Contemporary Issues in Marketing and Management - Coursework Example

Contemporary Issues in Marketing and Management Executive summary This topic is basically deals with the mobile marketing for toys and games industry. It has described about the toy and game industries for the recent years. The toy industries growth is increasing rapidly with a profit margin. The market has to shift digitally from physical playing activities. The industries have also started inventing some new technology which is more advanced from the earlier days. The industries are involved in influencing the customers with better products. The taste and preference of the children is more sophisticate now days. The sale of the industries is growing rapidly in the recent years. The toy manufactures are focused in introducing more improved technology and better ideas. Table of Contents Introduction 4 Part 1 4 The chosen issue: Mobile Marketing 4 The toys and games industry 5 Impact of “Mobile Marketing” on toys and games industry 6 Recommended strategic response to the issue 7 Part 2 7 Personal reflection 7 Recommendations 8 Conclusion 8 Reference 10 Introduction Two toy industries in unfamiliar territory: they are watching numbers of tumble. Hasbro’s year-on-year operating profit got down by 11% in the last quarter and Mattel’s net income fell down 24%. Sales of Barbie, a Mattel property, fourth quarter is running, this time by 12%. After the first flight of Buzz Lightyear across in Toy Story, Sherriff Woody says mockingly and that was not flying. That was a style of falling. Although, the same can be said of Mattel and Hasbro (Krum, 2010, pp.55-61). Stephanie Wissink, the analyst at Piper Jaffray, considered attributing at least a small part of profit fall to the ongoing in new or better techniques. As the toymakers are more focusing in new directions, profits are going to hike up by quarterly figures. One respect of new and the better idea is that women of this generation are having fewer children at a later age when they are having more money. The year between 2005 and 2010 the average age of a first-time mother in Britain, Germany, Switzerland and Japan rose by almost half a year. The sales were down in the significant shift and it was not a profit boosting up. The journey from womb to web is getting shorter. Now a day’s more children are preferred playing digital rather than in physical play. Toymakers can also try to boost up the growth in other ways also. One option is that they can reach to some of the new demographics (Elkin and Pasqua, 2012, pp.89-90). Part 1 The chosen issue: Mobile Marketing The mobile game industry is separating very quickly at a great rate into haves and haves-not. The companies are dividing along with the lines of those that monetize and those are not. The companies which can afford to spend money for acquiring more users. Marketing is the necessary because it is quite tough for players to discover games naturally (Heart, 2014 pp.99-103). Some of the titles are staying for months. The normal rate for people gets tired of playing with typical users. In the social communities the players fight against other real players and come to a contact again and again. The players are compelled for spending money to keep themselves with the community players. The reasons for going at the top of mobile rankings and staying there for a long time are a clear issue for the companies like Rovio, the producer of Angry Birds. Operating profits were up to 50% to $ 98.5 million. The good thing is that the leading companies that practice mobile monetization have the capability to produce billion dollar valued games. In opposite to this fact the bad news is that is a like lottery for the other companies operates in toys and gaming industry. The market is going to grow drastically in the next few years, said by the managing director at game investment bank Digi-capital (Neubert, 2013, pp. 45-48). The toys and games industry The market has shifted from physical to digital world which is influencing consumer’s behaviour across the multiple industries. Children are also participating in more diverse forms of play than ever before. The toy industries are gaining more solution to engage with the consumer and make a better business decisions. Combining the data with the third party input it can create even more comprehensive solutions that address the unique business issues (Haig, 2002, pp.45-47). This is the only source for competitive product detail and insight on toy sales trends. This type of market helps to understand the dynamic market which identifies the opportunity, benchmark pricing, introducing new products and to manage the business better. The data includes a global category and which use to make a comparison over the cross country. It includes about 80% of total traditional toy industries which covers more than 37,800 global retail doors and the online retailers (Ferrell, and Hartline, 2012 pp.75-77). The global toys and games industry is expecting to hit $ 100 billion in the year of 2015, according to the research done by Global Industry. Analysts. The market has changed consumer’s tastes by making the children attracted to more sophisticated electronic toys and video games. The children have also become choosier and tend to change toys more frequently. By this we can say that the toy and game manufacture are introducing new products on a regular basis and are more focused to introduce more technological advancement. The toy market has grown with video, console and computer games with the industry and is also benefitting the adult growing consumers with a greater interest in games as popular leisure(Henry, 2011, pp.85-87). The toys and games market shows medium growth rate in Europe and US and strong growth rates in China and especially in rest of the world. Growth levels of toys and games sales are much higher than the economy. The industry is providing a positive outlook for the toy sector with an opportunity for expansions especially for the producers in the European market who are the second largest exporters after China. In 2011, EU has exports as a whole which worth 5.3 billion in the intra trade amounted to EUR 4.2 billion. The EU production of traditional toy is competitive when the transportation cost is high from China. Production in the EU includes low price plastic toys where the order volume is often below the amount that is needed to outweigh transport cost (Meyer & Schwinger, 2007 pp.100-105). Impact of “Mobile Marketing” on toys and games industry Consumers are price sensitive. With low concentration in the market the producers face cost and price competition to a significant extent. The competition in the price is reflected in the production strategy that the industry will produce in the offshore and in the outsourcing as well in China to reduce production costs. In production of toy the margins in the entire sector are under pressure and it provide a long term profit margin that is around 6% for the top 100 firms in terms of size. The profit margin is low for a small or medium sized firm. The short product life cycle of toys need for innovation and research and development. Innovation is widely required in the toy sector to make it more competitive in position. The manufactures are reducing the price competition for innovative toys. The actual R&D expenditure for the toy industry is 0.6% to 2.6% of total turnover. The marketing strategy is also required in the toy industry (Ranched and Miranda pp.77-88). The licensed toys and games have a strong impact on the industry sales in the year 2012. The products with license are extremely crucial for the key players who agree to pay a lump sum amount of money in order to avail the licenses to manufacture or sell such toys. In the year 2012 it was recorded for the digital gaming in Sweden. Online games and console games downloads mobile games that experienced the strong current value sales growth. It was due to the digitalisation of gaming behaviour and the internet spectrum growth. The structural transformation is introducing video game software under the digital distribution selling form stores to online. The range is extended from tablets to the mobile phones. The old republic has created significant attention for online games. The non-store retailing value share continued to grow in toys and games in Sweden in the year 2012. It is mainly the internet retailing, while the traditional toys and the games store remained the leading distribution channel. The internet has retailing has increased its value significantly in both the way in traditional toys and games and video games (Geppert, 2008, pp.85-87). Recommended strategic response to the issue The firm with both domestic and foreign institute adopt a proactive strategy. The study tells that a very few firms in the Chinese toy industry adopt such a strategy. This is due to perception of these firms that together have global institutions. Reasons for firms not adapting this strategy may be high cost for an individual to figure out the difference between domestic and global institution. The help from the domestic government may be important to help them to adopt the proactive strategy. If the government is providing the domestic firms the necessary knowledge about foreign institution but when the domestic institutions change because of pressure from foreign institutions than it can help to make understand the institutional difference and development by firms in its economy. The firm can also learn the difference in some other ways such as from their foreign partners or domestic competitors. The firms accept their responsibility and comply with both home and host country institutions. It not only gives them a first advantage but also help to maintain legitimacy in long term (Ferrell, and Hartline, 2012 pp.100-103). Part 2 Personal reflection The project was based on the toy and game industry. The topic that was chosen in this paper was mobile marketing of toys and game industry. As we know the toy industry is now growing up drastically in the foreign and in the domestic market. While doing the research the topic was very interesting and it gave me a wide range of knowledge about the toy and the game market in the countries. Most of the children is opting the mobile game and the video games rather to play physically. It has stated that in the year 2015 the toy and game industry would hit $ 100 billion. From the research it made a clear vision that china is the largest toy manufacturing country as well as exporting country. The second is the EU market. The toy and game industry have a positive outlook for manufacturing more toys in the EU markets. Taste and preferences of children are also changing and they have become sophisticated (Hastings, 2011 pp. 55-58). The video games are most fast growing toys in the country and it have a clear vision that now days children do not prefer to go for outdoor games they prefer more indoor games. The toy industry is having more sales and the profit margin is also growing drastically (Saxena, 2010, pp.65-66). Recommendations The toy manufactures are introducing more innovative and advanced technologies in the games and toys. They can also introduce some games that are only for outdoor purposes. So that the children can go out and play the games and can make their mind free from the home environment. Sometimes playing online and sitting in front of the computer also harms their eyes. It is more useful if they go out and have some friends and they can also share their feelings to the people of their same age. Parents should also influence them and should go with them. In recent days the use of Smartphone has been increasing rapidly throughout the world. Therefore, demand of mobile games has been increasing from traditional play station games. From kids to young people, all are becoming very much familiar with Smartphone due to availability of various low priced Smartphone in the market. Therefore, demand of mobile games has been increasing because Smartphone allows people to play games even on the go i.e. during travelling. Therefore, the leading toys and games manufacturers can diversify their business to the mobile gaming market where demand is very high as this market is in growth stage whereas the traditional gaming and toys market is on maturity or some extent in declined stage. Currently they have only one potential segment of consumers left who are little kids because cannot play mobile games. To survive the business the traditional toys and games manufacturers needs to enter into mobile gaming business. Conclusion In this paper it tells about the marketing strategy of toy and game industry. Which also tell about the increasing market of the particular industry? The types and video games are the current trend in the market. Most of the children preferred playing online than to physically. China is the largest toy selling country in the world and the second largest country which exports toy is EU. The China market reduces the cost for manufacturing the toys ion the, markets. The children are more into video games than they are playing physically. These industries have also a long term profit margin if the firm is big enough but if the firm is small than the profit margin is small or medium sized. The current market of the toy and game industry has taken by China. It is also producing new innovative idea that the children can play the games and can make it a good use as well. The labour cost is also very low as they have a good knowledge about the market and the season of that particular market. There is also a benefit for the adult children for the video games in the mark. Reference Dent. J. 2011. Distribution Channels: London: Kogan Page Publishers. Elkin, N. and Pasqua. M. 2012, Mobile Marketing: An Hour a Day, New York: John Wiley & Sons. Ferrell, O. 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R. 2010, Marketing Management 4. New Delhi: Tata McGraw-Hill Education. Read More