Xbox: Marketing Audit

Marketing Audit Approach: Microsoft Xbox 360

Company Description

Microsoft is motivated and inspired every day by how our customers use our software to find creative solutions to business problems, develop breakthrough ideas, and stay connected to what's most important to them (Microsoft Corporation, 2006). Microsoft is in various technological areas (computers, IT programs, IT Solutions, and gaming systems). This Marketing audit will focus on the Microsoft Xbox 360.

Currently, Microsoft has three goals for the Xbox 360:

1. Gain a considerable portion of the rapidly growing video gaming market. Microsoft's core PC software businesses have slowed, so moving into a fast-growing and sizable market is very attractive to the company.

2. Microsoft would like to diversify beyond PCs by attracting consumer home entertainment spending.

3. Microsoft's reputation has suffered considerably over the last few years as a result of the litigation surrounding its Windows monopoly. The company hopes Xbox 360 will combat the impression it is not innovative and well change the public's view of the company (http://www.xb360info.com).

Porters 5 Forces

Target Audience

Microsoft has multiple targets for the product. Mossberg and Boehert (2005) reported that Microsoft is attempting to attract dedicated male gamers by offering "...the most powerful computer ever sold specifically for gaming". Additionally, Microsoft has opted to expound upon Nintendo's strategy of broadening the appeal of consoles to nontraditional demographics. Specifically, Microsoft is targeting single women, and women who live with male gamers by incorporating multimedia features. Not only can it play DVDs and CDs, but it can also play media stored on its own hard disk, the hard disk of another computer accessible over a network, or an iPod when it is plugged in.

Product Marketing Plan An interesting decision Microsoft has made is to offer two versions of Xbox 360 at the time of initial release. The $300 Core System is more like a traditional console with wired controllers and no hard drive, making it unable to play original Xbox games. The higher-end $400 version includes a wireless controller, a headset, a remote control, and connection cables. The Core System has the same price as the original Xbox at the time of its initial release, whereas the $400 version hits a new price point for gaming consoles. Additionally, the Xbox consoles will have interchangeable face plates, which will allow one to personalize his or her console, for example, a single woman may prefer to look at a pink Xbox console, as opposed to the traditional silver.