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The Marketing Mix

The Marketing Mix. Product. Which other products on the market at the time could said to be GOW2’s competition? How is it similar to/different from these other titles?. How quickly did GOW2 eliminate GOW? What might this suggest for GOW 3?. Price.

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The Marketing Mix

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  1. The Marketing Mix

  2. Product Which other products on the market at the time could said to be GOW2’s competition? How is it similar to/different from these other titles? How quickly did GOW2 eliminate GOW? What might this suggest for GOW 3?

  3. Price • Look at the information on the following slide. • Which entries could reasonably be considered ‘costs of production’? • Which entries could reasonably be considered ‘profit’, and between which institutions is the profit divided?

  4. Where Does the Money Go? ON A $60 GAME OF GEARS: • 25% (aka $15) goes to pay the art and design guys. • 20% ($12) goes to pay the programmers and the engineers. • 20% (also $12) goes to your friendly neighbourhood retailer. EB / GameStop, whoever. • 11.5% ($7) goes to a "Console Owner Fee" – i.e. Company made the console (Sony, MS, Nintendo) • 7% ($4) goes to marketing, and puts Marcus Fenix on MTV. • 5% ($3) goes to "market development" -- paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer. • 5% ($3) goes to actually manufacturing and packaging the disc. • 5% ($3) is spent paying the agents/companies for the rights to use licensed voice talent • 1.5% (just $1) goes into the publisher's pocket. • 1.5% (also $1) goes into the distributor's pocket. • 0.3% (about 20 cents) goes into corporate costs: management, overhead, lawyers, etc. • 0.05% (less than 3 cents) go into the cost of paying for the Developer's Hardware. Source: Forbes Magazine

  5. Price Skimming • Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time. • Gears of War 2 prices: • Release [12/11/2008] = $60 • Dropped [03/07/2009] = $39.99 • Current [24/04/2010] = $29.99 You will need to find out how the other two games compare with this...

  6. Place • We have already looked at conventional distribution vs digital distribution • There are no direct sales for Epic Games • All sales are done through third parties • E-Commerce accounts for digital downloads • Dark Corners (which is a complete collection of all previous DLC) retails for c.$20; initial product price = $60. MGS would expect to make at least an additional 33% of the original price through add-ons. • This means they can overspend by up to 1/3 when developing the original product and expect the overspend to be soaked up by add-ons. • This might allow a more extravagant spend on the initial product: it will need to secure a market for later sales.

  7. Promotion • Promotion has four distinct elements: • Advertising – trailers, teasers (short trailers), interviews, ‘making-of’ videos: • Can be on TV • Cinemas • Official Website of Manufacturer • Public Relations – other professional bodies like: • Video Games Conventions (E3, Comic Con) • IGN or other respected websites • Computer Games magazines, reviewers, etc (who often get free copies in advance of general release) • Word of Mouth – includes friends talking offline, but is especially targeted via Xbox Live community • Point of Sale – cut-outs, banners: the stuff you see in-store when you go to buy a game. Also includes promotion by store staff.

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