string(106) ‘ time of year would be strategic time to kick off, as discretionary consumer spending increases in that time\. ‘
Emotiv Case BACKGROUND: By March 2007, Emotiv Systems Inc. had developed a mind reading system called EPOC, which got the ability to method brain alerts in order to assess 30 distinct mental declares. Founded in 2003 (with $1 million in startup cash from several partners and $17 , 000, 000 in added financing generally from Technology Venture Lovers and Epicure Capital Partners), the company’s research and development team integrated existing electroencephalography technologies to introduce a relatively inexpensive and effective cognitive and emotional acknowledgement system.
Management for Emotiv presumed that video gaming applications symbolized a solid opportunity for the EPOC technology. EPOC would allow video gaming users to advance onscreen objects or support secondary features using their thought patterns. While using product all set to launch, the organization had to decide how to market EPOC. Emotiv desired to launch the product in 12 to 14 months, on time for the 2008 christmas.
Although it is new product was generating much interest through the gaming sector, it had yet to secure a collaboration for the sale and promoting of EPOC with one of many three key video gaming games consoles (Sony PlayStation3, Microsoft Xbox 360, and Nintendo Wii). The Nintendo Wii seemed like a perfect match. The Nintendo wii was established to provide interactive activity games pertaining to casual users. Thought game titles seemed like another natural step for Nintendo. In addition , Wii had a leading 42. 1% share with the gaming industry in the United States. Joining up with the innovator would certainly offer Emotiv more exposure.
Nevertheless , the Nintendo wii was not suitable for the EPOC system as it lacked the computational power the operate the advanced EPOC program. It would also provide made perception for Sony to get on the bandwagon with Emotiv, as it was trying to turn around rapidly declining sales. Nevertheless , poor interorganizational conflict inside Sony slowed down talks involving the two companies. Sony’s Euro division performed offer Emotiv a contract for any dumped down version of EPOC, although that was never really an affordable option for Emotiv (it may have hurt Emotiv’s image and consumer perceptions of EOPC).
Microsoft was highly interested, but did not want to be an initial mover within the new technology. That wanted to wait for an EPOC to prove the popularity and worth. To further add to Emotiv’s problems, there were no online games incorporating EPOC yet. It might be very expensive to get Emotiv to create games internally, and the Digital Arts (the leading gambling manufacturer) had a wait-and-see strategy similar to that of Microsoft. It was now time pertaining to Emotiv to make decisions on the marketing strategy. Should it wait until that locked within a major gambling partner to launch EPOC?
Or ought it to launch inside the PC gaming market? Emotiv also faced many inquiries related to the retail price, distribution, and promotion of EPOC. Their choice as well as the success with the marketing plan would affect the future earnings of the organization. RECOMMENDATION: My own recommendation would be for Emotiv to in the beginning enter to LAPTOP OR COMPUTER gaming market. Even though it was less rewarding than the console gaming market (only a 5th of the size) and carrying on to lose business, the COMPUTER market was easier to enter into because game titles featuring EPOC would be relatively simple to produce.
By simply merely liberating compatibility codes, independent users could very easily build EPOC applications in to new or existing game titles, representing a stark difference from the difficult game creation process inside the console industry. The large availability of games would support promote re-homing of the new-technology and add to customers’ identified value in the product. Set up company was able to immediately discover a console spouse, sales may be low due to a shortage of games for EPOC. I believe Emotiv should selling price EPOC on the highest price point advised by retailers, which has been $399. Emotiv should produce an exclusive merchandise and manufacturer.
From its value to their distribution to its placing statement, the business should portray that EPOC gives users a high buyer value. Around the distribution entrance, EPOC ought to be sold on its own website including specialty electronic devices retailers including Brookstone, which can be known for providing the latest and a lot innovative great gizmos. I believe a positing statement that could indicate quality and resonate with buyers is “Imagine the Unimaginable. ” (See Exhibit one particular for the ad that contains this positioning statement). The statement conveys that EPOC offers a distinctive experience.
This is important because a distinctive user encounter is the key point of big difference that isolates EPOC from the other products. Company value is normally created through usage as well as the customer’s general experience. Hence, I would suggest Emotiv produce 1 game featuring the best that EPOC provides. The game could possibly be bungled inside the sale of the EPOC, giving users a preliminary application and tutorial for the device. The corporation had a $2. 5 million offer coming from Demiurge Galleries to develop a PC game to give the user a demonstration from the capabilities of mind-controlled interactivity.
The game would feature a fighting methods master raising rocks or perhaps walking on drinking water using the wearer’s thoughts. Once the company experienced its EPOC headset and game ready to launch, it will begin to disperse these items to several influential opinion leaders. Division to personnel at technical magazines and tech television set stations can be ideal. Advantageous reviews by simply sources including PC Journal as well as G4 TV and Tech TELEVISION SET would quickly spread phrase about EPOC. Advertising may be done employing these same means. The niche hard-core game enthusiasts segment routinely follows these types of media shops.
Therefore , it would make sense to pay attention to these resources. EPOC as well had good reviews in industry tradeshows. To gain more exposure, I might advise Emotiv to continue to show up at different tradeshows throughout the nation, and perhaps even number their own seminar. The high-profile 2008 Video game Developer’s Meeting was five months aside. Emotiv should certainly use the function to demonstrate their breakthrough merchandise and create enthusiasm by announcing a launch time. The holiday period would be strategic time to release, as discretionary consumer spending increases in that time.
Management’s plan was to release EPOC for the 2008 christmas season, and I could encourage Emotiv to stick with that idea. As the company produces attention and increases consciousness for EPOC, it will most likely gain a partnership with a major gaming system as they was seeking. During that time, Emotiv could move through the niche hard-gamers segment to a mass web marketing strategy that would likewise target informal gamers that play to get entertainment and fun. The inroads made by their primary strategy will help the company accomplish that goal. BASIS FOR ADVICE: The PERSONAL COMPUTER gaming marketplace provides a sturdy first step or maybe the company. You will find significantly fewer barriers to entry from this market. Consumers in the LAPTOP OR COMPUTER gaming market tend to be hard-core players that dedicate thousands of dollars upgrading their personal computers. As such, hard-core gamers would likely be the early adopters of EPOC anyways. In fact , the prospect of a human brain computer software was already creating buzz and generating enjoyment in on the net hard-core gamer blogs. I feel that the hard-core gamer part is a good target portion, and organic first step pertaining to EPOC. Gambling for hard-core users is known as a lifestyle.
Each uses video games and peripherals for the experience and seek as much reality as possible. EPOC matches this group’s needs flawlessly, and provides substantial customer worth. Thus, top dollar00 tag will be warranted. The retail price skimming would give Emotiv more flexibility since it eventually moves into the mass market. Coming from a cost benefit standpoint, the move can be an ideal strategy. The PC industry generates higher margins because the company would not have to pay royalties to gaming console partners. The fee in the console market is usually among 3% and 4% of sales.
Offering the EPOC in Brookstone is a good strategy to target customer looking for the next cool tool (Brookstone would attract this kind of customer), however the company would also be in a position to negotiate far better terms than the 35% margins that A few days ago demands. Emotiv should be able to exploit hard-core gamers due to the centered nature of that market. Adverting costs can be kept little, as advertising in tech magazines and television channels command reduced rates than would primetime placements to target the mass market.
At a price of $399, the company would need to sell 213, 399 units right at the end of 2009 in order the breakeven (See Exhibit 2 for a complete breakeven analysis). This may seem like an achievable sales level for the organization. With time, I think EPOC will end up popular enough to move towards the mass market. Following the successful launch of EPOC, Microsoft, Fiat, and Electric Arts would be more ready to work with Emotiv. The pace at which the industry adopts EPOC depends upon many factors. An opportunity to get the company to accelerate the conversion via niche to mass market segments would be a relationship with an influential company like Apple.
Many are widely recognized as being highly innovative. An iPad app that reinforced the EPOC system could drive product sales, making EPOC mainstream quicker. (See Show 3 to get a full SWOT analysis intended for Emotiv). Once the EPOC technology is adopted by the main consoles, I think its expansion can be similar to that of Guitar Hero. Like Guitar Hero, EPOC is usually an add-on device that creates an interactive encounter for an individual. The video video game industry is usually rapidly changing, and everyday fans are increasingly strenuous the kind of games that EPOC can provide.
A good sales prediction once the EPOC reaches the mass market could be believed with a great analogy to Guitar Main character (See Demonstrate 4 intended for an optimistic EPOC sales outlook by analogy to Acoustic guitar Hero sales). Once EPOC becomes mainstream, sales may quickly enhance to multiple million units annually. Even though advertising expenditures, distribution costs, and royalties paid to console and video game companies would enhance, the company could realize a cost savings intended for manufacturing. After one million models, the pregressive cost every unit drops from $110 to $60.
ASSUMPTIONS AND UNCERTAINTIES: In the breakeven research, I assumed that Brookstone would get a 20% perimeter on the sale of EPOC, substantially lower than the 35% perimeter that Greatest coupe demands. My spouse and i am assuming that hard-core avid gamers will pay an increased price to get a product that provides mainly second features, because hard-core gamers usually perform fast-paced taking pictures games that contain less of any need for EPOC in the main popular features of the game. Additionally there is a huge presumption that EPOC will be powerful enough to encourage a console machine to adopt the technology.
Finally, comparing EPOC to Any guitar Hero could be the best circumstance scenario pertaining to Emotiv. Informal gamers are harder to reach than hard-core gamers. They could be highly price very sensitive (EPOC will probably be priced at $399 compared to Guitar Hero’s $99 price) and expensive to attract (because they are more fragmented and ad space in primetime television set would be even more costly). EPOC will also need to compete with with regard to newer editions of Electric guitar Hero, that could cut into their sales. ACTIONS STEPS: Emotiv should immediately contact Demiurge Studios, so that it can have tutorial game ready immediately.
Emotiv should certainly showcase EPOC at the 08 Game Developer’s Conference in March 08. At this point, it should distribute the headset and game to influential view leaders through the gaming sector. Hopefully this will likely create hype for the release of EPOC. The release ought to be slighly prior to the holiday searching season, at the begining of November 2008. As sales build, the organization should carry on and target a partnership which has a console developer and video game producer. By the beginning of 2010, they have to have gained a contract and stay positioned to mass marketplace EPOC.
At this time, their online strategy would change. The increased demand facilitated by the console market will offer the company larger revenues and profits, creating more financial flexibility to advertise on primetime television and distribute usana products in Best Buy stores. In time, perhaps the organization could use their talented research and development team to develop even more advanced devices intended for the video gaming market, and even expand the distribution of EPOC for other uses, including applications in the medical, military, market research, and organization sectors. Observe Exhibit 5 for a complete time line for Emotiv). Display 1 . Print advertisement for EPOC having a positioning assertion. Imagine the Ridiculous Emotiv’s EPOC Exhibit 2 . Breakeven evaluation for years a single (2008) and two (2009). Fixed Costs| | | Startup expense | | $1, 000, 000 | Additional financing used *** | | +$9, 500, 000 | Cost to produce video fighting styles games| | +$2, 500, 000 | Expected working expenses to get 2008 | | +$11, 086, 1000 | Expected operating bills for 2009| | +$20, 557, 1000 | Anticipated total fixed costs| | $44, 643, 000 | | | Contribution| | | Cost | | $399 | Retailers Margins (Price 5. 20%)| | -$79. 85 | Emotiv’s Revenues| | $319. twenty | Expense of Goods Sold| | | (Manufacturing Value is $110 per unit pertaining to the initially million models produced)| -$110 | Total contribution per unit | | $209. 20 | | | | | | | Breakeven (fixed costs/contribution)| | 213, 399| | | | | | | ***| | | Extra financing elevated | $17, 000, 000 | | Capital continue to on hand| $7, 500, 000 | | Added financing applied | $9, 500, 1000 | | Exhibit three or more. SWOT research for Emotiv.
Strengths * Superior quality * Emotiv’s EPOC was the best mind- reading device on the market * Scientific leader 2. Its r and d team was highly experienced and progressive, giving the corporation the ability to always improve EPOC and perhaps develop another product in order to move into another video gaming category or market segment| Weaknesses * EPOC could be inconsistent 2. The human head works differently on several days and times, that may confuse the algorithm lurking behind EPOC * The EPOC is not compatible with the Nintendo Wii, damaging its development chances since Wii includes a leading market share in the system market 5. No online games are currently readily available for EPOC, that could slow ownership rates simply by decreasing the value customers acquire from the product | Chances * Efficiently target hard-core gamers because they are a concentrated group that might likely offer an high interest in EPOC and act as early on adopters with the technology 5. Eventually goal the mass market when gaming console firms realize the importance of the EPOC, allowing the organization to experience robust sales similar to those of Any guitar Hero 5. Could boost penetration price sooner in the event that an innovative head such as Apple accepts ts technology | Threats 5. Although EPOC was the most advanced mind-reading unit on the market, Emotiv still faced the menace of competition from other organizations * NeuroSky and OCZ Technology were both producing mind-reading equipment (although second-rate to EPOC) that could be promoting for video gaming applications, that could cut into its market share 2. Consumers may well have unjustifiably high objectives from EPOC (someone once asked if it could move objects in real space), which could result in customer disappointment and poor reviews| Demonstrate 4. Sales Forecast intended for 2011 when EPOC is usually mass directed at all gaming players. Beneath an optimistic circumstance, sales of EPOC is going to mirror revenue of Any guitar Hero. Demonstrate 5. Fb timeline for Emotiv. OCTOBER 2007: Sign a $2. five million agreement with Demiurge Studios to build up a LAPTOP OR COMPUTER game to get sold with EPOC that demonstrates the capabilities of mind-controlled interactivity. MARCH 2008: Appear in the 2008 Game Developer’s Seminar. Showcase EPOC and mention that it will become released in The fall of 2008.
04 2008: Start creating buzz for EPOC’s launch by sending headphones and the associated PC video game to important opinion frontrunners at Tech TV and PC publication. OCTOBER 08: Create even more consumer consciousness through advertisements. Target hard-core video game players by running ads on Technical TV and in PC journal. NOVEMBER 2008: Launch EPOC in time pertaining to the start of the 2008 christmas. Commence it is distribution arrangement with Brookstone. MARCH 2009: Wait for product sales figure intended for the fourth quarter. Then resume talks with Sony, Microsoft company, and Electronic digital Arts for a partnership to advertise EPOC. Show them sales statistics for EPOC, which could support demonstrate the success and popularity of the merchandise. JANUARY 2010: With any luck , sign a contract with one of the major gaming system makers.
MARCH 2010: Make to release EPOC for a gaming console. Start marketing on primetime television for capturing the mass market. THE FALL OF 2010: Release EPOC for any gaming console over time for the start of the 2010 holiday season. Grow distribution to add Best Buy. DRIVE 2011: Carry out research about EPOC enhancements. NOVEMBER 2012: Introduce a new and improved EPOC a couple of model. In the event consumers are satisfied with the initially model, duplicate sales volume level will be large. MARCH 2013: Begin exploration to increase its product line beyond video games, probably for medical, military, researching the market, or organization applications. NOVEMBER 2015: Release a new merchandise in a fresh sector.
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