Marketing Mix for Nintendo Wii - Essay Example

?Market analysis Table of Contents Market analysis Table of Contents 2 Introduction 3 Discussion 3 Product 3 Price 5 Place 6 Promotions 6 Conclusion 7 References 8 Introduction The age increased market competition has led to considerable pressures on business organizations to ensure organizational efficiency. The present study would analyze the case of Nintendo Corporation and analyze its elements of marketing mix. Nintendo is a Japanese game console manufacturing and marketing company that is engaged in the production of gaming consoles. The company was established in the year 1889 and since then has been credited with being one of the pioneers in the industry segment. Some of its innovations like Mario are still quite popular among the target market audience. The company presently has subsidiaries across many nations of the world including manufacturing units that help it to make it one of the best known brands in its category (Nintendo, “Company History”). Discussion In order to analyze the business strategies of Nintendo it is very important to analyze its elements of marketing mix. The elements of marketing mix for product category firms like Nintendo include the aspects of Product, Price, Place and Promotions. Product The new Wii product launched by Nintendo has somewhat helped generate profit margins for the company since the failure of game cube. The company faced stiff competition from competitors like Sony and X Box who used flashy designs and fast technology to generate innovations. Nintendo however did not follow the same strategy; instead it chose to maintain its focus on gaming consoles. The main reason behind this aspect of strategy was to create a distinction between Wii and the other consoles available in the market and follow a differentiation strategy. The company is of the view that this differentiation strategy would help generate a distinct identity and a unique positioning of the brand in the minds of the target market audience. The company also thinks that blindly following their competitor’s moves would not help in the long run as Nintendo is of the opinion that fast technology based innovations are likely to have a fad effect and tend to dissolve very quickly. Nintendo is of the faith that a firm using such core competence has to constantly upgrade their innovations and that their positioning in the minds of the customers can easily change considering the fact that their demands are constantly fluctuating. Instead of giving fast technologies the company would emphasize on providing greater values to its customers. One of the essential features of the Wii is its small size that makes it easier to carry and use. The company is of the faith that this would provide greater mobility and flexibility to the product and that such features were not present with any of the competitors of the company. The new controller of the console introduced by Nintendo in its product Wii has helped introduced movements and mobility in the product. This was a completely new feature in the market and has been largely done in order to use innovations to segregate their product offerings in the market. Nintendo also believed in creating a product design that would not only fascinate kinds but would be attractive to all the family members across various age groups. It is because of this reason that the company chose to focus on design rather than high end software and complex hardwires as done by all its competitors in the market. The company’s strategy of keeping a small design has helped it to reposition the product and showcase it as a fun device rather than another innovation in the existing product line. Nintendo’s main intention of keeping the size small was perhaps its most important and vital competitive edge as Nintendo was able to position the product as a modified form of toy appealing to all age groups rather than another addition to the existing product line. The design of the product that constitutes its core competence also includes easy handling and greater maneuverability that are innovations within the industry segment. This has helped generate a differentiation with respect to its competitors and creation a niche for the brand in the consumer market. This helped it to create a niche for the product in the minds of the target market segment and generate segregation with regards to the products offered by its competitors in the market. Price Nintendo follows an overall cost leadership strategy, and its products are available at much cheaper rates as compared to its main competitors namely Sony and X box. The company has adopted a strategy and has refrained from using high end hardware but has focused on creating values and providing better looks and designs. This strategy has helped the company cut down on the costs and hence provide products at a cheaper cost deriving competitive advantage. Nintendo also refrained from charging high price to the game licensors as done by most of its competitors. This can largely be referred to as an overall cost leadership strategy under which a firm minimizes its cost of production in order to generate cost advantages. This cost benefit is ultimately being passed on to the consumers in the form of very low prices on its products and services. Nintendo followed the same strategy by reducing expenditure on high end hardware and focusing on design aspects while making the product look smaller. The company also did not impose high licensing fees that helped it to make better relationship with the suppliers. All these led to considerable advantages for Nintendo in terms of saving costs that was used to fuel its overall cost leadership strategy that gave the company the ability to provide products and services at lowest possible cost generating a competitive edge for the company in the market. The value based pricing strategy has helped it to expand its line of targeted customers as the products offered by its competitors are higher than Nintendo’s Wii, thus helping it to expand its target market base and increase its sales volume and market share. Place Nintendo has launched its Wii product across all the locations where it has its presence globally. One interesting aspect of the company’s international strategy has been the fact that Nintendo has used a ‘glocalisation’ strategy of thinking globally and acting locally. Nintendo has a specific product packaging that include packaging and printing documents and user manuals in regional languages that has helped customers make a good connect with the company and its products. Moreover in addition to availability in company stores, the product is also widely available in a large number of partner retailers as well as independent retailers that ensures a good availability and penetration of the product in the market. Nintendo has also opened up the online channel under which the customers can directly purchase the product from the comfort of their homes. It is also planning to make a foray into international markets including India and China that hold immense opportunities for the company in the form of a large market for the goods and services of the company. Promotions Promotions are very vital in determining the success of a product in the market. Nintendo’s success for its product Wii has been attributed to its promotional strategies. Nintendo while launching the product provides customers with a free game that is also quite popular. This feature is not present with any of its competitors in the market. Moreover, Nintendo also provides customers with a free Wi-Fi service that enables players to play multiplayer games with opponents located across the world. This feature is available at a premium cost with its competitors like X box who charge a sum for this service that is provided freely by Nintendo in the market. Nintendo has also launched a popular monthly magazine that updates customers about the new games as well as other exciting news about the company and the product offering. This is quite popular with the customers and also gives an opportunity for the company to stay close to its customers and maintain a strong relationship with them. It also helps it to cross sell other products like new games and help in fostering loyalty with the customers in the market (Moats, “Promotional Strategies”). Conclusion The analysis of the elements of marketing mix for Nintendo Wii reveals careful planning and a successful differentiation strategy. In spite of being technologically less superior to its counterparts in the market, Nintendo’s Wii has been able to achieve success mainly because of efficient management of the marketing mix and a strategy to create differentiation by the company. The company presented a bold decision not to follow the competitor whose products were a huge hit in the market. Instead it chose to concentrate its focus on creating a distinction and carving a niche for itself in the market. The company also used a successful promotional strategy to position the product as a modified toy rather than as a gaming console that has helped the company to increase its target market audience and create a distinction for its products and services. Finally a balanced promotional strategy has also helped complement the product strategies of the firm and has helped it to generate long term sustainable competitive edge in the business market. References Moats, B. Promotional Strategies. 2008. Nintendo Wii. December 2, 2011 < http://brianmoats.com/Portfolio/Nintendo_Wii_Marketing_Plan.pdf>. Nintendo. Company History. 2011. Corporate. December 2, 2011 < http://www.nintendo.com/corp/history.jsp>. Read More