ASSIGNMENT 2 Submission Date: 06/07/2015 Group Chapter:Chapter 9. Designing a Customer-Driven Strategy and Mix NameIDCourse Avelashmene Ravi21240ICT Deva Kumaran Gengadharan18852ICT Kiretharan Ramachandran21210ICT Puvanan Eswaran18926ICT Nor Farzana Syaza Bt Jeffri19246ICT Wan Nor Suhaili Bt Wan Zahari19141ICT Course Code : GDB 20433 Course Name : Principles of Marketing Lecturer name:Dr. Zullina bt Hussain Shaari 1) Executive SummaryNintendo launch Wii which is a home video game console competing with Microsofts Xbox 360 and Sony PlayStation 3. They have their own distinguishing feature which is the wireless controller that can be used to detect movement in three dimensions. Their target and concept was to develop the concept further which more focus on new form of player than focusing on power. They targeted a wider demographic than its competitors. They were not focus only on males but they focus on attracting woman, grandparents as well as rural folk. Nintendo keep on updating by adding more application to Wii. Through 2008 till mid of 2009, Nintendo produce significant profit with each Wii sold. After mid of 2009, Wii sales started to flatter and they announced their first price cut. 2) Current Marketing SituationNintendo was the pioneers of home video games consoles in early 1980s but in mid-1990s Sony entered with PlayStation and Microsoft entered with the Xbox. Review shows that the first Wii system software update (via WiiConnect24) caused a small number of launch units to become completely unusable. This forced users to either send their units to Nintendo for repairs (if they wished to retain their saved data) or exchange them for free replacements. As of March 31, 2015, the Wii has sold 101.52 million consoles worldwide. Since its launch, monthly sales numbers of the console have generally been higher than its competitors around the globe. According to the NPD Group, the Wii sold more units in the United States than the Xbox 360 and PlayStation 3 combined in the first half of 2007.This lead is even larger in the Japanese market, where it currently leads in total sales (having outsold both consoles by factors of 2:1to 6:1 nearly every week from its launch to November 2007).In Australia the Wii broke the record set by the Xbox 360 and became the fastest-selling game console in Australian history. 2.1 Market Description Nintendo Wiis market consist of consumers that prefer for entertainment. Specific segments being targeted to young males, women, grandparents as well as families. The revolutionary motion-sensing wireless technology forces the gamer to get up off the couch and get into the game. It is reported that pensioners as old as 102 and Queen Elizabeth II were playing the Nintendo Wii in the U.K. On Norwegian Cruise Line vessels. The wireless controller allow s players of traditional sports such as tennis or bowling to play the games if they were on a court or in an alley. Segment Needs and Corresponding Benefits Targeted SegmentCustomer NeedsCorresponding Benefits/Features FamiliesEntertainment hub Online resources Activities for the family Advertising and sponsorship trade with family products. WomenShopping Beauty apps and advise Alliances with brands Increase usability of women Large marketing, branding andcommunications campaign targeted at women, mostly focused on social networks GrandparentsPopulation ageing longer life Retired people have a lot of time and money Advertising of products and alliance with pharmacy companies Activities and services through the Wii Use the abilities of the Wii for this target Develop health and exercise capabilities Students ,Parents & SchoolSpecial services Different channel Different positioning Wii Education Alliance with government New marketing communications and PR campaign 2.2 Product Review The Wii U Gamepad is a new controller exclusively for Wii U, which removes the traditional barriers between games, players and the TV by creating a second window into the videogame world. These are the following features for Wii U Gamepad: Approximately 1.8 inches high, 10.6 inches deep and 6.75 inches long. Approximately 3.5 pounds (1.6 kg). The new console features a compact design that will make it a natural addition to any home entertainment setup. IBM Power(R)-based multi-core microprocessor. AMD Radeon-based High Definition GPU. The Premium Pack console has 32GB of internal flash memory, and the Basic Pack console has 8GB. (Click here for more details about Wii U storage). In addition to the internal flash memory, external USB storage can be used to increase maximum storage capacity. SD Memory Cards up to 2GB and SDHC Cards up to 32GB are supported. Wii U and Wii optical discs. Wii U can access the Internet via wireless (IEEE 802.11b/g/n) connection. The console features four USB 2.0 connectors two in the front and two in the rear that support Wii LAN Adapters (sold separately). Nearly all Wii software and accessories can be used with Wii U. Uses six-channel PCM linear output via HDMI port, or analogue output via the AV Multi Out connector. Supports 1080p, 1080i, 720p, 480p and 480i. Compatible cables include HDMI, Wii Component Video, Wii RGB and Wii AV. The Wii U console is capable of supporting two Wii U GamePad controllers, up to four Wii Remote (or Wii Remote Plus) controllers or Wii U Pro Controllers, and Wii accessories such as the Nunchuk, Classic Controller and Wii Balance Board. On January 31, 2010 the Wii became the best-selling home video-game console produced by Nintendo, with sales of over 67 million units (surpassing that of the original Nintendo Entertainment System).On March 31, 2010, according to Nintendo the Wii had sold 70.93 million units worldwide (including 20.53 million units during the 20092010 fiscal year. Nintendo reported that on Black Friday 2011 over 500,000 Wii consoles were sold, making it the most successful Black Friday in company history. In September 30, 2013, the Wii has sold 100.30 million consoles worldwide. As of March 31, 2015, the Wii has sold 101.52 million consoles worldwide. 2.3 Competitive ReviewKey competitors for Nintendo Wii are Microsoft and Sony. They used to target the core video gamer, now aiming at becoming a family center hub and trying to get Wiis consumer. This were their attempt to compete with Nintendo Wii : SONYMICROSOFT Launched Move and failed Sales have been declining Good video game offer Online services with problems and hacking Has a good brand positioning Reboot sales with Kinect Large sales growth Impact in final profit Market leader in 2012 Complete online service package with console Wide range of games Nintendo announced the successor to the Wii, Wii U, at the Electronic Entertainment Expo 2011. The Wii U features a controller with an embedded touch screen and output 1080p high-definition graphics; it is fully backward-compatible with Wii games and peripherals for the Wii. The Wii remote, Nunchuk controller and balance board are compatible with Wii U games which include support for them. The Wii U was released on November 18, 2012 in North America, November 30, 2012 in Europe and Australia, and December 8, 2012 in Japan. 2.4 Channel and Logistics Review Nintendo products is distributed through a network of retailers in the top markets. The Distribution Process oParts are bought from various suppliers and constructed at the Nintendo factories in Japan oThe product is distributed to branches in the United States and Europe Inspected and correct packaging applied oDistributed to retailers Channel Intensity and Levels oThree Channel Levels Manufacturer Wholesaler Retailer Consumer oWholesalers: Mega Goods, Super UFO, Ingram Entertainment, Light in the Box and BRE Software oRetailers: Wal-Mart, Target, Best Buy, Game Stop, Toys-R-Us SAMPLE OF COMPETITIVE PRODUCTS AND PRICING COMPETITORMODELFEATURESPRICE MICROSOFTXbox733 MHz x86 Intel Celeron/Pentium III Custom Hybrid CPU 233 MHz nVidia custom GeForce 3 NV2A DirectX 8.0 based GPU 64 MB DDR SDRAM @ 200 MHz; in dual-channel 128-bit configuration giving 6400 MB/s US$299.99 GB299.99 479,99 VGA, Component (YPbPr), SCART, S-Video, Composite 1080i, 720p, 576p, 576i, 480p, 480i SONYPlayStation 4 8-Core AMD "Jaguar" Custom AMD Radeon 18 Compute Units (1152 shaders) @ 800 MHz 38,980 US$399 399 349 3. Strengths, weakness, opportunities, threats STRENGTHS Revolutionary motion-sensing wireless technology - Wii targeted a wider demographic so its force the once sedentary gamer to get up off the couch and get into the game. More inviting controllers - They speculated that the familiarity a of TV remote would be more inviting than the more typical and complex video game controllers that its competitors had. New application (Wii Shop Channel, Wii Fit) - Wii adding a new application that can scan weather, news, and website through a wireless internet connection. OPPORTUNITIES Only three big companies in the game console sector - Nintendo has been a household name in the video games industry for three decades and its was one of the pioneers home video game. Mid 90s, Sony entered with PlayStation and Microsoft introduced Xbox 360.Entering new markets - In 2006, Nintendo introduced its Wii a home video game console competing with PlayStation and Xbox 360.First successful company in the industries - Wii exceeded the record set Xbox 360 to become the fastest-selling game console in Australian history. WEAKNESSES Cut-price strategy - Nintendo announced its first price cut. In the U.S., the price was reduced by $50 to $199.99. In Japan, the price dropped from 25,000 to 20,000.Ignoring hardcore gamers - In mid-2011, Nintendo revealed the next generation Wii U dispel notions that its system is not up to par for "hardcore" video-game players. Easy games - It allows players of traditional sports such as tennis or bowling to play the game as if they were on a court. THREATS More advanced technology in the industry - Nintendo stay away from a touch-panel concept that was adopted by its DS gaming system so that both system would not be identical. It happen some technical glitches. High competitive market - The product was losing its novelty and that heavy discounts from competitors were eating into Wii's share. 4Objective and IssuesProducing companies best products and support services available. Strongly commit to provide products and marketing the best products to support service available. Believe that essential not only provide products of the highest quality, but to treat every customer with attention, consideration and respect. Listening closely to customers and constantly improve products and services. Fell an equal commitment towards employees. Wants to remain an atmosphere in which talented individuals can work together as a team. Commitment and enthusiasm are crucial to the high quality of the products and support services. 4.1 IssuesDoes not have a third party title No frequent release Does not embrace the current reality technology No launching 4.2 Marketing StrategyAdvertisement Social Media Roadshows LaunchingPromotions 4.3 PositioningNintendo first identified possible competitive advantages like price, exclusive features, gaming style and social attributes. Then the organization select the right competitive advantage which is FAMILY. It will relate all possible competitive advantages to the family. It also Emphasize the Wii as a family product that is inexpensive, has more family-oriented games and is easy for anyone to use. Lastly Nintendo communicate and deliver chosen position with new slogan which is Wii produce the action, YOU produce the fun! 4.4 Product StrategyShopping Product as in purchases for hardware, games and accessories are bought on a casual yet infrequent basis. It also makes sure that the product reaches the maturity stage in product life cycle. A new direction is formed by having more apps available on the Wii. It also build co-branding relationship with Facebook, Twitter, YouTube, Tumblr, Flick, Skype, Pandora and more which means large scale of promoting is been done through social media. 4.5 Pricing StrategyFirst of all it uses competition-Based Pricing price lower than Microsofts X-box 360 and Sonys PS3. They keep it affordable for families .Their variety of tastes will encourage the purchases of the many accessories Wii offers. They also implement bundle product pricing like family bundle ( includes hardware, 4 controllers, the latest Mario Party game and Sports), Fitness Bundle (includes hardware , 2 controllers, Wii Fit, Wii Fit Balance Board and Wii Sports, Part Pack (includes hardware, 2 controllers, Mario Kart, Mario Party and Dance Dance Revolution. 4.6 Distribution StrategyThe distribution process is been done where by parts are bought from various suppliers and constructed at the Nintendo factories in Japan and the product is distributed to branches in United States and Europe. Inspection and correct packing is applied. It uses 3 channel Levels which are manufacturer, wholesaler, retailer before it reaches the customer. Their wholesalers are Mega Goods, Super UFO, Ingram Entertainment, Light in the Box and BRE Software. On the other hand their retailers are Wal-Mart, Target, Best Buy, and Game Stop, Toys-R-Us. 4.7 Marketing CommunicationIntegrated Marketing Communication is the approach to obtaining the objectives of a marketing campaign through the use of different promotional methods that are intentionally designed to support each other.It is also used when companies are trying to attract new customers and retain them in the future.The stronger the brand value of a company is the easier it will be for the company to retain customers. Nintendo worked with advertising agency Leo Burnett for over seven years but in 2007 they decided to break away from them.This resulted in a bidding war between advertising firms to establish who would work with Nintendo.The marketing firm Karmarma outbid three other firms with a bid of $13 million to become the current advertising agency for Nintendo.Going out of their way to let people know they care about everyone, not just their target market has allowed Nintendo to build up good relationships with all they encounter. Nintendo use the following ways to advertise their brand: InternetHaving a market that is influenced greatly by technology and innovation, Nintendo decided to put a big percentage into internet marketing. Placing ads on popular websites such as YouTube, Google and Facebook will help to reach the target market in a larger way. Also giving the consumer an opportunity to purchase products online allows them to purchase at their own leisure. Nintendo have set up contracts with some of the top gaming websites which include gamestop.com, ign.com and cheatcodecentral.com. Exposure through these leading websites will give Nintendo instant exposure and the ability to reach the target audience quicker. Interactive/Direct Mail Direct and Interactive media is another way Nintendo can target a segment and keep them interested. Demo booths set up in stores such as Gamestop will give Nintendo give the market the ability to try out games before they buy them. This gives them familiarity with products and decreases the chance of a customer returning a game that they do not like. Interactive kiosk in shopping shopping centers will also allow customers to get an idea of what the product is about. Billboards promoting our Nintendo will generate a buzz and interest that will have consumers talking and interested to see what the company has to offer.Television Like any company, television is an important method to use for integrated marketing program. A strong advertising message will be a strong component to building solid ground within the market. Placement of commercials on stations such as Cartoon network, MTV and ESPN will target a good part of Nintendos target market. In saying this Nintendo will also broadcast advertisements on channels that will target all types of consumers. The great thing about what Nintendo are doing is that they feel gaming is for everyone to enjoy. To get that information out to everyone Nintendo need to have an integrated marketing communications approach that exceeds those that they have put out in the past.Magazine Magazine is a media link that is not used enough by companies. Nintendo want to hit the magazine market in a way that will brings positive feedback and customers desiring Nintendo products. Bleed pages is a strategy that Nintendo want to incorporate to grab the readers attention. Nintendo have set up different structural measures with two of the most popular gaming magazines: Game-pro and Game-informer. When reaching out to the older market or less known markets, Nintendos strategy will concentrate more on the ability to enjoy games at a certain age than the actual game they are playing.Promotions Nintendos promotion objective has less money thrown into it, but seems to bring about the most interest. Coupons in magazines and kiosks placed in shopping centers will have opportunities to get discounted items and other bonus options. Combining the products in with different discounts of purchases keeps customers happy that they get a help with pricing, but also keeps them purchasing within the company. Such promotions as purchasing a Nintendo game, you could get up to ten percent off your next video game. 4.8 Strategy Blue Ocean Strategy Swinging The Power The What Get their customers to think of themselves as vested in their interest. Ordinary individuals can take control over their financial decisions. The How Nintendo Crowdsourcing which is vote up or down various elements of upcoming games. Make suggestions directly to the on top of screenshots of preview builds released by developers. The best ideas are fast-tracked to the developer and either end up in the game or as an add-on. Users are able to proudly display what they have contributed to Nintendo and are awarded by being a beta tester for example. The Why Transparency is the key concept here. Customers want to have their say and feel reciprocated, especially on an individual basis. Customers can take control of their financial destiny by being couch-side developers. The basic architecture for this is already in place. Using Nintendos Miiverse platform, players can upload hand drawn sketches on the tablet. Comments are also heavily moderated for the family-friendly factor. A likes system is already in place for generic posts about games. 4.9 Marketing ResearchIt does research by having questionnaire with the customers in comparing sony or other competitor. It targets the customer with the results of the research thus Nintendo is the only game company that target ladies. 4.10 Marketing OrganizationGenyo Takeda (Representative Director,IRD General Manager) Shigeru Miyamoto ( Representative Director, EAD General Manager) Reggie Fils-Aime (NOA President) Satoru Shibata(NOE President) 4.11 Action Programs 4.12 BudgetsTotal projected revenue for 2011: $2,178,770,000 The Tii Vii is estimated to generate $107.22 million in net income before income tax. Break-Even: 6,420,789 units, $1,129,994,656 The Tii Vii will break even within the first year. This is based on sales of 12.38 million units, which is 20% of target market segments. 4.13 ControlsNintendo will consistently review the success of the Tii Vii marketing campaign and work to maximize efficiency and continually improve processes. Nintendo will measure success via the following factors:Annual plan: Sales Revenue Market ShareProfitability: Contribution Margin Net Profit MarginProductivity: Promotion Redemption Rate Percentage of Shipments delayed or damaged Production Levels meeting Consumer DemandStrategic: Customer perception of brand image - annually Awareness of social responsibility campaigns annually Marketing audit annually