Emotiv Systems

EMOTIV SYSTEMS

Case Analysis

Which platform should Emotiv pursue – console or PC? Focus only on the US market and assume that US has 110 million households.

If Emotiv manages to convince one of the console makers in time for a fall 2008

debut, what marketing mix decisions (specifically, pricing and channel) are appropriate? How about if EPOC is only PC enabled?

Emotiv has currently many options, but as per the current situation the best platform for Emotiv’s EPOC launch would be the PC market. Presently this system was being used for Professional uses like presentation of the Emotiv products. Launching this product in the PC market would also be beneficial for Emotiv as it would be able to charge higher price for it’s product. As PC users are hard-core gamers and they do not mind spending much on new products, they would definitely try the product once it is launched in the market. Moreover, Emotiv does not have to share their margins with the PC Game publishers, so Emotiv will earn a higher margin.

Console manufacturers are currently not giving any proper confirmation for the integration of EPOC into their consoles. Wii has refused plainly. With Sony they are facing problems due to internal politics of the Hardware and Software divisions and Microsoft wants to follow second to market approach. Console manufacturers are also charging huge margins for the every EPOC headset sold.

PC is the best platform for EPOC product launch and it will also be able to skim the market by charging a higher price initially. Later if consoles agree to integrate this product, they can easily penetrate the market with low price.

If Emotiv manages to convince one of the console makers for integrating EPOC, it should price it’s product at $199 so that it can easily cover it’s production cost for the initial units. Since EPOC is new in the market and people wonder if this technology is even possible, EPOC would be sold majorly through retail channels. Selling through retail channels is necessary, as people would like to have Product Demo and try the product before buying it. In such a scenario, it will also have to share the margins with the retailers like Best Buy. The margins shared with the retailers is also huge i.e. upto 35%. Once people start buying this product and get wowed by the possibilities of the product, it can start entering other markets like Medical and Military and charge a premium for their product. Once their product becomes popular, their products will also be bought through online e-tailers.

If EPOC was only PC enabled, Emotiv can charge a higher price for their product, as much as $350 and earn high margins per product. PC gamers would also not mind spending such a huge amount on a hugely popular product, which would enhance their entire gaming experience. This product can also be used for other purposes later, like the medical and military once the product becomes popular in the PC market.

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