Marketing plan proposal for second year in Canada
Microsoft
CANADA
Program
• Objective of the meeting
• Results of first year
• Market environment
– External environment
– Internal environment
• Marketing strategy for year 2
• Financial forecasts
• Controls
Objective of the meeting
• Presentation of the strategies
that should let us reach our
marketing and financial
objectives
Results of first year
• Best console launching in the
video game market
• 27% of market share from
January to April 2002
• 30,1% in June
• Second place in the market
after Sony’s PS2
Market
environment
External environment
OPPORTUNITIES
-
Canada: first market of the world
for Xbox (30,1% market share,
June 2002)
-
Sony PS2 is the market leader with
56% (April 2002) of market share
in Canada
-
Increasing
of
recreation market
-
Video games customers are not
loyal to a console, they are loyal to
a video game
-
42% increasing console
since November 2001
-
Advertising is expensive in Canada
-
Third-party software publishers
prefer to work with successful
video games console.
and
market
Market expected to increase again
(+51%)
-
More than 80% of Canadians are
connected to internet. The online
game is a real trend and so Xbox
have capacities to connect on-line
-
Game Cube passed to the third
place at the time of the Xbox
launch
-
The technology of Sony is difficult
to work for the game developers
Forecasts
Controls
leisure
-
Environment
Strategy
THREATS
Internal environment
Strengths
•
•
•
•
•
•
•
•
•
Environment
•
Strategy
Forecasts
Controls
•
•
Microsoft: the worldwide leader
of computer software.
Relationships with over 75
software publishers
Xbox has been launched with 15
games
Relationship with the US team
Video game market research
(survey about gamers, define a
precise target…)
Relationships with game experts
Specific budget allocated to the
marketing programs
A technically superior product
Market leader NVidia co-designed
Xbox graphic processor
The team knows well Microsoft
policy and the video game market.
Good know-how
The Xbox website.
Public Relations have been taken
into account
Weaknesses
•
•
•
•
•
•
•
The Microsoft philosophy is not
really defined
Xbox is not a separate entity of
Microsoft: it is hard to create a
new brand image
Third-party software publishers
(the most important game
developers) preferred developing
games for the market leader,
Sony Playstation 2
Limited budget allocated to
advertising
The most expensive video game
console available on the market
Each of Microsoft team member
had been with the team for
several years: lack of new idea
Weakness of brand because
assimilated to Microsoft
Competition
Environment
Strategy
Forecasts
Controls
5 forces of Porter
Competition table
XBOX
PS2
GameCube
November 2001
March 2000
November 2001
Manufacturer
Microsoft
Sony
Nintendo
Retail price at lauch
Cdn$ 459
Cdn$ 449
US$ 199 (~Cdn$)240
Retail price on January
2002
Cdn$ 299
Cdn$ 299
US$ 199 (~Cdn$)240
-34,86%
-33,41%
−
Target
Males, 18 to 24
Males, 18 to 24
8 to 12
Quality
***
*
**
Image
**
***
**
Financial resources
***
**
*
Advertising resources
**
***
**
Partnerships with game
manufacturers
**
***
*
Relationships with
retailers
**
***
*
Range of games
**
***
*
27%
56%
17%
Releasing date
Price evolution
Environment
Strategy
Forecasts
Controls
Market share (spring
2002)
Product offering
Environment
Strategy
Forecasts
Controls
Keys to success
• Good relations with retailers
• Strong partnerships with game
developers
Environment
Strategy
Forecasts
Controls
• An adapted communication
strategy
Marketing
strategy
for year 2
Marketing objectives
• Reinforce the brand image of Xbox
showing its superiority.
• Promote the games of the Xbox besides
our large target.
• Launching of the Canadian Xbox website.
• Improve relations with game developers
and retailers.
Environment
Strategy
Forecasts
Controls
• Increase our market share of 12 points.
STRATEGY:
TACTIC 1:
improve brand
image
PROGRAMS:
Take part into a major
sport event
Advertising campaign
adapted to our target
Choose a new forceful
message
Environment
Strategy
Forecasts
Controls
Improve penetration of Xbox
TACTIC 2: act on game
developers
TACTIC 3:
act on retailers
PROGRAMS:
PROGRAMS:
> Good financial
conditions
> 70% contribution of
Xbox on game
advertisements
> Highlight our technical
simplicity for them
> Advertising in sales
outlets (demonstrations)
> Increase payment
delays
> Increase discounts
besides purchase
amount
Financial objectives
– Xbox expect for a turnover of
215,700,000 $ Cdn minimum with
800000 Xbox sold in year 2.
Environment
Strategy
Forecasts
Controls
– We must respect the budget
accorded by Microsoft for
marketing: 11 million $Cdn.
Target Markets
•
•
•
Our global target:
males
16 to 34 years old
about 4,351,000 customers (15% of the Canadian population)
•
•
•
Main target:
males
18 to 24
the first choice of Microsoft
Second target:
• males
• 16 to 18 and 24 to 34
Environment
Strategy
Forecasts
Controls
Third target:
• the rest of the population ( young females...)
Committees
Research
Purchase
occasion
Environment
Strategy
Forecasts
Controls
Wanabees
Fun seekers
Time killers
To finish the
hottest
game and
to find the
best tricks
To improve
their level
in order to
become
committees
Each
innovation,
each new
game or
console
For a “hit” and
for a
console
which
received
the
acceptance
of the
specialists
Games which
permit to
play in 2, 3
or 4
players
mode or on
line
Just for an
excellent
game and
which not
necessit
too much
time to
finish
7-12h/week
3-6h/week
Less than
3h/week
Usage
13h/week and
more
Perception and
beliefs
Game is their
world
Game is a
challenge
Fun
entertainment
Game is fun
A past time
Game is just a
pleasure
Marketing Mix
Product:
• Xbox & Microsoft: a
separate entity
• Launch more game
Price:
• maintain the sale price:
Cdn$ 299
Promotion:
• Xbox Canadian website
• Advertising on sales outlet
• A special offer for important occasion as
Christmas
• Advertising in specialized press
• Organization of press conference
Environment
Place:
• Spot radio
• to increase our shelving space
Strategy
• Spot TV
Forecasts
Controls
• Sponsorship
• To sponsor different parties in famous
pub and nights club
• a commission system for the
sales force
• a mail-order selling
Marketing Research
• A market survey to evaluate the
female market.
• A research to identify what
customers expect from our website
Environment
Strategy
Forecasts
Controls
Financial
Forecasts
Sales Forecasts
PESSIMISTIC
Environment
Strategy
Forecasts
Controls
AVERAGE
OPTIMISTIC
Xbox sold in year 1
452,458
452,458
452,458
Market growth year 2
40%
51% (R. Mugford)
60%
Xbox sold in year 2 with
same market share
(prevision)
452,458 * 1,4 =
633,441 units
452,458 * 1,51 =
683,211 units
452,458 * 1,6 =
723,932 units
Market share June 2002
30,1%
30,1%
30,1%
Market share growth
(prevision)
8 points
12 points
16 points
Xbox sold in year 2 with
same market share
considering
provisional market
share growth
38,1 * 633,441 / 30,1
=
801,797 units
42,1 * 683,211 / 30,1
=
955,587 units
46,1 * 723,932 / 30,1
=
1,108,746 units
Retail price
Cdn$299
Cdn$299
Cdn$299
Retailers gross margin
10%
10%
10%
Provisional turnover per
sold Xbox
299 * 0,9 = 269,1
299 * 0,9 = 269,1
299 * 0,9 = 269,1
Xbox Year 2 provisional
turnover
269,1 * 801,797
=
Cdn$215,763,572
269,1 * 955,587
=
Cdn$257,148,461
269,1 * 1,108,746
=
Cdn$298,363,548
Approximation
Cdn$215,700,000
Cdn$257,000,000
Cdn$298,300,000
Marketing Expenses Forecast
TACTIC 1:
Sponsorship of a national Canadian sport event (Ice Hockey)
Cdn$2,500,000
Xbox bus and advertising for Xbox bus
Cdn$350,000
TV airtime for Xbox and 1st party games 6 months
Cdn$1,760,000
Radio 6 months
Cdn$220,000
Magazines 4 months
Cdn$420,000
Posters 3 months
Cdn$630,000
Press 4 months
Cdn$770,000
Xbox.ca website (development and webmastering)
Cdn$300,000
Sponsorship of parties organized in famous pubs with demonstration of
Xbox and gift offering
Cdn$650,000
TACTIC 2:
Environment
Strategy
Forecasts
Controls
Improve brand image
Act on game developers
TV airtime for 3rd party games 6 months (Cdn$2,640,000 * 70%)
Cdn$1,848,000
Magazines for 3rd party games 4 months (Cdn$420,000 * 70%)
Cdn$294,000
TACTIC 3:
Act on retailers
Christmas bundle
Cdn$867000
Advertising and demonstration in sales outlets
Cdn$300,000
TOTAL
Cdn$10,909,000
Controls
Schedule
Nov.
2002
Task 1
Task 2
Task 3
Task 4
Task 5
Task 6
Task 7
Task 8
Task 9
Task 10
Task 11
Environment
Strategy
Forecasts
Controls
Task 12
Task 13
Dec
Jan
2003
Feb
Mar
Apr
May
Jun
Metrics
Metrics allow to measure the result of our
different marketing operation.
We plan:
• A survey of notoriety in order to evaluate
the repercussion of our action of
communication (advertising on sales outlet,
sportive event…)
Environment
Strategy
Forecasts
Controls
• Evaluate the level of sales during the period
concern by our action of communication in
order to see evolution.
Microsoft
CANADA