Microsoft CANADA. Marketing plan proposal for second year in Canada
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1 Microsoft CANADA Marketing plan proposal for second year in Canada
2 Program Objective of the meeting Results of first year Market environment External environment Internal environment Marketing strategy for year 2 Financial forecasts
3 Objective of the meeting Presentation of the strategies that should let us reach our marketing and financial objectives
4 Results of first year Best console launching in the video game market 27% of market share from January to April ,1% in June Second place in the market after Sony s PS2
5 Market environment
6 External environment OPPORTUNITIES - Canada: first market of the world for Xbox (30,1% market share, June 2002) - Increasing of leisure and recreation market - 42% increasing console market since November 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 THREATS - Sony PS2 is the market leader with 56% (April 2002) of market share in Canada - Video games customers are not loyal to a console, they are loyal to a video game - Advertising is expensive in Canada - Third-party software publishers prefer to work with successful video games console.
7 Internal environment Strengths Weaknesses 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 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
8 Competition 5 forces of Porter
9 Competition table XBOX PS2 GameCube Releasing date 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 Price evolution -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 Market share (spring 2002) ** ** ** ** 27% *** *** *** *** 56% ** * * * 17%
10 Product offering
11 Keys to success Good relations with retailers Strong partnerships with game developers An adapted communication strategy
12 Marketing strategy for year 2
13 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. Increase our market share of 12 points.
14 STRATEGY: Improve penetration of Xbox TACTIC 1: improve brand image TACTIC 2: act on game developers TACTIC 3: act on retailers PROGRAMS: Take part into a major sport event Advertising campaign adapted to our target Choose a new forceful message PROGRAMS: > Good financial conditions > 70% contribution of Xbox on game advertisements > Highlight our technical simplicity for them PROGRAMS: > Advertising in sales outlets (demonstrations) > Increase payment delays > Increase discounts besides purchase amount
15 Financial objectives Xbox expect for a turnover of 215,700,000 $ Cdn minimum with Xbox sold in year 2. We must respect the budget accorded by Microsoft for marketing: 11 million $Cdn.
16 Target Markets Our global target: males 16 to 34 years old about 4,351,000 customers (15% of the Canadian population) Main target: males 18 to 24 the first choice of Microsoft Second target: males 16 to 18 and 24 to 34 Third target: the rest of the population ( young females...)
17 Committees Wanabees Fun seekers Time killers Research To finish the hottest game and to find the best tricks To improve their level in order to become committees Fun entertainment A past time Purchase occasion Each innovation, each new game or console For a hit and for a console which received the acceptance of the specialists Games which permit to play in 2, 3 or 4 players mode or on line Just for an excellent game and which not necessit too much time to finish Usage 13h/week and more 7-12h/week 3-6h/week Less than 3h/week Perception and beliefs Game is their world Game is a challenge Game is fun Game is just a pleasure
18 Marketing Mix Product: Xbox & Microsoft: a separate entity Launch more game Price: maintain the sale price: Cdn$ 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 Spot radio Spot TV Sponsorship To sponsor different parties in famous pub and nights club Place: to increase our shelving space a commission system for the sales force a mail-order selling
19 Marketing Research A market survey to evaluate the female market. A research to identify what customers expect from our website
20 Financial
21 Sales PESSIMISTIC AVERAGE OPTIMISTIC Xbox sold in year 1 452, , ,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 ,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 Provisional turnover per sold Xbox Xbox Year 2 provisional turnover Approximation 10% 299 * 0,9 = 269,1 269,1 * 801,797 = Cdn$215,763,572 Cdn$215,700,000 10% 299 * 0,9 = 269,1 269,1 * 955,587 = Cdn$257,148,461 Cdn$257,000,000 10% 299 * 0,9 = 269,1 269,1 * 1,108,746 = Cdn$298,363,548 Cdn$298,300,000
22 Marketing Expenses Forecast TACTIC 1: Improve brand image Sponsorship of a national Canadian sport event (Ice Hockey) Xbox bus and advertising for Xbox bus TV airtime for Xbox and 1 st party games 6 months Radio 6 months Magazines 4 months Posters 3 months Press 4 months Xbox.ca website (development and webmastering) Sponsorship of parties organized in famous pubs with demonstration of Xbox and gift offering TACTIC 2: Act on game developers TV airtime for 3 rd party games 6 months (Cdn$2,640,000 * 70%) Magazines for 3 rd party games 4 months (Cdn$420,000 * 70%) TACTIC 3: Act on retailers Christmas bundle Advertising and demonstration in sales outlets TOTAL Cdn$2,500,000 Cdn$350,000 Cdn$1,760,000 Cdn$220,000 Cdn$420,000 Cdn$630,000 Cdn$770,000 Cdn$300,000 Cdn$650,000 Cdn$1,848,000 Cdn$294,000 Cdn$ Cdn$300,000 Cdn$10,909,000
23
24 Schedule Nov Dec Jan 2003 Feb Mar Apr May Jun Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Task 8 Task 9 Task 10 Task 11 Task 12 Task 13
25 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 ) Evaluate the level of sales during the period concern by our action of communication in order to see evolution.
26 Microsoft CANADA
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