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SO NY P LAYS TATI ON 2

MARKETING PLAN

November, 18, 2004

GROUP #8 CINDY BROWN KUNAL SHAH ROBERT BURNS EDDIE CARTER

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

P L AY S TAT I O N 2 : M A R K E T I N G P L A N

INTRODUCTION The Sony PlayStation 2 was released by Sony Computer Entertainment in 2000. Sony Computer Entertainment also develops, publishes, markets, and distributes software for PlayStation 2. PlayStation 2 is a gaming console giving consumers the ability to play not only PlayStation 2 games, but PlayStation One games as well. PS2 also has the ability to read and play DVDs and CDs and comes with a parental lock feature. It also features an Ethernet port which enables users to play against others on a world wide spectrum. PlayStation 2 offers something for everyone no matter what youre into. Within our marketing plan, we will discuss many attributes of Sony and its product, PlayStation 2. First, we will analyze the past, present, and future of Sony PlayStation 2 through the SWOT analysis. Second, we go into the market product focus and goals set for PlayStation 2 as a superior entertainment product. Our plan goes on to discuss, the marketing mix through product, price, promotion, and place of distribution. Competition is analyzed, followed by the global market outlook and future trends.

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

SWOT ANALYSIS

Figure 1 shows the internal and external factors affecting the market opportunities for Sony PlayStation 2. Strengths and weaknesses, opportunities and threats are

highlighted within this analysis.


Figure 1. SWOT Analysis for Sony PlayStation 2 Strengths Weaknesses Legendary leaders in the field. Succession problem. Outdated mission statement. Offerings Revolutionary console aimed at A few higher-quality, lower defining a new form of priced competitors. Lowering entertainment. Unique, versatile, margin for technology low priced. advancement. Marketing Easily creates new markets Lacks long-term direction Personnel Self promoting, job rotating Poor communication with system creates satisfaction management Finance Monetarily well-established Decreasing return on investment. High capital investment figures. Manufacturing Well-established Lacks long-term direction Research and Development Four research facilities to make Lack of communication to continuous efforts in innovation management. Lack of general direction. External Factors Opportunities Threats Consumer/Social Declining market Competitive Lowering of prices Competitors can duplicate product. Technological Leader in technology Other competitors prior advancement Economic High consumer income; obtain Exhausted market for product. wants you only need one Legal/Regulatory Internal Factors Management

MARKET-PRODUCT FOCUS AND GOAL SETTING GOALS. The goals of Sony include developing an easy to use gaming console with the features of todays technology. Affordability is also important. Different

technologies of gaming systems set to be release in the future include the PSP, PS3, and

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

the PSX. These three items are new versions of the PlayStation 2 developed to compete with other like products on the market. The PlayStation Portable (PSP) will be released in Spring of 2005 at a price of $186. This product markets to people also on the go or traveling. The PlayStation 3 (PS3) will be released in late 2005 or earlier 2006 at a price range from $300 to $350. The PS3 is an advancement of the PS2 including TIVO, surround sound support, improved hard disc, and a processor with a speed 200 times faster. The PSX is now released in Japan highlighting features such as TIVO, DVD burning capabilities, and broadband utilization. The PSX is available in two versions; 160GB hard drive and 250GB hard drive, starting at $914.

TARGET MARKET.

The target market includes every one of all ages and

genders, but predominately the specific target market includes males ages 8 to 28. Specific games are targeted at different age groups and genders.

POINTS OF DIFFERENCE. Characteristics that make PlayStation 2 superior to other products include: CD/DVD player use without requirement of remote control, smaller controllers, arguably better designed controllers, smaller size of console take up less space, largest array of game selections, and numerous accessories.

POSITION THE PRODUCT.

The name says it all

PlayStation 2 has

established itself in the market as a superior gaming console. It is described as being indisputably the most popular computer entertainment system in the world

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

MARKETING MIX

PRODUCT LINE. The Sony PlayStation 2 is a Digital Video and Gaming system for home entertainment. Sony PS2s entertainment capabilities include the ability to watch DVD movies and have an enormous library of video games for the PlayStation console. Having the largest third party gaming developers for the PlayStation 2 is a huge advantage over the competition.

UNIQUE PRODUCT QU ALITY. The PlayStation 2 has an extensive after market product line with numerous developers of products that enhance the gaming console. The PlayStation 2 also has online gaming capabilities to engage other human players across the world through a cable adapter that attaches to the rear of the PS2 that adds an Ethernet port for the console to connect to the Online Community that each software game can access.

PRICE. The PS2 costs $149.99 for a complete new system including: - PlayStation 2 console - Analog Controller (DUALSHOCK 2) - AV Cable (integrated audio/video) - AC Adaptor (AC power cord included)

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

A Pre-owned PlayStation 2 console may vary in price depending on location and whether or not the distributor has any specials on refurbished or pre-owned systems, including all the same products a new system comes with. Competitors in the gaming console system market produce a closely similar price range for new and used systems and will stay consistent to a price decrease when other companies decide to reduce the price of their product.

PROMOTION. Key promotional programs for the PlayStation 2 will include instore displays featuring hands on testing by consumers plus magazine and television advertisements.

PLACE. The Sony PlayStation 2 will be distributed at various electronic entertainment stores throughout the country and online distributors.

COMPETITION

The major competitors in the video gaming console industry lie mainly between two companies: Microsoft, with their Xbox gaming system, and Nintendo, with the GAMECUBE gaming system. Microsofts Xbox gaming system is the closest gaming console that has equal product features (ex: DVD movies, exclusive software, online gaming community, etc.). Nintendo produces the Nintendo GAMECUBE which is focused mainly towards the gaming market with no emphasis towards the video entertainment industry. This is

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

demonstrated by the absence of DVD movie processing components in its system design. Consumers may feel that the quality of the GAMECUBE is less sufficient than that of the Sony and Microsoft produced computer systems.

GLOBAL MARKET OUTLOOK

The global market outlook for PlayStation 2 is very broad. PlayStation 2 is being sold in more that 120 countries world wide, including North America, Europe, Africa, Middle East, Oceania, Southeast Asia, South Korea, and Central and South Americas. PlayStation 2 has been leading the gaming market since its launch in Japan, March of 2000. It had record breaking sales, selling 980,000 consoles in two days. More that 70 million shipments for PlayStation 2 hardware and 572 million shipments of software have been made worldwide. We were able to break these numbers down by countries; more than 40 million copies in Japan and 70 million in North America. These numbers alone show the popularity of PlayStation 2 world wide. Japan has predicted Sony to sell about one million PlayStation 2 consoles by the end of March 31, 2005. PlayStation 2 has dominated the gaming market world wide. It controls about 80 percent of the market in Japan and Europe, and about 40 percent of the market in the United States.

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

FUTURE TRENDS

Sony Computer Entertainment, maker of PlayStation 2, will unveil a new book size version of PlayStation 2 in late 2004, which has only 25 percent of the internal volume of that of the original PlayStation 2. The new version weighs half as much and it is only 2.8cm thick, down from 7.8cm. This version will also be cheaper than the current PlayStation 2. This new version comes with a built in Ethernet port for online gaming. It will also come with an analog modem port for users still without broadband. The Future of the console gaming market is going to grow even bigger over the next five years. Newer consoles and an ever increasing gaming library for all systems are going to have a direct impact on the gaming industry. Newer technology just around the corner, and the development of easier methods to produce components for these gaming consoles, is only going to make it simpler for these companies to expand the gaming market. A future trend that is going to be seen by the public in the up coming months and through the holiday season will be the release of two new hand held gaming systems. One produced by Sony and the other by Nintendo. The Sony PlayStation Portable (PSP) is going to be a portable entertainment package that can fit into a persons pocket. The main features of this system are to have a clear crystal LCD screen, a computer processor capable of having PS2 quality games in your hand. Digital movies will also be a main feature for this console by Sony.

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown

CONCLUSION

In conclusion, the Sony PlayStation 2 has seen much success in the United States markets and on the international board alike. Research and development worked

incredibly hard in the planning and preparation of the PlayStation 2 gaming console. Sony will indeed continue to set market trends by staying on top of the technological revolution. Strongly supported by software developers and publishers, PlayStation 2 is indisputably the most popular computer entertainment system in the world and the new design will position it for even greater success over the next half of its life.

Kunal Shah, Robert Burns, Eddie Carter, Cindy Brown