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Saturday, December 19, 2009

Creating A Need

I'm studying marketing right now with a view to getting a degree in the field.  I'm learning some things that demonstrate why Nintendo is more successful now than in the past.

There's a hierarchy of marketing performance: Selling Products, Meeting Needs, Anticipating Needs, and Shaping Needs.  Typically, companies that merely sell a product are in the weakest position.  They're depending on other companies to create the need and then moving into that gap, so if the need goes away so does their business.  Companies that merely meet needs are in a slightly stronger position, but it's kind of a reactive field.  Someone else has found the need and probably filled that gap, so you're just competing with them in that field.

Those who anticipate needs are in much better shape.  They'll see, like Sony has, that high-definition video is becoming a big deal, so therefore there needs to be a new standard for it.  They saw that a need was coming up and they're anticipating the need.  However, Nintendo has shaped the need.  There was no need for motion controls in gaming until Nintendo made it a big deal.  Of course, Sony now talks about motion controls as being the "holy grail" of gaming, but it wasn't there until Nintendo created it.  Nintendo also created a need for touch-screen gaming and has benefited from it greatly.

I think the gaming public in general (Yahtzee excluded) is coming around to this idea.  The new market has been extremely beneficial to gaming.  Can you imagine what would have happened to gaming in this economy without the Wii?  As it was, the other consoles benefited from Nintendo's exposure and helped everyone out.  The problem is that you have to keep innovating and not rest on your laurels, but Nintendo might do just that.

This is the whole "Red Ocean/Blue Ocean" strategy that Nintendo talks about from time to time, but it's a lot simpler than that.  It's about creating a need and then filling it, which they did.