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Strategy and Positioning Analysis Part 2 17

Strategy and Positioning Analysis Part 2

MKT/421

January 31, 2017

Strategy and Positioning Analysis Part 2

Introduction

No introduction is required and not bold type

Developing the marketing strategies for the NBA2k18 game involves many different steps. Gamers don’t have to look hard for new games if they are the newest and hippest games out there. Every new product will have a product life cycle and in the following analysis readers can see just how that life cycle effects how the product is marketed. Developing a good package, analyzing the appropriate price, and evaluating the channels of distribution will help companies like PlayStation add profit and value to their products.

Marketing Efforts

Product Life Cycle

Every new product in the market undergoes a cycle which determines a company’s marketing efforts. The concept of the Product Life Cycle describes the cycles a new product passes through the marketplace. The Product Life Cycle consists of four stages: introduction stage, growth stage, maturity stage and decline stage (Stark, 2015). Throughout these stages, the new products have different needs and each stage addresses the new products needs and permits a various marketing tactics to be used. The marketing tactics used in the various stages of the new product may range from marketing objectives, competition, product, price, promotion, and place. The primary intent of this paper is to identify the various marketing concept involving the release of the NBA2k18 video game by Sony PlayStation Company. This paper will analyze on how the marketing efforts and marketing mix change at different phases within the Product’s Lifecycle, how packaging adds value to the product and how the Sony PlayStation Company will determine the pricing strategies. Lastly, this paper will identify the various channels of distribution the Company will use to sell the NBA2k18 video game and how each partner can add value to the brand. This section is an editorial

Introduction Stage

Companies attempt to maximize their profits over the entire lifecycle of a product. For the companies to achieve the desired levels of revenue, the introduction of the new product at the appropriate time is very vital. In the introduction stage, the Sony PlayStation will introduce the NBA2k18 video game in the market with the intention to create a clear identity to the target market. As such, heavy promotions will be conducted for the maximum creation of awareness. However, before the actual offering of the NBA2k18 video game to the customers, the Company can decide to undertake the product development phase which involves market tests and prototype. The Sony PlayStation will incur more costs in this stage due to the heavy promotions carried out through advertising. Also, the Company will bear additional costs for distribution and the market tests carried out (Sale, Mesak, & Inman, 2017). Additionally, the Company will experience a few customers at this stage resulting in low sales volume. Consequently, during the introductory stage, the Company’s profit is negative because of the huge operational costs incurred and low sales volume realized. This section is an editorial

At the introduction stage, the Sony PlayStation Company’s core focus is on establishing a market for the NBA2k18 video game and the rising demand for the product. The marketing strategy of the Sony PlayStation will have a significant impact on the marketing mix which comprises the product, price, place, and promotion. Based on the product, the Company will ensure that the branding, packaging, quality level and the intellectual property and protections of the NBA2k18 video game has been obtained to stimulate the consumers. Based on the price, the Sony PlayStation can use high pricing for the new video game which is ranked among the best regarding the broad range of services it can offer to the consumers. The Company can use high pricing for the NBA2k18 video game to make high profits with the intention to cover the initial costs within a shorter period. Another marketing mix tool is the place; whereby it deals with the distribution channel. The Company will be very selective on the mode of distribution at this stage. Based on promotion as a market mix, the Company will allocate large budgets on the various advertising and marketing techniques to gain customer awareness (Stark, 2015).

Growth Stage This section is an editorial

A company enters the growth stage once the customers are aware of the new product and the sales volume begins to increase. The increase in sales is partly as a result of new customers trying the product, in addition to repeating purchasers. In this stage, more competitors are established, and aggressive pricing strategies are involved; therefore, profit levels are very high. In the case of Sony PlayStation, the growth stage is vital for product differentiation and building a brand preference for their target customers. The impact on the market mix will be as follows, the product; whereby the Sony PlayStation will maintain the existing quality and introduce new features and improvements in the quality of the NBA2k18 video game so as to compete and maintain the market share (Huang, & Sarigöllü, 2014. Another impact on the market mix is the price; whereby the Company may resort to increasing the price of the NBA2k18 video game since the demand could be high as a result of low competition. In the other hand, the management of the company may opt to reduce the price of the video game to grasp more consumers. Another market mix element is distribution; whereby the Sony PlayStation Company will diversify its distribution channels due to the increased demand and acceptability of the NBA2k18 video game. The last element of the marketing mix is the promotion; whereby the Company increases its level of advertising the new video game. When acceptability of the product increases, the Company will put more efforts on advertising for promoting brand preference and loyalty.

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Maturity Stage

At maturity stage, the brand awareness of the NBA2k18 video game is strong; therefore sales continue to grow but at a declining rate as compared to the growth stage. More competitors are likely to emerge offering video games similar to the NBA2k18. Therefore, the Sony PlayStation Company should carry out great promotions to encourage the retailers to give more shelf space to the product than that of the competitors. The marketing mix decision by the marketing managers of the Company includes the Price whereby it may be reduced. Because of intense competition, the marketing managers of Sony PlayStation may lessen the price of the NBA2k18 video game to compete successfully with similar products from the competitors (Huang, & Sarigöllü, 2014). Besides, the pricing of the video game is reduced so as to attract the price-conscious consumers and also to retain the existing customers. Another marketing mix element is distribution; whereby the management of the Sony PlayStation Company could add new channels of distribution to face the intense competition by their competing rivals. Also, incentives can be offered to the retailers for the Company to get shelf preference over its competitors. The last marketing mix element is promotion, whereby the Sony PlayStation Company aims to create product differentiation and consumer loyalty. Incentives are also offered so as to attract more customers to purchase the NBA2k18 video game.

Decline Stage

At this stage, the Sony PlayStation Company could experience a decline in the sales volume due to changes in trends and unfavorable economic conditions. The sales volume of the NBA2k18 video games is likely to drop at this stage because the market is saturated with similar video games from competitors. Also, the decline in the level of sales could be a result of changes in customer tastes and preferences. The marketing managers of Sony PlayStation Company could opt to maintain the NBA2k18 video game, possibly by adding new features and finding new uses (Sale, Mesak, & Inman, 2017). Additionally, the marketing managers could resort to reduce the cost and continue to offer the video game to a loyal niche segment.

Packaging and Labeling

“The packaging component of a product refers to any container in which it is offered for sale and on which label information is conveyed (Kerin).” This means the product that is being sold comes in a specific recognizable package that give the product more value and has its name on them. The packaging that is used for the NBA 2K18 game is important and will add value to the game. Packaging as well as labeling are needed as they both give important benefits for the manufacturer, retailer and the consumer as well. “Packaging and labeling also can provide a competitive advantage (Kerin).”

Could have provided an illustration of a label or package design

It has been show that packaging makes products stand out when put up with other products and having that certain products that stands out makes it stay in consumers’ minds. “Familiarity with packaging elements would help designers and manufacturers in realizing their goal of impressing and attracting shoppers (Taghavi 2015).” NBA 2k cases always have a key player on the front of the case, whether he was the top player for the year or for example NBA 2k17 had Kobe Bryant on the cover due to his retirement. This case was visually attractive as well as it was a good marketing idea. Knowing that this was his last year, the case was made special as a gold edition and had additional features on the game. The packaging plays a key role in selling the product.

Packaging is also information to help decide if it is the product you want. These informational are helpful to as to know what game it is specifically, what console it is for, the age for consumers that is better for, what features the game includes. NBA 2k packaging includes all this information as well as an instructor’s manual inside. The instruction manual that is placed in the packaging is a communication benefit. This booklet gives step by step instructions on how to place the game in the console as well as each button for the controls on the game and how to control your player. The packaging also includes the NBA logo on the cover as well as a seal of the logo. The packaging also has informational elements regarding online play that is optional. This is important because consumers see this and know that they can play with gamers all over the world.

Perceptual benefits of packaging and labeling are apparent with NBA 2k18 as well. The package and label shape, color and graphics identify its brand from another brand as well as building brand equity. “Successful marketers recognize that changes in packages and labels can update and uphold a brand’s image in the customer’s mind (Kerin).” NBA 2k games show a different player on each cover every year the game is released and consumers realize and see these different changes. The products also showcase a case with graphics on the front that have a specific color scheme and this scheme is recognized by the consumers.

Pricing Strategy

What would be the margin at the final price and if this would also the price for resellers? How about the prices for consumer at list, price for wholesalers and distributors, price for businesses or Commercial price.

Once all products are finalized, it is important to understand the best possible pricing for NBA2K18. Companies like PlayStation and Xbox take the time to analyze what will be the best price for consumers. “Finding the right pricing strategy for a product or service might not be a single strategy (Lohrey, 2017)”. There are many different pricing strategies that these companies might use such as; skimming price, this policy sets the highest initial price that customers are willing to pay (Kerin, 2015, p. 352). These clients have a strong desire for products like NBA2k18 and are ready to pay any price. Says who? The expert is not you. After the demand for the new game has been satisfied by those first customers, they will drop the price to attract the more price conscience consumer. Who are the “they”?

PlayStation may also use penetration pricing, according to Kerin, Hartley, and Rudelius this is opposite of skimming in that the price starts low and appeals to the mass market quickly because of the lower price. Bundle pricing also something PlayStation and Xbox will do to sell more consoles along with new games like NBA2k18. Bundle pricing takes “two or more products in a single package price (Kerin, 2015, p. 354)”, this style of pricing helps consumers pay an overall lower cost and lowers the marketing cost for the seller.

PlayStation and Xbox must also take into consideration the cost to produce the games into their pricing so they may make a profit on not only the game systems but the games. They may choose to use the target profit pricing; this is where PlayStation “set an annual target of a specific dollar volume of profit (Kerin, 2015)”. Keeping in mind the variable cost which can be the cost per unit, the fixed cost, demand for the price per unit, and the target profit at a specified number of units.

Once these companies have analyzed pricing strategies, they can decide on what is the best price for NBA2k18 by setting the list or quoted price for the game. Two standard price policies are a fixed price or a dynamic pricing policy. As the name implies fixed price policy uses on “fixed” price for all buyers, for example; a consumer purchases a game from Best Buy they will pay the same price for the game at GameStop because NBA2k18 has a fixed price not matter the retailer. Dynamic pricing is more flexible because it changes with supply and demand; this“gives the sellers considerable discretion in setting the final price in light of demand, cost, and competitive factors (Kerin, 2015, p. 362)”.

PlayStation and Xbox might use games from previous years to help decide what would be the best price for the latest game. Amazon shows the NBA2K17 game at the cost of $38.80 for PlayStation4 and $37.00 for the Xbox One (Amazon, 2017). Based price of the current year’s version NBA2k17 the price for NBA2k18 is estimated to be around $ 59.99 with Amazon (Amazon, 2017). Consumers may find a price saving with pre-ordering the game, as this is an excellent way to market the newest version of NBA2k. PlayStation, as well as Xbox, can discount older versions of the game to entice customers to buy the latest version of the game. Offering these discounts will help customers see what type of game NBA2K is and if customers enjoy the older version might be interested in purchasing the newest.

Marketing Channels

Could have provided an illustration of the selected channel or supply chain

Marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by the consumers or industrial (Kerin, Steven & William 386) Marketer can use the media to deliver their products for sale or they can go through the distribution process themselves. Sellers can take the direct route by making their product available to the market, through retail and online stores. Another choice is to use distribution channels, which can be anyone or company related individuals that are involved with buying, selling and promoting the product before it makes its way to the consumer. Distribution channels can also be sold in bulk to wholesalers, distributors and retailers, who will resale the product to their consumer. The primary function of the distribution channel is to make the product more available in the markets, this will provide a more convenient way for the customer to buy it. Exploiting all these distribution channels would be recommended for the delivery of the new NBA 2k18, but first we would need to determining who is our target market and group. I believe it will be the gamer enthusiasts, with a basketball interest. the consumer will be of all ages, starting from the age of five and up.

Media and website media is a communication channel and the website if it your own is not a distribution channel should be the first distribution channel, due to by advertising and promoting the new NBA 2k18 before it's released date. Can pique the interest of many gamers and hyping up the NBA 2k line, using a marketing pitch that will involve describing its new features and the enjoyment of playing this game, will sell the product before it's released. As the release date approaches the company will need to set up the distribution that will be sold in bulk to the retail store such as Toys R Us, GameStop, Fry's and Best buy. The channel is your team decision according to the rubric. Bulk is sold to a wholesaling channel that breaks bulk to resellers such as retailers, jobbers, and agents. A retailer buy from producers quantities to sell to consumers.

Conclusion

The primary focus of this paper was to identify the various marketing concepts involving the release of the NBA2k18 video game by the Sony PlayStation Company. This paper has analyzed on how the marketing efforts and marketing mix change at different phases within the product’s lifecycle, how packaging adds value to the product and how the Sony PlayStation Company will determine the pricing strategies of the new video game. Lastly, this paper has identified the various channels of distribution the Company can use to sell the NBA2k18 video game and how each partner can add value to the brand. The use of the product lifecycle concept in marketing strategy is very vital for any company to succeed in increased sales and profitability levels. While the product lifecycle model does not predict actual sales, when used alongside carefully analyzed figures and forecasts by the marketing managers, it provides a useful guide to marketing tactics that may play a significant role in the success of a new product.

Grading Guide

References

Amazon. (2017). NBA 2K17 Standard Edition-PlayStation 4. Retrieved from https://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=nba2k17+for+ps4&rh=i%3Aaps%2Ck%3Anba2k17+for+ps4

Lohrey, J. (2017). How to Identify the Appropriate Price Strategy. Retrieved from smallbusiness.chron.com: http://smallbusiness.chron.com/identify-appropriate-price-strategy-80543.html

Kerin, Roger, Steven Hartley, William Rudelius. Marketing, 12th Edition. McGraw-Hill Learning Solutions, 01/2014. VitalBook file.

Taghavi, M., & Seyedsalehi, A. (2015). The effect of packaging and brand on children's and parents' purchasing decisions and the moderating role of pester power. British Food Journal, 117(8), 2017-2038. Retrieved from https://search.proquest.com/docview/1694511539?accountid=458

Sale, R. S., Mesak, H. I., & Inman, R. A. (2017). A dynamic marketing-operations interface model of new product updates. European Journal of Operational Research, 257(1), 233-242.

Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (pp. 1-29). Springer International Publishing.

Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.York.