EA Games Case Study - Global Industry Analysis Report by Directors

Questions : You have been appointed as the Marketing Director for EA Games. As part of your role you are required to address the following issues: Q1) Critically review the Global Industry Analysis Report produced by the Marketing Executive and highlight the key strengths and weaknesses of the report. Highlight ways in which the report could have been improved. Q2) Identify the positioning objective(s) of this new product and design a positioning strategy based on achieving this objective(s). Q3) Using any product management portfolio tool (e.g. Product Life-Cycle Model, Boston Consulting Group Matrix (BCG), Growth-Share Matrix, McKinsey/GE Market Attractiveness-Competitive Position Matrix, A.D Little Business Profile Matrix), outline, appropriate marketing strategies for your new product at each stage of its life-cycle. Q4) On what basis (competitive advantage) would the new product/service compete in the market place in the long-run? Answers : Introduction. Marketing planning is complex process starting from explicit analysis of the market and includes planning entire product life cycle. Global Industry Analysis Report made by Senior Marketing Executive for EA Games included versatile industry and market analysis, new gaming product presentation, identification of marketing mix elements, identifying appropriate segmentation and targeting strategy. As a complex process, mentioned report have strong and weak sides. In purpose to compete in the market place, new product development process includes further marketing planning elements: positioning strategy; communication plan; marketing strategies for new product at each stage of product life cycle (using product management portfolio tool); new product's competitive advantage approaches. Based on Global Industry Analysis Report, this report examines further new product development elements, and also determines strengths and weaknesses of Global Industry Analysis Report. 1. Global Industry Analysis Report review. The strengths and weaknesses of the report are described in the diagram below. The report is based on complex environmental analysis. The company analysis was substantially based on the companys sales and revenue values, although these indicators gives not the solid understanding of EAs prosperous work. For instance, the fact that company sales are mainly concentrated in the USA does not confirm that the best way for company to succeed is concentrating on the USA market. According to Passport, EA has the biggest company share in Turkey, Germany and Poland (16,4%, 15.6% and 14,6% respectively). More commonly, EA has extremely high company share, hence competitive advantage in Western and Eastern Europe (Figure 1.) Moreover, according to market growth forecast statistics, North Americas gaming industry is expected to grow much slower, in comparison with Europe, Latin America, Middle East and Africa markets (Figure 2). The presented 5 Ms model for EAs internal environment has some disadvantages, for example it does not include competitive advantage, capabilities, RD, identifying combination of the resources and generated capabilities, evaluating the organizational performance. Rational and justification for introducing the new product is supported by macro and micro factors and the impact they have on the company. Segmentation and targeting strategy is created not by accident, but considering supply and demand on such type of games in the market place, and other factors. The ways to improve the report: Use Porters 5 Forces, the analysis of the organizational resources, value chain analysis, or functional analysis while analysing internal environment. (Claudiu et al., 2011) (Table 1.) Pay attention on regional comparison of EA's market share. Findings from all three environments must be precise. Linking the marketing mix to the findings in industry analysis is required. Table 1. The profile of the organizations strategic capabilities. 2. Positioning strategy 2.1 Features and distinction of positioning and communication strategy for mobile applications. Some time ago, conveying a press release, posting a couple of magazine banners worked fine to advance applications. However many of those old shareware methods don't have any significant bearing here. In unique mobile application market, frequently app producers doubtlessly see a fleeting deals knock on dispatch day that immediately dove in the week that took after. Without a long haul promoting strategy set up, companies hazard definitely shortening the life compass and profitability of the application (Wooldridge et al, 2011). Integrate a few components specifically into application can empower sales, deliver extra income streams, help clients spread the statement by means of built-in social marketing, and enhance customer support. (Smith Zook, 2011) 2.2 Positioning strategy for the new EA's mobile game. Standing out among the 500,000 or more applications accessible in the global mobile applications business is getting to be progressively difficult (Apppli, 2013). As the environment is the highly saturated app industry, differentiation from potential competitors is key (Apppli, 2013). Using appropriate communication tools for reaching mentioned objectives is expected to be taken during the whole Product Life Cycle. Each component of marketing mix is going to be applied to appropriate positioning features, created marketing mix actually delivers the intended value to target customers (Kotler Artrong, 2014) (Figure 3). Figure 3. Customer-Driven Marketing Strategy. In purpose to appeal to the targeted segment, EA made the game incredibly simple. The game allows users to play either several seconds or a few hours. The figures inside the game, which are contents of woman's handbag are aimed on attracting targeting audience, which are women of Generation X Y, professionals. According to Prescott (2013) and Angelides Agius (2014), casual and puzzle games are becoming increasingly more played by female gamers. That fact confirms this genre was chosen not incidentally. Compatibility with limited number of platforms (smartphones, tablets, Facebook), and luxury products placement (perfume, cosmetics brands, etc.) emphasizes brand's exclusivity dimension, but the same time it is easily accessible. Such combination has the right for existence, because according to Hennigs et al (2012), luxury brand scan use the web to spread the brand's dream and draw in new customers yet at the same time keep an exclusivity feature by offering specific online content and services to the brand's conventional users. The price is set by"freemium"model - freedownloadsthatsellitemswithintheapp, that is considered as monetisation tool. As of November 2013, "fremium" model represented an incredible 92% of the income created in Apple's App Store and 98% of the Google Play application store (Pham, 2014). 2.3 Communication plan When considering marketing communications it is important to emphasize the long-term and integrated nature of those communications. This requires the attention of correspondence targets which may not be accomplished for a few years, for example, brand devotion or attitude as opposed to a basic concentrate on the short term, for example, sales figures for the next period. (Masterson Wood, 2005). EA promote products worldwide through a various range of advertising and promotional tools such as TV and internet publicizing, print promoting, retail merchandising, website advancement, event sponsorship and direct communications with customers. EA's capacity to offer products is reliant to a limited extent upon the success of these tools The company spends millions of dollars for advertising and promotion. Promotional expenses were $788 and $680 million in 2013 and 2014 respectively (Electronic Arts, 2013). In purpose of creating productive communication process for the new game, EA encodes a message, targeting the audience they wish to reach. Sending messages through media which reach target audience, EA expects to receive feedback from the customers (Figure 4). EA contacts with the audience through personal (word-of-mouth) and impersonal (media) channels. The "word-of-mouth" element is put in action in real life, so as through social networking sites that facilitate interconnectivity of users. Promotion for the created "What's in your handbag?" application includes direct marketing, SMM, cross-promotion, banner advertisement inside existing EA apps, digital marketing. Chosen communication tools follows AIDA concept (Figure 5.) (Smith Zook, 2011) to separate the stages a buyer go through before getting the game. Figure 5. AIDA concept. Digital media, including online display, online retargeting, and mobile (SMS/MMS campaigns) represented the top ranges of expanded funding in 2013. Social media and direct mail enter the Top 5 most effective mediums (Direct Marketing Association, 2013). Direct marketing is one of the quickest developing areas in marketing communications, as many organizations switch a big proportion of the budget far from use of mass media (Masterman Wood, 2006). It is expected to use the tool before the app is placed in the digital stores via direct mail. Involving users on beta-testing the app helps to allocate disadvantages of a product, and get individualized response. To get the targeted audiences attention it is expected to place banner advertisement inside the existing EA mobile applications (The Sims, Bejeweled Blitz, Plants vs. Zombies) and Facebook games (Scrabble, Zuma, Solitaire) and SMM. SMM includes integrating the game to the social networks, such as Facebook, Twitter, YouTube and LinkedIn. Prior to apps launch it is key to network with app review sites and other relevant blogs and web communities. (Wooldridge, 2011). EA already has pages of all the mobile apps in the social networks, accounting more than 10 million likes each. To create buzz of interest and desire in the game EA puts ads in Facebook, this will cost approximately $10,000 a month (Killer Facebook ads, 2011), with design and image attractive for women. It is expected that cross-promotion, representing joint campaign with OPI, will be introduced in products maturity stage. "Time" is important element in marketing planning. In purpose to cover more of targeted audience, it is expected that promotion elements take place in prime-time (7:00 pm to 11:00 pm) (Figure 6). 3. BCS product portfolio matrix and product life cycle. 3.1 Boston Consulting Group Matrix for Electronic Arts' product portfolio. Part of any marketing plan involves finding of how to manage a range of different products. The BCG matrix represents a classification of business units according to market share and market growth (Strategic development and marketing planning, 2007). Mobile apps product portfolio of EA Games is presented by 246 units of 12 genres and  over huge audience of game players (EA Mobile, 2014). Table 2. Mobile apps portfolio of EA Games. Figure 7. BCG Matrix for mobile games portfolio of EA Games. Stars are products that have relatively high market share and growing market. (Assen et al., 2009). According to Newzoo (2013), "The Simpsons: Tapped Out" and "Real Racing" take the leading positions among the mobile apps. However, not all stars win over the long term. Actual market share and market growth sizes are not sufficient criteria to justify investment (Seeger, 1984). "Star Wars", "Battlefield", "Warhammer Online" are profitable apps, but their market growth is descending. "SimCity" and "Plants vs. Zombies" growth rate is uncertain, that defines them to "question marks". The forth element of the matrix is Dogs, which include "Bejeweled", "Scrabble", "Cut the rope". The new app "What's in your handbag" in the introduction stage of its life cycle takes position of question mark, with little market share and increasing market growth (from zero). Generally, there are 4 strategies to apply: 1.Build: making different investments to maintain star status or turn question marks into stars; Hold: do nothing; Reduce investments and maximize profits from stars and cash cows; Divest: "kill" the dogs and use capital received from them into stars or cash cows. The BCG Matrix adapts the Product Life Cycle Theory to set priorities in the product portfolio of a business unit or whole business (Trompenaars, 2014). 3.2. New product's life cycle. Product Lifecycle (PLC) Management helps to manage the product across the lifecycle. (Stark, 2011). New product development includes managing the product's performance during whole the PLC. Figure 8. Product lifecycle linked to BCG matrix elements. There are five main decisions that are planned to take place during the whole PLC (Fifield, 2007): Increasing the demand curve. In the introduction stage, to pay attention and get interest of the audience direct marketing and banner advertisement will take place. Reaching the "tipping point". To get the best from the "growth" stage and become a "star" EA gets rid of the "dogs" to invest more into "What's in your handbag" game. SMM and digital marketing tools play important role in new game development. Creating the "maturity boom". Just because the game is in maturity stage does not mean that subsequent growth is now possible. It is expected to stimulate demand by adding cross-promotion, which was described in Global Industry Analysis Report. Extending the maturity stage. "Stars" will need a lot of investment to maintain their position, to support further growth as well as to maintain its lead over competing products. Product extension or repositioning to maintain the product being "cash cow" longer. 4. Competitive advantages in the marketplace. According to Marketing Mentor (2014), "competitive advantage is gained by using the unique blend of activities, assets, attributes, resources, market conditions, product benefits and relationships that differentiate an organization from its competitors". Being competitive in the market place means that the company has high market share and hence strong position. For definite product strong position in the market place is achievable if customers find that the product creates value for them over a long period. If product creates value for customers, it is gaining market share and high performance in the long run (Jannesson et al., 2014). In complex mobile gaming industry marketing intelligence is crucial for creating possible competitive scenarios in marketplace (Hedin et al., 2011). To give a competitive edge to the new mobile game for women and achieve planned objectives EA uses some competitive advantage approaches. First, the game already has cost leadership, as it lower cost and broad target. In mobile gaming industry marketing, the most important thing is technology. After the game is ready, it is very important that our product should survive in the market for long runs and compete with other products. To provide a competitive game to customers, a company should take care of customers gender, likes, dislikes and demand for the concept so that the customer is going to like it for sure. With the globalization of markets and its competition, all the markets have really become easily viable. Natural opportunities are also coming to all of the market. So a company should take care of these parts before making strategy of launching the game. The clear cut motive is to win the market and after that it has chances to go worldwide too. To start, the game should have a reasonable price and interesting outlook which shows the actual concept of a game. If the game is very unique and there is no game exists in the market like ours, then it becomes very easy to sell the game and to attract customers and a make new market. It also has to take care of the same type of games which are having the same concept as ours. That is why research is a very important part before taking any action. Consistency is a very important part if you want to play long run. To play the long term game, one should be prepared for the hurdles and be always ready for the new challenges. It is necessary to Product should create a continuous demand by giving the new challenges to customers and also informing about the next part of the product so that consumer who is receiving our services will be aware and it will help for the next new product and in creating goodwill as well (Gruca and Sudharshan, 1995) Conclusion As it is already shown in the document that Global Industry should be based on different environmental things. After identifying the objective of EA Sports, it is necessary to make a plan and design it properly. A product management portfolio has also been made in the assignment. The logic of strategy should be very clear. Simplify our product by compared to products that the market is offering. And this would be the best part if a company creates a new game with a new concept. Then it is necessary to focus on making the online sales and the process is very easy in order to achieve a better online sales. After launching the game, what matters is the growth of the product in terms of sales. The promotions of the product should make an impact on the customer so that he will attract to it and will purchase it. Because the customer just wants to enjoy the services given by the provider to satisfy their wants. And it is our duty to fulfill those. So it is necessary to focus on the wants a nd demands of customers and there is also need to focus on increase in the sales of product (Product, 1989). References Cravens, D. (1975). Marketing strategy positioning.Business Horizons, 18(6), pp.53-61. Kumari, R. (2006). The Firm's Strategy Type and Market Value.Global Business Review, 7(1), pp.43-55 Nachum, L. (2012). Global comparative strategy.Global Strategy Journal, 2(1), pp.92-95. Dao, B. (n.d.). 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