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The technological advances in various companies' departments is being inevitable trend nowadays. Also the world of gaming, games consoles and video games have blossomed into very a profitable entertainment industry. The content of the article is analysis of marketing strategy of Japanese company of Nintendo, which is one of the main representatives in current IT and technological industry. Nintend is main focus is producing specialized platform for video games and games consoles. The company is considered the most valuable enterprise on Japanese market with market value over 37 billion USD and it is market capitalization was estimated 55 billion USD on average in 2018. Nintendo considered to be the most significant global consumer electronics and video game company by market capitalization. The aim of the paper is to analyze company's development of marketing strategy from brief analysis of product portfolio and consumer segmentation to company's distribution and communication policy. Because of the fact that the video game industry is considered as the most innovative in the world of business the article is focused on diversification of Nintendo's product portfolio. The paper also aims on international business activities, especially distribution politics of the company. Analysis of customer segmentation consists of identification of primary and secondary segments based on product portfolio. The specific product values are also analyzed and the positive and negative aspects are defined in the article. Discussion part consists of analyzed data evaluation and the results lead to generalization of Nintendo's marketing strategy and application of the results towards other competing companies in the video game and video consoles market.
ABSTRACT
The technological advances in various companies' departments is being inevitable trend nowadays. Also the world of gaming, games consoles and video games have blossomed into very a profitable entertainment industry. The content of the article is analysis of marketing strategy of Japanese company of Nintendo, which is one of the main representatives in current IT and technological industry. Nintend is main focus is producing specialized platform for video games and games consoles. The company is considered the most valuable enterprise on Japanese market with market value over 37 billion USD and it is market capitalization was estimated 55 billion USD on average in 2018. Nintendo considered to be the most significant global consumer electronics and video game company by market capitalization. The aim of the paper is to analyze company's development of marketing strategy from brief analysis of product portfolio and consumer segmentation to company's distribution and communication policy. Because of the fact that the video game industry is considered as the most innovative in the world of business the article is focused on diversification of Nintendo's product portfolio. The paper also aims on international business activities, especially distribution politics of the company. Analysis of customer segmentation consists of identification of primary and secondary segments based on product portfolio. The specific product values are also analyzed and the positive and negative aspects are defined in the article. Discussion part consists of analyzed data evaluation and the results lead to generalization of Nintendo's marketing strategy and application of the results towards other competing companies in the video game and video consoles market.
Keywords: Nintentdo, video games, marketing strategy, segmentation
1.INTRODUCTION
The diversity of the international environment is influenced by a number of factors. According to Ivan and Čepel, differentiation is due to the increasing openness of economies and stronger integration processes (Ivanova, Cepel, 2018, p. 54 - 72). However, these areas may also include the value factor of the brand, the applied marketing strategy and consumer behavior. However, the current trend in this environment is the perception of brand value and its impact on the marketing strategy of an international company. Views of brand value and strength can vary due to various factors. Klieštiková and Janošková argue that brand value.is mainly affected by the subjective consumer preferences These may ultimately also influence the change and implementation of the international marketing strategy (Kliestikova, Janoskova, 2017, p. 149 - 157). The Japanese undertaking Nintendo, whose main activity is the production of gaming consoles and games, may also be included in that area. Currently, the company employs 5944 employees on average. Since 2016, the company has (seen) recorded an increase in net income. In 2017, the company's net income reached US $ 4,366 million. dollars, in 2018 its value rose to 9 595 million US dollars and in 2019 net income was 10 914 US dollars. Despite the unprecedented adverse situation that the company is undergoing from 2013 to the end of 2016, it can be argued that at present net income is similar to the 2006 - 2011 period when the company launched Nintendo DS and Nintendo Wii. (Margino, 2008)
2.ANALYSIS OF NINTENDO COMPANY
In the next chapter there is a short analysis of the Nintendo company, its product structure, customer segments and (briefly described) competition of the company is described briefly. Based on the above analysis, the discussion part of the article describes the general marketing strategy of the company.
2.1.Product structure of company
Table 1 gives an overview of the products since the company was establishmented. From 1974 to 1978, Nintendo distributed Magnavox Odyssey. The company began providing its own hardware in 1977. In 1980, the company launched the first series of video games called Game & Watch. The most popular game was Famicon, published by the company in 1983. Nintendo 64 was the product introduced by the company in 1996. The advantage was its innovative design and low technical demands. In 2003, the company released Game Boy Advance SP, which was the editor of the classic Game Boy Advance. In 2004, the company launched Nintendo DS, and later in 2006 began selling the Nintendo Wii. With the advancement of innovative technologies, in 2011 the company released (in 2011) Nintendo 3DS based on the 3D platform. Later came the more innovative version of the Nintento Wii U. (Nintendo Wins Emmy for DS, 2008)
Currently, Nintendo's best-selling products include Nintendo DS (DS Lite and DSi), Nintendo 3DS, Wii and Wii. In 2011, 75.28 mil. 3DS product and is currently considered the best selling product of the company. In 2018 and 2019, 3DS recorded a year-on-year decline in product sales of 39.2% on average. Nintendo Switch, however, at the turn of 2018 and 2019 recorded a year-on-year increase in the number of pieces sold, an average of 23.5%. and Wii U sold 13.56 million units in 2012. (Video Game Industry Statistics. Ratings, 2019). One of the best-selling products is the Wii console, which recorded 101.63 million worldwide sales in 2016. The entire Wii concept was created with a compact look and state-of-the-art technology. The company even participated in the production of PowerPC processor with advanced 90 mm SOI CMOS technology. Wii includes a service called "WiiConnect24", which allows the console to be connected to the Internet even when it's turned off (Angelo, 2018).
Based on the concept of a complex product, it can be determined that the core of the product constitutes the essential benefit of play, relaxation, entertainment and (relaxation) abreaction. The product itself is a design because the products are developed by the latest technologies taking into account current design trends. In addition to the design, the product itself is 3D control, quality, technical support, or the use of the latest technologies (eg in the case of Switch rank). The extended product category includes online gaming with other players, access to a 20-year archive of games, or the introduction of various innovations in the form of improving the quality of games, graphics and the like.
2.2.Structure of customer segmentation
Segmentation structure of Nintendo is defined in the following categories:
* Primary segments are families with children aged 6-14 years and parents aged 30-55 years. The mission of the business is to provide entertainment and relaxation. Games are unpretentious, simple, colorful, which will keep the attention of children. When playing games, the family can spend more time with the children, have fun with them and not think about common worries and enjoy life. This can also be considered as the value that the product provides to customers. As it is now possible to see the trend of family separation, when there is a misunderstanding between a 15 year old child and a 40 year old parent, the Nintendo product should be the one that should connect the family with children through relaxation and fun. For this reason, we have decided to define this segment as primary. Even some Nintendo products also provide multiplayer for up to four family members. This can ultimately bring pleasant playing together in a circle of loved ones and family meetings.
* The secondary segment is a group of friends aged 20-27 who can use Nintendo products for leisure, entertainment and relaxation in terms of leisure. As in the first segment, Nintendo should bring people together and maintain a coherent friend status.
* The tertiary segment is a group of women aged 28-45 who spend a lot of time at home. This segment can be defined as a "housewife". For this type of segment, the company launched the Nintendo Wii Fit, which is designed primarily for women who do not have (the) time to go to the fitness center and still want to stay (in a slim line) slim and fit. In the case of leisure time, the product can also be used by men or children.
As mentioned in the previous sub-chapter, the company is trying to bring different values to its customers. Based on the definition of the company's main customers (of the company), it is also possible to define values. The most important values provided by Nintendo products include the unique control system, entertainment, relaxation, abreaction, connection and cohesion of family and friends. Within the tertiary segment, it is also possible to define a value in the form of maintaining a lean line, fitness and better health. Nintendo also brings culture with its games. They are pleasant and iconic characters that are well known all over the world. One of them is Mario, who is now known all over the world. Others are characters from the series, but also Pokémon games especially for younger players, who besides playing "pokeballs", collect cards, participate in various Internet clubs Nintendo. Samples of 25 respondents aged 20-27 were asked which factors the gaming console should fulfill. This mini survey was focused mainly on the secondary segment, as young people fell into this area according to their age structure. Each of the respondents identified 3 factors that he thinks the game console should fulfill. Individual factors and their response by respondents are shown in Table 2. Subsequently, we compared the real expectations of the respondents with the real expectations of the customers who marked the rating on the official site of the game console vendors. Data was analyzed by reviews. A point was assigned to each factor for each positive assessment. The survey was conducted on Ninentdo Wii U, Nintendo 3DS and Nintendo Wii. Based on the data we can confirm our defined segmentation.
The table shows that a significant factor in terms of 'ideal expectation' is the cost of the game console and the amount of games the customer can play on the console. In terms of "real expectations", the most important factor is the gaming experience, design and price. In this case, it can be seen that respondents assigned the gaming experience to 5th place in the ideal expectation. Therefore, based on real expectations, it can be argued that the gaming experience provided by the game console is more important than the cost factor. Based on the analyzed data it is possible to confirm our identified customer structure. In defining the first two segments, the value provided to the customer should be determined based on the fulfillment of the gaming experience (Video Game Industry Statistics. Ratings, 2019).
2.3.Opportunities and threats affecting Nintendo company marketing strategy
Opportunities and threats can significantly influence the marketing strategy of a company not only in the positive but also in the negative way. Opportunities should try to strengthen the business, while threats should try to reduce. The first opportunity a business can take is to increase marketability. Game console sources have shown that up to 40% of the total number of players are women, a tertiary segment for society. The business opportunity arises by increasing the sales of the Wii with WiiFit. Statistics show that 41% of women used the Wii in 2008, and two years later in 2010 it was 80% of the women who had the Wii. According to the statistics, it can be seen that sales are currently rising in women. The figures given represent global values. The second opportunity the company can take advantage of is expansion into new markets. Nintendo has already reduced production costs by 40% of the $ 88 game console. In setting such a price, companies have opened up new markets such as Latin America, Eastern Europe. In technological development, which the company can effectively apply to the production of products with lower costs, it is possible to take advantage of the opportunity to find new markets. The development of new segments and the adaptation of the marketing strategy can be another opportunity for the company to increase its sales. Quality of life is an invaluable part for people and is mainly related to a healthy lifestyle, personal health but also education (eg obtaining information about health status). It is precisely on the principle of determining health, measuring pressure, helping to build a healthy lifestyle that the company can take the opportunity. We see this in the technology solution that is currently available on the market, and it can challenge Nintendo how to gain new customer segments and strengthen the current marketing strategy. In addition to opportunities there are also threats that can reduce business revenue and revenue and ultimately weaken the implementation of the marketing strategy. The first threat may be PC BOX, which currently produces accessories for Nintendo products. The device is capable of playing copied "pirated" games and MP3 music. Nintendo game consoles have their own chip, and therefore only games purchased from or exclusively licensed by the company should work on it. Currently, Nintendo is in court with PC BOX.
In this sense, it is a business that provides cheaper options for accessories and is a big threat to Nintendo, as the "accessories" provided by PC BOX customers can also perceive the poor quality associated with Nintendo. In this case, it is possible to see a weakening of the company's marketing strategy. The second threat is the number of children in households. At present, there is a trend in the decline in household children. This trend is influenced by the fact that women postpone pregnancy to a later age due to career growth, life use and other factors. The trend is expected to continue. This may compromise the marketability of Nintendo for game consoles and games. Therefore, the company should take the opportunity to focus on new segments and thus strengthen the marketing strategy in this sense. In addition to the decreasing number of children in households, there is also a trend of market saturation. It is now saturated with games, game consoles and products so many that customers are unable to decide which gaming product can meet their high-level needs. The result of the decision-making process is also the non-realization of the final purchase.
3.DISCUSSION
Currently, the company's marketing strategy focuses on selling current products. Based on the data, it is possible to claim that the company has secured an effective strategic position on the market. The disadvantage, however, is that it is unable to exploit the potential provided by the international environment. Therefore, the main strategic recommendation for Nintendo is to strengthen and strengthen the defense strategy in the international market. In particular, this strategy should be fulfilled by expanding its operations with existing products to new markets and thereby more effectively exploiting the potential provided by the international environment. On the basis of the above, it can be argued that the defined strategy will be strengthened and strengthened when new products are introduced, eg a tablet that includes all the usage options and can be connected to a game console (such as Wii U). Essentially, the implementation of this strategy may be related to the combination with a new product in a new market, but the essence will remain in the existing gaming industry. By applying the strategy, the company will preserve its gaming culture and strengthen the brand in the world, thereby firmly strengthening its international presence. Key activities are essential for the proper implementation of Nintendo's marketing strategy. As has been found, Nintendo is taking a different path than its competitors, but in fact its priority is to sell gaming consoles, games and accessories. It mainly sells products through specialized online and offline stores. It should be emphasized that Nintendo also presents itself through its stores. One of them is a store in New York that provides not only consoles, games and accessories, but mainly space, which is properly located, divided into sections according to what customers like. For example, one can find a Pokémon section, a Mario section or a Sonic section. Customers meet their cartoon characters and heroes. Every week in this store is something special. Other such Nintendo WorldStore stores can be visited in Tokyo and the latest is being prepared in China. This activity is occurring. The development of new products can be considered as a key activity. Nintedo was the first to introduce motion-playing technology. Even now, the company seeks innovative solutions in the gaming industry, which can ultimately add value to its customers. Nintendo also focuses on low-cost consoles. The games available on Nintnedo do not have high HW or SW demands and therefore the company saves production costs. It should be added that the company is also engaged in strengthening the game culture while playing games. Customers live with Mary and Pokémon characters, and it also adds value when playing games. Many of them are collectors of Pokémon cards and fans of Pokémon or Sonic. In addition to the key activities, the key resources are important for the company. For Nintendo, they are employees, finance and suppliers. Without the efficient use of these resources, the company would not be able to function properly. Employees are important because they have a lot of developers, service technicians and managers who are responsible for developing not only new products, but also internal business processes. Besides employees, financial analysis is an important indicator of the company's success. Bartosova and Kral argue that financial analysis results are effective when they can objectify analytical results. (Bartosova, Kral, 2016, p. 189-197) Fogarassy, Neubauer et. al. (Forgarassy, Neubauer, Mansur, Tangl, Olah, Popp, 2018, p. 52-66) The main financial source and basis for financial analysis is the profit from the sale of gaming goats, games and accessories.
4.CONCLUSION
For the fulfillment of marketing strategy is also important competitive advantage of the company, which should gain by implementing the development strategy. Nwachukwu and Olatunji, who claim that a well-elaborated strategy can provide a competitive advantage to the company, also share this statement. (Chijioke, Olatunji, 2018, p. 15-25) As mentioned above, this should be achieved by penetrating new products into new markets. This is evidenced by the fact that three years after the Wii was launched, the company managed to reduce production costs by an average of 30%. It is with this existing product on the market that companies are opening up new markets such as Latin America, Eastern Europe, where these products are not very available. Therefore, the company should focus on the development of other products with lower costs. Other factors that will influence the fulfillment of the development strategy may be, for example, improving WiiFit, opening new markets for the company, creating a gaming console to monitor health. An important factor that can give a company a competitive advantage is the use of new technological opportunities offered by the market. Roberts and Marchais argue that the use of digital technology has radically changed the way consumers behave. This can ultimately be used by Nintendo to promote sales (Roberts, Gauthier, 2018, p. 9-42). It also identifies itself with the aim Majerova and Kliestik. (Majerova, Kliestik, 2015, p. 546-552). In general, a marketing strategy should primarily bring benefits and value to customers. Mirică says that emotions are also an important element in influencing shopping behavior. (Mirică, Oana, 2018, p. 39-44) It also identifies itself with the aim Gajanova, Nadanyiova and Kliestikova. (Gajanova, Nadanyiova, Kliestikova, 2019, p. 239-252). It is possible to agree with the author and the enterprise can achieve this mainly by bringing together players and creating new friendships and acquaintances between them. The value can also be seen in the key activities described above (eg stores where players can meet their main characters or innovative product solutions).
ACKNOWLEDGEMENT: This paper is an output of scientific project VEGA no. 1/0718/18: The impact ofpsychographic aspects ofpricing on the marketing strategy of companies across products and markets.
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