BB Group Project ( Nintendo Switch) PDF

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Summary

Buyer Behaviour group project...

Description

MKTG1052 - Buyer Behaviour LF03 - Group 75 Prepared for: Mr Foo Hee Luan Submitted by: Name

RMIT Student ID

Wong Jia Hui

S3745784

Michelle Gay Mei Xuan

S3744815

Poon Bi Zhen

S3747139

Loy Qiao Ling

S3745116

Lim Shu Min

S3745061

Ng Li Ling

S3745176

0-GROUP 75

DUE 5 OCT, 7PM, submit via TURNITIN (one student submit!) Submit one day before! Due in Week 12.

The assignment will be structured within a marketing mix framework, exploring internal, external and decision-making influences and involves a detailed and in depth analysis of the primary target market. 4000 words and maximum 10% more (excluding tables and charts)

1. Market………………………………………………………………………………….... 2. Competitors …………………………………………………………………………... 2.1 Direct Competitors ……………………………………………………………. 2.2 Indirect Competitors ………………………………………………………….. 3. Identification of Target Markets ………………………………………………………. 3.1 Primary Target Markets ………………………………………………………. 3.2 Potential Market Segments …………………………………………………. 4. External Influences …………………………………………………………………….. 4.1 Culture and Subculture ………………………………………………………. 4.2 Demographics ……………………………………………………………….... 4.3 Group influence ……………………………………………………………….. 5. Internal Influences ……………………………………………………………………... 5.1 Needs and Motives …………………………………………………………....

5.2 Perception …………………………………………………………………… 5.3 Learning ……………………………………………………………………… 5.4 Lifestyle ………………………………………………………………………… 6. Consumer Decision Making Processes …………………………………………… 6.1 Information Search ……………………………………………………...…… 6.2 Consumers’ Product Evaluation ……………………………………………. 6.3 Consumers’ Shopping Behaviour …………………………………………… 6.4 Post Purchase Behaviour ……………………………………………………. 6.5 Product Disposal ………………………………………………………...……. 6.6 Brand Loyalty ……………………...………………………………………….. 7. Marketing Strategy …………………………...…………………………………….….. 7.1 Comparison for Marketing Mix Approach with Competitor …………….…. 8. Evaluation and Recommendations ………………………………………………… 8.1 Evaluation ……………………………………………………………………… 8.2 Recommendations ..………………………………………………………… 9. Conclusion ……………………………………………………………………………… 10. References ……………………………………………………………………………

1. Market Nintendo Co. is a renowned Japanese company specialising in video games and electronics. To date, Nintendo has sold close to 5 billion video games and 725 million products worldwide. Their best-selling gaming systems include the Game Boy, Wii, Nintendo 3DS and the latest Nintendo Switch. Learish, J. (2017, May 15). The Best-Selling Nintendo Consoles And Games Of All Time, Ranked. Retrieved from https://www.gamespot.com/gallery/the-best-selling-nintendoconsoles-and-games-of-al/2900-1219/15/

Nintendo. (n.d.). Nintendo History. Retrieved from https://www.nintendo.co.uk/Corporate/Nintendo-History/Nintendo-History-625945.html

Size of Market

In 2018, consoles and PC games combined have taken up the other half of the games market share. Between console games and PC games, console games are slightly more successful, having generated $1.7 billion more revenue. .

For the next few years till 2021, forecasts have shown that consumer spending on games will rise to $180.1 billion with a CAGR of 11%, making it a 100 billion dollar industry. This is outstanding progress for an industry existing for only a few decades. Wijman, T. (2018, April 30). Global Games Market Revenues 2018 | Per Region & Segment | Newzoo. Retrieved from https://newzoo.com/insights/articles/global-games-market-reaches-137-9billion-in-2018-mobile-games-take-half/ Market Share

In 2017 Nintendo came in third place in the consoles market, followed by industry giants Sony and Microsoft. Although Nintendo lost to Microsoft in 2017 as they earned $2 billion lesser than Microsoft, IHS Markit’s analysts are anticipating Nintendo to take over Microsoft in 2018. Nintendo’s sales

is estimated to reach $11 billion and Microsoft’s to fall to $9 billion. Wijman, T. (2018, April 30). Global Games Market Revenues 2018 | Per Region & Segment | Newzoo. Retrieved from https://wccftech.com/nintendo-microsoft-console-market-2018/ https://www.marketwatch.com/story/nintendo-gains-share-on-microsoft-ingame-console-market-2018-03-07 Depth & Breadth of Product Range

Nintendo have been focusing on their twin product line strategy: Handheld Consoles and Home Consoles. For example, Game Boy, Pokemon Mini, Nintendo DS, Nintendo 2DS and Nintendo 3DS are in the handheld consoles product line. As for their Home Consoles, it includes the Color TV Games, Super Nintendo Entertainment System, Virtual Boy (3D console), Nintendo 64, Gamecube, Wii and Wii U. Not only that, they have curated video games along with their various consoles. Some of the well known characters would be Pokemon, Zelda and Mario. Nakamura, Y. (2017, July 23). Nintendo may be moving away from its twin product line strategy. Retrieved from https://www.seattletimes.com/business/nintendo-expected-to-mergedevices-into-single-hybrid-called-switch/ http://nintendo.wikia.com/wiki/List_of_Nintendo_handhelds

Product Positioning

Nintendo Switch has very competitive prices as compared to its competitors and its features of being able to play on-the-go and able to connect it to a large screen at home to play makes it even more attractive for both gamers and non-gamers.

Product Life Cycle Stage

Graph 2: Nintendo Switch’s Product Life Cycle Stage The Nintendo Switch experienced a strong growth in sales and profits since it was being introduced in the market and its distribution channels have been increasing. The product has also been reaching a wider audience and has a steady increase in revenue. Nintendo Soup. (2018, June 20). Nintendo: Switch's Success Is Due To Its Being Better Positioned Than Wii U | NintendoSoup. Retrieved from https://nintendosoup.com/nintendo-switchs-success-is-due-to-its-beingbetter-positioned-than-wii-u/ Product in terms of features and Benefits

Nintendo Switch is the 7th major console developed by Nintendo and was released in March 2017. It’s marketed as a hybrid console whereby it is primarily a home console with its main unit inserted through a docking station but could be removed and switch into portable mode alternatively. It is designed to bring games to life. Nintendo. (n.d.). Features - Nintendo Switch Official Site. Retrieved from https://www.nintendo.com/switch/features/

2. Competitors Direct/Indirect Competitors

Direct Competitor: Microsoft XBox One S

Product Specifications / Features

Features: - 4K Ultra HD Resolution ● 4K UHD Blu Ray ● 4K Streaming - High Dynamic Range (HDR) - Spatial Audio Gears: - Controllers and Remote - Charging solutions & Hard Drives - Headsets and Communication - Stands (Specifically for Xbox One S)

Price

Console: - From $499.99 Video Games: - Ranges from $0.00 to $79.90 - Limited edition games > $79.90 Gears: - Ranges from $24 to $194

Promotion

Features: - Light, Adaptable & Comfortable - Transcendent Sounds - Varieties of Games & Experiences → Eg:VR Video Games, VR Apps, Netflix, Youtube VR, Oculus TV)

Gears: - VR Gears: Oculus Rift, Oculus Go, Oculus VR

Video Games: - Ranges from $0.00 to $39.99 Gears: - Ranges from $129 to $399 - $399 USD (Oculus Rift) - $129.99 USD (Gear VR) - $199USD (Oculus Go 32GB), $249 USD (Oculus Go 64GB)

Digital Media Platforms (Instagram, Facebook, Youtube, etc) Gaming Events: - Game Start Asia - Asia GAME Festival IT SHOW Events: - COMEX

Place

Indirect Competitor: Oculus VR

Addressing social issue: (Increasing use of e-cigarettes) - Coming out with smokeSCREEN VR backed by Facebook’s Oculus.

1. Online Retailers (Amazon, Walmart) 2. Official Website Physical Retailers (Newstead,

HTC, Video games retail shops

Harvey Norman)

The Direct Competitors would be Microsoft XBox One S, Sony Playstation as they are the more well known players in the gaming industry. We chose XBox One S to focus on because the pricing of the consoles and target audience are similar. Sources: J., & GameStart Asia. (2018, September 13). [GIVEAWAY] : HyperX Cloud Alpha & Cloud Stinger Core Headsets. Retrieved from https://news.gamestart.asia/?s=xbox Accessories | Xbox One. (n.d.). Retrieved from https://www.xbox.com/en-SG/xboxone/accessories Join us at Asia GAME Festival and be part of Asia's most happening gaming event of the year!Get your tickets here now. READ MORE. (n.d.). Retrieved from https://asiagamefest.com/ Microsoft Xbox Brochures from COMEX 2018 Singapore on Tech Show Portal. (n.d.). Retrieved from https://www.hardwarezone.com.sg/comex/view_brochure/17872/#.W4QIJMzbOQ Pick up an Xbox One S console with Minecraft bundle for only S$298 from Microsoft Store now. (2018, March 21). Retrieved from https://www.greatdeals.com.sg/2018/03/14/xbox-one-s-minecraft-bundle-microsoftstore-offer-march-2018 Xbox One | Retailers. (n.d.). Retrieved from https://www.xbox.com/en-SG/xboxone/retailers The Indirect competitors of Nintendo Switch includes Oculus VR, HTC VIVE, iDevices & Apple TV and Onlive. All of the stated competitors do not focus on game consoles excluding Nintendo Switch. Oculus VR and HTC VIVE specialise in gears which provides VR experiences through their VR games whereas iDevices & Apple TV uses Apple tablets as a game console to allow consumers to play games on a Apple TV. Out of these competitors, Oculus VR is our main indirect competitor. Games Machines. (2018, February 25). Retrieved from https://www.stuff.tv/top-10/games-machines Zigu. (n.d.). Nintendo SWOT Analysis | Competitors & USP | BrandGuide | MBA SkoolStudy.Learn.Share. Retrieved from https://www.mbaskool.com/brandguide/consumerelectronics/5382-nintendo.html Eaton, K. (2012, July 30). Nintendo's Wii U Is Flashy'But Its Competitors May Be Flashier. Retrieved from https://www.fastcompany.com/1758601/nintendos-wii-u-flashy-its-competitors-may-be-flashier Oculus. (n.d.). Retrieved from https://www.oculus.com/ Sipherd, R. (2018, June 20). Facebook's Oculus backs VR game to help teens kick e-cigarette habit. Retrieved from https://www.cnbc.com/2018/05/03/facebooks-oculus-backs-vr-game-to-help-teenskick-e-cigarette-habit.html Size of Competitors:

From the statistics, we can infer that Playstation 4 has the highest sales of 75,282,342 (units) with XBox One coming second with sales of 36,030,181 (units) and following by Nintendo Switch with the sales of 14,455,009 (units). From the total sales of all the consoles through January 2018, it shows that Nintendo Switch is closing the gap on XBox One. The PlayStation 4, XBox One and the Nintendo Switch has passed the 75 million mark, 36 million mark and the 14 million mark respectively. With reference to the market share, the Playstation 4 is currently in the lead with 60% market share, followed by XBox One with 29% and lastly Nintendo Switch with 11%. ("PS4 vs Xbox One vs Switch Global Lifetime Sales ? January 2018," 2018) Sources: Video gaming console market share 2017 | Statista. (n.d.). Retrieved from https://www.statista.com/statistics/276768/global-unit-sales-of-video-game-consoles/ PS4 vs Xbox One vs Switch Global Lifetime Sales ? January 2018. (2018, March 1). Retrieved from http://www.vgchartz.com/article/272742/ps4-vs-xbox-one-vs-switch-globallifetime-salesjanuary-2018/

3. Identification of Target Market(s):

3.1 Primary Target Markets

Based on the research, 43% of Switch users are aged between 25-44 years old. As such, generation Y segment is considered as Nintendo Switch’s primary segment. (Wynne, J. 2017) Generation Y have higher spending power compared to the others, thus the pricing of Nintendo switch is considered affordable to them. Generation Y also appears to have high rate of usage of gaming devices due to their good understanding of technology products (Zickuhr, K. 2011). Nintendo Switch is also found to help working adults in generation Y combat workplace stress effectively (Keach, S. 2018). References: 1. Wynne, J. (2017). Nintendo Switch demographics show it is competing with PS4 and XB1.Retrieved from https://csgmagazine.com/2017/04/29/nintendoswitch-demographics-show-it-is-competing-with-ps4-and-xb1/ 2. Zickuhr, K. (2011). Generations and their gadgets.Pew Research Center: Internet, Science & Tech. Retrieved from http://www.pewinternet.org/2011/02/03/generations-and-their-gadgets/ 3. Keach, S. (2018). Millennials are playing video games to cope with life stress, study finds. The Sun. Retrieved from https://www.thesun.co.uk/tech/5541388/video-games-stress-mental-health/

3.2 Potential Market Segments Nintendo Switch & Microsoft XBox One S Demographics

Potential Market Segments

Segment 1 Baby Boomers

Family life cycle

Family in later years

Unattached young adults & Married adults

Unattached young adults & Married adults

Unattached young adults

Gender

Male & Female

Male & Female

Male & Female

Male & Female

Income

No income

High

High

No income

38 - 53 years old

24 - 37 years old

6 - 23 years old

High

High

High

Age

Education level

54 - 72 years old

Medium

Segment 2 Generation X

Segment 3 Generation Y

Segment 4 Generation Z

Psychographics Potential Market Segments

Segment 1 Baby Boomers

Segment 2 Generation X

Segment 3 Generation Y

Segment 4 Generation Z

Activities

Vacation

Work & entertainment

Work & entertainment

Study & entertainment

Interests

Home & recreation

Job & home

Job & recreation

Recreation

Opinions

Themselves

Business & social issues

Business & social issues

Education

Behavioural Potential Market Segments

Segment 1 Baby Boomers

Segment 2 Generation X

Segment 3 Generation Y

Segment 4 Generation Z

Benefits sought

Entertainment

Brand

Entertainment

Entertainment

Readiness to purchase

Low

High

Medium High

Low

Rate of usage

Low

Medium

Heavy

Low

Loyalty status

Nonusers

Potential users

Regular users

First- time users

4. External Influences Generation Y are technology-savvy users who are updated with the latest trends and product launches (Ankita Varma, 2015). Since the Switch is a relatively new product in the market, it would attract consumers of this generation. They also possess high purchasing power and are willing to splurge on entertainment gadgets, thus making them able and willing to purchase the Switch. The adopter category that the Nintendo Switch would appeal to is the Early Adopter category. Early adopters are typically the most opinionated and likely to kick-start trends (Investopedia, 2018). They adopt quickly and look for product benefits which attracts them to Switch. Another group of consumers that the Switch might attract would be the early and late majority. They are more practical compared to early adopters, and would research before committing (Investopedia, 2018). The Switch suits them due to its versatility of it being a home and portable console. This freedom of choice is unique yet useful for gamers, hence perceivably worth buying for them. Varma, A. (2015, August 30). What makes Gen Y tick. Retrieved from https://www.straitstimes.com/lifestyle/what-makes-gen-y-tick Investopedia. (2018, February 16). Adopter Categories. Retrieved from https://www.investopedia.com/terms/a/adopter-categories.asp

4.2 Demographics Gender

It was found that the majority of Nintendo players are male (86%). Males tend to have dedicated interests compared to females (Henry, J. 2017). For instance, women prefer shopping, watching movies etc instead of playing games at home. Conversely, men can spend their entire day for playing games at home.This results in Nintendo Switch having lesser female consumers than male consumers. Henry, J. (2017). Only 11% of Nintendo Switch Players Are Women. Retrieved from http://jstationx.com/2017/11/02/nintendo-switch-players-women-statistics Age -

Generation Y being digital natives, appears to be the highest user of Switch among all-ages. They grew up in the world of technology and are more familiar with digital devices compared to other generations. Comparing to generation X, generation Y has longer attention span when playing games. On the other hand, most of the baby boomers are retirees and they are not obsessed with technology. Generation Z who born after late 90’s do not have spending power like generation Y because commonly they are still students. This sums up that the reason why there is an influence of age upon consumption.

Socioeconomics (income and education) Income & Assets - Generation Y are mostly working adults with high spending and earning power. Although consumers of generation X have high income, their consumption of Nintendo Switch is low. They prefer spending their money on mortgaging their own assets, and do not prioritise gaming devices (Alhanati, J. 2012, July 30). In addition, baby boomers aged between 54 - 72 years old and they are all retirees with no income. As such, their readiness to purchase Nintendo Switch is low. Lastly for the consumers from generation Z, the price of Nintendo Switch is too expensive for them as they are still students with no income. Reference : 1. Alhanati, J. (2012, July 30). The Generational Debt Gap. Retrieved from

https://www.investopedia.com/financial-edge/0812/the-generational-debtgap.aspx Education -

Technological tools have been implemented in generation Y’s learning process from an early age, making it into a necessity in their lives. Conversely, Generation X was not used to technology since young and lack technological knowledge. Baby boomers are not obsessed with technology, making it a challenge for them to learn and adopt. This concludes that there will be an influence of socio-economics factors upon consumption of Nintendo Switch.

4.3 Group influence Nintendo Switch’s reference group influences consumers through Information Influence. Information Influence occurs when behaviours and opinions of reference groups are used as useful pieces of information. The identified references group for Nintendo’s Switch are game reviewers. Game Reviewers are hard core gamers who have been in the gaming industry for years and they write critics and opinions on different games and their consoles. In the world of gaming, consumers or gamers, who do not have much expertise about the product, usually get hold of up-to-date information through reviews from gaming blogs. Such reviews influences the word of mouth, increasing recommendations from friends and families. ("Who Influences Gamers?," 2010) Hence, typical consumers get influenced by the information provided by game reviewers and make intelligent purchase decisions after gaining more knowledge. Sources: Who Influences Gamers? (2010, July 11). Retrieved from https://www.adweek.com/brandmarketing/who-influences-gamers-102776/

5. Internal Influences 5.1 Needs and Motives

Maslow’s Hierarchy of Needs describes the human needs in a five-tier model: physiological needs, safety needs, belongingness and love needs, esteem needs and al...