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HTC Vive Marketing Plan


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HTC Vive Marketing Plan

  1. 1. Selling a Fantasy: A Marketing Plan for the HTC Vive Gregory Alexander Haeger Spring 2016 Honors Thesis Submitted to the Honors College in partial fulfillment of the requirements for the designation of Honors Distinguished Scholar
  2. 2. 1.0 Executive Summary There is a technological boom occurring in the virtual reality industry. Virtual reality technology has exceeded far beyond what many thought possible even a decade ago. Taking leadership in this innovation revolution are two titans of industry who have partnered up to create the highest caliber virtual reality headset to date: The HTC Vive. HTC and Valve have formed a partnership with the sole purpose of developing the HTC Vive headset. This product is the on cutting edge of virtual reality immersion technology, with greater hardware and software capabilities than both its predecessors and competitors. Therefore the question now becomes: what is the best way to bring this product to market and who can benefit? The virtual reality market is sizable, and only growing larger as technology evolves and more products are brought up. The HTC Vive is one of the main driving forces of this growth. A few of the features this high-end technology includes are: 360 degree tracking, high resolution display, and software adaptability to name a few. These are a small portion of the differentiating factors of the HTC Vive over its competing products. The main competition includes well-known products in the industry by other well-branded companies such as Oculus, Sony, and Samsung. The competing companies’ products all have individual strengths in various areas, however the HTC Vive can leverage its hardware and software capabilities as well as its brand recognition and prestige to form a unique selling proposition that differentiates it from the competition. When comparing to competitors, the HTC Vive stands tall as far as its advanced technology, vast software availability, and multiple industry functionality. Using an analysis of the aforementioned strengths as well as weaknesses, opportunities, and threats; we can position the product in the best market segments for optimized growth. These segments are: -Consumer/Gaming -Business/Industrial -Education -Psychology -Physical Therapy As odd as some of those segments seem, there are valid and compelling reasons to believe that these areas could provide a substantial amount of revenue for our product. In order to tap into the potential that these segments provide, we determine our market penetration strategies and tactics for each segment and follow this with our pricing and distribution plans as next steps for the project. The HTC Vive is the next big product for immersive virtual reality and it is ready to rise to the top of the industry. This marketing plan will serve as a map and a guidebook that we can use to help our product get there. This is the future of virtual reality technology. This is the HTC Vive.
  3. 3. 2.0 Situation Analysis 2.1 Market Summary Virtual reality devices are not a new invention, however we are currently experiencing a technological leap when it comes to virtual reality headset devices. Virtual reality and augmented reality are consistently evolving fields that specialize in immersion into a computer-generated situation or landscape (in the case of virtual reality) or superimposing computer-generated information over the physical world (which is the purpose of augmented reality). The key difference here is that virtual reality provides a completely virtual experience, while augmented reality simply adds features to the existing world. A prime example of augmented reality is Google Glass. And the optimal example of high end virtual reality is the HTC Vive. The current market for augmented reality (AR) and virtual reality (VR) is growing at a rapid pace and capable of providing significant opportunity for revenue generation. In fact, Fortune magazine projects that by the year 2020, the AR and VR market is expected to generate $150 billion. This brings us back to our product, the HTC Vive. The HTC Vive is a VR headset in a market with several well-known competitors, high levels of anticipation, and rapid innovation. Currently the main target market for VR is consumers, particularly gamers. While gaming is a relatively large market segment (a Newzoo and GlobalCollect survey showed 1.78 billion gamers worldwide in 2014), there are more opportunities for this product across many segments. The HTC Vive has potential for a variety of segments and therefore a variety of end uses, as such the market sizes and demographics vary. 2.2 Product Description HTC Vive VR The product we intend to sell is the new, innovative virtual reality headset known as the HTC Vive. This product was born out of a collaboration between technology hardware giant HTC and gaming software developer Valve.
  4. 4. Features: - Provides a 360 degree, mobile, immersive, virtual reality experience - High quality software design developed by industry leading company, Valve - Hand controls for added realism - OLED 2,160 x 1,200 pixel resolution display - Front facing camera for visibility of real-world objects - Room-scale tracking devices - Ability to run any software coded for the device The HTC Vive is one of the newest and most discussed virtual reality devices coming on to the market today. It operates as a headset and hand controllers that are tracked through a room by sensors covering 360 degrees of movement. This results in a room-sized virtual den in which the user can travel around and explore the virtual world. The device is also equipped with a front facing camera that can be turned on to allow the user to see overlays of physical object around them within the virtual landscape. While the primary reason for developing this product was for the gaming market, the product has the adaptability to be used in a variety of areas, which will be discussed in a later section of this marketing plan.
  5. 5. 2.3 Competition Virtual reality is an up and coming field with a lot of recent growth. This growth has been accompanied by several companies releasing new virtual reality technology. Main Competitors: - Oculus Rift - Sony Playstation VR - Samsung Gear VR All of these competitors are listed for having similar products. Specifically, a virtual headset device and hand controls in most cases. There are other virtual reality headset devices in the marketplace at various prices and technical capabilities. These three listed competitors are the biggest current threat to HTC Vive market share for reasons including but not limited to: brand recognition, aggressive pricing, current customer base, and more experience in the market. Competitor Feature Comparison Graph: Features Oculus Rift Sony Playstation VR Samsung Gear VR HTC Vive 2160 x 1200 or higher resolution Display Unique hand controllers designed for life-like experience 15 x 15 foot tracking area Greater than 110 degree field of vision Front Facing Camera
  6. 6. Competitor Price Comparison Graph: Clearly the HTC Vive is sold at the highest price in the marketplace currently. However the reason for this is largely due to the larger bundle of hardware that comes standard with the HTC Vive. Nevertheless, pricing will be an issue for sales, and to combat this issue we will need to have a unique selling proposition that can differentiate our product from that of the competition. We will do this in part through diversifying our target markets and partly through product capabilities that the competition lacks for the direct-to-consumer (or B2C) sales. Competitor Strengths: In order to discover where our product would best fit into the marketplace, we must first examine our main competitors’ primary strengths. $- $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 $900.00 Oculus Rift Sony Playstation VR Samsung Gear VR HTC Vive Unit Selling Price Comparison Among Competitors • Enjoys a pre-existing high consumer involvement • Established consumer base • Highest quality VR of the competition Oculus Rift • Integrated with highly successful console • Half the price of HTC Vive • Extremely well known brand Sony Playstation VR • Lowest selling price of main competition • Integrated with popular Samsung phones • Promotional strategy with phone sales Samsung Gear VR
  7. 7. Oculus Rift: Currently the most compared device to the HTC Vive, the Oculus Rift has had a longer exposure to the public and was started through crowd funding. This automatically boosted the market involvement of the Oculus Rift prior to release. The device has a selling price that is roughly $200 cheaper than the HTC Vive and has fairly comparable technology. Sony Playstation VR: Sony is a very successful company, and have owed their success in part to the popular Playstation console generations. As a long-standing player in the video gaming vertical, Sony made the decision to enter the new virtual reality arena. Coming in at half the price of the HTC Vive (one could purchase both the VR device and a new Playstation console for the same price as one HTC Vive) those who are willing to sacrifice optimal quality for price will likely fall in line with this product. Samsung Gear VR: Samsung is a hardware brand similar to Sony, with the exception of spreading through the cellular phone vertical of consumer technologies as opposed to video gaming. The Gear VR has the lowest price tag of these main competitors and requires a Samsung phone to run the software. Those consumers who are among the least excited for a virtual reality device will likely come across purchasing this product, if for no other reason than because the device came either discounted or free with a phone they were purchasing from Samsung as a promotion. This segment is quite well established as a large sector of the population will not desire a very immersive and high quality experience for a high price. 2.4 Unique Selling Proposition The HTC Vive is certainly not the “everyman’s” device in the current market. However what it lacks in direct cost savings it makes up for in providing the most immersive and high quality virtual reality experience currently available. The HTC Vive will differentiate itself through being a high-priced item only for those who truly want the best. The partnership with Valve also opens up a world of possibilities, as any game developer has the capability to produce a game for distribution on Steam™, developers could do the same for the SteamVR™ platform. This results in a virtually limitless production of software from various developers without any limitation to one software company. This market segment will likely be responsible for a significant amount of sales. However to take the product further we will also diversify our target markets into untapped, less price-sensitive realms where a product of the highest caliber would be superior for the purposes it would be used for. HTC Vive Most advanced technology Greatest software availability Functional for multi-industry uses
  8. 8. Advanced Technology – The HTC Vive offers specialized handsets designed to mimic the true feeling of gripping a physical object, a front-facing camera for visibility into the physical world when necessary while using the device to prevent stumbling or injury, and a standing, walking, 360 degree virtual reality experience with 15 square feet of tracking designed for optimal immersion. Software Availability – The Steam platform is used to distribute software in the form of games designed by developers at all levels. With the Steam platform being brought to VR, the possibilities for new, downloadable software are near endless. Multi-Industry Functionality – The unique capabilities of the HTC Vive both in hardware and software functionality and design leave room for potential uses in numerous industries and markets stretching far beyond the gaming segment.
  9. 9. 2.5 SWOT Analysis for the HTC Vive Strengths: Innovative/High Quality Product Partnership of Industry Leaders Provides Brand Recognition (HTC and Valve) Offers Unique 360 Degree Immersive Experience Highly Rated in Early Reviews High Levels of Crowd Support Weaknesses: One of Many VR Products. Not First, Not Last. Estimated Higher Price Highly Anticipated, “Big Shoes to Fill” Big Expensive Project = Big Expensive Risk Opportunities: VR Industry is Growing Lots of Available Market Share Many Possible Industry Uses Wealth of Untapped Markets If Product Lives up to Hype, Expect Huge ROI No Dominant Player in Field Threats: Similar Competitors w/ More Affordable Products One of the First of This Class of Product, Copycats Sure to Follow May Not Meet High Expectations on Release VR is Fairly New; Not Necessarily Stable Market Given the Expansion of the Technology Industry, Could be Made Obsolete In Coming Years
  10. 10. 3.0 Marketing Strategies Note: Corporate Marketing Plans typically do not have citations presented in the way they are presented below. I have included citations and sources as this plan is, in actuality, an academic document. 3.1 Marketing Objectives The overall objectives for the HTC Vive project are as follows: 1. Gain market share over competitors in the primary target market of Consumer Gaming. 2. Diversify into markets that are less price-sensitive and more value-oriented. 3. Manage pricing and distribution to maximize ROI in both primary and untapped markets 3.2 Target Markets Using the analysis given above and some external research, we shall explore some of the more ideal target markets for the HTC Vive market penetration strategy. The segments are listed in order of greatest immediate revenue opportunity to smallest. 3.2.1 Gaming The high esteem that is held by both HTC and Valve provide immediate customer interest in the electronic gaming market. Valve’s exceptionally popular game and media distribution program known as “Steam” is being advertised for the product as well. “Steam” is currently the premiere online marketplace for downloading and playing video gaming content. The knowledge that the Vive will be “powered by Steam” gives the consumer a picture of endless possibility for compatible games for the product. The brand recognition of HTC sets up a platform for marketing to the casual gaming or technology consumer as well. The main issue with the gaming industry for a VR product is that there are a wealth of options to choose from (which we will touch on in the “Competitor” section). The product is also estimated to be priced higher than many competing products, which leaves the Vive relying quite heavily on the differentiating factor of unique 360 degree, untethered technology that provides an immersive, room-filling experience. 3.2.2 Business While the video game market will be the initial target, the Vive must be pushed into other markets to maximize growth. When it comes to business, the VR “holodeck” (virtual room) kind of experience that the product provides can certainly have benefits for the architecture industry and even interior design. Virtual reality has not fully permeated business industries, however the notion of it has been tested. As a sales tool, VR devices can help a salesperson provide a visual representation of an abstract product or service to their customer (Sj¨ostr¨om 2015). VR products also have potential in training and development areas of business, specifically for industries involving in hands-on work with complex machinery (Aurich, Ostermayer, & Wagenknecht 2009). The Vive has not been specifically tested in this way, but these studies show that VR does in fact provide benefit to business customers.
  11. 11. 3.2.3 Education: The unique technology presented in the HTC Vive has the potential to provide a unique learning experience unlike other device. Children learn things largely from experience, and virtual reality provides an avenue for expanding an interactive experience that would be otherwise impossible. As Maria Roussou writes in a Computers in Entertainment article: “…since virtual reality technologies provide a wide range of possibilities for this kind of interactivity and support for active participation in the formation of the content, they become well suited, powerful media for use by schools, museums and edutainment centers.” (Roussou 2004). Which is the more impactful way to teach a child about history: Read about it in a text or allow the child to live it through virtual reality? The same also applies to other areas as well, some science experiments are too dangerous to attempt physically, but could be demonstrated quite well virtually. And since the learning process is so deeply impacted by experience and interactivity, the HTC Vive offers more than its competitors. For example, the Oculus Rift is a popular VR device, however it does not allow the user to move around and interact with the virtual environment in a physical way like the HTV Vive does. 3.2.4 Psychology The issue with untapped markets is that marketers need to work harder to establish a need for their product, as the customer may not believe that a brand new product has any necessity in their industry. This is likely true for the psychology market especially because with the exception of pharmaceuticals in psychiatry, there are not many products being sold. While it is true that the HTC Vive will probably be labeled as only a gaming device, it is possible that a label of that sort could be used to gain some level of access into the market. A 2009 study showed that there is a correlation between playing action video games and increased attention skills. (Dye, Green, and Bavelier 2009). The Vive has immensely more potential than simply a gaming device, but the value and benefit of the product will need to be communicated in order to remove the stigma of video gaming. To prove this, there is research showing VR as a therapeutic tool for mental health issues including OCD, phobias, PTSD, panic disorder and more (Sanchez-Vives and Slater 2005, Wiederhold and Bouchard 2014, and Botella et al. 2014). 3.2.5 Physical Therapy As surprising as this target market may sound, there is evidence to show that virtual reality has an impact in physical therapy in certain areas. The way the brain organizes motor functions opens a space for specified VR programs to aid in rehabilitation in balance, movement, vision, perception, and more. Virtual reality has been shown to have a particularly strong effect on neurodegenerative diseases and brain injuries such as a stroke (Wiess, Keshner, and Levin 2014). It can be asserted that the more immersive and interactive the experience in VR, the more effective the treatment. This is a particularly untapped market, and significant market research and testing would be required to penetrate, however if the HTC Vive is the frontrunner, it will likely enjoy a period of time without competition in this segment.
  12. 12. All of these segments are likely to follow the Technology Product Adoption Curve shown below. While this curve generally applies to the consumer market, a new technology such as the HTC Vive entering into a diverse range of market segments has a high probability of experiencing this curve in each individual segment. With the adoption curve in mind, we must plan adequate strategies and tactics for market penetration in each market segment. 3.3 Market Penetration: Strategies and Tactics 3.3.1 Consumer Segment So far the HTC Vive has managed to get early adopters talking about the product. This is good for the first wave of initial sales but with growing competition in the VR consumer marketplace, the Vive needs to expand to a greater audience (that is: the early and late majority). There is also a considerably larger amount of competition in this segment when compared to other target markets, therefore we will have to define our push strategy to get the products into the hand of consumers instead of the products of our competitors. AMOUNT OF TIME PRODUCT IS IN THE MARKET SEGMENT
  13. 13. Strategy: Push the value that the product will provide as well as make effective use of brand recognition. Tactics: 1. The first step will be to attend trade shows and conventions where tech enthusiasts, journals, and bloggers will be in attendance. A selected representative will show a promotional video to the crowds and offer a live demonstration of the Vive’s capabilities. This will be coupled with areas that provide the opportunity for a hands-on demo of the product for members of the audience. Shows such as SXSW and E3 have a high likelihood of showing positive results. 2. Once early adopters have had some experience with the product, we will push brand recognition to the larger segment and focus on the room-scale capabilities that other VR devices lack. When combined with Valve’s online gaming marketplace (SteamVR software), casual gamers and those who enjoy new experiences will be given proprietary content for the Vive headset that competitors will not have access to. 3. Once the technology enthusiasts have begun reviewing the product and word of mouth spreads, online, television, and radio advertising can continue to push the product through the market. The marketing would be in a similar vein to pre-release advertising, that is to say, it would focus on the wonderment and “magic” of experiencing a virtual world through the HTC Vive. Value sell & Branding Trade Shows/Conventions Brand Recognition and Proprietary Steam™ Content Advertising
  14. 14. 3.3.2 Business Segment The business segment is the next logical segment for our product following consumer sales. Business or Industrial sales will be higher volume and therefore aid in accelerating our payback period from initial research and development as well as hardware upfront costs and sunk costs. Broad as it is, the HTC Vive has B2B opportunities in several areas. These areas include, but are not necessarily limited to: interior design, architecture, industrial training, and sales for various abstract products. Strategy: Improve efficiency and manage risk in various business related processes. Tactics: 1. For each of the above industries, we would need to have software dedicated to each specific task (training software, sales presentation software, design software, etc.) Depending on the required level of sales to financially support the project, we could either develop our own software for these purposes or form contracts with third party software companies. For example, the IrisVR software is designed specifically for interior design purposes. 2. The method for promoting the product through any of these areas would be firstly to have a sales presentation. This presentation would explain the product, what it is capable of, and how it can be of value to the parties involved in these areas. 3. Following the sales presentation, we would set up a trial period of 60 days for the employees and operators to use the product in the manner specified by their industry as an extended demo. After this trial period, negotiations would begin for implementation of the product into the companies’ current processes. This would spread through the market as a competitive edge in efficiency and/or impressions left on customers. Improve Efficiency and Manage Risk Software Design Sales Presentation Trial
  15. 15. 3.3.3 Psychology Segment Psychology is a scientific field and as such, requires that there be data to back up the value proposition. While it is possible to gain entrance into many markets without scientific or researched data, a field that deals in medical or scientific practice will almost certainly not accept a product that has not been tested in a true experimental setting for proof that the product’s performance will match our claims. This claim is of course that our product will provide a more efficient or improved solution to certain problems facing a psychological patient. Strategy: Incorporate new technology to provide improved solutions for patients. Tactics: 1. In order to promote the product into this market, we should first target an industry leader as far as psychological innovation is concerned. Determine who is pushing technological and scientific progress in this field, and prepare a presentation for them. This presentation will be similar to the business presentation with regard to explaining the product and the value it could provide, but will be much heavier on scientific data regarding VR. 2. These conversations would be used to gain permission to fund a study with the firm and some of their patients using the HTC Vive as a therapeutic tool. A scientific study created by recognized psychologists would provide incentive for others in the segment to take the product more seriously. Improved Solutions Presentation of Data Fund Scientific Study Expand and Develop
  16. 16. 3. For this study we would provide a test software designed for exposure therapy in a virtual setting for common phobias and other psychological issues. Provided the study follows past data and shows an improvement in patient conditions due to the virtual therapy, the typical sales process would begin. The product would enjoy some time of very little competition in this segment before other VR devices begin to come forward. 3.3.4 Education Segment There is a growing trend focused around experiential learning in classrooms. This trend is visible in the increasing prevalence of charter or “magnet” schools that explore unconventional learning methods. Given this trend and openness to new practices, virtual classrooms could be of great benefit in the near future. Strategy: Provide a new method or teaching tool that would allow for broader exposure for the child with regard to experiential learning. Tactics: 1. Conduct a study on the impact of experience on the learning and development of children, comparing the typical classroom as a control to physical field trips and then to virtual reality “field trips”. Should the results be positive in the favor of virtual experiences showing comparative results to physical ones, virtual “trips” could save schools all of the risks and expenses of field trips without sacrificing the benefits for the children. 2. For the study as well as moving forward, a team of developers (either internal or third- party) would be required to craft an education-based program for the devices. This program would have the capability to reconstruct a virtual landmark or concept in which the teacher could explain details of what the children are seeing. This could be coupled with helpful notes or text to further explain the subject matter to the children. Innovation Conduct Research Study Develop Software Test Marketing & Seek Government Contract
  17. 17. 3. When approaching decision makers in the education sector, we will use our data to gain entrance into a test market. In this case we would allow private schools in certain districts to utilize the product for several experiential lessons. If the results continue to be positive we will begin conversations with local government agents who make decisions regarding public, charter, and other publically funded schools. Using our data from the study and test market feedback, we have the potential to implement our product into schools at a government level and begin a new wave of education technology. 3.3.5 Physical Therapy Segment This segment will arguably be the most difficult to penetrate, given that there is a relatively small amount of data on the subject. However the data that is available shows opportunity for our product to be of a benefit to customers in this segment, though it is a smaller segment. Strategy: Provide sufficient evidence to create awareness of our product’s capabilities for improving treatment. Tactics: 1. Should we decide to pursue this vertical, we would first need to provide demonstrations of the product to a community that likely has little to no exposure to it. During this demonstration, we must explain and provide real evidence for virtual reality’s positive impact on patients with certain neurodegenerative diseases. The initial evidence we will bring to the discussion will not be our own, but rather that which our research team has uncovered regarding virtual reality being tested for use in this field in the past. 2. Once again, we would need to develop a test software for this purpose. This can be achieved either through our own development or by way of contracting to a third party developer. It would be designed with specific components to provide the best opportunity for successful results (based on previous research). Raise Awareness Presentation of Evidence Develop Test Software Fund Scientific Study Market Research/Market Penetration
  18. 18. 3. Should prospects show interest, we can then fund a study with a well-respected firm in the industry in which we track improvement in patients with the same condition treated both by using the HTC Vive (with specific software) and treated using traditional methods. If the study shows positive results, it could then be published and word would spread quite easily within the segment. 4. We would then enter into an expansion program which would consist of typical sales, test marketing, market research, and recrafting the software to accommodate more treatments. 4.0 Pricing and Distribution Strategies 4.1 Pricing Objectives The HTC Vive is currently priced higher than most, if not all, of its competitors in the market. While the information for fixed and variable costs that go into the production and sale of this product is not available to the public, we can gather educated general estimates for the strategy involved in pricing and selling the HTC Vive. Using this, we will devise a pricing strategy for the first 3 years of production as well as specific strategies with regard to the industries listed in the market segmentation section. 4.1.1 Phase 1: Recuperating Costs from Research and Development (R&D) As mentioned above, the exact costs are not known to the public. However it can be reasonably assumed that a contributing factor to the high unit selling price (USP) of the product is the costs of research and development that have been accrued over the last several years prior to the product’s launch. It would be in the best interest of the partnership to take advantage of high level of interest within the early adopter/technology enthusiast communities in the consumer segment who are less price-sensitive and therefore are more likely to pay the current USP of $800 for the product. This will feed into growth in the consumer segment to larger groups such as the early majority. This strategy will allow us to gain back some of the sunk costs from R&D and early production, but likely not all of the sunk costs. We need a larger segment who will purchase higher volumes of products to reach the break- even point quickly and begin realizing profits. The segment with the most volume potential would be the Business and Industrial segment, in which we will market simultaneously with the consumer segment. The key differences in pricing between the consumer segment and the business segment are entirely dependent on the volume of orders and purchasing potential. Since the consumer segment will begin slowly, with low volume sales at the established USP of $800, sales within the business segment will help to speed up the process of recuperating our sunk costs. The business segment will also begin slowly, but the volume will most certainly be higher. Due to the increase in volume, we have the flexibility to offer a discounted USP for larger orders. For example, if a company tested our product and was prepared to purchase 50 units of product, we would have the flexibility to offer them a 10% discount off of their order. Thus instead of charging them $40,000 for the order, we would offer the product to them for $36,000 (at a USP of
  19. 19. $720). This example is arbitrary, as the true total costs of the product are not known, but a modest discount for high volume orders could still accelerate the recuperation of sunk costs (and of course coverage of total fixed and variable costs) to bring the project closer to gaining profit from revenue. 4.1.2 Phase 2: Reduced USP for Maximization of Sales in Other Segments Once the sunk costs have been recuperated and sales begin generating profit, the USP can be lowered to cater to the majority of consumers, the education segment, psychology segment, and physical therapy segment. These segments are all generally more price-sensitive than the early-adopting consumers and businesses. Therefore to maximize sales in these areas the USP will be lowered with a reasonable profit margin, this can be accomplished easily as there are no more costs to regain and as long as the product is priced above the cost of production, there is potential for net revenue. Let us say, for example, that once the R&D costs are recuperated, the total cost of producing and selling the product come out to $450. These costs include variable costs such as: materials, labor, commission for the sales force, and other general costs specific to each unit. The product must be priced (dependent on anticipated sales for the year) to cover both the unit variable cost as well as the total fixed costs for the year. Let’s assume that based on the anticipated sales for 2016, the unit price to cover all costs, fixed and variable, is $525. Now we will also place a profit margin on the product, as obviously covering costs is not enough on its own to establish growth. With an 18% profit margin, the product’s new USP is $619.50. This USP (though arbitrary) brings the price of owning an HTC Vive system much closer to the price of owning an Oculus Rift, the Vive’s main competitor. The reduced price is certain to garner more attention in the consumer segment and cause more individuals in the majority and laggard communities to consider purchasing the HTC Vive. Concerning the education segment, price sensitivity will be higher than the consumer segment due to the nature of the monetary structure. Public schools are a government entity, and as such have certain restrictions relating to the allocation of tax-payer dollars for programs. However, the potential savings of field trip programs will lower some of the barriers to purchase. The other pricing strategy for this segment is the potential for wide-spread use across school districts. If the local government in a district agrees to implement the VR program into the schools of that district, sales for those schools are guaranteed. This situation can follow a similar volume discount to the one offered in business sales, to further lower purchase barriers. The psychology segment will have a certain level of price sensitivity due to the wide array of VR products available. Once the study is conducted and if/when using VR headsets shows promise in the improvement of patients, the likely course of action for those in this segment will be to explore the lower cost VR products to gain benefits without spending too much on implementation. The way to get around this is to show that the HTC Vive is a superior product with regard to immersion and quality of the VR experience. The new USP stands closer to the prices of competitors, therefore pushing the quality of the product will be more likely to be effective since the price is only a minor difference compared to the original USP. In the physical therapy segment, the unknown will be the biggest contributor to price sensitivity. The HTC Vive (and VR in general) is unheard of in this industry and likely has never been considered for use in benefitting patients for their physical ailments. The reason for this is entirely logical, why would a product that brings the user into a virtual world be of any use in treating a physical problem? Therefore, barrier to entry will be very high at first, since no one will want to spend any amount of money on a product that they do not believe can benefit them. Once we follow our penetration strategy, the evident
  20. 20. benefit and USP that is not much higher than competitors will help reduce some price sensitivity. We must also remember, however, that this is a smaller segment to begin with and substantial revenue will not be as easy to obtain in this area as it will be in the previously mentioned segments. 4.2 Distribution Plan Distribution is touched on briefly in the pricing segment, and as such this section of the plan can be summed up quickly. Essentially: 1. Those segments with the largest earning potential from the onset of distribution are targeted first. 2. Once sunk costs have been recuperated, we will diversify into less crowded markets. 3. As we approach a point where we come to the end of the product life cycle, we gather any additional revenue we can. 5.0 Conclusions and Next Steps 5.1 Conclusions Virtual reality as a technology and an industry has reached the pinnacle of innovation up to this point in the HTC Vive. This product combines industry-leading hardware and software functionality to provide the most immersive virtual reality experience to date. This product shows promise for revolutionizing the gaming market, industrial training, business-specific processes, educational experiences, psychological treatment, and even physical therapy. Though competitors exists, they all fall short of the technological advancements and immersive capabilities of the HTC Vive. Sell product through product adoption until market is saturated Begin distribution to segments with shortest payback period for R&D costs (e.g. Consumer and Business/Industry) Explore potential while markets are new Begin market penetration process in segments with less upfront revenue, make use of lowered USP (e.g. Education and Psychology) "Finish strong" Explore untapped market to maintain some growth as product reaches maturity and eventual obsolescence (e.g. Physical Therapy)
  21. 21. 5.2 Next Steps Now that the product has been tested and prepared for sale, our next step is to move to market as quickly as possible to position ourselves on the front of the upcoming wave of high-end virtual reality products. We will accomplish this through our promotional, pricing, and distribution strategies. The sooner the product can spread through the marketplace, the more likely the product will find its place in the evoked set of the customer. Thus, the more likely the HTC Vive can be considered the premiere high- end VR device in the market. The HTC Vive is preparing for launch, and the world will never be the same.
  22. 22. 6.0 Appendix May 6, 2015 IRISVR AND HTC VIVE INTEGRATION: NATURAL MOVEMENT AND INTERACTION The HTC Vive, covered in the sensors that make room-scale positional tracking possible. Photo by Maurizio Pesce (Creative Commons/flickr) Navigation in virtual reality has been a challenge that developers across every industry have been struggling with since they first felt the urge to explore beyond simple head rotation. Several solutions so far have been sufficient but imperfect; controllers and keyboards can cause nausea from the lack of perceived inertia, and gaze-based movement can feel unnatural. Fortunately, the Vive VR headset being developed by HTC and Valve is allowing developers to take a literal step forward when it comes to moving around their scenes. Using Valve’s Lighthouse technology, the user’s physical location is constantly tracked from a number of small base stations positioned around a room. This allows users to actually walk around their designs in VR for the first time, which means that not only can they see how their new kitchen will look, but they’ll know how it will feel to walk from the kitchen into the living room.
  23. 23. The user’s position isn’t the only thing that’s tracked, either; Valve’s handheld controllers for the Vive are similarly tracked using the Lighthouse system, so users can see where their hands are in virtual reality and use them to move furniture, point out key areas, and write notes on any surface of the design. The precision of the tracking makes the system feel completely uninhibited and intuitive; move the controllers closer together in virtual reality and as soon as their representative models touch in VR you'll feel them click together in real space. As we get closer to “real” interaction instead of symbolic interaction in virtual reality, experiences get more immersive and less nauseating. The only shortcoming in the Vive’s positional tracking paradigm is the inability to move up or down (unless you happen to have a jetpack, of course). Fortunately, preliminary informal tests have shown us that smooth, linear, vertical motion in VR is very unlikely to cause nausea, so elevator-like systems are a great way to experience multiple floors without having to load them separately. HTC Vive review By Nick Pino a month agoWearables HTC Vive wins the first battle in the VR war OUR VERDICT If you have the budget, the HTC Vive is the best virtual reality experience on the market, bar none.
  24. 24. FOR  Best VR experience  Intuitive controls  Software partnership with Valve AGAINST  $800 price tag  Requires a high-end GPU  Less comfortable than the Rift Michael Nunez 4/05/16 10:00am Filed to: HTC VIVE REVIEW “The HTC Vive is the most advanced VR system ever sold. Its headset is ridiculously powerful, so you can look around in all directions without a hitch. Its wireless controllers make it easy to interact with objects in the virtual world. Even cooler than all that, the Vive lets you walk around in the game—which sets it apart from every other VR headset ever made. Yeah, I know, the Oculus Rift is legit, but it just doesn’t offer the same type of immersion. If you ever wanted to stand up, walk around, duck, or lunge in the virtual world, the Vive is the only system that will let you do that.”
  25. 25. Note: Corporate marketing plans do not typically include a reference page for sources presented in the manner shown below. I have included a reference sheet for my sources as this is, in fact, an academic document. Sources: Aurich, J. C., D. Ostermayer, and C. H. Wagenknecht. "Improvement Of Manufacturing Processes With Virtual Reality-Based CIP Workshops." International Journal Of Production Research 47.19 (2009): 5297-5309. Business Source Complete. Web. 12 Sept. 2015. Botella, Cristina, et al. "Treatment Of Flying Phobia Using Virtual Reality Exposure With Or Without Cognitive Restructuring: Participants' Preferences." Revista De Psicopatologia Y Psicologia Clinica 19.3 (2014): 157-169. Academic Search Complete. Web. 12 Sept. 2015. Dye, M.w.g., C.s. Green, and D. Bavelier. "The Development of Attention Skills in Action Video Game Players." Neuropsychologia 47.8-9 (2009): 1780-789. Web. Roussou, Maria. "Learning by Doing and Learning through Play: An Exploration of Interactivity in Virtual Environments for Children." Comput. Entertain. Computers in Entertainment CIE 2.1 ( 2004): 10. Web. Sanchez-Vives, Maria V., and Mel Slater. "From presence to consciousness through virtual reality." Nature Reviews Neuroscience 6.4 (2005): 332+. Health Reference Center Academic. Web. 12 Sept. 2015. Sjöström, Elin. "Virtual Reality as a Sales Tool for Industrial Companies." Digitala Vetenskapliga Arkivet. Web. 10 Oct. 2015. <DiVA: diva2:825941> Wiederhold, B K, and Stéphane Bouchard. Advances in Virtual Reality and Anxiety Disorders. 2014. Print. Weiss, Patrice L. Tamar. Virtual Reality for Physical and Motor Rehabilitation. New York, NY: Springer New York, 2014. Ebook Library. Web. 12 Sep. 2015.