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Sunday, March 3, 2013

Funnel Marketing and Games Workshop

Games Workshop Knows All

I have been troubled by the state of our game, as many others have. One of our local retailers said that GW is slowly making models direct only,  the most resent one was the basic terminator kit,  which was removed around the time dark angel came on the store shelves. This was obviously to boost the sale of the dark angel terminator kit. I was able to have another conversation with some friends on this subject and a point was brought up that blew my mind.  A friend told me that in a conversation, with another major GW retailer he had stumbled upon GWs marketing strategy.  This plan involves funnel marketing.  They will over years slowly make every model kit direct only.  I thought this will kill the business and then it was explained.



As the picture shows at the top is all the customers that are aware of 40k and buy a kit or two.  The next level considers going to store and playing games, which leads to more purchases.  At the conversation level the customer is in contact with GW and probably continues to buy multiple armies.  The loyalty level is the customer that buys from retailers and GW directly.  The final advocacy level is where the customer only buys  direct only and never buys else where. 

GW wants to eventually have only advocacy customers.  Yes, they will lose some of the consideration and conversation customers but will retain most of the loyal and all of the advocacy customers.  This is all about make less models and making the same or more profit. 

I am not, by any means, a marketing expert however this seems to make sense and the information I gathered was trust worthy.  The only question that is left in my head is, I do not see how this can last.  Let me know what you think in the comments.

Cheers,
Victory

9 comments:

  1. This type of marketing only works for specific kinds of products. Toy soldiers aren't one of them. The market has changed and Games Workshop refuses to change with it. It continues to believe that they ARE the market. This type of strategy can only end in bankruptcy.

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  2. I suspect GW believes that sales are going to decline in the long term, so are taking active steps to downsize in order to keep going and remain profitable. Chances are the 'direct only' is them making a move toward an almost casting on demand scale like Forgeworld.

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  3. I agree why would they then gradually take certain kits off of the market?

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  4. That may be their plan but it isn't a good one. Many people (in the United States at least) play at their store. I understand it is different in the United Kingdom. If Games Workshop doesn't support the stores, the people who play at them won't support Games Workshop. They would have to write off a huge chunk of their American market.

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  5. That is a good point. I do feel like they don't give a flip about the American customers. Look at games day Chicago. They know what they are doing at GW. How do you shut down the GT. Now make kits, even some kits, direct only.

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  6. The sci-fi world they own and control is without bound... demands are continually put on them to emerge into new markets (computer/console games) but they want to maintain their roots. In the states the miniatures market for gaming is small, but in England and Europe it is huge, gaming is cool and done by family and friends as recreation. their issue is trying to fit a model that works on the other side of the pond to the mass American buyer.

    GW will not fail, but it will eb and flow with the times... GW stores in the US are struggling as other games move in on a niche population. I think they want to revert back to being a game at a local shop and less of a all in one game store stateside. That's just because so many Americans don't fit in that funnel, we are loyal to the game but I haven't set foot inside a GW store in 5+ years. I am a discount shopper, most for my money... something they can't answer directly and as such they will force the hand of some, but I bet GW only items will become available to stores 3, 6, 12 months after release. It keeps the first purchases in their profit column, resale and late arrivals can be shared.

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    Replies
    1. but at the same time, Death from the Skies sold out in a day from GW direct. I think they might be testing the size of that loyal market.

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  7. Great comment and great point about the Death from the Skies. There are plenty of loyal customers but how long will they stay loyal?

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  8. I feel that if GW continues to take away products from mom and pop stores as well as the mass order web stores, eventually there won't be enough products for stores to carry. It wouldnt be worth while to only carry just a few gw products. This will make the GW web store and any GW stores left open in the states to carry the products. If GW does do this there won't be any discount stores to purchase anything. Only GW. Then GW can charge whatever they want for their products.

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