Marketing research presentation Essay Example

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6MARKET RESEARCH

Market Research

Introduction

The Chinese Games Market is emerging especially with the introduction of Newzoo, a Chinese company specialized in gaming and entertainment research.

Through relevant data and analyses, the company has monitored the gaming industry in China and has provides greater insights into the industry in terms of financial performance, regulators, products, competitors, and customers (Heler & Denissova, 2013).

Since 2011, the company has been obtaining data and market developments of Chinese games. Specific areas of interest have been government policy on gaming, revenues generated, and the type of games. There are a variety of games in China; client games (online and popular), mobile games, web games and single player games. Complimentary products to gaming in China are game consoles and steam boxes. Finally, Newzoo research in Chinese games consider cross-screen gaming, market segmentation, and actors in the sector.

Marketing research

Objectives of research study

  1. To develop extensive knowledge of Chinese games market

  2. To assist game companies pay attention to Chinese games market

  3. To assist Chinese companies in assessing the business opportunities in western markets

Rationale

The study chose three objectives that sought to broaden the knowledge of readers regarding the Chinese games market and also provide relevant information to the game companies to make them succeed (Leon & Leslie, 2010).

The objectives also mentioned on the need to assist Chinese companies involved in game to extend their knowledge outside China into the global market for business opportunities.

. Brooksbank, 1994)The case of Newzoo Research Company offer insights into concepts and theories on consumer behavior, marketing mix, strategic management, and segmentation (

Consumer behavior has been explored by looking at product attributes of games console and steam box.

Marketing mix highlights the product features of the various games, their pricing, promotion and distribution in the Chinese market (Donnelly, 2002).

Strategic management underscored the government policies and regulations, economic performance of Chinese consumers, technological development, and cultural sphere of the emerging market (Rowland-Jones et al. 2008).

Segmentation strategies considered the various demographics and psychographic factors that influence decision making among game buyers in China (Kotler, 2002).

Methodology

The aim of the market research was to investigate the performance and industry growth of Chinese gaming market. This was a quantitative study as it involved obtaining figures on players, revenues and trends which are based on real values (Malhotra, 2007).

Quantitative was chosen over qualitative because the research area sought to describe market performance as it is and not to attempt to make correlations or establish relationships (Cooper & Schindler, 2008). The sample population was gaming companies and the gamers.

While random sampling was used to sample the gamers in each company, the companies were sampled based on the list provided by China Game Publishers Association Publication Committee (GPC). In this case, secondary sources (GPC) were the main source of data.

To obtain this data, GPC had to conduct a survey on the participants using questionnaires. The data required was number of gamers, revenues, developments and trends in the gaming industry (Malhotra, 2007).

Descriptive statistics were mainly used by Newzoo market research such as pie charts, bar charts and tables. The visual descriptions are simple, easily understood and interpreted (Oyatoye, 2011).

Analysis

Descriptive data was used mainly bar charts and tables. Readers find these tools simple and easy. One of the most important areas of analysis was market share by revenue of the various games.

The different games analyzed were client, web, and mobile, social and single play games. In 2013, the performance of these games is as shown in the figure below.

Marketing research presentation

(Source: Newzoo Research, 2014, p.21)

Figure 1: Market share of games by revenues in 2013

Approximately 64.5 percent of the total revenue ($13.8 billion) was generated from client games.

Revenue growth rose from 35.1% in 2012 to 38.0% in 2013 in the overall Chinese game market.

Online Client Games

Revenues: 150 million gamers generating $8.9 billion. The dominant segments are role playing game (66%) and casual competitive game (34%).

Popular client games are League of Legends (4.8million DAUs), Cross Fire (1.73 million DAUs), Dungeon & Fighter (1.3million DAUs), JX Online III (800,000users), World of Warcraft (0.8million DAUs) and Fantasy Western Journey (0.95 million DAUs).

Others are Ask Tao (1 million users), Tian Lon Ba Bu (0.8million DAUs), Swordsman Online (400,000 users), Age of Wushu (300,000 users).

Challenges: include increasing player acquisition costs and increasing development budgets.

Trends: Entry of mobile game market among client game developers. Have longer lifecycle and higher revenues than web games. Mature and secure payment infrastructure.

Market leaders: Tencent (49.2% market share), NetEase (16.3% market share) and Sanda Games (7.1%).

Mobile games

Revenues: 310 million mobile gamers generating $1.9 billion.

Trends: Expected to grow steadily due to spread of touch screen smartphones, mobile internet infrastructure improvement and secure and friendly payment systems.

Chinese Market to reach $1.2 billion and 500 million Smartphones in 2013. More than 80,000 app development studios in China and at least 84% of Chinese people play video games. Buy virtual goods are bought using Android tablets (63%) and iPad (67%).

Market Leaders: Tencent Games (15.5%), and Locojoy (6.1%), Playcarp (4.6%), and Yin Han Technology (4.5%).

Segments: The iPhone earns Tencent from Cool Running game ($16million) while Locojoy from MT Online ($30million). iPad earn Locojoy ($13million)and Supercell ($12million).

Web games

Revenues: Generates $2.2 billion in 2012 and expected to increase by 57.7% in 2013.

Trends: Improvement in quality of graphics, artwork and game design.

Challenges: Increased competition and instances of copyrights violations

Market Leaders: Goddess Alliance (2.5D) and New Chinese Paladin (3D).

Segments: Social media such as Qzone, Sina Weibo and Renren play and allow users to interact. No need to download. Social games earned $0.9 billion in 2013. Market share grew from 6.2% in 2012 to 6.5% in 2013. The sub-segments are Happy Farm for networking sites and runs for five minutes, and Fishing Holiday that runs on 3D casual game.

Single player PC Game market

Revenues: This segment earned $15million and is the smallest. More than 7,000 single player games.

Trends: Huge potential for growth.

Availability and popularity of Western PC Games

Challenges: Rampant piracy although some download sites respects the IP of local developers. Limited versions published in Chinese due to strict censorship rules.

Opportunities: A number of websites provide free Chinese versions of the games in translation and localization. High quality of Western Games is attractive in China and the presence of local partners in development, and marketing.

Game consoles

Were banned in China in 2000 to protect the youth from corruptive influence

Smuggling continues despite the ban due to weak enforcement

More opportunities for foreign firms given the Shanghai Free Trade Zone (SFTZ)

Strong content vetting but weak IP rights

Arrival of AAA free games may be a game changer

Mergers and acquisitions between Microsoft and SmartTV but on a digital platform

Steam and steam boxes

Available in Chinese language and can be obtained from Steam stores or online

B2C form of distribution and is classified as a console

Need to be manufactured in SFTZ to be allowed to enter China

Manufacturers include Xiaomi (MiBox) and goes for $75

Other competitors are Alibaba, Baidu, PPTV and LeTV.

Local steam forums are Steam Tieba (400,000 members) and Steamcn.com (180,000 members)

Conclusion and results

Newzoo has been cooperating with GPC to document and continuously assess the Chinese games market.

The company has provided the relevant information from GPC that comprehensively provides understanding Chinese consumers and the gamers.

The regulations by the Chinese government on gaming affect distribution and revenues of the industry.

The Chinese market is robust at 1.2 billion consumers and spending more than $13 billion on games.

It is worth investing in the Chinese game market especially on mobile and client games as they are the fastest growing segments.

Market research of Chinese market

Chinese market has more than 173 million active gamers and about 215 million actively use the internet.

China has the highest number of gamers in the world of which 65 percent and paying players.

Mobile gaming is popular in China than other parts of the world with 87% of gamers using smartphone.

Social segment is the highest among active Chinese gamers and so are smartphones (Owusu,2013), MMOs, and PC/MAC.

Marketing research presentation 1

(Source: Newzoo, 2014, p. 30)

Figure 2: Number of active Chinese gamers/Market segment

Most people in China are spending around 65% of their time in the computer screen

Although Males (21-35 years) and females (21-35 years) are most likely to play social network games, older Chinese gamers play across the platforms.

The Chinese market is attractive for foreign companies with interest in mobile gaming

Newzoo is unique as it focuses on 10-50 years olds, focuses on select consumer groups and uses different set of segment definitions.

References

Brooksbank, R. (1994). The Anatomy of Marketing Positioning Strategy, Marketing Intelligence & Planning. 12(4):10 – 14.

Cooper, D.R. & Schindler, P.S. (2008). Business Research Methods. New York, NY: McGraw Hill International.

Donnelly, J.H. (2002). Preface to Marketing Management, 9th ed., by J. Paul Peter. New York: McGraw-Hill Professional.

Heler, C. & Denissova, J. (2013). How to mix and match your digital marketing media, International Franchising Association, Franchising World.

Leon, S. & Leslie, K. (2010). Consumer Behavior, 10th ed. (Upper Saddle River, NJ: Prentice Hall.

Rowland-Jones, R., Thomas, P.T. & Page-Thomas, K. (2008). Quality Management tools &techniques: profiling SME use & customer expectations. The International Journal for Quality and Standards. London. Vol. 5. p. 56-78.

Kotler, P. (2002). Marketing management, 21C Upper Saddle River, USA: Pearson Education, Incorporation, Pearson Prentice Hall. PMCid:378567.

Malhotra, K. N., (2007). Marketing Research: An Applied Orientation. 6th Edition. Upper Saddle River, NJ: Pearson Education International.

Owusu, A. (2013). Influence of price and quality on consumer purchase of mobile phone in the Kumasi metropolis in Ghana: A comparative study, European Journal of Business and Management, 5(1):180-198.

Oyatoye, E.O. (2011). Advanced quantitative research methods, Ph.D. Lecture Notes on Conjoint Analysis, Department of Business Administration, University of Lagos, Lagos.