策略行銷與財務分析案例研究: 以臺灣Pokémon Go為例 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 立. 政治大碩士論文. ‧. ‧ 國. 學. Master’s Thesis. er. io. sit. y. Nat. 策略行銷與財務分析案例研究: 以臺灣 Pokémon Go 為例 a. n. v The Case Study ofl C Pokémon GO inn iTaiwan: Strategic hengchi U Marketing and Financial Analysis. Student: Ashton Atanacio Ebenhoeh Advisor: Professor Jason Tsai. 中華民國一○九年六月 June 2020. DOI:10.6814/NCCU202000651.

(2) 策略行銷與財務分析案例研究: 以臺灣Pokémon Go為例 The Case Study of Pokémon GO in Taiwan: Strategic Marketing and Financial Analysis 研究生：艾希頓. Student: Ashton Atanacio Ebenhoeh. 指導教授：蔡政憲. Advisor: Jason Tsai. 立. 政治大國立政治大學. ‧ 國. 學. 商學院國際經營管理英語碩士學位學程. Nat. sit. y. ‧. 碩士論文. er. io. A Thesis. n. Submitted a to International MBA Program v. i l C n U h eChengchi National i n g c h University. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一○九年六月 June 2020. DOI:10.6814/NCCU202000651.

(3) Acknowledgements I would first like to thank my thesis advisor Cheng-Hsien Jason Tsai (蔡政憲) of the International MBA, College of Commerce, at National Chengchi University. Professor Tsai is also a Professor of the Risk Management and Insurance Department. The door to Prof. Tsai’s office was always open whenever I ran into any trouble, I learned a tremendous amount while taking his Finance Management class and even while being his teaching assistant. It was an honor to be chosen to assist him in class and with the exams and assignments.. 政治大. I would also like to acknowledge Dr. Kondo Yuichi, Dean of Admissions, at Ritsumeikan Asia Pacific University as a major supporter of my studies. I am gratefully. 立. indebted to him for his very valuable comments and advice throughout all my educational. ‧ 國. 學. endeavors. He has always been a source of inspiration and encouragement and I will always look up to him and follow his guidance.. ‧. Finally, I must express my very profound gratitude to my parents and to my sister for. sit. y. Nat. providing me with unfailing support and continuous encouragement throughout my years of. io. er. study and through the process of researching and writing this thesis. Without their endless love and encouragement, I would never have been able to complete my graduate studies. I. n. al. Ch. i Un. v. love you all and I appreciate everything that you have done for me. This accomplishment. engchi. would not have been possible without them. Thank you.. I extend my deep and sincere gratitude to all those who have helped me to make this all possible. Ashton Ebenhoeh. i DOI:10.6814/NCCU202000651.

(4) Abstract The Case Study of Pokémon GO in Taiwan: Strategic Marketing and Financial Analysis By Ashton Atanacio Ebenhoeh This business plan focuses on the case study of Pokémon GO, an augmented reality (AR) mobile phone game developed by the U.S. company Niantic Inc. The report draws on secondary data analysis to demonstrate that due to the COVID-19 pandemic, Taiwan appears to be a highly. 政治大 as of May 2020. The conducted 立 PESTEL, Marketing Mix, segmentation, targeting and attractive geographic market for the company, as only 440 flu cases have been reported there. ‧ 國. 學. positioning analyses suggest that although local consumers are price sensitive due to the relatively low level of income, the mobile game industry in Taiwan is still in its growth phase and thus can help Niantic Inc. strengthen its financial performance, which has been challenged. ‧. due to the pandemics and declining interest towards the game. 4P`s marketing analysis suggests. sit. y. Nat. that Niantic Inc. has to focus on foreign tourists, urban residents and rural players to pursue the strategy of market penetration. In line with the identified strategic priorities, Niantic is also. io. n. al. er. advised to focus on natural reserve areas to integrate sustainability component into its overall. i Un. v. marketing strategy and brand building. Niantic Inc. has to reduce its smallest bundle in-app. Ch. engchi. purchase cost from 0.99 USD to 0.5 USD to reduce the entry purchase barriers, appealing to cater to the local residents. Finally, according to the developed financial projections, Niantic Inc. Taiwan is likely to create 83.4 million USD during its first fiscal year in Taiwan. The organizational and management and planning issues are also considered within the business plan along with the first day opening balance sheet.. Key words: AR games, Pokémon GO, Niantic Inc., video games in Taiwan. ii DOI:10.6814/NCCU202000651.

(5) TABLE OF CONTENTS 1. Introduction ............................................................................................................................ 1 1.1. Problem background ........................................................................................................ 1 1.2. Research rationale ............................................................................................................ 2 1.3. Research objectives .......................................................................................................... 2 1.4. Methodology .................................................................................................................... 3 2. Company and Product Analysis ............................................................................................. 4 2.1. Niantic Inc.: overview...................................................................................................... 4. 政治大. 2.2. Product analysis ............................................................................................................... 6. 立. 2.3. Pokémon GO and Taiwan ................................................................................................ 8. ‧ 國. 學. 2.3.1. Taiwan and popularity of Pokémon GO ................................................................. 8 2.3.2. Pokémon GO in Taiwan: benefits and limitations for the local population ......... 10. ‧. 3. Marketing Plan ..................................................................................................................... 13. y. Nat. sit. 3.1. Market analysis: Taiwan ................................................................................................ 13. n. al. er. io. 3.1.1. Video game market in Taiwan: overview............................................................. 13. i Un. v. 3.1.2. Taiwan: PESTEL analysis .................................................................................... 15. Ch. engchi. 3.2. Unique selling points and differentiation....................................................................... 18 3.3. Segmentation, Targeting and Positioning Analyses ...................................................... 20 3.4. 4P`s Marketing Mix ....................................................................................................... 24 3.5. Competitor analysis ....................................................................................................... 30 3.6. Distribution channels ..................................................................................................... 33 3.7. Sales forecast ................................................................................................................. 34 4. Operational Plan ................................................................................................................... 37 4.1. Production ...................................................................................................................... 37 4.2. Location ......................................................................................................................... 37. iii DOI:10.6814/NCCU202000651.

(6) 4.3. Legal environment ......................................................................................................... 37 4.4. Personnel, inventory, supply chain ................................................................................ 38 4.5. Operational budget considerations................................................................................. 38 5. Management and Organization............................................................................................. 40 5.1. Organization................................................................................................................... 40 5.2. Professional and Advisory support ................................................................................ 40 6. Conclusion ............................................................................................................................ 41 7. References: ........................................................................................................................... 42. 政治大. 8. Appendix 1. Sales Forecast (12 Months).............................................................................. 44. 立. 9. Appendix 2. An opening day balance sheet ......................................................................... 46. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. iv DOI:10.6814/NCCU202000651.

(7) LIST OF FIGURES AND TABLES Figure 1 Forecasted growth of Augmented Reality gaming market (source: Newzoo, 2020) ... 2 Figure 2 Global spending on Pokémon GO................................................................................ 5 Figure 3 Pokémon GO print screens (source: Niantic, 2020)..................................................... 7 Figure 4 Popularity of Pokémon GO in the United States, May 2018 (Statista, 2020) .............. 9 Figure 5 Pokémon GO player behavior: insights (source: Niantic, 2020) ............................... 10 Figure 6 Tourism growth in Taiwan (in thousands) ................................................................. 11. 政治大 Figure 8 Online population (Newzoo, 2018) ........................................................................... 15 立 Figure 7 Forecasted video game market growth (source: Forbes, 2019) ................................. 14. Figure 9 Leading types of smartphone brands in Taiwan (source: Statista, 2020) .................. 17. ‧ 國. 學. Figure 10 Demographic characteristics of Pokémon GO users (source: Newzoo, 2020) ........ 21. ‧. Figure 11 Popularity of Pokémon GO: rural versus urban (source: Colley et al., 2017) ......... 23. sit. y. Nat. Figure 12 Competitor analysis (source: Newzoo, 2020) .......................................................... 24. io. er. Figure 13 Ansoff matrix ........................................................................................................... 25. al. Figure 14 The list of different Pokemons, based on their rarity (source: Pokemongo, 2020) . 26. n. iv n C Figure 15 Pricing options for buying h Pokecoins (Niantic, e n g c h i U2020) ............................................. 27 Figure 16 Community days: Pokémon GO UK (source: Niantic, 2020) ................................. 30 Figure 17 Competition in Taiwan games and toy industry (source: Euromonitor, 2019) ........ 31 Figure 18 The forecasted revenue streams for Pokémon GO in Taiwan.................................. 35. Table 1 Points of parity and points of differentiation for Niantic Inc. ..................................... 19 Table 2 Segmentation analysis for Pokémon GO Taiwan ........................................................ 22 Table 3 The proposed pricing options for Pokémon GO in-app purchases.............................. 28 Table 4 Promotion for Pokémon GO Taiwan ........................................................................... 29. v DOI:10.6814/NCCU202000651.

(8) Table 5 Competitor analysis: comparison ................................................................................ 32 Table 6 Professional and advisory support ............................................................................... 40. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. vi DOI:10.6814/NCCU202000651.

(9) 1. Introduction 1.1. Problem background One of the most widely discussed Human-Computer Interaction (HCI) inventions was the global success of Pokémon GO – the location-based game introduced in 2016 (Newzoo, 2020). Although location-based games have existed for almost a decade before Pokémon GO was introduced, the latter can be viewed as an example of democratization of the segment. At a peak of its popularity, Pokémon GO had more active users than the social networking platform Twitter and enjoyed more user engagement than Facebook (Alha et al., 2019). Thus, Pokémon GO can be credited with the first major success and widespread popularization of the concept. 政治大. of location-based gaming among millions of people around the globe (Alha et al., 2019).. 立. However, as argued by Broom et al. (2019), success of Pokémon GO differed. ‧ 國. 學. significantly from country to country and thus local and contextual factors have a major impact on performance of this game. As shown in Figure 1, although the various segments of. ‧. Augmented Reality gaming are expected to grow, the most significant growth is and will continue to be observed within the mobile segment (Newzoo, 2020). Moreover, according to. Nat. sit. y. the forecasts developed prior to the COVID-19 pandemics, the global augmented reality game. er. io. market was expected to reach 174 billion USD in 2021 (Newzoo, 2020).. al. n. iv n C offer products and services to the customers the time of quarantine and self-isolation. h e n gduring hi U c Pokémon GO is an example of a game in which the players have to visit various physical. Due to the emergence of COVID-19 pandemics, companies face various challenges to. locations in order to progress.. 1 DOI:10.6814/NCCU202000651.

(10) 立. 政治大. ‧ 國. 學. Figure 1: Forecasted growth of Augmented Reality gaming market (source: Newzoo, 2020) However, as the countries began to introduce quarantine measures, the latter created a. ‧. situation where the fans of the game can no longer enjoy freedom to catch the Pokémon. One important consideration that while some countries (the United Kingdom, the United States, Italy,. y. Nat. sit. Spain) were hit hard by COVID-19 virus, others (e.g., Taiwan, South Korea) were able to avoid. al. er. io. or mitigate majority of the negative effects (Wang et al., 2020). These differences in how heavy. v. n. the COVID-19 impact was and the nature of quarantine measures make Taiwan one of the most. Ch. i Un. attractive geographical markets for the Pokémon GO game.. 1.2. Research rationale. engchi. Commercial success and cultural popularization of Pokémon GO present a unique opportunity to explore marketing and financial underpinnings of such performance. To the present knowledge, no systematic attempt has been made to critically analyze the marketing implications of promoting Pokémon GO in Taiwan in the face of COVID-19 pandemics. Thus, the present study will attempt to address this research gap.. 1.3. Research objectives This research aims to explore marketing and financial aspects of Pokémon GO`s success and explore whether it is feasible for Nintendo to focus its effort to further popularize the game. 2 DOI:10.6814/NCCU202000651.

(11) in Taiwan. Although a large proportion of urban population of Taiwan is already known to play Pokémon GO, there is significantly less activity and interest related to Niantic Inc.`s game in rural Taiwan (Euromonitor, 2019). Therefore, rural Taiwan residents as well as other groups of people present a unique target for Niantic Inc. to increase its market share in Taiwan. To achieve the established objective, this report will conduct an overview of the company (Niantic Inc.) and its product portfolio, focusing specifically on Pokémon GO. The report will also conduct an in-depth exploration of why Taiwan is a suitable market for such a business initiative, and whether Pokémon GO can benefit the country itself.. 1.4. Methodology. 政治大 on one case study – Niantic Inc. 立 in Taiwan, and promotion of one of its products – Pokémon This report is based on secondary data and adopts a mono-method approach, focusing. ‧ 國. 學. GO. Secondary data will be extracted from the available industry reports, corporate websites, scholarly databases and other reliable sources. Marketing plan will be developed based on the performed market, competitor, and segmentation, targeting and positioning analyses. The report. ‧. will draw on the 4P`s framework to develop a comprehensive marketing mix for Pokémon GO. sit. y. Nat. in Taiwan. Finally, operational and management and organizational plans will be developed to explore which aspects of strategic management and operations does Niantic have to account for. io. n. al. er. in Taiwanese market, including financial aspects, forecasted revenues, etc.. Ch. engchi. i Un. v. 3 DOI:10.6814/NCCU202000651.

(12) 2. Company and Product Analysis This section of the report will conduct a thorough analysis of the company (Niantic Inc.) and its key offered product - Pokémon GO. Although an entire product portfolio of Niantic will be mentioned, the section will specifically focus on Pokémon GO, as it is the product the current business plan focuses on. The second part of this section will explore the uniqueness of Taiwan as a market for Niantic Inc.`s products, and explore how the proposed business intervention can benefit the company and the island.. 2.1. Niantic Inc.: overview. 政治大 Niantic Inc., founded in 2010. The company is based in San Francisco, U.S., and apart from 立 creating Pokémon GO is also known for a number of other augmented reality games for the. Pokémon GO has been developed by an American software development company,. ‧ 國. 學. smartphone users. Harry Potter: Wizards Unite, Ingress. Niantic Inc. first emerged as a Googleaffiliated start-up (Niantic Labs) in 2010 and became independent in 2015. Niantic Inc. has. ‧. experienced a major financial success in 2016 when its hit product Pokémon GO was released. y. Nat. (Alha et al., 2019). As shown in Figure 2, annual global expenditures on Pokémon GO were. sit. 832 mln USD in 2016 and grew to reach 894 mln USD in 2019 (Broom et al., 2019). 2017 had. er. io. less growth due to player fatigue and a lack of innovation. However, as the international markets. al. n. iv n C which puts Niantic Inc. into a position, the company has to think of new effective h e nwhere hi U c g solutions to strengthen the product`s positioning.. become saturated and the initial enthusiasm over Pokémon GO is likely to continue to decrease,. 4 DOI:10.6814/NCCU202000651.

(13) 學. ‧ 國. 立. 政治大. Figure 2: Global spending on Pokémon GO. Niantic Inc. has chosen a unique niche – the augmented reality (AR) games, with its. ‧. first game being Field Trip. The first success of the company was a mildly popular Ingress. y. Nat. (Broom et al., 2019). The company is innovation driven, and focuses on constant growth and. sit. expansion to the new geographical markets and extending its current product portfolio. While. er. io. the company is open to the new business ideas and partnerships, the key focus of Niantic Inc.. al. n. iv n C that the company has successfully identified unique business niche. h e n its gchi U. is AR-based games, platforms and business solutions for the game developers, which suggest. The company is pursuing the strategy of acquisition to achieve local and international growth. More specifically, in 2020 Niantic Inc. has acquired Escher Reality, a start-up committed to developing multi-user AR and virtual reality (VR) types of solutions that can be used across the different platforms. The company is also in the process of acquiring Matrix Mill, which is specialized in building AR solutions based on deep neural networks that help create 3D images within the surrounding environment. In addition to acquiring the tech start-ups, Niantic Inc. also partners with innovative companies to collaborate on the specific projects. For example, as of 2020, Niantic is collaborating with Fuji TV and Craftar Studios in order to come up with an anime adaptation of its first hit – Ingress Prime, which is supposed to air in 2020 (Niantic, 2020). These acquisitions and partnerships help Niantic Inc. develop ways to make. 5 DOI:10.6814/NCCU202000651.

(14) AR tools more affordable and accessible to a wider range of users and draw on a multi-platform approach to increase audience outreach of its games. This strategy by Niantic is aligned with its vision, according to which “… Today and in the future, augmented reality will continue to provide dynamic ways to connect digital information, objects, and experiences with the physical world in situ as you experience them” (Niantic, 2020, n. p.). According to the company, the strength of AR is in offering unique potential to enhance various human functions, create, and imitate unique experiences. As pointed out on the company`s website: “Augmented reality can transform the mundane into something more colorful and fun, and can provide a useful nudge to go off and see new places. 治政 effectively combine three components into the offered 大 products (user experiences): (1) real 立 world gaming; (2) geospatial technology; and (3) world-scale augmented reality game. Such and meet new people” (Niantic, 2020, n. p.). The strategic vision of the company is to. ‧ 國. 學. ambition is only possible if Niantic Inc. puts effort into internationalization and penetration of the existing markets.. ‧. 2.2. Product analysis. Nat. sit. y. As of 2020, Niantic Inc. offers four types of main products (services): the Niantic Real-. al. er. io. world AR platform, Pokémon GO, Harry Potter: Wizards Unite, and Ingress Prime (Niantic,. n. 2020). While the latter three are AR games, the first service is a platform developed by the. Ch. i Un. v. company to be marketed to other technological firms and start-ups, that wish to design games.. engchi. The key feature of the Niantic Real-world AR platform is that it allows to blend in the worlds of AR and the real world, and helps scale hundreds of millions users and engage them in gaming, via allowing easy communication, shared information, security, full AR functionality, mapping, etc. (Niantic, 2020). As the goal of this report is to develop a business plan for Niantic`s strategy in Taiwan regarding marketing and finance of Pokémon GO, this section of the dissertation will specifically focus on this particular product. Pokémon GO can be described as a location-based game that is free to play. Niantic Inc. has developed it for both, Android and iOS devices and the game was first released in the chosen countries in July of 2016. To play Pokémon GO, players have to use various mobile devices (e.g., smartphones, tablets) with such capabilities as geographic location to identify, capture and fight virtual creatures (referred to as Pokémon). These creatures appear on the user`s screen 6 DOI:10.6814/NCCU202000651.

(15) as if they were seen in real-life geographic location by the player (Alha et al., 2019). There are over 150 different types of Pokémon, which can be classified into the following categories: water, normal, ground, ghost, grass. The plot of the game is centered around the individual Pokémon appearing temporarily and unpredictably at the new location, which is referred to as “spawning”. It is only during spawning that the players are able to catch the Pokémon and it is the main way for the players to progress in the game.. 立. 政治大. ‧. ‧ 國. 學 er. io. sit. y. Nat. al. iv n C h e GO As shown in Figure 3, Pokémon n gallows c h i theUplayers to engage in many different n. Figure 3 Pokémon GO print screens (source: Niantic, 2020). activities throughout the day in addition to the main task – catching Pokemon creatures. Although initially the game was developed as a solo walk through for the individual players, who have to visit different locations, it has undergone some changes as Niantic Inc. has been responsive to the needs and preferences of the community of players (Broom et al., 2019). Importantly, Niantic Inc. promotes the unique sense of belonging to a community of players. For example, the players are referred to as “trainers” because they can train their Pokémon, reaching higher levels and advancing within the game. As shown in Figure 3, the game also allows “buddy” adventures, which creates an opportunity for a group play. Another important modification Niantic Inc. has introduced to the game in 2020 concerned introduction of the strict quarantine measures across some of the geographical markets where the game enjoys its. 7 DOI:10.6814/NCCU202000651.

(16) maximum popularity (e.g., the United States, the United Kingdom, France, China). The new feature of the game allows Pokemon trainers enjoy the game and catch Pokemon creatures from the safety of their homes, thus following the self-isolation guidelines developed to limit spread of COVID-19 (Oe, 2020).. 2.3. Pokémon GO and Taiwan 2.3.1. Taiwan and popularity of Pokémon GO To understand potential success of Pokémon GO in Taiwan, it is important to first understand factors related to popularity of the game in relation to the local context. When compared to other countries (e.g., Germany, the United States, France), the residents of Taiwan. 政治大 (Euromonitor, 2019). This is立 important for Niantic Inc. as research has demonstrated that can be characterized by an increased knowledge and awareness of the Pokémon franchise. ‧ 國. Pokémon GO.. 學. nostalgia is one of the key drivers of user interest and engagement in relation to playing. ‧. According to the data by Statista (2020), while there are over 23.5 million residents in Taiwan, only 18.8 million people possess and actively use smartphone. This can be regarded as. y. Nat. sit. a relatively low smartphone penetration rate, which may have a negative impact on the proposed. al. er. io. business plan. It is also beneficial to compare market positioning of the game in the United. n. States and Taiwan. As shown in Figure 4, in the United States Pokémon GO was the fifth most. Ch. i Un. v. popular game app following the Candy Crush Saga, Rave, IGN and Google Play Games (Statista, 2020).. engchi. 8 DOI:10.6814/NCCU202000651.

(17) 立. 政治大. ‧ 國. 學. Figure 4 Popularity of Pokémon GO in the United States, May 2018 (Statista, 2020). ‧. As Pokémon GO has already been introduced in Taiwan, it is possible to analyze the specific business examples of how Niantic Inc. was promoting its product and whether they. y. Nat. sit. were successful. One such example are live events organized throughout the different locations. al. er. io. on the island, among them – the Pokémon GO Safari Zone, located in Tainan. Niantic Inc.. n. started organizing short-term events (5 days), which draw a significant number of visitors to. Ch. i Un. v. one specific location. For example, the Pokémon GO Safari Zone gathered trainers in the Tainan. engchi. Metropolitan Park and the Chimei Museum, where the trainers were able to catch Pokémon, meet other fans, socialize and experience the unique atmosphere of the event. Over a million of visitors attended the 5-day event, and according to Pokemongo (2020), on average one trainer would walk a distance of 4 km per person. Together the trainers caught 45 million Pokémon (Pokemongo, 2020). This example illustrates that while Niantic Inc. can benefit greatly from pursuing new business opportunities in Taiwan, the island itself can also derive unique value from the AR game. Possible benefits and challenges associated with Pokémon GO in Taiwan are discussed within the following sub-section.. 9 DOI:10.6814/NCCU202000651.

(18) 2.3.2. Pokémon GO in Taiwan: benefits and limitations for the local population There has been an ongoing debate regarding how introduction of such mass scale games as Pokémon GO impacts local market, population and communities (Alha et al., 2019; Broom et al., 2019). The researchers and policy makers discuss both positive and negative manifestations of the game. Importantly, as shown in Figure 5, 91% of the Pokémon GO have visited a certain location because of the game, partnerships or game-related events (Niantic, 2020). Another 73% of the players report that they have changed their normal daily route (e.g., to work, school) to play the game. Surprisingly, another 74% of the players have shared that they have altered their schedules and plans to play Pokémon GO (Figure 5) (Niantic, 2020).. 政治大 visitors of the island alike to engage in various physical and community-based activities. For 立 example, organization of Pokémon GO events may be combined with the local effort to clean. This data provides a strong rationale for using Pokémon GO as stimuli for the local players and. ‧. ‧ 國. 學. trash.. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Figure 5 Pokémon GO player behavior: insights (source: Niantic, 2020) The above data suggests that introducing and making Pokémon GO more popular in Taiwan may have a number of serious implications for the latter. First of all, as the world is experiencing crisis related to physical inactivity, and child, adolescent and adult obesity, AR games such as Pokémon GO provide a unique opportunity to motivate various demographic 10 DOI:10.6814/NCCU202000651.

(19) groups to spend more time engaging into physical activities during the day. As reported by Pokemongo (2020), during the live events each trainer has an opportunity to walk for 4 km to catch the creatures (Alha et al., 2019). However, Baranowski and Lyons (2020) develop an argument according to which although AR games such as Pokémon GO engage children and adolescents in various physical activity exercises, such games may also have a negative longterm impact on their well-being. Under such circumstances, the game appears to act as a substitute for normal communication and socialization with peers, which then has a negative impact on the child`s ability to make friends (Alha et al., 2019). Another important aspect of the issue of Pokémon GO in Taiwan is the possible impact. 治政大a small business outlet (a shop, café, et al. (2019), 84% of the Pokémon GO players have visited 立 bar) and made a purchase of a minimum 11 USD. Although this can be considered a small. of the game on the local tourism, economy and business opportunities. As discussed by Broom. ‧ 國. 學. purchase, in case of a live event when tens of thousands trainers explore the city in search of Pokémon, the latter are likely to become a significant contribution to the development of local. ‧. businesses. While this can be regarded as a positive factor to stimulate performance of local businesses, it also opens up unique opportunities for Niantic Inc. to capitalize on the. y. Nat. n. al. er. io. GO fans.. sit. sponsorship opportunities with the companies, which would like to benefit from the Pokémon. Ch. engchi. i Un. v. Figure 6 Tourism growth in Taiwan (in thousands). 11 DOI:10.6814/NCCU202000651.

(20) As shown in Figure 6, during the recent years Taiwan has enjoyed a considerable amount of tourist visits, which peaked during the winter months and reached over 1 million visitors per month. However, since February 2020 a steep decline in the number of visitors has been observed due to the COVID-19 pandemic and the associated quarantine measures (Oe, 2020). COVID-19 virus poses a serious threat as it disrupts tourism in Taiwan, and its capital – Taipei, which has been voted the 9th most popular Asian city among the tourists. Introducing unique Pokémon GO events, which offer an opportunity to catch exclusive creatures can be a boost, which will help revive the tourism sector as soon as the international borders will be opened and the tourists can travel freely again. In addition to fostering international tourism,. 政治大. the game can also facilitate internal tourism for the Taiwanese residents. In addition to spending on airfare and supporting passenger airline industry, tourism revival can also stimulate. 立. hospitality segment (hotels, B&B, hostels), restaurants, bars, cafés, retail, etc. (Easternpeak,. ‧ 國. 學. 2020). All in all, consideration of the abovementioned factors allows to conclude that focus on Pokémon GO business opportunity in Taiwan will benefit Niantic Inc. and the island population. ‧. and businesses alike. The following section of the report will explore the specific details related to marketing planning and implementation.. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. 12 DOI:10.6814/NCCU202000651.

(21) 3. Marketing Plan This section of the Thesis will cover a wide range of issues relevant to the Marketing Plan. A more detailed analysis and overview of the specific geographic market (Taiwan), macro environmental factors will be performed to determine its attractiveness. In addition to that, the report will aim to develop value proposition, unique selling points and points of differentiation, which will help formulate a clear marketing strategy for Pokémon GO to increase its current market share in Taiwan.. 3.1. Market analysis: Taiwan. 政治大 Within the context of Taiwan, video games sector is known to be dominant within the 立 bigger – toys and games market. Importantly, video games category is appealing not only to 3.1.1. Video game market in Taiwan: overview. ‧ 國. 學. children and adolescents, but is also paving its way to a broader demographic of consumers, among them – young adults (Euromonitor, 2018). It is forecasted that the discussed category. ‧. will continue its growth within Taiwanese market in the future. The segment has been impacted. y. Nat. in 2018 by the decision of Sony and Nintendo to stop production of their hand-held consoles.. sit. The issue with such decision is that it came at a time when AV and VR headsets industry has. er. io. received little development and growth, as such headsets remain relatively expensive and. al. n. iv n C apart from the Niantic`s Pokémon GO, a relative stagnation observed within the h ethere n g was chi U. limited to a small sub-population of the consumers (Euromonitor, 2018). In addition to that,. AV/VR segment, with a fear that the customers will lose interest in these types of games.. According to the forecasts developed in 2019, the growth of the video game industry will continue globally. As of 2018, the size of the global market was estimated to reach 139 billion USD; however, by 2020 it is expected to reach 196 billion USD (Figure 7) (Forbes, 2019). As shown in Figure 7, vast majority of this growth (54.9 billion USD) will be due to the increased popularity of playing games on smartphones, which account for 36% of users in the video games market. Console will remain the 2nd most popular outlet, which will account for 47.9 billion USD and be used by 32% of the gamers. Downloaded games will account for 21% of the market, and tablet gaming will reach 13.6 billion USD (or 9%) (Figure 7) (Forbes, 2019).. 13 DOI:10.6814/NCCU202000651.

(22) Overall, according to the forecasts the industry will continue experiencing stable growth throughout all of its segments, but particularly – through the smartphones.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Figure 7 Forecasted video game market growth (source: Forbes, 2019) Another important factor, impacting consumer preferences within the segment of AV/VR video games concerns the new products related to AV/VR headsets. Importantly, a number of local manufacturers offer various products in the segment, among them – Samsung, HTC Inc., Sony. Prior to 2018, these companies have launched a wide range of AV/VR sets, which sparked the interest among the gaming community (Euromonitor, 2019). However, the initial interest has been relatively quickly lost as the gamers failed to see an immediate benefit of purchasing such headsets in regards to playing AV and VR games. At the same time, it is important to note that in Taiwan the market segment related to AV and VR technology is developing quickly, with the first VR theme park opened in Taipei in 2017 by HTC Inc., which also uses its own line of products (HTC VIVE) in the establishment (Euromonitor, 2019). 14 DOI:10.6814/NCCU202000651.

(23) 政治大 As of 2018, the video game market in Taiwan was estimated to be worth 1.3 billion 立 USD and was ranked as the 15 most attractive in the industry. As shown in Figure 8, similarly Figure 8 Online population (Newzoo, 2018). th. ‧ 國. 學. to the global trend majority of the gamers prefer games that can be played on their smartphones: 67% of male gamers and 65% of female gamers. One important distinction, however is the. ‧. console gaming is only the third most popular option (35% and 20% of male and female. y. Nat. audience respectively). Unlike in the U.S. and other countries, in Taiwan many users still prefer. sit. PC Games: 54% of male gamers and 38% of female gamers (Figure 8) (Newzoo, 2018).. er. io. According to the available market, data nearly one half of the urban gaming population (54%). al. n. iv n C high level of penetration among the urban populationi ofU Taiwan. Up to 78% of the individuals, hen gch watch gaming video content (49% - on their mobile devices). This data suggests that there is a. who play games have spent money on various in-game items and virtual products within the last 6 months; among them 32% of male and 30% of female gamers purchased various powerup offerings (Newzoo, 2018).. 3.1.2. Taiwan: PESTEL analysis This section of the report will present analysis of the key macro environment factors, relevant to Niantic`s performance within the chosen geographical market – Taiwan. PESTEL framework will be used as a model to structure findings of this analysis and identify relevant factors that can help the company position its key product – Pokémon GO. Political. In 2020 although Taiwan was among the countries with the confirmed cases of Coronavirus infection, the island has enjoyed relatively small number of cases with only 440 15 DOI:10.6814/NCCU202000651.

(24) cases of the disease officially registered as of May 2020. Although certain quarantine measures have been introduced, overall the island was least affected unlike the neighboring mainland China (Wang et al., 2020). Taiwan has been facing diplomatic isolation from mainland China, due to the latter claiming the island as its territory and the latter opposing such view. Although boycott has negatively impacted the flow of tourism to Taiwan, it is the political tensions between it and China that cause uncertainties for the foreign investors (Copper, 2019). Importantly, the isolation worsened following election of Tsai, Ing-Wen in Taiwan, who is an open proponent of the island`s independence (Copper, 2019). Economic. In 2018 – 2019 Taiwan has experienced 2.7% GDP growth and its GDP per. 治政大USD registered in 1983. This data Taiwan was 14,273 USD, which has increased from 9,720 立 strongly suggest that although average income keeps increasing in Taiwan, majority of the capita was 24,828 USD (Wang et al., 2020). As of 2018, an average household income in. ‧ 國. 學. population has significantly less disposable income when compared to Niantic`s key markets (United States, United Kingdom, Germany, France, Japan) (Easternpeak, 2020). Thus, it is. purchasing.. ‧. likely that people have significantly less money to spend on computer games and in-app. y. Nat. io. sit. Social. As of 2015, the country had 13.6% of residents ages 0 – 14, 73.9% ages 15 – 64,. er. and 12.5% - ages 65+. There is a major segregation in Taiwan with the urban population on. al. n. iv n C haware people are historically interested in and e n gofccultural h i Utrends in other Asian countries, among average earning 30 – 50% more than their urban counterparts (Wang et al., 2020). Taiwanese them – Japan, China, South Korea. This makes them dedicated audience for a game such as. Pokémon GO, because majority of the Millennial population on the island grew up watching the famous cartoon. This fact makes the market of Taiwan significantly different from other (Western) markets, where the percentage of Pokemon fans is lower than in Taiwan. Technological. It has been estimated that over 14 million people in Taiwan are using smartphones, which means that only 60% penetration is currently observed and there will be a significant increase in the number of mobile phone users in future. Apple controls one third of the market share (33.8%), which makes iOS the most popular mobile platform in Taiwan (Statista, 2020). The brand is followed by Samsung (20.8%), OPPO (11.7%) and Xiaomi (6%) (Figure 9).. 16 DOI:10.6814/NCCU202000651.

(25) 立. 政治大. ‧ 國. 學 ‧. Figure 9 Leading types of smartphone brands in Taiwan (source: Statista, 2020) The Internet penetration is 92.6%, although the Internet speed and coverage remains a. y. Nat. sit. critical issue in the rural areas of Taiwan. Overall, due to the level of income the consumers in. al. er. io. Taiwan are unlikely to invest into the headsets allowing for AR and VR experiences. Despite. v. n. that, the AR and VR themed parks and recreational areas are gaining popularity in Taipei and other major cities.. Ch. engchi. i Un. Environmental. Due to the rapid industrialization process and economic development and growth on a relatively limited territory, Taiwan has been facing a number of environmental issues, beginning from 1980s when these problems started to accumulate. Among the current concerns facing the nation are: deforestation, endangered species and shrinking natural habitats, air, soil and water pollution, waste management (Tseng & Pilcher, 2019). Although the local residents are less concerned about sustainability issues when compared to the neighboring Japan or the Western countries, there is an increased level of awareness among the local populations regarding the impact businesses have on the island. As of 2020 the country is investing into green and renewable energy to minimize its impact on the environment (Tseng & Pilcher, 2019).. 17 DOI:10.6814/NCCU202000651.

(26) Legal. Taiwan tries to create a plausible climate for Foreign Direct Investment (FDI) and other types of market entry strategies for the foreign companies to increase the flow of capital into the country. Intellectual property (IP) laws implemented in Taiwan closely resemble those adopted in the United States, however the government invests less effort to ensure that these laws are followed. Thus, there are frequent violations of the IP legislature in Taiwan (Euromonitor, 2019). The environmental analysis strongly suggests that in order to develop an effective strategy in Taiwan, Niantic Inc. has to consider a number of macro environmental aspects and significantly modify its strategy. The key consideration is relative political instability caused. 治政 economic development, which makes purchasing power大 of the customers significantly lower 立 than in the United States or Japan. At the same time, there are some environmental factors that. by the frozen diplomatic relationships with China. The second concern is relatively modest. ‧ 國. 學. support Niantic`s decision to develop local market. Among these positive factors are an overall high awareness of Pokemon game among the Taiwanese people and rapid growth of the. ‧. percentage of residents that owns a smartphone. The latter strongly suggests that unlike the saturated Western markets, Taiwan`s mobile gaming industry is still undergoing its. y. Nat. sit. development (growth) stage as only 60% of the residents own a smartphone. Another important. al. er. io. finding is that despite proximity to the epicenter of the COVID-19 crisis (China), Taiwan was. v. n. among some of the world`s countries which have been least impacted by the epidemics.. Ch. 3.2. Unique selling points and differentiation engchi. i Un. As per argument by Armstrong et al. (2018), it is important to develop unique selling points (USPs) of a product and consider clear differentiation points to develop a sustainable competitive advantage. In the case of Pokémon GO, the company creates value for the customers by pursuing and stimulating the natural drive for creativity and curiosity among the gamers (Alha et al., 2019) and by reducing possible barriers (technological and nontechnological ones) related to the use of the game. More specifically, Pokémon GO draws on the already existing and highly popular platform (smartphones) and focuses specifically on AR as opposed to using a more appealing and technologically sophisticated virtual reality (VR) platform. The issue with the use of VR is that it would require the users to invest into additional devices (VR headsets, etc.), which would create significant entry barriers for the new users. 18 DOI:10.6814/NCCU202000651.

(27) (Euromonitor, 2019). Furthermore, Niantic Inc. aims to minimize the possible barriers by allowing the users rely on the existing applications and features they already have installed and know how to use: global positioning system (GPS). This strategy allows to target a wider demographic audience when attracting the new fans; introducing more complex feature would make the game less accessible to the older user demographic. Such strategy reflects the fact that Niantic Inc. aims to ensure that the current and prospect users of the game are not taken out of their comfort and do not have to learn new technology skills to play the game. Such strategy is proven to be highly effective for the game, particularly during the stages of early adoption as it helps minimize beginner barriers and helps gather a critical mass of new users using “buzz”. 治政大and points of differentiation. While Table 1 summarizes the so-called points of parity 立 the first features allow the company to merely exist in a given environment, differentiation marketing and word-of-mouth (WOM) (Alha et al., 2019).. ‧ 國. 學. points are critical to achieving a sustainable competitive advantage (Armstrong et al., 2018). In the case of the smartphone game sector, high quality visual graphics, 24/7 customer support,. ‧. game flexibility and affordability can be discussed as points of parity. On the other hand, drawing on AR technology without requiring the players to invest into the costly gear,. y. Nat. sit. combining appeals and values for the different generations and segments of audience, and a. er. io. clear sustainability message can be regarded as points of differentiation. For Niantic Inc. to. al. iv n C Table 1 Points of parity and points ofhdifferentiation e n g c h iforUNiantic Inc. n. successfully penetrate Taiwanese market, the company has to focus on the latter points..    . . Points of parity High quality visual graphics 24/7 player support service to solve issues The game is easy to be picked up and played, can be accessed on a smartphone with full functionality The game is affordable, in-app purchases are cheap, low purchase barriers Interesting plot, regular updates, new contests, challenges.    . . Points of differentiation AR technology AR game that does not require investment into expensive gear Combines and appeals to the different values: curiosity, adventure, nostalgia Responsive content, that can be modified due to the environmental factors (COVID-19, team quests) A clear corporate social responsibility (CSR) strategy. 19 DOI:10.6814/NCCU202000651.

(28) 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. 政治大 populations of customers and立 help position the offered products or services in relation to the. techniques, which help determine target audience for the product offering, unique sub-. ‧ 國. 學. 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. sit. y. Nat. 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. io. n. al. er. are more likely to have sufficient resources for the in-app purchases. As demonstrated by. i Un. v. Newzoo (2020), although male customers appear to have a slightly more interest in Pokémon. Ch. engchi. GO, the game is also enjoyed by the female audience.. 20 DOI:10.6814/NCCU202000651.

(29) 立. 政治大. ‧ 國. 學. 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. Nat. sit. y. categories, majority of the females are 21 – 35 years old; similarly, majority of the male players. io. er. (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. n. al. Ch. i Un. v. when positioning Pokémon GO product is where the customers are originally from: local. engchi. 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.. 21 DOI:10.6814/NCCU202000651.

(30) Table 2 Segmentation analysis for Pokémon GO Taiwan. Segmentation. Demographic characteristics. Groups Age groups: 0-17, 18-24, 25-34, 35-44, 45-54, 55+ Profession/ occupation: unemployed, students, stay-at-home moms, professional, retired Where from: locals, foreign tourists Sex: males, 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 Living: tier 1 (urban), tier 2 (rural) Cultural references: grew up watching Pokémon, not interested in Pokémon before the game, avid gamers Values: curious about travelling, adventurous Lifestyle: active, healthy, on go, stays at home most of the time, sporty, inactive, focused on work Frequency of gaming: once a month, once a week, 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. 立. ‧. ‧ 國. 學. Psychographic. 政治大. n. al. er. io. sit. y. Nat. Behavioural. Ch. engchi. i Un. v. Mobile purchasing: never, rarely, sometimes, frequently, unlimited. Target 0-17, 18-24, 25-34 Students, stay-at-home moms, professional locals, foreign tourists Males and females Not married, newly married, full nests 1 and 2 Urban and rural Watched Pokémon growing up, interested in computer games Adventurous Active, stays at home, on go, focused on work 2-3 times per week, daily, multiple times per day recreation, winning the game, competing with friends, easy to engage in and stop during a busy day 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.. 22 DOI:10.6814/NCCU202000651.

(31) 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,. 政治大. 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.. 立. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. 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.. 23 DOI:10.6814/NCCU202000651.

(32) 政治大. Figure 12 Competitor analysis (source: Newzoo, 2020). 立. One important characteristic feature of Pokémon GO is that it offers players a unique. ‧ 國. 學. 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. y. Nat. game providing an opportunity for travelling, visiting different places and flexibility (Newzoo,. sit. 2020). Niantic Inc. therefore has to position its product as a flexible AR game offering, available. er. io. to individuals, who are not necessarily gamers and who are not willing to invest into costly AR. al. n. iv n C section of the report will develop a marketing h e n gmix i Uon the developed STP strategy. c hbased. headsets, but at the same time have spare resources to conduct in-store purchases. The following. 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).. 24 DOI:10.6814/NCCU202000651.

(33) Figure 13 Ansoff matrix. 政治大. As per Ansoff matrix, Niantic Inc. has a number of strategic options in regards how the. 立. company will strengthen its positioning in Taiwan. The environmental and STP analyses. ‧ 國. 學. 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. Nat. sit. y. share by targeting users, which have not been watching the famous Pokemon cartoon when they. er. io. grew up (e.g., Generation Z).. al. n. iv n C market. Furthermore, similarly to theh strategy adopted by e n g c h i Uthe company so far, it should remain focused on the smartphone gaming, as the key platform to attract and engage the maximum Product. Pokémon GO should remain the core focus of Niantic Inc. in Taiwanese. 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.. 25 DOI:10.6814/NCCU202000651.

(34) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. i Un. v. Figure 14 The list of different Pokémon, based on their rarity (source: Pokemongo, 2020). Ch. engchi. 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.. 26 DOI:10.6814/NCCU202000651.

(35) 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/. 政治大. 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. 立. the gamers can afford purchase the bundle. However, as the company wants to increase market. ‧. ‧ 國. barriers.. 學. share in Taiwan and attract more users, the challenge is to further reduce the entry purchase. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Figure 15 Pricing options for buying Pokecoins (Niantic, 2020). 27 DOI:10.6814/NCCU202000651.

(36) 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. 治政 order to keep the purchase barrier low for the Taiwanese大 players. 立. USD cents, however Niantic Inc. is advised to sell it for half that price – 0.50 USD cents in. Proposed price 0.5 0.99 4.99 9.99 14.99. io. y. sit. Original price 0.99 7.99 14.99 49.99 62.99. ‧. Nat. Bundle 1 2 3 4 5. 學. ‧ 國. Table 3 The proposed pricing options for Pokémon GO in-app purchases. n. al. er. Another important pricing consideration is concerned with two other types of products. i Un. v. that will be offered by Niantic Inc. in Taiwan – in-app ads and sponsorships. The company will. Ch. engchi. 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. 28 DOI:10.6814/NCCU202000651.

(37) 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 Before the start. Activity Google Ads Social Media advertising Influencer marketing Traditional media (billboards, TV) Local events organization. Quarter 0. Quarter 1. Quarter 2. Quarter 3. Quarter 4. 1,160,000. 0. 0. 0. 0. 1,160,000. 64,000. 0. 0. 0. 0. 64,000. 120,000. 0. 0. 0. 0. 120,000. 60,000. 0. 0. 0. 0. 60,000. 0. 0. 0. 0. 110,000. 5,000. 0. 0. 0. 0. 5,000. 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) Local events organization. 0. 25,000. 20,000. 5,000. 0. 50,000. 0. 45,000. 0. 40,000. 45,000. 130,000. Natural reserve event. 0. 15,000. 0. 15,000. 0. 30,000. 立. Ongoing. ‧ 國. Google Ads. Nat. n. al. 1,909,000. er. io. sit. y. 學. 110,000. ‧. 政治大. Natural reserve event. Total. Total. Ch. i Un. v. As discussed earlier, 91% of the Pokémon GO players are interested in visiting a. engchi. 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. 29 DOI:10.6814/NCCU202000651.

(38) triple bottom line of corporate social responsibility (CSR) as discussed by Armstrong et al. (2018): achieving financial performance, addressing social and environmental issues.. 立. 政治大. Figure 16 Community days: Pokémon GO UK (source: Niantic, 2020). ‧ 國. 學. 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. y. Nat. of the event will be to generate awareness of the local population and foreign tourists regarding. io. sit. the issues facing Taiwan`s environment, wild life and natural resources. These types of events. er. will also help strengthen brand image of Niantic Inc. and help make sure that the players. al. n. iv n C heng Another example of a promotional activity will target c h i Uchildren and adolescents and involve. associated Pokémon GO with sustainability, accountability and environmental protection.. 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.. 3.5. Competitor analysis A number of strong competitors are represented in Taiwanese gaming market: Sony Computer Entertainment Co Ltd.., Microsoft Taiwan Corp, Nintendo Phutten Co Ltd., Bandai Taiwan Co Ltd., TOMY CO Ltd (Figure 17) (Euromonitor, 2019). As of 2019, Sony Computer. 30 DOI:10.6814/NCCU202000651.

(39) Entertainment can be regarded as a market leader as it controls 16.1% of the game and toys market share (Figure 17) (Euromonitor, 2019).. 立. 政治大. ‧ 國. 學. Figure 17 Competition in Taiwan games and toy industry (source: Euromonitor, 2019) However, it is important to point out that Pokémon GO operates within the unique video. ‧. games niche – AR smartphone-based games, thus it is important to explore competitive. y. Nat. landscape relevant to this specific category. According to the most recent market analysis,. sit. globally Dota 2 and Candy Crush Saga appear to be the most relevant competition to Pokémon. er. io. GO (Newzoo, 2020). However, Pokémon GO stands out among its competition, as it offers a. al. n. iv n C activities, with the latter giving a unique h esense h i U to a “trainer” (Pokemongo, 2020). n gofc belonging unique blend novel technology (AR), flexibility, sightseeing, nostalgia and community-based. Individuals playing Pokémon GO, mostly valuing openness and flexibility of the game, however may not find it competitive enough when compared to Dota 2. Up to 25% of the. players report that they most prefer the ability to freely travel and visit places, which is not offered by other games.. 31 DOI:10.6814/NCCU202000651.

(40) Table 5 Competitor analysis: comparison. Pokémon GO; Harry Porter: Wizards Unite, Ingress. Focus on AR technology, physical places, mobility There is a wide selection of bundles, it is possible to play for free as well Excellent graphics, realistic images. Difficult to play during quarantine time. Dota A. Candy Crash Saga. The existing pricing scheme is too high for Taiwan. Starting from 2.49 USD for 1,000 point bundle. From 0.99USD to 74.99 USD per bundle. NA. High quality game. High quality game. A narrow selection of products, all AR-focused. Targets a specific group of customers. A narrow selection of products. A narrow selection of products. Limited customer support. Different channels to connect with the service Overall reliable, can play while moving/ travelling. Excludes committed gamers, ready to invest into AR gear Takes long time to solve issues Pokémon are rare in rural areas, the game is suitable for urban players. Reliable in case of stable internet connection, infrequent glitches. Starting from 0.99 USD for a bundle. High quality game Quality. ‧ 國. io. Reliable in case of stable internet connection, infrequent glitches. Stability. Expertise. Company Reputation. Stable performance, except for COVID-19 pandemics Focuses specifically on AR games. Strong and high level of awareness, associated with Google Inc.. al. n. Reliability. Ch. engchi. Can be played anywhere, supported in many languages Superior AG experience, immersion into the world of augmented reality The customers trust to make online (inapp) purchases. Players can only play at home. NA. NA. Limited customer support. ‧. Nat. Service. 學. Selection. 立. 政治大. y. Price. Strength. sit. Products. Weakness. Valve Corporation. Niantic Inc.. er. Factor. i Un. v. Gamers can play the game regardless of COVID-19 Competitive, battle games. Relatively less known to the general audience. King. Limited customer support Reliable in case of stable internet connection, infrequent glitches Gamers can play the game regardless of COVID-19 Mobile games, simple graphics. Relatively less known to the general audience. Importance to customer Customers can easily play on their mobile devices Affordability makes it easier for the customers to make the 1st purchase The players want to immense into the game reality Customers are typically committed to a game, not a brand Customers have to have access to 24/7 support Customers want to be able to play on go and when they travel Gamers want to continue playing despite the crisis Helps target a specific niche of players. Has limited importance to the gamers; security threats may change that. 32 DOI:10.6814/NCCU202000651.

(41) Location. Appearance. Can play globally, including Taiwan Image is a combination of high tech and nostalgia. Steep drop in 2020 Sales. Yes, minimal Advertising. Cannot travel during COVID-19 pandemics NA. Can play globally, including Taiwan Highly detailed, extremely high quality graphics. Can play globally, including Taiwan Brightly colored, simple graphics. Minimal purchases since COVID-19 crisis. Provides a superior game experience, uninterrupted. Minimizes possible financial gains and income The company faced some ethical issues regarding endangering players` lives. Stable performance, even throughout the COVID19 crisis Yes, minimal. Stable performance, even throughout the COVID19 crisis Yes, medium. Focus on the quality of the game, little focus on sustainability. Focus on the quality of the game, little focus on sustainability. 立. ‧ 國. A number of points for the customers to develop a relationship with the brand. ‧. Focused not only on the product itself, but also sustainability issues and community around the game. 政治大. 學. Image. Are locationbound, Pokémon GO tourism Bright, high quality imagery that helps spot the favorite characters Strong performance since 2016. Important for the players who travel The customers have to find the image appealing and engaging Is a reflection of how interested the customers are in this game Annoyance, stimulates premium adfree options. Nat. n. al. er. io. sit. y. Customers have to be able to related to the brand`s values. i Un. v. Table 5 details the specific points in which Niantic Inc. and its product Pokémon GO. Ch. engchi. differ from its key competition – Dota 2 and Candy Crash Saga. The performed competitor analysis demonstrates that Pokémon GO differs from its rivals in regards to pricing, brand image, visual characteristics, expertise and other characteristics. This is important for Niantic Inc. as it will help ensure that it will attract the audience by drawing on the key differentiation points discussed earlier.. 3.6. Distribution channels As Niantic Inc. will remain committed to the smartphones as the key platform for the Taiwanese players to engage in Pokémon GO, the proposed distribution channels will remain Google Play and Apple Store. The customers will be able to download the game free of charge and install it on their devices. These two platforms are highly secure and trusted among the. 33 DOI:10.6814/NCCU202000651.

(42) smartphone users and thus it does not make sense for Niantic Inc. to switch to the alternative distribution channels.. 3.7. Sales forecast To develop an accurate sales forecast it is first important to understand the streams of revenues for Pokémon GO in Taiwan. Currently the population of Taiwan is estimated to be 23.78 million people and its rural population is 21.5% (or 4.7 million). In addition to that, Taiwan receives nearly 10 million tourist visitors per year, which, however has changed in 2020 due to the ongoing corona virus crisis. Among the Pokémon GO`s stream of revenues are: (1) the in-app purchasing; (2) advertisements; and (3) sponsorships (Easternpeak, 2020). The in-. 政治大 estimated that in the first day 立 of the game`s launch it made 17.6 million USD. The players can. app purchases currently account for the main stream of income for Niantic Inc. as it has been. ‧ 國. 學. choose to purchase Pokémon GO currency (Pokecoins) as discussed above, or special virtual goods (e.g., a lure for Pokémon), which accounts for nearly 1.6 million USD income daily (globally). Thus, the in-app purchases alone contributed to a near 584 million USD per year in. ‧. 2016 (Easternpeak, 2016). However, as the game has been gradually losing its popularity the. sit. y. Nat. sales have dropped as well. Another important revenue stream is location-based advertisement (Google Ads) and sponsorship. Within the context of Taiwan, the latter are particularly. io. n. al. er. important as while Pokémon GO can enjoy increase in its revenue streams, the local small and. i Un. v. medium enterprises (SMEs) can attract more customers and clients. The detailed calculations. Ch. engchi. of the expected revenues are presented in Appendix 1.. 34 DOI:10.6814/NCCU202000651.