Product and Service Development: Nike's Gym Equipment Report

This report provides a comprehensive analysis of Nike's product and service development, focusing on the potential launch of gym equipment (dumbbells and treadmills). It begins with an introduction highlighting the importance of product development in response to market demands, using Nike as a case study. The main body explores the processes involved in new product development, including idea generation, screening, concept development, market strategy, business analysis, product development, market testing, and commercialization. The report then delves into the product life cycle, examining the stages of introduction, growth, maturity, and decline, using Nike's existing shoe products as an example. Furthermore, it covers product line management, discussing sales and marketing strategies, their conversion into units, and detailed product line analysis to optimize results. The report concludes with a reflective statement, summarizing the key findings and implications for Nike's product development strategies.

Product and Service
Development

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
LO1. Processes involved in new Product or service development.........................................1
P3. Product life cycle..............................................................................................................5
P4. Product line management.................................................................................................6
P5. Designing and pitching product idea................................................................................7
P6. Reflective statement.........................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and journals...............................................................................................................12

INTRODUCTION
In modern times one come across many products and services present in market, which
are result of requirements and dynamism of current and future needs. Some of them are not even
thought by anybody a decade or before, but the visions of developers and needs arose by
changing times have necessitated these developments. Few examples could be online payment
apps, Unmanned Ariel vehicles and many more. Developers and companies for this purpose
makes intensive and inclusive researches (Blanchard, Christofol and Richir, 2021). They
forecasts preferences and expectations of consumers and time, and makes scientific analysis
before developing and introducing any new product in market, making best uses of technological
developments, opportunities and business models. Success of these new products depends on
various factors. These factors are studied in report that how a new product, that is bought by any
business organisation penetrate and succeed in market and for this purpose report have
undertaken case study on Gym equipments by an established and popular brand of sports outfits
and equipments Nike. Nike is a well renowned powerful international brand. This company is
well known for its shoes and sports products. It is one of the highest grossing company in this
market, generating around 60% sales of the USA itself and has more than 1900 stores
worldwide. Nike so far has not introduced any such products that satisfies needs of Gym
operators and their users. Thus, this will be a new kind of product by Nike, in new markets and
thus fulfils purpose of this report on Product and Services development. Report shall be first
studying different processes involved in Product development, what is a products life cycle in
business operations and markets followed by what steps are involved in management of product
line so that desired results are met.
MAIN BODY
LO1. Processes involved in new Product or service development
When any new product has to be bought in the market, either by a new organisation or
any existing organisation, the launch of that new product passes through a set of different stages,
which are necessary from development to the point where it becomes directly accessible to the
customers. Understanding of these stages becomes important in this context (França and et.al.,
2017). In this report, analysis of the processes involved in development of new product and
service is made in context of Dumbles and Treadmill gym equipments.
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Idea generation- This stages tells about generation of an idea in mind of the company.
This is the stage of conception of the idea in the minds of developers that happens when they
assess the need of that new product in the market and how that new product will be helpful for
company in revenue generation. For generation of idea about gym equipments of dumbles and
treadmills, Nike can make use of two sources possibly, one is internal, when Research and
development department of company bring the idea, or there are external sources which can
pertain to any source like customers, suppliers, distributors etc. In case of Nike the idea must
have came from external sources when company saw new trends rising in market.
Idea screening- In this step, company looks at the advantages and disadvantages which
the new will bear on profits and efficiencies of company. Nike will make thorough screening of
different angels and dimensions thus involved in development and launch of new Gym
equipments (Huang, Hsu and Chen, 2019). Question like cost of development, attraction of
targeted customers base, potential revenue deriving, impact over socio-cultural and political
sentiments etc. are answered under this stage. Dumbles and Treadmills products to be developed
by Nike, screening about cost of developing is nominal whereas, these products have large
potential to create new consumer bases for company.
Concept development and Testing- After company have made all thorough analysis
regarding advantages and disadvantages to the company from new product. The idea passes on
the stage where it becomes a concept from an idea. Concept development is a precise task and
totally consumer oriented. Under this Nike will be bringing and developing concepts that how
particular products be launched before different consumer segments in best possible way so they
can understand rationale behind developing product and then make best use of it (Ibarra,
Ganzarain and Igartua, 2018). For example, as the Nike is intending to bring Gym products in
the market, it must develop concepts for every set of consumer differently, like athlete,
professional players, regular gym operators etc. After concepts are developed company must
attempt testing efficacy of product in targeted markets either physically or symbolically.
Market strategy development- When the company have developed product concepts
and tested its efficacy in targeted set of consumer markets, it is the time to attract consumers
through appropriate use of marketing strategies. Under this Nike will be generating consumer
awareness about its gym products of Dumbles and Treadmills, undertaking strategies to attract
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them and convincing them about potential uses of new products. Nike can do so by using
Marketing Mix 7P's model.
Business analysis- Under business analysis step, Nike makes analysis about impact of
new product development and impact of its aftermaths over business. This is basically review of
costs, profit and sales of new products in market and what new advantages shall dumbles and
treadmill products bring for company. For the sales review, Nike can make surveys about sales
of similar products in the market by other businesses and from this they can forecast its cost and
profits.
Product development- Product development is the process of actual development,
processing and manufacturing of the new product after all the analysis of its cost and targeted
sales are made and marketing strategies regarding the same are prepared by the business. Nike
shall undertake production of dumbles and Treadmills, as per designs made in product concept
development, that means gym equipments which shall be useful for different consumers such as
athletes, professionals etc. in different manners. Product development is significant as it leads to
physical availability of products to consumers and requires sudden pool of investments in
business for undertaking business operations of R&D, production, packaging, distributing,
appropriation of raw materials and many more.
Market testing- Under Market testing, Nike shall be launching few samples of its new
Gym products, to check their efficacy in market and the consumer response that they can
generate. Dumbles and Treadmills are specific heavy weighted gym products. Therefore, it is
necessary that Nike must gather feedbacks and responses from customers, through launching
them in many accomplished and established gyms. Considering stature and success of Nike in
market, Nike can do it easily and also can try testing their products in International market as
well.
Commercialisation- Commercialisation is the final step of decision making where
businesses decides to finally launch the product in market. This step incurs maximum cost for
business, this includes distribution of product in market, Nike have to build or lease a
manufacturing facility, sales promotion activities and marketing activities of its new gym
products, of Dumbles and Treadmill goes hand in hand this time, similarly Nike will have to
monitor that everything goes by plan. Also, in commercialisation process Nike will build brand
for its new product before consumers and achieve competency in market more than other
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business players (Kasiri and et.al., 2017). For this Nike must consider two things, one is
introduction timing of new product in market and secondly place of introduction of products,
which would be targeted.
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P3. Product life cycle
Product life-cycle defines different stages of life of product or durability in any business
before it is outlined from market and business completely. Under this section, report shall be
taking instance of existing products of Nike, like Shoes, that are available in Market. Also, how
this particular product have to pass through various stages, from its introduction to decline in
market is analysed in report. These stages includes Introduction, Growth, Maturity and Decline.
Introduction- Introduction is stage of bringing product in targeted markets of company
once product has been developed and it is ready for final use by consumers. At this time stakes
of product is highest in product life-cycle (Ladhari, Souiden and Dufour, 2017). Business
operations for Nike in this stage includes production of shoes products in pre-decided manner as
per demands and preferences of consumers, sales marketing and promotional activities for
attracting consumers and informing them and developing distributive channels for reaching out
to consumers.
Growth- Growth involves the stage where consumers are already using shoes of Nike,
buying it and Nike is ready with all sort of statistics, increasing sales and increasing profits.
More developments that take place at this stages are changing preferences of consumers, their
rising demands and expectations with the Nike shoes. These developments are required to be
monitored by Nike, to be analysed and then intend to fulfil them in order to achieve customer
satisfaction so they continue buying product. Also, at this stage competitors become more
awakened and brings new policies to snatch consumer base, monitoring their activities is also
important for Nike.
Maturity- Maturity is that stage in which sales for shoes will starts declining so does
revenue for Nike. This stage comes after product have reached its zenith in market and is no
more preferable by consumers. In case of shoes products of Nike, this stage may come when
more competitive products of same type are bought by any other player, or Nike loses its
competitive edge where its products becomes obsolete for consumers. This can also happen if
company reduce its focus over shoes products and decline innovation and expenditure on same.
Prices in this stage become more competitive and margins are seen declining (Lee, Woo and
Joshi, 2017).
Decline- Decline is stage of complete wipe of product from market by company, which is
attributed to many reasons like increased competition, declining sales, rising cost for company or
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Nike's shoes are no more preferred by users. Improper channelisation of products to targeted
markets can also be the reason in which consumers stops preferring products due to late
deliveries or non-availability.
P4. Product line management
Product line management is the task of managing and controlling production and sales of
New products (Gym equipments of Nike in this report) or existing product in such a way that
they derives optimum results to company. This technically deals with identifying, make
expansion and use those opportunities which increase sales and ultimately revenues for company
(Lenka, Parida and Wincent, 2017). This can be done by Nike in following manner:
Clarity on sales and marketing strategies
Sales and marketing strategies are adopted to attract more and more customers, generate
awareness among the about benefits they will avail by using product and thus convincing them
for making purchase. Nike would have done it through a number of strategies, making best use
of traditional as well as modern methods, which will pool huge investments in this order. Thus,
considering prominence of sales and marketing activities, it is imperative that Nike must monitor
results derived from such strategies and that should align with desired results and customer
choices as well.
How sales and marketing strategies are converted in units
In this process it is noted that forecasts and predictions made under marketing strategies
should align with production targets and activities. For example, when in marketing strategies
Nike will analyse and evaluate needs and choices of consumers, regarding quality and quantity
of products and expectations of consumers in market. Then, while carrying out production
activities these targets must be met.
Prepare detailed Product line analysis
In this a detailed product line analysis plan is prepared with consideration of historical
statistics, present performance and future targets. This would help Nike in identifying deviations
with ease, in implementation of set production mix.
Take actions
After deviations are identifies that are resulting in deviations from targets and poor
performance, Nike shall go ahead for formulating such policies and strategies, taking note from
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marketing and production statistics as well as form projected targets, which would lead in
bringing actual and desired results closer (Ouyang and et.al., 2020).
P5. Designing and pitching product idea
Discussion in the report is on all new category of product for Nike that are Gym
equipments. Nike is already a renowned brand but that only in terms of sports related products,
sports outfits like t-shirts, trousers, shoes etc. and sports equipments like bats, balls, nets, rackets
and several in line. Gym equipments are not in the line of production for company but if we
consider modern trends in world, Gym equipments and materials, especially dumbles and
tredmills, are more commonly used products than any other sort of fitness related products like
sports products. Even if we consider sports products than Gym equipments are usable along with
them. Also, importance of Gym equipments is significant from the fact of rising fitness trends in
the world (Papadas, Avlonitis and Carrigan, 2017). People are becoming more careful about their
fitnesses, body mentions and inner body health. This creates a very good opportunity for Nike to
launch these products at this time. Nike have a strong brand image in minds of people due to its
existing products quality, especially in shoes. Thus, if Nike brings quality products of Gym, it
could cater a huge support from existing customers as well as new customers who shows faith in
the company. Also, utilising this brand image, Nike can induce customers for focusing on their
fitnesses, which will as part of loyalty of people for the company. When people will look at
advertisements of Nike about equipments as well as supplements and proteins, they will be
attracted and feel connected in the same way they connect themselves with Company. This way
Nike brand also have huge potential in bringing fitness revolution in world, and not just only in
seeking profits for company itself (Schroeder, Anggraeni and Weber, 2019). This can also be
acclaimed as part of fulfilment of social responsibility by business entity. In this way Nike can
undertake pitching different segments of its potential consumers for buying its new products of
Gym equipments and ultimately increase its sales and profits for company. The report have
developed this understanding by accounting testing of new products in different segments of
consumer markets separately, which are also conceptualised by Nike in the processes of product
development.
 Market opportunity: - As per the selected product of weighted arm bands of Nike, it was
a market opportunity for an organization. It is defined as a situation in which a company
identifies the product which is needed by the consumers. In terms of weighted arm bands
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it was the market opportunity for all the youth generation. In today’s world almost all the
audiences go to gym and use certain equipment’s. As per the emerging trend it was an
opportunity for the business. With respect to this by implementing such product it was
very easy for all the consumers to use such effective arm bands of best company. The
business organization develops new products every year so with regards to the gym
product all the customers liked it especially the youth generation.
 7 P’s of marketing: -
Product Price Place Promotion Process People Physical
evidence
Nike offers
wide variety
of products
for both men
and women.
So, they
implemented
a new gym
product
which is
weighted
arm bands.
It was
beneficial
for all the
individuals
as they
would be
getting best
quality
bands.
The
company
always set
up their
prices as
per the
value of
specific
product.
They
always
offer good
looking
and
durable
items. So,
by
developing
gym
product it
was very
durable
The
company
sell their
product
around the
world and
through
both
online and
offline
marketing.
It was
easy for
all
consumers
to
purchase
the
product
from
websites
and also
By enabling
a new
product they
use the
method of
modern
promotional
strategies.
They started
showing
videos that
involve
personalities
by wearing
weighted
arm bands.
Nike focused
on business
expansion so
by
developing a
new product
they
followed the
process of
effective
research and
development.
As per the
gym product
they started
focusing on
the youth
generation
and lead to
higher
efficiency.
A company
can achieve
success if
there are
talented
employees
so with the
help of
them a new
proposed
product got
established.
It always
invests in
those
people who
can help in
leading
growth.
In context
with the
new gym
product
they were
selling
the item
through
both
online
and
offline
and its
packaging
was the
main
physical
evidence.
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and
effective
quality
they
charged
premium
prices for
the
product.
from the
retail
stores.
 Financial overview: -
Particular 31/12/19 ($) 31/12/20 ($) 31/12/21 ($)
Implementing
technology cost
15000 - -
Promotional event 9000 8000 6000
Advertisement
expense
6000 5600 5800
Catalogues 2000 4000 3000
Training charges 6500 8000 8500
Total Cost 38500 25600 23300
 Porter’s five forces model: -
There are wide variety of the external factor that get determine the strength and weakness
that impact on the products of Nikes that is based on the porter five force analysis, there are
the following intensities of these forces that are currently influencing the Nike” Gym
weighted arm brands”. The porters five forces are will be explained further in relation to the
development of product is as follows-
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