Handheld Gaming Manufacturers - Essay Example

Consumer Behaviour Audit - Nintendo DS - Table of Contents I. Introduction ............................................................................. 4 II. Market Segmentation ................................................................ 5 a. External Influences ...................................................... 5 b. Internal Influences ....................................................... 6 c. Situational Influences .................................................. 7 d. Decision Process Influences ....................................... 7 III. Product Positioning .................................................................. 7 a. Internal Influences ....................................................... 8 b. Decision-Process Influences ....................................... 8 IV. Pricing ..................................................................................... 8 a. External Influences ...................................................... 9 b. Internal Influences ....................................................... 9 c. Situational Influences .................................................. 10 d. Decision Process Influences ....................................... 10 V. Distribution Strategy ................................................................. 11 a. External Influences ...................................................... 12 b. Internal Influences ....................................................... 12 c. Situational Influences .................................................. 13 d. Decision Process Influences ....................................... 13 VI. Promotional Strategy ................................................................ 13 a. External Influences ...................................................... 13 b. Internal Influences ....................................................... 14 c. Situational Influences .................................................. 15 d. Decision Process Influences ....................................... 15 VII. Product ................................................................................... 16 a. External Influences ...................................................... 16 b. Internal Influences ....................................................... 16 c. Situational Influences .................................................. 16 d. Decision Process Influences ....................................... 16 VIII. Conclusion ............................................................................... 17 References ...................................................................................... 18 - 19 Introduction Other handheld gaming manufacturers such as Nokia N-Gage, Tapwave Zodiac, and Sony PlayStation Portable (PSP) is continuously offering the market with new features ranging from digital audio players to Bluetooth features on mobile phones. (Fischer, 2004) Sony is highly competitive since the company has developed a considerably large library of software games exclusively for the use of PlayStation users. Although Nokia is still in the process of struggling to succeed in the market, the company is very much determined to compete with the gaming industry. Lastly, Tapwave which has been known as Palm is struggling more than Nokia in establishing a reliable gaming platform. The main branch of Nintendo Company, Limited (NCL) is located in Kyoto, Japan. Over the years, Nintendo managed to establish its global offices in the United States, Canada, Australia, Europe, China, and Korea. (Nintendo - The Official Magazine, 2007) Nintendo DS, also known as NDS or DS which stands for ‘Dual Screen and Developers’ System (Nintendo DS, 2007a), is a handheld game console that is manufactured by Nintendo back in 2004. Similar to Game Boy Advance SP, NDS has a two LCD screens with a sensitive touch screen, built-in microphone, and is Wi-Fi capable in order to enhance the gaming experience of the players. In China, NDS or DS is known as iQue DS. The development and promotional activities of NDS is incredibly a success. After the first week of launching the new product, the company managed to sell 500,000 or more than 90% of its available Nintendo DS units. (Becker, 2004) During the same year, Nintendo DS successfully defeated Sony’s sales of PlayStation Portable or PSP with only 200,000 sold in Japan by mid-December. As of end of September 2006, Nintendo DS and Nintendo DS Lite have sold more than 26.82 million units. The purpose of this study is to enable the researcher to have a better insight on how to conduct a marketing audit on Nintendo DS. In order to successfully analyze the market segment of Nintendo DS, it is necessary for the all the Nintendo for the researcher to carefully study the product mix or the 4 P’s of NDS known as product, pricing, promotional activities, and place (market distribution). Market Segmentation The market for Nintendo’s Game Boy has already reached its peak. In order to maintain the company’s current position on being able to grab the biggest market share on handheld gaming, it is crucial for the company to constantly develop and launch a more high-tech handheld console in the global market. External Influences There is a minimum ethical, social, regional, and religious factor that could affect the sales of Nintendo DS. The only constraint in the selling of this product is more on the socio-economic factors of the potential buyers. Nintendo products, considering its high product costs, can be easily sold in developed countries such as Japan, U.S., Europe, Canada, Australia, China, and Korea rather than in developing countries like the Philippines, Africa, or Thailand. In order for Nintendo to maintain a strong hold on its prospective consumers, the company exclusively designed Nintendo DS to be used by consumers regardless of gender, profession, and age. Nintendo has developed games that are appropriate for boys and girls as well as men and women regardless of their educational attainment, nationality, or culture. For example, the company managed to develop ‘Sonic Rush Adventure’ as a unisex game for children (Wales, 2007) or the ‘Aerial Mahjong’ or ‘Monopoly’ for male and female of all ages (Enkord, 2007). Normally, it is the children and the teenagers who are considered to be the influencer in making a purchase for Nintendo DS. In the process, most children between the age brackets of 5 - 18 often persuade their love ones such as parents and relatives to buy them a unit of NDS. Internal Influences Nintendo DS can easily satisfy the different needs and motives of different individuals. The company has developed a wide selection of games ranging from educational ones that are exclusively designed for young players between the age brackets of 4 – 7 to games that can be very entertaining and brain stimulating for adult players such as the ‘Brain Age: Train Your Brain in Minutes a Day’, the ‘Tetris DS’ or the ‘Big Brain Academy’ (Nintendo, 2006; Rojas, 2006). Nintendo DS has been designed and developed with different available accessories and a variety of hardware colours to suit the different personality types of its target market. Nintendo DS is available in Coral Pink and Polar White aside from the common colours like black, grey, and silver. (Nintendo, 2006) Particularly the Pink colour easily attracts the population of the female players. Polar white is much more attractive to stylish individuals while the masculine type of consumers would normally prefer the common colours. Situational Influences Parents could easily purchase Nintendo DS as a form of reward to their children in case of a good academic achievement or on occasional basis such as Christmas, birthdays, graduation gift, etc. In some cases, it is possible for some parents to use Nintendo DS as a way of enabling their children to acquire additional education in relation to basic spelling games, mathematical games, etc. Decision Process Influences In selecting Nintendo DS, purchasers particularly the parents would normally evaluate the type of games available for their children. Some parents would not allow their children to play aggressive games such as war, the use of guns and knives, or anything that may project or promote violence. Instead, this type of consumers would limit their purchase of games that are educationally entertaining for their kids. As long as the consumers are highly satisfied with Nintendo handheld games such as the NDS, potential consumers are likely to develop loyalty to the brand. According to Brian O’Rourke, a senior Analyst of In-Stat/MDR’s converging markets, “Nintendo is still considered to be the most successful company when it comes to the gaming quality of handheld games.” (Fischer, 2004) Product Positioning Product positioning is necessary in order to enable Nintendo DS marketers to effectively and efficiently promote Nintendo DS in domestic and global markets. With proper product positioning, it will be easier for marketers to plan for a more sensible product distribution or channelling as well as deciding on the type of marketing campaign to be used in its promotional activities. Internal Influences Considering the trend of technology today, Nintendo seems to have positioned the NDS as Nintendo’s iPod version with matching lifestyle accessories and big screens. (Plunkett, 2006; Design Translator, 2006) As part of Nintendo’s branding initiative, the company has successfully created a new design that enables the consumers to feel unique holding the NDS. With the special features of the new product, Nintendo would definitely be able to create a new appeal to male and female social gamers as the company captures the market segment of gaming fanatics. Decision-Process Influences Basically, better product quality particularly its features, design, and innovativeness very much influences the consumer to purchase Nintendo DS. Despite the high price of Nintendo DS, consumers considers more persuaded and convinced to purchase the product because of the sense of uniqueness and high gaming quality standards they get out of it. Pricing Pricing is a very sensitive issue when it comes to the success of marketing. Regardless of the product line, specifically the customers’ perception regarding the value of the product is one of the most important determinants of the price. In the case of Nintendo, the company managed to measure the acceptable pricing for NDS by analyzing the customer value accounting with the performance quality that Nintendo DS offers to its loyal customers including the psychological benefits the social gamers could gain. (Gale and Swire, 2006) External Influences Considering that most of the target markets of Nintendo are mostly from the developed countries like the United States and Europe, the target consumers or Nintendo’s market segment are more concerned with the quality product they consume more than the price. So long as the pricing of Nintendo DS is highly competitive with its four major competitors’ prices, there is a bigger possibility that the target consumers would patronize Nintendo DS. Normally, it is the head of the family that evaluates the price of Nintendo DS. Upon evaluating the price of Nintendo DS, the evaluator normally checks on the product’s overall quality with the price. Based on the continuous growth in sales despite the current price of Nintendo DS and the limitations of its competitors’ product lines, there is no need to lower down its market price. Internal Influences In general, the price of Nintendo DS can be acknowledged as an indicator of socio-economic status of its enthusiastic consumers. Consumers of Nintendo DS unconsciously have in mind that the best handheld game is already in their hands. This gives them a special sense of belonging to specific classy high-end groups. In line with this matter, lowering down the price may only affect negatively the psychological perception of most of its target consumers. Considering the overwhelming attitude of Nintendo DS’ market segment towards Nintendo brands, it is highly advisable to keep its market price as it is. In the process, there is really no need to increase or decrease its market price. In the case of Nintendo DS, the target markets’ perception of a fair and reasonable price lies behind the highly innovated gaming products that suit the personal needs of the social gamers. Situational Influences The acceptable pricing greatly varies with the type of situation Nintendo DS is currently experiencing. Considering that the NDS is still at its peak in terms of grabbing a global market share, there is still no need to make some adjustments with regards to its asking market price. However, when the sales performance of the product eventually decline and becomes stagnant at the bottom, there is a need for the company to develop a new marketing strategy to boost its sales again. Decision Process Influences A low price can be used to address problem recognition. However, it should be the last resource in the case of Nintendo DS. Other more important factor that ‘Nintendo DS’ marketers should focus include the promotional activities and advertising. There is a great possibility that the advertisers have not been able to effectively persuade more potential buyers to look into the product more closely. In this case, marketers should conduct another thorough review on its promotional strategies. Another possible cause of market failure is improper market distribution. Even if potential buyers are willing to purchase the product at its market price, consumers will not be able to make a purchasing decision in case the product is not easily accessible to its consumers. Pricing is usually considered as an important evaluation criterion for typical consumer products. It is less likely to be looked upon when selling a specialty product like the Nintendo DS. High quality technology normally corresponds with the price especially when the company is monopolizing the production of the product. In case one of Nintendo’s four major competitors in the handheld gaming manufacturing is able to develop a better quality than what Nintendo could offer to the public, that is the only time when Nintendo should seriously review its pricing and product quality in order for them to be able to retain its huge global market shares. It is possible for consumers to respond to an in-store price reduction up to a certain point only. When the price reduction goes well beyond its production’s break-even-point, there is a huge possibility that the company would eventually face a serious internal financial problem in the near future. Such price reduction would also unconsciously make its loyal customers who have bought the same product at a much higher price feel bad about having had paid the high price. Therefore, adjusting the market price of Nintendo DS should be carefully studied prior to making any decisions with the product’s pricing strategy. Distribution Strategy Depending on the product positioning, the marketers should carefully decide on the distribution strategy such as the selected outlets and location for the selling of Nintendo DS product line. External Influences The impact of market segment on product distribution for Nintendo DS is great. Basically, it is the market segment including the socio-economic status of most individuals within a certain geographic area that dictates the potential market distribution to the marketers. A geographical region with a high number of young individuals belonging to an acceptable socio-economic status is considered the best market distribution sector for Nintendo DS. Regardless of whether the number of single individuals or single parents is high in a target region, in case these individuals are relatively earning more than the minimum amount of money they need to survive each day, it is still possible to sell Nintendo DS to such group of people. Internal Influences When conducting a market distribution for Nintendo DS, marketers should consider its desired product positioning based on the purchasing capability of the people within the chosen area. Therefore, the selected outlets for Nintendo DS can be perceived as a factor that could enhance the marketers’ desired product position target. Alternative market distribution such as the use of e-commerce is already highly acceptable by the new generation. For this reason, relying on e-commerce as one of the major market distribution for Nintendo DS should not be a problem. Situational Influences Particularly the desired features for the market distribution system for Nintendo DS could vary depending on the situation. Considering that the official market for this product is highly concentrated in developed countries, the company could be losing a lot of business opportunity by not extending the NDS to limited areas in developing countries considering the fact that there are still a large number of individuals who lives in developing countries that can easily afford a unit of NDS. Decision Process Influences Marketers should carefully plan the market distribution of Nintendo DS in such locations that is very close to where most of the potential consumers are situated. Having several market outlets within the close proximity to where the target buyers live and go is considered to be the best spot to market these products. Basing the location on population alone does not promise a good sales outcome. The markets should consider the purchasing capabilities of the people close to the chosen location of the outlet. Promotional Strategy Marketers for Nintendo DS need to consider the best promotional and advertising strategy suitable for the product. Marketers should be able to choose the best communication tool that could enable them to reach the individuals who are social gamers. External Influences There is a saying that marketers should be wherever the target consumers are. Considering that Nintendo DS is related to computer games, one of the best marketing communication tools for this product is the use of lifestyle communication medium such as the Internet (DooYoo, 2007). Aside from the exclusive magazines related to gaming and computers’, news release and articles as well as the traditional television advertisements (Captain, 2006) are considered to be the best choice for advertisements. When communicating NDS to its target market, the marketers should pay extra attention to the non-verbal communication such as gestures, facial reaction, etc. Non-verbal communication could highly affect the target markets’ perception regarding the NDS as much as verbal communication such as writings or spoken words does. Establishing a Nintendo DS club is the best way to gather all DS fanatics to meet and enjoy the gaming experience offered with the Wi-Fi capabilities of the product. By establishing a DS club, it is easier for the company to allow its avid consumers to spread the good news regarding the product quality. Nothing beats the ‘word-of-mouth’ advertisements since it is a form of testimonial which the listeners would normally believe. When conducting exclusive advertisements for NDS, it is best that the marketers or advertisers use some personalities of both genders in order to influence the mentality of the readers that the product is non-gender bias. Internal Influences One of the main selling strategies used by Nintendo DS is the special added feature that NDS have over the old Nintendo handheld gaming such as the Game Boy, etc. Informing the target consumers with the high technology that NDS could offer has been widely used by the company in order to motivate its target market to purchase a unit of NDS. The lifestyle that is being portrayed in the company’s advertisements is in accordance to the consumers’ desired lifestyle and personal image. Situational Influences In general, the marketing and promotional campaign strategy used by Nintendo is appropriate enough to reach its particular target market. Each promotional and marketing strategy used to convince the target consumers to purchase the product is effective enough to convince the target consumers to purchase at least one unit of NDS. Decision Process Influences There is not much problem when it comes to Nintendo DS product recognition. The company’s avid consumers have been actively encouraging their friends to patronize the NDS. On top of the ‘spread-of-mouth’, the company has been relying on Internet, magazines, news articles, and television advertisements to reach out to the rest of the potential NDS consumers. For many years, Nintendo being the leader of gaming handheld device has already successfully set a record to its brand name. Today, Nintendo as a brand name is quite good enough to convince the target market to purchase their product aside from the good quality and innovation that the company has invested in order to deliver the best gaming experience to its avid consumers. As a result, its old time consumers are more likely to remain loyal to Nintendo brand as well as having a firm decision to purchase another newly innovated gaming product in the near future. Product In general, Nintendo DS is a product that is good enough to sell on its own. External Influences Nintendo DS is designed to suit the needs of all the members of the family regardless of age, sex, nationality, race, and cultural differences. NDS being an innovating product enables the players to use Wi-Fi connection in order for them to be able to play with other people of their own interests. Depending on the personality type of each individual, the product is also available in different colours in order for the product to fit in the personality type of its consumers. Internal Influences NDS is a product being is perceived by the consumers consistently with the desired image set by its marketers. The image of being sophisticated comes along with the product quality and its price. Considering that NDS is the first gaming handheld device that has the design of the iPod feature, consumers of NDS are mostly satisfied with purchasing the product. Situational Influences The product design is very flexible. It can be used based on the players’ chosen type of game available in the market. Decision Process Influences One of the product advantages of NDS is its gaming performance over other alternative gaming devices such as PS2, etc. Aside from being potable and handy, NDS has double wide screen that enables the players to enjoy their gaming experience better than the available alternative devices. Conclusion NDS is one of the most promising gaming devices as of the 20th Century. In order to effectively conduct a consumer behaviour audit, the researcher has to pay close attention to the product mix or the 4 P’s namely the price, product, promotional activities, and place (market distribution). Under each category, the researcher has to conduct an in-depth analysis regarding its external, internal, situational, and the decision process influences. In general, the four categories in the product mix are all inter-related. For this reason, the researcher has to consider all the connections or link that could affect the decision-making of the target consumers. As a result of the consumer behaviour audit for NDS, the researcher concludes that the product itself is readily acceptable by the consumers because of the high-quality gaming experience it offers to the public consumers. *** End *** References: Becker, David. “Nintendo DS a Sales Sensation.” 1 December 2004. C/Net News. 12 September 2007 http://news.com.com/Nintendo+DS+a+sales+sensation/2100-1043_3-5472919.html Captain. Nintendo Set for Unprecendented Wii Marketing Campaign: Nintendo Moves You in a New Campaign, Aimed Heavily at the Internet. 24 September 2006. 12 September 2007 http://www.aussie-nintendo.com/?v=news&p=5267 “Design Translator.” 25 June 2006. 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Nintendo DS Frequestly Asked Questions. 12 September 2007 http://www.nintendo.com/consumer/systems/ds/faq.jsp Plunkett, L. “Rumor: Another DS Update in 2007?” 2006. Kotaku. 12 September 2007 http://kotaku.com/gaming/nintendo-ds/rumor-another-ds-update-in-2007-222491.php Rojas, P. “The Engadget Interview: Reggie Fils-Aime, Executive Vice President of Sales and Marketing for Nintendo.” 20 February 2006. Engadget. 12 September 2007 http://www.engadget.com/2006/02/20/the-engadget-interview-reggie-fils-aime-executive-vice-preside/ Wales, M. “Sonic Rush Adventure UK Review.” 7 September 2007. ign.com. 12 September 2007 http://ds.ign.com/articles/818/818572p1.html Read More