Source: Kotler, Adam, Brown and Armstrong (2003). Principles of Marketing, 2nd Edition, Prentice-Hall
The picture below is courtesy of source: http://www.reppel.co.uk/marketing-theory/the-marketing-mix-4ps-7ps-or-what.html
The Micro-environment
The microenvironment includes those forces that impact on the Nintendo’s ability to serve its customers. These are often referred to as internal forces as the company has direct contact with them. Nintendo has the potential for level of control over these forces and may be able to reverse or lessen the impact of a negative trend or encourage a marketing opportunity. Nintendo should take these forces and trends into account when developing a marketing strategy.
Included in the microenvironment are the following factors:
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Nintendo’s own internal environment
In developing marketing plans, Nintendo must consider the other departments within their organisation, such as top management, finance, research and development, purchasing, manufacturing and accounting. All these departments have their own objectives that must be considered and many of them will provide information relevant for the marketing plan.
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The marketing channel firms
Suppliers and intermediaries need to be examined before Nintendo develop a marketing strategy as their activities can significantly impact on the organisation. Suppliers product availability needs to be monitored as do their price and overall performance. Suppliers and intermediaries that appear to be becoming less `amicable' over time may need to be reviewed. Intermediaries are firms that assist in the distribution process and their performance and attitude towards the product need to be monitored closely as they often have direct contact with the end customers.
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The relevant customer markets
Nintendo must examine all five of its customer markets closely and look for changes in their particular needs and wants. These markets include:
Consumer markets - individuals and households that purchase goods for their own consumption
Industrial markets - organisations that purchase for use in their production process
Reseller markets - organisations that buy goods and services to resell them to the end consumer
Government markets - government agencies that purchase goods to transfer them to their customers who need them.
International markets - overseas buyers including any of the above categories.
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Competitors
For Nintendo to be successful they need to satisfy consumers needs and wants better than their competitors. Therefore it is important to monitor the trends and behaviour of Nintendo’s competitors e.g. Sony Playstation Sega. Identifying customers' perceptions of Nintendo’s competitors and their strengths and weaknesses is important.
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Nintendo’s publics
A public is any group that has an actual or potential interest in, or impact on, Nintendo’s ability to achieve its objectives. These could be financial, media, government, and citizen-action, local, general or internal publics. Increased attention from these groups may require Nintendo to make changes these marketing strategy.
Source: Kotler, Adam, Brown and Armstrong (2003). Principles of Marketing, 2nd Edition, Prentice-Hall
Definitions of marketing
There are many definitions to marketing
Marketing is the management of exchange relationships (Philip Kotler)
How this definition relates to Nintendo?
This definition relates to Nintendo in many ways, this definition
Emphasises the role of marketing in relating to the world outside Nintendo.
All relationships between Nintendo and the outside world, especially
When they relate to customers, need to be managed. The organisation will
Be judged by customers, suppliers, competitors and others experiences.
· Marketing is the management process which identifies, anticipates and
Supplies customer requirements efficiently and profitability (CIM)
How this definition relates to Nintendo?
This definitions relates to Nintendo in various ways, this definition
From the CIM highlights the wide scope of marketing, ranging from
Initial identification of customer needs by means of research, right through
To eventual profitable satisfaction of those needs.
Marketing is concerned with meeting business objectives by providing
Customer satisfactions
How this definition relates to Nintendo?
This definitions is important to Nintendo because it stresses the
Importance of the customer and more particularly, customer satisfaction.
When people buy products or services, they do not simply want the products,
They also want the benefits from using the products or services.
Products and services help to solve a customer's problems. It is the solution
To these problems that customers are buying.
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organisational goals: (AMA)
Business Basics for Degree Students
Marketing process
The marketing process currently adopted by Nintendo Group is relationship marketing; relationship marketing is the dual aim of getting and keeping customers. Traditionally much of the effort of marketing has been directed towards the getting rather than the keeping of customers. Relationship marketing aims to close the loop. I have made this decision because in the case study the Never get old theory of Nintendo is mentioned were Nintendo target a certain audience) the current marketing process adopted by Nintendo is the sales technique were how they sell a product and how they keep a customer is important to. I have this decision because in the case study it is mentioned that Nintendo will need to do co-operative deals with entertainment providers.
The marketing element currently adopted by Nintendo Group is the relationship Marketing Era-
What is the marketing era? Period in which product and aggressive selling were no longer seen to suffice if customers either did not desire a product or preferred a rival band, and in which customers needs were identified and satisfied. The case study mentions customer specification such as (never get old theory) Nintendo identifies the wants of adult customers (target audience) satisfies them.
Nintendo is concerned with meeting business objectives by providing
customer satisfactions
This marketing process is important to Nintendo because it stresses the
importance of the customer and more particularly, customer satisfaction.
When people buy products or services they do not simply want the products,
they also want the benefits from using the products or services.
Products and services help to solve a customer's problems. It is the solution
to these problems that customers are buying.
Source: Dibb, S., Simkin, L., Pride, W., Ferrell, O. C. (2001) Marketing: Concepts and Strategies, 4th European Edition, Houghton Mifflin Company.
Marketing concept
AIDA stands for Awareness, Interest, Desire, The AIDA theory relates to Nintendo in various ways as how they sell their products, Games for example.
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Firstly Nintendo make their consumer aware that the product exists and then inform them about what it does catching the target audiences attention
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The next stage used by Nintendo is to stimulate interest from the consumer by explaining what special features it has or how it will satisfy their wants and needs. This is often the stage that creates either a favourable or unfavourable reaction to the product.
Once Nintendo have consumer interest they need to create a desire for the product by expanding on the benefits and how it will satisfy wants and needs. This stage is dependent on capturing their interest.
Once the consumer desires Nintendo’s product Nintendo need to stimulate some action from them such as 'call this number now' or 'click here to find out more'.
Relationship marketing
Relationship marketing relates to Nintendo in various ways according to the case study Nintendo are a company who competing aggressively for a market share this indicates Nintendo want to keep their customers.
According to the case study
Nintendo focuses on developing a close relationship with its customers, by identifying and satisfying its needs. Nintendo have focused on new promotional ideas such as identifying adult customer needs and satisfying such as the Infogenius software.
In addition, Nintendo may use various other elements of the marketing concept such as the 4P,s Price Place, Promotion, Product
- Product
- Price
- Promotion
- Place
Nintendo can plan a promotion for the right product, at the right price, and to get it to their chosen market, in the right place.
Product
A product can be either goods or a service that is sold to either a commercial customer or an end consumer. A customer buys a product, and a consumer uses it. For example, takeaways might buy meat from butchers, so it is a customer. Then the takeaway will sell the meat cooked as a Kebab to various targets. These targets are the end users
Nintendo will identify who their target market is, what they want, and sell their product to them.
Nintendo may use their product to provide a service as well for example a gaming centre Nintendo can delay the release of a product and wait for competitors product to saturate or Nintendo may observe competitors product in the delayed time. Another option Nintendo could use is to release the product early or in a special time such as Christmas and Easter and demand a high price.
Price
No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a Nintendo console with all accessorises than for x-box with no quality accessorises. On the other hand, if one console is worth more than another, and if so, how much?
Nintendo should use skim pricing or premium pricing initially, in order to maximize its profits. This is useful, as it will help them to recover expensive research and development costs quickly.
Promotion
The main aims of promotion are to persuade, inform and make people more aware of a brand, as well as improving sales figures. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost. As Nintendo is an international company, it would market its product by advertising on international televisions station such as sky. Furthermore, the Internet is an excellent source of advertising, which Nintendo could use or may use to market its product such as advertising on search engines
Nintendo may use sponsorship and public relations to improve their image, notably through financing sports, the arts and public information services.
Place
Distribution channels are the key to this area. Nintendo may have to find the most cost-effective way to get the product to the consumer. Direct marketing through catalogues, via a TV shopping channel and through the Internet have become popular, because the consumer can shop from home. This is also cheaper for Nintendo.
Nintendo may cut out the middleman i.e. wholesalers and high-street retailers in the process, and can therefore make more profit. Going through wholesalers and high-street retailers, however, is the most popular form of distribution, as that is still where most people shop. As technology is developing, super, fast Nintendo may decide to use E-commerce to gain a competitive advantage.
Source: Source: Dibb, S., Simkin, L., Pride, W., Ferrell, O. C. (2001) Marketing: Concepts and Strategies, 4th European Edition, Houghton Mifflin Company.
Marketing approach
An effective marketing approach will certainly boost Nintendo’s sales and
Increase Nintendo’s profit margins, which is the goal of every business
Nintendo must be able to convince customers that they have the best product or
service for the best possible price. If Nintendo cannot
convince potential customers of this, then Nintendo are wasting
time and money. This is where the marketing philosophy comes into play,
In addition, this is why it is so important.
The marketing approach is an excellent tool for identifying and developing strategies for extracting these advantages. (See below for advantages)
The marketing approach is a plan of how Nintendo will market their product or service. For example, all football teams do a plan on how they will play a game of football that plan is their approach or plan. Nintendo may adopt a marketing approach; a marketing approach has many benefits and costs
The benefits of the marketing approach
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Identifies needs and wants of consumers for example Nintendo know the need of their 18-40 years old through the marketing approach
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Determines demand for product for example Nintendo will know how much demand there is for the new Info genius software
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Aids in design of products that fulfill consumers needs for example a Nintendo consumers want specially designed consoles i.e. in the colour of their best football club
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Outlines measures for generating the cash for daily operation, to repay debts and to turn a profit for example Nintendo do skim pricing or premium pricing to help pay for debts
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Identifies competitors and analyses your product's or firm's competitive advantage for example Nintendo know about other competitors new and old furthermore they were their product is and how successful it is
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Identifies new product areas for example Nintendo will know which area their product can be marketed next for example from Japan & USA to Europe
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Identifies new and/or potential customers for example Nintendo have the knowledge of a new target audiences and know how their next target audience is like
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Allows for test to see if strategies are giving the desired results for example Nintendo are going to use a promotion they will test it in a certain area using the marketing philosophy
Some of the disadvantages of the market approach are:
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Identifies weaknesses in Nintendo’s business skills for example when Nintendo released Nintendo 64 a few years ago if they used the marketing approach they would have known that the Sony Playstation is better hence making the whole organisation feel unconfident.
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Leads to faulty marketing decisions based on improperly analysed data for example members of Nintendo staff carry out questionnaires with result showing that 18-40 years old are interested in Tom & Jerry cartoon type games
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Creates unrealistic financial projections if information is interpreted incorrectly for example Nintendo say they have millions to spend on their next project when they only have hundred of thousands to spend.
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Identifies weaknesses in Nintendo’s overall business plan for example Nintendo know how weak they are against rival’s such as Sega Microsoft (X box) this will influence Nintendo to not take a risk.
Market segmentation
When a company decides to target a certain audience instead of all the market like Nintendo and the Never Get Old theory it is called Market Segmentation.
Market segmentation is the division of a market into distinct groups of buyers who might require different products or marketing mixes (Kotler et al, 1994).
figure 2: segmenting consumer markets (jobber,2001:p188)
In other word, it is separating the market into buyers with different needs & wants into buyers with similar needs & wants. Like Pokemon games for kids and James Bond games for adults.
There are different types of market segmentation which Nintendo may decide to adapt. Nintendo may decide to segment the consumer market.
Types of segmentation and how Nintendo will use them
Source: Neal, W.D. (2001) "Segmentation as a Business Strategy Does Work" Marketing Research, 13(2), pp 45-47
Geographical segmentation
Nintendo may decide split the market into different geographical categories e.g. Counties, cities countries, where Nintendo focuses on the geographical differences in needs and wants. For example, there may be a greater need or need for ice cream all year in New Zealand the Iceland.
Demographic segmentation,
Nintendo may decide to divide the market into groups depending on density, location, age, sex, race, occupation & lifestyle
Nintendo may decide to use a city rather than a town to market their product because this is were Nintendo’s target audience I.E. college university students
Psychographics segmentation,
Nintendo may decide to divides buyers into groups based on social & economic status, lifestyle or personality characteristics. For example, Instead of Marketing their product to people in a village Nintendo may decide to market their product because of the lifestyle and sources available to both consumers and Nintendo i.e. electricity is less in some villages so Nintendo would decide to use a city to market because of good source electricity. Nintendo may also decide not to market their product in some counties were citizens believe computer console use is time wasting and illegal.
Nintendo may decide to separate the market, depending on consumers: product knowledge, usage, attitudes or responses. For example Nintendo may produce specially designed Joy Pad for people with arthritis. Some equipment may harm potential consumers so Nintendo will target these problems and segment them and produce personalised equipment to satisfy these consumers needs.
Target marketing
A target market is a set of buyers with common characteristics, which a Nintendo decides to serve. Nintendo may target markets in different ways such as
Undifferentiated Marketing, a marketing philosophy in which the seller views the market as an identical completely, and, therefore, has only one marketing program (the same product, the same price, the same promotion and the same distribution system) for everyone
Nintendo may decide to use undifferentiated marketing, for example, Nintendo may decide to serve the market as a whole and focuses on regular customer. This technique is nonsense because Nintendo will not be able to satisfy all the market.
Differentiated Marketing -the division of a mixed market into relatively identical segments so that the needs and wants of the different segments may be served more effectively; a segmented approach to marketing.
Nintendo may decide to use differentiated marketing Nintendo may decide to use this technique so that they can approach the market with different marketing techniques approaches and mixes. For example, Nintendo will target children’s audience with a different marketing mix and a adult audience with different marketing mix.
Concentrated Marketing. - a marketing segmentation strategy in which the firm concentrates its entire efforts and resources on serving one or more segments of the market.
For example, Nintendo concentrates on a large share of one or more segments i.e. like identifying needs of 18-40 years olds and satisfying them using all resources.
Source: Neal, W.D. (2001) "Segmentation as a Business Strategy Does Work" Marketing Research, 13(2), pp 45-47
Marketing mix strategies
In addition, Nintendo may use various other elements of the marketing concept such as the 4P,s Price Place, Promotion, Product
- Product
- Price
- Promotion
- Place
Nintendo can plan a promotion for the right product, at the right price, and to get it to their chosen market, in the right place.
Product
A product can be either goods or a service that is sold to either a commercial customer or an end consumer. A customer buys a product, and a consumer uses it. For example, takeaways might buy meat from butchers, so it is a customer. Then the takeaway will sell the meat cooked as a Kebab to various targets. These targets are the end users
Nintendo will identify who their target market is, what they want, and sell their product to them.
Nintendo may use their product to provide a service as well for example a gaming centre Nintendo can delay the release of a product and wait for competitors product to saturate or Nintendo may observe competitors product in the delayed time. Another option Nintendo could use is to release the product early or in a special time such as Christmas and Easter and demand a high price.
Nintendo may decide to modify their product and use different strategies when producing the product to meet specific user needs for example customers may experience the product before buying
Nintendo may decide to modify or differ the strategies for the following quantities, timing, product variation, quality, style and packaging. In order for a product to hold its prestige in a given market segment it should be of consistent quality.
Price
No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a Nintendo console with all accessorises than for x-box with no quality accessorises. On the other hand, if one console is worth more than another, and if so, how much?
Nintendo should use skim pricing or premium pricing initially, in order to maximize its profits. This is useful, as it will help them to recover expensive research and development costs quickly.
Promotion
The main aims of promotion are to persuade, inform and make people more aware of a brand, as well as improving sales figures. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost. As Nintendo is an international company, it would market its product by advertising on international televisions station such as sky. Furthermore, the Internet is an excellent source of advertising, which Nintendo could use or may use to market its product such as advertising on search engines
Nintendo may use sponsorship and public relations to improve their image, notably through financing sports, the arts and public information services.
Place
Distribution channels are the key to this area. Nintendo may have to find the most cost-effective way to get the product to the consumer. Direct marketing through catalogues, via a TV shopping channel and through the Internet have become popular, because the consumer can shop from home. This is also cheaper for Nintendo.
Nintendo may cut out the middleman i.e. wholesalers and high-street retailers in the process, and can therefore make more profit. Going through wholesalers and high-street retailers, however, is the most popular form of distribution, as that is still where most people shop. As technology is developing, super, fast Nintendo may decide to use E-commerce to gain a competitive advantage.
People
All people directly or indirectly involved in the consumption of a service, e.g. employees or other consumers Nintendo might differ how their workers appear towards their customers
i.e. uniform. In addition, attitudes how People represent Nintendo, may decide to use different strategies when involved with potential customers and suppliers
Process
Procedure of activities by which services are consumed i.e. how the lifecycle of Nintendo product is processed. Nintendo might differ this strategy to make their life cycle of their product longer. Nintendo may observe How their customers consume their services. Nintendo may decide to modify this to make it is easy to use e.g. better user manuals
Nintendo may decide to make all resources of their product available to their consumers
Physical Evidence
The environment in which the service is delivered, Nintendo may change how and which environment their deliver their product. Nintendo may decide to release their product in Europe first and then Japan afterwards. Nintendo may decide to choose a completely different environment to market their product i.e. different lifecycle
Source: Hill, C.W., and Jones, G. R. (2001) Strategic Management Theory, 5th ed, Boston, Houghton Mifflin.
Recommendations
Nintendo must target the Western world's growing ageing population, as it represents a potential source of high revenues in the near future. Nintendo should try to target a mature audience as this will help to keep games consoles form saturating
Nintendo should must emphasis their product more when they go into Asia, Nintendo should do market research on issues such as culture and lifestyles of their target audience
The developed world has increased use of the Internet, and the success of online gaming software illustrates that Nintendo needs to develop a stronger online presence.
Nintendo should consider whether or not to promote the product in countries such as southern Asia were there are very less TVs and entertainment is regarded as forbidden in some cultures so promoting the product in southern Asia is a major risk.
I would also recommend Nintendo take the 4cs into account
Countries: Nintendo would have to consider the culture of all the countries the currency and then produce plan. Nintendo will have to research the competitors within the countries so they know what they are heading for. The corporation is Nintendo customer were they learn more the company and offers.
Personally, I would recommend Nintendo research the macro and microenvironment identify the advantages, problems, and trying tackling these first for example science and technological problems. Secondly, I would recommend Nintendo research the benefits and cost of the marketing approach. Thirdly I would recommend Nintendo segment the market and satisfy needs of that segmented area e.g. Nintendo segment the age group and satisfy it Never get old Fourthly, I would recommend Nintendo target the market and look at issues such as: The size and purchasing power of the segments must be measurable. Nintendo must be able to reach and serve the segment.
The segments must be large or profitable enough. The segments must be suitable for the design of effective marketing mix programs. Fifthly, I would recommend Nintendo test and analyse the marketing mix. Sixthly I would recommend Nintendo implement their product in one market segment and see how successful it is.
Reference:
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Kotler, Adam, Brown and Armstrong (2003). Principles of Marketing, 2nd Edition, Prentice-Hall
-
International Market Research Information,
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Holden Ltd 2002,
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Glossary
A
B
C
D
E
F
G
H
I
Intermediaries - independent firms which assist in the flow of goods and services from producers to end-users; they include agents, wholesalers and retailers; marketing services agencies; physical distribution companies; and financial institutions. Also referred to as Middlemen. See Marketing Channels.
K
L
M
Marketing Plan - a detailed, written account and timetable of the objectives, methods to be used by a firm to achieve its marketing goals
N
O
Objectives - specific, measurable outcomes or results that an organisation plans to achieve in a given period.
P
Q
R
S
Suppliers - individuals or organisations from which businesses purchase the goods and services they require to operate
T
U
V
W
X
Y
Z
* Note all work in italic is subject to being sourced
