MARKETING RESEARCH CASE EXERCISE
SEGA ENTERPRISES

With new corporate leadership, Sega announced it would launch a new high-powered "super console" in Japan during the spring of 1998 and in Europe and
America in the spring of 1999. Sega reportedly spent $500 million in development of this console, branded as Dreamcast. To help ensure its success and produce the world's first game console with NEC, and Yahama were involved in joint ventures with Sega to produce a game system designed to speed up access time and allow for bigger games and larger playing fields.

Unveiled at the Electronics Entertainment Expo in 1999, Dreamcast was positioned to outperform all in home gaming platforms and most commercial arcade systems. According to Sega executives, Dreamcast's success would be based on three key benefits: (1) interactive nature of playing the games. In March of 1999, Sega announced that Dreamcast would be supported with a $100 million marketing budget that included an extensive test- marketing program. Consult the Web page for Sega at www.sega.com for complete background on the Dreamcast system.

1. Given the high-tech nature of this new product, what are some of the pressing issues that Sega must address before developing the test market for Dreamcast? For example who should be considered as the subjects for this test market, consumers or retailers? Where should the test marketing take place, in a retail setting or on the Internet?

2. Develop you own plan for developing a test market for Dreamcast. How should the test be implemented, and what critical marketing variables would you manipulate and measure?