Assignment:
Part 1: Proposal
1. Company: The product that I chose is within the Microsoft company.
2. The first product to be launched by Microsoft as their breach into the entertainment market was the Xbox in 2001. Xbox Live which extension of the Xbox with additional online features that allowed users to subscribe then be able to game online, that had not been available on the original Xbox. The following in the Xbox line was the Xbox 360, the 360 had an even more enhanced online presence and allowed the user to do more than gaming on the console. They later added the Kinect feature which enabled the user to make gaming more sensitized to the player and more interactive. The latest versions of the Xbox include the Xbox One, Xbox One X and Xbox One S.
3. The product's marketing mix:
a. Product: The product that I chose for this course is the Xbox One X.
b. Price: Microsoft in terms of the Xbox gaming consoles, follows a competitive based strategy in its marketing mix pricing approach. With their prices they provide bigger quality and forward-thinking features in comparison to their competitors. Traditionally, consoles are sold at US$299.99. The Xbox 360 old model was sold at varying prices from US$299.99 - US$479.99 contingent on the internal memory size and extra features that one is willing to purchase. The newer model is available at prices ranging from US$199.99- US$299.99 depending on choices variant of 4 GB internal memory or 4 GB internal memory + Kinect or 250 GB. Other versions of Xbox like the Xbox One is sold at prices ranging from US$499 for Kinect Bundle to US$399 for Standalone. Xbox in other available markets are priced accordingly. The latest version which is the Xbox one X is currently sold at prices ranging from US$489.99 to US$599.99 again depending on the extra features that one chooses to include.
c. Place: Microsoft uses its immense circulation channels to sell this product and entice as many customers as they possibly can. Since 2009, Microsoft began selling their products in stores of their own Microsoft Stores - the outlets being available in major metropolitan areas within the US (106 stores), 8 stores in Canada, 1 in Australia, 1 Puerto Rico and another one in the works in the United Kingdom. Many local entertainment stores across the world also have the Xbox brand carried by them, these stores include The Source, Walmart, Best Buy, Staples etc. In the online world, Xbox is available on the online version on the Microsoft Store, Flipkart and Amazon.
d. Promotion/Marketing Communication: Most of the promotion that happens in the Xbox world is via its website . Xbox provides unique games compared to its competitors boosting its popularity. Xbox 360 was launched on MTV and far ahead at the Electronic Entertainment Expo (E3) giving a complete detailed information of the product. This strategy resulted in a complete sell out of the product upon release. The Xbox logo is very unique and has never changed since its inception creating a stronger brand recall. The online games can be played between different people across the globe ensuring word of mouth marketing. Besides these they have advertisements on magazines, internet sites and even online contests on their website providing customers appropriate rewards. All these promotional activities have helped maintain sales of Xbox.
4. Product category: The Xbox falls under the specialty products.
5. Direct competitors: Competitors of the Xbox include PS4 Pro and the Wii U with a hand-held console.
Part 2: Intro to Brand Audit
1. What is the core proposition (intention) of the brand?
The intention of the Xbox brand is to provide entertainment and the best possible console to make gaming more enjoyable and interactive.
2. What do the stakeholders think about the brand?
" Customer feedback and insights are critical in shaping how we enhance existing products and services and develop new ones. For example: In FY16, the Windows Insider program reached millions of customers and developers to gain their feedback on Windows 10, which helped shape key updates to the product" - Satya Nadella. This goes to say that the stake holders have a high thought on how the consumer views the product, and they endeavor to shape the product accordingly to the customer feedback
3. In what marketing mix activities are the direct competition involved in that influence your brand? Provide detailed information about these communication and promotional activities, such as the offering of new brand extensions, promotions, co-operative advertising, sponsorship, etc.
1. Direct Competitor 1:
- Product: PlayStation 4
- Price: between US$349.99 and US$399.99
- Place: the PS4 is primarily sold in electronic stores that include The Source, Best Buy, and large grocery store like Walmart. It can also be purchased online in the PlayStation store on Amazon, on the EB games site and many other channels.
- Promotion/Marketing Communication: In 2014, PS4 signed a major deal with Top Rank (a boxing promotions company) giving them an opportunity to be featured on all Pay-Per-View, HBO and Unimas giving them a higher visibility chance within the usual gaming users. In 2016, they signed a deal with Fiesta Bowl which is an American college football bowl game which takes place annually at the University of Phoenix. This multi-year deal will see PlayStation marketed as a sponsor at this event.
2. Direct Competitor 2:
- Product: Wii U with hand-held controller
- Price: US$299
- Place: as with the PS4, the Wii U can be purchased primarily in electronic stores. Also, online in the Nintendo store, on the EB games site, Game Site, Amazon and many other channels
- Promotion/Marketing Communication: Wii U as part of the Nintendo family offers a page on their websites where they offer earlier models of either games and consoles as a decreased rate.
Part C: Brand Audit
Perform a brand audit, by providing the following information about your brand's:
1. Target Market Segment: By focusing on the being an entertaining center, the target audience for Xbox One X no longer becomes "hard core gamers". The hardcore gamers" market segment is composed of users within the ages of 16 and 30 and represents 32% of all video game users. At launch, Microsoft's promotional messaging seemed to focus on how some of Microsoft's other apps are integrated into the console, rather than technological upgrades; all of this in line with the One Strategy, One Microsoft.
Target Market Segment #1
• Demographic:
• Psychological:
• Geographic:
Target Market Segment #2
• Demographic:
• Psychological:
• Geographic:
2. Differentiation points: whereas the Xbox One and PlayStation 4 consoles are essentially built with the same technological building blocks, with a software library mostly populated by the same titles, Microsoft's focus on bringing its back catalogue across to a recent hardware is a clear point of differentiation with the competition.
3. Positioning: the Xbox one X was unveiled at the Electronic Entertainment Expo 3, which see many gaming fans and influencers in attendance. This positions it on the frontline of the market, because they offer some of the consoles to the influencers who then talk about the consoles in their blogs, YouTube channels, Instagram etc. This then allows Xbox One X to be on the forefront of the minds of gamers alike.
4. Relevance: the Xbox brand is perceived as a good brand by the masses since in 2016 it ranked 11th on the Prophet brand relevancy index.
5. Identity: the Xbox is identified an entertainment unit.
6. Relationships: for their release in 2017, Xbox One X teamed up with Taco Bell.
Part D: Conclusion
Explain why you think the market position of the brand needs to be improved by strengthening the brand equity and improving the integrated marketing communications strategy.
Brand Equity: After conducting research and conducting the brand audit if feel strongly that the Xbox brand needs a stronger brand equity. I say this because when it first came out in 2001, the original Xbox was situated as an innovation in gaming - it designs where strongly masculine with the intention of aiming its marketing towards the ‘hardcore' male gamers. Microsoft wanted to be perceived as and distinguish itself by providing a product that was superior and with most emphasis on intense gameplay. These assumptions resonated well with the core audience of the Xbox. However, as the Microsoft is seeking to inflate the appeal its appeal of the newer console the Xbox
One X, it must overcome the challenges of this initial brand association.
Currently the brand is perceived as expensive with competitors boasting lower prices than the Xbox X. The PS4 has starting prices of US$399 and the Wii U even cheaper at UD$299. All three consoles come with an HDMI cable and a hand-held controller. The PS4 adds a head set as extra whilst the Wii adds a choice of Mario games and a stylus pen. Because the consumer perceives that the brand is expensive since the other competitors are providing so much more value at a lesser price. The job of the marketer then becomes to suggest that other components of the game such as the Kinect and online activities make the Xbox worth the extra dollars from the consumer.
The brand can focus on diversifying the target market of the brand so that it appeals to more that its current target of males between the ages of 16-36. Get the customer to view the brand as having more value for the price that the price that the consumer is paying.
Improving Integrated Marketing Communication Strategy: In the past Microsoft as the parent company to Xbox One X, has used their public relations in a positive light for example when they announced the release of the Xbox One X at the Entertainment Expo 3 which is one of the largest gaming entertainment convention. Xbox One X can piggy back off that public relations in social media and engage with their customer. Also using social media as a mass marketing opportunity.