Real Edutainment Development
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1 Real Edutainment Development Document Title: Marketing Plan Date: 16 December 2011 Version Number: Author(s): Peterson M., Pittard D. Purpose: To outline and describe the marketing strategy for Doctor Sawbones vs. The Medical Monsters
2 Table of Contents I. Introduction... 3 II. Potential Market... 4 Immediate Market... 4 Longterm Market... 4 III. Product Package... 5 Our Niche... 5 IV. Price Point... 6 V. Return on Investment... 7 Customer Return on Investment...7 R.E.D. Return on Investment... 7 Works Cited
3 I. Introduction Diabetes is an epidemic in the United States that represents an enormous economic burden. According to a study done on behalf of the American Diabetes Association, the US spent $116 billion on diabetes treatment in 2007, and the projected cost of healthcare will reach 20% of the US GDP in Diabetes education is an effective method for teaching patients how to manage disease and is also an effective tool for reducing the cost of treatment (Boren, Fitzner, Pankalkar & Specker, 2009). Doctor Sawbones vs. the Medical Monsters (DSVMM) will be Real Edutainment Development s (R.E.D.) first interactive game, designed to educate children between the ages of six and thirteen about diabetes management. R.E.D. is developing this game as a means to address the growing problem of diabetes in North America. While a number of games offer diabetes education through traditional user game play, DSVMM involves parents, educators and physicians in the experience through a unique system of reporting and customization. DSVMM has two dimensions. One dimension is the game itself. Players progress through it and learn valuable lessons about health management. As they accumulate more knowledge, they unlock more complex lessons. The second dimension is the reporting interface, which allows parents, physicians or other interested parties to monitor a player s progress through the game. Using this two dimensional approach helps to ensure that each child who plays the game receives a quality, personal education. The R.E.D. marketing strategy revolves around one premise: education is good for everyone. R.E.D. understands that the health care market is complex, but we intend to market our product specifically towards insurance companies. While the benefits of medical education to doctors and patients are fairly obvious, the rewards for insurance providers are not quite as clear. However, we can show that over the course of time, insurance companies may actually receive the greatest profit from investing in DSVMM. 3
4 II. Potential Market To generate initial interest in a product like Doctor Sawbones vs. the Medical Monsters, the R.E.D. Marketing Team has divided the market into two categories: an immediate one, which targets medical centers, and a longterm market, which aims to involve insurance companies. Immediate Market R.E.D. Believes that the initial customer should be a local medical center or group of medical centers like Sentara Healthcare. These centers will be allowed to use and test the game for free on a limited free trial. Ideally, as the game begins to gain popularity among doctors, it will develop a reputation as a valuable tool, and give the team important statistics in determining how to make the game better. Most importantly, it will allow the team to evaluate the reporting interface that makes DSVMM unique. Longterm Market The longterm market for DSVMM consists of two major entities: medical facilities like doctors' offices or hospitals, and insurance companies. The overall idea is to get subsidies from insurance companies. When doctors' offices receive these subsidies, they can distribute physical copies of the game, and subscribe to the reporting and customization interface. 4
5 III. Product Package The main customer actually purchasing the game will be the medical facilities themselves. With this purchase, they will receive much more than just the game itself. Customers receive copies of the game, enough for the amount of children their office generally treats. Along with the game comes a separate program for the doctors allowing them to customize the game according to each child, as well as receive reports from the game regarding each child s progress, both positive and negative. Finally they will also receive a subscription, which must be renewed annually, that allows them access to such features as customization, reporting, and receiving constant updates keeping the treatment methods presented in the game as up to date as possible. Our Niche Our product delivers quality diabetes education through a rich, interactive, game play experience. Plenty of games do that, but customization and reporting set our game apart from the competition. What do we mean by customization? Before the software reaches the end user, the software engineers at R.E.D. cater it to individual needs. For example, consider a child at risk for diabetes and heart disease. Before the child even begins playing, the software team has incorporated game play that ensures education about blood sugar, diet, exercise and the numerous factors that affect diabetes and heart disease. The customizations do not end there, however. Now imagine that same child has progressed through the game and made clear empirical knowledge gains. We call these gains Medical Milestones, and they are important in allowing physicians and caretakers to track the educational development of their patients. Our reporting system logs Medical Milestones and allows parents and doctors to view Milestone Reports. Based on the data in the Milestone Report, pediatricians can adjust the game to a more appropriate experience for players. 5
6 IV. Price Point R.E.D. uses three factors in determining DSVMM's price point. The first factor is the average cost of video games in the United States. According to MSNBC's Tom Loftus, the average price of a video game in the United States today is $49.99, and that number will increase by $10.00 over the next few years (Loftus 2011). R.E.D. assumes an average cost of around $60.00 for top-of-the-line video games in today's market. R.E.D. development costs play an important role in determining the cost of DSVMM. Specifically R.E.D. incurs costs from the various customizations it creates when tailoring a personalized copy of DSVMM for a patient. See the DSVMM Financial Plan for a detailed analysis of R.E.D.'s development costs. Thirdly, R.E.D. accounts for annual subscription fees by using the cost of one of the most popular subscription-based games in the United States, World of Warcraft. For a one-month subscription, players pay $14.99, $41.87 for a threemonth subscription, and $77.94 for six months (Blizzard Inc., 2011). Refer to Figure 1 below for analysis of DSVMM's price point. Factor Cost Average cost of comparable software $59.99 Cost of customization $ month subscription fee $ month subscription fee $ month subscription fee $77.94 Figure 1 Factors involved in determining initial price point. 6
7 V. Return on Investment Customer Return on Investment There are three major groups that will be benefitting from Dr. Sawbones and the Medical Monsters, two direct customers and one end user. The first customer benefitting will be the doctor, the game will give them the ability to treat more patients, by freeing up a lot of the time previously required to sit down one on one with children and explain disease management, and treat them more efficiently, by allowing the children to learn through a medium that they understand, video games. The other customer that will benefit is the health insurance companies. Doctor Sawbones and the Medical Monsters will allow children to learn to manage their diseases from outside of the doctor s offices, which will reduce the amount of visits required, which will turn into a major reduction in cost for the insurance companies. The final benefactor is the end user, or the children themselves. Their being able to learn to manage their diseases and chronic illnesses through a medium they already understand will lead to healthier children which is, of course, the end goal. R.E.D. Return on Investment R.E.D. uses the costs shown in Figure 1 to evaluate its return on investment. The team plans on taking out a $2,000, small-business loan to cover its costs in the production phase; all other costs in Phase I and II will be covered by SBIR grant money. Based on the team's analysis of the market, achieving a break even point is feasible. Consider that there are almost 18.8 million diagnosed diabetics in the United States. Of these 18.8 million, 215,000 are under the age of 20 ("American diabetes association," 2011). These 215,000 young diabetics represent a considerable amount of potential customers. The project assumes a 5% customer conversion rate at minimum, which yields at least 10,750 customers. To estimate return on investment, assume that R.E.D. sells its product to 10,750 at-risk children and young adults. If each of these customers maintains a one-month subscription for a year, R.E.D. can expect to see $6,878, Of course these estimates are best case scenarios. The project assumes a worst case of 2000 copies sold, in which case the project sees no profit. See further analysis in Figure 2. 7
8 Copies Sold One-month Subscription Three-month Subscription Six-month Subscription 2000 $1,279,740 $1,634,940 $1,611, $3,199,350 $4,087,350 $4,029, $6,398,700 $8,174,700 $8,058,700 Figure 2 Return on Investment for DSVMM. Figure assumes that each subscription is paid for one year. The marketing team has calculated break even points for each subscription type in Figure 3. The figure assumes that each subscription is paid for one year, a customization fee of $400.00, and a baseline product price of $ Subscription Type Number of copies needed to break even One-month 3,126 Three-month 3,188 Six-month 3,248 Figure 3 Break even evaluation. 8
9 Works Cited Boren, S., Fitzner, K., Pankalkar, P., & Specker, J. (2009). Costs and benefits associated with diabetes education: A review of the literature. Retrieved from Loftus, T. (2011, June 17). Top video games may cost more. MSNBC. Retrieved from Blizzard Inc., B. E. I. (2011). The company. Retrieved from 9
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