3. Marketing Plan
3.3. Segmentation, Targeting and Positioning Analyses
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
As argued by Newzoo (2020), the game Pokémon GO appeals to the different groups of audience; however it specifically targets Millennial consumers, who grew up watching Pokémon cartoons. Although the initial strategy was to capture this specific market share, Niantic Inc. succeeded in growing a significantly larger audience of customers who are motivated by treasure hunting and enjoy geocaching (Easternpeak, 2020). The following section of the report will consider these issues to perform segmentation, targeting and positioning analysis for Niantic Inc. Taiwan.
3.3. Segmentation, Targeting and Positioning Analyses
Segmentation, targeting and positioning analyses are a common set of marketing techniques, which help determine target audience for the product offering, unique sub-populations of customers and help position the offered products or services in relation to the competition (Armstrong et al., 2018). First of all, segmentation analysis of Pokémon GO Taiwan is presented in Table 2. Among the identified age groups (Table 2), Niantic Inc. should target the following sub-groups: 0-17, 18-24, 25-34. These groups are more likely to be an owner of a smartphone in Taiwan and be interested in AR type of game. When compared to the U.S. market, Taiwanese residents have a significantly lower income, it is mainly employed, professional, students and stay-at-home moms will be targeted, as these categories of customers are more likely to have sufficient resources for the in-app purchases. As demonstrated by Newzoo (2020), although male customers appear to have a slightly more interest in Pokémon GO, the game is also enjoyed by the female audience.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 10 Demographic characteristics of Pokémon GO users (source: Newzoo, 2020)
As shown in Figure 10, according to the available data, among the players of Pokémon GO there are 43% females and 57% male players (Figure 10). Furthermore, within these categories, majority of the females are 21 – 35 years old; similarly, majority of the male players (26%) are between 21 and 35 years of age (Newzoo, 2020). This means that the company has to target both male and female audience. Another demographic characteristic to be considered when positioning Pokémon GO product is where the customers are originally from: local residents or Taiwan or foreign tourists visiting the island temporarily. Depending on the year the total number of tourists on Taiwan may reach 10 million. This makes it important for Niantic Inc. to target both local residents and tourists as depending on the event (or season of the year), revenues obtained from the visiting tourists can exceed the in-app purchases obtained from the local residents. Therefore, Niantic Inc. has to target both demographic groups.
‧
Table 2 Segmentation analysis for Pokémon GO Taiwan
Segmentation Groups Target
Demographic characteristics
Age groups: 0-17, 18-24, 25-34, 35-44, 45-54, 55+
0-17, 18-24, 25-34 Profession/ occupation: unemployed, students,
stay-at-home moms, professional, retired
Students, stay-at-home moms, professional Where from: locals, foreign tourists locals, foreign tourists
Sex: males, females Males and females
Family lifecycle phase: not married, newly married, Full nest I (1 child), Full nest II (2 children), Full nest III (3 children), Empty Nest I, Empty Nest II
Not married, newly married, full nests 1 and
2
Living: tier 1 (urban), tier 2 (rural) Urban and rural
Psychographic
Cultural references: grew up watching
Pokémon, not interested in Pokémon before the game, avid gamers
Watched Pokémon growing up, interested in
computer games Values: curious about travelling, adventurous Adventurous
Behavioural
Lifestyle: active, healthy, on go, stays at home most of the time, sporty, inactive, focused on work
Active, stays at home, on go, focused on work Frequency of gaming: once a month, once a
week, 2-3 times per week, daily, multiple times per day
2-3 times per week, daily, multiple times per
day Sought benefits: recreation, winning the game,
competing with friends, engaging in a physical activity, easy to engage in and stop during a busy day
recreation, winning the game, competing with friends, easy to engage in
and stop during a busy day
Mobile purchasing: never, rarely, sometimes, frequently, unlimited
sometimes, frequently, unlimited
Family lifecycle phase is another important demographic characteristic to consider when developing a business plan (Armstrong et al., 2018). In the case of Pokémon GO and Taiwan, the preferred groups of customers will be those who are either unmarried, newly married, or Full Nest (I or II) (Table 2). The rationale for this choice is that these categories of residents are more likely to belong to the target age demographics and have sufficient resources and time to engage in Pokémon GO playing.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
The study by Colley et al. (2017) clearly illustrates that location of the users has a significant impact on popularity of the game and its outcomes. As shown in Figure 11, the number of Pokestops and its density per square kilometer reduces significantly in rural areas.
People who reside in rural areas are significantly more disadvantaged in regards to playing and progressing in Pokémon GO when compared to the urban residents. For example, according to the data by Colley et al. (2017) while the average density of PokeStops is 2.9 per square kilometer in most of the urban areas, the similar value is only 0.03 for the rural areas of the United States. This means that currently, urban areas have on average 97 times more Pokestops when compared to the rural areas (Colley et al., 2017). This data provides a unique insight, according to which there is a large section of market (people living in urban areas) that is underserved as the residents simply have little access to the Pokestops.
Figure 11 Popularity of Pokémon GO: rural versus urban (source: Colley et al., 2017)
For Niantic Inc. to develop an offering interesting for the local audience it is also important to understand what attracts players to the game. In regards to consumers` cultural values (Table 2), the company may target both, individuals who did not watch Pokemon as they grew up, and those who actually did. Niantic Inc. will mostly focus its attention and effort on the customers, who value creativity, exploration are adventurous and curiosity-driven.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 12 Competitor analysis (source: Newzoo, 2020)
One important characteristic feature of Pokémon GO is that it offers players a unique opportunity to begin and stop the game whenever they want, which makes the game stand out among its competition (Figure 12). Another important behavioral characteristic of the target audience sought by Pokémon GO is that they are those individuals, who are interested in the game providing an opportunity for travelling, visiting different places and flexibility (Newzoo, 2020). Niantic Inc. therefore has to position its product as a flexible AR game offering, available to individuals, who are not necessarily gamers and who are not willing to invest into costly AR headsets, but at the same time have spare resources to conduct in-store purchases. The following section of the report will develop a marketing mix based on the developed STP strategy.
3.4. 4P`s Marketing Mix
Prior to formulating a clear approach towards 4P`s marketing mix (Armstrong et al., 2018), this Thesis will formulate a marketing strategy, most applicable within the context of the Pokémon GO marketing in Taiwan. Ansoff matrix ( Figure 13) will be used as a strategic tool to formulate such strategy. Ansoff matrix is a commonly adopted model, which allows a given organization to formulate its strategic approach by focusing on two dimensions: products and markets. The four available strategic options include: market penetration, product development, market development and diversification (Armstrong et al., 2018).
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 13 Ansoff matrix
As per Ansoff matrix, Niantic Inc. has a number of strategic options in regards how the company will strengthen its positioning in Taiwan. The environmental and STP analyses strongly suggests that there are a number of user segments, which have not been engaged by the game (e.g., residents of urban areas). Thus, market penetration strategy (focuses on the existing markets while using the existing products) can help the company target this specific segment of users. On the other hand, development of the new products can help increase market share by targeting users, which have not been watching the famous Pokemon cartoon when they grew up (e.g., Generation Z).
Product. Pokémon GO should remain the core focus of Niantic Inc. in Taiwanese market. Furthermore, similarly to the strategy adopted by the company so far, it should remain focused on the smartphone gaming, as the key platform to attract and engage the maximum number of players (Easternpeak, 2020). As shown in market analysis, console gaming accounts for less than one third of the gaming population (Newzoo, 2018). In addition, as shown in STP analysis, rural players remain one attractive niche for Niantic to capitalize on and the company should take advantage of this opportunity. These gamers, however, due to the lower income when compared to the urban population are less likely to invest in consoles or expensive AR/VR sets (Euromonitor, 2018). Therefore, smartphone-based Pokémon GO is the most logical product for Niantic Inc. to offer in Taiwan. In addition to that, Niantic Inc. has to adopt a more complex business strategy to attract local businesses and use the in-app ad platform to promote themselves during this difficult period of time.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 14 The list of different Pokémon, based on their rarity (source: Pokemongo, 2020) Another critical aspect of the proposed marketing mix strategy for Niantic Inc. is to ensure that Taiwan is viewed as a unique location by the foreign tourists – another important group of consumers targeted by this mix. In order to achieve this goal, it is important to understand that the company generates interest and curiosity among its customers by allowing them to hunt unique creatures – Pokémon. As illustrated in Figure 14, these creatures differ in their appearances, which makes it more challenging and interesting for the players to pursue the different Pokémon. One important stimuli and motivation for the players to engage in Pokémon GO is to catch the so-called rare creatures. In order to make Pokémon GO more appealing to the foreign tourists, Niantic Inc. should develop Pokémon exclusive to Taiwan.
This will help attract tourists from Asia Pacific as well as die hard Pokemon fans from Europe, North America and other parts of the world.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Price. Currently Niantic Inc. uses the pricing strategy of value pricing to sell items via Pokémon GO. Pokecoins is one example of how the users may spend money when playing Pokémon GO as the game itself is free to download (Easternpeak, 2020). Figure 15 illustrates six options the users have when purchasing Pokémon GO currency: 100, 550, 1.200, 2.500, 5.200 and 14.500 coins. Although intuitively the biggest bundle (14,500 Pokecoins) appears to be the most cost-saving, in reality it is the smallest bundle of 100 Pokecoins that is the most cost-efficient (Figure 15). This strategy adopted by Niantic Inc. is not accidental and is based on the following motivational considerations to engage the users into future purchases: (1) to eliminate the initial entry barriers; (2) create habit-forming behavior; (3) no commitment/
drawback model. According to the market analytics data majority of the Pokémon GO players (54%) make over 50,000 USD per year (Easternpeak, 2020). This means that vast majority of the gamers can afford purchase the bundle. However, as the company wants to increase market share in Taiwan and attract more users, the challenge is to further reduce the entry purchase barriers.
Figure 15 Pricing options for buying Pokecoins (Niantic, 2020)
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Thus, the business plan suggests penetration pricing model to be adopted by Niantic Inc.
to increase its market share in Taiwan, particularly its rural areas. Penetration pricing is a strategy concerned with offering a lower price (when compared to competition) in an effort to attract more users (Johnson et al., 2014). This type of pricing will help appeal to the residents from the rural areas, who have a significantly lower level of income when compared to the urban population.
Table 3 illustrates the proposed bundle model for in-app purchases for Pokémon GO in Taiwan. As shown in Table 3, Niantic Inc. is advised to lower its bundle prices to account for the economic factors discussed above. For example, the first bundle has an initial cost of 0.99 USD cents, however Niantic Inc. is advised to sell it for half that price – 0.50 USD cents in order to keep the purchase barrier low for the Taiwanese players.
Table 3 The proposed pricing options for Pokémon GO in-app purchases Bundle Original price Proposed price
1 0.99 0.5
2 7.99 0.99
3 14.99 4.99
4 49.99 9.99
5 62.99 14.99
Another important pricing consideration is concerned with two other types of products that will be offered by Niantic Inc. in Taiwan – in-app ads and sponsorships. The company will adopt a flexible scheme (on average 15 USD per 100 impressions and 100 USD per sponsorship session). The prices will fluctuate depending on the time of the year. For example, the prices for in-app ads and sponsorships (having Pokémon found in one`s café or restaurant) will increase during the winter holiday season to respond to the growing demand of local businesses to promote their offering. The key rationale underlying the proposed pricing strategy concerns the fact that Niantic Inc. has to respond to more price-sensitive local audience.
Promotion. Based on the market analysis, a number of promotional strategies have been developed to help launch and maintain of Pokémon GO in Taiwan (Table 4). The various promotional activities are described in detail in Table 4 and are divided into two groups – before the start of the intervention, and the ongoing ones. To promote the events, the following types of activities will be used: (1) Google Ads; (2) Social Media advertising; (3) influencer
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
marketing; (4) traditional media (billboards, TV); (5) local events, community-based activities;
(6) an event in a Taiwanese natural reserve area. The total budget for promotion of the event is expected to reach a theoretical number 1,909,000 USD based on other promotions(Table 4).
Table 4 Promotion for Pokémon GO Taiwan
Scheduling Activity Quarter 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Before the start
Google Ads 1,160,000 0 0 0 0 1,160,000
Social Media advertising 64,000 0 0 0 0 64,000
Influencer marketing 120,000 0 0 0 0 120,000
Traditional media (billboards, TV)
60,000 0 0 0 0 60,000
Local events organization 110,000 0 0 0 0 110,000
Natural reserve event 5,000 0 0 0 0 5,000
Ongoing
Google Ads 0 45,000 35,000 25,000 17,000 122,000
Social Media advertising 0 10,000 10,000 12,000 15,000 47,000
Influencer marketing 0 11,000 0 0 0 11,000
Traditional media (billboards, TV)
0 25,000 20,000 5,000 0 50,000
Local events organization 0 45,000 0 40,000 45,000 130,000
Natural reserve event 0 15,000 0 15,000 0 30,000
Total 1,909,000
As discussed earlier, 91% of the Pokémon GO players are interested in visiting a location because of the events. This statistical fact creates unique opportunities to promote Pokémon GO in Taiwan. For example, the Pokémon GO events should be promoted as an opportunity for Taiwan to invest and support internal tourism, particularly in the time of COVID-19 crisis. Furthermore, the game events create unique opportunities to solve some environmental issues. As shown in Figure 16, in the United Kingdom the Pokémon GO community is actively engaged in various events that involve cleaning different parks, natural areas, etc. (Niantic, 2020). A similar approach may be adopted in Taiwan to motivate local population address sustainability concerns, as well as make sure that Pokémon GO brand is associated with sustainability, community engagement, fueling local economy, etc. Such initiatives will help promote the game and the associated events, as well as help achieve the
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
triple bottom line of corporate social responsibility (CSR) as discussed by Armstrong et al.
(2018): achieving financial performance, addressing social and environmental issues.
Figure 16 Community days: Pokémon GO UK (source: Niantic, 2020)
As illustrated in Table 4, one core approach towards promoting Pokémon GO in Taiwan will be creating special events in the natural reserve areas. Annually, this type of promotion will total to 30,000 USD and will consist of 2 – 3 events in natural parks of the island. The goal of the event will be to generate awareness of the local population and foreign tourists regarding the issues facing Taiwan`s environment, wild life and natural resources. These types of events will also help strengthen brand image of Niantic Inc. and help make sure that the players associated Pokémon GO with sustainability, accountability and environmental protection.
Another example of a promotional activity will target children and adolescents and involve them navigating
Place. Being an AR game, Pokémon GO will rely on a unique blend of physical and online features and locations. Similarly to other markets, the game will be available online to be downloaded free of charge via Google Play and App Store platforms.