Emotiv

Case Report: Emotive Systems Inc.

Distribution Channel & Consumer Promotions. Emotiv should target Sony Corporation for a PS2 enabled EPOC along with targeting the PC segment. We know that a majority of hardware purchases occurred through stores, especially for new product as customers can then try out the product to get a feel of it. Judging from the sales of gaming devices, it is expected that 80% of EPOC sales will occur through retail, 15% through e-tailers & rest direct through the company. Hence most of the sales force will be directed to retail outlets like Best Buy. Simultaneously, EPOC will also be launched through e-tailers & through direct sales. Additionally, a 7% margin will contribute to the MDF for non-direct sale. Consumer promotions should be directed keeping the above distribution in perspective.

Also EPOC launch should be combined with the Out-of-the-Box experience game for a more involved customer experience.

Pricing: From the Table we can summarize the Fixed & Variable costs of Emotiv. Above Table considers Year 1 as 2008. Also, while calculating cumulative net profits each year, the fixed costs are not accounted for.

It is clear that keeping a price of $99 or $199 will incur a loss at least till the third year after the launch. Also, while pricing EPOC at $299, Emotiv will incur losses for the first 2 years. Hence Emotiv should go for a skimming strategy, launching EPOC at $399 & subsequently lowering its price within 1-2 years.

Since about half of the yearly game titles sales occur during Christmas season, Emotiv should go for a high base price & sizable consumer rebate.

The Demand for EPOC if it is console enabled is given below. Also since Xbox has a wait & watch policy, Emotiv will make PlayStation as the preferred console. Hence we can draw analogy from Guitar Hero sales from 2005-2008. To adjust the unit sales figures for 2008, we increase it by the rate of increase of sale of accessories from...