CHAPTER	8

Managing sports products

The article on Nike Fuel Bands provides an interesting illustration of a new sports product that is taking off in the North American market. There is obviously nothing new about fitness, or even wristbands, but when combined they create an exciting new sport product. Nike will have to keep this in mind when executing a marketing strategy for this emerging new sport product

New sports products

Although it might seem as if new products are easy to describe and think about, “new” is a relative term. Think about purchasing season tickets to your favorite college basketball team for the first time. You might consider this a new product even though the tickets have been available for many years. In other instances consumers may be exposed to a sport that utilizes a combination of techniques they are familiar with to create “new” and exciting alternatives, such as Bossaball.

Bossaball combines elements of different sports on a pitch of trampolines and bouncy inflatables. The popularity of Xtreme sports, soccer, and volleyball around the globe suggest the time could be right for this new product. There is obviously nothing new about volleyball, soccer, and jumping on a trampoline, but when combined they create an exciting new sport. The founders of Bossaball will have to keep this in mind when developing a marketing strategy for this emerging sports product. This sports product is new to spectators and participants alike.

Web 8.1 The new sport of Bossaball combines volleyball, football, gymnastics, and capoeira.

Source: www.Bossaballsports.com

Regardless of how you define “new products,” they are critical to the health of any sports organization for two reasons. First, new products are necessary to keep up with changing consumer trends, lifestyles, and tastes. Second, as unsuccessful sports products are dropped from the product mix, new products must be introduced continually to maintain business and long-term growth.

One of the key considerations for any sports organization is to continually improve the products it offers to consumers. New products seek to satisfy the needs of a new market, enhance the quality of an existing product, or extend the number of product choices for current consumers. Before discussing the process for developing new products, let us look at the different types of new sports products.

Types of new products

As noted previously, there is no universally accepted definition of new products. Instead, new products are sometimes described from the viewpoint of the sports organization versus the consumer’s perspective. The organization’s definition of a new product is based on whether it has ever produced or marketed this particular product in the past. This can be important for organizations trying to understand how the new sports product “fits” with their existing products.

However, newness from the consumer’s perspective is described as any innovation the consumer perceives as meaningful. In other words, the new product could be a minor alteration of an existing product or a product that has never been sold or marketed by any organization. Looking at new products from the consumer’s viewpoint helps sports organizations understand the most effective way to market the product. Let us examine the types of new products from the organizational and consumer perspectives in greater detail.

Newness from the organization’s perspective

New-to-the-world products

Brand-new sports innovations, such as the first in-line skates, the first sailboard, or the advent of arena football in 1987, all represent new-to-the-world products. These products were new to the organization selling the product as well as to the consumers purchasing or using the product.¹

Another interesting, new-to-the-world sports product is the wireless ballpark. Raley Field, home of the AAA Sacramento River Cats baseball team, has become one of professional sports’ most technologically advanced venues. The River Cats were among the first teams to implement wireless Internet access to customers in suites and the exclusive “Solon Club.” The stadium is now wired for all fans who are able to operate laptop computers, PDAs, and other wireless devices from their seats for access to up-to-the-minute stats and replays. Additionally, fans can order food or tickets for future games right from their seat.²

New product category entries

Sports products that are new to the organization, but not to the world, are referred to as new product category entries. For example, IMG, a sports, entertainment, and media company, acquired Host Communications in November of 2007. Several months earlier IMG acquired the Collegiate Licensing Company and collectively these two companies formed the foundation for IMG College, a division of IMG Worldwide, which provides unparalleled expertise and resources to the collegiate market through the use of licensing and multimedia rights services. IMG further expanded this platform with the acquisition of ISP Sports on July 28, 2010. This acquisition made IMG College the leading representative of colleges and universities in their efforts to maximize their revenue through media and marketing rights deals.

New Balance, known only for its footwear, acquired Brine, Inc., a recognized industry leader in soccer, lacrosse, field hockey, and volleyball. “Brine’s history of manufacturing high-performance team sports products will enable us to broaden our offerings at the global level,” said Jim Davis, chairman and CEO of New Balance. “Brine’s motto, ‘Find Your Game,’ speaks directly to their long-standing support of game improvement products and programs, and fits in well with New Balance’s philosophy of promoting personal athletic achievements.”³

In another example, the athletic footwear landscape was significantly altered when German-based manufacturer Adidas announced it would be acquiring all outstanding shares of Reebok. Under the terms of the deal, Adidas bought Reebok for $3.8 billion in 2006. For Adidas, the merger strengthens its presence in global athletic footwear, apparel, and hardware markets – allowing for a more competitive vantage point, a more defined brand identity, a wider product offering, and a stronger presence in professional athletics. These products are not new to the sports consumers, but they are new acquisitions for the organizations.

Product line extensions

Product line extensions refer to new products being added to an existing product line. For instance, the addition of expansion teams in Major League Baseball, or Daiwa’s new Dendoh Marine Power Assist fishing reels, precision engineered with Daiwa’s unique Power Lever for instant control of winding speed and power, are product line extensions. The NBA D-League is also a product line extension of the original National Basketball Association. The league is currently fielding 17 teams across the United States and until summer 2005, was known as the National Basketball Development League (NBDL). The NBA D-League started with eight teams in the fall of 2001.

In another example of a product line extension, New Balance footwear launched Custom US574 in 2011. The Custom US574 puts New Balance’s best-known and best-loved silhouettes in the hands of consumers to style the way they want. Consumers pick the color ways and fabrics and then the shoe is shipped directly to the consumer in 4–5 business days.

Product improvements

Product improvements refer to current products that have been modified and improved, such as the new shoe addition to the long line of the Jordan Brand with the release of the Air Jordan 10 “Powder Blue” retro sneaker, 20 years after the first Jordan 10s hit shelves. According to Forbes, like all the Jordan retro releases, Powder Blue was highly anticipated and first-day sales hit $35 million.⁴ For perspective, in all of 2013, Adidas sold $40 million in the U.S. of the signature shoes of its top star, Derrick Rose. Other notable Jordan lines include: the Jordon Melo M10 YO TH, retailing at $200 and the retro Jordan IX Kilroy Pack, retailing at $160, and are labeled product improvements. The shoes have a revived marketing campaign, made popular during Jordan’s first retirement. The collection started with the Jordan namesake, followed with the Fonte Montanas, and continues with its third installment of the Bentley Ellis shoes.

Another example of a product improvement is the Wilson Six. One Tour BLX tennis racquet. This improved version of the flagship Wilson Tour 90 includes the addition of Wilson’s new BLX treatment, which involves weaving Basalt fibers into the composition for improved vibration resistance. Wilson claims its BLX technology allows a smoother signal to reach the player after impact for cleaner feedback and the ‘perfect feel.’⁵

Any sports team or individual that improves during the off-season can be considered a product improvement. Sometimes this improvement takes place because of trades or purchasing new players, and other times an enhanced product is the result of a new coach or players who are maturing and finally performing to their potential. In either case, product improvements represent an opportunity for sports marketers to promote the improvements (either real or perceived) in product quality.

A final example of a product improvement comes from the Chicago Cubs and their rearranging of a few group areas at Wrigley Field to free up more room in the 97-year-old ballpark to allow more room for fans to mingle. The organization’s proposed $500 million ballpark renovations to be completed by 2015, include: a 57,000 square foot Jumbotron, larger home clubhouse equipped with a new weight room, medical area, player’s lounge, batting cages, and media center, wider concourse, new restaurants club, improved concessions, more restrooms, enlarged and renovated skyboxes, new plaza area for pre- and post-game festivities, new office building to house team, stadium, and concession personnel, and lastly, a seven-story hotel with a connected walkway.⁶

Repositioning

As defined in Chapter 6, repositioning is changing the image or perception of the sports entity in the minds of consumers in the target market. Sports products such as bowling and billiards are trying to reposition themselves as “yuppie sports activities” by creating trendy and upscale environments in sports facilities that are stereotypically grungy and old-fashioned.⁷

Another repositioning example comes from the city of Moscow, the largest city in Europe with no modern arena to serve the sports and entertainment community. The city of Moscow, partnering with VTB Bank and AEG, are building a massive $1.5 billion sport and entertainment complex to serve Europe’s largest market. The arena/stadium project will include the VTB Bank stadium with 6,750 club seats, 98 suites and an expandable seating capacity that serves populations from 33,000–45,000. The VTB Bank Arena will house 1,632 club seats, 82 suites and have a seating capacity of 12,000 expandable to 15,000. These sports venues are targeted to open in 2016 and hope to be an integral part of the 2018 FIFA World Cup competition.⁸

The most common examples of new products are repositioning and product improvements because of the limited risk involved from the organization’s perspective. The rearrangement of existing sports products also has its advantages. For example, this type of new product can be developed more quickly than new-to-the-world or new product category entrants, and it already has an established track record with consumers.

However, new-to-the-world products must undergo enhanced research and development because they are new to the organization and to consumers. Moreover, more money must be invested because heavy levels of promotion are necessary to make potential consumers aware of the product. In addition, consumers must learn about the benefits of the new product and how it can help satisfy their needs.

Newness from the consumer’s perspective

Another way to describe new products is from the perspective of consumers. New products are categorized as discontinuous innovations, dynamically continuous innovations, or continuous innovations.⁹ The new products are categorized on the basis of the degree of behavioral change required by consumers. Behavioral changes refer to differences in the way we use a new product, think about a new product, or the degree of learning required to use a new product. For instance, a new extra-long tennis racquet does not require us to change the way we play tennis or to relearn the sport. However, extensive learning took place for many Americans exposed to soccer for the first time in the 1994 World Cup match and the learning process continues. Similarly, learning will have to occur for the many Americans who will watch cricket or experience the growing sport of lacrosse for the first time. Let us look at the three categories of new products from the consumer’s perspective in greater detail. Discontinuous innovations are somewhat similar to new-to-the-world products in that they represent the most innovative products. In fact, discontinuous innovations are so new and original that they require major learning from the consumer’s viewpoint and new consumption and usage patterns. Some of the “extreme sports,” such as sky surfing, bungee jumping, and ice climbing, represented discontinuous innovations, but are now becoming more mainstream. New “extremes” such as free diving, hang gliding, cave diving, base jumping, wakeskiing, and kite-surfing are also becoming popular.

Many Southerners who have had limited access to ice hockey may view this sport as a discontinuous innovation. Interestingly, a study found that spectator knowledge of hockey was found to be a significant predictor of game attendance and intention to attend hockey games in the future. An equally important finding in the study was that knowledge of hockey may vary based on sociodemographic variables. In other words, the fan’s age, gender, educational level, income, and marital status influence the degree of hockey knowledge.¹⁰

Even distribution patterns for sport have required new consumption and usage patterns and therefore represent discontinuous innovation. For example, Sports Business Journal noted that programs such as Twitter via smartphones could serve sports properties and brands and offer a real time perspective of how people react to a game, a deal, or a critical decision. These instantaneous feed mechanisms provide information and even gratification for consumers searching and desiring up-to-date news.

Dynamically continuous innovations are new products that represent changes and improvements but do not strikingly change buying and usage patterns. For instance, the titanium head and bubble shaft on a golf club or the liquid metal technology aluminum bat are innovations that do not change our swing, but do represent significant improvements in equipment (and hopefully our game). When the shot-clock and three-point field goal were added to basketball, changes took place in how the game was played. Coaches, players, and fans were forced to understand and adopt new strategies for basketball. Most basketball enthusiasts believe these dynamically continuous innovations improved the sport.

The latest dynamically continuous innovations from the golf industry, which thrives on new product development, are the mainstream acceptance of the hybrid club and new surface geometrics of the golf ball. Many low- and high-handicap golfers are replacing their long irons with hybrids – a half iron, half wood alternative to the difficult to hit long irons. The innovative designs of the golf ball which include use of swirls or grooves rather than circular dimples allow balls to fly like rockets in breezy conditions.

Software giant, SAP, has entered the next phase of its sponsorship strategy. They are now using sponsorship and a new strategy of consumerism to put a personal touch on their brand by using new information technology. This technology is adopted by consumers and then spreads to business and government applications. SAP paired up with three professional sports properties: The NBA, the NFL San Francisco 49ers, and, more recently, MetLife Stadium, home of the NFL New York Giants and New York Jets. SAP plans to use this technology in order to enhance the fan experience. Examples of this include offering real-time statistics through NBA.com. This information was not available to the public until now. This is one way SAP is using sponsorship to introduce its brand to new customers.

EA Sports utilize dynamically continuous innovations that enhance the XOS PlayAction Simulator platform, EA’s engine used to drive EA’s top-selling Madden NFL 13 and NCAA Football 13. Back in 2011, EA Sports added online scouting, online team play and online attribute boost for co-op play to enhance functionality. Previous dynamically continuous innovations include customizable playbooks, diagrams, and testing sequences to better prepare athletes for specific opponents. Additionally, the software includes built-in teaching and reporting tools so coaches can analyze and track the tactical-skill development of their athletes. Instead of simply playing a video game for enjoyment, an athlete can play a game to test and train for upcoming on-field action. For example, a quarterback using the new tool can practice reading a defense, picking up blitzes, and making quick decisions on where to throw the ball, all based on the tendencies of the team he is going to play the upcoming weekend.

A final example of a dynamically continuous innovation comes from the world of trading cards and technology. Upper Deck, not just a sports trading card company, but a world-wide sport and entertainment company, has developed the Shadow Box slot cards. For the first time ever, these interchangeable acetate cards allow collectors the opportunity to customize their own unique trading cards. Certainly, this change represents a new buying behavior for a product (trading cards) that has been on the market for decades.

Continuous innovations represent an ongoing, commonplace change such as the minor alteration of a product or the introduction of an imitation product. A continuous innovation has the least disruptive influence on patterns of usage and consumer behavior. In other words, consumers use the product in the same manner that they have always used the product. Examples of continuous innovations include the addition of expansion teams for leagues such as NBA D-League, MLB, the WNBA, or MLS or even expanding the number of games in the season. Another example of a continuous innovation comes to us from the world of sports video game technology. Continuous innovations include slight improvements over time. Very little usually changes from year-to-year in video games, e.g. Madden 2014 vs. Madden 2015. In fact, many of these games are played much the same way that games were played in editions released decades before.

We often could debate which new product category best represents a team that has built a new arena and changed its venue or any new sports product, but few new products fall neatly into the three categories. Rather, there is a continuum ranging from minor innovation to major innovation, based on how consumers perceive the new product. Knowing how consumers think and feel about a new product is critical information in developing the most effective marketing strategy. Before we talk more about the factors that make new products successful and spread through the marketplace, let us look at how new products are conceived.

The new product development process

Increased competition for sports and entertainment dollars, emergence of new technologies, and ever-changing consumer preferences are just a few of the reasons sports marketers are constantly developing new sports products. As Higgins and Martin point out in their research on managing sport innovations, “Clearly, the list of innovations in sports is extensive and appears to be increasing at a rapid rate. This would suggest that spectators are seeking new and better entertainment and participants are seeking new and better challenges.¹¹

Many new sports products are conceived without much planning, or happen as a result of chance. For instance, the modern sport of polo was created by British cavalry officers in India who wanted to show off their horsemanship in a more creative way than the parade ground allowed. Although polo represents a sport that was developed by chance, this is more the exception than the rule. More often than not, sports organizations develop new products by using a systematic approach called the new product development process. The phases in the new product development process include idea generation, idea screening, and analysis of the concept, developing the sports product, test marketing, and commercialization. Let us briefly explore each phase in the new product development process.

Idea generation

The first phase of the new product development process is idea generation. At this initial phase, any and all ideas for new products are considered. Ideas for new products are generated from many different sources. Employees who work in product development teams, salespeople close to the consumers, consumers of sport, and competitive organizations are just a few of the potential sources of ideas for new sports products.

Naturally, a marketing-oriented sports organization will attempt to communicate with their consumers as much as possible to determine emerging needs. As we discussed in Chapter 3, marketing research plays a valuable role in anticipating the needs of consumers. Moreover, environmental scanning helps sports organizations keep in touch with changes in the marketing environment that might present opportunities for new product development. For instance, in our opening scenario, the entrepreneurs who established Ultimate Fighting understood that the environmental conditions would be conducive to success.

Idea screening

Once the ideas are generated, the next step of the product development process, idea screening, begins. During the idea screening phase, all the new product ideas are evaluated and the poor ones are weeded out. An important consideration in the idea screening process is to examine the “fit” of the product with the organization’s goals and consumer demand. The concept of new product fit is consistent with the contingency framework, which states that product decisions should consider the external contingencies, the internal contingencies, and the strategic sports marketing process. One formal idea screening tool for analyzing the “fit” of potential products is the new product screening checklist (see Table 8.1).

Sports marketers using some variant of this new product screening checklist would rate potential new product ideas on each item. As Table 8.1 indicates, a score of less than 30 would eliminate the new product from further consideration, whereas a score of 70 or more means the product would be further developed. Obviously, each sports organization must design its own new product screening checklist to meet the demands of its unique marketing environment and organization.

Analysis of the sports product concept or potential

By the third phase of the new product development process, poor ideas have been eliminated. Now, the process continues as the firm begins to analyze potential new products in terms of how they fit with existing products and how consumers respond to these new products. As new product ideas begin to take shape, marketing research is necessary to understand consumers’ perceptions of the new product concepts. One type of marketing research that is commonly conducted during the new product development process is referred to as concept testing.

Table 8.1 New product screening checklist

Rate the new-product concept using a 10-point scale. Score a “1” if the concept fails the question and a “10” if it meets the criterion perfectly.

Relative advantage Does the new product offer a cost advantage compared with substitutes? Does the new product have a value-added feature? Is your innovation directed at neglected segments of the marketplace?

Compatibility Is the product compatible with corporate practices, culture, and value systems (i.e., the internal contingencies)? Is the new product compatible with the market’s environment (i.e., the external contingencies)? Is the new product compatible with current products and services being offered (i.e., product mix)?

Perceived risk Note: On the following questions absence of risk should receive a higher score. Does the consumer perceive an economic risk if they try the new product? Does the consumer perceive a physical risk in adopting the new product? Does the consumer fear the new technology will not perform properly? Does the product offer a social risk to consumers?

A bottom-line score of 100 (10 points for each question) suggests a new product winner. For most companies, a score of 70 or better signals a “go” decision on the new product concept. A risk-oriented company would probably consider anything that scores 50 or higher. A score of 30 or less signifies a concept that faces many consumer obstacles.

During concept testing, consumers representative of the target market evaluate written, verbal, and pictorial descriptions of potential products. The objectives of concept testing are to understand the target market’s reaction to the proposed product, determine how interested the target market is in the product, and explore the strengths and weaknesses of the proposed product. In some cases, consumers are asked to evaluate slightly different versions of the product so that sports organizations can design the product to meet the needs of consumers.

The most important reason for conducting a concept test is to estimate the sales potential of the new product. Often, this is done by measuring “intent to buy” responses from tested consumers. Using the results of concept testing, along with secondary data such as demographic trends, sports marketers can decide whether to proceed to the next step of the new product development process, drop the idea, or revise the product concept and reevaluate. Table 8.2 shows a hypothetical concept test for the Beach Soccer World Wide Tour, a new sports product that has been growing around the globe.

Developing the sports product

Based on the results of the concept test, design of the product begins in order to conduct further testing. Ideally, if the sports organization is employing a marketing orientation, then the product design and development stem from the consumer’s perspective. For instance, Nike began its product design efforts for a new baseball glove by asking 200 college and minor league baseball players what they disliked about their current gloves. Eighteen months and $500,000 later, researchers designed a prototype glove that is lightweight, held together with plastic clips and wire straps, and resembles a white foam rubber clamshell. Nike was hoping this space-age design would not be perceived by baseball purists to be too far afield from traditional models.¹² However, consumers didn’t respond favorably and Nike was forced to discontinue the glove line.

Photo 8.1 Concept testing is used to understand consumer reactions to sports such as white water rafting.

Source: Shutterstock.com

Table 8.2 Concept test for the Beach Soccer World Wide Tour

The sport of beach soccer is played on a 30-by-40-yard soft sand surface with five players on each team, including the goalie. There are three periods of 12 minutes each with unlimited player substitutions (as in hockey). In the event of a tie, the game goes into a 3-minute overtime period, followed by sudden-death penalty kicks. Beach Soccer World Wide would feature nation against nation (e.g., United States vs. Italy). What is your general reaction to beach soccer? How likely would you be to attend an event if the tour stopped in your city?   Would definitely attend   Probably would attend   Might or might not attend   Probably would not attend   Would definitely not attend What do you like most about this concept of BSWW? What could be done to improve the concept of BSWW?

In the case of a sporting good, a prototype usually is developed so consumers can get an even better idea of how the product will function and look. Today’s superior engineering technology allows manufacturers to develop more realistic prototypes in a shorter period of time. It is common for prototypes to then be sent to select individuals for further testing and refinement. For instance, new golf, tennis, and ski products are routinely sent to club professionals for testing.

Another consideration in developing the sports product is making preliminary decisions with respect to the planning phase of the strategic sports marketing process. Potential market selection decisions (segmentation, target markets, and positioning) are considered. Furthermore, packaging, pricing, and distribution decisions are also deliberated. These basic marketing decisions are necessary to begin the next phase of new product development – test marketing.

Test marketing

In the concept stage of new product development, consumers indicate they would be likely to purchase the new product or service. Now that the product has been designed and developed, it can be offered to consumers on a limited basis to determine actual sales. Test marketing is the final gauge of the new product’s success or failure.

Test marketing allows the sports organization to determine consumer response to the product and also provides information that may direct the entire marketing strategy. For instance, test markets can provide valuable information on the most effective packaging, pricing, and other forms of promotion.

The three types of test markets that may be conducted include standardized test markets, controlled test markets, and simulated test markets.¹³

In standardized test markets, the product is sold through normal channels of distribution. A controlled test market, also known as a forced-distribution test market, uses an outside agency to secure distribution. As such, the manufacturer of a new product does not have to worry about the acceptance and level of market support from retailers or those carrying the product because the outside agency pays the retailer for the test. A simulated test market uses a tightly controlled simulated retailing environment or purchasing laboratory to determine consumer preferences for new sports products. This type of test market may be especially important in the future as more and more sporting goods and services are being marketed through the Internet.

Whatever type of test market is chosen, it is important to keep several things in mind. First, test marketing delays the introduction of a new sports product and may allow time for the competition to produce a “me-too” or imitation product, thereby negating the test marketer’s investment in research and development. Second, costs of test marketing must be considered. It is common for the cost of test marketing to range from $30,000 to $300,000. Third, the results of test marketing may be misleading. Consumers may be anxious to try new sports products and competition may try to influence the sales figures of the tested product by offering heavy discounting and promotion of their own product. Finally, test marketing presents a special challenge for sports marketers because of the intangible nature of many sports services.

Commercialization

The final stage of new product development is commercialization, or introduction. The decision has been made at this point to launch full-scale production (for goods) and distribution. If care has been taken at the previous stages of new product development, the new product will successfully meet its objectives. However, even if a systematic approach to new product development is followed, more often than not sports products fail. Just what is it that makes a small portion of new sports products successful while the large majority fails? Let us look at some of the factors that increase the chances of new product success.

New product success factors

The success of any new sports product, such as the NASCAR SpeedParks, depends on a variety of new product success factors. First and foremost, successful products must be high quality, create and maintain a positive and distinct brand image, and be designed to consumer specifications. In addition to the characteristics of the product itself, the other marketing mix elements (pricing, distribution, and promotion) play a major role in the success of a new product. Finally, the marketing environment also contributes to the success of a new product. A brief description of these critical success factors is presented in Table 8.3. Let us evaluate how well the new NASCAR SpeedParks perform on each of the critical success factors.

Table 8.3 Critical success factors for new products

Product considerations •  Trialability – Can consumers try the product before they make a purchase to reduce the risk? •  Observability – Can consumers see the benefits of the product or watch others use the product prior to the purchase? •  Perceived complexity – Does the new product appear to be difficult to understand or use? •  Relative advantage – Does the new product seem better than existing alternatives? •  Compatibility – Is the new product consistent with consumers’ values and beliefs? Other marketing mix considerations •  Pricing – Do consumers perceive the price to be consistent with the quality of the new product? •  Promotion – Are consumers in the target market aware of the product and do they understand the benefits of the product? •  Distribution – Is the product being sold in the “right” places and in enough places? Marketing environment considerations •  Competition – Are there a large number of competitors in the market? •  Consumer Tastes – Does the new product reflect a trend in society? •  Demographics – Is the new product being marketed to a segment of the population that is growing?

Source: Courtland L. Bovee and John Thill, Marketing (New York: McGraw-Hill, 1992), 307–309.

Based on the critical success factors in Table 8.3, would you predict that the NASCAR SpeedParks will be profitable? The NASCAR SpeedParks would seem to perform well on each of the product characteristics. Families can observe others enjoying the SpeedParks and try the sports product once with limited perceived risk. The NASCAR Go-Karts are safe and built for kids, so product complexity is low. With the NASCAR branding, the sophisticated engineering, and the authenticity, the perceived advantage of these replica cars should be far greater than for “just another Go-Kart.” Finally, the SpeedParks are consistent with core values, such as safe and fun entertainment for the entire family.

In addition to the product considerations, other marketing mix considerations have also been well thought out for the NASCAR SpeedParks. Initially, the SpeedParks will be placed in parts of the country known for entertainment (e.g., Myrtle Beach) and the love of NASCAR racing (e.g., Tennessee). Given the signing of Kasey Kahne, Kevin Harvick, Bobby Labonte, and Elliot Sadler, promotion of the SpeedParks should be solid.

The marketing environment also appears to be ready for the growth of the NASCAR SpeedParks. NASCAR is one of the fastest-growing spectator sports in the country and has a huge and loyal fan base. Moreover, there are other Go-Kart tracks, but none with the backing of NASCAR, so competition is limited. In summary, the NASCAR SpeedParks seem to perform well on all the critical success factors, but only time will tell whether this new sports product will run the victory lap.

Product life cycle

From the time a sports product begins the new product development process to the time it is taken off the market, it passes through a series of stages known as the product life cycle (PLC). The product life cycle was first introduced by Theodore Levitt in 1965 in a Harvard Business Review article, titled “Exploit the Product Life Cycle.”¹⁴ The four distinct stages of the PLC are called introduction, growth, maturity, and decline. As shown in Figure 8.1, the traditional PLC was originally developed by marketers to illustrate how the sales and profits of goods vary over time. However, other sports products, such as athletes, teams, leagues, and events, pass through four distinct phases over time. The sport product life cycle often differs from the traditional because it affords sport organizations the opportunity for off-season enhancement. Companies like Dell Computer do not have an off-season to further enhance or develop their product. This unique time lapse provides sport marketers the opportunity to modify strategies to enhance the life cycle of the product. Regardless of the nature of the sports product, the PLC is a useful tool for developing marketing strategy and then revising this strategy as a product moves through its own unique life cycle. Authors Rick Burton and Dennis Howard used the product life cycle as a tool to assess the current state of big league sports. Their conclusion was that all four big league sports (baseball, hockey, basketball, and football) have reached either late maturity or decline. The authors speculate that part of the reason for this decline is that professional sports leagues have experienced “player strikes (MLB, August 1994; NHL, October 1994, September 2004 and 2012), player lockout (NBA, July 1994, 1998, 2011; NFL, March 2011), player free agency and salary demands (all leagues, all the time), various player arrests, rising ticket prices (an annual custom), stadium referendums, franchise movement, and constant legal wrangling.” The authors also point out that each league should examine its current position in the marketplace and be prepared to adjust its marketing strategy based on the phase of the product life cycle. As expressed in the article, “despite all the hype and rhetoric, a case can be made that professional sports leagues are marketable brands that require sophisticated marketing plans and an understanding of how the product is perceived, received, and purchased. If a brand is in late maturity or the earliest phases of decline, then new uses, new product features, or new markets must be developed.”¹⁵

Figure 8.1 Product life cycle

The water bike is an excellent example of a sports product whose life cycle mirrors the shape of the conventional PLC. The water bike, or personal watercraft, had its first commercially successful introduction in the early 1970s. It had tremendous growth in the early 1990s. Sales of water bikes reached their peak in 1995 with 200,000 units sold. However, since then unit sales have been steadily decreasing. It was not until 2012 that personal watercraft sales had a significant year-over-year increase, with growth of 10 percent. This was after plateauing at a 10 percent year-over-year decline in the 2011 season.¹⁶ Industry insiders want to believe the water bike is in the maturity phase of the PLC and sales have merely reached their plateau. Others, however, contend the industry has developed an image problem because of the safety and pollution issues associated with the activity. In this case, water bike brands such as Jet Ski and Sea-Doo may need to find ways to extend the life of their products. Makers of personal watercraft have long been committed to changing the product to be more environmentally friendly, quieter, and safer.

Before we explore the four phases of the PLC, keep several important factors in mind. First, the PLC originally was developed to describe product categories, such as water bikes or baseball gloves, rather than specific brands, such as Sea-Doo or Mizuno. Second, the product life cycle was designed to monitor the industry sales and profitability of goods rather than services. Third, the traditional shape and length of the product life cycle is generalized. In other words, it is assumed to look the same for all products. In reality, the length of the PLC varies for each sports product. Some products die quickly, some seem to last forever, and others die and are then reborn. Collectively, these items as well as the opportunity for off-season enhancement require sport marketers to carefully consider the unique PLC of each of their products on the market. Let us now explore how the PLC can be used for decision making in the strategic sports marketing process.

Photo 8.2 Extending the product life cycle of the waterbike

Source: Shutterstock.com

Introduction

When a new sports productt first enters the marketplace, the introduction phase of the PLC is initiated. New leagues such as the Women’s Football Alliance and the National Women’s Hockey League are excellent examples of sports products being introduced. Another sport product in the introductory phase is Zoombang protective gear.¹⁷ It fits like a compression shirt and incorporates shock-absorbing padding that minimizes the harshest hits, yet does not in the least diminish flexibility and reach. The padding uses the most advanced material available which dissipates more energy than foams and gels by up to 80 percent while being 40 percent lighter. Zoombang is also available in a variety of sports, including skateboarding and snowboarding and makes products for industrial and military applications too. Already worn by NFL and NHL players, Zoombang is available in the form of padded shirts and girdles, knee and elbow pads, and hand and foot protection.

The broad marketing goal of the first phase of the PLC for any sport product is to generate awareness and stimulate trial among those consumers who are willing to try new products. Typically, profits are low because of the high start-up costs associated with getting the product ready to market.

During the introduction phase, pricing of the sports product is determined largely by the type of image that has been determined in the positioning strategy. Generally, one of two broad pricing alternatives is usually chosen during the introduction of the product. If the product strategy is to gain widespread consumer trial and market share, a lower price is set. This low pricing strategy is termed penetration pricing. However, a higher priced skimming strategy is sometimes preferred. The advantages of skimming include recouping the early marketing investment and production costs, as well as reinforcing the superior quality usually associated with higher prices.

Distribution of the new product is also highly dependent on the nature of the product. Usually, however, distribution is limited to fewer outlets. That is, there are a small number of places to purchase the product. Incentives are necessary to push the product from the manufacturer to the consumer. Promotion activity is high during the product’s introduction to encourage consumers to try the new product. In addition, promotion is designed to provide the consumers with information about the new product and to provide a purchase incentive.

Growth

Sales are usually slow as the new product is introduced. With the onset of the growth stage, sales of the product increase. In fact, a rapid increase in sales is the primary characteristic of the growth stage of the PLC. Because industry sales are growing, the broad marketing goal is to build consumer preference for your product and continue to extend the product line. Although competition is usually nonexistent or very weak at introduction, more competitors emerge during the growth phase. Promotion must stress the benefits of your brand over competitive brands.

For example, the sport of lacrosse is currently in the growth stage in the U.S. market. Ten years ago lacrosse was played only in select East Coast cities and considered a sport for prep schools only. For the last decade, according to the SFIA and the U.S. Lacrosse Participation Survey, lacrosse has been one of the fastest-growing team sports in the country. U.S. Lacrosse chapters have been established in 42 states and nearly 819,000 people played on organized teams in 2013 compared to just over 250,000 in 2001. Overall lacrosse achieved a total 7.1 percent year-over-year (YOY) increase and a 12.4 percent YOY increase in casual participation. Youth lacrosse is the fastest-growing segment of the sport with nearly 30,000 additional players picking up the sport last year. Over 54 percent of all lacrosse participants are under 18 years of age.¹⁸

Another sport product in the growth phase is the Fatheads wall graphics. Fatheads are “sport posters,” approximately 6 feet tall by 3 feet wide, printed on thick, high-grade vinyl with a low-tack adhesive that sticks to almost any wall. Additionally, unlike posters of old, Fatheads can be moved from place to place with no loss of adhesion or damage to the wall. These big, bold, colorful graphics illustrate a 3-D look and appear as if the image is jumping off the wall. A variety of sport and entertainment options, e.g., NFL, NBA, NASCAR, and Disney, are available for purchase. For example, a LeBron James REAL BIG FATHEAD has dimensions of 3’11”W × 6’5”H.

Another example of a sport product in the growth phase, where more and more competitors are starting to enter the market, is distance measurement devices in golf. The external, environmental factors are ripe for this product’s continued growth as the technology develops and golf’s governing bodies recognize distance measurement devices as part of the game. “With the recent USGA and R&A rulings that have made GPS distance measurement devices allowable for the game of golf, handheld GPS currently represents one of the fastest growing product sales segments in the golf business,” said Scott Lambrecht, CEO of GolfLogix, Inc.¹⁹

During the growth stage, product differentiation occurs by making minor changes or modifications in the product or service. A premium is placed on gaining more widespread distribution of the product. Manufacturers must secure outlets and distributors at this early phase of the PLC so the product is readily available. Finally, the prices during the growth phase are sometimes reduced in response to a growing number of competitors or held artificially high to enhance perceived quality. Let us look at some of the strategic decisions discussed thus far in the context of the growth of the fantasy sports industry.

Maturity

Eventually, industry sales begin to stabilize as fewer numbers of new consumers enter the saturated market. As such, the level of competition increases as a greater number of organizations compete for a limited or stable number of consumers. The primary marketing objective at maturity is to maintain whatever advantages were captured in growth and offer a greater number of promotions to encourage repeat purchases. Brand strategy shifts from “try me” to “buy one more than you used to.” Unfortunately, profitability is also lessened because of the need to reduce prices and offer incentives.

If attempts to maintain sales and market share are unsuccessful in the maturity stage, an organization may try several alternative strategies to extend the PLC before the product begins to decline and eventually die.

One household sport product in the maturity to decline phase of the product life cycle is AstroTurf. In order to extend this dying brand GeneralSports Venue, which recently acquired the rights to the AstroTurf brand, will announce its “re-launch” with a new celebrity spokesman, former pro football quarterback Archie Manning. AstroTurf was the first synthetic turf used on a sports field when it was installed in the Houston Astrodome in 1966. But the product fell on hard times as rivals made technological advances. GeneralSports plans to spend “several million dollars” over the next few years to promote what it boasts is new-and-improved AstroTurf.²⁰

Another excellent illustration of a sport that realized it was rapidly moving toward extinction, decided to take corrective action, and developed and implemented new marketing strategies, is badminton. Table 8.4 provides additional suggestions for sports marketers who want to extend the PLC.

Table 8.4 Extending the product life cycle

•  Develop new uses for products.

•  Develop new product features and refinements (line extensions).

•  Increase the existing market.

•  Develop new markets.

•  Change marketing mix (e.g., new or more promotion, new or more distribution, and increase or decrease price).

•  Link product to a trend.

Source: Joel Evans and Barry Berman, Marketing, 6th ed. (New York: Macmillan, 1992), 439.

Decline

The marketing goals for the decline stage of the PLC are difficult to pinpoint because decisions must be made regarding what to do with a failing product. These decisions are based largely on the competition and how the sports organization chooses to react to the competition.

The distinctive characteristic of the decline phase of the PLC is that sales are steadily diminishing. Several alternative strategies might be considered during the decline phase. One alternative is referred to as deletion. As the name implies, the product is dropped from the organization’s product mix. A second alternative, harvesting (or milking), is when the organization retains the sports product but offers little or no marketing support. A final alternative is simply maintaining the product at its current level of marketing support in the hope that competitors will withdraw from a market that is already in decline.

Other life cycle considerations

The PLC, although an excellent tool for strategic decision making, is not without limitations. These limitations include generalizing the length of the PLC, applying the PLC to broad product categories only, and using the PLC to analyze “pure” sporting goods only. Each of these potential weaknesses of the PLC model is discussed below.

Length and shape of the PLC

Figure 8.1 depicted the traditional length and shape of the PLC. However, each product life cycle has its own unique shape and unique length, depending on the product under consideration and the nature of the marketing environment. Several variants of the typical PLC length, including the fad PLC, the classic PLC, and the seasonal PLC are shown in Figure 8.2.

Fad

The fad PLC (Figure 8.2a) is characterized by accelerated sales and accelerated acceptance of the product followed by decline stages. Often, sports marketers realize their products will be novelty items that get into the market, make a profit, and then quickly exit. These one-time, short-term offerings would follow the volatile fad cycle. The ABA red, white, and blue basketball followed the fad cycle, as do many products in the golf equipment industry. Other examples of a fad cycle include the bobblehead doll as a sports promotion and retro look jerseys and sports apparel. Fitness and fads seem to go hand in hand. While some exercise routines and machines have endured the test of time to become classics, others come and go in a flash.

Figure 8.2 Selected product life cycle patterns

High-impact aerobics might have been the first of the more modern fitness fads in the 1970s, followed by the cardio-fitness movement of the 1980s. Then came the incorporation of strength training into workouts, and more recent fads include the indoor cycling program called “spinning” and cardio-kickboxing. The latest and greatest exercise fad links the mind and body in routines such as P90X, yoga, and tai chi. Who knows what the next fad might bring?

Classic

Another variation of the PLC is characterized by a continuous stage of maturity (Figure 8.2b). Season tickets for the Green Bay Packers, Frisbees, baseball gloves and bats, tennis balls, and hockey sticks all represent other examples of the PLC known as the classic.

Seasonal

The seasonal life cycle is found in most sports where the sales of sports products rise and fall with the opening and closing day of the season. To combat the seasonal life cycle, some sports have adopted year-round scheduling. Most auto racing series are run on an 8- to 10-month schedule, giving sponsors almost year-round coverage. Professional tennis has also adopted a continual schedule, but this may not be the best thing for the sport.

When asked what he would do to cure the ills of tennis, former star and current TV analyst John McEnroe did not hesitate before responding, “I would cut the amount of events. Now, there are too many tournaments, so people don’t have any idea about what’s really important. I would make a schedule that would be like the baseball or basketball season, so we wouldn’t go 12 months a year.”²¹ Somewhat surprisingly, the NBA used the “less-is-more” strategy more than 20 years ago, when the league was plummeting in popularity. David Stern, then a rookie commissioner, significantly cut the number of televised games to increase long-term interest in the sport.

The fad, classic, and seasonal life cycles are three common variants of the traditional PLC. Other products, however, seem to defy all life cycle shapes and lengths. Consider skateboarding. Since its inception in the 1950s skateboarding has been a fad in nearly every decade. Now, skateboarding seems to be here to stay, according to the National Sporting Goods Association (NSGA). Skateboarding posted an unbelievable growth rate in participation for youth ages seven to 17 from 1995 to 2010. Over that 15-year period, skateboarding has experienced 160 percent growth in total participation and a 213 percent increase in frequent participation and was second only to snowboarding, in terms of percentage growth, which experienced 160 percent growth in total participation and a 257 percent increase in frequent participation.²²

The level of product

Another consideration for developing marketing strategy based on the PLC is the level of the product. Historically, the PLC was based on total industry sales for an entire product category, such as basketball shoes, bowling balls, mountain bikes, or golf clubs. Although examining the PLC by category is useful, it is also necessary to understand the PLC by product form and product brand.

Product form refers to product variations within the category. For example, titanium woods, metal woods, and “wood” woods represent three variations in product form in the golf club product category. The potential marketing strategies for each of these product forms differ by the stage of the PLC. The titanium woods are in the growth stage, metal woods are in maturity, and traditional woods are near extinction.

In addition to looking at the product category and form, it is also beneficial to examine various brands. Within the titanium wood form, there are a variety of individual brands, such as Titleist 910 D2 and D3, Ping G10, and Nike’s SQ MachSpeed Drive. Each of these brands may be in different stages of the PLC. Therefore, sports marketing managers must give full consideration to variations in the PLC, based on the level of the product (category, form, and brand).

Type of product

The PLC originally was designed to guide strategies for goods. However, the notion of the PLC should be extended to other types of sports products. For instance, individual athletes can be thought of as sports products that move through a life cycle just as products do.

The phenomenal rise, success, and fluctuations of stars like Peyton Manning in the NFL, Tiger Woods of the PGA, and Bode Miller from the U.S. Ski Team demonstrate how numerous athletes may waver through the various phases of the product life cycle. Prior to and after sustaining injuries, the number of products that Manning endorsed has rapidly increased because everyone was aware of his star qualities. However, when these athletes become injured, retire, or encounter turmoil, there may be a significant change in their status within the product life cycle. The former Cleveland Cavaliers’ star, LeBron James, has gone through an entire life cycle in the Cleveland market; however, overall LeBron continues to have growth and market presence, retaining the best-selling jersey during the 2010–11 and 2013–14 seasons. At the same time, New York Knicks star, Carmelo Anthony, who had the best-selling jersey during the 2012–13 season, is in the growth phase of his PLC, while the former NBA MVP Shaquille O’Neal entered the decline phase of his playing career after being traded to the Cleveland Cavaliers in the 2009–10 season and then with the Boston Celtics in the 2010–11 season before retiring. Although Shaq was entering the decline phase of his playing career, numerous outside endeavors such as endorsements, albums, movie and TV appearances have kept his career outside of basketball in the growth and maturity stages.

Interestingly, some individual athletes have a unique shape to their PLC. Think about the many professional athletes who have come out of retirement to reintroduce themselves. Mark Spitz attempted to come back to Olympic swimming 20 years after winning seven gold medals in Munich and was no longer able to compete. Jim Palmer, Bjorn Borg, Sugar Ray Leonard, Magic Johnson, and Muhammad Ali all tried to come back after years away from their respective sports and failed miserably. Arnold Palmer, with his incredible staying power, will undoubtedly stay in the maturity phase of his PLC and remain a classic even after playing his last competitive golf tournament. Many aging golfers, such as Tom Jenkins, who won $10.5 million since 1998 on the senior circuit, but won only once on the regular PGA Tour, are experiencing tremendous success on the senior circuit. Unfortunately, many athletes experience a life cycle that is best represented by the fad PLC. For instance, Brian Bosworth (Seattle Seahawks linebacker), Mark “The Bird” Fydrich (Detroit Tigers pitcher), and Buster Douglas (boxing) were all athletes who had short-term success, only to quickly fall into decline for a number of reasons.

Sports teams also can pass through the various phases of the PLC. For instance, the National Basketball Development League awarded a franchise to Canton, Ohio in 2011 and it is in the introductory stage of its PLC. In 2012, many considered the Phoenix Coyotes to be in the decline phase as their stay in Phoenix still remains in limbo. Likewise, the Sacramento Kings under previous majority owner the Maloof family were contemplating leaving Sacramento for a new, more appealing market after an impasse in their new arena negotiations. However, the 2013 transaction created an exchange of ownership, offering the organization “an opportunity of adjustment” in the PLC, moving from decline to growth. Under new owner Vivek Ranadivé, the Kings would hope to develop new strategies to enhance the Kings’ brand and its offerings to enhance the growth of the organization. Keep in mind that the revitalization of these product examples would each require completely different marketing strategies.

Professional and collegiate sports leagues also pass through the stages of the PLC. Many of the established leagues in the United States are going global and are currently in the introduction phase of their life cycles internationally. Therefore, the leagues have directed their marketing efforts toward making fans aware of them and generating interest. For example, the international markets are attracting a lot of attention by major sports leagues/structures in the United States as the accompanying spotlight illustrates.

Each level of sports product must receive careful consideration by sports marketers because of the strategic implications. Sometimes the interaction of athlete, team, and league PLCs can make strategic decisions even more challenging. Take the case of Derrick Rose, point guard for the Chicago Bulls in the NBA. The Bulls and the NBA could be seen in the maturity phase of the PLC, while Rose is in introduction. What about the case of Barry Zito? Zito is a veteran in Major League Baseball, but needed to be marketed as a new product for the Giants. As complex as this seems, sports marketers must remember not to neglect any of these products. Decisions will be made about the perceived relevance of each of these types of products.

Diffusion of innovations

New sports and sports products, or innovations, are continually being introduced to consumers and pass through the various stages of the product life cycle as described in the previous section. Initially, the new sport and sports product are purchased or tried by a small number of individuals (roughly 2.5 percent of the marketplace). Then, more and more people begin to try the new product. Consider the “metal wood” in golf. When this innovation was first introduced in the late 1970s, only the boldest “pioneers” of golf were willing to adopt the new technology. Now, only a very small percentage of the golfing population does not carry metal woods in their bags.²³

The rate at which new sports products spread throughout the marketplace is referred to as the diffusion of innovation.²⁴ The rate of acceptance of a sport innovation is influenced by three factors, which are shown in Figure 8.3. The first factor affecting the rate of diffusion is the characteristics of the new product. These characteristics, such as trialability, observability, perceived complexity, relative advantage, and compatibility, were discussed earlier in the chapter in the context of new product factors. The interaction of these factors can accelerate or slow the rate of diffusion. Perceived newness, the second factor that influences the rate of diffusion, refers to the type of new product from the consumer’s perspective (continuous, dynamically continuous, and discontinuous innovations). Typically, continuous innovations have a faster rate of acceptance because they require no behavioral change and little disruption for the adopter. The third factor is the nature of the communication network. The rate and way in which information is shared about a new sports product is critical to its success, as well as the speed of acceptance. Most marketers conceptualize the communications network for innovations as a two-step flow of information. In the first step, the initial consumers try a new product or opinion leaders are influenced by mass communication such as advertising, sales promotions, and the Internet. Then, in the second step, opinion leaders use word-of-mouth communication to provide information about the new product to the rest of the target market. Martin and Higgins believe this two-step flow of information is especially important to sports innovations because, “unlike typical consumer purchase decisions, which involve only the individual, recent studies show that of the consumers who attend sporting events, less than 2 percent attend by themselves.”²⁵

Figure 8.3 Model of the rate of diffusion

The diffusion of innovations is an important concept for sports marketers to understand because of its strategic implications. Stated simply, the marketer must know the stage of the life cycle and the characteristics of the consumers likely to try the product at any given stage. Let us examine the characteristics of each group as a product spreads throughout the marketplace.

Types of adopters

There are several types of adopters. Innovators represent those consumers who are the first to adopt a new sports product as it enters the marketplace. Because they are the first to adopt, these consumers carry the highest risk associated with the new product. These risks may be social (what will others think of the product?), economic (costs are high and drive up the price), and performance (will the product perform as it was intended?). This younger and usually high-income group of consumers is also known for the high degree of interaction and communication they have with other innovators.

The next group of consumers to adopt a new sports product is the early adopters. As with the innovators, this group is also characterized by high social status. It is perhaps the most important group to sports marketers, however, because they carry high degrees of opinion leadership and word-of-mouth influence. As just discussed, these individuals are the key players in communicating the value of new sports products to the majority of consumers.

Once the new sports product has spread past the early stages of the product life cycle, the early majority is ready for adoption. This group is above average in social status but more deliberate in their willingness to try new products. In addition, this group is heavily influenced by information provided by the innovators and early adopters.

The late majority adopt innovations in the late stages of maturity of the product life cycle. As their name implies, over half (roughly 60 percent) of the market has now purchased or has tried the new product before the late majority decide to do so. These individuals are skeptical and have less exposure to mass media.

The final group of adopters is known as laggards. These individuals are oriented toward the past and tend to be very traditional in the sports products they choose. They begin to adopt products in the declining stage of the product life cycle. Clearly, prices must be reduced, and promotions encouraging trial and widespread distribution must all be in place for laggards to adopt new products.

Summary

Few sports products are critical to the success of any organization. Newness, however, can be thought of in any number of ways. The organizational perspective on newness depends on whether the firm has marketed the product in the past. From the organizational perspective, new products are categorized as follows: new-to-the-world products, new product category entries, product line extensions, product improvements, and repositioning.

Conversely, newness from the consumer’s perspective is based on the consumer’s perception of whether the product represents an innovation. From the consumer’s perspective, new products are classified as discontinuous innovations, dynamically continuous innovations, or continuous innovations. Discontinuous innovations represent the most innovative new products, whereas continuous innovations are simply improvements or limitation products. Regardless of how new products are classified, organizations are constantly searching for the next innovation that will help the firm achieve its financial objectives. Rather than leave this to chance, many organizations use a systematic approach called the new product development process. The new product development process consists of the following phases: idea generation, idea screening, analysis of the concept, developing the sports product, test marketing, and commercialization. Idea generation considers any and all ideas for new products from sources such as employees, competitors, and consumers. During the idea screening phase, these new product ideas are screened and the poorer ones are eliminated. To perform this task, organizations sometime use a new product screening checklist. In the third phase, analysis of the sports product concept, marketing research is used to assess consumer reaction to the proposed product. More specifically, concept tests are used to gauge the product’s strengths and weaknesses, as well as the consumer’s intent to use the new product. Next, a prototype of the new product is designed so that consumers can get an even better idea about the product. In addition, preliminary decisions regarding marketing strategy are established. In the sixth stage, the new product is test marketed. Depending on the product and the market conditions, sports marketers may use standardized, controlled, or simulated test markets. The final stage of the new product development process is commercialization in which the new product is formally introduced in the marketplace. Whether the product succeeds is a function of a number of factors, such as the product considerations (e.g., trialability and relative advantage), other marketing mix variables (e.g., pricing), and marketing environment considerations (e.g., competition).

As a new product reaches commercialization, it moves through a series of four stages known as the product life cycle (PLC). The PLC is an important marketing concept in that the stage of the life cycle dictates marketing strategy. The four stages of the PLC include introduction, growth, maturity, and decline. At introduction, the marketing goal is to generate awareness of the new sports product. The broad goal of the growth phase is to build consumer preference for the sports product and begin to expand the product line. During maturity, the number of promotions is increased and marketers seek to maintain any competitive advantage they have obtained during growth. Finally, the product goes through decline, where decisions must be made regarding whether to delete the product or extend the life cycle.

Although each product has a life cycle, the length of that life and the speed at which a product progresses through the four stages is unique for each product. Some sports products grow and decline at a rapid pace. These are known as fads. Other products, which seem to last in maturity forever, are called classics. The most common life cycle for sports products is known as seasonal. Other life cycle considerations are the level of product and the type of product. For example, sports marketers might analyze the life cycle of leagues, teams, and individual athletes, as well as other types of sports products.

The rate of diffusion is the speed at which new products spread throughout the marketplace. The rate of diffusion, or speed of acceptance, is based on three broad factors: new product characteristics (e.g., trialability and observability), perceived newness (e.g., discontinuous innovation), and the nature of the communications network. It is critical that sports marketers monitor the rate of diffusion and understand the characteristics of consumers that try new products as they spread throughout the marketplace.

Innovators are the first group of consumers to try a new product. They are generally younger, have higher incomes, and have a strong tolerance for risk. The next group of consumers to try a sports product is the early adopters. This is a larger group than the innovators and, as such, they are key consumers to target. After the product has passed through the initial stages of the product life cycle, the early majority adopt the product. This group is above average in income, but more deliberate in trying new things. The late majority adopts the product during the late stages of maturity and finally the laggards may try new products. Strategically, sports marketers must adopt a different marketing mix when marketing to each new product adopter group.

Key terms

  classic

  commercialization

  continuous innovations

  decline

  developing the sports product

  diffusion of innovation

  discontinuous innovation

  dynamically continuous innovations

  early adopters

  early majority

  fad

  growth

  harvesting (or milking)

  idea generation

  idea screening

  innovations

  innovators

  introduction

  laggards

  late majority

  maturity

  new product category entries

  new product development process

  new product success factors

  new sports products

  new-to-the-world products

  product form

  product life cycle

  seasonal

  test marketing

  types of adopters

Review questions

1.  What is meant by a “new sports product”? Describe a “new sports product” from the organization’s perspective and from the consumer’s perspective.

2.  What is the difference between discontinuous, dynamically continuous, and continuous innovations? Provide examples of each to support your answer.

3.  Describe, in detail, the new product development process.

4.  Why is test marketing so important to sports marketers in the new product development process? What are the three types of test markets? Comment on the advantages and disadvantages of each type of test market.

5.  What are the critical success factors for new sports products?

6.  Describe the product life cycle concept. Why is the product life cycle so critical to sports marketers? What is it used for? How can the product life cycle be extended?

7.  What are some of the variations in the shape of the traditional product life cycle?

8.  Define the diffusion of innovations. What are the different types of adopters for innovations? Describe the characteristics of each type of adopter.

Exercises

1.  For each of the following sports products, indicate whether you believe they are discontinuous, dynamically continuous, or continuous innovations: WNBA, titanium golf clubs, and skysurfing.

2.  Contact the marketing department of three sporting goods manufacturers or sports organizations and conduct a brief interview regarding the new product development process. Does each organization follow the same procedures? Does each organization follow the new product development process discussed in the chapter?

3.  In what stage of the product life cycle is Major League Baseball? Support your answer with research.

4.  Find an example of a “new sports product.” Develop a survey using the critical success factors for new sports products and ask 10 consumers to complete the instrument. Summarize your findings and indicate whether you think the new product will be successful, based on your research.

5.  Some people think boxing may be in the decline phase of the product life cycle. Develop a strategy to extend the product life cycle of boxing.

Internet exercises

1.  Search the Internet and find examples of three “new sports products” recently introduced in the marketplace.

2.  Find three Internet sites of professional athletes in any sport. In what stage of the product life cycle are these athletes? Support with evidence found on the Internet.

3.  Search the Internet for an example of a new sports product that could be classified as a fad. Describe the product and why you think the product is a fad.

Endnotes

1  William Zikmund and Michael d’Amico, Marketing, 4th ed. (St. Paul: West, 1993).

2  “Raley Field Pioneers the First Wireless Ballpark; Stadium Launches WiFi – Wireless Technology – Application Throughout Ballpark to Better Serve Fans,” Business Wire (September 3, 2003).

3  Donna Goodison, “New Balance Adds Brine to Beef Up Sports Shoes,” The Boston Herald (August 9, 2006).

4  Kurt Badenhausen, “How Michael Jordon Made $90 Million in 2013,” Forbes (February 27, 2014). Available from: http://www.forbes.com/sites/kurtbadenhausen/2014/02/27/how-michael-jordan-made-90-million-in-2013/, accessed February 25, 2014.

5  “Wilson Seeks ‘the Perfect Feel’ With New BLX Racquet Technology,” Tennis Industry (January 2010). Available from: http://www.tennisindustrymag.com/articles/2010/01/wilson_seeks_the_perfect_feel.html, accessed June 19, 2014.

6  Matt Synder, “Chicago Approves $500 Million in Renovations to Wrigley Field,” CBSSports.com (July 24, 2013). Available from: http://www.cbssports.com/mlb/eye-on-baseball/22873768/chicago-approves-500-million-in-renovations-to-wrigley-field.

7  Mark Glover, “Taking the Cue – New Billiard Parlors Cater to Family Crowds and Aren’t Shy About Giving Hustlers the Heave,” The Sacramento Bee (January 15, 1996).

8  Don Muret and John Lombardo, “AEG Involved in Massive Moscow Sports Complex,” Street & Smith’s Sports Business Journal (March 28–April 3, 2011). Available from: http://www.sportsbusinessdaily.com/Journal/Issues/2011/03/28/Facilities/AEG-Russia.aspx?hl=All%20Sport&sc=0, accessed June 19, 2014.

9  Del Hawkins, Roger Best, and Kenneth Coney, Consumer Behavior: Building Marketing Strategy, 7th ed. (New York: McGraw-Hill, 1998), 248–250.

10  James J. Zhang, Dennis W. Smith, Dale G. Pease, and Matthew T. Mahar, “Spectator Knowledge of Hockey as a Significant Predictor of Game Attendance,” Sport Marketing Quarterly, vol. 5, no. 3 (1996), 41–48.

11  Susan Higgins and James Martin, “Managing Sport Innovations: A Diffusion Theory Perspective,” Sport Marketing Quarterly, vol. 5, no. 1 (1996), 43–50.

12  Bill Richards, “Nike Plans to Swoosh into Sports Equipment But It’s a Tough Game,” The Wall Street Journal (January 6, 1998), Al.

13  Gilbert Churchill, Basic Marketing Research, 3rd ed. (Fort Worth: Dryden Press, 1996).

14  Theodore Levitt, “Exploit the Product Life Cycle,” Harvard Business Review (November 1965).

15  Rick Burton and Dennis Howard, “Professional Sports Leagues: Marketing Mix Mayhem,” Marketing Management, vol. 8, no. 1 (1999), 37.

16  “PWC sales improving in 2012,” PowerSportsBusiness (September 25, 2012). Available from: http://www.powersportsbusiness.com/top-stories/2012/09/25/pwc-sales-improving-in-2012/.

17  http://zoombang.com/, ©2014 Zoombang, Inc., accessed June 19, 2014. ©2014 Zoombang, Inc.

18  SFIA, SFIA 2013 Participation Topline Report (2013).

19  “GolfLogix and Garmin Enter Consumer Handheld GPS Golf Market; ForeFront to Exclusively Distribute GolfLogix GPS Devices,” PR Newswire US (January 25, 2007).

20  David Ranii, “Reclaiming Its Turf; A Raleigh Company That Has the Rights to AstroTurf, the Stuff of Football Legend, Has Big Plans,” The Pantagraph (April 9, 2007).

21  David Hidgon, “Trim the Season to Grow the Game,” Tennis (November 1996), 22.

22  “The Action Sports Market,” Active Marketing Group (2007).

23  James P. Sterba, “Your Golf Shots Fall Short? You Didn’t Spend Enough,” The Wall Street Journal (February 23, 1996), B7.

24  Everett Rogers, Diffusion of Innovations, 3rd ed. (New York: Free Press, 1983).

25  Bernard J. Mullin, Stephen Hardy, and William Sutton, Sports Marketing (Champaign, IL: Human Kinetics Publishers, 1993).