1 Sport Marketing Plan Final Project Executive Summary Our product, the Freezable Bandage, is the next innovation in recovery systems for a sporting injury. In the current economic climate, it is essential to provide a cheaper alternative for injury treatment, and that is exactly what the Freezable Bandage provides. Our target market of year old males who compete in DIII collegiate athletics in the New England area are in dire need of a cheaper treatment option, and that is where the Freezable Bandage steps in. Our cheap price of $5 allows all student- athletes to be able to afford the product. Through the numerous marketing strategies that we will employ, it is our hope that we will be able to gain a loyal consumer base that will stick by our product and continue to buy it, especially when we pursue product development. Introduction/Background The mission of Freezable Bandages is to provide a comprehensive recovery system for individuals who sustain an injury. When sustaining a sprain or strain, the RICE approach is often followed, encouraging rest, ice, compression and elevation. The concept of applying compression and ice simultaneously has been proven to be effective, and therefore we feel that it is our duty to allow individuals to recover as quickly as possible. Furthermore, it is our belief that not only should athletes have access to effective treatment products and services, but also all people in society. Hence, it is our goal as a company to not only provide the necessary product, but also the knowledge to use the product correctly. Our core product is the Freezable Bandage, however we have room for expansion in the future. Geographically we are based in New England, and it is our goal to target males who are and compete in DIII collegiate athletics. We have developed a useful product that is currently being marketed through the use of numerous media (newspaper, magazines, and television) to ensure that all our product information is reaching our target markets to allow them to make the best purchasing decisions. Products/Services The product is known as the Freezable Bandage. This product is based off the Ace Bandage, however it has numerous differences and advantages to it. The main difference is that this product will have the ability to be frozen. This is essential because it will allow for an individual to treat a sprain in a more effective manner as they are applying both compression and ice at the same time, as opposed to one or the other, which is typically the case. The product itself will be made of a material similar to that of Ace Bandage, which will allow it to be stretched and tightened as necessary to apply the appropriate compression needed for treatment. On top of this, as previously mentioned, it will have the ability to be frozen. When the product is used, it will slowly thaw out over 20 minutes, which is the recommended time for icing an injury, and then act as a regular Ace Bandage and continue to provide compression and support for the injury. Once the athlete wishes to refreeze the injury, they simply place it in the freezer for 2 hours and it will be useable again as a Freezable Bandage. With proper use and care of the product, the product will be useable for numerous years.
2 The most evident reason as to why our product differs from those offered by competitors is because there is no current option that is similar. At this point in time, the most similar product is the hot/cold treatment options that are offered by Ace. This product differs from ours in that it does not offer any compression treatment, which is one of the core aspects of sprain treatment. The only advantage that this product has over the Freezable bandage is that it does provide heat treatment, which is useful to treat muscle aches. The projected core product is the freezable bandage. The basis of this product will be an ace bandage, which will be manufactured in such a way that it can be put in the freezer and still retain it s flexibility and ability to wrap a limb. One possible product extension would be a Wrapping Class which would demonstrate to all who participate the correct and effective way of wrapping limbs in order to ensure the quickest possible recovery period. Another possible product extension would a class that focuses on the correct recovery steps to a sustained injury. Situational Analysis Economic Climate At this in point in time, the United States economy is facing a time of turmoil and uncertainty. The United States is currently experiencing one of the worst recessions it has ever faced, and there are numerous theories as to when the recession will end, or if in fact we have already begun the recovery period. Many prominent economists (Gulanti) believe that there are numerous indicators to indicate we have hit a period of recovery, however there is also room to fear for a double- dip recession. Despite this bleak outlook on the possibility of a double- dip recession, the fact that we have hit a recovery period is reason for optimism. In the New England area, despite the bleak outlook of the United States as a whole, there is actually a sliver of hope as the number of people who are unemployed has actually decreased in the area. Today s interest rates range from 3.25% to 5.15% depending on the type of loan/mortgage that is being taken out Currency exchange and fluctuations o US Dollar ($) vs. the Euro ( ) $1 = Exchange fluctuations since 2006
3 o US Dollar ($) vs. British Pound Sterling ( ) $1 = Exchange fluctuations since 2006 Legal Environment The biggest concern for any company that attempts to claim a segment of the health care market is that of liability. With any company that provides a product or a service that promises to heal, they have to be very careful to ensure that the product/service delivers as promised, because otherwise there is always the chance that they will face legal ramifications. Furthermore, in order to supply a product such as the Freezable Bandage, it is essential that it undergoes numerous tests and certification processes to ensure that it is a top of the line product. Demographics According to the most recent Census, the number of people who are uninsured in the Northeast, which is our target market, has increased by 647 thousand from 2007 (DeNavas), which is when the recession started. On top of this number, the number of uninsured people between the ages of 18 and 24, which is my target market, has increased by 932 thousand from 2007 (DeNavas). Furthermore, there are approximately 93,000 male student athletes who participate in DIII collegiate athletics, and the number is steadily growing. (NCAA). Demand Trends Perhaps the most important demand trend that applies to my industry segment is the continuous growth that is experienced and demonstrated by 3M, which is the company who owns Ace Bandages, which is a similar product to the Freezable Bandage. In the most recent fiscal quarter, 3M reported a 17.70% growth in their sales, which demonstrates that there will be adequate demand for a new product. Product Life Cycle When a company is in the introduction stage, it is expected that costs will be high and that there is no guarantee of profit. However, at this stage it is the most important to be willing to spend money to market your product in order to ensure that one is able to secure a segment of the market. During the growth stage, profitability begins to rise and the public image of the product becomes established,
4 therefore diminishing the need of marketing. During the maturity stage, there is an increase in competing products, and market saturation has been reached, therefore making it necessary to market again to ensure the company retains the market segment. During the decline stage it becomes less profitable to produce the product and therefore encourages the company to develop new products to maintain it s portion of the market. For our current product we are still in the introduction stage as our product is yet to be introduced to the market. It is our hope that with our product we are able to have a long product life cycle, however we have already prepared a new product to be released at the time that the Freezable Bandage has hit the decline stage, and that is the Freezable/Heat treatment Bandage that will allow for both hot and cold treatment in bandage form. Technological Trends One technological trend to consider while marketing for the product is the continuing change that occurs with the typical treatment of a strain/sprain and so forth, which would be the typical use of our product. The old adage used to be RICE, which stands for Rest, Ice, Compression and Elevation. However, there have been numerous studies that have developed a newer method known as PRINCE, which stands for Protection, Rest, Ice, Nsaids (nonsteroidal anti- inflammatory drugs), Compression and Elevation. It is essential to keep up with the technological or theological advances for the market in which our product is based. Competitor Analysis Direct Competitor Ace Bandages Product Characteristics Braces and Support (prevention) Hot & Cold Therapy Elastic Bandages Strengths Currently established brand name Effective treatment Numerous products for numerous injuries Weaknesses Very little advertising (in my opinion) A saturated market, due to generic brands Opportunities With current economic climate people will be turning to more cost effective treatments Still have room to increase their product line, and the injuries that they target to treat Threats Has no real competition, and therefore when a competitor comes into existence they won t know how to treat it
5 Current Market Share Majority of market as they are the only true provider of this product (there are many generic brands that are far cheaper) Current Actions in the Market Have recently produced a Hot & Cold treatment program that will allow for muscle relaxation and cold treatment for injuries Probable response to your actions With the creation of our product and marketing actions there is a good chance that they will develop their product in such a way that they will be able to create a similar product, which shouldn t be too difficult for them, considering that they already have the Hot & Cold treatment program Indirect Competitor Ice packs Product Characteristics Generally used for keeping food/drinks cold in coolers, however also serve the purpose of providing cold treatment for injuries Strengths Products have numerous purposes Reusable Weaknesses Are very awkward to keep on an injured limb, as it is not their intended purpose Opportunities Development in the consistency of ice packs will allow them to have numerous uses and make it simpler to use for treating injuries Threats Development of my product would pose a threat to the use of ice packs that are used for athletic purposes, however they will never be completely lost because ice packs have numerous other uses Regular ice is a threat because it is just as easy to make/use as an ice pack and is far more cost effective Current Market Share Have a very small share of the athletic use share due to the presence of Cold therapy and regular ice in general Current Actions in the Market No current actions target the use of ice packs for athletics Probable response to your actions Will have no real response to my actions as the main target market for many producers of ice packs is not athletes who need it to treat an injury
6 SWOT Analysis Strengths: Bold new direction Combines two essential aspects of the RICE or PRINCE treatment ideology Weaknesses: Newly developed product, and therefore will have to deal with loss of profit and the costs associated with a new product Opportunities: One of a kind product, and therefore if marketed correctly will hold the majority of the market and will be able to withstand any competitors Threats: New developments from other companies such as Ace Bandage Current economic condition Analysis of Target Markets Target Markets Our target segment within the market is that of males, aged who are DIII college athletes in the New England area. There are numerous reasons for this. First and foremost, generally speaking DIII collegiate programs do not have the same funding that is available to bigger programs, and therefore if students have access to an effective treatment alternative (Freezable Bandage), it will make it simpler for athletes. Secondly, the New England area is an important consideration because I have the most knowledge of this area and have direct experience with this area, which will allow me to more accurately market the product. Segmenting, Targeting & Positioning According to Mullin et al. (2007) buyers engage in purchase decision- making in one of the following ways: Economic this view of consumer behavior looks at the ideal concept, in which the consumer makes objective purchases based on logic and facts. Those who ascribe to this view believe that if you put a good product in front of consumers for a reasonable price, they will buy it. Psychological this approach examines consumer attitude and its effect as a predictor of behavior. However, it is important to note that there may be a difference between the intent to purchase and what is actually purchased. Sociological this approach identifies social influences such as demographics, parental influence, and peer group pressure. These, of course, differ with each consumer or market segment. Behavioral this concept forwards the notion that everything is a result of interaction with the environment, rather than a stimulus and response. The ultimate intent is a change in behavior.
7 Furthermore, the consumer purchase decision- making process can be broken down as follows: Identification of the need Quest for information Evaluation of product alternatives Purchase of the product Post- purchase satisfaction Using all this information we can fully understand the main influences of purchasing decisions, and we can also understand the steps that a purchaser goes through before making their final decision regarding a good. As an organization, when we approach segmentation, we will base a lot of our segments on the economic and sociological aspects of the purchase decision- making. Market Size 727,441 males between the ages of in the New England Area 92,786 male student athletes participating in DIII collegiate athletics 54,654 uninsured for health care in North East 29,313 uninsured for health care in the age range in the United States Increasing number of people who are uninsured, due to the current economic climate Market Research When collecting primary data, there are numerous different methods that can be used. One method is through the use of direct surveys, which entails presenting questionnaires through the mail or via an online survey site in order to collect opinions on a topic under investigation. A second method that can be used to gather primary data is through personal interviews or focus groups. When conducting a focus group study we asked the following questions: If you were to get a sprained ankle, in your opinion what is the most effective way to treat it? How would you suggest marketing the product? Do you feel that this target market, male college athletes in New England, is an adequate choice? Why or why not? Are there any suggestions that you have that could improve the product? Would you use this product? Do you have any concerns with the product? What are they? What aspects of the product are major draws for you? Why? Do you feel as though regular Ace Bandages have too strong of a hold on the market to allow for Freezable Bandages to enter the market? As an athlete, would you rather use this product as treatment for an injury, or would you prefer to pay for professional treatment? Why?
8 Would you feel that as an organization providing a treatment product that it is a requirement for us to provide workshops or demonstrate proper wrapping treatment? From conducting the focus group study we were able to gain a lot of important information about our product and any changes that should be made regarding our product or marketing plan. This focus group was responsible for our future development of a product that provides both an icing and heating element. When collecting secondary data, it is important to realize that this is characterized by the fact that it is not conducted directly by the organization or its agents and does not entail the analysis of an organization s own customers, but rather samples larger segments of the general market. From a secondary research service (the Census) we were able to determine that there are 727,441 males between the ages of in the New England area, that there are 92,786 DIII collegiate athletes, 54,654 uninsured for health care in the North East and that 29,313 are uninsured for health care in the 18 to 24 age range in the United States. Benefit Segmentation One specific product benefit that I will use to segment my consumers is price and accessibility. This will allow for segmentation because college- aged individuals generally speaking do not have the disposable income to afford cutting edge treatment options. Sport Marketing Objectives Competitive Advantage This product is based off the Ace Bandage, however it has numerous differences and advantages to it. The main difference is that this product will have the ability to be frozen. This is essential because it will allow for an individual to treat a sprain in a more effective manner as they are applying both compression and ice at the same time, as opposed to one or the other, which is typically the case. The most evident reason as to why our product differs from those offered by competitors is because there is no current option that is similar. At this point in time, the most similar product is the hot/cold treatment options that are offered by Ace. This product differs from ours in that it does not offer any compression treatment, which is one of the core aspects of sprain treatment. The only advantage that this product has over the Freezable bandage is that it does provide heat treatment, which is useful to treat muscle aches. Marketing Objectives Obtain endorsement from medical professionals o 5 medical institutions in the New England area o 5 medical institutions in the United States (not New England area) Target new market of female DIII athletes Conduct market segmentation analysis to compete with o Ace Bandage market of sport participants treating injuries o Athletic trainers target to DIII athletes
9 Increase sales of product o 10% increase in overall product sales Increase visibility of product o Increase marketing expenditure by 10% o Measure visibility of product through consumer surveys Time frame: One year Quarter 1: Obtain medical endorsement from 3 New England medical institutions Complete market inquiry to determine whether DIII female athletes is an adequate target market Determine which company we will use to provide secondary market data 2.5% increase in sales of product, and ensure that sales department has a report to demonstrate their findings if not on track to meet objective, reassess and set new standard for the objective Commence active marketing campaign in numerous medias (magazine, newspaper, television, internet) Quarter 2: Obtain medical endorsement from 2 New England medical institutions and 1 medical institution in the USA (not New England) Conduct trial experiments in new target market to assess plausibility of expansion Allow chosen company to perform secondary market research for 2 quarters A further 2.5% increase in sales of product (5% overall), and ensure that sales department has a report to demonstrate their findings if not on track to meet objective, reassess and set new standard for the objective Continue active marketing campaign in numerous medias, and also address newer media forms (social networks, youtube) Quarter 3: Obtain medical endorsement from 2 medical institutions in the USA (not New England) Begin marketing product to new target market to increase anticipation of product and willingness to buy product Allow chosen company to perform secondary market research for 2 quarters (this is the 2 nd quarter) Further 2.5% increase in sales of product (7.5% overall), and ensure that sales department has a report to demonstrate their findings if not on track to meet objective, reassess and set new standard for the objective Distribute consumer surveys to our target market Quarter 4: Obtain medical endorsement from 2 medical institutions in the USA (not New England) Commence selling the product to our newly developed market segment Have chosen company report to our organization to allow us to act about the findings that are obtained from the secondary market data
10 Further 2.5% increase in sales of product (10% overall), and ensure that sales department has a report to demonstrate their findings if not on track to meet the objective, reassess and set new standard for objective Collect and analyze consumer surveys to determine whether we have increased the visibility of our product Sport Marketing Strategies and Tactics 1. Traditional Market Strategies: a. New market penetration i. According to Brooks, market penetration involves attracting more participants to your established programs. Market penetration can take one of two directions; an organization can pursue new markets with existing products or attempt to have existing consumers consume at a higher rate. ii. Market penetration applies to our organization as we are a newly developed organization and we are attempting to gain a hold of the market for our freezable bandage. b. Market expansion i. Market share development, or market expansion, is an attempt by the organization to increase the volume of products sold to totally new consumers. Market expansion is achieved by getting a bigger share of the untapped consumers to purchase your product or service, basically attracting a new market. Market expansion is most often accomplished with either better or more promotions to ensure that the new market is informed about the product. ii. Market share development applies to our organization as we could try to tap into other markets. We are currently focusing our efforts towards males who are and participate in DIII athletics in the New England area. There is plenty of room for market expansion as we could market our product to females in the same age range, or we could look to target a completely different demographic. c. Product Development i. An organization can also expand their market by creating new products and services to meet the needs of existing markets. These would be products or services of a similar nature that current customers would be interested in purchasing. ii. This marketing strategy applies to our company as we are looking to create new products that will allow us to target a similar market to the one we are currently looking at. Often times ideas for a new product comes from brainstorming sessions. When conducting a focus group, one of the questions we asked was whether they had any suggestions for product
11 changes or improvements, and numerous people suggested adding a heating option to the product, which will be taken into consideration. d. Diversification i. Diversification is characterized by creating new products for new clients. ii. It is hard to determine where this will apply to our organization, however, once we gain a steady hold of our current target market, we will look to diversify our product portfolio and target market. 2. Brand Management a. A brand is a name, term, sign, symbol, or design or a combination of these intended to identify goods and services of one seller or group of sellers and to differentiate them from those of competitors. Often times the brand is based on the product, experience, identity, and associations (Stotlar). b. Sport enjoys a unique position in the marketing world, because of the team as brand concept. There are many brands to which consumers are loyal, however the power of a sports team is unparalleled. c. Our company will position ourselves to demonstrate that we meet all the steps of the IEG Brand Model: i. Product quality of product and mission fulfillment ii. Experience pricing and customer relations iii. Identity ads, media selection and the logo iv. Associations suppliers and competitors 3. Relationship Marketing a. Relationship Marketing focuses on the interactions between the company and the consumer. Relationship marketing can be defined as an integrated effort to identify, maintain, and build a network with individual consumers and to continually strengthen the network for the mutual benefit of both sides through interactive, individualized, and value- added contact over a long period of time. (Stotlar) b. Relationship marketing can provide two very important benefits: i. Relationship marketing techniques allow managers to become more knowledgeable about customers and assist the organization with product development and market assessment ii. Economic advantage in that it is generally accepted that it costs at least five times as much to recruit a new customer as it does to maintain an existing one. c. As an organization it will be essential to maintain an effective relationship with our customers, and therefore will place an emphasis on relationship marketing to maintain a loyal fan base that will continuously buy our product. 4. Tribal Marketing
12 a. Tribal marketing focuses on the connection between customers, who are generally linked by a shared passion or emotion. b. As a newly developed organization that is entering the market, tribal marketing will be essential for us as we develop a loyal fan base that is willing to share our product with others who may not be part of the tribe. Furthermore, as an organization, we could provide an option to the loyal fan base to be the first to experience our new products. 5. Tools for implementing strategy a. Product i. Our product, the Freezable Bandage meets the needs of the consumers in that DIII student- athletes need a cheaper alternative to provide treatment for simple sprains and strains. ii. The sport product, in our case is a hard good that is related to the field of sports as it provides treatment for a typical sports injury. With our promotional aspects we also provide a service in the clinics on adequate wrapping techniques. iii. Our product will be developed and marketed in such away that is based on mass marketing. Our product is a universal product that will have no customization, as there is no room for customization with our product. b. Price i. Pricing theories 1. Supply- demand The basic interaction of the market in which the supply and demand of a product set the price of the product. 2. Utility Consumers essentially base the price on the utility (enjoyment) that the consumer gains from buying the product. 3. Elasticity Price elasticity of demand relates to how demand changes in relationship to changes in price. 4. Marginal costing Many sport companies use a traditional cost- oriented pricing structure that begins with a calculation of the cost of production, marketing, and distribution. To this figure, the manufacturer adds its desired profit margin. Eventually, wholesalers and retailers add desired profit margin to arrive at the final retail price. 5. Our choice of pricing theory to be used will be the supply- demand approach, which will also be influenced by the elasticity approach on the basics of economics. ii. Breakeven Analysis purpose of analysis is to determine how many unites must be sold at a given price to fully cover costs 1. Fixed Costs: $100,000
13 2. Variable Costs (at a production volume of 100,000 units): $50, Cost per unit: $1.50 c. Place When determining what the place and distribution channels are for our product, there are numerous things to consider. The product can be bought in numerous locations. It can easily be found at a sporting goods store (Dick s Sporting Goods and the Sports Authority) and it is also sold in Wal- mart and many of the larger pharmacies (CVS, Walgreens, Rite Aid, Target). d. Promotion When it comes to selling our product, we intend to use numerous promotional activities when we first enter the market to ensure that people are willing to buy our product. One promotional activity that we plan on using is the buy 1 get 1 50% off. A second promotional activity we may instill at one point in our marketing plan is to provide a coupon with the purchase of our product for a free clinic on adequate wrapping and treatment techniques for given sprains and strains. e. Public Relations as an organization it will be essential for us to pursue positive public relations to ensure that we maintain our consumer base and to increase our consumer base and extend to numerous other target markets Works Cited DeNavas- Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith, U.S. Census Bureau, Current Population Reports, P60-238, Income, Poverty, and Health Insurance Coverage in the United States: 2009, U.S. Government Printing Office, Washington, DC, Gulanti, R. (2010, March). Roaring out of Recession. Harvard Business Review. Retrieved from out- of- recession/ar/1 NCAA. (April 2008) NCAA Sports Sponsorship and Participation Rates Report. Retrieved from participation- rates ncaa- sports- sponsorship- and- participation- rates- report.aspx Stotlar, David K. Developing Successful Sport Marketing Plans. (2009). Morgantown: University of West Virginia.