Nintendo is one of the most famous and large-scale companies in the software & tech services industry, or rather in the field of video games since many children and adults in the United States and the world love its games. The company is the creator of games with famous characters like Mario, Donkey Kong, and Pokémon that people worldwide know and love. The stock price of Nintendo’s shares currently reaches 71.41$ (“NTDOY”, 2021). Nintendo was founded in 1890 by Fusajiro Yamauchi as a small playing card company, and in 1980 Nintendo of America became a wholly-owned subsidiary under the leadership of Minoru Arakawa (“Nintendo’s history,” n.d.). Today, the President of Nintendo America is Doug Browser, and the company produces video games, game consoles, and accessories, as well as virtual and physical add-ons to games. Today Nintendo America is one of the largest after Nintendo Co., has 1,191 employees and generated 43.2% net sales for the entire corporation in 2019-2020 (“Nintendo CSR Report 2020”, 2020). Thus, Nintendo America has a significant chance of successfully launching a new product. However, the development of the marketing strategy for Nintendo’s new product should focus on strategic marketing planning and implementation.
Nintendo of America’s Mission, Goals and Strategy
One of the main tasks of any company is to maintain its identity, which is usually expressed in the mission, goals, and values of the organization. Nintendo is no exception as its central images and message are known throughout the world to customers and fans of the company as well as the general public. For this reason, it is essential to evaluate Nintendo’s corporate strategy, goals, and mission to develop an efficient market strategy.
Nintendo has a strong mission statement and is focused on customer intimacy. The company’s mission is to produce and market the best support services and products available. Additionally, the company believes that it is crucial to provide high-quality products and treat customers with respect, consideration, and attention. One of the main features of Nintendo is that, according to its vision statement, the company has a solid commitment to putting smiles on the faces of every person the company touches. This statement refers not only to the customer but also to the suppliers, shareholders, and company’s employees (“About Nintendo,” n.d.). Thus, this message should be central in the marketing strategy for the new product.
Moreover, Nintendo is dedicated to being a leader in the gaming industry with innovative products, which has achieved its ultimate goal of bringing smiles to its customers. The company uses an innovation strategy at the corporate level, which has provided a competitive advantage. One of the main technical features of Nintendo is that it makes games designed to be used only on Nintendo devices. This approach has two advantages since it allows the company to improve the technical characteristics of games to avoid errors due to bad software compatibility and get regular customers who buy only Nintendo games and consoles.
These benefits also encourage the company to invent and improve innovative options for consoles and other technological tools with an emphasis on innovation and quality. For example, the company offers Amiibo, a series of figurines of different game characters that come to life on the screen when they contact the console (“What is amiibo?” n.d.). This way, players can find out which of the characters will win the battle, even if they are from different video games. Innovation also has been the source of success in recent product launches such as the Nintendo Switch, which brought the company significant profit. Therefore, this strategy should be maintained for the new product of the company.
Nintendo’s New Product and Its Rational
The advancement of technology in the world of video games is forcing Nintendo to use every opportunity to maintain a competitive advantage and retain its customers. One of the fastest-growing technologies in recent years has become virtual reality (VR) devices and games. For this reason, the company’s new product is the Nintendo VR headset, which will take its place among traditional consoles in the video game industry.
The launch of the Nintendo VR headset has several rationalizations related to the external and internal aspects of the company’s operation. Firstly, in recent years, virtual reality gaming headsets have emerged as a new technology that has shaken the industry. First appearing at amusing public centers, VR technologies are now available to anyone to play at home due to their relatively low cost and ease of use. This feature has resulted in the fact that the number of virtual reality gamers has increased. Consequently, the demand for VR headsets and games adapted for them has also grown significantly, opening up a new niche for Nintendo’s development. Thus, launching the Nintendo VR headset to capitalize on the massive market of VR gaming and the Nintendo Switch is a good business decision (Forzoni et al., 2019). However, this fact is only one of the external reasons.
Another reason for the launch of the Nintendo VR headset is market competition from other video game manufacturers. Sony has already sold five million PlayStation VR units in 2020 since its launch in 2016 (Parlock, 2020). Although VR technologies are not prevalent in the market yet, they show promising perspectives; thus, the success of Nintendo’s competitors means that the company should develop in the market of VR gaming. Consequently, Nintendo’s marketing goal is to achieve and surpass the success of the leading PlayStation VR headset.
Moreover, Nintendo’s intrinsic features and strengths are beneficial for launching the Nintendo VR headset. First, Nintendo is a company that focuses on creating the highest quality technologies and attractive features that allow the company to develop games with unique technical characteristics. Consequently, Nintendo customers expect a quality and unique product from the company that outperforms the competition. Thus, the success of recent product launches and strong brand recognition will help achieve product success (Tomczak et al., 2017). In other words, the combination of a company’s technological advancement and brand recognition will contribute to the sales and profitability of a new product. Therefore, all these features demonstrate that the launch of the Nintendo VR headset is the most appropriate and beneficial development strategy for the company currently.
Process of Marketing Strategy Development
The marketing strategy of any new product must be carefully and accurately planned to address potential barriers and challenges. For this reason, marketers must use a set of marketing tools to assess the external and internal factors that influence the company’s success. Consequently, Nintendo’s marketing strategy process will be done through situational and SWOT analysis, market segmentation, targeting and positioning, alignment with corporate strategy, 4P’s and 5C’s marketing, and mission statement.
Nintendo needs to conduct a SWOT analysis and situational analysis. A situational analysis needs to be done to uncover and identify key trends, future opportunities, or problems in the internal, customer, and external environment. At the same time, SWOT analysis demonstrates that Nintendo’s strengths are its excellent distribution network, competitive pricing, strong brand, and innovative products (Business Strategy Hub, 2020). At the same time, the weaknesses are that the company depends on a relatively narrow sample of popular title games such as Mario. Therefore, these features also demonstrate the potential for developing VR games and unique, innovative features of the product and the threat of high competition.
A situational analysis can most accurately be done with the five C’s of marketing, which stand for features overview of a company, customers, collaborators, competitors, and climate. While the SWOT analysis demonstrates the main strengths and weaknesses of the company, the analysis of other characteristics of its activities helps to determine the focus of the marketing strategy. Firstly, the digital and traditional marketing campaigns need to be aligned with Nintendo’s corporate strategy and mission statement. The company focuses on a unique consumer experience that makes its customers happy and satisfied (Appel et al., 2020). Secondly, an analysis of Sony as Nintendo’s main competitor is also needed to identify and exploit the strengths and weaknesses of the PlayStation VR units and outperform them.
At the same time, Nintendo has reliable suppliers and employees traditionally focused on innovation, which implies successful product development. However, Nintendo needs to analyze and select the best VR development companies to consult and collaborate with them. Climate analysis also demonstrates beneficial conditions for launching the product because the US economy shows significant growth after the recession caused by the pandemic, while indoor activity is still popular (Schwartz, 2021). Analyzing customers and their needs and interests is also part of the five C’s tool; however, a more detailed and appropriate approach would be to use STP marketing.
STP marketing is more appropriate for Nintendo because it aims to segment and target its regular and new customers. Targeting the vast market of approximately sixty million Nintendo Switch customers will provide a strategic focus, making the marketing strategy efficient. Market segmentation will allow the company to target customers who love the Nintendo Switch, which would be a more streamlined focus (Ferrell & Hartline, 2017). At the same time, part of the marketing efforts will be directed to new customers who have not yet used Nintendo products and therefore are not familiar with their benefits.
Furthermore, Nintendo also needs to use the four P’s to shape its marketing strategy or determine the most appropriate product, promotion, price, and distribution place. The rationalization of the need to launch the Nintendo VR headset demonstrates the benefits of the product; however, the company has to define the characteristics of the new VR headset that make it stand out. For example, the Nintendo VR headset is optimally positioned as an accessory that consumers can take anywhere in the world and play their favorite games.
The pricing strategy used will be price skimming, allowing the firm to make huge profits early in the launch of the product. The premium prices will also undercut the competition of other headsets. The promotion strategy will focus on strategic locations such as big-box retailers, and the price will start at $ 200, which will rival other brands with higher prices. The place of sale will also be the online store Nintendo of America and large online distributors such as Amazon. In addition, the promotion strategy will focus on the vision and mission of the company, as well as the portability of the device. In other words, the main emphasis will be the device’s versatility for buyers of all ages, gender, and video gaming experience and Nintendo’s mission to make people smile. Therefore, all of these details must be taken into account when formulating a marketing strategy for launching the Nintendo VR headset.
Evaluation of the Strategy Success
The success of the Nintendo VR headset launch, like any other product, can be measured in the short-term and long-term perspective. In the short term, the primary indicator of success is the number of new product sales as well as customer reviews. In the long term, measurements should also take into account the number of video game sales for the VR headset since an active purchase of new games means customer satisfaction with the quality of the product. In addition, since Nintendo’s games are suitable only for its devices, the numbers will be more accurate.
However, key indicators can be defined in several ways. Firstly, preliminary sales forecasts should be estimated based on Nintendo Switch sales, adjusted for VR technology marketing research. For example, pre-ordering the Nintendo VR headset can provide an indication of the potential demand for a product. Secondly, the mark of success is overcoming the number of competitors’ sales. In other words, achieving Sony’s sales in a shorter time and retention of leadership will demonstrate Nintendo’s success. Third, the profit from the sale of the Nintendo VR is a major indicator of a strategy’s success. These measurements are relevant for both short and long-term purposes. However, measures should be made for VR headsets and games adapted for this device sales separately and in proportion in the long term. In this way, the company will determine the success of the system and alter it if it needs improvement by tracking the marketing strategy (Ferrell & Hartline, 2017). This approach will also allow the company to choose different methods to stimulate sales due to the decline in the popularity of the product due to its gradual and inevitable obsolescence.
Therefore, the marketing strategy for Nintendo’s new product will focus on strategic market planning as well as its implementation. The strategy planning step will include situational and SWOT analysis and the use of four P’s, five C’s, and STP marketing. These kinds of research are essential to accurately determine all aspects of the marketing strategy for VR headsets regarding its features, price, and distribution. At the same time, evaluating the company’s corporate strategy, mission, and goals helps determine the characteristics of the marketing strategy and its central message. The implementation and evaluation of the strategy’s performance are crucial to the success of the new product in the market and will be conducted by analyzing short-term and long-term sales. In this way, Nintendo will be able to adjust necessary elements of its strategy to keep profit and brand reputation. Thus, this paper shows that an effective marketing strategy is essential because it helps a business develop a competitive edge over its competitors and surpass its own abilities.
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