Nintendo Gameboy Colour Launch

1 EXECUTIVE SUMMARY

Peter MacDougall the president of Nintendo was responsible to launch the colour version of Nintendo's Game Boy to November 23, 1998, scheduling to release simultaneously in North America and Europe. It is the most important launches in Nintendo's history, after declined steadily since 1992 to 1996. Although Nintendo had recovered somehow in 1997 due to marketing efforts, the efforts, however this effort was unlikely to sustain as no new products can be marketed. As a result, the third party developers begun to lose their support towards Nintendo, resulted the limitation of the game offerings. They viewed their rival's, Sony Playstation as an easier platform and more profitable in developing games.

Faced with huge competition from Sony Playstation in the teens and tweens market segment, indicated that Nintendo needs to reinforce itself as the primary offering to its target market. With the new product of Nintendo Game Boy color to be launched, Nintendo will have the opportunity to continue to expand its largest market share in the handheld games market.

The launch of the strategy Game Boy Color plan is surely hope to achieve 200,000 units within the 1999 fiscal year and altogether achieved the highest possible level of profitability for Nintendo.

2 ISSUES STATEMENT

Peter MacDougall challenge was to be responsible for ensuring the Canadian launch successful. Despite of the competitive position in Canada, the Canadian launch strategy needs to be different and profitable in significant ways. Therefore, Peter MacDougall needs to increase Nintendo's market share and boost sales by making decisions in these areas:

a) Target Market;

b) Product Positioning;

c) Marketing Communication Mix;

i. Product

ii. Price

iii. Promotions

d) Marketing Mix Strategies.

3 DATA ANALYSIS

3.1 Channel of Distribution

The distribution of Game Boy in Canada had become increasingly concentrated in about 20 large direct accounts like Wal-Mart, Future Shop as well as Toys R Us. 80% of Nintendo sales had accounted from these 1,000 retail outlets. Smaller retail accounts such as specialty electronics store like Beamscope and Fidelity also contributed to Nintendo Sales. However, in the late 1990s, a number of specialty stores had delisted Game Boy due to no achieving competitive return on their sales of Game Boy both hardware and software.

Another major symptom of the decreasing sales of Nintendo is the difficulties getting the large retailers to commit their "open to buy" dollars to Game Boy. As the retailers have constraints in their budget, Nintendo had to compete against other competitors before the retailers placing an order to support the "hot" products. As Nintendo had no new product since 1997, Nintendo failed to get very much initial support from the large direct accounts.

3.2 Promotion-Marketing Communications

The marketing communication budget for Nintendo in Canada was only a small fraction of Nintendo United States. With the budget limitation, leaving no choice for Nintendo Canada but to select its ads from the pool developed by the Nintendo United States.

Compare to United States, Nintendo Canada has historically done much more grassroots marketing by demonstrating centres in Toronto, Montreal and Vancouver. This had given the masses the real experience trying out the latest Nintendo Hardware and games. Nintendo also worked closely with partners like McDonalds and Famous Players Theatres to promote its products.

3.3 Competition

An early competitor for Game Boy was Atari Lynx, which was the world's first color handheld video game system. It was launched in 1989 and had a backlit screen. However, Atari experienced siginificant difficulties during the 1990s and had essentially gone out of business in 1998.

The TurboExpress was a handheld 16-bit graphics active matrix color liquid crystal display (LCD) screen. In comparison to Atari Lynx and Sega's game Gear that only had 8-bit graphics chip, the Turbo Express had one major weaknesses, which is the short span of battery life of only 3 hours.

The strongest competitor was Sega's Game Gear which had 32-color backlit LCD screen. Sharing the same limitation with the TurboExpress, Game Gear too drained batteries very quickly. Sega's other product, Nomad which was introduced in 1995, too faced the short duration of batteries life.

Therefore, despite all of the competitive competitors in the handheld games, Game Boy still has the prospect of regaining its largest market share.

3.4 Customer

The disposable income was substantially lower, especially among kids/"tweens" and teens in Canada, compare to the United States. This resulted a lower sales achievement for Nintendo in Canada. As Game Boy was typically purchased by their parents as a holiday gift or great report card present, the purchases are more seasonal rather than all year round.

The kids too, have the potential in becoming Nintendo Game Boy Color's target market by positioning the product as a "gotta have" product for the younger set. The size of population among the kids segment shows the potential to associate the product as being the "cool and must have" product. However, similar to the tweens, the purchasing power would still be on their parents and therefore remains the seasonal purchases.

The teens that comprises more male than female, have the prospect of purchasing power throughout the year. However, many had already owned a Game Boy leading this segment to view the product as "old technology". The teens instead, appeared to move past the handheld machines to console due to greater spend and game complexity. Moreover, there is a possibility of other competitors are targeting teens as their market segment, leaving Nintendo to gain smaller market share.

Table 1: Population of Canada By Sex And Age

3.5 Behavior/Decision Making

Considerations in terms of price, may become one of the main determinants in the decision making phase. Nintendo in Canada charged slightly higher in Canada compare to its neighbour United States. This resulted greater sales in the United States partly to this pricing decision.

In order to address the behaviour of its target