Upon immediate release of the Wii one quickly realised that once again Nintendo had revolutionized the video game industry. In a way that only Nintendo knows how they have managed to separate themselves from competitors and set out to create new markets. Their latest product is loved by consumers for the experience, price point and unique Nintendo content that it offers.
The Wii experience offers something not seen before in the industry. The immersive, motion-sensor gameplay makes the Wii unique. The product differentiation Nintendo chose has resulted from the target market Nintendo focused on. It identified and targeted groups of people who had no interest in video games. Before long the product was popular in nursing homes and kindergartens, demographics that no company in the industry once catered for. The unique experience not only “battled the difference between the indifference of people who have no interest in video games” and succeeded, it also proved attractive to innovators and early adopters. This strategy has been identified by the Journal of advertising research as a key component to rapid market penetration and high profits .
As suggested by the article energy policy late majority and laggards are categories of innovation that lack willingness to adopt new products.
The article proves that to reach these groups the innovators and early adopters must first embrace the product and that the late majority and laggards can’t be financially burdened by their purchase. Nintendo appealed to these categories by using a price penetration strategy. They brought the Wii into the market $150 cheaper than its closest competitor (Microsoft Xbox 360) and reached the mass market .
Part of the success of the Wii is the Wiimote, a Wireless motion-sensitive remote controller . Nintendo went through a heavy screening phase for the Wiimote, coming to an ingenious conclusion through attribute listing and developing prototypes that the casing of the Wiimote resemble that of a TV remote, a common appliance left lying around living rooms unlike traditional videogame controllers that are always packed away. Perhaps the highlight of the Wiimote though is the $2.50 microchip developed by analog devices Inc. A recent case study from the International Journal of Product Development reiterates having no development costs for the chip makes for higher profits. This assists the financial phase of business analysis and allows for the price penetration strategy.
From industry-changing machines, to handheld gaming devices, to 3D graphics and now to immersive gameplay the brand name Nintendo is identified as a brand proven for industry change. It was recently published that brand identification is an important variable to influence brand loyalty . The Wii permits for Nintendo brand loyalty by offering consumers Nintendo content such as Mario brothers and Zelda, consumers loyal to the Nintendo brand feel obliged to remain loyal to Nintendo products.
Nintendo has managed to find success in a market segment that had never been targeted by video game companies in the past. To maintain the growth of the product Nintendo could look to broker deals with 3rd party game companies. Already offering Nintendo favorites the Wii could be made more appealing to a larger market by forging alliances with the likes of EA Sports and Activision.
Nintendo Company History, viewed 19th April 2012 http://www.nintendo.com/corp/history.jsp
CEO Satorou Iwata, 2007, Wii will rock you, CNN Money, viewed 19th April 2012, http://money.cnn.com/magazines/fortune/fortune_archive/2007/06/11/100083454/index.htm
Danko, WD and Maclachian J,M 1983, ‘Research to Accelerate the Diffusion of a New Invention’, Journal of Advertising Research, Vol. 23 Issue 3, p39
Egmond, c, Kok, G and Jonkers, R 2006, ‘One size fits all? Policy instruments should fit the segments of target groups’, Energy Policy, Vol. 34 Issue 18, p3464-3474
Summers, J, Gardiner, M, Lamb, CW, Hair, JF, Mc Daniel, C 2005, Essentials of Marketing Second Edition, South-Western College Publishing, Cincinnati, Ohio
Wii, viewed 19th April 2012, http://www.enotes.com/topic/Wii
Consolidated Financial Statements 2007, viewed 20th April 2012, http://www.nintendo.co.jp/ir/pdf/2007/070426e.pdf#page=21
Nintendo Company History, viewed 19th April 2012
Summers, J, Gardiner, M, Lamb, CW, Hair, JF, Mc Daniel, C 2005, Essentials of Marketing Second Edition, South-Western College Publishing, Cincinnati, Ohio
Summers, J, Gardiner, M, Lamb, CW, Hair, JF, Mc Daniel, C 2005, Essentials of Marketing Second Edition, South-Western College Publishing, Cincinnati, Ohio
Summers, J, Gardiner, M, Lamb, CW, Hair, JF, Mc Daniel, C 2005, Essentials of Marketing Second Edition, South-Western College Publishing, Cincinnati, Ohio
Yadav, SR, Mishra, N, Kumar, V, Tiwari, M.K 2011, ‘A framework for designing robust supply chains considering product development issues’, International Journal of Production Research, Vol. 49 Issue 20, p6065-6088
Kuenzel, S, Halliday, SV 2010, ‘The chain of effects from reputation and brand personality congruence to brand loyalty: The role of brand identification’, Journal of Targeting, Measurement and Analysis for Marketing, Vol. 18 Issue 3/4, p167-176 