Commercialisation

The final stage of the NPD process is the decision to market the product – Commercialisation.  This is often the most expensive stage of the NPD process and therefore it is important the test marketing results are analysed thoroughly prior to the decision to market the product.  This stage includes ordering production equipment and materials, initial production, distribution, sales force training and advertising the release to potential customers (McDaniel, Lamb & Hair, 2008). 

 

Trott (2008) states that successful entry to the market is dependent on a full marketing strategy.  Kotler and Keller (2012) agree and list the sequenced mix of marketing communication tools commercialisation relies on as being: 

·         When – the release date may be impacted by other products e.g. competitor’s products release dates.

·         Where – in which location will the product be released?

·         Who – which target market is the product focussed towards?

·         How – through which marketing activities is the product going to be advertised?

 

 

 

 

 

 

 

 

 

 

An example of a sports organisation going through the process of commercialisation is Rip Curl.  Rip Curl began manufacturing wetsuits in 1970 and in 2007 released the first ever heated wetsuit called the H-Bomb.  Rip Curl initially released the H-Bomb to the Northern Hemisphere specifically targeting young adult surfers.  As Rip Curl planned to release the H-Bomb to the Australian market in 2008, The Australian Institute of Commercialisation (AIC) assisted them with technological developments improving the wetsuit to have lower battery consumption and reduced heat loss.  In addition, the AIC have since aided Rip Curl in the improvement of wetsuits through introducing the company to research and technology providers.  These private organisation’s collaboration with Rip Curl has since provided a continuous development of production and manufacturing materials (Australian Innovation, 2010).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gymathlon is expected to be accepted quickly by gym users as it is hoped there will be an initial interest of participants testing themselves.  As Gymathlon is a franchise, the aim is to use success recorded during the test marketing stage to attract more franchisees.  The concept would hopefully be initially distributed in 10 franchises, as this enhances the competition.  Gymathlon’s production capabilities are dependent on the franchise facilities as around 5 staff would be trained to deliver the activity ensuring there will be no shortfall in instructors.  The price will be £20 and will be promoted through the franchisees and YouTube fitness video adverts in addition to be showcased at fitness events such as Triathlons.

Competitors for Gymathlon will be other fitness activities, however as shown in Appendix A, there is no very direct competition as other activities tend to be more regular, have a lower price and a lower physical benefit with the exception of a personal trainer which is a higher priced activity. The business analysis stage of the NPD process included projected income to show Gymathlon to become profitable in month 9 of trading.  Commercialisation was calculated to cost £12,430 based on the start-up of 10 gyms, this included training staff to deliver the activity, website and branding, promotional materials and legal fees. 

Appendix A

 

References

Australian Innovation (2010) Rip Curl a Commercialisation of the first ever power heated wet suit. Available at: http://www.ausinnovation.org/articles/rip-curl-a-commercialisation-of-the-first-ever-power-heated-wet-suit.html (Accessed: 4 February 2015).

Kotler, P. & Keller, K.L. (2012) Marketing Management. Global Edn. Harlow: Pearson Education.

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

Trott, P. (2008) Innovation Management and New Product Development. 4th Edn. Edinburgh: Pearson Education.