Nintendo and the 4Ps of Marketing - Case Study Example

Nintendo and the 4Ps of Marketing. An Analysis, critism, and strategies of the use of this Marketing tools by Nintendo on its Products and Services. By: Table of Contents 1.1 Introduction 1.2 Nintendo and the Four Ps. 1.2.1 Nintendo and the "Product." 1.2.2 Nintendo and the "Price." 1.2.3 Nintendo and the "Place." 1.3.0 Conclusion November, 2007 1.1Introduction Nintendo Building long-term relationship and remaining competitive, requires being active in implementing and maintaining new technologies. Strategy is survival. It is a way through which organisations strife at becoming winners. It affects the overall activities of an enterprise and as such it shouldn't be neglected as an integral part of what management does (Drejer, 2002). In doing this analysis, the Nintendo WII will serve for illustration Nintendo WII is one of the successful product emerging Nintendo brand name in the entertainment industry. The head office is currently in the US, it has branches in almost all the continents to facilitate distribution of its product and create more values for the shareholders1. 1.2 The Business Environment In most present day strategy literature, competitiveness seems to cover state-of the art thinking. "Strategic positioning is concern with the impact on strategy of the external environment, an organisation's strategic capability (resources and competences) and the expectations and the influence of stakeholders. (Johnson, Scholes& Whittington, 2005:17). Using Porters five forces framework, one will see that the intensity of competition in this market is very high, coming primarily from the market leaders like Sony and Microsoft. How ever, there are some other niche players in Asia and Europe. The Entertainment industry has become diverse especially with the current pace of technological advancement. Buyer's loyalty will be high with respect to those producers who dance to the taste of time (The case of Sony), offer customers a good value for their money and see them as strategic partners and not customers Suppliers tend to have a low bargaining power with the respective dealers. In the entertainment market, mostly the main company set the price including wholesalers and retailers commission. Thus, working with suppliers is not an issue at stake as their switching cost is high. With the current level of sales and profit being enjoyed by participants in the market, s threat of potential entrants from China or Asia is high. China is presently considered as an emerging market. A solution for Nintendo will be to offer customers a better value for their money using the marketing mixes. 1.3 Nintendo Strategic marketing Objective "The influence of words over men is astounding." -- Napoleon. As the whole world gears for peace, marketers and other business people talk in terms of war. We see battle words everywhere in business: Japan bashing, corporate raiders, hostile takeovers, cola wars. Marketing is war. With the advent of events, ordinary business executive fancy themselves as warriors. Aggressively attacking weak companies, and defending market shares. Positioning products in people's minds and making them attractive to market segments requires careful formulation of the marketing mix. Getting the right blend of the product, promotion price and distribution is essential to put the carefully carried out analysis into operation. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people's mind2. Thus with the recent launching of the Nintendo WII in the UK market, these features were carefully integrated to give the product a break through. Table 1: A summary of what constitute each of the Ps of the 4Ps Product Tangible products Psychological attributes Quality Services Benefits and features Packaging Styling Image Branding Customer service After care Guarantees Image Pricing Selling price Price positioning Distributor margins Credit Discounts Payment methods Price promotions Discriminatory and variable pricing Promotion Advertising Web sites Direct marketing - including email as well as direct mail and telephone marketing Public relations (PR) and publicity Personal selling Sales promotion Placement Channels of distribution Service levels Logistics Channel segmentation Consumers are exposed to a vast level of information everyday, and in most situation, most of these information is being considered as junk mail. Advertising is just one of the elements with which the consumers must deal with everyday. For a company to remain successful it marketing communication mixes must dance to the taste of time. Nintendo WII and the Product Communication mixes is the use advertisement, sales promotion, public relations, personal selling and direct marketing in a unified and cohesive manner designed to achieve specifically defined and measurable objectives3. The management of Nintendo has carefully put the Marketing mixes in to practice. Turn to the company's web page and watch how the four "Ps"are put to practice. Packaging is one of the most important components of Nintendo's WII product as a communicating device. As shoppers wander the aisles and scan shelves looking for that benefit, image, or value communicated by each product's design, packaging, price, and place, products which are not on the shelves, or are shelved inadequately, or priced too high or low, or is unclearly packaged or labeled are put off the shopping basket of the client. This is what the management had in mind. Thus the artistic features, visual and sound effect used for the launching of WII, this is backed by the emotional message used in their advertisement. With this in mine, the management of Nintendo has successfully incorporated not only to WII but to others such as Super Mario, to the Ds. For example, the launching of WII, a breakthrough product of Nintendo, was readily welcome in the UK market, because of aesthetic features, its value for money, and its emotional appeal in the advertisement. The name Nintendo is a brand in the making and with the successful launching of the Nintendo WII the brand name is becoming quite popular. The four Ps is carefully reflected in the design, aesthetic, or ergonomic aspects of the product. Nintendo WII has the same style, features and characteristics that help consumers get value for their money. All purchases of Nintendo WII items are covered by warranties, free installation and delivery with after sales services. There is an option being offered by Nintendo, for customers to log online and diagnose common problems. These measures have been used successfully as a competitive weapon, a strategy for a new product launch. 1.1.1 Nintendo WII and the "Promotion" "For customers to entertain a purchase, you must first entertain them." That's a fair deal (Soares J.E 1991). A promotional feat is a feat only because it entertains. The entertainment aspect is causally instrumental in persuading a prospect to try or buy your product. The trick making the product so appealing that people goes out of their way to watch, and exchange their cash for this product. Thus, these processes have been followed closely by Nintendo in launching of WII in the UK through the promotional mix. Log on to the web page you see an integration of these concepts into play. No wonder the WII has been quite successful Specific media tools used being used by Nintendo, for WII include print (magazines, newspapers, direct mail), broadcast (television, radio), and display (billboards, signs, posters) and in some countries special channels are reserved for marketing Nintendo products. Nintendo uses the internet as an effective tool for pushing the WII product to the customers. In addition to enhancing the content of its website, which include product related news and frequently asked questions, the websites offers download of manuals and provide prompt information about the WII. These tools are intended to convey a consistent, enduring image that continually reinforces the positioning and market share of the Nintendo WII. Sales promotional tools such as "Buy me now" "Buy me and pay monthly" discount, out of season offers have been effectively been used by most stores selling the Nintendo WII The effect is "short-term," as most sales promotions have a finite time frame when the terms of the offer are enforced. However, interest is being spark in the product or services being promoted. Personal sales staffs are used in big events such as trade fares, Olympic games, football matches to lure and get customers interest about WIIetc. Nintendo's sales force and trade promotion through the above mention methods "push" the WII through the channel of distribution.Nintendo's promotes WII to wholesalers, wholesalers to retailers, and retailers to the end user. This is the push strategy. A television campaign will however cover the entire circle and channels. "Promotion can take many forms: advertising in various media, events, press releases, trade shows, brochures, flyers, and internet sites to name a few. Promotion means to create awareness although awareness is just the beginning. Good promotion compels the buyer to buy". The "need" for the product must be addressed. How does it solve the customer's needs (even needs he doesn't know he has)4 1.1.2 Nintendo WII and the Price Basically, all the other three Ps are cost. Price is revenue. This is the nightmare on the head of the management of any big organisation. Are we charging the right price What will be the effect should a loophole be created on our prices How and who are our prospective customers and customers. Nintendo, launching, the WII started by offering a lower price relative to competitors for the home version. As an emerging key market player in the electronic game market has segmented the market so well with it product line pricing techniques. Each successive product in the line offers more features, with the features carefully fitted to lure consumers, taking those of competitors and related product into consideration. The case of the WII is a good example. To avoid "trade up" the price difference between one product and the other is made to match the features and functionality. WII is expensive than most of the product because of its functionality. No wonder, their technique is proving quite useful in their balance sheet. Nintendo also used the price skimming strategy, and the captive price in some markets segment here in the UK for WII. Being an emerging brand this strategy is employed once a new product is launch, with the price set very high and gradually being adjusted with other competitors stepping in. This is the premium and over charging strategy. This is the upgraded version of WII installed in public places. 1.1.3 Nintendo WII and the Place Place includes all Nintendo company activities involved in making the product available to target consumers. It includes: Nintendo channels of distribution, the extent of its market coverage, managing discrepancies of quantity and assortment, its retail locations, and the management of inventory, its transportation, and its logistics5. Nintendo has offices in North America, Latin America, Africa, Europe, Asia, Oceania etc. With it head office located in the US all these locations have Nintendo's wholesales stores, retail outlet, a packaging or manufacturing facility, Nintendo distributors, Sony retailers and a team of experts and technician to follow up customers query. All these participants are in the value chain and value creation process. Though the use of distribution specialists results in greater efficiency, this mean management has turn over part of the selling function to intermediaries the by, giving up some control of how, and to whom, WII are sold. It is advantageous to Nintendo, in that through contact, experience, specialization and scale of operations intermediaries usually offer the firm more than it can achieve on its own. Some retail stores and outlet are run under the company logo and brand name to facilitate easy penetration of the WII. Nintendo has retail stores in most of its location selling only the company items with WII displayed allover. In some instances, it uses its own sales force to sell directly to business customers and some industrial distributors to sell the WII to business customers. These networks and channels are connected by physical flow of products, the flow of ownership, the payment flow, the information flow, and the promotion flow. Distribution channels are not limited to the distribution of physical goods. Producers of services and ideas also face the problem of making their output available to target populations. In the private sector, department stores, hotels, banks, and other service providers take great care to place their outlets in locations convenient to target customers6. That is why, WII was initially hook to active stores, train and bus stations, Who is the final consumer or user of WII Where does a prospective customer look when buying Nintendo's WII If she buys this product from an office products retail store, then where does that retailer obtain his products Once the Management of Nintendo have identified the channels, it is easier to determine which ones make the most sense or which ones offer the path of least resistance to the WII. Thus, we see that, through it product segmentation, product range and product line, market segmentation has been implemented in the launching of WII in the UK. 1.5 Conclusion and Possible Recommendations Nintendo WII has been one of the most successful products launched by Nintendo. I will want to say it has been quite successful within its first year of entering the market. With top players in the market like Sony, Microsoft, the company has so far been able to penetrate the market with the WII. Thanks to its price skimming, product line pricing, and integrated marketing strategies utilized for the launching of WII . The management of Nintendo however needs to consider using techniques such as above the line activity. Like integrated marketing communication, this kind of activity include broadcast and print advertising where an agency is paid on commission based on the media space bought. By using the technique, it is easy for the company to breakthrough competitors existing customers (Attitude). What consumers think about Nintendo WII How the consumers feel about Nintendo's WII. How consumers have been reacting towards the WII and who are those competitors. By using such a technique, Nintendo with its current Blue markets of attacking virgin markets will be able to address consumer's negative perception about the WII, early post purchase dissatisfaction experience by customers may be done through television advertising. Changing the way customers think and feel about a product requires emotional messages to appeal to consumers and increase their likeability for the brand. Their integration marketing strategy should be redesign to ensure that both trust and commitment can be developed and maintained and that there is a level of interdependence between the channel members, which means that an action by Nintendo will impact all the channels members. Integration of a company's marketing communication activities can avoid confusion and disaffection in the minds of consumers and buyers, offering a comfortable identity to customers and staff (Kotler. 2005). Schultz et al. (1993, 1998) postulated that any model of marketing communication should analyse what happens with the customer rather than starting with the marketer. By doing so, the communication mix is developed on the basis of (actual, 'natural') customer activity in relation to the brand and not (necessary) marketer activity in relation to the brand. This is the secret behind Nike, McDonalds marketing mix and other leading brands. The company and suppliers can jointly invest in a common database which is more appealing and supporting to more support functions. Electronic commerce could boost sales, as it is a convenient way of purchasing and could also provide the ambiance of providing all the services and goods under one roof. Such a step towards technology could improve customer satisfaction and bring about additional revenues from satisfied. Competing in the right way in the right arena can be extremely profitable, but only for a limited time. The[core competencies] of the corporation, which are the basis of competition, provide the foundation of a sustainable competitive advantageand long term performance. WII is a core product for Nintendo. Unless there is an advantage over competitors that is not easily duplicated or countered, long term performance is likely to be elusive (Aaker, 1989, p. 91). Nintendo WII is a competitive product. I will highly recommend Nintendo to continuously take the lead in new product development, innovation, technology and collaborate with other partners and competitors when entering new markets. Managing change in organisation is a complex and complicated issue that needs to be thought of in terms of how feasible and applicable is it in relation to the resources and capability of the organisation Creative marketing people will come up with events and techniques that will leave lasting impressions. The marketing mix, the 4 P's is the marketing "mix" of every company. The company should strive at controlling the 4P's known to be the "independent" variables. The dependent variable is sales volume. Thus the right mix should give the best sales volume. This can be possible through "Product Space Map"7. All too often, Kortler (2003) further argued that, companies fail to integrate their various communication channels. The result is a hodgepodge of catastrophe to consumers. "Mass advertisement says one thing, price promotion sends a different signal, and a product label creates still another message. Company's sales literature says another thing all together, with the webpage at the other end". Marketers should be alert, and present this in one shot to the consumers. References Aaker, D.A., (1989)"Managing Assets and Skills: The Key to a Sustainable Competitive Advantage," California Management Review 17, Winter Issue 1989, 47-50. www.questia.com Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Quorum books.www.questia.com Johnson G., Scholes K., Whittington R. (2005), Exploring Corporate Strategy. Prentice Hall, Financial Times, Schultz, D. E., Tannenbaum, S. I., and Lauterborn, R. F. (1993) Integrated Marketing Communications: Putting It Together and Making It Work, Lincolnwood, IL: NTC Business Kortler, P. (2002)A framework of Marketing Management. 2nd ed. Published by Pearson education, Inc. Read More