Top Banner

of 12

Sony EyeToy SCEE

Jun 02, 2018

Download

Documents

NipunDalmia
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
  • 8/11/2019 Sony EyeToy SCEE

    1/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY

    Jianxiong Guo

    Ashley Hegland

    Matthew Joffre

    Preetham Pillarisetty

    September 28, 2005

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    2/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Background

    Sony Computer Entertainment Inc.

    Playstation 2

    Video Game Industry: Hardware Vs. Software

    EyeToy History To-Date

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    3/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Problem Statement

    Central Problem

    Symptoms

    Inadequate initial marketing strategy for the Sony EyeToy

    Lack of brand synergy between the Sony Eye Toy and the Sony PlayStation

    Groove sales cause concern that product may be a fad and that Sony will notbe able to sustain the initial success of the technology

    Uncertain adoption by the complementary network of 3rd party gamedevelopers

    What is the optimal marketing strategy that SonyComputer Entertainment Europe (SCEE) should pursue toenhance the competitiveness of the Sony PlayStation andgrow the Sony brand?

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    4/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Situational Analysis

    Internal Analysis

    External Analysis

    Product Price Promotion Place

    Strengths

    Weaknesses

    Social Technological Economic Political

    Opportunities

    Threats

    First to market

    Expertise in technicaldevelopment

    Can be sold profitably ata price consistent withother gaming offerings

    Experience marketing tohard-core gamers

    Sony & PlayStations brand& $$

    Internal fundingmethodology designed forsoftware

    Reliant on success ofPlayStation console

    Margin constraints onbundling camera withsoftware

    Weak groove sales hurtfuture efforts with retailers

    Product needs to be seen /tried / buzzed

    Target customer notwell defined

    No experiencepositioning to broader

    market

    Potential to leverageresources and know-howfrom other Sony divisions

    Camera technologies arerapidly improving

    May appeal to broader marketthan other offerings

    Royalties from 3rd partydevelopers

    Technology will likely beimitated by competitors ifsuccessful

    3rd party developers not100% sold ondevelopment

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    5/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Situational Analysis Cont.

    Internal Analysis

    Internal Capabilities & Resources Valuable Rare Costly ToImitate

    OrganizedTo Exploit

    CompetitiveConsequences

    PerformanceImplications

    Innovation Y Y Y Y Competitive AdvantageAbove Average

    Returns

    Integrated Market Power Y N Y N Competitive Parity Average Returns

    Product Quality Y N N Y Competitive Parity Average Returns

    Brand Awareness Y N Y Y Competitive Parity Average Returns

    A Competitive But Profitable Market:

    Power of buyers - HighPower of suppliers - Low

    Barriers to entry - High

    Threat of SubstitutesHighRivalry Among Competitors - High

    http://www.us.playstation.com/peripherals.aspx?id=97036http://www.us.playstation.com/peripherals.aspx?id=97036http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    6/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Strategic Orientation Modes

    Product Ecosystem Perspective

    1. User Networkgamers

    2. Complementary Network3rdparty

    3. Producer Network - Sony

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    7/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Alternative 1

    Cost-leadership mass market penetration strategy, using pipeline products.

    Strengths Weaknesses

    Protect EyeToy technology in a

    most effectively way

    Extend product life cycle

    Extend technology platform

    Heavy costs of product-line-

    developments

    Risks, lack of experience of

    marketing to the mass market

    Substitute new technology

    emerging

    Jeopardize Sony brand

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    8/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Alternative 2

    Abandon all Sony Pipeline offerings except EyeToy Play 2 and focus on mass

    market with third party software.

    Strengths Weaknesses

    Greater mass market appeal in the

    short-run

    Could create more solid

    complementary network

    Over time may lead to less

    competent game designing teamand game market sensitivity.

    Could decrease synergy

    between between EyeToy and

    PlayStation in the mid to longterm.

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    9/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Alternative 3

    Initially focus on integrated high-profile game leadership & alliance strategies in

    the hard core gamer segment and use selected publishers, such as Electronic

    Arts, to market to both the mass market and hard core gamers.

    Strengths Weaknesses

    Targets most sophisticated players

    and biggest spenders first.Pricing and bundling issues can be

    resolved in partnership with 3rdparty

    developers.

    Leverages core competence in R&D

    Does not have the potential that

    alternative 1 does to enhance the lifecycle of the technology

    Less mass market penetration

    potential than alternative 2

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    10/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Alternative Analysis

    Criteria Weight

    Alternative A Alternative B Alternative C

    Rating (1-3) Score Rating (1-3) Score Rating (1-3) Score

    Profit 1 1 1 2 2 3 3

    Brand Equity (Eye Toy +

    Playstation)2 2 4 1 2 3 6

    Synergy within Sony 1 2 2 1 1 3 3

    Market Penetration 1 1 1 3 3 2 2

    Cost Minimization 1 1 1 3 3 2 2

    Risk Minimization 2 1 2 3 6 2 4

    TOTALS 11 17 20

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    11/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Recommendation

    Alternative 3:

    Focus on integrated high-profile game leadership & alliance

    strategies in the hard-core gamer segment and use selected

    publishers, such as Electronic Arts, to market to both the

    mass market and hard core gamers

    http://www.us.playstation.com/peripherals.aspx?id=97036
  • 8/11/2019 Sony EyeToy SCEE

    12/12

    SONY EYETOY: CASE ANALYSIS

    MKTG 6525

    SONY EYETOY Implementation

    Re-design marketing strategy to initially target the hard core gamer market (mass

    market to broad and costly to target now)

    Larger than average budget must be allotted to initial campaign (manage the internal

    funding issue)

    When hard core-focused games are in the pipeline, invest the majority of allocated

    marketing budget toward marketing communications in gaming magazines, high-profile

    sports events, gaming conferences, internet marketing, and television commercials

    Year1:Essentially a massive one-time effort to create the critical mass required to tip

    the demand for the EyeToy.

    Year 2+:Spending on communications and promotions can be reduced significantly:

    Natural word-of-mouth among customers initiates (buzz) and;3rdparty games developers advertising and joint advertising.

    http://www.us.playstation.com/peripherals.aspx?id=97036