Mattel Inc. Presentation - Khushboo Bharati

MATTEL Inc.

Presented by:

KHUSBOO BHARATI PUSPHPDEV RAI GIIB – 2008-10

PROFILE• In 1945, Ruth Handler, Elliot Handler and Harold “Matt” Masson launched

Mattel out of a garage workshop in Southern California.

• Mattel, Inc. is a worldwide leader in the design, manufacture and marketing of children's toys. With headquarters in El Segundo, California.

• In 1997, Mattel merged with Tyco, the third largest toy company in the world, resulting in the Sesame Street License.

• World’s Largest Toy Company Mattel toy lines include: Barbie, Hot Wheels, Harry Potter, American Girls and Fisher-Price.

• Toys are produced in company-owned manufacturing facilities in China, Indonesia, Malaysia, Mexico, Thailand, as well as through independent contractors located in United States, Europe, Mexico, the Far East and Australia.

• Mattel has offices and facilities in 34 countries and sells its products in more than 140 nations throughout the world.

MATTEL HISTORY

• 1959 with the introduction of Barbie.

• 1968 introduction of Hot Wheels miniature model cars.

• 1987 to1992 Barbie make-over.

• Developing accessories other than their core products.

MATTEL’S BUSINESS UNITS

Mattel Inc.

Fisher-PriceBrand Business

Unit (Infant and Pre-

school Toys)

Mattel BrandsBusiness Unit

(Lifestyle Brands for kids

of All Ages)

American GirlsBrand

Business Unit (Products For

Girls In the Age Group 3-

12 Years)

Mega BrandsBarbieHot Wheels

Power WheelsRescue Heroes

Character Brands(e.g. Dora, the explorer)

Little People

American GirlsCollectionAmerican Girl TodayMagazineGirls of many landsAngelina BallerinaAmerican Girl

Strategic Marketing Management

• It is a system designed to help management both precipitate and make strategic decisions, as well as create strategic visions.

• A strategic decision would involve creation, change or retention of a strategy.

Strategic Decisions taken at Mattel

• Appointment of Robert Eckert as President and CEO. - Sold off the Learning Company. - Improved Inventory Control. - Developing more toys in house. - Increase in the use of focus groups. - New Packaging practices. - Improving relations with retailers.

• Barbie: - Developed a more modern version of barbie.

- With features which more accurately reflect a natural female body.

- More in-style cloths.

- Introduction of ‘tweens’ (for a little older age group)..

- launched a website.

• Hot wheels: - Included replica cars from racing circuits.

- Introduced X-treem wheel spots lines.

- Introduced story and character based packing.

- Introduced various promotions.

• International Sale: - Mattel entered into a global marketing alliance with Bandai

Company.

- They combined and released ROBO wheels.

Risks:• Physical and mechanical.• Flammability.• Chemical properties.• Electrical properties.• Hygiene.• Radioactivity.

Responsibilities:

• Children’s rights.• Communicating with parents.• Quality control.

Mattel’s Response - Corporate social responsibility.

- CPSC toy safety standards.

- Children’s Advertising Review Unit.

- Global Manufacturing Principles.

- Environmental health and safety standards.

- Charity.

Evidence of strength

- Commitment to responsibilities: June 8

Mattel is first alerted to possible lead paint contamination.

June 9

The CPSC deadline for Mattel to report the problem.

June 10

CPSC deadline passes; Mattel fails to act.

July 26

Mattel files full recall report with CPSC.

Aug. 14

Mattel voluntarily recalls 17.4 mill products with loose magnets.

Sept. 4

Mattel voluntarily recalls 850,000 toys with lead paint.

Oct. 25

Mattel voluntary recalls Go Diego Go! Rescue Boats coated in paint containing hazardous levels of lead.

Nov. 6

Mattel voluntarily recalls 155,000 toys manufactured in Mexico because of choking hazards.

Strengths:

- Stringent inspection - 3 point security check.- Avoiding conflicts.

Weaknesses:

– Denial tactic - shifted blame to China – Diminishing tactic - said media and government overly

magnified the crisis.

Opportunities For Mattel

• Demand for new interactive and entertainment - oriented products.

• Venture into Web-based games.

• Capitalizing on children’s toy safety issue -producing new product lines from safer materials.

Threats Faced by Mattel

• Global shift from traditional toys.• Revamps for recession – dollar decline.• Ungainly acquisitions and mergers in future.• Decline in Barbie sales.• Increasing competition.• Expensive supply chain model.• Lapse of safety- standards.

Strengths• History that it has behind their company.

• An Integrated focus on the customer

- market research

- releasing new products annually.

• Follows a code of ethics.

• Contributes to the communities in which it operates,

particularly to causes benefiting children.

• Mega Brands– Barbie, Hot Wheels & American Girls.

• Mergers and Licensing with other established brands

like Disney, Fisher Price, Nascar & Microsoft.

• Increament in service level from 50% to 90% due to

improved information systems and warehouse facilities.

• International success

- Product availability has been improved in specific market due to collaborative efforts with international firms, specifically Bandai Co. of Japan.

- Cater products to each market’s taste and maintains high flexibility and low costs by simplifying packaging strategies.

- Global marketing strategy.

Weaknesses• Management struggles and uncertainty.

• Unprofitable mergers and acquisitions.

• Slipping popularity of their core product, Barbie.

VS

• The Pleasant company, maker of American dolls, was acquired by Mattel in 1998.

• Financially, American Girl is much more popular and profitable than Barbie these days.

• This isn’t a situation where the more ‘valuable’ system wins – it’s more like a situation where the more ‘valuable’ system is taken advantage of.

• The identity of Mattel is just more powerful than the identity American Girl.

• of American Girl.

Problem / Decision Statement

• To regain market position.

• Problems breaking into foreign markets due to cultural barriers.

• Adapting their products with the constant changing of society.

Strategy Alternatives

1. Maintain the course of action that it is currently taking.

2. Expand into the technology market.

3. To add-on to and re-innovate their existing product lines.

4. To strengthen its advertising efforts in their main product lines.

Recommendations

Strategies 2 & 3: Expand into the technology market & Add-on and Re-innovate Their

Product Lines.

Implementation Issues • Costs.

• Past Failures.

• Customizing to Foreign Markets.

Revamping Barbie

International sales of Barbie in the latest quarter fell by 3%.

Strategies to be implemented :

• You Are Not Bratz.

• Barbie And The Electronic World.

• A Perfect Miniature World.

• Stop The Pink and Purple.

• Resculpt.

S

THANK YOU