Marketing plan for Nintendo's mobile games product launch

Marketing Plan for a new Nintendo Product

Nintendo is the undisputable leader of the video games industry but it does not take this position for granted. Nintendo has consolidated its first place with the introduction of the Wii, and its core strategy of targeting new customers, rather than focusing on already existent customers (Farhoomand, 2009). The same strategy would be implemented regarding the new product -- the game collection for mobile telephones. The move towards this product is given by the necessity to ensure sustained rapid growth of Nintendo and the securing of a leading position within the national and international industries.

The first move in the creation of a marketing plan is constituted by the analysis of the situation, meaning a simultaneous look at both the company as well as the market and industry in which it operates. The company analysis was conducted with the aid of the SWOT matrix, revealing the strengths, weaknesses, opportunities and threats. The most important characteristics are revealed by brand and financial strength, counter-balanced however by an increased dependency on manufacturers and a relative inflexibility.

The analysis of the external environment -- industry and market -- was conducted with the aid of the PEST matrix, detailing the forces which currently mark the political, economic, socio-cultural and technological fields. The most notable of them include a political emphasis on the protection of the consumer, an increasing customer base, a reduced purchasing power or the massive technological developments which pose both opportunities as well as threats.

Based on the company and industry analysis, as well as based on the features of the product to be developed and commercialized, the target markets are identified as adolescents looking to be fashionable, young male adults looking to enhance their hi-tech experience and young female adults looking to engage in complementary pleasurable activities. The successful launch of the Nintendo mobile games onto each of these personas is characterized by risks associated with the adjacent competition for the respective personas.

The next step is constituted by the construction of the marketing mix, which virtually integrates the strategic decisions which need to be made regarding the product, the price, the channels of distribution or the promotions.

The budget estimated for the entire marketing campaign is of $500,000, with an forecasted return of $1 million during the first year of sales. The first risk is that of investing the money without retrieving a real ability to generate a return on the investment. The mitigation of this risk would be insured by the correlation of the outcomes with the expectations and the development and implementation of solutions as necessary.

The second major risk is that of going over the budget and getting expenses out of control. This risk could however be mitigated with the assignment of a special committee to oversee the spending of the marketing budget. Finally, the third most important risk is posed by the complexity of the marketing campaign, which simultaneously addresses three different and complex personas. The mitigation of this risk would be achieved through the slow implementation and the thorough and immediate analysis of all intermediary outcomes and impacts.

2. Situation analysis

2.1. The company

The analysis of the organization is best conducted through the construction of the SWOT matrix, revealing the internal strengths and weaknesses, but also the external opportunities and threats, as follows:

Internal strengths

- Long standing reputation as innovator and a strong, well developed brand

- Leading position within the international community

- Vast technological expertise

- Sufficiency of resources to research, develop and market new products and a limited dependency on borrowed funds (Datamonitor, 2010)

Internal weaknesses

- Large organizational size which often generates loss of centralization abilities as well as the loss of flexibility

- the Nintendo applications are often inflexible and depend on other devices, such as consoles or joysticks

- the company depends on manufacturers to retail its applications (Datamonitor, 2010)

External opportunities

- Increasing interest for video games and other technological applications

- Enlarging market share as more people gain access to technology

- Increasing popularity of mobile application and the ability to extend into this market

External threats

- Despite the advent of technology, there are still global regions in which technology is not a daily commodity. This reduces the opportunities for global expansion

- Fierce competition within the industry

2.2. The market

Similar to the analysis of the company, the analysis of the market can also be conducted through the construction of a well established marketing research tool -- the PEST analysis. This is revealed below:

Political

- the political climate is rather stable, but the legislation regulating the telecommunications industry -- including video games -- is still developing. Changes could as such be expected in the future.

- the past trend has manifested in the sense of increasing patent rights, and also the protection of the customers by limiting the exposure to violence and nudity. It is expected that this trend be maintained.

Economic

- at an economic level, the most important element is represented by the emergence of the internationalized economic crisis which has generated a reduction in the spending on video games, which are not a necessary commodity.

- the second element is given by the fact that Nintendo sells its products in various global regions at fairly the same price, but this makes the products unaffordable in the less economically and still emergent economic regions.

Socio-cultural

- at the socio-cultural level, the observed tendency is that of an increasing popularity of video games among various consumer categories, including the elderly who are becoming gradually introduced to the world of it.

- the second element is composed from the incremental pressures on environmental stability, which means that economic agents have to operate in such a manner that they generate less pollution. This often implies the replacement of technologies and equipments and the generation of additional expenditures.

Technological

- the technological field reveals a series of developments which constitute both opportunities and well as threats.

- on the one hand, the technological developments allow Nintendo to improve its own products and services

- on the other hand, they also allow other players in the industry to improve their own product and service offers and generate as such more powerful competition.

2.3. Targeting

The collection of video games for the mobile telephones would address three specific customer segments: adolescents, young male adults and young female adults. The first segment is characterized by the desire to continually keep up with trends and fashion. They would purchase the games because Nintendo is fashionable and because they own the mobile telephones and desire to game on them. The second target market is composed from young adult males, with a collective interest in hi-tech applications. These consumers are often software developers or work in other positions within the technological industry. Mobile telephones represent for them a multifunctional gadget, on which they would also play games; these consumers are generally hi-tech connoisseurs.

Finally, the third consumers' base is formed from young adult females, who use the telephone for its main purpose -- that of ensuring communication. Nevertheless, the device does offer them specific applications, such as the ability to browse the internet or play a game while waiting in the parlor shop, in line at the grocery store, on the bus to work and so on. At this stage, it would be assumed that the second persona would be the most valuable for the firm as it is both able to make its own purchases -- rather than depending on the parents or other tutors -- but also because they would appreciate the complexity of the applications, rather than just the interface. This characteristic nevertheless increases customer demands and raises the bar for higher quality games.

2.5. Strategy

The selection of video games for mobile telephones has been attributed to the already established trend set by the Nintendo executives in seeking new opportunities for development. It is constructed on the same principles issued by Satoru Iwata with the launch of the Wii, when he "believed that the video game industry had been focusing far too much on existing gamers and completely neglecting non-gamers. Armed with this insight, the company repositioned itself by developing a radically different console" (Farhoomand, 2009).

With this realization in mind, the move into the mobile devices market represents a new era for Nintendo, which has generally been focused on computer games or console games. This virtually means that the organization would have to develop a marketing strategy aimed at attracting new personas. The current personas would also be encouraged to purchase the games for the mobile telephones, but a new approach is required in order to appeal to the three personas previously established. The marketing strategy to attracting new personas would be a strong and aggressive one, focused on approaching the three target markets through specific channels.

3. Marketing mix

The marketing mix -- or the 4 Ps of marketing -- incorporates the multitude of strategic choices which would be made relative to the product to be sold / launched, its price, its distribution channels (place) and finally, the promotional campaigns to be developed and implemented. "These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response" (NetMBA, 2010). The following lines detail on the strategic elements to be integrated at each of the four Ps.

Product

At the specific level of the product, several decisions would have to be made regarding issues such as brand, functionality, styling, quality, safety, packaging, repairs and support or accessories and services. The following are recommended:

The set of video games for the mobile telephones be sold under the already established Nintendo brand. This would help consumers relate to the previous success of the company and trust the brand, and subsequently, the new products.

The functionality of the games is that of offering entertainment and also challenging the individual to solve puzzles and other logical and intelligence challenges.

The styling of each game would be represented by their particular interfaces, which would be created in accordance to the game features, as well as the personas they address. A game of war for instance, would be designed using dark colors and nuances and loud noises, whereas as puzzle game would be designed using brighter nuances and noises of lower intensities.

The quality of all the games in the set would be increased and it would be supported by the most recent high definition and full high definition technologies.

The safety of the games would rely on the provisions of the active regulations which limit the incidence of nudity and violence in the video games. A need for material safety does not arise, as this would be ensured by the manufacturers of the mobile telephones, but the emotional safety would be ensured by Nintendo.

Given the immaterial nature of the game and its representation as a software application, the packaging requirements are reduced. Nevertheless, the game would be sold on data cards or compact disks, which would be packed in plastic containers that protect them throughout the transportation and storage processes.

Support would be offered by the Nintendo technical team. The contact information for this department would be integrated on the interior of the plastic packages. The functionality problems arising as a result of the actions of Nintendo would be resolved free of charge.

Finally, in terms of accessories and services, these refer mainly to the customer support services.

Price

The price strategies are ones of the most difficult to make as they stand the highest ability to influence the success of the products and the final outcomes for the organization. The decisions which have to be made at this stage refer to the pricing strategy to be impended, the suggested retail price, the volume discounts or the seasonal pricing.

At the level of the pricing strategy, it is recommended that the company implemented a penetration pricing strategy. Through this approach, it would basically forward a low retail price in order to attract customers. Once the customers are attracted and convinced of the high quality for the products, the company ought to move towards a variable pricing strategy. With this, it would implement a retail price which reflects the costs incurred in the manufacturing and distribution of the video games set. It is however expected that the penetration pricing strategy be supported for a longer period of time than normally in order to best penetrate the highly dynamic and competitive market.

The suggested retail price during the implementation of the penetration pricing strategy is that of $2 per individual game in the set. It is at this stage estimated that the first set would integrate 5 games -- either new games or modified versions of the past games, adapted for the mobile telephones. The total suggested retail price for the complete set then would be of $10. In terms of discount prices, these would be offered in the amount of 15 per cent discounts on purchases larger than 5 sets of games. As for seasonability, this is not considered as a viable element and seasonable pricing would not be implemented.

Place

The place decisions refer to the following:

The product would be sold through complex distribution channels, integrating both the personal facilities of Nintendo, as well as the intermediaries, such as the manufacturers of mobile telephones or video game specialized websites

The sale of the video games requires limited logistics efforts, but these would be ensured by Nintendo, or by its partners, as stipulated in each individual contract.

Promotion

The strategic decisions which need to be made at the level of the promotional campaign are constructed with the aid of the 6M marketing model, specifically: mission, means, message, moment, media and measurement. Before actually engaging in a discussion of these elements, it is important to note that the promotional strategy would be divided into three particular sets of efforts in order to ensure the ability to raise the interest of all three personas.

The mission of the promotional campaign is to familiarize the customers with the new Nintendo games and to generate demand for the games. The promotional campaign would be focused as such on presenting the games from three angles -- fashionable, hi-tech and enjoyable.

In terms of means, these refer to the return on investment to be generated from the plan, specifically the interest of consumers and the demand for the new Nintendo games obvious at the level of all three personas.

The message would be a triple one, as required by each of the three personas. First of all, the first message would indicate the novelty and fashionability of the new games so as to attract the adolescents. The second message would promote the high quality of the games, whereas the third message would promote the entertaining dimension of the games.

The moment element refers to the timing of approaching the personas. This moment would be the same for all three personas and would be represented by the period prior to the launch of the products within the market. This would ensure that demand for the games is created even before the items are up for sale.

In terms of the media channel to be selected in the promotion of the new video games from Nintendo, this would refer to the internet. This means is accessible to most members of the three target segments and can support the promotion of the games on various websites, especially those specialized in the differentiated topics of interest for the personas.

Finally, the measurement of the promotional campaign's success would be completed through the analysis of the reactions manifested by the three personas, their levels of interest in the product as well as the initial sales.

4. Finance and risks

At an initial level, it is estimated that the overall cost of the marketing campaign would be of $500,000, divided as follows:

$100,000 market research

$300,000 advertising and promotions

$100,000 media communications

The revenues to be generated as a result of the promotional campaign are expected to total up to $1,000,000, during the first year of sales. The revenues would be divided as follows:

$600,000 worth of sales during the promotional sales with the implementation of the penetration pricing strategy and the retail price of $10 per games set

$400,000 worth of sales after the implementation of the variable pricing strategy and the increase in the retail price.

The sums to be allocated to the marketing campaign are rather high and the main risk refers to the inability to generate the desired return on the investment. Such a risk can however be mitigated with the adequate control of the decisions being implemented and the correlation of the results with the expected outcomes. New solutions would be developed and implemented as necessary.

The second risk is constituted by the possibility of exceeding the approved budget. In order to mitigate this risk, thorough budgetary controls would be ensured. In the situation in which new financial needs arise, these would have to be approved by the executives.

A third and final risk is given by the very complexity of the marketing strategy. To better explain, the current marketing plan proposed for the launch of the games set for mobile telephones is constructed so as to integrate and attract three categories of consumers. But these personas reveal different characteristics, different needs and even different reasons for using the Nintendo video games. The effort of combining the dissimilar persons into a single positioning strategy might lead to the creation of a confusing campaign in which not enough emphasis is placed on either of the three personas. The outcome could then be that of increased amounts of money, time and other resources being spent, while the final product does not seem appealing to the customer base.

In order to limit this risk, the actual implementation of the marketing campaign would have to be slowly and gradually done. This would ensure that all immediate effects are observed and the reactions of the personas are fully comprehended. Subsequently, any errors which would be incurred in the process would be immediately assessed and addressed. Were any issues to be identified, solutions would be developed and implemented in an efficient manner. Additionally, what is necessary to remember in order to mitigate this risk is the diversification of the promotional campaign to the specific needs of the three personas.

References:

Farhoomand, a., 2009, Nintendo's disruptive strategy: implications for the video game industry, the Asia Case Research Center

Kotler, P., Keller, K.L., 2009, Marketing management, 13th edition, Pearson Education

2010, Nintendo Co. Ltd., Datamonitor, http://www.datamonitor.com/store/Product/nintendo_co_ltd?productid=AC85BB43-AE55-413B-A0AD-445DFE712CE3 last accessed on November 26, 2010

2010, Nintendo Co. Ltd., Hoovers, http://www.hoovers.com/company/Nintendo_Co_Ltd/crxkki-1.html last accessed on November 26, 2010

2010, the marketing mix, NetMBA, http://www.netmba.com/marketing/mix / last accessed on November 26, 2010