Tuesday, February 19, 2019
Nintendo Marketing Mix
QUESTIONS & IDEAL ANSWERS . 1. Conduct a 4Cs Stakeholders Analysis of the Nintendo Wii Market in 2006. occupy note that an analysis is more than than unsloped a list. You need to specify each stakeholder and how they affect the formation. Consumers (note thithers more than one tar begin segment) The type notes that Nintendo targeted non- adventurers in addition to gamers. This included consumers of any age and gender. Conversely, competitors like Sony strained on teens and males. The case similarly mentions moms/housewives and families as targets of Nintendo selling.The ideal assist analyzed gamers and a few non-gamer segments, such as moms. Analysis should strike included soft description why is this segment interested in the Wii? and quantitative info, such as the segments size and value. Finding quantitative data required look beyond the case, perhaps to the U. S. Census website. Such data is not voiced to find, only if this tautological effort is what dist inguishes an A paper. Extra credit was granted to creative segmentation, such as targeting businesses and office civiliseers, who talent play the Wii on breaks, or doctors who would barrack Wii to their patients. Company (keep this brief focus on 2006 no Nintendo business relationship required) A guild analysis is not a history report. It should describe the companys marking, resources, internal stakeholders, strengths and helpless(prenominal)nesses. An ideal answer noted that Nintendo has a dogged reputation in gaming, entirely with the Wii it built a family-friendly brand that puts smiles on surrounding peoples faces. In contrast, the competition had numerous violent games. In addition, distant Sony and Microsoft, Nintendo is not a diversified company.Its total income is much lower than either of its primary competitors (the case Appendix contains these figures), which meant fewer resources and much more at stake. Either the Xbox or the PS3 could fail, and the p arn t companies would survive Nintendo could not afford to return the Wii fail. At the same time, the gaming focus helped position Nintendo as the merely pure gaming company its name is synonymous with electronic gaming. In terms of internal stakeholders, the case talks at length somewhat Satoru Iwata, whose vision drove the company. In a footnote, the case mentions that Iwata had experience as a game developer.By contrast, the CEOs of Sony and Microsoft have no game development experience. Competitors (keep this brief describe both direct competitors and indirect competitors, barely focus on strengths and weaknesses how much of a threat do they pose? ) The case discusses the key direct competitors, Sony and Microsoft. Sony had a strong reputation in high-quality electronics, and its PS2 and PS3 systems emphasised technological sophistication. Sony focused on hardcore gamers with increasingly violent games. This recipe translated into early gross revenue success nevertheless also high footings.Sonys weakness was its increasingly bureaucratic nature, and the decline of its separate(a) businesses. While Sony was cutting be and laying off workers, they also had overlapion problems with the PS3 a complicated and dear(predicate) piece of technology that is supposed to be a multimedia fun hub. This made Sony vulnerable to a ch every last(predicate)enge. Microsoft was primarily a software company with a controversial brand. Research beyond the case reveals criticisms of Microsofts monopolistic tendencies, and the item that Apple was posture Microsoft as dull and low quality.Research also reveals significant quality-control problems with the Xbox. Microsoft relied heavily on market timing and quantity of games to pull ahead the Xbox, along with Xbox Live, which enables consumers to play each other online. Despite weaknesses, Microsoft and Sony were still impressive competitors Nintendo k freshly it couldnt compete by doing the same things they were . Nintendo had to do something vastly different charge disruptive. Indirect competitors include PC games, Web-based games and phone-based games. You could even mention non-gaming entertainment, such as YouTube and Facebook, as indirect competitors. Comm social unity (focus on complements and collaborators) Game-software developers were both collaborators and complements. These developers worked with Nintendo to create games wholly for the Wii such games do not work on any other platform, so their fate is tightly tied into the Wiis. They were complements in that hardware gross sales affected software sales, and an interesting game could boost Wii sales. The broader community, according to the case, includes doctors and therapists who recommend the Wii Fit to patients.Thinking outside the case study, the community also includes the news program program media like the New York Times reviewed the Wii and reported on the shortage and long lines of buyers. This join ond desire f or the product, and enab conduct Nintendo to limit its publicizing expenditures. 2. Create a positioning be. Your interpret must include the Nintendo Wii, Sony PlayStation and Microsoft Xbox, and the target consumer segments you described in move 1. You may hand-draw the map or use any software you prefer, but the map must be pasted into the body of your document. You choose the criteria that are nearly relevant and in-chief(postnominal). Youre allowed to guess what the consumer segments want, but you will receive extra credit if you can find any research or data on gamer preferences. Do you see any opportunities on this map for new competitors? We discussed positioning maps in the forum. You necessitate to draw a similar map here. The two criteria must be product features important to consumers. For video games, this might include price, complexity, family friendliness or graphics quality. It does NOT include sales (few consumers care how much money a company makes) thoug h you could ask for scarcity or popularity as viable criteria.Consumer segments should appear on the map according to their preferences. This example uses Price and Game Complexity as criteria pic The sober star represents the Wii, the green triangle Xbox, and the red circle PS3. The PS3 combines the highest price with the highest complexity, bandage the Wii combines the lowest of both. Consumer segments are represented as letters NG = Non-Gamers, CG = chance(a) Gamers, HG = hardcore Gamers. The Hardcore Gamers prefer the PS3 in terms of complexity, but would like a lower price. The Non-Gamers want a low price (they dont want to pay anything) and a simple game.The Casual Gamers want something in between, but are closest to the Wii. You can see that the Wii appeals to two segments, bandage the PS3 and Xbox fight over just one segment. This leaves an opening in the meat for a competitor who can appeal to the Casual Gamers the iPhone, perhaps? completely these positions are bas ed on qualitative analyses presented by the case. For this exam, I allowed you to obviously estimate what consumers wanted. In the real world, you would conduct market studies and consumer surveys to find arrogate preferences.If you actually did find actual research or survey data on segment preferences in video games, I gave you extra credit. Also, on an ideal map, the symbols vary in size depending on sales and value. Since Wii led the market, its star would be bigger than either the circle or the triangle. Hardcore Gamers might be the most valuable segment, since theyre willing to spend more money on games the HG would then be bigger than the other letters. Drawing a positioning map tends to be the most gain sound out question in this exam, so I am fairly permissive in grading. However, some students still have trouble with it.Thats why its important to participate in the forum. 3. Describe Nintendos Marketing Mix strategies for the Wii. Be current to describe the strategie s behind each element of the marketing mix, and how they differentiated the Wii from the competition. increase (keep this brief focus on Wiis Unique Selling Proposition what makes it truly different) The Wiis unique selling proposition compared to the Xbox or PS3 is simple games based on physical motion. Consumers dont need thick manuals or long learning curves to adore the Wii, which attracts casual gamers and non-gamers.You could also discuss Wiis family-friendly, non-violent games. Price (for the United States only) In 2006, the Wii sell for $250 (or $249) and included five games for a complete product, yet Nintendo still profited on each unit sold. (The games are less sophisticated and cost less to produce than the competitions. ) Sonys PS3 started at $599 and was cut to $499. The Xbox sold at $479. Despite these significantly higher prices, both Sony and Microsoft lose money on each unit sold. Neither the PS3 or the Xbox originally came with games, so to make a profit, Sony and Microsoft supercharged high licensing fees to game developers.This in turn translated into expensive games. Place (think in terms of retailers and product supply) The Wii sells through traditional and online retailers, such as stovepipe Buy. More significantly, in 2006, the Wii was continuously in short supply. This is an important dissemination (place) issue. If consumers cant buy your product, you not only wont make money, you send business to your competition. However, in the case of the Wii, the shortages actually increased consumer desire for the product. Since there were long lines and waiting lists for the product and numerous major news stories some it consumers assumed the Wii was good.Since there was a greater supply of PS3s and Xboxes than demand, consumers assumed they werent as interesting. Consequently, some consumers only waited for new Wii shipments others searched stores and websites and paid higher than the retail price. Some analysts believe Nint endo had a policy of intentional scarcity. This is a common practice in marketing some companies produce a express mail supply of a indisputable product to increase its perceived value. For example, luxury car companies have limited edition models, fashion designers produce a few of each product, most universities do not accept e actuallyone who applies.The Wii shortages increased both consumer desire and news coverage which was key since Nintendo could not compete against Microsoft and Xbox in advertising. Promotion (describe the advertising budget and any ads) This required research, since the case was not explicit about advertising expenditures. Searching for Nintendo advertising budget on Google reveals a heel of estimated figures, ranging from $85 million to $200 million. Any reasonable estimate was graceful if it was referenced and came from a trustworthy source (not someones personal blog).The important wind was to have you practice corporate research, and to show that Nintendo did not rely on word of mouth alone to generate sales it spent millions of dollars to get the word out. More research reveals the Nintendo Wii commercials (http//us. wii. com/tvcm_usa_gallery. jsp), which emphasize people enjoying the game, not the graphics. The very first commercial (found on YouTube and other video sites) shows two Nipponese men visiting American homes with the game and announcing, Wii would like to play. This underscored the Japanese origins of the Wii, which enhance its credibility.In addition, the case mentions a word-of-mouth campaign in which suburban housewives were given games in hopes that they would share its value as family entertainment. Overall, the promotions establish the Nintendo brand as family friendly, fun and physical. By contrast, ads for the Xbox and PS3 emphasized the sophisticated graphics and much fast, violent action not an attraction for casual gamers. 4. Answer just ONE of the following questions. If you answer more than on e, only the first answer will be accepted. This is your opportunity to use your imagination, so be creative.Your recommendations here had to make sense based on the companys brand and resources. You couldnt just regularize spend more money on advertising or increase distribution. Of course, all companies would like to do that (unless product scarcity is part of their plan) but could they afford to? Your answers also had to be specific you couldnt just say you would make your product higher quality or more fun. You needed to state exactly what you wanted to achieve. More points were granted for originality and creativity. If you decided to work for Sony or Microsoft, and all you did was copy Nintendo, you didnt get many points.Above all, your answers had to be marketing driven. If you talked about improving factory efficiency or hiring the silk hat engineers, those were answers for other class. A. If you were the VP of Marketing for Nintendo, what would you have done different ly? This is the hardest of the trine questions, since Nintendo was already successful. You could make more products available so that there werent any shortages, but how would this affect the benefits of product scarcity? Also, assuming Nintendo was already producing as many games as it possibly could, where would it get the extra production capacity?You could beg that Nintendo should have launched with a higher price, using a skimming strategy to profit off early adopters, and then lower pricing as production caught up. That would make sense but it wouldnt have created the buzz of the product shortages. Some other ideas could involve different target segments, such as schools or hospitals. B. If you were the VP of Marketing for Sony, how would you respond to the Wii? One of Sonys advantages is that its the only one of the three companies to produce entertainment kernel, such as music and movies (like Spider-Man).How could they have leveraged that content to make the PS3 more at tractive? Sony also produces other electronics equipment. Could you have merged those products, perhaps in a bundling special (buy a Sony high-definition television and get a PS3 free) or by making a game that uses a Sony Camcorder? C. If you were the VP of Marketing for Microsoft, how would you respond to the Wii? Microsofts key advantage is that it creates the operating system that runs most of the worlds computers. Is there a way to combine personal computers and the Xbox? (That would have helped them compete against Apple, as well. Since Microsoft lost money on the Xbox console, why not just focus on the software market? D. Is there another competitor that might be a significant threat to all three of these companies? If so, who is it, and why are they a threat? How should Nintendo respond to them? PC Games and the phone-based games are two possible competitors. Dell, for example, makes sophisticated gaming computers under its Alienware brand. Nintendos reception could include making its controllers compatible with Dell computers. Or perhaps Nintendo could work with Apple to make iPhones interact with the Wii. There were lots of possibilities here.