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  • Emotiv Systems Inc

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    Prashant Pratap Singh
    769 vizualizări2 pagini
    Emotiv Systems is deciding whether to launch its new brain-computer interface technology on PCs or gaming consoles. It would be best to first launch on PCs, where there is no platform royalty fees, more game developers, and a market of hardcore gamers willing to pay a premium price. If Emotiv can later partner with a console maker, it should use both offline and online sales channels initially and price the product at $299 to gain market penetration as the market is still growing. If only launching on PCs, the declining market means a higher price of $299 is appropriate to target hardcore gamers.

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    Emotive Harvard Case STudy

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    Emotiv Systems is deciding whether to launch its new brain-computer interface technology on PCs or gaming consoles. It would be best to first launch on PCs, where there is no platform royalty fees, more game developers, and a market of hardcore gamers willing to pay a premium price. If Emotiv can later partner with a console maker, it should use both offline and online sales channels initially and price the product at $299 to gain market penetration as the market is still growing. If only launching on PCs, the declining market means a higher price of $299 is appropriate to target hardcore gamers.

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    © All Rights Reserved
    Descărcați ca PDF, TXT sau citiți online pe Scribd
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    769 vizualizări2 pagini

    Emotiv Systems Inc

    Încărcat de

    Prashant Pratap Singh
    Emotiv Systems is deciding whether to launch its new brain-computer interface technology on PCs or gaming consoles. It would be best to first launch on PCs, where there is no platform royalty fees, more game developers, and a market of hardcore gamers willing to pay a premium price. If Emotiv can later partner with a console maker, it should use both offline and online sales channels initially and price the product at $299 to gain market penetration as the market is still growing. If only launching on PCs, the declining market means a higher price of $299 is appropriate to target hardcore gamers.

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    din 2

    ISB:TERM2:MKDM

    ShortCaseWriteupAssignment1PrashantPSingh(SecL61710779)

    EmotivSystemsInc.

    1. WhichplatformshouldEmotivpursueconsoleorPC?FocusonlyontheUSmarketandassumethatUShas110
    millionhouseholds.
    Duetotherecentinnovationsintheconsolemarket,WiiandGuitarHerosuccess,itmakesmoresenseforEmotive
    tolaunchitsfirstdeviceontheConsoleplatform.However,asitlooksdifficulttocrackthedealwithanyofthemajor
    playerandwaitinglongerwouldonlygivethecompetitorstimetodeveloptheirdevice,itsbesttolaunchthedevice
    withfullfunctionalityonthePCmarketandchargeapremiumpriceasthePCmarketisamaturemarket(Exhibit8).

    TherearevariousbenefitsoflaunchingitinthePCMarketnamely:
    1. NoroyaltiestobepaidtotheGameDevelopersandplatformmakers.Thus,higherprofitmargin.
    2. ThereweremorePCgamesthanConsolegamedevelopers.So,itwouldberathereasiertoconvinceformerto
    designgamesforthem.
    3. ThePCmarketisnowachoiceofthehardcoregamerswhosetuphighperformancePCwithgraphicupgrades
    spending1000sofdollars.Thusforagoodproducttheywouldbewillingtopayapremiumprice.

    WiththesuccessinthePCmarket,probablyitwouldbeintegratedwithconsoles(Microsoft)aswell.

    2. IfEmotivmanagestoconvinceoneoftheconsolemakersintimeforafall2008debut,whatmarketingmixdecisions
    (specifically,pricingandchannel)areappropriate?
    Channel:
    Startwithofflinechannelandlaterwithincreasingpopularityandcompetitiongoforonlinechannel(Highermargin
    whichcouldbesharedwithcustomer)aswell.
    Reason:Itisanewproductandpeopleneedstoseeforthemselvestobelievethatproductdoeswhatitsays.

    Pricing:
    Fromtheoptionsavailable(99,199,299,399)$299seemsthebestbetfortheproduct.Asthemarketisingrowth
    stagePenetrationseemstobethebeststrategyhere.Makinghighsellingefforts(offlinemode,RetailerMargin
    35%,BDS7%)andchargingmoderatelylowprice.

    3. HowaboutifEPOCisonlyPCenabled?
    Channel:
    Startwithofflinechannelandlaterwithincreasingpopularityandcompetitiongoforonlinechannel(Highermargin
    whichcouldbesharedwithcustomer)aswell.
    Reason:Itisanewproductandpeopleneedstoseeforthemselvestobelievethatproductdoeswhatitsays.

    ISB:TERM2:MKDM

    ShortCaseWriteupAssignment1PrashantPSingh(SecL61710779)

    Pricing:
    Charge$299becausethemarketisindeclinestageHighsellingeffortsandchargingHighPriceseemstobethe
    beststrategy.Also,mostofthepeopleintoPCgamingarehardcoregamerswhobuilttheirPCsspendingthousands
    ofdollarsthuswouldbereadytopaythepremiumprice.

    80%
    15%
    5%

    RetailOffline
    RetailOnline OwnWebsite
    Salesmore
    Salesmore
    Salesmore

    than1Million than1Million than1Million


    COSTOFPRODUCTION
    110
    110
    110
    Return(10%)
    11
    11
    11
    ActualCost
    121
    121
    121
    RetailerMargin
    35%
    35%
    0
    Marketdevelopmentfunds(MDF)
    7%
    7%
    0
    ConsoleRoyality(35%)(4%)
    4%
    4%
    4%
    GameDeveloper(2%)
    2%
    2%
    2%

    PCMODEL

    MARGIN(SP=199)
    5.58
    5.58
    78
    MARGIN(SP=299)
    52.42
    52.42
    178
    CONSOLEMODEL

    MARGIN(SP=199)
    17.52
    17.52
    66.06
    MARGIN(SP=299)
    34.48
    34.48
    160.06

    SALES
    GuitarPro
    Conservative
    Aggressive
    AssumingActual
    ESTIMATE
    Sales
    Estimate
    Estimate
    Sales
    FirstYear
    82,800
    20700
    20700
    20700
    SecondYear
    1,138,000
    284500
    569000
    426750
    ThirdYear
    1,734,000
    693600
    867000
    780300
    TOTAL
    2,954,800
    998,800
    1,456,700
    1227750

    ACTUALPROFIT
    RETAILMARKET
    OnlineMarket
    OwnWebsite
    CALCULATIONS:
    (80%)
    (15%)
    (5%)
    TotalProfits

    Sales
    982200
    184162.5
    61387.5
    Profit
    $51,486,924.00
    $9,653,798.25 $10,926,975.00 $72,067,697.25
    (SP299)
    PC
    Platform Profit
    $5,480,676.00
    $1,027,626.75 $4,788,225.00
    $1,720,077.75
    (SP199)

    Profit
    $33,866,256.00
    $6,349,923.00
    $9,825,683.25
    $50,041,862.25
    Console (SP299)
    Market
    Profit
    $17,208,144.00
    $3,226,527.00 $4,055,258.25
    $16,379,412.75
    (SP199)

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