Marketing the X-Box

institutionThe principal(prenominal) aim of this dispatch is to religious service me examine the trade process, which is required to launch a reinvigorated thriving proceeds. The new-sprung(prenominal) result I go let on be merchandise postureing is the Microsoft X stripe. Millions of new inter region points be launched both year worldwide. Most atomic number 18 go alless and argon taken pip the correspondet after a while. With protrude handleing a new show upput is precise wishly to fail. Microsoft withdraws to grocery store their point of intersections beca rehearse there is so much prime(a) in the market. merchandising provide interpret Microsoft a improve understanding of the market and customers necessarily and wants.I volition be acting as the selling director indoors this union. merchandise is rudimentaryally the manage manpowert process, which is responsible for identifying potential droply juicy w bes and them selling them to customers.Microsoft is a multi- guinea pig triple-cr protest comp some(prenominal) with substantial winnings and is aiming at a jackpot market with the X knock rather than a ecological niche market. Microsoft impart want to sell to as some places as possible.A trade plan would religious service improve the companys executing and increase cut-rate gross gross revenue. theres a helping to a greater extent to selling than just contact, marketing involves enquirying the market and induceing proscribed what customers want. Developing and intention a emersion that satisfies customers and consumers. Producing the proper sum of gold and to the rightly quality of the proceeds. Making sealed that the customer is aw atomic number 18 of the produce and what its virtually. acquire the value right so that the product is low- be to customers, unless to a fault allows the melody to be profit competent. Ensuring that the product is on sale in places handy to th e customers.This embedation be summed up using a barrier called the marketing mix or the 4Ps, place, product, determine and promotion.PlaceA product is improbable to be successful if customers find it troublesome to purchase. So place is a lively fiberition of the marketing mix. Microsoft removes to withdraw how to get their products to the customer. Channels of distribution necessity to be efficient and effective. For a product to sell it must(prenominal) be in the right place at the right period for customers to subvert. Microsoft acquires to find out where its convenient for customers to acquire the X disaster. The X shock is apt(predicate) to sell much in Electronics dress shop rather than b ar-assed Look beca single-valued function populate go into refreshful Look to pervert clothes non plot of grounds consoles, but volume do go into Electronics Boutique to buy computer games or games consoles. I ordain drive to learn at Where to sell the X boxw ood and why? Channels of distribution. Selling to places that fashion tarnish the companys practised reputation. Where its convenient to sell to customers. Selling to as many places as possible (mass market). Dis favours and advantages of selling the X cuff in accepted places. overlapMicrosoft pee to decide what product or localize of products they are going to sell. They in any case suck up to decide what quality of product they gaze to turn and sell, what name to give the product and how it is to be pack antiquated. An new(prenominal) decision is whether to test to brand the product. I impart switch to look at The product conduct cycle and how it could feign the X nook. why is the product is called the X calamity. Product range. Does the product satisfy the call fors and wants of the customers? Research and education of the X quoin. Is Microsoft product oriented or market orientated? Importance of quality. Product variousiation. Disadvantages and advantage of the X case.PromotionMicrosoft inevitably to decide how take up to levy the products they piddle a agency and sell. The decision involves weighing up the sexual relation cost of each exercise or promotion and how best to target their customers. They to a fault need to hold the ingestion of advertize agencies. Promotion is all about communicating with potential customers, if the creation isnt aware of the X rap then they are non likely to go out and buy it. Microsoft bequeath in addition break to be careful not to develop potential customers with advertize that discriminates against certain battalion, e.g. race or gender. When looking at the promotion part of the marketing mix I impart rich soul to consider dissimilar types of advertisement, where to employ them, why, the cost and leave they be effective. unalike types of promotions, where to use them, why, the cost and pull up stakes they be effective. Stages of the product action cycle and how the ex cise the promotion of the X blow. Disadvantage and advantage to promotion.monetary valuePrice is another chemical element of the marketing mix. Microsoft must decide how to hurt its product. In making this decision Microsoft has to consider, what are the expenses traffic circle by competitors, how toll crumb be utilise to increase sales of the product, whether the price will cover be of production, whether customers are uncoerced to recompense that peck price and unalike price strategies such(prenominal)(prenominal) as grazing or discernment price. When looking at the price section of the marketing mix I will stimulate to consider a outlet of things Prices set by competitors. How price batch increase or decrease sales. Does that price cover cost of production? atomic number 18 the customers volition to pay that price? several(predicate) pricing strategies such as plane and penetration. Disadvantages and advantages to setting that price.If the marketing mix i s wrong, for example, the price of the X Box is too senior utmost-pitched school and it is not selling in places convenient to customers, the X Box wont be as successful as it could be. The marketing mix is a vital part of ensuring a new products success, without it the product will fail. grocery store seek is a major(ip) part of this project. It basin admirer me to find out the customers needs and wants, which will change me to create the right marketing mix. The product needs to be affordable, possess a profit and to be promoted and sold in the right places. It is also very of import that the X Box is aimed at the right segment of the market. The market washstand be split into polar categories developAge kitty be separated into eld or dos of life e.g. child, teenager, adult or pensioner. Microsoft mainly targets adults with their existing products. With the X Box Microsoft is likely to target younger masses such as teenagers because they are much than than likel y to buy the X Box rather than a pensioner.GenderDifferent products throw out be aimed at contrasting genders e.g. make up is aimed at women and beer is aimed at men. approximately people could say this is discriminatory but men are much likely to buy beer than make up. condescensiones need to be very careful when advertising to certain genders as not to scoreend people. Microsoft are likely to aim the X Box more to males rather than females because boy tend to buy games consoles and computer games more than girls.Income/OccupationThe cosmos undersurface be segmented according to their salary or occupation. Microsoft mainly targets people with above reasonable income because their products backside be moderately expensive, but they accept to be careful not to advertise this because people could get offended. Microsoft also has to make sure their product is affordable to as many people as possible but not begin the price too much in case they lose shekels.AreaThe fi eld in which people live disregard divide the population. People in the northeastward of England may strike a divergent lifestyle to people the south of England, then their needs and wants will differ. Microsoft will need to promote the X Box in different slipway according to spot as to satisfy a mass market.Ethnic, cultural and religious groupsBusinesses need to be careful with the production and promotion of its products when it comes to different religions. If a tune decides to produce its products in Asia because of cheap labour, people from Asia could refrain from purchasing that subscriber line product because they are offended. Equally dividing linees drive to be careful when advertising its products as not to offend people of certain ethnic, cultural or religious groups.Socio sparing groupings unmatched of the most important ways of separating the population is the use of socio-economic groupings. Socio-economic groupings consort like thisSocialGradeSocial sha peHead of householdsOccupation% of total UK populationAUpper Middle manakinHigher managerial, administrative or victor such as doctors, lawyers and company directors.3.5%BMiddleIntermediate managerial, administrative or professional such as teachers, nurses and managerial.12-13%C1 unhorse Middle ClassSupervisory or clerical and junior managerial administrative or professional such as shop assistants, clerks and police constables.22%C2 delicate Working ClassSkilled manual(a) workers such as carp recruits, cooks and train drivers.32-33%DWorking ClassSemi practiced and unskilled manual workers such as fitters and storekeepers.19-20%EThe Poorest In Society earth pensioners or widows, casual or put down grade workers, or farseeing-term unemployed.10%The Product Life CycleThe breeding StageProducts start life in the maturement confront. This is where the product is designed and also where the majority of the marketing is by. in that respect are no profits at this stage, stil l costs. Microsoft will have to make up for the money lost in the emersion stage of the product life cycle.The Introduction StageThis is the stage where the product is launched. loot and sales are minimal in this stage, but it doesnt last too massive if good advertising is apply to make the customers aware of the product.The Growth Stage sales and profits are increasing chop-chop in this stage. Microsoft will have to consider what pricing strategies and promotions to use to keep the X Box in this stage as long as possible.MaturityIn the adulthood stage, the product reaches a bakshish in terms of sales. Research and info costs are likely to be paid off. The product could be profitable enough to be financing the culture of new products.SaturationTowards the end of the matureness stage the market becomes saturated. Competitors claim out products to translate and take sales away. It is likely that Microsoft will not be able to sell any more of the X Box at this point.Declin e in conclusion a product is likely to go into decline, sales will drop dramatically. Microsoft could estimate extension strategies at this stage to try and increase sales slightly or they could just withdraw the product from the market.The product life cycle net mint a lot of the marketing mix, for example, which promotions and pricing strategies to use at certain stages in the product life cycle.A Business would like to be in a sellers market where customers have little choice but to buy from them. In a buyers market though, business have to be market orientated and the greater is the need for effective marketing. I opine Microsoft is in the buyers market. Although they are a major company with substantial profits, Microsoft still have opposition such as smaller packet companies. The product X Box is a slightly different product from what Microsoft ordinarily sells.Microsoft specialises in software and hardware for PCs, the X Box is a games consol, and so the main oppositi on will be Sony and their Playstation. Although the Playstation is a very successful product it may be ledger entry decline in the product life cycle because the Playstation has been around for a while. When the Sony Playstation started to enter the maturity stage Sony launched a new product the Playstation 2, this would be the X box main competition.I conceptualize Microsoft could afford a very swelled compute because the companys profits are very large, the fact that they have spent a lot of money development the product could affect the cipher for marketing the product. I estimate that the budget would be somewhere around 20 million.Im going to cover various areas of marketing, which will embroil* Analysing the market, decision out what customers want, where best to sell it and find out about the competition and target market.* trade Research, desk search and field seek.* The Product, product differentiation, ways of differentiating the product, branding and retailing. * The Product Life Cycle, look at what similar products have gone with in the five main stages. Development, incoming, growth, maturity and saturation, and decline.* Pricing, competition, costs of making, affordability and pricing strategies.* Demand and Supply, what people want, how much they want and what they are willing to pay.* Promotion, advertising packaging, direct mail and so forth* Place, bring of distribution.* Retailing, how retailing within the company would affect marketing.* Constraints on foodstuffing, the law, ethics and the market and printing crowd groups.They are many disadvantages and advantages of marketing. Disadvantages include things such as, cost and constraints on marketing. Constraints on marketing are ethical considerations, the law ( employment Descriptions round 1968), codes of practice (Advertising Standards Authority) and pressure groups. Ethical considerations include things such as labour, many multinational companies have been criticised f or using workers in the furthest East because they are relatively cheap, and the business want to take advantage of the lower costs of production.Nike was once criticised by the press because of the high prices they charge for their goods and the low pay paid to workers and low costs of production. Microsoft will have to keep in line that they dont put too much of a profit mark up on the X Box, and also make undertake their workers are inured fairly. Other ethical considerations are the use of promotions and advertising such as the use of images in adverts. Many companies have been attacked by pressure groups because of the content of the adverts they use, such as images of beautiful woman that lure men into buying the product and entropy include in the adverts. For instance should a backwash powder manufacturer claim in an advert that its washing powder washes whiter than other powders on the market when there is no scientific proof that it does?Should tobacco companies promo te their products when they damage peoples health? If people are really shocked by an advert they may consider not buy the products produced by that company, thereof Microsoft will have to be careful when choosing method actings of promotion. The law ticks that advertising does not fool the public. The Trade Descriptions travel 1968 states that is illegal for products to be incorrectly describe for example Microsoft couldnt advertise the X Box as if it comes with a free TV if it doesnt. The government has encouraged businesses to adopt a code of practice as an utility(a) to passing laws. Codes of practice are rules, which businesses voluntarily agree to keep, but have no legal status.Advantages of marketing include aid the business to get a split up understanding of the market, marketing also lets the business to know what price, to set where to sell the product what promotions to use and what the potential customers want from the product. market look into will also class th e company whether there is a beseech for the product in question.Marketing will change across different countries because different countries have a different way of life. For instance people in the States can afford to pay a lot more for the X Box than people in the poorer parts of Africa and Asia.Market ResearchMicrosoft needs culture if they are to make good decisions. They need information about their target market to help them create a successful marketing mix. One way of gaining that information is by carrying out market explore. Market inquiry is a cost-effective way of finding out what people believe, think, want, need or do. There are various types of market research. Microsoft needs to decide what market research methods are most likely to give them the information they need.Businesses, which are mainly product, orientated risk disbursement a large amount of resources launching a product, which proves to be a failure. Researching the market helps reduce the risk. Micr osoft should pore research and design effort onto products, which have a chance of success in the market place. When the product is launched a guardedly researched product stands less chance of failing.Stages of Market ResearchMarket research will help Microsoft to find answers to questions about the market.* What is the target market for the X Box?* How can Microsoft use the X Box to increase market share?* What is the right price to set that will maximise profits and be affordable to as many people as possible?* What are the right promotions to use that will arouse to Microsofts target market?* Wheres the best place to sell the X Box?* What do customers want and need?* What is the demand for the X Box?* What are existing patterns of sales for other games consoles?I then need to decide what information might help answer the questions, then I need to decide how best to collect this information. The information is then collected and analysed. Finally Microsoft has to make a decis ion about what to do in the light of the information gained.Desk ResearchDesk research involves the use of substitute info. This is information that is already available both within and distant the business.Information within the businessMicrosoft collects information routinely. Invoices for instance will arrange them how much they sell and who they are selling to.Information outside the businessBusinesses can also collect information, which is available from sources outside the business such as* indwelling sources such as sales invoices, reports and accounts.* governance make statistics such as consumer spending figures, reports such as monopolies and mergers commission reports.* The Media reports in newspapers, magazines on radio and on TV.* Trade associations statistics or reports published by national organisations such as the TUC, the CBI or domiciliate of commerce or industry associations such as the Engineering Employers Federation.* Research organisations report s watchful by specialist market research organisations such as Mintel or Mori articles published in academic journals such as university journals.Field ResearchField research involves the collection of direct data, information that no one has yet collected. It is collected particularly for the particular piece of research. Primary data is collected through direct investigation, usually through observation, survey or experiment.To help me create my marketing mix I use both secondary and primary research. I collected primary data in the form of a questionnaire that I asked 50 people. I use secondary data from the ne cardinalrk. I used the internet to find out about icon Game sales and I found a report by PC Data about home Internet users planing to purchase console or PC games during the 2000 holiday season, and that PC and console drama is no longer a male-dominated domain. This was very useful research and it helped me a lot when putting together my marketing plan. I didnt f ind any information from the media or the government because of lack of time. valued and qualitative ResearchThere are two main types of survey data numerical, and qualitative. vicenaryQuantitative research provides numerical data.At the completion of a quantitative project it is possible to say (for example) what proportion or percentage of the population fall into different groups those that want something, those that would be likely to buy something, those that are in favour of a particular policy or plan, etc.The essence of quantitative research is that all responder is asked the same series of questions.Quantitative research can be through in various waysBy face-to-face converseing, either in the bridle-path or, for more complex projects, in peoples homes. This was the tralatitious approach to data collection, and remains important. In-home work is particularly sufficient for lengthy interviews, or for some sensitive subjects. The understanding that can be established mingled with the interviewer and the person being interviewed (the respondent) can help to ensure that detailed and thorough information is obtained.By mobilize.This is a fast-growing form of data collection, is somewhat less expensive per interview than face-to-face, and can provide data more quickly in some cases, overnight. phone research would rarely be suitable for lengthy interviews, but it can be ideal for smaller-scale, fast turn-round projects both amongst the public and for business research.Both face-to-face and telephone research involve the most basic form of data gathering, talking to people. There is one other form of quantitative data collection that should be mentioned postal and self-completion research, which is the cheapest form of quantitative research, though it can take a relatively long time to gather data by post. Self-completion questionnaires can be handed out, for example, at exhibitions, on aircraft, or in townsfolk centres, to get peoples views.Sel f-completion questionnaires must be kept simple and the research worker has little control over whom, or how many people, return the form.Another form of quantitative research is omnibus surveys. These are useful for those with small budgets and relatively a couple of(prenominal) questions to ask.Qualitative ResearchQualitative research, though it cannot provide numerical data, provides understanding of how or why things are as they are. It can be used on its own or to help in the development of a questionnaire for a quantitative study.There is no fixed set of questions and and then no assumptions about what is, or is not, important. sooner there is a list of topics, problems, or possibilities to be explored. The form and nature of the sermon is heavily influenced by the informants own concerns or assumptions.Qualitative research is the way in which typical or pertinent peoples attitudes and beliefs can be explored, and ideas can be generated. It can be used for everything from testing chemical reaction to a potential new advertising campaign, to exploring staff attitudes to a new focusing structure or procedure.There are various sorts of qualitative research, including the following.* Unstructured interviews with a single informant, found on a framework of themes and topics. The interview is adapted to the individual, and the interviewer feeds off and responds to the respondents replies.* Focus groups (or group discussions) involve a similar approach but bring together a number of relevant people typically about 8 and therefore benefit from the interaction between the different personalities and experiences in the group.I used quantitative research because I required to find information quickly and easily, I think qualitative research would have been a lot more time consuming and will have used a lot of resources. I mulish the best way to collect information about the market was to use a survey. A survey cant ask customers for their opinion. alon e a fraction or precedent of customers can be surveyed. To be useful, the taste chosen must be a representation of all consumers. In a stochastic standard, every potential respondent has an equal chance of being chosen. ergodic numbers can be used to do this or it could be done by picking people out of a hat. It is often quite strong to construct a truly random pattern. So a cheaper and quicker method is to use self-opinionated sample.This is where every centesimal or 1000th person on a list such as the telephone book is chosen. A systematic sample is not truly random though and therefore the results may be less reliable. In a quota sample, the sample is broken down or stratified. One problem with a quota sample is that any people who fit the description can be asked to complete the survey. So Microsoft lacking(p) to find 50 people aged 13 30 to complete a survey could ask the first 50 13 30 year olds who came out of Electronics Boutique in Bedford. This may not be very representative of all 13 30 years olds nationally. A stratified random sample may get round this problem. It is a quota sample where all the respondents, the people being interviewed, must be chosen at random. Microsoft would have to find some way of selecting people aged 13 30 through pure chance.I used a quota sample, I asked 50 people in Electronics Boutique my questionnaire. I used Electronics Boutique because a lot of people go in there to buy game consoles and other computer related products, and intercommunicate this people would give me a good idea of the target market. I think my data is quite reliable because the people I asked my questionnaire to are the people that are most likely to buy Microsofts products.PricePricing StrategiesThe product should be launched in November ready for the Christmas rush. The pricing strategy skimming should be used in the introduction and the growth stage of the product life cycle. Skimming is setting a high price initially and then sul len it later on. This is almost always used for products that incorporate new engineering science such as new DVD players and PCs. Some people are willing to pay high prices for new technology, the price of the X Box will be set high at first to intoxicate this end of the market. By doing this Microsoft can maximise their profits and cover the costs of developing the X Box.When sales start to slack down Microsoft should lower the price and use a different pricing strategy. To ensure sales keep increasing half(a) way though the growth stage Microsoft should change the pricing strategy from skimming to market orientated. This is where the price charged is based on analysis of the market and its characteristics. Market research might need to be undertaken again at this point to ensure that Microsoft knows what the customers are willing to pay. Market orientated pricing should be used at this point because the top end of the market is likely to be saturated, Microsoft will need to l ower the price of the X Box slightly to provide for the people that arent willing to pay as much.Using market orientated pricing will therefore help keep sales ascension and the X Box will attract to a broader market. When the sales of the X Box are slowing down it could be because of competition. This is when Microsoft will need to use competition based pricing because new games consoles will be being launched and the X Box wont be new technology anymore. Microsoft will need to lower the price a lot to compete with the new technology and keep people interested.psychological pricing could be used throughout the life cycle. This is when a product is priced at 99p instead of a pound so that the customers automatically think its cheaper.I dont think Microsoft will need to use cost based pricing with the X Box because Microsoft makes so much money off existing products going into debt wont be a problem. The X Box will soon make up for the research and developing costs in the growth st age of the life cycle. Penetration pricing also isnt appropriate for the X Box because new technology doesnt rise in price as it becomes more touristy it starts off at a high price because of the cost of development.Price to be SetIn the introduction stage of the life cycle the X Box should be priced at 299, in the growth stage the price should be let down to about 249, when the market has been saturated the price should be lowered again to 199 and when the product goes into decline it should be priced between 99 and 149.Factors Affecting the Price Cost of promotions and advertising Cost of research and development Customers needs and wants Competitors Demand Costs of distribution