An Analysis of Nintendo’s Marketing Strategy and Global Practices
"It's a-me, Mario!" Mario, from the "Super Mario" video game franchise, is a global fictional icon. He is a short, Italian plumber created by Shigeru Miyamoto, a Japanese video game designer for Nintendo. Nintendo is a Japanese multinational company headquartered in Kyoto. They also have central control headquarters in the United States, Europe, and Australia, as well as smaller subsidiaries. Nintendo started as a playing card manufacturer in 1889 and eventually developed hardware for video games and consoles (Nintendo History, 2020). Currently, the primary product strategy is to produce simple, fun, and intuitive entertainment products.
Nintendo removes unnecessary features for gameplay like high performance and multi-media function. Some of their most popular products include the NES, SNES, Gamecube, DS, Wii, WiiU, and Switch. They also have created industry icons like Mario, Donkey Kong, Metroid, Pokemon, and Zelda. Additionally, Nintendo is expanding into new markets by collaborating with partners to build theme parks and produce films. By analyzing Nintendo's marketing environment, global considerations, and marketing mix, one can better understand Nintendo's international success.
Nintendo's marketing environment, which they operate in, dictates the company's marketing strategy. With the continuous development of the social economy, there is a general increase in consumers' purchasing power throughout the developed and developing world. Therefore, as income continues to rise, people's living standards improve, and their disposable income increases (Lamb et al., 77). Thus, consumers have more space in their budget to spend on Nintendo's entertainment products. One of Nintendo's competitive advantages is its pricing strategy.
Nintendo's initial product launch has a premium price, but once it becomes adopted into the market, the prices lower to compete with Microsoft's and Sony's game consoles. As the product's popularity declines, Nintendo applies discounts or additional benefits to push the product. Overall, Nintendo products are more affordable compared to its competitors. According to a writer for "PCMag," Will Greenwald (2019), "All current baseline iterations of the three major systems are available at $300…Stepping up to 4K gaming requires paying a premium. The PS4 Pro tacks an extra $100 onto the price, while the Xbox One X adds $200." Nintendo isn't a "graphical powerhouse," but 4K Switch games could be imminent. When thinking about consumer spending patterns on necessities and luxury items, Nintendo mass produces and outsources their products' manufacturing to make them affordable for their consumers.
Nintendo appeals to people ages 15-35 who value casual gameplay over competitive gameplay. This characteristic is a social factor that most gaming companies ignore. However, Nintendo tries to expand its market by targeting this newer segment through advertisements and games catering to different demographics and lifestyles. For instance, the game "Animal Crossing" involves slow world-building and life-planning. This small task-based game incorporates various socially constructed popular hobbies among females like sewing, gardening, and shopping. Additionally, the "Wii Fit" game tries to appeal to people with active lifestyles. Although Nintendo takes into account the social, economic, and demographic aspects of their marketing environment, since they are a multinational company, they also have to consider the global implications of their strategy.
Nintendo utilizes the global marketing standardization strategy across its headquarters, various divisions, and subsidiaries. However, Nintendo offers complementary products associated with the main console, such as the motion sensors and customizable product skins for their products. The company's goal is to expand the gaming population and create video games and consoles the same no matter where in the world. Because of this standardization, instead of adapting the product based on cultural values, Nintendo focuses on a shared value among all cultures—entertainment and sharing activities with loved ones. In addition to this common value, Nintendo also considers the economic development in the countries where they distribute their product.
The video games which Nintendo offers are those that consumers buy on a discretionary basis. Therefore, Nintendo must consider the family incomes of its consumers. Due to the general increase in BRIC countries' purchasing power and market size (Lamb et al., 78), Nintendo can expect to serve a greater global demographic in these countries as game consoles sales and popularity increase. Nintendo also considers the cost of doing business and manufacturing in another country.
Nintendo outsources computer and graphics processors and overall product development to overseas companies like Foxconn, IBM, and ATI Technologies. In March 2019, at the beginning of the COVID-19 pandemic, consumers increased their demand for the Nintendo Switch to relieve their anxiety or boredom. However, the multinational company has struggled to meet the demand due to the COVID-19 recession impacting component sourcing throughout the global supply chain (McKellop, 2020). Additionally, politics play an increasingly important role in outsourcing countries to develop the components needed to create the final Nintendo product.
Nintendo relies on Chinese manufacturing; however, uncertain relations between the United States and China motivated Nintendo to move some production. According to Colin Lloyd (2017), a newsletter macroeconomic commentary writer, "Malaysia, India, Thailand, Indonesia, and Vietnam…have a competitive advantage over China in the manufacture of labor-intensive commodity-type products." Nintendo may have concerns about the potential for increased tariffs on goods produced in China. However, their official statements reveal their decision to transition elsewhere is not a direct result of the trade friction, but rather an opportunity to "diversify our manufacturing options" (Snider, 2019). While Nintendo employs a standardized product, it adapts its marketing mix's to achieve success internationally.
Nintendo maintains a physical and online distribution network around the world. Nintendo manufactures products and distributes it via wholesalers to retailers to customers. Their product is available at gaming stores, hypermarkets, and physical and online retail stores throughout Japan, the United States, and Europe. The online distribution includes downloadable content, game updates, and accessories. Additionally, people can purchase refurbished systems or bargains on "eBay.com." Since Nintendo promises "borderless commerce," they adjust their promotional tactics depending on the country advertising the product.
Nintendo utilizes traditional, online, and social media advertising campaigns to generate hype. Nintendo engages in promotion adaption via television commercials to appeal to different cultural audiences (Lamb et al., 94). For instance, in Japan, the Wii commercial has minimal dialogue and narration but emphasizes the product name due to Japanese society being a high-context culture. In contrast, the Wii commercial played in the United States had a direct storyline and wester influenced music to overtly express the notion that the Wii is a game console everyone can play and an explicit call to action to purchase it. Nintendo produced differing commercial to cater to the different ways each market perceives fun. After analyzing Nintendo's marketing environment and considering its global considerations and mix, its strategy results in effective international competition.
Nintendo hosts special launch event days or dedicated time events to learn about new products and features. During these launch parties, people try out the product, and Nintendo gives away free t-shirts and accessories. Also, Nintendo usually attends the Electronic Entertainment Expo (E3). According to the Nintendo of America President, Doug Bowser (2019), "At E3 we're giving fans a look at what's in store for the rest of the year and beyond by demonstrating the widespread support for the system from both Nintendo and a wide range of indie and big-name development partners" (Bowser, 2019 as cited in Nintendo News). These promotional and advertising strategies make people aware of their products and become attention-seeking occasions.
Nintendo follows a global strategy with minor changes among its subsidiaries. Even so, these slight differences are not enough to disrupt the synergy between them all. Thus, Nintendo has an effective, consistent, and recognizable brand around the world. Continuing their global product standardization marketing strategy will allow BRIC countries' growth and increase consumer loyalty (Lamb et al., 61). Moving forward, one suggestion Nintendo could consider regarding their marketing practices is to conduct marketing research and interview locals of the prospective countries deemed to bring significant growth by expanding into that market. By gathering substantial research and testimonials from locals about spending habits, societal structure, customs, and preferences, Nintendo will localize their branding messages, making it easier for the new market segment to accept their business. As the video game community continues to grow, Nintendo will have a whole new generation of gamers ready to meet Mario.
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