Concepts and Theories
Majority of companies employs both consumer-oriented approaches and organization-oriented approaches to increase sales and promote customer loyalty. Information obtained through market research enables an organization to introduce a new type of product popular among consumers or improve an existing product to make it more useful.
Additionally, the information from market research enables a company to focus on promotional activities and pricing to increase sales. Companies dealing in technology products engage in product-orientation approach to attract more customers than the other players in the market. This involves innovative products that are high-tech and with more user-friendly applications. Other companies establish relationships with retail shops to help in distribution of their products.
Evidence and Analysis
The competition between the three companies dealing in video game consoles i.e. Microsoft, Nintendo, and Sony is stiff with each employing different marketing strategies to generate more revenue and build a competitive advantage. The focus on younger generation customers who form the bulk of the customers contributed to the increase in competition.
Microsoft went a notch higher in 2001 by introducing the online gaming; Ethernet, which allows users to play video games online. The next generation video game technology has led to introduction of mobile gaming by Nintendo and Sony’s play Station Portable (PSP) device which are more user-friendly; a move enhanced by the availability of Wi-Fi and broadband in most residential homes.
Microsoft’s strategy involves cutting down the cost of production by moving its console manufacturing department to Asia. Microsoft also strategized to release its Xbox 360 earlier before the other competitors, thus ensuring market dominance in next-generation consoles. Microsoft’s product promotions and advertising involving cooperation with partners created consumer awareness and usefulness of the Xbox 360.
Implications
Competition in the console technology has led to establishment of partnerships with retail stores like Wal-Mart and Target to promote distribution of their products. The competition has also led to companies increasing their production line to include a wide range of products. Microsoft in 2006, developed PC models with features that provide a unique online gaming experience to the users.
Nintendo resorted to mobile gaming by introducing the Gaming boy Advance in 2001, selling more than 75 million units. Sony on the other hand, entered the mobile gaming market segment with the introduction of Play station portable (PSP); another hit in the market.
Competition between the three companies also focused on innovative approaches to win over customers. Microsoft’s introduction of Xbox 360 in 2005 was followed by an advanced Xbox live that improved the gaming experience. The improved version coupled with strong marketing strategies allowed Microsoft to record sales of 10.4 million units of X-box lives 360.
Sony’s lapse in marketing its liquid crystal display (LCD) led to shrinking market share in 2006. In addition, the production costs for the PS3’s were high and the soft ware developers did not get sufficient time to make compatible software. Nintendo focused on producing unique and cheap products as opposed to expensive products sold by the other competitors. Such cheap products include Nintendo’s Wii that is low-tech but appealing to majority of the users.
Conclusion and Recommendation
Microsoft employed cooperation with partners to successfully market its products and ensuring that the products are innovative and high-tech enhanced its market dominance in console technology. Sony relied on high-tech products including the PS3 to increase its market and gain more revenue.
Nintendo opted for strategies that involve innovative but cost-cutting approaches through production of low-tech Wii consoles. For a company to get a competitive advantage and gain more revenue, it should focus on producing high-tech products that meet consumer needs through innovation and reduction of production costs.