Strategic Marketing Plan of Play Station Vita - Case Study Example

Executive Summary Play Station Vita which was launched in December 2011 has seen an increase in the sale of hand held game console. The paper highlights the strategies which have been adopted by Play Station Vita after looking at both the internal and external factors along with competitors’ strategy. It is seen that Play Station Vita has worked on its internal resources and used the different opportunities which the market present. The analysis of the external factors through the use of Porter Five Force Model further shows intensifying competition and increase in the overall degree of competition. Further, the analysis of the target market and segment analysis highlights that the product Play Station Vita is aimed at all people belonging to all gender who are fond of game console. In addition to it Play Station Vita has also used different promotional and marketing process through which the overall sale of the product has grown. The organization along with it has used different developments and technology to ensure maximum effectiveness. The overall strategy of Play Station Vita thereby highlights the manner in which maximum productivity have been ensured and has helped o grow their business over the entire globe. Table of Contents Introduction 3 Smart Objectives 3 Hierarchy of Strategy 4 Porter Five Force Model 4 Analyzer, Prospector, Defender, and Reactor Strategies 6 Micro & Macro Analysis 7 Market Research 9 Target & Segmentation 9 Differentiation & Positioning 9 4 P’s of Marketing 11 Conclusion 12 References 13 Introduction The report analyzes the existing product Play Station Vita where both the internal and external factors will be analyzed so that the impact it has on the business prospects can be determined. This is followed by analyzing the market which will look at segmentation, target market, positioning which will help to identify the marketing strategy which has to be adopted by Play Station Vita. This will help to identify the different areas and directions which have to be worked on so that better performance can be achieved and the objectives of the business can be achieved. In addition to it the report also analyzes the different aspect of marketing mix which will help to develop future strategies based on the target market and will help to ensure that the resources will be used in the most productive manner. The overall analysis will thereby provide useful direction for the future and ensure a platform through which better effectiveness can be achieved. Smart Objective Play Station Vita is a handheld console game which has been developed by Sony Computers Entertainment. The product was launched in December 2011 and over a decade the organization has managed to sell over 2.2 million consoles all around the world. The organization when looking to launch the product all around the globe and will be aimed at section of the society who are fond of games (Stephanie & Timothy, 2005). The organization aims at the following Identifying promotional tool and strategies through which the sale of console increases To penetrate deeper in markets where they have a limited presence by focusing on the target market Increasing their presence by developing better software which helps to maximize the experience for the customers Hierarchy of Strategy Play Station Vita has to develop strategies which will focus on Improved marketing mechanism by using the established brand name and distribution of Sony which will help to increase the presence Look to work in markets by retaining customers through the process of better facilities and avenues so that they are able to garner maximum efficiemcy Porter Five Force Model The external analysis for Play Station Vita is being analyzed through the Porter Five Force Model which will help to understand the manner in which the working of Play Station Vita will be impacted. According to the Walker and Mullins (2011): “Porter’s five competitive forces are including five elements which are Threat of entry of new entrants, Threat of substitute products, Bargaining power of buyers, Bargaining power of suppliers and Degree of rivalry among competitors.” Threat of Entry of New Entrants: The degree of threat of new players in the market is low because of the fact that the market is highly competitive and requires huge capital investments. After the popularity of the hand help console game Nintendo and SEGA only Microsoft and Sony has been able to enter the market. Sony has become successful because of superior products and innovation along with extensive marketing and the presence of the already distribution network which has ensured that the product can be sold to different places and has multiplied the opportunity for being successful (Dimitri, 2002). Other than that the other players have been unsuccessful leading to a low threat from other players. Threat of Substitute Products: The threat of substitute product in the hand held console market is limited as on the broad context very little differentiation in the product is seen. The only threat comes from the different games which are developed through the use of software. The degree of competition in the preparation of software is high (Dimitri, 2002). This is further matched by the fact that prices also act as a substitute as people would prefer a product with a low cost if they have the same feature and quality. The only threat comes from the development of the different games which has intensified the degree of competition (Roger, Hartley, Barkowitz & Rudelius, 2006). Bargaining Power of Buyers: The bargaining power of customers is limited and low as retail chain and final customers purchase the product. The fact that the final customer base is very high as the product is aimed at all section of the society has reduced the bargaining power of customers (Dimitri, 2002). This is being supported by the fact that people preference towards a particular product or game increases as communities are developed for the same which thereby increases the demand for the product even at a higher prices resulting in reducing the bargaining power of customers Bargaining Power of Suppliers: Suppliers exert a high degree of bargaining power as the main requirements in hand held console is processor chips. Suppliers to ensure the same either will reduce the quality of the product or will increase the price. Processor chip determine the success of a product and with a few producers producing the same the suppliers have an influence over companies as using their power they can influence the decisions (Dimitri, 2002). This has thereby resulted in an increase in the market share of suppliers and has thereby increased their bargaining power. Degree of Rivalry among Competitors: The intensity of rivalry among firms is very high because of the fact that the handheld game consoles represent an oligopolistic market with major share being shared by Sony & Microsoft. This has made both Sony & Microsoft to adopt an offensive strategy where they look to control the market through innovation in their products (Dimitri, 2002). This is matched by the fact that both the manufacturers’ looks to sale console at the cost at which it is manufactured and looks to develop software with new games to attract customers. The fact that the consumer base is huge and few players dominate the market the degree of competition is stiff. Analyzer, Prospector, Defender, and Reactor Strategies Identification of the different strategy adopted by Play Station Vita helps to understand the manner in which the organization looks to develop bigger strategies. Sony through its established brand name has created the required awareness and through the use of its already established distribution network the reach has been increased. This has been matched by strong promotion and correct market segmentation. The policy of being a differentiator and providing superior products with better technology has helped them. In addition to it Play Station Vita has been able to use its internal resources and develop them keeping in mind the evolving external environment Micro & Macro Analysis The internal analysis for Play Station Vita is being analyzed through the Value Chain Analysis which will help to understand the strengths and weakness and the manner the resources are being used and is as under The primary objectives achieved by Sony entertainment Inbound Logistics: Play Station Vita has developed their internal network to ensure products free of errors (Finlay, 2000). This is matched by the fact that the products are readily available and has been possible due to the availability of raw materials through correct procurement. Operations: Play Station Vita develops the product internally and has relied on quality along with superior technology. This has been matched by the developments of the software and the hardware internally ensuring genuine in quality. Outbound Logistics: Play Station Vita looks to use the already established network and brand image of Sony to ensure the availability of its products to different nook and corner of the globe (Finlay, 2000) Marketing & Sales: Play Station Vita has spent aggressively on promoting the product. This has been supported by the already established brand name of Sony. In addition to it Play Station Vita also looks to use different promotional tools and offers to attract and retain customers. Services: Play Station Vita has focused on quality as Sony always does. This has ensured that the products are checked and verified before being launched in the market and aggressive use of production technology which uses the latest developments has ensured quality in the offerings (Shah, 2005). The primary objectives are being assisted by the secondary objectives for better achievement of the goals and is as Infrastructure of Firm: Play Station Vita uses the best processor and ensures effective designing and graphics so that the playing experience of the customer maximizes and satisfies the maximum needs and wants of the customers. Human Resource Management: Play Station Vita hires the best employees and have ensures superior distribution network to ensure maximum satisfaction of the customers Technology: Play Station Vita uses the technology which have been developed by Sony and is privately owned by them Procurement: Play Station Vita procures the materials well in advance after keeping in mind the need and requirements of the customers so that strategies based on the needs can be determined. Market Research The market research for Play Station Vita highlights the manner in which the organization has been able to use the different resources through which overall development becomes possible. Play Station Vita has focused on quality as Sony always does. This has ensured that the products are checked and verified before being launched in the market and aggressive use of production technology which uses the latest developments has ensured quality in the offerings. Play Station Vita have thereby developed their console after keeping in mind the different needs and requirements of the customers and offers a bundle of offer through which customers experience gets enhanced. Target & Segmentation Play Station Vita focuses on attracting people between the ages of five to seventeen years who are fond of games especially the males. Recently, Play Station Vita has started to focus of the women counterpart by looking at attracting females within the age of 5 to 17 years towards the product. The prime reason for the primary target being males is that females on an average spends around 70% less times on gaming equipments. The recent change in the trends and increase in the demand for video games has made the focus to be shifted and created a secondary market in the form of females (James, 2004). Instead, Play Station Vita should focus on both the segment and through their advertising mechanism should attract people from all section of the society. Differentiation & Positioning Play Station Vita has to continue to position itself similarly where they have focused on being technologically advanced and matched the needs and requirements of all. In addition to it the focus is on designing the products which increases customers experience and the use of advanced technology has provided an opportunity to enrich their experience and position themselves differently from others in the market. This has thereby helped them to determine their positioning as shown below The above chart clearly highlights a different positioning where Play Station Vita has projected their product differently from the competitors and have thereby created a niche market for its products. This has helped them to focus on a special segment and have created a special category through which they are able to expand their reach. 4P’s of Marketing This aspect will throw light on the strategies adopted with regard to price, promotion, place and other tools so that Play Station Vita is able to increase its reach and penetration and develop a market through which productivity multiplies. Product: The product Play Station Vita has been designed and developed to appeal its targeted customers. Casual gamers are in search for objects and games which will enhance their experience and Play Station Vita has been directed in that path. This has been matched and accommodated by the changes which are being witnessed due to change in fashion (Johnson, Scholes and Wittington, 2005). Play Station Vita have thereby developed their console after keeping in mind the different needs and requirements of the customers and offers a bundle of offer through which customers experience gets enhanced. Price: The price charged by Play Station Vita is higher compared to other competitors who has hampered the expected growth and is an area which needs to be looked at. The prime reason for having a higher price is the advanced technology which has been incorporated compared to other players (Johnson, Scholes and Wittington, 2005). This has impacted the progress as customers or casual gamers are getting the same at a lower price and needs to be attracted by highlighting the different benefits which will accrue to them. Place: Play Station Vita is available all around the globe as Sony has used the already developed network of distributors. This has increased their penetration and helped them to reach at far off places. In addition to it Sony also sells Play Station Vita directly to its customers through their own website or through other agencies (Mintel Reports, 2005). This has helped Play Station Vita to expand its reach and has helped to attract a lot of customers from different section of the society. Promotion: Sony on the first instance has used their already established brand name to spread awareness about Play Station Vita. This has been supported by different promotional and celebrity endorsement. The organization has also relied on aggressive marketing which has helped them to each every nook and corner and create an impression in the mind of the customers. Conclusion The paper thereby looks at the different strategy adopted by Play Station Vita. Sony through its established brand name has created the required awareness and through the use of its already established distribution network the reach has been increased. This has been matched by strong promotion and correct market segmentation. The policy of being a differentiator and providing superior products with better technology has helped them. In addition to it Play Station Vita has been able to use its internal resources and develop them keeping in mind the evolving external environment. This has helped them to develop correct strategies and has improved their focus towards better services and customer satisfaction. References List Dimitri, W. (2002). Structure and Competition in the US Home Video Game Industry. The international journal on Media Management, p. 41-54 Finlay, P.N. (2000). Strategic Management: An Introduction to Business and Corporate Strategy. Financial Times: Prentice hall Johnson, T. , Scholes, P. and Wittington, R. (2005). Exploring Corporate Strategy: Seventh Edition, Prentice Hall, Pg 319 James, D. (2004). The New Risk Imperative-An Enterprise Wide Approach. Handbook of Business Strategy. 5 (1), 29-34 Mintel Reports, (2005). Massively Multiplayer Online Games (MMOG) and Mobile Video Games, Leisure Intelligence, November Roger, A., Hartley, W., Barkowitz, N., Rudelius, W. (2006). Marketing, 8 edition. New York. New York: The McGraw-Hill Companies Shah, N. (2005). The Video Game Industry: An Industry Analysis, VC Perspective, Tuck Darmouth, Hanover Stephanie, C. & Timothy, G. (2005). Customer Retention is Not enough. Journal of Consumer Marketing. 22 (2), 101-105 Walker, O. & Mullins, J. (2011). Marketing Strategy: A Decision-Focused Approach, McGraw-Hill Irwin. Read More