[Type the company name]

Marketing plan
Assignment
Student Name: Tianmeng Li Student ID: 4231910

2012

Executive summary
Firemint is an Australia-based studio, develop and publish great video games which founded by Robert Murray in 1999 (Firemint, 2012). Currently this company is looking for opportunities to expand their business not only within Australia but worldwide if possible. This company with team of 60 people have developed some truly best game such as Fly Control, Real Racing and Spy Mouse (IGN, 2012). The product that is going to discuss in this market plan is one of Firmints key product - Fly Control Rocket online, that have been developed by the company based on the next evolution of Fly Control PC game. The purpose of this market plan is to verify and evaluate if Fly Control Rocket can be deployed in China market and achieve business success. There are several methods such as Micro and Macro analysis, SWOT analysis and Market segment strategy that will be adopted in this report to investigate and support this argument. The groups of customer are teenagers and young people with low level income. However, Fly control Rocket online game can enjoyed by any internet users in China because the price is reasonable. The main competitor of Firemint is Blizzards which controlled by American. Due to they have enter China market for certain years, the operations is much more mature the Firemint. But as a small size of company, Firemint has its unique features to competitive with large famous company. Firemint will use the effective market mix strategy to gain the market share in China. There is limitation in this report due to lack of data to support the forecast profitability for Firemint business in China. As such, this market plan is more focusing on the feasibility of running its online game business in China and not much of financial aspects will be discussed.

Contents
1. Introduction ........................................................................................................................... 5 1.1 Overview of product and company ................................................................................. 5 1.2 The purpose of the report ............................................................................................. 5 2. Rationale for choosing China ................................................................................................. 6 2.1 The reason for choose china ......................................................................................... 6 2.1.1Potential sales ........................................................................................................... 6 2.1.2 Strengths of local resources ..................................................................................... 6 2.1.3 Cultural difference .................................................................................................... 6 2.1.4 Country restrictions .................................................................................................. 7 2.2 How to enter into China market ................................................................................... 7 3. Situation analyses .................................................................................................................. 8 3.1 Macro environmental (PEST) analysis ...................................................................... 8 3.1.1 Political-legal factors ................................................................................................ 8 3.1.2 Economic factors ...................................................................................................... 8 3.1.3 Sociocultural factors ................................................................................................. 9 3.1.4 Technological factors................................................................................................ 9 3.2 Micro analysis .............................................................................................................. 10 3.2.1 Consumer ............................................................................................................... 10 3.2.2 Competitor ............................................................................................................. 10 3.2.3 Market size ............................................................................................................. 11 3.2.4 Market trends ......................................................................................................... 11 3.2.5 Product trends ........................................................................................................ 11 3.2.6 Target market trends .............................................................................................. 11 3.3 SWOT analysis ............................................................................................................... 11 3.3.1 Internal analysis ...................................................................................................... 11 3.3.2 External analysis ..................................................................................................... 12

4. Market segment to be targeted & positioning strategy. .................................................... 15 4.1.1 Geographic ............................................................................................................. 15 4.1.2 Demographic .......................................................................................................... 15 4.1.3 Benefit .................................................................................................................... 15 5. Demand forecast for the new product ................................................................................ 16 6. Marketing mix strategy ....................................................................................................... 17 6.1 Product ............................................................................................................................. 17 7. Conclusion ........................................................................................................................... 19 8. Reference............................................................................................................................. 20

1. Introduction

1.1 Overview of product and company

Firemint is an Australia-based studio, develop and publish great video games which founded by Robert Murray in 1999 (Firemint, 2012). The team of 60 people develop some truly best game such as Fly Control, Real Racing and Spy Mouse (IGN, 2012).

Fly Control Rocket is a multiplayer online game, developed from the next evolution of Fly Control PC game. Players need to control all of rockets back to their depot logically and quickly. It includes all the classic elements of Fly Control. At the meantime, Fly Control Rocket gives you a different experience of venture into a new galaxy of exploration (Firemint, 2012).

1.2 The purpose of the report

This market plan report is created based on basic knowledge of International Marketing and will going to focus how Firemint will investigate and develop its new published game Fly Control Rocket in new arising market, China. Based

on SWOT analysis and market segment research, Firemint will need to make their decision on the eligibility of operation in China and there will be potential sales and profitability forecast in this new market through implementing right strategy and marketing campaigns.

2. Rationale for choosing China

2.1 The reason for choose china

2.1.1Potential sales
Due to the rapid growth of economic, the purchasing power of China is much stronger than any other Asia countries. In year 2010, China has become the 2nd largest economic entity in the world (Telegraph, 2011). It shows that customer in China has a quite strong purchasing power. China has about 52,990,000 computer users and this number is even two times larger than the whole population of Australia (Maps of World, 2012). This means that it has a big opportunity for online game companies enter into its market.

2.1.2 Strengths of local resources

One of the most important strengths of china local resource is the low-labourcost. Labour cost is a momentous criterion for a company to choice foreign market (Uminski & Draper, 2006). From EA Games strategy on developing Chinese market, low labour cost is valuable when EA Games needs to set up office in China to do game maintenance. As such, their expense in China will be comparably lower than other operating in other developing countries. On the other hand, when the company enters into Chinese market, it needs to do various kinds of promotions for its games and the company will increase its forecast. Chinese low labour cost base could also help company to reduce its human resource expenditures.

2.1.3 Cultural difference

It is believed that the recognition is considered as one of the most important things to oriental peoples mind in China. In other words, people from China have higher expectation from others when they have some achievement. In this case, Firemint should take this factor into concern and when they develop Chinese version of Fly Control Rocket, they should prioritise this criteria and making effort on how to help consumers be awarded by other peers.

2.1.4 Country restrictions

The free trade and abolished trade restrictions have been encouraged by Chinese government since 1978 and it has already become the third largest trading country in the world which next to the United States and Germany (Lai, 2003). Firemint needs to be clear what they can and cannot do in China. Considering Local game industry is still in an unfavourable position in China, Firemint can form strategic alliance relationship with a selected Chinese company and therefore stepping into Chinese market and this method will be discussed in later section of this report.

2.2 How to enter into China market

Currently there are several following methods that have been used to send goods and services to other countries. Unlike other methods, strategic international alliance creates a certain platform and allows different companies still working cooperatively after contract signed. According to this method, Firemint can share the business risk with other companies to work out mutual needs in creating more profit (Cateora et al. 2012). Though there is no ownership involved between one party over another, the business relationship is still every close between two parties who have entered the contract. In this case, strategic alliance is particular appropriate to apply by Firemint for them to explore China market because they could work together through the stages of new game development and ongoing maintenance.

3. Situation analyses

3.1 Macro environmental (PEST) analysis

3.1.1 Political-legal factors
Chinas fundamental political system is the peoples congress system which controlled by Chinese community party since 1949 (Martin, 2010). The

political system in China is stable so that it can develop a healthy and stable market. In the end of 2001, China has officially become a member of World Trade Organization (WTO, 2001). It means many aspects of administration of China should be complying with the requirements and arrangement of WTO. At the meantime, with more respect of intellectual property rights, China need to pen domestic service and markets to foreign business. Therefore, Firemint will be welcome by Chinese government to expand business in China.

3.1.2 Economic factors

The economy in china has experienced continuous growth over the past few years even though the global economic downturn. consumption is raised in a line with rapid urbanization. China domestic

Source: CIA World Fact book

From this picture, it clearly shows that the rate of Chinas GDP growth is much higher than United States and average level of world. In certain words, there is no other country like China that has experienced consistent economic development is such speed and scale over past 15 years. So Firemint cannot afford not to do something in this country.

3.1.3 Sociocultural factors

There are nearly 1.4 billion people live in China, this number present 20 percent of worlds population (Hille & Tsang, 2012). It means in every five people have one Chinese resident. By the year 2040, this number will

increase to 1.45 billion (Rosenberg, 2012). Sociocultural factors have an important influence of people consumption behaviour.

3.1.4 Technological factors

The technology factor applied to this marketing plan is mainly about internet usage and information technology development in China. The purpose is to make sure that China market is capable to run this game. At the moment, the average broadband web speed in China is about xxx kb/second, which fulfils the minimum requirement of Fly Control Rocket that needs xxx kb/second speed broadband web service. Secondly, as Fly Control Rocket is designed to play online remotely; the game platform should laptops and other remote electronic devices such as Ipad. For example, there are about 1.3 million of Ipad have been sold to customers in China (Techieapps, 2012),and this means there could be a lot of potential users of Fly Control Rocket available for Firemint to target.

3.2 Micro analysis

3.2.1 Consumer
Because Fly Control Rocket is a type of online game, the base of potential consumers must be coming from internet users.

Among those computer users in China, there are more than 420 million of people who use remote devices to get onto internet which has the highest number of internet users (Internet World Stats, 2010). From this Chart, it is clearly shows that China also have 33.3% penetration rate as the internet top 1 users.

3.2.2 Competitor
It is not correct to identify all kinds of online games are Fly Control Rockets competitors because they are not substitutable and categorised as same type of online games. Moreover, they are not targeting on the same group of game players and therefore it is not comparable. However, it cannot overlook other competitors because some of the world major online game organisations have be extremely successful in China business, such as Blizzards. Since year 2002, the World of Warcraft has become national known and one of the most popular online games in China (CCBC, 2009). It can be seem as Fly Control Rocket main competitor in China. Because they already had a big market share and mature operation system.

3.2.3 Market size

The market size is generally counted in dollar values. As this market plan is mainly focusing on online games, the current China online gaming expenditure should be investigated. At the moment, the yearly overall income from China online games is a huge number. From Fly Control Rockets point of view, they will need to target on young players and unfortunately, who with lower purchasing power.

3.2.4 Market trends

It is believed that online games itself will be the market trend for PC game development. And this is exactly what Fly Control Rocket targets on. The reason might because it is now much easier for people to get access on internet though broadband or WIFI that they dont have to sit one place but can play online games at anywhere they like.

3.2.5 Product trends

The trend of this type of online games such as Flight Control Rocket is 3D platform. Unlike traditional 2D game that is easier to make, 3D online game requires higher technology and better device to play with. However, the visual effects generated by 3D are much better than 2D ones (Soneira, 2010)

3.2.6 Target market trends

Players in developing countries have similar features as customers in developed countries. They all like innovation products and attempting new things. Playing online game have already became fashion behaviours. Various people join this new trends and it will leads to Firemint enter into a profitable market.

3.3 SWOT analysis

3.3.1 Internal analysis
Strengths:

Low-cost Operation: As Firemint is an almost 60- people team, compared with some large companies which have hundreds employees, it saves large amount labour cost. This means Firemint will have more forecast to invest in games development. Good Reputation: Firemint is famous for its classic game such as Real Racing and SPY Mouse. Players are relying on the good quality of our games and innovation development. Once the company have new games to release, it will attract many old players of Firemint to pay close attention to. All these players are the potential customers of Fly Control Rockets. Unique features: Throughout the history of Firemint, the minds behind the games would often have to travel to the various gaming conventions throughout the year, giving each team member a unique viewpoint to the festivities. The strength for Firemint to provide Fly Control Rocket to Chinese players is the unique experience of the brand new game to Chinese customers. Weakness: Technical limited: Due to the dimensions of Firemint, the technology aspect update may be lower than the other internal video games company. The running speed of our system need to improve so that it can proved a stable internet environment for all players. Poor relationship: Firemint could have difficulties in maintaining relationship with local human resource and managing business corporations with their Chinese partners. Not only because of the languages but also that Firemint will need to take time to understand business culture in China.

3.3.2 External analysis

Opportunities

Emerging market: Although the overall economic scale in China is already the 2nd in the world, Chinas remote online gaming is still seen as an emerging market (Mindful money, 2011). Therefore, the possibility of future growth provides the opportunity for Firemints growth and in further developing Fly Control Rocket. Favourable trade policy: With award to more Investment, China has a few good trade policies are provide for foreign investment activities since they open market (Chen & Feng, 2001). It is much easier for investors running business in China market, especially IT industry.

Rapid growth users: Based on the picture, it shows a rapid growth of internet users in China, it obverse claimed that there is a huge number of potential users will become Fly Control Rockets players.

Threats Too much Competitors: As many famous video games companies came into China market. The competition becomes more and more violent. Most of those companies have a strong reserve of capital and excellent expertise team, Firemint want to make a good market share is a difficult challenge. Intellectual property protection: One of the most obvious of weakness for Firemint to develop business in China is high risk of intellectual property protection. According to Kyodo News International research (2004), there is serious problem in intellectual property violation. For example, there are lot of users willing to download illegal copies of games for free and not paying to buy legal copy that normally cost more to them to play.

3.4 Justification for launching this product

Firemint needs to make sure Fly Control Rocket is attractive enough to Chinese players. A Chinese language version needs to be produced at least. If possible, market survey is needed to be conducted in order to find out whether Chinese players will buy it or not. If not, what the Chinese players expectations are for this game is critical for Firemint to make improvement to this game.

4. Market segment to be targeted & positioning strategy.

4.1 Market segment

4.1.1 Geographic
The target customers are manly comes from city. Because this is a type of online game that need players played via internet. Therefore the geographical boundary will limit this game and its development when remote internet access is not available. Most area of country cannot access internet in China. If there is proper remote internet access, any player who wants to play this game can always play where ever she/he likes with proper device as long as there is remote internet access.

4.1.2 Demographic
The target customers are both female and male who ever older than 6 years old people. Consider the price is acceptable which will mention in 4P analysis, both high income people and low income people can afford this game. Even you are a student without any income; the part of pocket money is enough to pay this game for you to have fun by Fly Control Rocket. It means almost all remote online users could be considered as the potential consumers of Fly Control Rocket.

4.1.3 Benefit
The target customers of Fly Control Rocket have a similar set of importance weights for the attributes of products (Levy, Weitz & Beitelspacher, 2012). They are seeding the experience of new adventure and happiness in our game. Also, Fly Control Rocket can reduce the pressure comes from customers study work

4.2 Positioning strategy

Generally, Firemint offers customer valuable benefit for product positioning. The target customer will pay a cheaper price to enjoy the most famous online game with a high level of service. Most of players are teenagers. The cute drawings and cute displays are used by Firemint to define their strategy in order to attract teenagers download game and play

5. Demand forecast for the new product

Due to the history sales data, Fly control sales 4.5 million times worldwide and Real Racing also got 2 million according to apple store contribute by 19 countries (Ramli, 2011). Fly Control Rockets build on the good reputation of Firemint game. Since China is maintain a big percentage of these internet users, it is assume that Firemint can also gain a big market share.

It can be assume that as a new game enters into China market, there is at least 10% of online game players in China will play Fly Control Rockets. As it shows in chart, there are almost 310 millions online games player in 2011. The growth rate become small over past 3 years so that in the next 3 year, the

number of online game users will be 310 millions, 320 million and 330 millions. It means there will be 31million, 32 million and 33million users playing Fly control Rockets.By using the price of 1$ per account which we discussed in 6.2, the following table works out. Item Number of Price players 2012 2013 2014 31 million 32 million 33 million 1$ 1$ 1$ 31,000,000 32,000,000 33,000,000 Sales ($)

6. Marketing mix strategy

6.1 Product

Fly

control

Rocket is an online competition game, players controlled all the Rockets just like travel conductors. It can improve players logical thinking and patience. The first player who can get all the Rockets back to mother ship is the winner. Every player has 3 chances to continuing game if the rocket collide each other. Compared with original Fly control PC games, this game creates better vision effect and nice background music. Also, there are unlock a cast of quirky Robots to grant your mother ship a competitive edge (Fireminit, 2012)

6.2 Price
As Fly Control Rocket is targeting on students and young people, the price must be acceptable. When setting up price for Fly Control Rocket, the benchmark of other similar games is important. But not like other online game charge by minutes, Fly Control Rocket recharge monthly. 0.99$ is paid when players create a new user account, 0.45$ for next every month. This kind of payment gives a huge discount for players who contribute tremendous time onto this game. Also, based on the huge number of potential users in China, Firemint can gain reasonable profit.

6.3 Promotion
The promotion strategy is very critical tool to attract more players joining this game and one of the most effective methods is publishing free version game to the public and allows users to download the game for free. There are two types of mechanic of issuing free game to users. Firstly, the company can create a Lite version, or call short version and users who are interested this game can go online and download the game for free. However, this Lite version game does not contain all information of this game. So if any user wants to continue to play, they will have to pay to buy the full version game. Secondly, company can release a full version of Fly Control Rocket but for only few tries. If user still wants to play after these tries, they will have to pay for it. The other attractive promotion activity is rewards players. The official website of Fly Control Rocket will select ten lucky users randomly from users database. The players who are chosen can play Fly Control Rocket free for month and opportunities to experience new games develop by Firemint.

6.4 Placement
As Fly Control Rocket is an online game, the running system will be build based on internet. Firemint will find a famous internet platform in China and

running this new game. It also helps Firemint increase the speed of expansion new players of Fly Control Rocket.

7. Conclusion

After all, China is an attractive market for gaming company such as Firemint due to size of market and potential growth. The purpose of the report was to expand Chinese market from deploying Fly Control Rocket online made by Firemint. By applying different kinds of research tools and methods, it is clear that Firemint will have opportunity of running successful business in China and obtaining higher sales and profits from this arising market. Also, this market plan has provided several strategies that could be adopted by the company such as product promotion setting a suitable price for customer and advertisement to let customer know our product in terms of developing its business in China.

8. Reference

Cateora, P R, Sullivan Mort, G, DSouza, C, Taghian, M, Weerawardena, J & Graham, J 2012, International Marketing, Australia Publishing, NSW CCBC 2009, ICT Sector, Accessed 26/03/2012.

http://www.ccbc.com/research-reports/sector-research/ict-sector/ IGN 2012, Firemint, Accessed 26/03/2012,

http://au.games.ign.com/objects/902/902273.html Kyodo News International 2004, Japan, China electronics groups agree on intellectual property cooperation. McClatchy - Tribune Business News, pp1-1 Levy, M, Weitz, B A & Beitelspacher 2012, Retailing Management, 8 th ed, New York: McGraw-Hil FAQS, 2008, Chinas GDP Growth, Accessed 26/03/2012,

http://www.faqs.org/sec-filings/100521/Datone-Inc_S-1/ Firemint 2012, Fly control Rocket, Accessed 26/03/2012,

http://firemint.com/2012/flight-control-rocket-now-available/ Firemint 2012, About Firemint, Accessed 26/03/2012,

http://firemint.com/about-firemint/ Maps of World 2012, Top Ten Countries with Highest numbers of PCs, Accessed 26/03/2012, http://www.mapsofworld.com/world-top-ten/world-topten-personal-computers-users-map.html Martin, M F 2010, Understanding Chinas political system, Congressional Research Service, vol.41007, pp1-1 Mindful money 2011, Is China still an emerging market, Accessed

26/03/2012, http://www.mindfulmoney.co.uk/3278/investing-strategy/is-chinastill-an-emerging-market.html

No author, 2005, China Market, Principals Report, vol. 05, no. 2, pp2-3 Telegraph 2011, China is the worlds second large economic entities in the world, Accessed 26/03/2012,

http://uow.summon.serialssolutions.com/search?s.cmd=setSort(PublicationDa te:desc)&s.fvf=ContentType,Journal+Article,&s.pn=1&s.q=China+has+becom e+the+2nd+largest+economic+entity+in+the+world Hille, k & Tsang, A 2012, Chinas rural population left behind, Financial Times, pp1-1 Internet World Stats 2010, Top 20 Countries with Highest numbers of users, Accessed 26/03/2012, http://www.internetworldstats.com/top20.htm Techieapps 2012, Apple to halt ipad sales in China, Lenovo and Samsung likely to gain, Accessed 26/03/2012, http://www.techieapps.com/apple-to-haltipad-sales-in-china-lenovo-and-samsung-likely-to-gain/ Uminski, D & Draper M 2006, Labor Cost, Area Development Site and Facility Planning, vol.41, no.1.pp3-3 Lai, H 2003, Local governments and Chinas WTO entry, American Asia Review, vol.21, no.3, pp151-186 Rosenberg, M 2012, China Population, Assessed 26/03/2012,

http://geography.about.com/od/populationgeography/a/chinapopulation.htm Soneira, R 2010, The Best 3D Technology: Stick with Passive Glasses, Display Mate, pp1-1 WTO 2001, China-Member information, Assessed 26/03/2012,

http://www.wto.org/english/thewto_e/countries_e/china_e.htm