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Marketing 101 Part 1: The 4 Ps

By Joseph Lieberman | Published Jul 03 2004 12:02 PM in Business and Law

game product price marketing people dollar demo time sales
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Note:  This article has since been revised and updated


Hello everyone, welcome to your first day of class. Thought you graduated (or maybe thought your day of school was over)? Sorry buckaroo, it's time for marketing 101 and I am your professor, Joseph Lieberman, owner of vgsmart.com.

Before you walk out of my class, let me tell you that this class applies to EVERYONE. If you are a programmer, artist, sound effects man, designer, developer, or... well the marketing guru for a company (or for yourself) this information is IMPORTANT.

The most common mistake people make is assuming that if you make it, they will download it. If you create a game, the publishers will find you. If you make the game, the players will find you. That when you are done pounding the code and graphics into the software you have but to sit and watch the money roll in…

Wake up! It doesn't work that way anywhere in the world. If you are not spending at least 25% of the time it took you to create the game, marketing it, you are doing something wrong. There are a million things to be done, but before you do any of them you have to learn a little bit about what marketing is, keeping these key concepts in mind for each and ever decision you make.

The big 4Ps of marketing that everyone should know are Product, Price, Place, and Promotion. In this article I will go over the 4Ps, which are the foundation of every marketing principal (just about).


Product
In video games, product is probably the thing coders and developers think about most. It is a good thing, because in gaming, product IS the most important factor. I know, we all remember some really BAD products which had good marketing and turned out to make a bundle, but those are the exceptions, not the rules. It is far easier to market a good product than a bad one, and I doubt any indie developer has the assets to market a bad product. The two key words in product are WANT and NEED. You have to make sure you are giving customers both, and those two things are not always the same!

Product comes best into play, for the marketing side, in the design of a demo product. You have to make sure, first of all, that the product is compatible with as many PCs as possible. Then, you should make sure that your layout is easy to navigate and the game can be picked up and played without much (if any) reading of help files. You only have a limited amount of time to show your new client your game, you don't want to squander that time having them read help files. On the other hand, you don't want them to be confused by the game. The game controls and game play have to be easy to pick up, if they are not, use either an in-game tutorial or force them to read the help file! Remember: The customer WANTS to instantly play but NEEDS to learn the basic controls!

Now, what most people I talk to are concerned about: What type of demo to use?

There are 3 basic demo types:

Time Limited
Pro: Gives the user a taste of what the full version is like.
Con: It is very hard to time the demo to end where the person is hungry for more.

Feature Limited
Pro: Easy to dangle the additional features right in front of the user.
Con: Some people may not buy because they didn't experience a feature they wanted, or didn't know a feature was there that should have been dangled better

Episodic
Pro: Easy to end the plot or game at a cliff-hanger. Often times these generate positive word of mouth, since you are basically giving away 1/3 of your game (if it's a 3 episode game).
Con: Could give too much of your game away. People may be content playing only your demo and never upgrading.

There is no right answer when it comes down to it. Every demo type has been used successfully by some people. The key to designing a good demo is that the demo ends right when the person is really getting into it. I like to use this motto: Give the customers all that they need and a taste of what they want and then leave them hanging.


Price
Possibly the most complicated process in any industry. Price is a huge factor in the success of your product. There are a few key concepts and key variables, each will be different for each varied product. In a recent talk I had with CEO of Save-A-Lot food stores, Bill Moran told me to key in on the term "Shocking Value." Value and Price are two different concepts. You have to deliver your product so that its value is greater than its price, otherwise people won't buy it. In this article I am going to touch on four different concepts. There are MANY more concepts of price, but these are some of the biggest.

Prestige Pricing is a term that basically says, "A more expensive product IS a higher quality product." 9 out of 10 people will tell you, when faced with two identical products; the one with the higher price tag is the higher quality product. Prestige price refers to this effect; a 20 dollar game is a better game than a 10 dollar game.

Or is it? Penetration pricing is the price strategy that says a lower price will generate more volume. More volume means more market share. More market share means more future sales. A 10 dollar game generates more sales than a 20 dollar game, but maybe not more profit. Penetration is best used with a product that has strong viral capacity. Viral Marketing will be covered in a later article.

Factor #3 is the hardest dollar concept. In online sales it is common that anyone willing to spend 1 dollar on your game would be willing to spend 10 (or maybe even 20!). This is a demonstration of a slight backwards bending demand curve. If you sold 100 units at 10 dollars, you may only sell 90 units at 1 dollar! Prestige pricing and the hardest dollar (which is the FIRST dollar) combine to not only cut your profits down but your sales as well. Do not price your products too low.

Finally is the concept of terms of sale, most likely seen in the use of discounts. A sale on your prestige price good may relay the benefit of the prestige price numbers and the volume of the lower price tag. The generation of spontaneous sales is what to look for in the use of this.

Two down, two to go! Keep reading!


Place
Luckily for all of you there are not too many place decisions to make in games. Download, CD, Retail or Online Publisher… that covers all the main ones you will encounter. Place is the distribution and where people get the product to try or buy it. Each place decision has its own benefits, but lo, most are not mutually exclusive!

Download is the most common for indie developers. You can get software and do it yourself (www.accusolve.biz) or you can hire a company to do it for you.

CD can also be offered, it can be done for free via www.swiftcd.com, but they overcharge you a lot and you either have to eat that cost or pass it on to the consumer. A CD can hold a lot more data and is best used for "special editions" in addition to a downloadable platform. If you expect enough volume I would get a professional company to create your CDs, not only will it cost your consumers less, but you will make more off it.

Retail is the most expensive and most difficult. You will NEED a publisher if you want to get into a retail store. In general, putting a retail title on a shelf runs anywhere between 100,000 and 200,000 dollars or more. That is just to get your title on a shelf!

Finally, a more recent innovation is Online Publishers, such as Real Arcade and BigFish games. These take a little less money than retail publishers do, you can expect to get 20% of each sale. They make up for their crappy payment in volume, the only down side, you don't get to tell your players who your company is! That means most of the customers you get from them won't be your customers at all. This dilemma will be discussed in a future article as well.


Promotion
Last but not least, promotion. Ask 10 people on the street what a marketing person does and all 10 will probably tell you that this is what they do. The above 3 are also what we do, but it's not what people think about. Promotion is the combination of advertising, publicity, and buzz (a subset of publicity).

Buzz is the hardest to create and the hardest to control. Most firms actually avoid trying to make buzz because of the havoc it can cause. Buzz items are typically fads, and the problem most frequently it creates is demand exceeding capacity. In the download world it is not as big a deal, thankfully.

Publicity is 'free' advertising. Reviews, Interviews, and Previews are the most common forms of this. Also included are press releases, screenshots, and link exchanges. The downside of publicity is usually it takes a lot of time and work to get. Remember, if you build it they will NOT come. Reviewers will not bang down your door, and you have to do more than just submit your game to some unknown E-mail address.

Advertising is a much easier creature; it's also much more expensive. To correctly advertise you must know your target market and your conversion rate. Conversion rates are how many sales you get for 100 download. Ads must be targeted. Target refers to what group is most likely to buy your game. Lately there has been a lot of emphasis on Google Adwords from sites, and google is a good advertising source, but part of me thinks it's a copout from doing research and finding better deals. Both Advertising and Promotion will get its own article (or two) in future articles.

Well, you made it through the first day of Marketing 101. Please exit the theater on your right.


About the Author
Joseph Lieberman is the founder and owner of vgsmart.com. To receive more helpful tips via e-mail, sign up for our newsletter at www.vgsmart.com.





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