Download - Sony EyeToy
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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
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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?
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SONY EYETOY: CASE ANALYSIS
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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
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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 -
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SONY EYETOY: CASE ANALYSIS
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SONY EYETOY Strategic Orientation Modes
Product Ecosystem Perspective
1. User Networkgamers
2. Complementary Network3rdparty
3. Producer Network - Sony
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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
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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.
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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
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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
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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
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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