Product -Lining

This installment of Marketing2015 will again focus around sports, but this time is about the sales and pricing strategies used by equipment manufactures. This strategy to which I am referring is the idea of “product-lining.” Firms in industries other than sporting goods and equipment employ this strategy as well, but product-lining is most prevalent and useful in those markets.

The idea behind releasing an entire product line makes sense in a sport such as hockey because many players have many different needs of their equipment depending on factors such as skill level, frequency of playing, and budget. The way that a company such as Bauer (considered by many the worlds foremost expert in hockey equipment) handles such a diversity of needs is to release a product line with multiple options rather than a single, “one-size-fits-all,” product. Currently Bauer has three major product lines Supreme, Vapor, and Nexus, which all are complete product lines in themselves that have differences between them in fit, function, and performance.

 Not only are there three product lines, but also there are generally about 7 products per item, per product line. What does that mean for producer and consumer? For the producer it means a great deal of market coverage and segmentation, reaching many different individuals from an NHL superstars like Ryan Kesler (face of the Nexus line) to the first timer just looking to play some pond hockey. Product lining also seems to be very conducive to high levels of brand loyalty and, more specifically, even product line loyalty. The expense of this is very high overhead costs for manufacturing and storing so many different items, as well as marketing in enough areas to reach all desired segements. For consumers it means being able to find a product that fits best physically and economically, no matter whom you are and what level of performance you need.

The image above shows the top four models of the Vapor line, which has a total of 9 different skates in its lineup, following the same pattern seen down to the X40 skate. The top skate of this line is $700 currently but you can get a pair of the lowest grade X40 for just under $100. The difference in price is influenced by many factors such as materials used, production method (hand-stitched vs. machined,) warranty level, and protection level to the user. Not only does the boot itself change, the performance that can be expected of it increases along with price, where the top of the line products will be much stiffer and stronger, as well as likely being a lighter weight overall. Other than skates, using this strategy has lead to success in the sales of gloves and sticks as well where novice players don’t demand their equipment to be as high-performance.

            The product-lining strategy is also used in the sales of items such as golf clubs and balls, baseball bats and gloves, as well as tennis racquets just to name a few. Outside of sporting goods, product-lining can be seen in vehicles, moving from a base model and adding trim packages and desired options to create a vehicle more tailored to the buyer. This strategy also is used in the sales of services such as insurance sales or banking where different price points can reflect different levels of coverage or options available.

Works Cited:

Jones, Steve. "Bauer Hockey Introduces New Product Line Inspired by Needs of Top Professionals." Business Wire. N.p., 15 June 12. Web. 23 Mar. 2015.

New Product Process

Welcome back to Marketing2015

Although recent blog themes have been have been focused around some area of athletics or athletes, it seems time to get into some of the more technical concepts of marketing. Class discussion and readings in the time passed since the last blog post have included topics such as product positioning, target markets, market segmentation, and other topics of market research and product placement. The purpose of this post will be to detail a process discussed in chapter 10, the New Product Process.

As expected, the New Product Process has multiple steps, seven to be exact, that must be taken in successive order to give a new product the best possible chance at being successful once brought to market. Taking these steps will greatly increase a product’s chances, however following them will not and cannot ensure than any product will ultimately meet the goals intended by the producer bringing it to market. This process is specifically geared toward the marketing of a new product, but applies as well to marketing a new service, with only a few conceptual differences. Although some of these 7 steps can be undertaken simultaneously, none can be skipped altogether, and any serious rearrangement will have effects on the effectiveness.

Without further ado, the steps:

1.     New-Product Strategy Development

This is the area where a team will define the role that needs fulfillment within a company’s portfolio. Firms will use SWOT analysis and environmental scanning to see where they can impact a market and how.

2.     Idea Generation

In this stage, a large number of concepts are developed based on perceived opportunities discovered in step 1. This process is undertaken by members of the new-product team of the firm, as well as by collecting input from customers, suppliers, outsourced R&D teams, and other similar products that can spark ideas.

3.     Screening and Evaluation

This is when a slightly narrowed group of ideas is evaluated to determine the actual plausibility of the product and the list is narrowed further to include just a few of the best ideas. Internally, production capabilities are assessed, and externally the idea of the product is preliminarily tested without an actual product being built.

4.     Business Analysis

At this point a product has shown high potential and is only one step from having a prototype built. Analysis done now will specify the product features, as well as the marketing strategy that will be employed. There are also many financial projections undertaken to show how the new product is likely to affect the bottom line.

5.     Development

Finally, all the conceptual work is done and the prototype of the product is produced. Getting to this point involves so many prior steps because this is where a significant capital outlay must occur. Having a tangible model allows for further testing of production efficiency as well as lab and consumer testing to see that the product meets the protocol that has previously been established.

6.     Market Testing

Now that there are actual units being produced, it’s time to test and see if people will buy the product when faced with the choice of it versus its competitors in realistic buying scenarios. The product can be tested in a standard, controlled, or simulated test markets depending on how much money can be spent, how long the firm has to test the product, and what type of product it is being tested.

7.     Commercialization

This final step is when the product is positioned in the minds of consumers and the process of getting it to actual retail locations is undertaken. Many products are slowly “rolled-out” regionally to mitigate the risk of the product tanking, and to add a stream of revenue as quickly as possible to begin to offset all the costs undertaken to get to this point.

           

The use of these sevens steps is typically a very lengthy and expensive process that can be immeasurable helpful if employed in the correct ways. Sometimes, going through all this means that your product is delayed months or years before getting to consumers, but taking the time is worth it to know the firm’s money isn’t wasted on a tanking product.