Another important concept that the case covers is the idea of product development and innovation. The release of the Wii was a savior for Nintendo who had recently released the Nintendo Game Cube, one of the largest failures of a video game console ever. Nintendo wanted to make sure that the same thing did not happen to the Wii, they carefully proceeded through the new-product development process to ensure that the Wii would be a success. The first step of this process was idea generation. Nintendo had thousands of ideas for their “next” video game console, however it wasn’t until the next step of the process, idea screening, that the Wii was chosen. Once the Wii was chosen as the model that Nintendo wanted to proceed with they had to develop a working and introduce it to test groups to ensure that it would be a desirable product. Once Nintendo has made sure that the Wii would be successful on the market they had to begin preparing a marketing strategy for its release. Nintendo needed to develop a target market, as well as coming up with a proposed market share and product goals for the first few years. Once the initial planning is done Nintendo had to then outline the proposed marketing mix and budget for the product. Once all this was accomplished the project was forwarded to Nintendo executives for their final approval.
Finally one last issue, and probably the most relevant idea that the case covers for Nintendo today is the product life cycle and the different stages of the Nintendo Wii. Following the product development cycle Nintendo had to pay close attention to the Wii’s product life cycle to ensure that the product maintained its vitality. In my opinion the Nintendo Wii did not really have an introduction stage. If anything the introduction was all done through marketing prior to the actual release of the Wii. When the Nintendo Wii was first released in November of 2007 it exploded with popularity and it was almost impossible to get your hands on one. This incredible sales period lasted for the first six-months or so, which in my opinion was the growth stage of the Nintendo Wii. The Nintendo Wii is currently in the maturity stage of the product life cycle. Sales have slowed down and the Wii is widely accepted throughout the market place. It is now time for Nintendo to begin thinking of ideas to revitalize the Wii, which they have been doing, as the life cycle of electronics and developing technology is notoriously short lived. If Nintendo is not careful the Wii will fall into the decline stage and will most likely disappear over-night, replaced by the newer and better video game console.
Discussion Questions
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Was Nintendo just lucky, or does the Wii’s success have strategic merit?
Nintendo strategy concerning the Wii was ingenious. Nintendo realized that it could not afford to keep up its attempts at competing with Microsoft and Sony. So instead of playing their “game” and continuing to keep creating more advanced technology to put into a video game system Nintendo decided to instead recreate what it means to play a video game. They realized that they couldn’t make a better product, so by changing the way in which the product is used they created a whole new market at their control. By changing their focus away from the game but the experience Nintendo created a unique strategy that is now synonymous with their name.
Nintendo developed the Wii with a very specific design and marketing strategy in place. It is because of this strategy that the Wii has turned into the household item it is today, one that is continuing to make its presence known throughout the world.
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Has Nintendo put the “fad” questions to rest? State a case as to why the Wii is or is not here to stay.
Nintendo has been pulling out all the stops and investing a great deal of money in order to ensure that the Nintendo Wii’s success does not fade away like most other video game consoles of the past. Nintendo has already produced its classic games (Mario, Zelda, etc.) for the Wii already, so in order to maintain a constant string of new games they have partnered with two outside companies to bring two very popular games (Final Fantasy, Capcom) to the Nintendo Wii. It is Nintendo’s hope that “the release of these titles will do more than appeal to traditional gamers. It will elevate the Wii’s image […] to one that will run the industry’s most advanced games.”3 By expanding their video game genre and producer base Nintendo is opening their product up to an ever growing market of people will different interests and wants.
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In which stage of the product life cycle is the Wii? Based on that stage, is Nintendo employing good marketing mix strategies?
The Nintendo Wii is currently in the maturity stage of the product life cycle. The Wii has been on the market for about two years now and the sales have peaked for the most part. The Nintendo Wii is now accepted as a great product, and the middle majority has begun purchasing the Wii for their use. The Wii is also considered to be a low cost to customers, while bringing in high profits for Nintendo. The cost of producing the Nintendo Wii is not high due to the lack of high-tech components, allowing the sales price of $250 to bring in decent profits for each unit sold.
Nintendo has been trying to bring non-gamers into the industry via the Wii, and by pushing the product in that direction they are able to set themselves apart from the competition. The final part of the Nintendo Wii marketing strategy is the sales promotions. Nintendo is consistently taking any opportunity to bring gamers over from the competition to the Nintendo Wii. By utilizing their price and advertising strategies as well this is becoming an ever growing reality.
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Develop a strategy for the Wii’s next product life cycle phase.
If the Wii is going to maintain a leading and edgy product they will need a defensive strategy that will help protect them from the decline stage of the product life cycle. The most immediate threat to the Nintendo Wii will be emerging technology and Microsoft and Sony utilizing that technology to draw customers back from Nintendo.
In my opinion Nintendo still has a few years left before the next generation of video game consoles comes to market. Unfortunately Nintendo cannot go back and redesign the Wii if it hopes to keep up with its competitors. Technology advancement is the one area that there is no redesign for, so in order to remain on the top Nintendo needs to already be looking for a new product to take over for the Wii when their competitors release their products. However in the meantime they need to ensure the Wii’s market share and continued profits.
These are a few suggestions for a strategy that I believe Nintendo will need to take if it hopes to remain on the top. By keeping the Wii edgy while creating a new product they will be able to maintain control of the market for a while longer into the future.
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Discuss the potential threats to Nintendo’s future success. What will help Nintendo avoid a premature decline for the Wii?
As previously discussed above there are several upcoming threats to Nintendo that will impact both Nintendo and the Wii’s future. The most immediate and important threat to Nintendo’s market dominance and the Wii is new and emerging technology. The entertainment industry is always looking for the newer technology, so unfortunately this means that the Wii has a limited lifetime that is characteristic of all video game consoles. In order to be prepared for this Nintendo needs to have their own R&D programs that are looking into newer technologies that can be applied to both the Wii and new products.
Overall the Wii will only have a lifespan of several years and Nintendo is going to get the most it can out of those years. Nintendo’s best bet to keep its market share is to keep its niche market and not try to directly compete with Microsoft or Sony for customers. Nintendo has a very loyal brand following and as long as they do not stray too far from their historical genres they will be able to keep that following. In addition Nintendo has done an excellent job of bringing in non-gamers into the fold, so as long as they keep it appealing for them they will be have their own audience that no one else has penetrated.
Conclusion
After analyzing the case and Nintendo as a company I have come to the conclusion that their strength lies in being unique or different from their competitors. In order for them to stay successful in the future I believe that they need to keep this uniqueness, both in their games and in their markets. As states above the Wii is not a traditional “gamers” console, but instead is designed for the usage by anyone. This has given the Wii a huge advantage over its competitors. Nintendo needs to remember this and capitalize on it by creating unique games that appeal to this huge untapped market. The number one selling game for the Wii today is the Wii Fit, an exercise game that has been spreading like wildfire because of the fun way it encourages people to lose weight. This is the kind of idea that Nintendo needs to work on developing and marketing as it will allow their products to reach so many more people than traditional video games would.
Bibliography
Kotler, Philip, and Gary Armstrong. "Nintendo: Reviving a Company, Transforming a Market." Principles of Marketing. 13th ed. New Jersey: Prentice Hall, 2008. 52.
Kotler, Philip, and Gary Armstrong. "Nintendo: Reviving a Company, Transforming a Market." Principles of Marketing. 13th ed. New Jersey: Prentice Hall, 2008. 285-87.
"The Nintendo Wii: Video Game System Fad or Revolution?, Page 2 of 2 - Associated Content." Associated Content - . <>.
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