Good Smile Company’s Marketing Tactics

Those of you nendoroid collectors will probably already know of the Miku Support version nendoroid that Good Smile Company (GSC) is releasing soon. It’s basically a remake of the original Miku nendoroid with an extra face, flag, and pompoms included.

What I find more interesting are not the extras, but how GSC is marketing and selling this new nendoroid. According to the product description, the Miku Support ver. was created to help with relief efforts in Japan after the massive earthquake and tsunami. How exactly will selling a nendoroid help with relief efforts? Well, GSC claims that 1000 yen from every nendoroid sold will go to the Japan Red Cross. Not to mention, the new Miku will be sold for 3000 yen, a bit less than most nendoroids.

That sounds like a pretty good deal right? Not only do get a discounted Miku, you’ll feel good knowing that some of your money is going to help people in need. It also paints GSC in a positive light, forfeiting a portion of their profits in order to help others, but is that really what’s going on?

If you take a look at the instructions for ordering the Miku Support nendoroid, you’ll notice that it is only being sold through GSC’s online store. Surprisingly, orders will also be open to international customers after orders for Japanese customers close.

Now, I’m no expert in economics but I do know a thing or two about business and it sounds like GSC just gave the middleman the shaft and went straight from manufacturer to consumer. Consider now that GSC has kept the price at 3000 yen, about how much most regular nendoroids cost. Since stores like AmiAmi regularly sell nendoroids at 20% off and HLJ sometimes lists them for 50% off, that tells me that GSC sells nendoroids to them for 1500 yen or less. One of the first rules in business is to increase profits and decrease losses, so a store would never sell something for less than what they paid unless it’s not even worth the space it takes up (which isn’t very much).

Recall now that retailers like AmiAmi and HLJ have been taken out of the picture. Even if GSC donates 1000 yen per nendoroid, that means they get 2000 yen, an extra 500 yen (at least) per nendoroid than if they had sold them regularly. Take note that GSC is also opening orders to overseas customers, something they’ve been trying to restrict recently.

All of this points to one big money grab under the guise of a humanitarian fundraiser. I’m not saying GSC is a bad company for doing this, I just think they’re being way too aggressive. Some of you may have heard about the recent spat between GSC and online retailers which sell their products overseas. I don’t know about you guys, but that was an indication to me that GSC wanted a piece of the overseas pie by restricting the release of their products to foreign markets and thereby giving them the exclusive ability to sell their products outside of Japan. They’ve already set up the foundations to do so by opening the GSC online shop, which I think is bad for business relations because you should never compete with your customers. This, combined with GSC’s blitzkrieg marketing strategy of recent years and now the Miku support version tell me that they are not just trying to top the figure industry, they intend to completely dominate it.

Profiting off of people’s guilt/conscience is a legitimate business practice though, and at least GSC is donating a relatively large proportion of their earnings. I’ve seen companies say that they will donate a portion of their profits from a new product to cancer research, but if you read the fine print it will say “up to a maximum of…” and have some ridiculously low amount like $5000 or less.

If you really want to help the victims in Japan, you should do so by donating that 3000 yen to a relief organization directly rather than falling for a gimmick like this. If on the other hand you’re a nendoroid fanboy (or girl) like me, then by all means buy the Miku Support version. It’s not often that you get to buy an exclusive figure for such a low price and despite already owning a Miku, I might get this one just for the pompoms.

As for my final thoughts on GSC, I think they really are set to dominate the figure industry (at least outside of Japan) with the way things are going. Unless the other large figure manufacturers like Alter and Kotobukiya step up their game, they’re going to lose out on an opportunity to gain greater brand recognition and expand into untapped markets.

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  1. To profit from a disaster such as this is really a dirty marketing plan. Sure there is a part that is given to the red cross, but the idea of making profit out of it still there. I agree with you as well, if people really want to help Japan, they should donate money directly to the red cross. For myself, I gave 10$ to the red cross.
    Will recently posted..K-ON! Anime Review

  2. Hmmm, that’s very interesting look into GSC’s strategy. I’ve always been on the cynical side since I saw the charity Miku, and what you say does make sense. I’m not an expert on the business end of figure makers, but I think you might be oversimplifying the equation. Producing a limited run of new parts may account for the 500 yen cap, especially if the number or orders aren’t exceedingly high. Of course, this is only conjecture. What do you think? Would the new moulds required for the pom-poms and the flags (as well as the material costs for the parts themselves) possibly account for this profit gap you mentioned?
    Chag recently posted..Comment on Figure Highlights- Still A-Ragin’ by Chag

  3. @Will:
    Good for you, you’re a much better person than I am :/

    @lvlln:
    It’s not a bad thing for us because the prices are the same and so we’re unaffected. I’m just saying it’s bad for business relations. A manufacturer sells products to retailers, making the middleman GSC’s main customer. Cutting them out is a ballsy move and can either make or break a company.

    @Chag:
    Having studied the manufacture of materials, I can tell you that moulds are dirt cheap and you would not need to sell many nendoroids to make back the cost of making new ones. Also remember that GSC actually needs to make fewer moulds for this release because they already have the original Miku ones. The plastic itself is worth pennies.

  4. I figured as much for the cost for the plastic, but you’re right about the molds — whatever cost raised by the need of new moulds is probably canceled by the rehashing of old moulds.

    At the end of the day, it’s hard to mount a strong criticism against this campaign, since they ARE giving away a decent portion of the profits. But the fact that they are milking public sympathy is still a little iffy in my eyes, but I suppose I shouldn’t expect too much out of a big company like GSC — business is business, after all.
    Chag recently posted..Comment on Figure Highlights- Still A-Ragin’ by Chag

  5. Meh they need to try harder if their that interested in foreign markets…Koto has had a much stronger western presence then any other Japanese figure maker so far, but more importantly they actively work with importers over here so you’ll see a fair few Koto figures far cheaper then you could otherwise get them.

    Making their site and Mika-tan have an english version is a step I suppose, but they still are holding us at arms reach it feels…

    Mah in any case while I’m not fond of cutting out the middle man it bothers me less then say what Kyoani did with their move to not only squelch anyones ability (Including independent GK makers) from making K-On figures from the EDs and then counter with their own inferior product, but also only to sell it through their own website….You wanna talk about dick moves that was one for the ages.
    Ashlotte recently posted..Comment on Figure Highlights- Still A-Ragin’ by Chag

  6. I don’t mind too much that the middle man is getting the shaft if it means cheaper prices for the consumers. Nendos are overpriced in general, and I’d rather buy from the manufacture than pay extra.

    Also, I’m of the belief that any help is good help regardless of intent. If GSC wants to profit from this, but still does donate money, than hey, good job! They’re doing something.

    Of course, agreed with what you said in the end. If someone is more interested in helping, it’s much more effective to just donate to a charity (I recommend Doctors without Borders), and cut out the middle man of charity, which would be GSC in this case.
    Yi recently posted..Amakute Hoshikute Torokeru Chuu

  7. A very interesting post Nopy :)
    I have to say, that I dislike GSC for being so dominating in the figure industry, but on the other hand its good that they pay more attention to the english speaking market, unlike many other figure manufacturers.
    They show their upcoming and new producs on Mikatan even though it’s only advertisement and he would never say bad things about the new products he is presenting , its a good way to reach possible customers.

    Well even though GSC makes profit with this Miku I think its a nice idea to give people who don’t want to donate directly(without receiving anything) the opportunity to help when purchasing this nendoroid, but in my case I preferred donating a few money directly to the red cross.
    Fabienne recently posted..Magical Record Lyrical Nanoha Force

  8. @Ashlotte:
    Kotobukiya does have a rather large presence outside of Japan, but I mainly see comic book and video game figures from them, not so much anime figures. That’s actually why I mentioned them in the post, they already have all the inroads set up. If they wanted to, they could start marketing anime figures more and beat GSC to the punch.

    Is that really what happened with K-ON? I always wondered why there seemed to be so few figures for how popular it was.

    @Yi:
    Well technically the prices would be the same, just who makes the money is different, and yes, nendos are overpriced, but they’re soooo cute.

    @Fabienne:
    I think Mika-tan’s blog was a good idea on GSC’s part. It’s actually a part of their blitzkrieg marketing strategy, expose as many people as you can to your products.

    @Valence:
    No kidding, I want one too.

  9. Although I understand your view of GSC and of your post, I am going to hold back judgement on this topic until I see a trend of similar actions. I really do think this is a good way for people who, at least, want to donate to a good cause and at the same time obtain something that they might have been on the edge of buying anyways.

    Kotobukiya has a very large distributor problem when it comes to vendors. Kotobukiya wants its vendors to buy an amount of goods (which from their requirements is quite excessive) from them in a certain period of time to become one of their distributors. The risk from not selling enough of the goods alone is one of the reason why Kotobukiya has problems entering markets. With that being said, I think eventually all companies know they need to adapt to market conditions to survive or else they will disappear.

    On another note, I don’t think HLJ will be mad at me if I decide to buy this Miku nendoroid just because I just plopped down some serious cash to buy a Macross Quarter from them.
    Tuan recently posted..Japan Earthquake

  10. @Tuan:
    I wasn’t aware of Kotobukiya’s distribution problem, that sounds like a good way for them to make sure they make a certain amount of money per batch.

    Selling this nendoroid alone won’t anger any figure retailers, but some people have speculated that GSC is getting their online store ready to directly compete with them. Of course, they could just keep it for exclusive/limited figures instead and go about business as usual.

  11. Interesting post.

    I agree with you that GSC is getting more aggressive when it comes to promoting their products. As long as they’re helping and everything is legit, then they’re still fine in my book. ^^
    Xine recently posted..Gundamunny Mega Edition

  12. Well, it’s a figure that I’ve been eying for a while and some of the money will go to a good cause, so it’s basically impossible for me to decline. ^^;
    MkMiku recently posted..Tsunderes

  13. bitter truth :( , I always thought only political parties or person will use disaster as campaign to lure sympathy glad it’s not near election in japan, but always sad considering GSC is Japanese company that own by Japanese person(s)…..can this became a dounle sided sword for GSC ?

    well for price and distribution I seen nendoroid sell for 900-1200 yen at amazon.jp few months ago, now GSC reminds me a lot with bandai hahaha they have a lot of limited/exclusive products that sell in their own website this past 2 years, but Bandai have a lot of branch overseas Bandai HK,US,EU,etc to distribute their normal released(delivered directly to the each branch from their manufacturer in china) ,as marketing student myself I also seen many other products sell like this but they sell in both of their retailers and own websites with same retail price let’s use Lego for example they have their own Lego-store but we still can buy them everywhere and some clothes manufacturer.

    for this Miku hmmm I already decided to stop buy Nendoroid.
    Aya recently posted..MMS Type Nine-Tails Renge

  14. @Xine:
    Yes, it is good that they’re donating money at the same time, but profiting from that just doesn’t feel right to me.

    @MkMiku:
    I might be ordering it too, it depends on if I have enough spare cash.

    @Aya:
    It’s hard to say which route GSC will take with their online store. I don’t think they’re big enough yet to try to tackle the existing retailers, but they could in the future.

  15. You know what I hate even more than them making profits (after all they’re a company I can understand that and I’m pretty sure not all charities are clean in that end, only looking at the salary of their president doesn’t feel right to me but that’s beyond the point), so what I hate are their “official retailers”, I don’t know how it is for the US, but there’s only one and only GSC official retailer for Europe, if stores want to do it right and not being bugged too much they basically need to go through that retailers.
    From Japan to a French store the price has doubled.

    /sobs
    Kuuki recently posted..Fashion post

  16. @Kuuki:
    I pay about double the price of a nendoroid if I buy it in North America too, it really is a rip-off, but when no one else sells it, there’s not much you can do.

    @lovelyduckie:
    That was my first thought too, but after looking at the promo pics for a while, I just really want those pompoms.

  17. As for me, I’d ignore what happened with retailers lately (which I thought sucked, though) and don’t mix that with what GSC does now.

    The reason is simple: As GSc states this Miku is made per Order, so she will be limited to the amount of orders and not be in stock anywhere afterwards (probably).
    So actually it is perfectly fine to sell them via their own store, after all there would be quite some problems selling them via amiami otacute and so on (When will the 1000 yen be helping? after the order? After they were sold? After who ever sold them gets the money from the customer?).
    And I wouldn’t say that GSC is making much of a profit with this either. I work for a little computer store in town (in germany) and truth is you often enough have to make a loss of your “in stock” items. I doubt GSC sells Nendoroids for 1500 yen. Why? When I look at the prices of hardware and software we buy for the store, the price differs roughly like this (fake numbers obviously):

    Price we pay: 100 $
    Price on the internets / huge re-sellers: like 120-130$
    Price in our story: like ~140$

    And to give you a small example we lately bought some touchpad handys (like shortly before christmas) for around 120$ each, planning to resell them around 160$. We sold about a third of them for that price, another third for 140$ in the last 2 months and we still have roughly a third in stock – and just now “Media Markt” (maybe compareable to walmart just for computers, hifi and stuff) now sells them for roughly 80$. Get the point? It now is either, we sell them cheap too, or we will probably sell 1 or 2 more, then have the rest stand here till they are worth like 5$ ;)

    Oh, and I know the figure market is not as fastly in worth-decrease like handys and stuff, but nevertheless I’d hardly doubt any company sells their products for below 50% of the reselling price.

    From my, surely amateurish, view, I’d expect GSC to take a minimum of 2000 yen per Nendoroid anyways, and even if not, how many of the other figure companys offer sth. like that yet?

    Even if GSC sells her for 10.000 yen and only gives 100yen to the red cross, thats better than not doing shit ;)

  18. Wow… I actually never thought of this… it’s so blatantly obvious though.

    I have no problems with GSC cutting out the middleman either, but once you do the math, you’re absolutely right that this is a money grab.

    Cutting out the middle-man is all fine and dandy, but if doing so results in an even bigger profit even after the donations, then that really is wrong.

    You and I both know that companies exist for the reason of making money. I do agree with you that they’ve sort of pushed the line a bit. But honestly, with the so-called “non-profit” organizations out there with high salaries paid to the owners (see Salvation Army), GSC might as well be joining the fray.

    As much as I’d like to support Japan, I’d rather just donate directly than to let GSC be a middle-man in this regards. Plus this Miku isn’t all that special if you compare it to any of the latest ones. I wouldn’t want to own this and look at it knowing that some company used it to profit.
    radiant recently posted..A Personal Message for Everyone

  19. I commend your effort to say this out honestly while not sounding like some of the hate-banner waving ranters out there. This is a serious issue for discussion (along with your next post, which I will have a look later), but I am not sure how much I will be able to speak out before my brain hurts too much from thinking. At the same time I suppose I can’t keep staying optimistic as such concerns has been growing a lot, especially in recent weeks.

    While the Miku Support ver. does seem good on the surface (you buy a nendoroid and donate for relief at the same time), it is pretty certain that GSC is using this oppurtunity to make money out of it. Besides as you and others have mentioned already it’s the normal version with a few extra accessories and an extra face, that’s all. I too know hardly anything about economics (or business), but business companies have to make a profit out of this or else there will be little point in doing so in the first place. Taking the advantage out of such things is apparently done so elsewhere too, such as the recently announced Ganbare Japan t-shirt that Danny Choo has cooperated with J-List.

    As with Danny, a lot of things have been advertised quite aggressively, be it GSC’s advertisments in the first place, or via Danny’s media such as his blog, figure.fm, Culture Japan (I still haven’t watched it, but there are reportedly a lot product placements spotted there). Some are more blatant than the others, and hence there are people saying how “hobby companies are milking wallets out of herds and mindless followers”. Quite problematic on both sides I have to say, and it has been something that has been bugging my mind a lot.

    Hobby has become quite business driven nowadays, especially with what we are interested with (i.e anime- or other similarly related things). It’s not surprising how some are saying that we are hitting the low point of anime and toys soon or later, and it’s not exactly pleasant ahead of us either. A lot of things seem quite artificially generated to encourage people to spend.

    At the end of the day, it’s still our own choices if some of us do decide to continue and order this Miku Support ver. The bottom of the line I guess is be a sensible customer, know what you’re doing, enjoy your hobby, and help out in the way of which you think it’s right.
    Q recently posted..Why do you collect

  20. @Summey:
    You make some really valid points. Everything that I stated in my post were conclusions that I drew based on observations and assumptions so I really can’t say if the prices that I predicted are accurate or not. The only people who know how much GSC sells their nendoroids for are the workers at GSC and the retailers they deal with.

    I also agree that GSC doing something to help relief efforts is far better than nothing at all, even if they’re profiting off of it.

    @radiant:
    It’s disappointing that so many people benefit from the suffering of others, but I guess that’s just how the world works. I just hope that enough people realize that they can donate 3000 yen directly to help relief efforts rather than give GSC 3000 yen and have them donate 1000 yen. On the other hand, I think if people really wanted the figure, they should just buy it.

    @Q:
    It’s interesting that you bring up Danny Choo because I had considered mentioning him while I was writing this post. The thing I noticed was that GSC did not start pushing their products until they teamed up with Danny, who helped immensly with their marketing. While they are trying to make as much money as possible out of us, I still admire Danny for different reasons. He has taken the skills and knowledge he obtained over his career as a marketing manager and built a little empire from the ground up. The ways in which he can convince people to open their wallets also amazes me.

    Even with the amazing advertising, it’s still up to the customer to make the final decision, like you said. I just hope that people take the time to think before they hit that buy button.

  21. Pingback: Suggested Reading March 27th-April 3rd 2010 « Black and Blue Socks

  22. Nopy-san, I’m too just assuming things, as I’m not sure as of how you can interchange such price-relations between different stuff like electronics and PVC’s ;)
    But it might stand as some sort of hint, that it would at least be possible that the retailers pay like 1800-2200 yen per Nendo :)

    Oh by the way, Square Enix gave 100 million yen tto the red cross :o
    Huge amount :o

  23. I’m in marketing (both in line of work and school) and i have to say that GSC isnt cutting out the middleman in this process. If i’m not mistaken this CSR (corporate social responsibility) effort of theirs is on a ‘made-to-order’ basis. Thus in order to ensure that they won’t be making surplus goods they are cutting out the middleman. Now as afaik the relationship of GSC and retailers is on a quota basis meaning they have to meet a certain number of sales, im relaly not sure about this aspect but im sure it might be a factor for this.

    I honestly don’t find anything wrong with buying a 3000y nendoroid to help out the victims, i can honestly say though that the amount of effort placed in relief efforts decreases drastically from the time the crisis occurs. This is GSC’s way of ensuring that the hype is still there if you will. We dont know for sure if this is a zero profit project, so all we need to do is trust them i guess.

    As far as i know, theyve dominated the figure industry as far as i’m concerned. The best way to stop GSC is for other figure companies to own (or at least have a time lock) on certain titles (like how bandai owns kamen rider, but GSC went underneath that and went with “dragon knight” in the US)

    The only marketing scheme i am iffed so badly about gsc are the limited edition nendoroids/figmas they make. REALLY A PAIN THE POCKET
    duqs recently posted..Black Rock Shooter Figma Review

  24. @Summey:
    That is a lot, but Square Enix probably has far deeper pockets that most companies.

    @duqs:
    I’ve never heard of CSR before, you learn something new every day :)
    Everything I said was conjecture, so you could be right that they aren’t making a profit, there’s no way for us to tell. I wouldn’t say they’ve dominated the industry just yet, but they’re definitely in the top 5 now. I’m also annoyed at their limited edition figures, they’re so expensive and so hard to get :(