Game Zone is a company that offers a unique opportunity for video game enthusiasts to frequent a place of a welcoming and pleasant atmosphere. Game lovers will enjoy a possibility to play any video game prior to its purchase. Moreover, Game Zone provides an excellent opportunity to find other video game lovers and share their experiences, connect, and make new friends. Providing video game enthusiasts with the best game experience, excellent customer service, and a welcoming atmosphere is crucial for the Game Zone business project.
Target Market Characteristics
Four bases for market segmentation pertain to the following categories: demographic, geographic, psychographic, and behavioral segmentation. The demographic characteristics include age, gender, income, and family cycle (Chand par. 1). The average age of Game Zone customers will range from 16 to 40. The majority of video game enthusiasts are male, but a certain percentage of female customers is also predicted. Research shows that an average gamer spends about three hundred dollars monthly on the gaming experience.
The average income level of a gamer amounts to $50,500 (Bhasin par. 5). The core gamers constitute approximately 25 percent of the total number of gaming enthusiasts. As the level of income influences the customer’s purchasing power, it is also an important parameter. However, Game Zone will offer relatively low product prices, thereby attracting customers with not only high- and middle-income levels but also a certain percentage of game lovers with low-income.
Game Zone offers a possibility of playing many types of video games in order to select the game the customer likes the most, which suits them in terms of price. Such a business approach accommodates for customers of varied levels of income. A large percentage of Game Zone customers will be single people with no children. However, it is incorrect to assume that video game enthusiasts are limited to this category. A substantial part of Game Zone’s customers will be married people, or even people with children.
From the geographic point of view, Game Zone customer segment is highly varied, as the Game Zone chain will be spread throughout the country. Urban areas will be selected as the main geographical targets, as they are predicted to yield high returns. As for the psychographic segmentation, a vast majority of Game Zone customers will be people of introvert nature. According to behavioral segmentation, it is possible to determine that Game Zone customers will be split loyal people (frequenting more than one video game store), with the majority being heavy users.
Target Market Size, Potential Demand, and Initial Market Capture Rate
For the purposes of providing a preliminary estimate of the target market size, it was necessary to define the target customer, estimate their number, and determine the penetration rate (“How to Estimate Market Size” par. 1). Estimated target market size of the company amounts to 1.81tn around the world, with 630.71 billion for the US in 2014 (“Video Game Industry: Statistics & Facts” par. 1). Potential demand can be seen when considering statistics provided by the Entertainment Software Associations (ESA): in 2015, nearly 155 million Americans were video gamers and an increase by 16.5% was predicted (Entertainment Software Association par. 1).
Major Competitors
Gamespot, Joystiq, and Kotaku are identified as three principal competitors and the major market players in the gaming industry. Kotaku is a strong competitor that produces an array of exciting video games that are quite popular. Gamespot’s products are rather costly, as its brand awareness and brand recognition are very high in the gaming industry. Joystiq is a company that boasts advanced graphic machines. Thus, it has a possibility to develop products of very high quality for end-users.
In order to differentiate from its major competitors and entice the target market, Game Zone will employ a range of methods, which will help gain a competitive advantage in the market of gaming industry. Production of the latest gaming devices is important for Game Zone in order to ensure its customers get the best possible experience, as well as efficient customer service.
The latter should run 24 hours per day, as its purpose consists in assisting the customers with any problems they might encounter with Game Zone devices. Online support system is crucial to an efficient customer service. The company will offer reduced prices on the products while ensuring that the prices are not cut to the detriment of quality (“Global Games Market Report” par. 2). The Middle East and China should be selected for the purposes of brand extension across the globe. New sales avenues will help establish Game Zone Company’s position on the global market.
Conclusion
Game Zone provides its customers with a unique opportunity regarding gaming, testing and sampling video games, as well as purchasing. The target market encapsulates people of different age groups; although the majority is constituted by the young single men in their twenties and thirties. Three major competitors of Game Zone are Gamespot, Joystiq, and Kotaku. Game Zone will employ an array of methods to differentiate from local, as well as global competition.
Works Cited
Bhasin, Hitesh. Four Types of Market Segmentation and How to Segment. 2016.
Chand, Smriti. Top 4 Bases for Segmenting Consumer Market. n.d. Web.
Entertainment Software Association. Industry Facts. n.d.
Global Games Market Report. 2016. Web.
How To Estimate Market Size: Business and Marketing Planning for Startups. 2009. Web.
Video Game Industry: Statistics & Facts. 2015.