Poster

Commercialisation

The information gained from test marketing is used by management to decide upon whether to launch the new product. If the company decide to commercialise the product which can be defined as, “introducing a new product into the market” (Kotler and Armstrong (2012), there are further implications in which the company must consider. Hair et al (2011) outlines those implications as, “the decision to commercialise the product sets several tasks in motion: ordering production materials and equipment, starting production, building inventories, shipping the product to field distribution points, training the sales force, announcing the new product to the trade, and advertising to potential customers. Therefore, once a new product has been released into the market there are ongoing factors that must be maintained, in order for the product to penetrate the market place and to identify its potential customers, to ensure the organisation remains successful/profitable and sustainable.

A sport organisation that has reached commercialisation and is arguable emerging into post-commercialisation is football which started in England in 1863. This led to the codification and formation of the Football Association and the sports first governing body (FIFA.com, 2015). The progression of the sport can be seen by Beech and Chadwick’s (2013) model shown in Figure 1. It took the sport a century between evolutionary phases of professionalization and commercialisation to recognise the commercial potential of the organisation, through the sale of broadcasting rights to BSKYB (Rodrigues, 2012) and the introduction of the English Barclays Premier League. Furthermore, Football has become one of the most participated and profitable sports in the world, with the international federation of the sport FIFA, recognising its profitability through the creation and hosting of mega events such as the Football World Cup, which is able to facilitate the sale of the organisations rights to sponsors and broadcasters.

Figure 1 Framework: the development of a sport as business.

The commercialisation of “Tri-Xtreme” will begin after the England Rugby 2015 World Cup, due to the media coverage and promotion hype surrounding the tournament in the months leading up to and the months after the World Cup, in the attempt to prevent the new organisation “Tri-Xtreme” of being over shadowed and to maximise marketing/promotional strategies. The organisation will first begin roll out to Fort William, Scotland because of the locations ability to host/sustain all three sporting activities, when this has been achieved other locations will be targeted, which are capable of adopting the sports, increasing the size/coverage of the organisation. Once these targets have been achieved, individual sports and triathlon clubs will be targeted as part of the organisations market penetration and promotional strategy, to increase participation amongst the sport. As soon as the sport has substantial numbers participating, competitions will be created to increase the sports exposure and possible revenue streams, in the attempt of expanding into new markets and taking advantage of other popular extreme sports such as skiing. In the hope of progressing the idea for professionalising the sport and creating a World Series.

References

Beech, J. and Chadwick, S. (2013). The Business of Sport Management. 2nd ed. Harlow: Pearson, p.5.

FIFA.com, (2015). Classic Football History of the Game - FIFA.com. [online] Available at: http://www.fifa.com/classicfootball/history/the-game/origins.html [Accessed 31 Jan. 2015].

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

McDaniel, C., Lamb, C. and Hair, J. (2011). Introduction to marketing. Mason, Ohio: South-Western.

Rodrigues, J. (2012). Premier League football at 20: 1992, the start of a whole new ball game. 

[online] the Guardian. Available at: http://www.theguardian.com/football/from-the-archive-blog/2012/feb/02/20-years-premier-league-football-1992 [Accessed 31 Jan. 2015].

Test Marketing

Kotler and Armstrong (2012) define test marketing as, “the stage of new-product development in which the product and its proposed marketing program are tested in realistic market settings”. Hair et al (2011) explains that test marketing is an opportunity for organisations to introduce a new product for a brief period of time, in order to gain vital insight into how potential consumers will react to the product within a market situation alongside competitors. This allows management to assess and evaluate the success of the marketing strategies used. This can be used to identify alternative avenues for organisations to use, in order to find the best situation granting the highest possibility for product success. However, there are also high costs associated with test marketing whilst also being a long process. Furthermore, the sampling gives competitors the opportunity to sabotage with the market testing. Consist of the introduction of promotional campaigns that interferes with the normal market conditions, which can affect the test results.

A sports Example relating to test marketing is The National Football League (hereafter known as the NFL). The NFL arguably one of the biggest sports to come over from the Atlantic, which is currently going through a test marketing period, involving the gradual introduction of more competition matches being held at Wembley Football Stadium. For instance in 2007 only one match a year was held within London, currently that has progressed to 3 matches a year (Slater, 2014). This highlights the growing desire of the NFL product to capitalise upon the increasing demand for the sport within London, which could eventually lead to the first overseas franchise since the collapse of the London Monarchs and the Scottish Claymores (Slater, 2014). Therefore, this shows that the NFL is using a business model to gradually increase demand surrounding the sport with the intention of opening a franchise within Europe to gain market penetration, which could potentially cause a change reaction throughout the sport and achieving worldwide uptake. 

The new sports organisation Tri-Xtreme will be released within geographical areas capable of sustaining all three sporting activities consisting of kayaking, mountaineering and mountain biking. For example a suitable destination for the UK would be Fort William where all three physical environments are available for instance a lake, mountain range and downhill bike track exists. This temporary release of the sport, will offer vital insight of public opinion and whether the organisation should proceed to national roll out of the service. Furthermore, the sport will be released to a select number of clubs relating to kayaking, mountaineering and mountain biking, which will help evaluate the marketing strategy to ensue the correct market segment is being targeted. Triathlon clubs will also be targeted within the sample in an attempt to understand wither market penetration is possible, among a group of individuals with ideal characterises common with the potential new service.     

   

References

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

McDaniel, C., Lamb, C. and Hair, J. (2011). Introduction to marketing. Mason, Ohio: South-Western.

Slater, M. (2014). NFL could give UK 'more than £100m'. [online] BBC Sport. Available at: http://www.bbc.co.uk/sport/0/american-football/29813017 [Accessed 28 Jan. 2015].

Slater, M. (2014). Seven years until London Jaguars?. [online] BBC Sport. Available at: http://www.bbc.co.uk/sport/0/american-football/29391069 [Accessed 28 Jan. 2015].

Product Development

Armstrong and Kotler (2012) define product development as, “Developing the product concept into physical product to ensure that the product idea can be turned into a workable market offering”.  Hair et al (2011) explains that product development gives the engineering department, although in this case a new sport organisation. Which constructs a prototype of the product, for the purpose of developing a marketing strategy, in order to generate a product concept consisting of the branding, packaging, advertising and etcetera. For many organisations and companies product development offers the opportunity for the initial idea to be transformed into a working concept. However this process of development may take a week, a month or years to generate. Once the product is constructed it is then able to undergo testing and sampling, in order to gain vital insight and feedback that could potentially go towards improving the product.

In 2012, a landlady won a court battle with the Barclays Premier League over broadcasting live matches using a Greek TV decoder to show games (BBC News, 2012). Karen Murphy was fined £8,000 for the use of a decoder in the Portsmouth pub. However, the case was taken to the European Court of Justice (ECJ), which ruled in the landlady’s favour. Outlining the use of freedom of European trade and there was no copyright involving the football match, only the extra’s SKY and ESPN offered at the time. Nevertheless, since this case the Premier League have protected its idea through product development. Using the intellectual property consisting of the brand, logo, slogans and commentary being incorporated within the matches. Moreover, the organisation is surrounding the product with more legal protection regarding broadcasting rights. Enabling the product to be improved and has since been successful in the attempt to protect the product against unauthorised avenues. As a landlord discovered upon losing a recent court case regarding, the use of a foreign satellite and breaking copy right law (BBC News, 2014).

The sports organisation within question (TriXtreme) has the potential to broadcast the idea to a global audience, which can be designed into a World Series league similar to the Red Bull Cliff Diving or an annual event such as the BUPA Great North Run. However the idea does not have any legal protection from competitors potentially stealing the concept. Therefore, by creating a logo and a brand as shown within figure 1.

Figure 1: Logo.

    

The organisation is able to protect the product idea through the use of copyright, Patents, design right and trademark. Enabling the organisation to create a sellable product. That can entice potential sponsors and the selling of broadcasting rights, which will provide the organisation with vital revenue needed for the creation of and the sustaining of the new sport.  

References

BBC News, (2012). Pub landlady wins TV court case. [online] Available at: http://www.bbc.co.uk/news/business-17150054 [Accessed 21 Jan. 2015].

BBC News, (2014). Pub broke law showing live football. [online] Available at: http://www.bbc.co.uk/news/uk-wales-south-west-wales-25968200 [Accessed 21 Jan. 2015].

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

McDaniel, C., Lamb, C. and Hair, J. (2011). Introduction to marketing. Mason, Ohio: South-Western.

Business Analysis

Palepu et al (2010) states the purpose of a business analysis is to identify the key profit drivers and the risks associated to the business, by conducting an assessment of the company’s potential profits at a qualitative level. Law (2014) similarly suggests that business analysis is “a means by which the current performance of a firm is evaluated as part of the strategic planning process”. Therefore, business analysis involves assessing a company’s external environment. Using a PESTAL analysis to assess what can affect the organisation at a macro level, which can influence the future performance of the company. While also conducting an internal analysis that can be achieved via a SWOT analysis, which identifies micro factors affecting the current performance of the company and how it correlates to market share, within the service industry (Law, 2014).

Conducting business analysis is a vital component of any company,to plan and predict any changes within the business environment that could affect the organisation financially or operationally. For example, changes within the macro environment regarding political agenda can influence sport organisations but also the wider business community, such as issues surrounding minimum wage (BBC, 2014). Due to increases within living costs and the minimum wage failing to rise with this correlation, political parties are basing future election campaigns upon this current issue to win votes. However, this change within the macro factor that is increasingly likely to occur due public popularity. Can have massive implications towards business owners, because of the increase within expenditure for wages and the taxation associated with having a work force such as, PAYEE and pensions. Leading to organisations having to cut jobs that will affect the company operationally due to a drop in efficiency, which could potentially lead to bankruptcy.

By conducting a STEEPLE analysis that identifies both the micro and macro factors affecting the future organisation. Can have massive implications towards operations and financial decisions that contribute towards the potential performance. Therefore, it is important to be aware of the influences surrounding the organisation, in order to make a more informed decision that could lead to organisational success.               

	Strengths	Weakness	Opportunity	Threat
Political	Aspiring more people through Olympic legacy.	Change in government	Linking in with government policy of increasing more volunteers	Minimum wage increased
Economical	Sponsorship, opportunities	Increased living costs, affordability for the average individual	Increase the sports awareness	Colliding with other international events, such as Wimbledon.
Social	Increasing participation, improving health	Equipment to get started is expensive	To use and promote a volunteer system	Niche market
Technology	Use of video technology, to broadcast via YouTube	Potentially lose control of marketing	Using social media to talk directly to target audience	The actions of the athletes could damage brand
Ethics	Values, ideologies	Risks associated with extreme sports	To be taught more frequently with mainstream schools	Increase dependence upon government\education system
Legal	Rights and association to sell	Permission needed to use venues	To increase number of locations available (e.g. a tour)	Events can be contested by local residents

References

BBC. (2014) BBC website. Available at: http://www.bbc.co.uk/news/uk-politics-29299230 (Accessed 10th December 2014.

Law, J. (2009) A Dictionary of Business and Management. 5^th edn. Oxford University Press.

Palepu, K. Healy, P and Peek, E. (2010) Business analysis and valuation. 2^nd edn. Andover : South-Western Cengage Learning.