1.0 Executive Summary
Terra ICT Malaysia provides a variety of creative and innovative online games to gamers, with the marketing mission of "If you have never experience Terra ICT Malaysia e-Games, you have never experienced online gaming". This recreation of online games has no boundaries by means of cultural and demographic environment.
Since 2000, sales of our online games have been surging healthily, with a growth rate reaching its peak in year 2002. Unfortunately, sales started to decline in year 2003.
Our partnership with Bintai Kinden Corp. Bhd. has maintained our status as a market leader in this field for the past several years. However, competitors are growing in numbers and competition is getting very aggressive. Therefore, we plan on marketing ourselves aggressively in the coming year. We will produce our first company brochure, which we'll use as a handout at the cyber cafes as place of distribution venues. Costs for production of the ads, the brochure and placement of the ads will be $8,500.
Terra ICT Malaysia will continue to position itself as market leader in online games by creating new and better services, developing a market for the corporate world, also playing an active role in promoting the online games globally.
Year 2005 will be both exciting and challenging for us as we move towards a different level in market expansion.
1.1 Organization Structure
Chief Executive OfficerTom Tamura
Chief Operating OfficerCS Chin
Chief Marketing OfficerLeong Seng Keat
Chief Technology OfficerY S Chan
Chief Support OfficerG L Goh
Above, is the organization structure of Terra ICT Malaysia. There are 4 different Chief Officers under the Chief Executive Officer (CEO) which are the following:-
*Chief Operating Officer which is responsible on the activities of the company and will report directly to the Chief Executive Officer (CEO).
*Chief Marketing Officer, which is responsible in managing the selling process of the company's products and developing marketing plans to market the products.
*Chief Technology Officer, which is responsible in managing, maintaining and updating the computer systems of the whole company.
*Chief Support Officer, who manages feedback from online game users.
The head of each department answers to the Chief Executive Officer (CEO). (refer to Appendix 1.1 for the structure of Board of Directors)
1.2 Market Analysis
This company, Terra ICT Sdn. Bhd., is quite new to the online games market. Teenagers, especially between the ages of 14-20 are their main target customers. Therefore, their target is to fulfill teenager's desire by giving them extreme excitement with full of great extensive catalog of games. In spite of that, they do want to prevail against other online game companies. This will be in detail further onwards.
1.3 Varieties of Game.
Terra ICT is offering 15 online games, compromising various genres at www.e-games.com.my (e-Games) portal. Currently, there are 7 games available for consumers in Malaysia to choose from. Moreover, there are different types of games for consumers to distinguish and choose among these various types of games:
*MMORPG ( Massive Multiplayer Online Role Playing Games )
*FPS ( First Person Shooter )
1.4 Competitor Analysis.
While Terra ICT Malaysia is one of the top leading online games in Malaysia, it faces tough competitions from rival online game companies such as Phoenix Games Studio, Game Flier, with Game Flier being the highest competitor. These companies produce very similar types of games compared to Terra ICT. Game Flier is really new to all the Malaysian, and recently released a game called "Ragnarok Online" in Bahasa Malaysia version. Moreover, Game Flier is a Taiwan owned company, with pay up capital over RM2.74 million. Hence, it is the world leading Chinese Online Game Developer, Publisher, Distributor and Operator in Chinese Market Region. However, for English version of online game market, Terra ICT is currently the largest online game company in Malaysia.
There are many reasons to why the marketing environment for online games is so competitive. Firstly, most teenagers in Malaysia prefer to spend their extra time playing online games. Therefore, all the online game based companies would want to target their games towards them. For instance, Game Flier will perform extensive promotions especially to the cyber cafes. Privileges like giving them few packages to choose from. Different packages will cost in a different amount.
Apart from that, there are macro-environmental factors to consider as well. Firstly, the economic environment is a major influence to a company's success in marketing its new product as its affects the consumers buying power and spending patterns. For example, if there is a current economic downturn, consumers are move value cautious and price sensitive to the products they buy.
Besides that, with the rapidly advancing technology, current products are technologically outdated in quick fashion. As a result, higher research and development budgets are needed to improve and develop new products to keep in pace with our competitors.
Another factor that affects the company's marketing management is the demographic environment. Our company can market our products to appeal to certain segments in the market such as certain age groups or social classes that is dominating the population in Malaysia
In addition to that, there are also political forces that the company must take notice of. For example, legislations regarding issues of advertising and promotions might tighten in the future and affect our company's effectiveness in marketing our products.
2.0 Target Marketing and Positioning
2.1 Identifying target segments
Our company practices segment marketing and our market-coverage strategy is differentiated marketing. We isolate the online games market into broad segments and sell our products accordingly to better satisfy the needs of one or more segments. Our newest product can be segmented in the following ways:-
2.1.1 Behavioral Segmentation
The game, O2Jam, is an MPOMG (Multi Player Online Musical Game) that allows people to organize bands, play their favourite music together with their friends, while leveling-up their cool avatar. This is mainly targeted at male consumers who love to play musical games. Most of them encounter difficulty navigating music according to their taste.
2.1.2 Demographic Segmentation
Using the age and life-cycle approach and the income approach, we target teenagers age between 14 to mid-twenties, who are earning between RM 1500 to RM 2500, or not earning at all, in the case of teenagers who live of their monthly allowances given by their parents and play online games frequently. This is because the price of this game is relatively cheaper than the other online games currently available in the market
2.1.3 Geographic Segmentation
For this game, we are planning to concentrate on urban and suburban areas where there is a high density of inhabitants living in the same area. 54% of all Malaysians live in urban areas with the population density approximately 56 persons per square kilometer. Out of this population, there are a high percentage of male consumers that fancy playing online games in cyber cafes. Besides that, teenagers living in urban areas are more exposed to western cultures that encourage them to play more games at a young age.
After reviewing the above segmentations, we decided to target our market to all of these segments as each of them has their own attractiveness and potential of growth.
2.2 Customer Profile
The customer profile of the new game can be divided into several types. The first types are male consumers who fancy playing online music games frequently. The product is appealing to them as the game was designed for musical fans.
The second type is the inexperience users who fall between the ages of 14 years old to mid-twenties, the age where teenagers start experimenting with online games. They will find that Massive Multiplayer Online Role Playing Games (MMOPRG) are exciting than Arcade Action games.
Lastly, third type are consumers who play online games but does not fall into any age category, who are earning between RM1500 to RM2500. The price of the new game is relatively cheaper than other online games currently available in the market.
2.3 Product Positioning
Our positioning strategy is to promote the new game as a value for money product. Even though the price is lower than most other online games in the market, it does not mean that it is of lower quality as it still performs what a basic standard game does, just catering for a different set of consumers needs.
3.0 SWOT Analysis
ÃÂÃÂ¦First ever online musical game with 3D Hybrid Avatar System that gives special items such as Electronic Guitarist, Bass Guitarists, Drum and Keyboard to the characters.
ÃÂÃÂ¦A Character Avatar System that allows you to display cute characters using splendid 3D technology.
ÃÂÃÂ¦With an easy interface, players will enjoy instantly.
ÃÂÃÂ¦Can communicate with other online game users and exchange information's.
ÃÂÃÂ¦There'll be rankings for each player which allows users to compete with other players in order to gain a higher level than others.
ÃÂÃÂ¦Price is relatively cheaper than competitors' games.
ÃÂÃÂ¦This game are based in cyber cafes at almost every state of Malaysia
ÃÂÃÂ¦Only uses keyboard as the controls.
ÃÂÃÂ¦Gamers will have to play the game in cyber cafes and not at home.
ÃÂÃÂ¦Gamers will be frustrated due to unstable server by Malaysian's Telco (Telekom)
ÃÂÃÂ¦Gamers get irritated when there are hackers who play cheats. Unfortunately, we can't figure out the way to prevent hackers into our servers.
ÃÂÃÂ¦Great potential to market the mascara to other Asian countries-mini-brush mascara design specifically for Asian lashes that are short
ÃÂÃÂ¦Demographic advantage- Malaysia's population of 19,723,587 inhabitants with a 2% population growth rate will result in a wider consumer base
ÃÂÃÂ¦A higher number of teenagers in who are currently studying which increases their level of income and can afford to play games frequently in cyber cafes.
ÃÂÃÂ¦Current economic downturn leads to a decrease in the level of demand and consumer spending-this will affect the sales of the games.
ÃÂÃÂ¦Competitors with high research and development budgets might produce similar price range like us.
ÃÂÃÂ¦Legislations regarding issues of advertising and promotions might tighten in the future and affect our company's effectiveness in marketing the game.
ÃÂÃÂ¦An increasing threat of war might affect the level of consumer's confidence for spending-affect the sales of the games.
4.0 Marketing Objectives
Terra ICT Malaysia's marketing objective is to become Malaysia's number one online game company. The company promotes an image that is hip, intelligent, stylish and charming with its tagline, "The Ultimate Online Game Portal". Terra ICT Malaysia aims to increase their total market share in online game products sold in Malaysia by 20% to 30%. This will make Terra ICT Malaysia the largest market shareholder for online game products sold in Malaysia out-leading the current largest market shareholder, Game Flier by 1% (see appendix 1.2 for current percentage of market share).
Terra ICT's online game products have always been dominant in Malaysia compared to its rivals (see appendix 1.3). Since online games is the strongest product of Terra ICT in Malaysia, the company is planning to increase its dominance in the online game market by launching the new game called " The Knight Online", thus, increasing its total market share of online games product sold in Malaysia. The sales target is to sell at least 300,000 units per year, earning sales up to 6 million ringgit and above.
Our product, which is the first ever online musical game that has cool interface, has potential to gain a substantial market share in Malaysia, as no other company products are similar to ours.
5.0 Marketing Strategy
5.1 Product Analysis
The core product of an online game is to enhance consumers leisure activity by emphasizing their interest towards online games. After that, the quality level, features, design, and packaging are added to produce the actual product, which is the new game called "O2Jam".
Other than that, the product is attractively made into a stylish, easy interface which consist 3D cute customizable avatars. The purpose of the stylish design interface is to attract the consumer's attention. As for the packaging of this game, it will be in compact disc form. Written on this compact disc cover are the company's name, information of the product, features and tips on how to login into the game efficiently and properly.
5.2 Price Analysis
Our company is using the value-based pricing for our product. Our brand carries high brand equity; therefore there is a substantial brand loyalty amongst our customers to our products. This allows us the privilege to set our price range considerably higher than our production costs and closely to our competitor's prices that are also high equity brands. This is due to the fact that our customers perceive our products to be of good quality and value. Below is a table comparing the prices of our competitor's products to our company's products:
PHOENIX GAMES STUDIOSRM40-RM45
Although our price range for our online game product line is between RM 30 to RM 40, our game "O2JAM" will be priced at RM35. This is to follow our positioning strategy, which is to project it as a good value for money product. The cost of production for the game is lower than our other online game products because the development of the game has simple framework. Hence, our customers will see the reduction of our usual price as reasonable and of good value, and not because it is of lower quality. In addition to that, the low price also serves as our market penetration strategy to earn a larger market share as to meet our marketing objective.
5.3 Place Analysis
Our company is using the Administered Vertical Marketing System as our distribution channel. As a major online games company, we are able to assume leadership over the distribution channel and obtain strong trade co-operations. We have an indirect marketing channel, whereby there are two intermediary channels. Our product is distributed to a wholesaler who will then distribute our products to our retailers. Our wholesaler provides our company warehousing facilities does bulk breaking and transport our goods to our retailers. Currently, we have almost 50 over retailers countrywide selling our products.
We are practicing selective distribution for our product. Our retailers are concentrated at urban areas where most of our target customers are situated. We display our products in places such as cyber cafes, shopping complexes and games specialty stores that are strategically located and easily accessible by our customers as to prevent them from switching to other brands that are more conveniently situated.
5.4 Promotion Analysis
Our company is adopting the percentage-of-sales method by taking 10% of our sales as our promotional budget. With this promotional budget, we plan to use the pull strategy as our promotion strategy. Our objective is to induce the consumers to purchase our product. We plan to do this by using three methods, advertising, sales promotion and public relations.
We are using information advertising for the first six months to aggressively introduce and promote our new product. We are planning to advertise in PC Game magazines and through the internet. We find that 90% of male population between the age of 15-40 read game magazines to get information. Hence, this is an excellent way to get exposure for our new product. Another way is by advertising on the internet with "enthusiasm" gaming execution message. Here, we are trying to express that playing online games is part of teenager's enthusiastic lifestyle. Advertising through internet offers better coverage and is able to attract the customer's attention longer. After six months, our company will stop advertising intensively and only advertise occasionally to keep the consumers attracted to the product
During the first three months after launching, we will do a sales promotion whereby, we will sell the product at a discounted price of 5%. This serves as a short-term incentive to get the consumers to try our product and get them hooked. Our third method is using public relations to establish a good, trustable image of our company in order to gain favourable publicity and maintaining it. We are planning to use favourable news about our company and product as our public relations tool.
6.0 Financial Planning
TERRA ICT SDN BHD MALAYSIA
Budgeted Statement of Financial Performance for Year 1 and Year 2
Budgeted RevenueYear 1 RM'000Year 2 RM'000
Less: Cost of Sales-2,400-2650
Less: Budgeted Operating Expenses
Selling and Promotional expenses-690-657
We budgeted that there will be an increase in sales from RM 6,570,000 in year one to RM 7,200,000 in year two. This is because the product has gained much exposure due to the intensive promotion of the product throughout year one. The selling and promotional expenses decreases in year two as fewer promotions are needed since the product has already been established into the market. There is also an increase in the operating expenses in year two due to an increase in demand. Overall, there is an increase of net profit from RM 2, 780,000 to RM 3, 133,000 in year two.
Appendix 1.1 Board of Director
Board Of Director
Vice ChairmanDato Abdul Latiff
Executive DirectorTom Tamura
Executive DirectorC S Chin
Director Kang Tai Hyun
Director / AdvisorOng Puay Koon
Appendix 1.2: Percentage of Market Share for Game Products in Malaysia
Appendix 1.3: Percentage of Market Share for Games in Malaysia
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