The Toys and Games Industry - Coursework Example

Emerging Themes Project: The Toys and Games Industry Table of Contents Table of Contents 2 Part 3 1 Introduction 3 2 Critical Understanding of Viral Marketing 4 1.3 Overview of Toys and Games Industry 5 1.4 Critical Evaluation of the Impact of Viral Marketing on the Toys and Games Industry 7 1.5 A Recommended Strategic Response to Viral Marketing 9 1.6 Conclusion 10 2. Part 2 11 2.1 Personal Reflection 11 References 13 1. Part 1 1.1 Introduction In the modern day scenario, toys and games have captured the imagination of children and teenagers alike. The toys and games industry has become a multibillion dollars industry wherein the interests of the users are ever-increasing. Over the years, it has been observed that children used to play with toys. In earlier times, a toy used to be designed with the help of plastic, lumber, paint, cardboard, glue, and screws and bolts other components. Suddenly after the discovery of computer and internet connectivity, the traditional trend of toys has changed a lot. Several organisations’ have started designing electronic toys, which have automatic sound effects and are rechargeable through power supply. Consequently, a few organisations’ have also focused on developing video games which can be played through the help of computer or television (Thielman, 2014). During the last decade, the entire trend of the toys and games industry has changed dramatically with the help of technology. According to the research of global industry, The global toys and game industry is anticipated to attain a figure of around US$100 billion by the year 2015 (Reportlinker, 2014). At the same time, viral marketing refers to the marketing techniques that are used in social networking facilities to increase the brand image and achieve marketing objective through viral process. It can be also done through mouth, the internet and mobile network. Viral marketing can be done in the arrangement of video clips, flash games, images, email, web pages and text messages among others (Torkildson, 2012; Scott, 2009). With these considerations, the study intends to demonstrate a critical understanding of one of the emerging themes with respect to toys and games industry i.e. viral marketing. An overview of the toys and games industry will also be provided to derive a comprehensive understanding. In addition, a critical evaluation of the impact of viral marketing on toy and game industry will be determined. Finally, a set of strategic response based recommendations will be provided to the toys and games industry players so that they are able to pertinently leverage the concept of viral marketing for their benefit. 1.2 Critical Understanding of Viral Marketing The concept of viral marketing has been introduced in the market in less than a decade back. Viral marketing is a consumer-to-consumer process and it is primarily related with word-of-mouth communication in general (Silverman, 2001). Correspondingly, along with the time, people have witnessed a great success associated with viral marketing, which has challenged the traditional advertising trends. During the practice of viral marketing, it has been observed that advertising expenses can be reduced by introducing innovative ideas and implementing creative marketing strategies (Briggs, 2009). In this regard, word-of-mouth is a traditional concept in marketing. It denotes the interpersonal communication among consumers concerning their personal experiences with an organisation or a product and/or services (Richins, 1984). It is a difficult spectacle and generally not something that can be directly controlled by the organisation (Allsop & et. al., 2007). According to an observation, it has been observed that consumers love to talk about their involvement and experience with the product and/or services for various reasons such as prestige and status among others, in order to help others (Cruz & Fill, 2008). Over the years, people have used several terms to denote this process, in case of management such as buzz marketing, word-of-mouth, referral marketing, viral advertising and viral marketing. In accordance with Rodic (2012) “viral marketing communication concerns the informal, peer-to-peer electronic exchange of information about an identifiable product or service” (Rodic, 2012). Thus, it can be asserted that viral marketing is a form of advertising which honestly encourages the communication between consumers. From the analysis, it has been found that several industries’ have been using viral marketing concept since last decade. Sport apparel industry players such as Nike, Chocolate industry frontrunners Cadbury, toys and games industry players such as Quicksilver and Lego among others have been competently using viral marketing strategy in order to ensure higher level of efficiency and popularity amid target masses about their offered products and/or services in the national and international market (Altoft, 2008). 1.3 Overview of Toys and Games Industry Usage of toys and games has been apparently witnessed in 1600th year before Christ (B.C). According to the findings, it has been observed that during the 17th century, Germany had started developing toys and games for children. Then, eventually other countries have been also involved in toys manufacturing process such as the United States (U.S.), China and Japan among others. In the primitive times, it has been found that small and medium enterprises (SMEs) had have been the key players involved in toys and games designing process. However, recently especially in the later years of 20th century and in the first decade of 21st century, large companies have also engaged in toy sector (Vault, 2014). Traditional toys and games have been dominated by the multinational brands such as Mattel Inc., The Lego Group, and Hasbro Inc. among others. Toys and games industry has advanced simultaneously with the development of science and technology. Thus, competition has also increased in between the global players. In keeping with the observation, it can be asserted that modern toys and games industry depend largely upon the domain of information technology (IT) regarding PlayStation such as joystick and graphics card among others. At the same time, Toy and games industry is also depended upon retail industry as it helps to spread its playing instruments in the global market. Apart from this, it has also used innovative approaches such as viral marketing strategy to promote its products on the global platform (Ecsip Consortium, 2014). It can be also ascertained that pull marketing strategy has been the key drawing fact6or with regard to the toys and games industry to expand its reach extensively. The pull marketing method generally is used by an organisation to promote its products or to create demand for its products and/or services. In the modern era, various media channels or the internet have been used to encourage customers. And, it has been also observed that most of the top ranked toy companies have used this marketing strategy especially to attract children. According to an observation, it is found that Lego has earned millions of dollars from worldwide market through a cartoon movie, which can be refereed to be a part of pull marketing strategy (Ecsip Consortium, 2014). Besides, apart from technological advancements, competitiveness has also increased in between the multinational toys and games manufacturers. Figure 1: Key Players of Toys and Games Industry (Foo, 2014). Figure 1 illustrates the prevailing competitiveness in the toys and games industry wherein Mattel, Hasbro and Lego primairly have engagegd in cut-throat competition to attain customer preference. 1.4 Critical Evaluation of the Impact of Viral Marketing on the Toys and Games Industry In the recent few years, the market trend has changed due to divergences in consumers’ tastes and preferences. It has been observed that children are largely opting for more sophisticated video games and electronic toys rather than typical old fashioned games. Children are also becoming gradually familiar to shifting toys more frequently. This signifies that toys and games industry has focused on innovation and technological advancements directly (Accesswire, 2011). Besides, in terms of marketing strategy, it has segmented its products in four major segments such as non-electronic toys, electronic toys and games, non-electronic games and puzzles and children’s vehicles (Therrel, 2002). At the same time, due to technological advancements, viral marketing has become a more useful strategy for several players due to its wider reach and cost effectiveness. This changing trend has been seen due to the rising cost of media. Simultaneously, viral marketing has become an attractive solution because it operates in free of cost and it has been more effective in spreading messages around the entire world (MindComet Corporation, 2008). Toys and games industry has used viral marketing strategy in order to promote its products in the global market. From the analysis, it has been delineated that toys and games industry players design viral advertisements to promote their products among young people through the internet (MediaSmarts, n.d.). These companies are particularly using social networking platforms for viral marketing. This marketing strategy is designed to create or improve brand image which motivates user loyalty by a considerable extent (Calvert, 2008). In keeping with SWOT analysis, it has been also observed that, viral marketing has few advantages and disadvantages that have influenced the toys and games industry in both ways. During the early phase of the year 2014, Lego had introduced a viral movie on the internet which had cost of production of around US$60 million and within a short period it had earned more than five times its cost of production from the global market. These movies of Lego have become a viral phenomenon wherein their popularity has reached the spotlight of YouTube (Lego, 2014; Herndon, 2014). Thus, it can be asserted from the evaluation that viral marketing cuts the traditional cost of advertising and it also enables to spread the message to the audience. Moreover, in case of viral marketing it does not require any agent or any campaign for communication; instead it has the power to attract the interest of human beings from any of its working platform. Furthermore, the most important factor is viral marketing is often welcomed by the receiver irrespective of the fact that eventually the person likes or dislikes the message (MindComet Corporation, 2008). In contrast, it has also a few risk factors which can influence the audience in a negative manner as well, for example if it is done improperly then it can cause massive bad image for an organisation. The Trojan games had used viral marketing strategy in 2003, through sex-games spoof video which had campaigned amid more than 38 million people all over the world (MindComet Corporation, 2008). Improper presentation can cause trouble for a brand within overnight, in case of viral marketing (Michalski & et. al., 2012). Recently, Hasbro has launched a free game named “Monopoly City Streets”. During the promotion, it has declared that it has multi-player playing facility. Unfortunately, it did not transpire successfully. As a result, 1.7 million users have become disappointed due to the poor execution of Hasbro (McDouga, 2009). Thus, it is crucial for a company to ensure that the messages conveyed in viral marketing process actually materialise while a user attempts to use the product otherwise it can tarnish the brand image of the company at large. 1.5 A Recommended Strategic Response to Viral Marketing From the entire analysis, it has been observed that, viral marketing has several benefits and most of the industries’ are using this strategy to promote their brand image in world-wide market. In order to recommend to the toys and games industry for viral marketing, it can be affirmed that, during the viral marketing practice toys and games manufacturing organisations’ must need to keep focus on proper representation of the jokes, games or competitions for promotional model. In addition, at the time of designing viral advertisements they should be made funny and any sexual depiction should be avoided for the children (Klopper, 2002). According to an observation, it is found that, children have viewed approximately 40,000 advertisements in a year (Pediatrics, 2006). Moreover, it has also observed children have a tendency of learning from the social media. Thus, it can be recommended that in case of designing viral advertisement, toys and games industry players should focus on animated cartoons for increasing its efficiency in modern days (Calvert, 2008). 1.6 Conclusion From the foregoing discussion, it has been magnified that, the toys and games industry has changed its approach towards the global market along with the advancement of technology. Apart from this, it has been also observed that, the marketing strategy has also changed considerably and it has become more innovative and effective than the traditional methods. Implementation of viral marketing tactic has been incredibly successful since the last few years. Major toys and games manufacturing organisations’ are using this tactic as a strategic plan for influencing a large number of child consumers at a time in the world-wide market. It can also be asserted that toys and games industry is using this strategy for cost saving purpose. The emergence of viral marketing theme can further lead to benefits if the industry players focus on streamlining the contents to more children friendly one so that any undesired drawback in the image of the companies does not arise. 2. Part 2 2.1 Personal Reflection In order to complete this project related to evaluating the theme of viral marketing with reference to the toys and games industry, first of all, I had gathered information about toys and games industry. Specifically, I had focused on the changes of the toys and games industry, i.e. from the old traditional trends to the modern trend. I, primarily desired to, biased on the secondary sources, to critically evaluate the emergence of a differentiated marketing approach i.e. viral marketing regarding toys and games industry. Correspondingly, I have learned about viral marketing and the effects of viral marketing as a marketing strategy. From the critical analysis, I have gathered a number of valuable information regarding the considered theme and have also tried to understand how toys and games industry uses viral marketing as its strategic planning. Finally, I have also tried to analyse the opportunities and threats of toys and games industry regarding viral marketing. According to my perception, I have learned a lot about toys and games industry. Especially, how a toy manufacturing company markets its products and how it promotes and creates popularity about its offerings through using social media platform and videos. I have realised that if the concept of viral marketing is not carefully used then it can create obstacles for a company to prevent its brand image from getting suffered. From my point of view, if I have to evaluate my performance then I would like to say that during the research of the project, I have largely fulfilled my responsibility of projecting the scenario related to the industry in a comprehensive manner within the allowable limits satisfactorily. . References Accesswire, 2011. FBC Holdings Begins Prototypes of Interactive Toys, Chooses International Sourcing Company to Speed Products to Market. Home. [Online] Available at: http://www.accesswire.com/viewarticle.aspx?id=408003 [Accessed April 24, 2014]. Allsop, D. T. & et. al., 2007. Word Of Mouth Research: Principles and Applications. Versatilesolutionsbb. [Online] Available at: http://www.versatilesolutionsbb.com/web_documents/word_of_mouth_research_jar_dec-07.pdf [Accessed April 24, 2014]. Altoft, P., 2008. The Top 10 Viral Marketing Campaigns of All Time. Branded3. 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