Case Study: Does Mattel’s Iconic Barbie Doll Need A Makeover?

Task description

One of the major issues identified for Mattel’s would increase in competition in the industry. There are some other relevant issues associated with this issue that includes:

• Unrealistic body image – One of the major issues regarding this that the company has faced includes the criticism by the customers and the industry about the brand reflecting unrealistic body image of a girl through this doll. Initially, the Barbie doll was developed with a very small waistline. The girls tend to imagine themselves in that body shape, which is practically not possible and led to unrealistic efforts by girls(Jarman, 2016).
• Privacy concern – With some of the Barbie’s models the issue of privacy was identified. For example, video girl Barbie had an inbuilt camera for which federal bureau of investigation had issue warning considering the breach of privacy and the risk of using the toy by the predators for a criminal purpose(Bach, 2017).
• Gender stereotypes – Another major issue regarding the product was it is toy made for girls. However, which change in market retailers and customer preferences the unisex toys was preferred. The retailers market the goods not according to gender anymore. They marketed the goods as per the theme instead of gender stereotypes. For instance, the wider toy retailing industry had brought major change and it was observed that the customer attention has rapidly enhanced over gender stereotypes in this industry and pointed fingers on gender marketing concern. In the United States the second biggest retailer decide to avoid departments for boys and girls separately (Balmer & Abratt, 2016).

From this, it can be said that competition is one of the major problems that the business is facing. There are various companies coming up with new products in the industry, which result in major competitors and effective the company’s revenue. Management has to bring innovation and major changes in the marketing of goods to gain competitive advantage and sustain in the industry further (Chari & Feng, 2018).

These issues can be analyzed through the various model. For instance for analyzing the competitor’s industry analysis needs to be done for which porters five force models can be applied. According to Porter’s five-force model, the major five forces that are affecting the Mattel business decision would include

• Competitors – From the case, it was identified that the major competitors were LEGO and Hasbro which introduced to toys like my little pony, transformers, and Jenga. The competition is very high in the market. Moreover, indirect competition has also been increased with the change in technology. For example, tablets, mobile devices or other electronic games like PlayStation have taken over the market to a greater extent(Dobbs, 2014).
• The threat of new entrants – The entry to the industry is not that difficult for the companies and the companies entering the industry are coming up with an innovative idea and bring along the technological advancement. This affects the pricing policy for the company as the company becomes unreasonable to ask for premium prices by the customers. Considering this Mattel has to manage the challenges and issues related to new entrants and develops barriers to save its competitive edge(Hsu, 2016).
• Bargaining power of suppliers – According to this force the bargain powers are not in hands of suppliers the reason being the company is procuring raw material from various suppliers and not rely on a single source. However, some of the dominant positioned suppliers can affect the profit margins for the company that Mattel must consider as it may influence the company’s profitability.
• Bargaining power of buyers – With an increase in options for the customer the demand from the customer has also increased largely. They are asking for best offers and wish to pay the minimum for the product and the customer has become smarter, search for various substitute product, and compare rationally. Therefore, the threat of bargaining power to the buyers is higher for the company.
• The threat of substitute goods – This is one of the major force that is influencing the business of Mattel as there is a various substitute to Barbie like fashion dolls in the local market or online doll decoration games. Therefore, it can be said that this threat to the company is high(Ogutu & Mathooko, 2015).

Another model that can be helpful to analyze Mattel internal and external environment analysis would include SWOT analysis

Strengths

• Brand name – The brand name is one of eth biggest strength of the company that is responsible for the recognition by the customer around the globe and increase the brand goodwill.
• Wide range – The range of goods by the brand is very wide that could be one of the reasons for the company to sustain in the market yet and brand recognition.
• Global market leader – Mattel has been market leader according to toy industry offering goods worldwide. This also effect the brand recognition and brand image.
• Good retailing network – The retailing network of the company has been due to which the company is able to reach out to maximum customers in various nations(Hunt & Bicen, 2017).  
• Customized product as per the nation’s culture – the company has customized the product according to each nation it is offering goods. For example, in Arabic countries their traditional dress has been used while creating a product.

Weakness

• Limited product portfolio – The Company is limited to Barbie dolls as product portfolio. This could be one of the disadvantages for the company as they would be unable to offer different types of products to customers.
• Fake imitations – In the local market, the imitability of the product is one of the major weakness of the company. The prices for these goods are very low than the original product that affects the company’s revenue to a greater extent(Jarman, 2016).

Opportunities

• Product innovation – The company can bring rapid innovation through product range a new product development could be done by the company.  
• Increase in Barbie activities – The activities associated with Barbie can be increased like events or television shows for kids to attract children.
• Regain dominance in the industry – The Company has lost the market share since some years due to increase in competition and change is customer preference, which can be taken as an opportunity by the company and regain the dominance in the industry (Chatzoglou & Chatzoudes, 2018).

Threats

• Change in the taste of the customer
• Change in technology
• The threat of new entrants
• Increased competition(Bruns, 2013)

Moreover, the issues identified can be analyzed through the STP of the company.

The company has segmented the goods through customized and innovative dolls that can be involved in various activities.  

Target

The company is targeting the young females of the upper and middle-class group. This could be one of the reasons for the issues of gender stereotypes identified in the previous section.

Positioning

The positioning of the product was different since years but one of the major positioning includes Barbie serving as a role model for a teenage girl. This has been one of the major causes of unrealistic body shape issue identified previously. This has affected the teenage girls to believe that they need to have a very small waistline and similar body shape to look beautiful, which was completely unrealistic (barbie.mattel, 2019).

These issues could be the reason for the decrease in gross sales of the company.

 

Figure 1: Mattel’s (Barbie) gross sales from 2012 to 2018 (Source: (statista, 2019)

From the figure it can be analyzed that the company has faced a various decline in sales volume since years.

Some of the alternative strategies that the company could have adopted in order to overcome the issues that are competitive strategies of the company could include:

 

Figure 2: (Source: (Betton, 2017)

Considering the porter’s generic competitive strategy the company needs to sustain in the increasing competition, for which one of the relevant strategies would be a differentiation strategy. According to this strategy, the company will consider approaching a broad customer base with innovation through the product. This could include a new range of products that would increase in activities by Barbie.

Issues faced by Mattel

• Hero’s – In order to resolve the problem identified previous was targeting only young females by the brand. This needs to be overcome through creating a brand perception, which could be done by a marketing campaign by the company encouraging heroes. Through this, the company can reflect playing with Barbie by a boy as well. This would also reflect a campaign against gender stereotypes or encourage equality(Andersson, 2016).
• Mothers – Mothers prefer their children to have a safe and high-quality product for their kids. The mother would be the perfect target customer who could influence and be the purchase decision maker for the product. The campaign could show the Barbie that a child’s mother uses to play with and now making her children play with the same brand with innovation in them.

Ansoff’s matrix: New product development

 

Figure 3: (source: (Aksoy, 2018)

For the product strategy of the company, Ansoff’s matrix could be used. There are various strategies that a company can be adopted according to the market to be targeted and products to be offered to the customer. This may include offering existing products in an existing market or existing product to a new market. Other two grinds indicate a strategy that includes offering new product to a completely new or untapped market or new product to be offered to the existing market. Barbie has already tapped most of the market worldwide due to which the scope for tapping into a new market is not been identified (Baker & Bowen, 2015).

The most approachable strategy for the company to overcome the decreasing sales of the company would be a product development strategy. The company could introduce toys with technological advancement and a new product line. This could be investing in technology to be integrated with the product or completely new product range like online Barbie games original to be played through paid applications or video games.

The major advantages of this strategy would be overcoming the saturated market issue. The market for the Barbie dolls has been saturated and the need for some new product by the brand has been identified. Another advantage would be an increase in customer database and would help to target boys along with girls with new products to offer. However, the major disadvantage would be an increase in the risk of the success factor of the product due to existing customer perception as Barbie being a popular brand for girls. Moreover the investment would be huge for this strategy to be implemented and for new product development some changes have to be adopted by the company according to the nation in which it must be offering new products (Betton, 2017).

• Attractive for kids – The promotional campaign must be attractive to the kids at first place and then target parents for the products.
• Advertisement to change customer perception that is reflecting boys using Barbie toys as well(Fan & Lau, 2015).

The current pricing strategy of the company is premium pricing. However, the company can adopt a competitive pricing strategy and price skimming strategy that is reducing the cost of the price when new model being launched  (Chu & Liu, 2017).

Brand repositioning 

There is a need for the brand to reposition its self in the market. Considering the figure below one of the major competitor of Mattel is LEGO, who follows this strategy that is existing in the educational grid. Barbie can move towards the educational use of toys and gain Educational opportunity as the parents or mother would prefer to go for the educational toys for their kids at priority (Doole & Lowe, 2008).

Models for analysis

 

Figure 4: (Source: (Hsu, 2016)

Some of the recommendations made to the brand manager of the company would be

• Keep updating – One of the key recommendations for the brand would be to keeping the products and brand up to date. Be aware of the change in the environment and accordingly bring changes to the brand(Finne, 2017).
• Technological updating – Keeping the use of technology to a higher rate and keep updating the technology to sustain in the competitive market(Porter, 2014).
• Improved quality – The quality of the product is USP of the brand that needs to be attained in the future as well. The brand must keep improving the quality and keep the quality to the best so that they could ask for premium prices from the customers (Gong & Yi, 2018) 
• Innovation – Innovation in the product and product differentiation is very important, which the company must work for regularly, getting new ideas to innovate the product and process(Reid, 2015).
• Customer relationship management – The brand manager must maintain CRM and enhance the customer base and customer loyalty; especially developing direct relationships with mothers(Jaworski, 2018).
• Customer feedback – The customer feedback must be taken by the company to understand the weak points of the product and improving the product while understanding the customer needs and expectation from the brand (Hudson & Roth, 2016).

Conclusion 

From this piece of research, it can be concluded that the toy industry is changing since years and due to increase in competition one of the largest toy manufacturer, Mattel’s Barbie brand has faced various issues for which the report included developing a strategic marketing strategy for the company. One of the major issues identified was the increase in a competition associated with some other issues like unrealistic body image, privacy concern, and gender stereotypes. These issues were analyzed using some of the models like the porters five force model, SWOT analysis, and understand the STP of the brand.

The strategic marketing strategies included product differentiation, new product development, price skimming strategy, and aggressive promotional strategy.

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