Marketing strategy for a LAN gaming centre

Marketing strategy for a LAN gaming centre Our business which is called Pro-Gamers, is a LAN gaming centre and an entertainment area for people whom are interested in playing computer and console games. It will be useful to explain what LAN gaming is. LAN means Local Area Network that enables more than one person can play in the same game environment at the same time,(Wikipedia) In other words, it is simply a network of devices and computers in a given area. In the light of the information about the meaning of LAN, LAN game centre is a business where a person can use a computer connected over a lan to other computers in order to play multiplayer computer games. (http://wn.com/LAN_gaming_center) LAN game centres are becoming common and well known in the world wide. There are over 650 LAN game centres in the US and 90% of the LAN game centres in the world are in China (Wikipedia). We are living in a computer era now and computer games are becoming more and more popular in the world especially for the new generation. Therefore, this creates us a good opportunity to setup this kind of business in this North West region of United Kingdom as further market research shows the laciness in this kind of gaming centres and identifying such market gap we are going to establish this kind of gaming centre in the Liverpool region. 1.1 Location and focused customer groups: We are planning to launch our business model in the areas which are close to the four universities in Liverpool because LAN game centre is more related to young people. So our focus customer group is students especially international students. Students have large groups in general and they tend to play such games together in the same environment. However, it cant be easy for international students to find chance in order to play computer games, especially LAN games. Local students have their own game consoles and convenient computers in their houses that enable them to play such games comfortably. Because of this reason, we are focusing on international students and it is a well known fact that there are many Chinese students in Liverpool, considering the majority of LAN game centres are in China, we have a significant opportunity. 1.2 Collaborations: In terms of our collaborations, we are planning to work with the organisation of Interactive Gaming UK which is professional in LAN gaming in UK. The IGUK provides professional support to new LAN gaming centres. So, we gain another significant opportunity to make a successful start up process. 1.3 Business: 1.3.1 Structure: Our business models structure is divided into two parts. First one is about the products and services, and the second is about the platforms. With regard to the products and services, we are providing project rooms to our customers with wide screens for watching sports games such as football for British and cricket games for Indians. We have a small food court as well in order to have some drinks, snacks, sandwiches while customers are playing games. In terms of our platforms, 1.3.2 Equipments: We arrange high end Pcs, X-box 360 and play station 3 (PS3) with LCD TVs so our customers can play separately or together with their friends. 1.3.3 Products: On the other hand, we also provide special memberships separated by their willingness of playing platforms such as Pro-Gamers PC for computers users, Pro-Gamers X for x-box users and Pro-Gamers PS for play station users. It is an opportunity for the customers to pay less and the same for us as well because we make discounts for membership cards holders. 1.4 Future purpose: As mentioned in the introduction part, our business model is a LAN game centre and the popularity of playing such games is getting bigger day by day in the world wide. The most important example about the popularity of LAN games is the World Cyber Games. It is an international e-sports event arranged by Korean Company World Cyber Game Inc. and backed by Samsung and Microsoft. (http://www.wcg.com/6th/main.asp) It is the largest gaming festival celebrated once a year and more than one million visitors come every year to this LAN game event.( http://www.bukisa.com/articles/362457_the-top-pro-video-game-competitions) In world Cyber Game Championship, there are specific games which are quite common in the world such as counter strike and each country has its own teams to represent. The teams are playing against each other to win the World Cyber Game Championship. It can be deduced from the information above that this championship is the hugest and the most popular one in the world and the biggest companies are in support of this big event such as Samsung, Microsoft, Dell Alienware. Our future purpose is to create a LAN game team sponsor them and send them to represent UK in the World Cyber Game Championship by means of our business. Therefore, we will expand our business to the world wide and be a well known and famous game centre, and on later expansions of such teams we will be introducing our own teams from the countries in which where we will be operating our LAN-Game centre, in this way we are in an option to enter into the International market and make our feature in the game centres. 1.5 The uniqueness of our business model: It is the fact that uniqueness is one of the most significant features for a new small business in the start up process. It is the essential point that enables small businesses to run and make profit. If there are some important competitors in that business area, it will be so difficult for new businesses to grow. Considering our business model, we have this significant feature, we are unique in Liverpool. There are some LAN gamin centres in UK in different regions but in North West region which Liverpool is located, there is no LAN gaming centre. (http://lancenters.com/Default.aspx) The locations of the LAN gaming centres in UK are shown region by region in the table below. Approaches to Start up Process: Every business start up is a unique event. Everyone has a different set of skills and experiences, which may give rise to entrepreneurship opportunities (David Deakins and Mark Freel), e.g. personal SWOT. Everyone wants their launched business to be stable, profitable, and manageable. This is only achieved by selecting the prior approach model which fits within the business idea. Therefore every business organization should have to consider all the aspects of setting-up a business. According to David Deakins and Mark Freel there are three types of approaches in setting-up a business, they are: I. Intuitive approach, II. Methodological approach and III. Incremental approach. According to the business start-up approaches given by David Deakins and Mark Freel, our business idea i.e., setting up a game centre (pro-gamers) in Liverpool resembles to both intuitive approach and incremental approach. Where intuitive approach has the upper hand than incremental approach. Intuitive approach: Carl Jung noted that intuitive approach does not denote something contrary to reason. But something outside the province of reason. It is neither a magical sixth sense nor a paranormal process. Intuition is not the opposite of rationality, nor is it a process of guessing. it is a sophisticated form of expert hones over years of job specific, experience (prietula Simon, 1989). Therefore intuitive business approach means just start up from nowhere, with strong personal belief in the idea and with minimal planning. Intuitive approach is an opportunistic and tends to be high risk because of minimal planning. Therefore as our business idea to launch a game centre in Liverpool, intuitive approach suited our business idea because of the following factors, Opportunistic. Strong personal belief in idea. Minimal planning. Can be viewed by some as the true entrepreneurial approach. Has the advantage of speed. Tends to be high risk. The above are some of the factors of intuitive approach (entrepreneurship and small firms 5th edition by David Deakins and Margarent Fletcher). 2.1 STAGES IN THE START-UP PROCESS: Everyone who are intended to launch their new business in the market should undergo a number of stages in the start-up process of a business. Without considering the stages, one cannot launch a profitable business. Similarly we have considered the stages in the start up process in our business idea, which gave us a clear idea on the opportunities and validating the idea of our business. Thus the following are the stages in the start-up process of a business. Formation of the idea. Opportunity recognition. Validating the idea. Entry in to entrepreneurship. Launch and development of the ongoing business. Formation of the idea: The seed stage of your business life cycle is when your business is just a thought or an idea. This is the very conception or birth of a new business. This is the stage where idea is formulated. Opportunity recognition: Most seed stage companies will have to overcome the challenge of market acceptance and pursue one niche opportunity. The seed stage business should recognise the opportunities for their business to move to the next stage. In our business idea we had recognised a great opportunity, because there is no game centre located in the north-west of the United Kingdom which provides lan gaming, play station gaming etc. Validating the idea: Validating the idea is an important stage where one should validate his/her idea, and ensure that it really solid enough for ones personal investment of time and money. Therefore validation means collecting the prior information to validate the business plan. In our case we gathered the information and validated the business idea. Launch and development of ongoing business: Launch and development of an ongoing business is the last stage of the stages in the start-up process of a business (David Deakins and Mark Freel, 2009). It is the stage where the business idea is finally launched. To launch and develop the game centre in Liverpool we have to consider some of the factors like, business idea is : Depending on budget Organizing events for the awareness among the people Expansion : infrastructure Food court Cafà © and bar Projector rooms 2.2 Start-up options of a business: To launch every business plan into business activity there are four options to start up a business. According to David Deakins and Mark Freel they described start-up options of a business into the following categories. They are. Starting from scratch. Buying a going concern. Buying a franchise. Management buy-out/ Management buy-in. Therefore according to David Deakins and Mark Freel the best start-up option of a business, which fits in our business idea, is starting from scratch. Starting from scratch: Starting a business from scratch can be the most rewarding method of business start-up. Unlike Franchising, Referral Marketing and Buying a business- you are 100% on your own. Before you dive in at the deep end, there are plenty of things you can do to increase your chance of success. There is a better opportunity to know the market and competition, creating a realistic business plan etc. Our business idea fits starting from scratch start up option,because as there is no such game centres in the north-west region of UK which provides different ranges of fun facilities. Therefore it will be 100% of our own implementation. Therefore starting from scratch got both advantages and dis-advantages. Thus the following are some of them Advantages: Initial investment level is decided by yourself or your ability to attract investment. Many organisations offer support / subsidies / funding. You will have the chance to explore new business concepts / formulae. No restrictions on your business methods. Control expansion to suit. Ability to adapt quickly to changing economic circumstances. Great sense of achievement and ability to say I told you so. Potential to sell, franchise or float on stock market once business has established. Disadvantages: Most business start-ups fail in their first year. Takes time to build up the business. No goodwill from customers and suppliers. Ability for your friends to say I told you so. Potentially high risk than all the other options. 2.3 Market research and marketing: Market research: In todays world as the gaming industry is booming to an extent, many of the gaming companies are competing between each other to become the best. Therefore many of the game centres in UK are trying to make good business with this opportunity. As there are many lan gaming centres spread in UK, north west of UK doesnt got any. Therefore according to the IGUK (Interactive game United Kingdom) list of lan gaming centres, north-west of UK is a game centre free zone. Therefore our business idea is to fill up the market gap. Therefore we would like to launch a lan gaming centre in Liverpool to cover the market gap. Market targeting: According to our business idea, i.e. launching a Lan gaming centre in north-west of UK, Liverpool. We mainly focus on people between the age group of 12-20 (youth) because people of that age group are more attracted to play computer games. So we have mainly concentrated on the people between that age group. Our main target is to attract the students of different universities, schools etc. We mainly focus on international students because numbers of international students are un-able to play the games which they would play in their home countries. The main dis advantage or limitation of this business idea is the age group of the people, because people of above 25 years will not have interest to play computer games. As our business idea has the age limitation criteria, we cannot attract the whole market. Therefore we need to capture the young generation market to achieve the goals. When it comes to market targeting there are many issues which we have to consider. They are, How to target the market? Whom to target? Can the targeted market is enough to achieve the profits? Marketing and marketing strategies: As one of the famous scholar described in his words the meaning of marketing that Marketing is the social process by which individuals and groups obtain what they need and what through creating and exchanging products and values with others, (PHILIP KOTLER). Every business has to market its products and its services to the consumers according to consumer needs and wants. Every business has to market its products and services or people will be unaware of that particular brand. Every company follows their own marketing strategies to attract customers. Without implementing marketing strategies one cannot attract the customers. In our business proposal as the main target is on young generation, we are mainly focusing on the young minds. We are planning all kind of marketing strategies to attract them. Some of the marketing strategies are as follows. Distributing palm plates in all the universities, schools etc in Liverpool. Organising events to increase awareness among the people. Advertising through internet pop-ups Offering different membership categories. Organising inter college championships Advertising through social networks. 2.4 Organization and management team: Management structure: A Management structure consists of activities such as task allocation, co-ordination and supervision, which are directed towards the acheivement of organizational aims (pugh, D.S., ed. 1990). In other terms management structure is defined as it is the form of structure that determines the hierarchy and the reporting structure inn the organization. Explicit and implicit institutional rules and policies designed to provide a structure where various work roles and responsibilities are delegated, controlled and coordinated to acheive the organizational goals is known as management structure. Therefore every organization i.e. from small scale organization to large scale organization will have a management structure. Without an organizational structure one cannot run business effectively. According to pugh, D.S. he has described management structure in to 3 types. They are, Traditional structure (based on the functions between line and staff managements) Divisional structure (based on different divisions in an organization. i.e. product division, market division, and geographic division) Matrix structure (it is the mixture of both traditional and divisional structures.) Therefore according to our business proposal, as our business is on a small scale. The initial owners will be 4 partners. Every thing is carried on the basis of divisional management structure, by categorising on the product, market,and geograpgic structures. As our business idea throws a light on incremental stage also, there will be a chance of recruitments in the future. 2.5 Operations: There are certain feature milestones for our business, those are set for the development of the business by all means in the international market, the key reason that is forecasted in our business plan are on the primary purpose Milestones: every business has its milestones to achieve so as to work on the first step is to establish firmly in the local market and the next step is to enter into the national market and the third step is to enter into the international market by franchise way, Franchise is a kind of vertical marketing system with a contractual relationship between the franchisor and franchisee, (Brassington and Pettitt, 2006, Pg. 1082), and on later expansion there will be a cafà © and bar in addition for the lateral income to the business Project and events: Pro-Gamers will sponsor teams from the operative country and sponsoring them to WCG and on the other hand we will be organising tournaments in between the operative countries and also there will be tournaments from the universities in the operating countries, which has its key reasons to keep us active and also to gain profit from these kinds of activities. Resources and Locations: in our Pro-Gamers business the resources are in general will in collaboration of IGUK.Org and associates providing all the required equipments like (n Vidia, WD Raptor, Creative sounds, AMD, Keconnect Broadband, EXS systems), supports all game publishers by buying their games and to reject all forms of piracy,(IGUK.Org sponsors), followed by the locations in the initial stage it will be organised near the university or in permission of the university premises, and later in the slightest increment in organising it will be setup in the large stadiums, with this there will be standard cash flow which will be helping us in the development of our business. SMEs Internationalization: 3.1 Role of SMEs: Business is a profession that starts with purpose of making profits out of it, and theres a fact that should never be kept out of focus that is by all means to develop the business, its development, growth, expansion in the sense of local to international markets. It is always said that SMEs involvement in international markets is increasing (Hall and Donchels 1988, Lamb and Liesch 2002), yet SMEs are not fully represented in the international economy as large firms (Fujita 1988). Well SMEs are though in the international economy but their reliability and feasibility are questioned by the big players, but in the recent times there were many reports which says that SMEs will play a greater role in the rapidly changing economic environment (WIPO General Assembly, Twenty-six (12th Extraordinary) Session Geneva, 25/09/2000 3/10/2000), so we often come across the term SMEs so lets know what is a SME as it is defined as, The category of micro, small and medium-sized (SMEs) is made up of e nterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro. Extract of Article 2 of the Annex of recommendation 2003/361/EC (European Commission). The researches says that the SMEs are real player of the todays economy in comparing to the large businesses, but there are also some reports that says that they also fail as it is the span of business or lack in improvement to survive or cannot sustain the competition from the other business firms, A study by Equifax has revealed that the retail sector saw a 17.2 per cent rise in business failures last year, with many SMEs forced to close their doors, reports Creditman, Neil Munroe, the external affairs director at Equifax, confirmed that a number of the failures recorded would be small businesses, (SMEs business failure rate increases, Published On 8 January 2007). 3.2 SMEs Market Expansions: Well though business starts from some point, but there is a point that a business can develop itself to the international level by entering into the international market. Which is in the term called as Internationalization, well we are talking about internationalization lets know what is internationalization as there are many definitions that internationalization is defined but there is no exact definition to define it, as it can be defined in general term its an opportunity that is recognized by the firm to enter into the markets of different countries to expand their activities. This is what internationalization can be define or said in general. 3.3 Pro Gamers Internationalization: As it is defined the business of LAN (Local Area Network) gaming centre Pro-Gamers', which is our small business that we are going to start, as it is defined that at some stage it is in need to recognize an opportunity to enter into different market from, local to national and international in an order to expand our activities by all means considering all the ethical marketing issues in a specified market. As our gaming centre is basically a new kind of gaming centre that is different from the other gaming centres of indoor game activities or casinos, though it is well known in the international market but the confusion that is always observed by the audience in the locality of the Liverpool, is that it is the same kind of gaming centres like the casinos and the indoor game centre, which is basically not of that kind and it differentiate from the other gaming centres by all means. The market that is observed in the North West region of England does not have this kind of gaming centre to the farthest reach of people of Liverpool. 3.4 Gaming Market of North West of UK: Liverpool has 4 casinos. Our database says there are 35 gaming machines in Liverpool, and 45 total table games., as for these are the casino and indoor gaming centres these centres does not meet the exact criteria to Pro-Gamers, so this is one of its kind as mentioned, this game centre will have all the state of the art technology for the gaming purpose and all kind of games that makes its customers to experience the good gaming experience. 3.5 Entering into the International market: There are several reasons to enter into the international market or supply chain relies on the development of a supportive business environment for SMEs and the build-up of the human, technical, and financial capacity of these SMEs so they can understand the policies and operations of global supply chains and profitably respond to those requirements. (Pg 1, Enabling SMEs to enter into the International Supply Chain, June 2005) . These are certain reasons that makes Pro-Gamers to enter into the international market to expand our activity, as we mentioned earlier that we will be providing a membership options to the customers to play in the respective platforms and, later on to the interest of the customers we will be organising teams and sponsoring them to represent U.K, and later as we enter into the international market we will be expanding our activity and then we will be organising team from the operating countries and they will be battling against each other in the WCG and in occasions there will be tournaments between the Pro-Gamers teams from the operating countries in the mean time 3.6 SMEs Advantages and Disadvantages: As it is said the SMEs have the advantage compared to the Multinational Co., because it tend to Includes faster and more streamlined decision making process Less bureaucracy Low fixed cost, and More agility to responding to new customers needs and changes in the business climate. (European IT SMEs in India SMEs in focus: Main results from the 2002 Observatory of European SMEs). Pro-Gamers is a micro business unit has the advantage in comparing to the other gaming or casinos of its nature of being a micro business unit and having low number of employed personnel thus the maintenance is low and, it has the benefit of one time investment in local but as it grows to the international markets it need more investments and more persons to employee and expand the activities into the international markets. There are some disadvantages in the SMEs Internationalization which in general, include limited working capital and resources, more difficulty in attracting and retaining talented workers, and higher transaction costs. SMEs also tend to be young, specialized companies, which means they lack the scale and scope of larger firms. A small number of managers leaves SMEs with a lack of collective experience as well as a limited bench to draw from for new initiatives. Many SMEs are also suppliers to much larger multinationals, which often translates to a lack of bargaining power(European IT SMEs in India, Eric Olsson, Peter Schumacher pg 1). Resource constraints of SMEs can be turned to their advantage by maintaining flexibility and resource leveraging (David, D and Freel, M, entrepreneurship and small firms), as for the resource gathering the IGuk.org is reliable sponsor of all kind of hardware and software installation as for the pert of infrastructure and they also provide guidance for the financial approvals and financial activities. 3.7 Network Model: The network model is based on the social exchange of firms, there is always a network of organisation that come in touch of the new emerging business and thus IGUK.org is a kind of an organisation that introduces and provides all kind of support from the government as well as from the private investors, well entering into the international market there is an Org that will help in establishing LAN game centres iGames.Org, thus continues interaction will eventually increase the speed up in process of the organisational set up. These are details regarding the countries that has won the medals in the international WCG championship these are some of the primary sources and thus, there is another primary data the illustrate the area of operation of the international gaming organisations which is in the below chart. Thus these are some of the primary data that is collected in the initial market research Secondary data: The secondary that is gathered is by a questioners which is provided to the respondent and the result of the active respondent showed that this business is new and some thought that its an old business model but on later discussion with the respondent and making them aware of the business it just came to approve that most of the respondent are very much positive of the business, there we almost all of 60 respondent of which almost all were positive and some were not sure about what is the business but the positive respondent made it to appear a good customer response. There is questioner is attached to the file and its a prototype. Joint venture Strategies: Joint venture and strategic alliances is a process that Pro-Gamers is in the purpose of alliance that we are going to opt for the international market to set up our business and iGamer.Inc and WCG.Org are the international partners for us to establish in the international market and grow our business in all times there are certain countries that is targeted to enter, most of these countries are the economy of emerging and transition like India, Brazil, Turkey, Pakistan, Sri lanka these are some of the target market in the internationalization of our business.