This research deals with a market analysis of Game stop and its ability to use e-marketing theory, its competition, customers and marketing needs, target market profile and customer relationship management. In the beginning, I will examine the company background, its competition, customers, theory of individual of the marketing and ways that are implemented in Game stop. Lastly, I will have target market profiling to assist the reader to understand the operations of the company.
The game stop is one of the largest E-retailing companies dealing with video games in the world today. The company operates in 18 countries physically with over 6,100 outlets. It was first increased in Dallas, Texas, USA whereas a small software retail company. The company has merged with various companies such as Etc and Funco. After merging with Funco in the year 2000 GameStop was born. Lates Acquition Rhino video games increased it market share as well as placing in the e-retailing industry. They offer a variety of video games products that are aimed to satisfy their customer. All their stores worldwide are networked providing the largest distributing network in the world (Proctor, 2003, p.129).
This is the recipient or the individual who consumes the final product or service. The customer is very important to the company as the company will not continue in operations if its products are not consumed. Therefore proper market communication should be done to the consumers about the company products through advertisements and other publicity to bring awareness(Keller, 2002 p.120). For the company to maximize its profits, its products must bring full satisfaction to its consumers as this will make them retain brand royalty since they will perceive certain rewards from purchasing the same product repeatedly. Although there are other economic factors that will influence the purchasing behavior of the consumers such as purchasing power, comparative prices, technological advancement, consumer credit and consumer convenience (Jttner and Wehrli,1994, p.25).
The success of Game stop depended on the availability of money from the customers. The fact that this company was set up in Texas and in particular in Dallas with an e-shop ensures that they have a wider audience and reception. The company targets the middle and upper-income population of the world that is those who have access to technological equipment to use in playing the games(Keller, 2002 p.123).
In establishing a value network the Game stop has ensured that it establishes a good relationship with the customers by ensuring that they formulate customer-friendly services and processes. In addition to this, the installation of information technology has ensured that suppliers are paid on time. In addition to this, they have a twenty-four-hour customer support system that ensures customer and product issues are addressed appropriately and on time(Jttner and Wehrli,1994, p.25).
These are the external forces to the target market. Competition in market brings about change and improvement of the product since all competitors are targeting one customer. Competition can be monopolistic or pure competition.under monopolistic competition the monopolist has absolute control over the supply of a particular product and in this case no communication with the consumer is required because there is no product differentiation. Under pure competition it is assumed that the market contains an unlimited number of buyers and sellers, that products on sale are homogeneous and undifferentiated, all buyers are fully informed and the price is determined by the forces of demand and supply(Christensen, 2000, p.20).
The existing well-known e-commerce retailers with such a high market share, especially those who are into the electronics business are a high competition for Game stops. As these retailers effectively implement niche marketing, use value-based pricing strategy, and move toward upscale discount specialty merchandisers – this is certainly going to put pressure on Game stop to design its strategies and break into the market in such a way so as to achieve its aim of becoming one of the market leaders in web-based sales of retail. Its biggest competitors include:
Amazon.com: – Amazon.com is working on redefining its niche from people interested in good value books to the time-challenged consumers who are interested in finding most things at one place with easy service and fair prices. Its plus points are that it communicates and highlights its positive points of difference before and after the sale. However, Amazon.com is currently facing the threat of losing its brand identity by extending it nonstop into new territories(Greenstein & Feinman, 2000 p.32).
Best Buy: – Best Buy is a prominent mass retailer of consumer electronics and music products. It practices markdown, uses a value-based pricing strategy for quality brands and products, and concentrates on best-selling lines and consumer trends. It has its biggest competitive advantage of being a click and mortar retailer, where it can attractively display all its merchandise as well as benefit from its website. Weight on margins impels Best Buy to have more proficient and resourceful operations and interactions throughout the company to limit costs, and to cater resources for new stores and new markets(Christensen, 2000, p.18).
E-bay: – E-bay is the leading online seller of collectibles, autos, and many other products. It has indeed worked through its success by its “location strategy” inside the virtual marketplace, which it pioneered, leading its way to create a flea market where buyers and sellers could participate in auction-type transactions. The competitive advantage that E-bay holds is in the rapport that it develops and sustains with each of its customer bases. It inspires buyers and sellers to evaluate each other, thus regulating and managing the quality of their sellers and transactions. It stays competitive by continuously growing product lines and appealing to individuals and large enterprises like IBM, Disney, and Home Depot as sellers and buyers (Christensen, 2000, p.18).
Game stop has already positioned itself as the world’s most renowned video game distributor in the flourishing e-commerce market, such an extensive experience that Game stop already has provided it with the data and figures to understand the much-needed products for customers. Game stop has positioned itself as a one-stop internet supplier of high-quality, fair-priced video games products. It has leveraged its competitive advantages to achieve the desired positioning (O’Brien, 2003, p. 78).
The competitive advantage that Game stop already has is its strong brand name and its affiliation with whoever uses video games. Its brand image and wide recognition is a strong customer-attracting factor, which cuts its advertising costs to a considerable level. Its designed competitive edge is the easiness to use the website and exclusive customer service. The easy-to-use website has substantially boosted the sales, as research highlights that sales of e-retails are frequently lost due to websites being way too complex. Another designed competitive advantage that amplifies its positioning is its superior customer service. The customer service sector serves the customer in any way that is required. There is an astounding amount of personal attention given to customers who inquire about any problem/issues or products(O’Brien, 2003, p. 82).
The marketing mix is the process of combining policy instruments that are incorporated at a particular time in a given market strategy with which marketing management competes in a particular market segment. Marketing policy and strategy are inseparable and are always influenced by marketing management. The marketing management can easily adjust the market mix for them to be able to compete effectively in a dynamic market environment. In addition, a separate market mix can be designed for each target market segment in order to compete effectively with other business enterprises which are competing for the same segment (Proctor, 2003, p. 412). The marketing mix is oriented towards the consumer since the mix represents as it were the market offering with which marketing management wishes to accomplish the business objective and in the process attempt to realize the greatest possible need satisfaction of the consumer. Since the consumer is most important the marketing mix should be developed with the greatest knowledge and care(Jttner and Wehrli,1994, p.28). In this case, the marketing manager has the task of clearly determining the market offering which the consumer desires and work backward to the specific policy instruments and elements to be employed to achieve the desired market result. This means that it is a business strategy that involves control of various parameters subject to the external and the internal constraints of the marketing environment of a company. The four marketing mix instrument are; Product, Price, Promotion and positioning(Keller, 2002 p.225)
Product policytakes care of all decisions regarding the development, manufacture and management of the enterprise’s product mix. Here the company identifies those services to offer to customers for example warranties to enhance product sales. Products offered for sale should be properly packaged to suit each customer’s needs worldwide and must conform to fashion and design so as to influence customers to buy their products. Competition to a certain target market can lead to many similar products in the market, proper branding will help to identify and distinguish products offered for sale (Proctor, 2003, 413).
Game stop Shop exclusively offers to customers who are interested to buy video games from its outlets and in this case, they are safe to get original products. Game stop offers several products in the games industry such as PC games, playing station2 and 3 games, Nintendo, sonny games, Macintosh games, Logitech games and many other games from other companies. The website below display shows the category of products being offered by the company at its online shop.
After the product has been designed and launched, the next step is to establish a price. When setting the price many issues should be considered but the price set will influence the volume sales and whether the company is making profits or losses. To increase sales, the company can decide whether to offer discounts and credit facilities(Jttner and Wehrli,1994, p.18).
As for every online retailer, designing a pricing strategy for the Game Stop is a tricky job. There is very little room for error in this area, as price hunters will go away or shift to the competitor if there is any bit of overpricing. Due to the price sensitivity of online buyers, Game stop always carries out value-added pricing. The extra small benefits and efficient distribution and after-sales services make the customer feel that they have been charged fairly. They also offer low prices to customers by practicing overall cost leadership. By achieving the lowest production and distribution costs, it prices lower than its competitors and gains a large market share(Greenstein & Feinman, 2000 p.53).
Is the movement of goods from the producer to consumer. Some companies prefer selling goods through middlemen but others sell directly to the consumer. In this case, whatever method to be agreed upon, the marketing manager should ensure that the product will be available to the customer at the right time and place as well as assist transfer of title of ownership (Greenstein & Feinman, 2000 p.61).
Game stop shop will distribute its products all over the world through 6,100 stores and e-retail shops. The retail stores that Game stop operates sell all their products and those of other companies. Game stop works as an intermediary and follows a logistics outsourcing strategy. When a customer places an order on the website, Game stop sends the product description to the store near the customer’s home and the store sends the product to the customer. Game stop also provides an interface in various languages. If people cannot understand the product description in English, they have other language options to choose from.
This is the last instrument of the marketing mix and this determines the popularity of the company in the target market. The main aim of this instrument is to influence customers so as to increase sales and profits for the company. Since there is a lot of competition in the marketing environment, consumers need information about company products which is normally done through advertisement, personal selling, and publicity. Increase communication does not mean increased sales but it shows the level of competition in the target market (Ries & Jack, 2000, p.45-52).
Game stop already has remarkable marketing communication, in fact, it does marketing for other brands. It does not join forces with any other marketing agency for its promotion has its mechanism has worked well. The innovative advertisements by the Game stop contain not just a video game but aim at telling the customers that Game stop is about product innovation. Furthermore, promotion through online games that are famous to the public such as football has enabled the company to penetrate and become competitive enough. Game stop has diversified the mediums of advertisements from the traditional newspapers, magazines, radios and TV to include billboards and the internet(O’Brien, 2003, p. 83).
The rapid increase in the growth of online marketing can be attributed to many factors. Goods, services and ideas can move across continents efficiently at the click of a mouse. Anyone can link up with anyone else, anytime and anywhere in the world. With the advent of e-commerce, the rapid growth of the Internet and online transactions taking place at all times of the day and night, today’s markets, businesses and customers never sleep. This is not only a new challenge for global businesses attempting to serve a client base that spans time zones, but also for local enterprises that can no longer afford to restrict themselves to traditional hours of doing business(O’Brien, 2003, p. 78). Online business is growing with the assistance of new powerful technologies like satellite communication, mobile telecommunications, interactive voice recognition, data mining, digital signatures, virtual private networks, and portable computing. The aim of these technologies is to benefit a firm’s online marketing efforts, in terms of both cost and value (Greenstein & Feinman, 2000 p.65).
E-business can create value for organizations if they continuously use new technology to improve their marketing system and if customer expectations are continuously met. The Internet can be used to build long-term relationships with customers(Ries & Jack, 2000, p.48).
With the evolution of the Internet, the customer today has become more knowledgeable. Companies must recognize the fact that most consumers can compare the prices of products from various companies within minutes on the Internet. Therefore, the companies can either compete on price or convince the user of superior quality, but under all circumstances, they must aim to deliver what they promise (Greenstein & Feinman, 2000 p.32).
The website attracts game producers who visit the site to either to put their games or see how the products are fairing on in the market. This is usually done by extensive mailing, telephone and banner exchange programs while also talking to and posting physical information with the local trade associations. Once an inquiry comes in, this is converted to revenue/order which is the responsibility of the sales team. Once the person places a video game brand, irrevocable order on the site, the order gets posted as a job posting and gets flashed to all company stores of the company (Greenstein & Feinman, 2000 p.51).
Customer Relationship Management
Customer Relationship Management considers specific needs for the organization’s long-term goals, performance objectives and measures of the organization, and draws the parameters defined by the organization for its cosmetic outlook and achieve that goal. It is an important tool in customer-centric strategies today (O’Brien, 2003, Ch.6, p.182). It not only enhances the quality of service but also adds more strength to compete in the highly competitive service industry. It also can improve the efficiency and reliability of systems and performance. Customer Relationship Management systems are enterprise applications that support and integrate customer-oriented business processes such as marketing, sales, and customer services to manage business interactions with customers. Customer Relationship Management analyzes and distributes a customer’s personal details and needs to the concerned departments within an organization for personalized services. Customer Relationship Management can also help initiate guest preferences, by which customers feel elated of being recognized without a formal introduction. Their personal preferences, billing details, method of payment, and eating habits can be optimized to create an atmosphere of being a very important person. The guest could use this to impress his/her guests too and recommend the resort to others on behalf of the company. By implementing Customer Relationship Management, organizations can minimize contingencies arising out of staff behavior. In a nutshell, Customer Relationship Management will:
- Evolve as the business grows with support for end-to-end business processes
- Empower Users with Role-Relevant Customer Insights
- Gain Immediate Value
- Increase Customer Satisfaction
- Reduce Cost of Ownership.
Target Market Profiling
The target market is also quite large. The auto market has been recording growth in the recent past and there are future prospects of growth. Therefore the target market is slowly expanding. The target is segmented into various categories (Jttner and Wehrli,1994, p.27):
- Children of ages 4-15 years: These are the largest consumers of video games and they contribute to 50% approximately of the whole market segment. The children, enjoy and love to play video games but to purchase they are supported by their parents. Video games have always been described as one that helps children grow.
- Adolescents: This is a segment that has largely formed the largest consumer of video games.
- Adults: This is a small group that consists of approximately 15% and it mainly consists of grown-up people who like to entertain them using video games. This segment has been known to be fully dedicated to achieving its source and has the purchasing power to do so.
The basis selected should be such that it evokes a sufficient purchase response to justify cultivating that segment. Remember if it were easy to identify the various mixes of benefits sought by the various groups in the market, segmentation would hardly present any problems. Market segmentation we should also discuss how a company should select its segments. Both general factors which one uses to evaluate any economic opportunity and the factors specific to the situation should be considered in evaluating segment options against these criteria. The marketing concept emphasizes consumer orientation and satisfaction as well as profitability for the organization. A human need is a state in which a person feels deprived of something (Thomson & Rampto, 2006). Price is the money value for the product or service offered by an organization. A retailer is a shopkeeper who buys generally from wholesalers or at times from manufacturers and then sells directly to consumers or users. Selling consists of an exchange of a product by the salesman or shopkeeper with the customer for money, and it must result in the satisfaction of the consumer and profitability for the organization. Channel decisions refer to the managerial decisions on the selection of the best routes or paths for moving goods from the producer to the consumer. Channels of distributions are concerned not only with the physical movement of goods but also with their promotion, selling and marketing control. The channel decision is important for two reasons (O’Brien, 2003, p. 93). The cost involved in the use of a channel enters the price that the consumer has to pay. The government tries to influence, regulate, intervene and also control the marketing system of a country. In addition, the government also seeks to manage shortages through a legislative process. Generally, the objectives of marketing are to keep the ethics of profit, customer satisfaction, retailer’s interest, wholesaler’s interest, etc. Department stores grew up in developed countries mainly to cater to the requirements of well-to-do people who required articles of high quality and looked forward to comfortable shopping (Schifmann and Kanuk, 2000). The stores make shopping convenient to consumers by providing them a whole range of goods in one building. Along with these abundant economic activities, the handling of coins is also a problem for the general public. The marketing segmentation variables that have been used to select the segments include (Ries & Jack, 2000, p.45-52).;
- Age: The size of the age groups of children has an important bearing on the target market. This market base serves a three-fold purpose in the segmenting; decision-making and buying by parents on behalf of children, the influence of children on the purchasing decision of parents, spending habits by the youths themselves.
- Sex: The main target market is for the company products include both male and female sex.
- Income: The large percentile of consumers has an influence on the purchasing decisions of the parents, hence their income levels become a subject of consideration. Games stop depends on the income levels of the parents.
It is recommended that internet marketing strategy be considered as a serious tool for implementing the dynamics of the client review by using the user rating and recommendation feature as suggested in the paper. In every business scenario client review which is obtained by user rating and recommendation has a significant role in establishing a credible consumer base (Kumar, Aaker and Day, 2002, p.12).
There is also a need for a well-developed website, web marketing and search engine line up which would give expansive exposure to the site. Internet business requires that people new to e-commerce business invest strongly in infrastructure that supports all aspects of customer service, technical support, product support and retuned for effective internet marketing (Greenstein & Feinman, 2000 p.45).
It is important to take control of the corporate Internet strategy to make sure that new technologies are there to initiate and enhance customer relationships. This requires that the dominant influence of technology over marketing should be minimized. It is of significant importance that the focal point of the company’s vision is the customer. The old world rules of psychology should be integrated with interactive technology (Keller, 2002 p.125). Efforts should be made to understand the customer, and explore consumer needs, wants, attitudes and motivations. There is a need to look at the historical relationship between media and technology to understand why marketing leadership is crucially important. It took years, even decades, for previous new media inventors to understand how audiences could use their technologies(O’Brien, 2003, p. 76).
Judging by the above analysis the following recommendation for Games stop can be made. Games stop should continue with its low price strategy, but implement some of the successful strategies that may draw some customers away from competitors. Games stop should implement a delivery service in some countries where they have not penetrated. Although some competitors such as Best pay and apple incorporated can offer free delivery, the savings from the low pricing strategy of Games stop could open up a whole new demographic of customers such as elderly people and dual-income families that are too busy during the week to go video game shopping. Additionally, Games stop should establish more of an online community with discussion forums. If Games stop can establish an online community more customers will return to the website and become aware of the seemingly constant bargains and promotions being offered. Lastly, Games stop could make improvements to ease at which users can locate products on the web page. When customers are frustrated by not being able to find what they are looking for they are probably not as likely to purchase items ( Kumar, Aaker and Day, 2002, p.12).
Based on this report, the Internet not only brings different images to all the elements of the marketing mix but has brought a new way to approach potential customers in a very interesting, creative and cost-effective way as well. Games stop use pictures of products with full descriptions to encourage the customers to be confident to make a purchasing decision online. Taking into account Games stop’s online performance, Games stop is perceived to be a leader in pricing strategy. However, on the other hand, Games stop could improve its online operation by adopting appealing strategies of the other two web pages. In terms of the promotion element of the marketing mix, the Internet has created a new method of distributing products ( Kumar, Aaker and Day, 2002, p.16).
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