Marketing Strategy for Nintendo Gamecube

Marketing Strategy for Nintendo Gamecube
This unit entitled ?Marketing? requires me to produce a marketing strategy for a new or existing product. The product that I have chosen to devise a strategy for is the forthcoming video games console, ?Nintendo Gamecube?, which is released in Europe on May 3rd 2002. I will have to carry out research about the principles of marketing; the way that close competitors will compete when the console is released; the strength of the brand name; possible marketing models/strategies; analysing the possible implications of external influences, etc. in order to produce a powerful strategy that will ensure that the product will do well in its market. obtaining information Information that will help me to complete this report can be obtained from a number of different ways. Some obvious methods that will be used throughout the report for obtaining data and information towards the formation of the marketing strategy are: ? The Internet: this method has become one of the most popular in finding information since there are many search engines available on the Internet as well as websites of the Nintendo company itself and many other sites designed by fans and video game players from around the world. The information provided is secondary data, but it can be very informative on enriching my knowledge about Nintendo?s console and marketing via the abundant sites devoted to Business Studies such as Biz/ed (www.bized.ac.uk) and Business Teacher (www.businessteacher.co.uk). ? Primary data: this type of data can be collected through observation and by carrying out primary research methods such as questionnaires, telephone interviews and personal interviews.
These will be useful as specific information can be extracted from the public. ? Information From Books: lots of information can be found in books about businesses and marketing. It is useful to extract knowledge from more than one book, since no one book will contain all information required. One book may cover something in more depth than another. For example, the ?Business Studies? book by Carlo Raffo et al. is more detailed and easier to understand than the Marketing textbook by Ian Swift, but the book by Ian has more analytical and evaluative technique, which are essential in this report. In order to prepare for the coursework, background information will need to be read from textbooks. The information can then be applied to the product and business being investigated. what I plan TO DO What I plan to do for this coursework is to collect as much information as possible about my product to understand about it first. Reading product reviews from the Internet, buying game magazines and talking with my friends about it will carry this out. I can then read the theory about marketing and the various aspects on the topic and apply the theory to what I know about the Gamecube and the market that it is running in as well as the competitors it faces. Strategies for the product will consequently be developed for the product throughout the report with the aid of analysing other firms? strategies and by collecting primary data and secondary data. problems enocuntered The main problem that was encountered in this report was time constraints. The obstacles that were present were revising for exams and the Swiss exchange, which both reduced the time I had in completing the project. I therefore had to work faster with this report and ensure that deadlines were met, even if it meant handing some areas a few days after! Extra time was also devoted to completing areas of the report due to the time constraints. This was certainly a new experience and something that I can learn from in the future. I found out how stressful it was in completing this report with about 4 other things to do at the same time! In addition I have realised that all this could have been handled slightly better if I planned out my plan and tasks more carefully! action plan Throughout the report, I kept a log and task plan to refer to. This allowed me to monitor how far I was in the completion of different tasks and also how much time I had left in completing it. It was especially useful during when the Swiss exchange was in action, as I could see how much work I had to still do and catch up on, in order to be on schedule. If I had not kept a log, I would have had to constantly read through the work I had done to see where I was and what I had done last. action plan for unit one report Dates: Task: Comment: Apr. 8, 2002 ? Choose the product for which the marketing strategy will be based on. ? Start gathering background information from the Internet and magazines/newspapers about the company that is manufacturing the product and also about the product itself. ? Start reading some theory about marketing from textbooks, worksheets, information sheets, and from the Internet. The product that I have chosen to produce a marketing strategy for is the Nintendo Gamecube. I have chosen this product as I am very interested in video games and am going to purchase the console when it is released so I thought it worthwhile to use a product that I am interested in! I have started to do some general reading about the product and the company by visiting some websites like www.nintendo.com, www.gamespot.co.uk, www.cube-europe.com and by reading some of the magazines such as the Nintendo Official Magazine and the ngc Magazine. In addition, I have started reading some theory on marketing by reading the ?Introduction to Marketing? section from the Marketing book by Ian Swift, the ?What is Marketing? section in the Business textbook by Carlo Raffo et al., and ?The Principles and Functions of Marketing? section in the Advanced Business Textbook by Dan Moynihan and Brian Titley. Apr. 10 ? Create a plan for the report and an action plan to show how the report will be completed and the tasks that need to be fulfilled throughout the duration. ? Produce a section titled, ?Information Gathering? to analyse secondary sources used during the course of the report. ? Start writing up an introductory section about Nintendo and the Nintendo Gamecube. This plan and log was created. However, it is very liable to changes throughout, if some tasks are unable to be completed due to time constraints. At this time, I am already aware of two time constraints: the first is that I am involved in the Swiss Exchange and the Swiss students are coming over for a week from April 24 to May 1; the second is that the AS examinations are very close (the first one being on May 13) and so revision time will also need to be taken into consideration. It is too early to predict how these constraints will affect this report and I will comment on them later on in this log. Like the unit one, I have started producing an ?Information Gathering section? to analyse the sources that I have used. In addition, I have managed to start typing up the section about Nintendo and Gamecube using information from the Internet and promotional leaflets from hmv, Bluewater and Dixons, as well as magazines. Apr. 13 ? 14 ? Commence writing up an ?Introduction to Marketing? section, detailing the principles of marketing and a summary of some key features. ? Read theory on market research from textbooks, books, worksheets, etc. ? Talk with friends about their views about the Gamecube and Nintendo in general. After reading the theory behind the basic ideas of marketing, I started to type up this section. I found the terms fairly easy to understand and concepts used, quite accessible. This is probably because I recently bought a handbook called ?The Complete A-Z Business Studies?, which I have found very useful for quick reference of terms and jargon. I also began reading the theory behind market research. Reading this part was fairly straightforward, as I have taken part in many of these, including telephone interviews, questionnaires and customer surveys. I have also managed to talk with friends at school about what they think about Nintendo and its latest console, during lunchtime in the canteen and during free periods. Some of the information I have picked up can possibly be used in the presentation, and also in the decision of an appropriate strategy. Apr. 15 ? Start typing up section on market research. ? Plan a rough questionnaire that could be used to collect primary data from the public. ? Decide on an aspect of the marketing strategy to present to the class via a PowerPoint slideshow presentation. Start reading some theory for this aspect. I started to type up this section on market research, but have to leave gaps, while I decide which methods of field research to carry out. At the moment, the only confirmed method is the use of a questionnaire, as this is a very popular method and can obtain answers and data to specific questions. For my presentation, I have decided to choose price as my aspect of the marketing strategy. This is because I think price is a very important factor in the video games industry because of the amount of competition in this market. Apr. 27 ? 28 ? Start putting together some slides for the aspect for presentation. ? Produce the final questionnaire on computer, print it out and photocopy 25 sets, so that 25 members of the public can be asked. ? Find a marketing strategy for a service or product by interviewing an senior employee from companies such as Sony or Playstation, and judge it with reference to the principles of marketing. This week (Apr. 22 ? 26) has been quite difficult for me, because my Swiss exchange partner came over on Apr. 24 and will be staying here until May 1. I therefore had little time to do a lot of what I had intended to do, because I had to go on trips with the Swiss party and entertain them during the weeknights. I have only managed to put together a couple of slides for the presentation, which is to be done on Monday Apr. 29. I intended to have filled the slides with a lot more information then I have done. However, I know what I want to say and I can add more to the slides on Monday before the presentation, as I have time during the day. Overall, I was fairly satisfied with my presentation, but personally believe that it could have been one of higher quality if it were not due to the time constraints. Due to the Swiss exchange, I did not have time to print out the final questionnaire and photocopy it. Nor did I have time to find a marketing strategy to judge. Apr. 29 ? Gather data using my questionnaire from people at school who have an interest in video games. ? Read the theory on marketing strategies such as market penetration, market development and diversification as well as the use of the Ansoff Matrix and the Boston Matrix to make judgements about products sold by the business. Again, due to time constraints of the Swiss exchange, I could not do these tasks. Instead, I had to complete the unfinished tasks from the weekend, i.e. I managed to complete the questionnaire on computer and print it out. I also managed to photocopy 20 (not 25, due to insufficient paper!) copies of the questionnaire. I have also found some details on the Internet about the marketing strategies of X-Box and Nike. However, due to time constraints and pressures of exam revision, I could not carry out my original intention of interviewing senior employees from Sony or Microsoft about their marketing strategy. I think, that if I did this, the information would be a lot more detailed and specific to what I need than the information obtained from the Internet. May 2 ? Start typing up the section on marketing strategies, analysing each one in turn and then deciding which one best suits Nintendo for its latest console. ? Analyse results from the questionnaire, by displaying them in graphical format and by looking at people?s opinions overall. Today, I managed to gather data for the questionnaires produced from friends at school during a free period. The majority of my friends wanted to fill in the questionnaire as they are fans of video games and thought it exciting to have a say in this report! I also managed to start reading some theory on marketing strategies and the Ansoff Matrix. This section was new to me, so I had to read it a few times and compare information provided from different books with each other to fully understand it. Unfortunately, I have not managed to complete the tasks that were set for today. As a result, these tasks have been put back until next time! May 4 ? 5 ? Read the theory and start typing up the section on external influences and how these will affect the Nintendo Gamecube. I have managed to type up quite a bit of the section on marketing strategies. Analysis of the questionnaire has also been started, using Microsoft Excel to draw charts and graphs for the data collected. The decision of a strategy and control of the marketing mix can therefore be related to these findings. I have not managed to type up the section on external influences, but have had some time to read into the topic, as I have covered some of this information in unit 2 with Mr. Glover. Therefore, I already had some knowledge in this area, but here, I would have to apply it to the real world. May 11 ? 12 ? Complete typing up the section on external influences. ? Look into areas of the marketing mix. I have started to type up the section on external influences and have noted how any of these would affect Nintendo?s marketing strategy for their new console. I have also started to read about the different aspects of the marketing mix. May 14 ? Type up the marketing mix section I have managed to start typing up the aspect of price and also write a brief introduction about the marketing mix and its importance to a product?s success in a market. I also managed to find the Sony Corporate site on the Internet and have sent them en e-mail (see appendix for evidence) asking them some questions on their marketing strategy such as how they decided to market the Playstation to consumers. May 15 - Today, I got an e-mail reply from the Sony site concerning the questions I asked them about their marketing strategy. They said that they were not allowed to send this sort of sensitive information through the Internet and therefore offered to send me a marketing information pack through the post. I took the offer and replied with my postal address. Shortly afterwards, they replied saying that they would dispatch the information as soon as possible. May 17 ? 19 ? Continue typing up the marketing mix section I have nearly finished the aspect of price and have started the aspects of promotion, placing and distribution. The aspect of promotion was easy to understand as it is everywhere and we see it wherever we go. However, the aspect on distribution was slightly more difficult as I had never learned anything about it before. Consequently, I had to read a few textbooks about it and refer to a business dictionary to understand some of the jargon used by the sources. May 21 ? Continue typing up the marketing mix section and any other areas that have not been completed I have nearly finished the marketing mix section, although the aspect of promotion took longer to write up than originally thought! However, I have not yet received the information pack from Sony that I requested for last week and they have not sent any e-mail to me concerning any problems over it. Therefore this piece of information cannot be used in the report, but I believe that it would have been very useful in helping to decide the overall strategy for the Gamecube. In any case, I have included the e-mail contents between myself and Sony in the appendix. May 23 Hand the report into Mr. Glover Hand the report into Mr. Glover 2.0 information gathering Type of secondary source: Textbook Title: Marketing Edition: First Edition ? 2000 Company: Hodder and Stoughton Authors: Ian Swift This textbook was used throughout the report as a guide and aid for analysing and evaluating various aspects of marketing. Compared with the other sources, it did not contain as much detail about aspects of marketing such as the four Ps of the marketing mix. However, I found the way it showed me how to analyse and evaluate conditions in marketing very useful. This source is reliable as Business Studies examiners have written it for A level students, so the information would be useful. In addition, it was a recommended book by Mr. McCool, which made it even more reliable and helpful! Type of secondary source: Business Handbook Title: The Complete A-Z Business Studies Handbook Company: Hodder & Stoughton Authors: David Lines, Ian Marcousé and Barry Martin This Business Studies dictionary was extremely useful for quick reference throughout the report. If there was a business term that I did not understand like market capitalisation, I could just flick to the appropriate page and find a definition and explanation of the term and sometimes, there were diagrams to make the explanations even more clearer. The source is reliable as it has been written by two A level examiners and a University Head and has been designed for students doing A levels, gnvq and a degree level in Business Studies. Type of secondary source: Textbook Title: Advanced Business Company: Oxford Authors: Dan Moynihan and Brian Titley This was one of the main textbooks that were used in the completion of this report. The textbook was easy to use, because the information was easy to find as it is laid out in chapters and then sub-chapters. I found the ?key words? boxes through the unit sections very useful as it helped me understand the information they provided. It also made me familiar amongst the terms and vocabulary associated with businesses. A feature that I found beneficial was that they provided some appropriate websites to visit at the end of each chapter in the units, which allowed me to carry out additional research and background reading. When I cross-referenced this book with the Business Studies Book by Carlo Raffo et al., I often found that this Oxford textbook was slightly vague on topics such as the aspects of the four Ps. It explained the theory well and concisely, but I found the approach of using diagrams to re-enforce what the theory explains by the Business Studies book by Carlo Raffo more appealing. Then again, this source contained a lot of relevant information to the report, which was especially useful. This source is quite reliable since it is a school textbook specifically targeted at the avce course that is being studied and has only been published recently. It covers all the necessary units of the course and is written by examiners. Although at time, it can be simple and vague, it generally provided interesting and useful information. Type of secondary source: Textbook Title of book: Business Studies Company: cpl Authors: Dave Hall, Rob Jones and Carlo Raffo This textbook was extremely useful. It was very informative and there were lots of diagrams used to help illustrate the concepts, such as the one illustrating the different stages of market research. The information it provided was very detailed as it discussed the advantages, disadvantages, effects, and consequences of various aspects of business such as the different types of management styles that could be adopted. The main areas that were used from the book were information on: the four Ps, market research, the product life cycle and a table comparing advantages and disadvantages of different methods of promotion above the line. Most of the information was relevant to this unit, although the book was really aimed at AS/A Level students. I was able to understand the information they provided as they defined all the technical terms at the end of each unit and gave examples of what it meant through diagrams and case studies. This textbook was also strongly recommended by Mr. McCool and therefore shows that it must be a very good source of information. 3.0 introduction TO nintendo and gamecube Nintendo is a Japanese video games company and is the acknowledged worldwide leader in the creation of interactive entertainment. To date, Nintendo has sold more than one billion video games worldwide, created such icons such as Mario and Donkey Kong and launched franchises like The Legend Of Zelda and Pokémon. Nintendo manufactures and markets hardware and software for its popular home video game systems, including Nintendo 64 and Game Boy ? the world?s best-selling video game system. As a wholly owned subsidiary, Nintendo of America Inc., based in Redmond, Washington, serves as headquarters for Nintendo?s operations in the Western Hemisphere, where more than 40 percent of American households own a Nintendo game system. Nintendo Gamecube was originally unveiled at Tokyo?s Space World show back in August 2000 and now, 18 months later, Nintendo?s new home consoles is UK bound. Initially codenamed Project Dolphin, Gamecube is a games-only machine. It uses Nintendo?s own anti-piracy optical discs, while up to four people can plug in and play. But it does not end there. The console links up with Game Boy Advance has broadband capabilities and two console colours, purple and black, which will be available at launch. The infrastructure for online gaming is still in its early stages, but Gamecube is prepared. Underneath the console are two ports, one for a 56k Modem Adaptor and one for the faster Broadband Adapter. The main Gamecube controller will come in two different styles, depending on the colour of the machine that you buy. There will also be an additional controller that?s half purple, half clear. But what makes Gamecube?s controller different? Well for starters, there?s a built in ?rumble pak? allowing you to feel every bump and scrape. Nintendo has also added another analogue stick, so in ?Luigi?s Mansion? for example, you can move with one stick and control Luigi?s torch with the other. Character and vehicle control will also be further enhanced thanks to the controller?s two analogue shoulder buttons. Depending on how hard the buttons are pressed down, they will cause characters to move faster or slower. A new dimension in gaming will arrive alongside the Gamecube as Nintendo?s home console will also connect with Nintendo?s handheld, the Game Boy Advance. Using a special link up cable that slots into a Gamecube controller port and the top of the Game Boy Advance, you?ll be able to control games on your television using Nintendo?s portable games machine. Titles like Sonic Advance and Sonic Adventure 2 Battle will even allow you to swap data between the two machines. This means that you do not have to your TV and Gamecube to continue developing you characters and their skills. With Gamecube and Game Boy Advance you can do this on the move. The specifications of the console and the freedom of creativity it gives game designers when producing games for the console, has attracted many third-party developers. For example, thq (who created ?WWF No Mercy? for the Nintendo 64) have joined with Yukes (a Japanese based company that created the ?Smackdown!? series on the Playstation) to produce ?Wrestlemania X8?, a Gamecube exclusive; and Capcom, have been working on ?Resident Evil: Biohazard?, also a Gamecube exclusive. (Sources used: the Nintendo site: www.nintendo.com, free Nintendo Gamecube leaflet from hmv and the May 2002 edition of the Nintendo Official Magazine) 4.0 AN introduction TO marketing Some definitions of the term marketing often suggest that it is the same as advertising or selling. This is far from correct, as selling is, in fact, just one of many marketing functions. One definition from The Chartered Institute Of Marketing that has gained wide acceptance is the following: ?Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.? [image] The definition places consumers at the centre of an organisation?s activities, which is what marketing is all about. Marketing should be seen as a business philosophy, as it is this philosophy that business organisations exist and prosper by satisfying customer demand. The above definition can also be illustrated in a diagram, as shown below: (An ?Ingredients Of Marketing Diagram? from Page 1 ? Marketing: Everybody?s Business, Second Edition by Dave Needham and Rob Dransfield) The following explanations refer to the above diagram: identifying involves answering questions such as ?How do we find out what the consumer?s requirements are?? and ?How to keep in touch with their thoughts and feelings and perceptions about a company?s good or service. For example, in the video games industry, sites often offer polls and surveys to the consumers to see what they think about the games, what they would like to expect, etc. Although it is mostly video game magazine sites and fan sites that carry this out, I think that this is highly beneficial for game developer companies and Nintendo themselves. The reason for this is that they can see what game magazine reviewers think of a preview copy of a game and use their comments in further improving the game to meet consumer expectations. anticipating: Consumer requirements change all the time. For example, as people become richer, they may seek a greater variety of goods and services. Anticipation involves looking at the future as well as at the present. This is one aspect that I think Nintendo has handled well, with respect to now and the future. They have concentrated on making a games console solely for the use of playing games rather than for dvd accessibility, but have a left a section on the underside of the games console for a broadband adaptor to be used in the future when enough people have broadband access in their homes. satisfying: Consumers want their requirements to be met. They want the right goods, at the right price, at the right time and in the right place. For example, if it is a really hot day and there is an ice cream van outside my school, I am highly likely to go over to it and buy some ice cream! profitability: profit needed to plough back into the future. Without the resources to put into ongoing marketing activities, it will not be able to identify, anticipate or satisfy consumer requirements. Different firms have different approaches to running all aspects of their business. For example, Microsoft used its strong image and popularity amongst home PC and office users to enter the intensely competitive video games market. I think this to be effective, as people will have already heard of the company, Microsoft due to it being a monopoly in the IT markets and having experience in PC gaming. It is this knowledge and reputation that they are hoping to use as leverage in the console market. Though the X-Box has the greater specifications out of the Playstation2 and the X-Box, I don?t think that people will notice the difference since all of the machines are ?next-generation consoles? anyway. The only segment of gamers who may care about these details are the PC gamers. However, graphics provided by the PC for its games are far better than that on the X-Box, so what can possibly persuade these gamers to drop an enormous amount of change on an X-Box console? The ideas that underpin the marketing role, therefore, vary from firm to firm. In broad terms, there are three possible approaches that firms could adopt, although in reality it is very difficult to find clear-cut examples of any of them. The actual situation, as with many theoretical ideas in business, will be a mixture, drawing on all three approaches, varying from one circumstance to another and changing over time. For example, Microsoft started out its marketing approach in a product-oriented way (an approach that ignores customer tastes and needs), trying to make clear the high specifications it had on offer and the quality of games that they could offer. However, due to poor sales during its month of release, Microsoft have adopted a more market-orientated approach (the extent to which a firm?s strategic thinking stems from looking outwards to consumer tastes and competitive pressures). The three approaches can be thought of as a continuum, as shown below: Product orientation Asset-led marketing Consumer orientation [image] At one extreme, firms tend to consider their strengths and assets (anything providing a flow of benefits to an organisation over a certain time period) when marketing decisions (product orientation), whilst at the other extreme the customer rules in every case. The central ground is taken by firms, which attempt to match the strengths of the company with the needs of the customer (asset-led). I think that the idea of taking a consumer orientated marketing approach will be the most appropriate for the Nintendo Gamecube. They need to be market oriented due to the current high levels of competition in the market with three consoles fighting it out for supremacy; customers have a wide range of choice from PC gaming to the Gamecube to the Game Boy Advance; and it is also possible to carry out effective market research via polls and surveys on the Internet, questionnaires and interviews carried out by Nintendo magazines and questionnaires carried out by a market research company. Nintendo?s decision to produce Gamecube games on optical discs instead of cartridges is an example of a consumer-oriented approach. The original Nintendo console, the Super Nintendo and the Nintendo 64 all had its games on cartridges. I thought that they should have moved towards disc-based games at an earlier stage, but their decision to do this with their current console will be welcomed by many people, especially amongst teenagers! The advantage of being market or consumer orientated is therefore quite clear ? since the firm is always meeting the needs of the consumer, there ought to be a clear demand for their products. (Sources used: pages 1 and 2 ? Marketing: Everybody?s Business by Dave Needham and Rob Dransfield, Chapter 1 ? Marketing by Ian Swift, Nintendo magazines, and Chapter 8 ? Advanced Vocational Business by Dan Moynihan and Brian Titley) communicating effectively with consumers A great deal of information needs to be communicated quickly and clearly to customers about the goods and services offered by the business organisations. A business that fails to communicate effectively, or as well as rival firms, with its existing and potential customers will not be successful. Business organisations can provide information to customers in a number of different ways. These can be oral communications with business employees and sales staff, or in written form. Examples of written communication could include a product brochure for Gamecube accompanying a video games magazine, showing the Gamecube hardware, launch titles preview, information about the console and future games for release; price lists and menus for the console, which are usually displayed in shops such as Dixons showing the price of the console as well as various special deals, such as the Gamecube console, two controllers, two games and a memory card for £280; product guarantees, which usually come with the console, its controllers and all games that are bought; and safety notices. However, the main way businesses communicate with actual and potential customers is through promotions. Almost every organisation will at some time or another engage in promotional activities to let consumers know about the business and the goods or services it provides. These messages may be present in a variety of places such as posters and leaflets, in letters and catalogues, advertisements in newspapers and magazines, or on the TV or websites, even on footballer?s shirts. They can be informative messages (such as the launch date of the Gamecube and opening times of shopping stores), or persuasive messages that try to persuade consumers that the product being promoted is better than rival products and is worth buying (such as the slogan ?Always Coca-Cola? used with Coke adverts). achieving marketing aims All departments in a business will contribute to marketing and the achievement of business aims. For example, if Nintendo needed to intensify its promotional activities after the console?s launch date, the finance department will have to provide more money for this to happen and the production department may have to increase the number of products produced if the extra promotion is successful in increasing demand for the console. These marketing activities need to be accounted for by the business along with costs (i.e. the aspect of management accounting that is concerned with the allocation of costs to different product lines) and revenues (i.e. expenditure on all costs other than fixed asset purchases). Additionally, if the marketing strategy is successful in generating more sales, customer service staff need to be on hand to deal with more enquiries and orders from customers. For example, within the first few weeks of X-Box?s launch in Japan, many customers were complaining that the machine was ?scratching? the game discs. Customer services were therefore very busy during this period and the company was therefore forced to take back these ?faulty? machines and replace them for free. This, in my opinion, is therefore a bad example of quality, as this should have been checked before the console was launched! Such activities need to be co-ordinated well, otherwise marketing and the business will not be successful. (Sources used: The Complete A-Z Business Studies Handbook by David Lines et al., and pages 227-231 ? Business Advanced avce by Dan Moynihan and Brian Titley) 5.0 market research A business will only be successful if consumers want and can buy what it produces both now and in the future. It is therefore true to say that market research has to be the starting point for business decision-making. However, this is only realistic if we accept the commonly held view that businesses ought to be market or customer oriented. Market research can reduce the risk of producing products that do not appeal to consumers by helping a firm to discover information about their consumers. Market research involves the gathering, collation and analysis of data relating to the consumption and marketing of goods and services. However, the gathering of data is not enough. Managers have to interpret this data to turn it into information. Information not data helps decision-making. The purpose of such research is to identify whether there is a want for a particular product ? a gap in the market ? or whether a want can be created among consumers by persuasive advertising. stage one Decide on the purpose of market research. What information do you need? What action will be taken as a result of research findings? For example, one purpose could be to see customers? reactions to the high price of the X-Box and then necessary action can be taken in the price setting of the Gamecube. stage two Decide the most appropriate methods of research given information requirements, time and budget constrains. For example, if sales need to be radically improved, then tactical research (defined later) may be necessary to solve its short-term problems. stage three To obtain the information required, how many people should you ask and what type of consumers should they be? For example, the consumers required for my research need to be those who play video games and have some knowledge about them, mostly teenagers and young adults. stage four Undertake the research. stage five Analyse the results, draw conclusions and make marketing decisions based on the findings. (A diagram showing a summary of the stages of market research. Source used: page 236 ? Advanced Vocational Business by Dan Moynihan and Brian Titley) Organisations that undertake market research are more likely to know: ? How consumers evaluate their products or services against those of competitors. For example, when I was interviewed in Dartford High Street about snack foods such as Supernoodles and Pot Noodles, the interviewer discovered why I liked certain foods than others. In the interview, I chose Pot Noodles as the product I buy the most and know most about because I had never tried the others or heard about them before! This kind of information would be very useful for the interviewer, as they can make reasonable and sound judgements based on my responses. ? What consumers are looking for in this market and how far the firm is providing this effectively. For example, in the video games market, people are always looking for cheaper games consoles and games that accompany them as these products are often very expensive (the X-Box costing around £299 on release and the PS2 costing £199). ? How consumer tastes are changing. For example, next-generation consoles such as the Gamecube are now expected to deliver highly realistic graphics for the games it produces as well as a wide variety of games to choose from. People now compare the specifications of the various consoles on offer and the types of games that will be released on them. In the past, video games were just thought of as a means of entertainment and people were not concerned about which console they owned. ? What consumers are buying from whom and why. For example, Sony?s Playstation beat Nintendo?s previous console, the Nintendo 64 in sales and popularity, even though Nintendo brought out the console later than Playstation and had higher specifications. I will try and find out the reasons for this when conducting my own market research. ? How consumers will react to new ideas the firm had thought up. For example, I believe that Nintendo?s decision to include more adult-oriented games such as Resident Evil, wwf Wrestlemania X8, Eternal Darkness and Burnout will attract more consumers in buying the console. This is because the majority of the games that Nintendo 64 offered were aimed at children. ? The extent of customer loyalty and retention. With every video games console, there are always loyal customers: they will always be those who consider Playstation to be better than anything Nintendo can produce and those who think that Nintendo produces the best games. The above shows just how important market research is to a firm?s success. Although it is self-evident that market research carried out by the marketing department is of great importance, we cannot say that this is the most important function of a business, as in reality, all aspects must be given sufficient weighting if the business is to succeed. Business decisions ought to be based on a sound knowledge of the marketplace, but without the right people to carry forward those plans, without the finance to put them into practice and without the machinery and plant to produce the products, the market research results would count for very little. Nevertheless, it is true to say that the sheer complexity of people and their behaviour make research very difficult. For example, some people that are interviewed may simply choose any answer at random. If this is the case, the company may receive false data. Therefore when I collect my data from market research, I think that it is very important that I interview and conduct questionnaires with customers who actually play video games and involved with them. The two types of market research that I could carry out are as follows: Tactical research: Most of the research that is carried out by businesses is tactical in nature. It tries to find out how consumers would react to a particular product or a product?s name, inquiring after the buying habits of customers or potential customers. Many firms tend to concentrate on tactical research, looking for short-term solutions to short-term problems and issues. For example, X-Box sales in Europe were below what had been forecasted and the release of the Gamecube is not far off. The company had therefore decided to lower the console?s price from £299 to £199 in an attempt to increase sales revenue. Strategic research: This, on the other hand, takes a long-term perspective by looking at market segmentation or attitude surveys. Market segmentation means the analysing of a market to identify the different types of consumer. By matching the consumer categories to the types of product on offer, unfilled market niches (gaps in the range of products or services offered within a market) may emerge. This allows firms to build up a clear picture of motivations and the issues underlying the behaviour of customers. Although tactical research is a popular method of market research amongst businesses, I would rather pay more attention to long term issues and the wider picture, as this would give a firm a clear competitive advantage. This does not mean to say that I will not include any forms of tactical research, but that strategic research will be the main focus leading up to the release date of the Gamecube. (Sources used: pages 56-56 ? Marketing by Ian Swift, page 235 ? Advanced Vocational Business by Dan Moynihan and Brian Titley, and the video games website: http://www.gamespot.co.uk) sources OF market research There are several sources of research data available to a firm. Decisions have to be made about the suitability and reliability of different sources as a basis for decision-making. The two main types of research are primary data (first-hand information that is related directly to a firm?s needs) and secondary data (information collected from second-hand sources such as reference books, government statistics or market intelligence reports), which are summarised below: primary secondary Relevant to the firm and its issues. For example, when I carry out primary research, I will be able to find answers to exact questions that I am interested in from the appropriate customers (e.g. those who play video games). Follow-up research may be possible. For example, if personal details are taken during the interview, I could contact the interviewee to see whether they would be willing to answer more questions take part in more interviews. The source data is available if required. For example, the data will be stored on computers or on paper and can be used when necessary for interpretations or conclusions to be made from them. Cheap to access. Unlike primary research, which is expensive due to the requirement of specialist researchers to generate accurate and useful findings, secondary research can be found cheaply via existing market research reports; annual reports; Internet data; stock movements; newspapers; and information from competitors (promotional materials for example). Analysis will usually have been undertaken. For example, if a games magazine carries out a poll, they will usually then present analysis of it either by stating percentages, or by representing the results graphically The format will make the data accessible to non-specialists. (Diagram showing the advantages of primary and secondary data collection techniques. Source used: page 60 ? Marketing by Ian Swift) primary data Primary data is information that does not already exist. In other words, it has to be collected by the researcher via field research. For example, I could not know the exact reason why my friends would buy the X-Box rather than a PS2. He may have bought it as it is has greater specifications and is designed by Microsoft; or because it has good games on offer; or because he is rich and buys the better console, etc. Primary research can either be carried out by a firm itself or by a market research agency. For example, when I was interviewed in the High Street about snack foods, it was not the companies of Pot Noodle and Bachelor?s Supernoodle that conducted it, but a marketing agency called Millward Brown. The main advantage of primary data is that the firm, which initially collects it, will be the only organisation with access to it. Primary information can therefore be used to gain marketing advantages over rival firms and so I will aim to collect enough primary data from customers and potential customers so I can make accurate conclusions and interpretations. There are a number of different primary research methods a business can use: Primary research methods Comments and application to my market research: Questionnaires. This is one of the most popular methods of primary research, as it is used within other methods such as personal interviews, telephone interviews and postal surveys. However, the designing of the questions must be considered carefully, because if the questionnaire is poorly designed, it may not obtain the results the business is looking for. Effectively collected data will allow market research to be very useful. I will definitely use a questionnaire in my field research, as it allows me to target a specific audience. For my coursework, I need to question those who have an interest in video games and own a console such as the Nintendo 64. This way, the information I can obtain will be more accurate, rather than if I interviewed people who have had no experience and have never played video games. Since the questions must be carefully planned, I will therefore briefly explain the questions that I have used. Personal interviews. This involves an interviewer who obtains information from one person face-to-face. The interviewer rather than the interviewee fills out the responses to questions on a questionnaire, which contains mainly ?open questions? (e.g. questions that do not have specific answers to be ticked. In this case, they are questions that demand more than just a factual answer). I think personal interviews are a great source for primary research as it allows the chance for interviewees to give detailed responses to questions that concern them. In the unit one coursework, I carried out a personal interview with the manager of the Boots branch in Bluewater and I found this to be extremely beneficial as it gave me a greater knowledge of the company and what it does, etc. For this coursework, I hope to interview someone from Sony who has been involved with the Playstation and/or Playstation 2 to ask them how they went about their marketing strategy that made their console one of the best-selling ever. However, this may not be possible due to time constraints. Telephone interviews. This method allows the interview to be held over the telephone. For me, this method of research would cost a lot of money, as I would be using my home telephone or mobile phone to conduct this. However, due to time constraints, I may use the telephone to ring a few of my friends in order to ask them questions or to carry out my questionnaire. The disadvantage however, is that the public often distrusts this and it is only possible to ask short questions. On the other hand, it does have the advantage of allowing a wide geographical area to be covered. Postal surveys. This involves the use of questionnaires sent to consumers through the post. Although, this is often considered a relatively cheap method of research, I don?t think that I will use this method due to the fact that not many people respond to postal questionnaires. Therefore, I will probably be wasting my time in creating all the questionnaires, buying the stamps and distributing them to the appropriate places. However, like the telephone interviews, it has the advantage of covering a wide geographical area and the fact that there is no interviewer bias. Observations. This is a survey technique that requires the researcher only to watch and record behaviour rather than to ask questions. For example, observers in retail firms often look out for the amount of time consumers spend making decisions and how readily they notice a particular display. I think that this is a good method of research that can easily be carried out, because I go to Bluewater quite often and see people playing and commenting with their friends about the console they are playing. For example, when I was in Electronics Boutique, there were quite a few young teenagers surrounding the Nintendo Gamecube with one of them playing it and the parents behind them seemed impressed with the graphics on display. This method does not involve any money and notes can easily be recorded after observing people?s reactions while playing the consoles on offer in a shop. Focus groups. This is an American term for group discussions, i.e. small-scale, in-depth research into the reasons behind consumers? habits and attitudes. I don?t think that this method is a suitable one for the Gamecube, because customers? attitudes and habits are continually changing and so results obtained from a focus group may not be reliable in say, a few months time. Consumer panels. This is a group of consumers within a firm?s ?target market? used on a regular basis for market research exercises. A typical use of a panel is for product testing, using the known tastes of the panellists to decide on the qualities of new product ideas, or of changes to the composition of existing products I think that this would be a useful method of research, because the panel would have some experience in gaming and would therefore be partly representative of public opinion. For example, the panel can be put to play a highly anticipated game to see what their reactions were. This information can then be used in improving the product. (Sources used: Page 252-253 ? Business Studies Second Edition by Carlo Raffo et al., and The Complete A-Z Business Studies Handbook by David Lines et al.) After considering all of the possible field research methods, I have decided to use a questionnaire to obtain information from the public (particularly those who have a knowledge of video games and own at least one console) and observational techniques if I happen to be in a video games shop such as Dixons, Game or Electronics Boutique. The questionnaire that I used was put forward to 25 people. A blank sample of the questionnaire is shown in the appendix along with some questionnaires that were filled out by students at Dartford Grammar School. Some of the results from my research are shown below and some conclusions made afterwards: Results tables: 1. What age group are you in? Under 15 years 4 15 ? 18 years 16 18 years and over 5 2. Which of the following consoles do you won or intend to purchase? Playstation 2 7 Nintendo Gamecube 9 Microsoft X-Box 9 3. Which adverts for the following consoles have stood out for you? Playstation 2 6 Nintendo Gamecube 9 Microsoft X-Box 10 4. When considering games consoles to buy, which of the following affects your decision? Price 11 Quality of games available on release 16 Media reviews of the console 7 Screenshots of game graphics for the console 9 Friends? comments 5 The hype 3 Design on the console 9 The fact that you are a fan of a particular games company 2 5. Why do you think that the Playstation was such a major success? Number of games available 12 Quality of games on release 17 The fact that the games were on CD-format 9 The fact that the games were cheaper 10 Friends? comments 4 Its advertising campaign 2 Design of the console 13 Unsure 0 6. How often do you surf the Internet a week? Less than 5 hours 3 5 to 15 hours 19 15 hours or more 3 7. Have you ever bought products over the Internet or intend to buy any within the next few months? Yes 14 No 11 8. How safe do you consider Internet shopping? Quite safe 0 Not very safe at all 4 Depends on the site 21 9. What do you think of Nintendo?s decision to produce games on CD format rather than cartridge? Great idea 20 Preferred cartridges 3 Not bothered 2 10. Do you believe that Nintendo focuses it games too much on children and young teenagers? Yes 15 Not really 13 Don?t know 2 Some results displayed graphically: [image] [image] From my results, I can make some conclusions. For example, the price of the console and the quality of games it has to offer were found to be the main decisive factors when choosing a console. Also, Nintendo Gamecube and the X-Box were found to be the most desirable consoles amongst those interviewed. The questionnaire that I have produced is very useful for obtaining information that is specific to what I require. However, after looking back on the questionnaire that I have carried out, I have spotted some improvements that could be made to it. secondary data This type of data is defined as the information collected from second-hand sources such as reference books, government statistics or market intelligence reports. Such data can provide information on market size and market trends for most product categories. It may be accessible publicly and therefore free, but is in any case not as expensive to gather as primary data. Secondary data will also be available from sources outside the business. Individuals or other organisations will have collected data for their own reasons. A business might be able to use this for its own market research. For example, if I wanted to see whether Nintendo concentrates too much on children with its video games, I could check their reports on the games they have released and intend to release to see how many games are aimed at children and how many are aimed at teenagers and older players. There are a number of different secondary research methods outside of the business that can be used: Secondary research methods Comments and application to my market research: Information from competitors. This may be, for example, in the form of promotional materials, product specifications or price lists. This method of research is very easy to do and does not cost anything. Even by surfing the Internet, it is possible for us to discover the price that Microsoft and Sony are selling their products at and their methods of promotion. It is also possible to find detailed explanations of their system and hardware from technology site such as www.cnet.com and www.zdnet.com. Data from customer services on complaints that have been received about a product. This can be useful, as we can learn from mistakes made by other companies and with our previous products to improve upon. Retail audits. The widespread use of epos (electronic point of sale) has meant that it is now much easier to collect detailed and up to the minute data on sales in retail outlets such as supermarkets and other retail chains. This is a good method of research, as it makes it possible for us to see how well the product is selling and where in particular it is doing successful. These results would also be useful in stating how many Gamecube consoles have been sold since the date of release, which is a piece of information, that the media would like to know as well as games magazines. benefits and problems OF market research Benefits of market research Problems of market research The main benefit of market research is that it allows us to make more precise and accurate decisions based on factual and secondary information. This is especially important in dynamic markets. We therefore need to constantly change our marketing activities to suit events in the market. Market research, though quite expensive will definitely reduce the risk for a business. Without market research, a product may be released with little success after vast amounts of money had been spent on it. Carrying out market research may be good for the image of a business, as customers feel that their views are being considered and this may lead to ?corporate brand loyalty?. The main problem of market research is the reliability of the data collected. Even though thorough market research has been carried out, the product may still be a flop. For example, when collecting data from the public, their behaviour is to some extent unpredictable as they may be truthful at the time of the research but may have different views within a few days! Secondary data can also be unreliable as most of the data can be out of date as soon as it is published due to rapidly- changing markets. 6.0 analysis OF current marketing strategies Arguably, marketing is becoming more important because of increasing levels of competition, ever faster product development, new ways of competing (e.g. via the Internet) and ever more demanding customers. Markets are fragmenting, customers expect higher standards of quality and with more and more trade barriers coming down, competition is often global. In such circumstances, the firms which best understand and work with their customers, the organisations which listen and react quickly and the businesses which build on their marketing assets are likely to be in a stronger position. A leading example of market-oriented company with an extremely successful marketing strategy is Nike. The company, in my opinion, has one of the best-known brand symbols in the planet, originally designed for a fee of $35! Nike?s ?swoosh? or ?tick? is so well known that the company regularly run advertisements without reference to the Nike name. For example, in a sports shop, there are shoes, hats, and t-shirts produced by Nike with no brand identification other than the Nike ?swoosh?. All of this plays testament to the marketing skills of Nike, a truly market-oriented company. Nike?s strategy of designing and producing technically superior innovative products and linking these products to popular athletes, has changed the face of the sports equipment market. Nike spends hundreds of millions of dollars each year on big name endorsements, promotional events, and those attention-getting adverts in the media. Tiger Woods, Jordan and Sampras all carry the Nike ?swoosh?. Nike adverts have been in my opinion, very entertaining and even better for the company, persuades people to but their products so that they can connect to and link their aspirations with the excellence of Ronaldo or Tiger Woods. The thought process presented to us is Nike are athletes, athletes are sport, therefore Nike is Sport. By constantly moving forward, 25% of Nikes approximate $8.8 billion turnover last year was in sports apparel often worn as a fashion item and not for sport. But the greatest potential for growth is football, the world?s most popular sport. In comparison only 3% of Nikes turnover is generated in this huge market. Nike has had an extremely successful marketing strategy and I believe that its next step into the football market will also be successful, as it is very market-oriented and provides us with a way of life ? ?Just Do It.? Advertisements on TV and in the media are now becoming more entertaining and so I believe that more money must be spent on this aspect of marketing in order to make it stand out. From the research into Nike?s successful strategy, it seems that getting big name endorsements may be worthwhile in persuading more customers to buy the product. On the other hand, it would be just as successful, if the adverts made an audience go ?wow!? In my opinion, promotions used by Nike have been of a high quality, although there are very few adverts used. When one is used, it is highly entertaining! With the marketing strategy of Microsoft?s X-Box, they entered the video games market with a huge and strong advertising campaign, which meant that it was possible for you to know about the X-Box by watching the television; magazine advertisements; contests; and even sporting event sponsorships. X-Box has been intent on getting the word out about the release of the X-Box, and so their advertising has been everywhere! I don?t really think that this much advertising is necessary, because the company did not produce anywhere near the number of consoles it expected to sell in the first week of release. No matter the size of the ad budget, success in the gaming arena depends on having compelling games to play. For its part Sony ? the undisputed leader in the gaming arena whose PlayStation 2 model has sold more than 5 million consoles ? is banking on games to retain its dominance. In addition, although advertisements are good, ?hands-on? is better, especially for teen

Marketing Strategy for Nintendo Gamecube 9.8 of 10 on the basis of 1187 Review.