such as Sky or BT to televise the format, from this a commercial will be made which will broadcast from around four weeks before the event to create anticipation and excitement for the first race.

Appendix A – The Marketing Mix

 

Reference List

• Dobell, G. (2014) T20 attendances tell two tales. Available at: http://www.espncricinfo.com/county-cricket-2014/content/story/773321.html (Accessed: 3^rd February 2015).
• Tomlinson, A. (2014) A Dictionary of Sports Studies. Available at: http://www.oxfordreference.com/view/10.1093/acref/9780199213818.001.0001/acref-9780199213818-e-262 (Accessed: 3^rd February 2015). 

Stage 7 - Test Marketing

Stage 7

Test Marketing

The seventh stage of the new product development process is the test marketing stage. It is defined in the Dictionary of Marketing (2011) as ‘a product test prior to launch with a small representative group’, therefore, it is releasing the product into a small area to see what the reaction to the product is like. It goes on to say that ‘feedback is gathered and the product can be improved before it is rolled out to a larger market or audience’. Also, Korotkov, Occhiocupo and Simkin (2013) believe that ‘test marketing secures business by seeking to avoid major failures’ therefore, by placing the product or format into the market and gathering information on how the small market reacted to the product, decisions can be made ahead of the final release of the format, as to whether to go ahead, make final adjustments or to not go ahead with the release of the format. However, there are disadvantages of doing this, which are, competitors could rush a similar format into production to reduce how successful your format is and it can also be expensive to carry it out.

An example of test marketing is that of the new ECB under 19 Twenty20 competition. To see how successful introducing this new competition would be, they ran four different competitions in Durham, Kent, Surrey and Yorkshire. They planned to see how people reacted to the competition and to see if it would be successful in delivering their aim of ‘boosting participation and keep more youngsters in the recreational game’ (ECB, 2014). However, they also wanted to see how giving the responsibility to the players in creating an occasion of each event, instead of arriving and everything being organised by just the coach. They also wanted to see if a new initiative of letting the players organise the game had the potential to make it into an event and not only make it fun for the participants but, also for the spectators, therefore boosting revenues at clubs. 

The test marketing process will be vital for R1 racing as it will be trying to break into the Formula One market and the formatting is crucial as this is the first event, to get the fan base they want. The first step will be to invite 50 people to watch an R1 event at a smaller circuit and feedback will be collected to see if any changes would have to be made before we then carry out another test market, on one of the practice days at the British Grand Prix held at Silverstone. Again, the event will be shorter than what a usual R1 racing event will be, with only three cars racing 10 laps each rather than four cars doing 12 laps. Holding an event here will mean feedback can be gathered from a large amount of people. The feedback collated from this event will then be reviewed to decide if any more changes are needed before the final commercialisation of R1 Racing.

Reference List

• Doyle, C. (2013) Test Marketing. Available at: http://www.oxfordreference.com/view/10.1093/acref/9780199590230.001.0001/acref-9780199590230-e-1747 (Accessed: 27^th January 2015).
• ECB. (2014) U19 club cricketers handed T20 opportunity. Available at: http://www.ecb.co.uk/news/articles/u19-club-cricketers-handed-t20-opportunity (Accessed: 27^th January 2015).
• Korotkov, N., Occhiocupo, N. & Simkin, L. (2013) ‘Marketing Intelligence & Planning’, Journal of Marketing Practice: Applied Marketing Science, 31(7), pg. 807-822.

Stage 6 - Product Development

Stage 6

Product Development

The sixth stage of the new product development process is the product development stage. It is defined by Tzokas, Hultink and Hart (2004) as ‘the design and manufacturing of several prototypes’, however, in the Business Dictionary (2015) it is further described as the ‘modification of an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer want or market niche’. Therefore, it is bringing the idea you have had in the other stages to life and into a physical form such as prototypes of the product and developing the brand you will be using.  Having these physical representations of the product will further allow you to gather feedback on the product. With this information it will allow the organisation to make adjustments to the product depending on the reaction of the market to the prototype. Different mediums can be used to develop and advertise the prototypes, such as short promotional videos and posters, to best get the message of the product across to the target market.

An example of the product development process is the England Cricket Board’s new under 19 Twenty 20 competition. The aim of the competition was ‘keeping U19 players in club cricket’ (ECB, 2014). They came up with the idea and they created four prototype competitions in different areas to test how well this new competition will work. Therefore, these four competitions are the prototype product and they can receive feedback from these four competitions and the clubs that competed in it, to see what worked well and what can be improved when the new competition is run across the country.  They have also created the brand to run alongside the professional T20 competition, the NatWest T20 Blast, which will ensure the competition is well advertised and that people are aware of it. These prototype competitions have been used to create a promotional video for the new competition to advertise it at the target market. 

As discussed in the earlier blogs, the concept being worked through the new product development process is a relay F1 format. As discussed, we will be using cars previously used in the Formula One season therefore no prototype of cars can be made. However, the way to test the event will be to run a small race at the British Grand Prix and this means we will have the spectators there watching and will allow feedback to be gathered. With this information decisions will be made on how to improve the format before moving on to fully running the event and a season. The concept will be branded by the name of R1 Racing (Logo in Appendix A), this will mean that people will still associate the format to Formula One and will attract the supporters of that format to watch this new one. However, the use of exciting words will try to appeal to new fans and feedback can be gathered and adjustments can be made if this does not work.

Appendices

Appendix A – The R1 Racing Logo

Reference List

• Business Dictionary (2015) Product Development. Available at: http://www.businessdictionary.com/definition/product-development.html (Accessed: 19^th January 2015).
• ECB (2014) NatWest U19 Club T20. Available at: http://www.ecb.co.uk/news/non-first-class/natwest-u19-club-t20 (Accessed: 19^th January 2015).
• Tzokas, N., Hultink, E. & Hart, S. (2004) ‘Navigating the new product development process’, Industrial Marketing Management, 33 (2004), pg. 619 – 626.