Mattel Case Study Analysis

Yes. As Mattels products are designed primarily for children, it must be sensitive to societal concerns about children’s rights. Children are the future of any nation and it is of utmost importance to protect children’s rights and work towards the betterment of children’s future. Mattel has successfully practiced these responsibilities making them a global leader in children’s toy products. Mattel recently published its first Corporate Social Responsibility´ report, including a strong statement about its commitment to economic, legal, ethical and philanthropic responsibilities. Some of which are commitment to product safety, volunteering in a community, developing a best practice or even treating colleagues with respect and dignity. Another area of the company’s strength comes from the Mattel Foundation. This foundation promotes philanthropy and community involvement among Mattel’s employees. It makes charitable investments to help children in need. It is funded through mainly pre-tax corporate profits. Mattel has shown Corporate Social Responsibility through this foundation by providing funds to build the Mattel Children’s Hospital at the UCLA, Los Angeles. It also supported fund raising events such as the Children affected by Aids foundation, the Mattel Family Learning Program to name a few. Mattel not only undertook social causes for the betterment of the society but also created a Mattel Employee Volunteer program wherein every employee is encourage to give back something to their community and hence foster the commitment for the well being of children. Fund raising in the form of Grants was made possible by the Pleasant Company which raised around $49,500 as a part of children’s elementary school education. Mattel’s leading core brand Barbie was one of the main strengths of the company. A worldwide social program called the Barbie Cares: Supporting Children in the Arts was initiated to support arts education for children. Mattel periodically informs parents about its corporate marketing strategy. It has taken appropriate steps to inform and explain about Internet based marketing to both parents and children. Mattel publishes all the information regarding internet safety on its website so that at any point of time, the parent is not kept in the dark about Mattel’s product and at the same time also protects children’s rights. Mattel also respects the privacy of the parents and the children’s information and hence does not collect or maintain a database of such information. All these steps have been planned by Mattel to safeguard the child and their rights. Mattel also abides by the Children’s Online Privacy Protection Act of 1998 and follows the guidelines of the Children’s Advertising Review Unit (CARU). In an audit conducted during the late 1990’s, it was found that the company was not using any kind of child labor, an issue which companies like Nike were being plagued with. In an effort to continue this, Mattel created a code of conduct called the Global Manufacturing Principles (GMP). According to this standard, Mattel would only deal and sign contracts with those business partners who comply with the GMP and are committed to ethical business standards.

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Mattel does have a few weaknesses that should be dealt with. Mattel is a huge brand in the children’s toy industry and has also partnered with various other corporations with a view to introduce new innovative products. But in spite of Mattel’s GMP, the company in no way can have complete control or see over the proceedings of its business partners. There is no guarantee that Mattel’s Business partners will comply with the GMP guidelines, safety procedures. This jeopardizes the quality of the product being manufactured.
2. Mattel’s flagship brand Barbie is the constant bestseller and it accounts for more than 50% of Mattel’s total revenue. This shows that Barbie as a brand is globally recognized. Children around the world especially girls can very easily relate their lifestyle and behaviors to the Barbie doll. Barbie was the only Mattel core brand that was in the list of “The 100 Best Global Brand “in 2002. Barbie seemed to become an instant sensation with girls less than 7yrs of age. This resulted in a increased demand for Barbie dolls at retail stores which was insufficiently met by the company for several years. Mattel’s Barbie raked in a whopping $2 billion in worldwide sales annually and more than 1 billion dolls sold in four decades. Mattel’s American Girl is targeted for girls between the ages of 7 to 12 years old. American girl is a well-known line of a historical dolls, books and accessories. Mattel opened the American Girl shops in New York, Chicago and Los Angeles. The New York Store was made of three floors of dolls, accessories and books located right in the heart of the 5th Avenue shopping district. The store also offers a café where the girls can dine with their dolls and a stage where young actresses bring their own versions of the American Girl Stories to life. Mattel’s American Girl aims to fulfill each girl’s dream by portraying their aspirations and see them happen with their dolls. For Barbie, Mattel has introduced a variety of Barbie characters like family, friends and professional colleagues. So, this encourages children to live their dreams. For example, Barbie now comes as a pilot, so if a girl dreams to become a pilot, then the Barbie doll fits perfectly for the girl child. Mattel also created clothing’s and Barbie merchandise for children, Barbie themed computers and digital cameras to capture the imagination of children above 7 years. Mattel also introduced the new line of My Scene dolls aimed at tweens´ (girls aged between 8 and 12 years). These so called tweens were considered to be trendier, young looking and hip. The My Scene dolls were an exact replica of what the tweens had in mind. Mattel effectively chalked out their marketing strategy. On the occasion of Barbie’s 40th anniversary, a marketing campaign called “Be Anything” was launched. This campaign allowed girls to buy any Barbie they liked. Mattel’s Barbie also had some weaknesses which had to be sorted out. The traditional Barbie doll was more Caucasian looking and triggered the possibility of being banned in Malaysia by the Malaysian Consumers Association of Penang. This was due to Barbie’s non Asian appearance and the lack of creativity in the doll which lead to the possibility of being tagged as non educational and boring. Even in Iran, the Barbie dolls were confiscated from retail stores due to the lack of Islamic features of the doll and a predominant western influence with regard to the characteristics of the doll. This creates a negative brand image that brings losses to Mattel. There were problems with the American Girl product distribution worldwide, because Mattel focused on the distribution in America but there was no mention of the same on a global scale. Due to competition from Mattel’s new rivals Bratz Dolls, Barbie’s popularity slipped in spite of their innovations in the product. Mattel’s American Girl Brand was not distributed properly because it had tremendous potential in the online market. This would enable American youth to buy it from anywhere around the world. In my opinion, Barbie has managed to outperform the sales of the American Girl mainly because the American Girl was more Caucasian in style and it did not connect to each and every girl’s dreams and aspirations. It catered only to the traditional American children who had American dreams. Whereas, Barbie was more appealing to the children all over the world. With the new characters and innovations in the Barbie doll, there were more options to choose. Mattel has also taken the Barbie a step ahead of the rest by introducing campaigns like the Barbie Care. Merchandising and Accessories for Barbie made it attractive for girls to acquire their dolls and accessorize them. If only Mattel can make Barbie more technologically advanced and make it more interactive, Barbie will rule the girl’s toys market for a long time to come.
3. There are innumerable opportunities that Mattel can exploit. Introducing more educational, interactive and tech savvy products would strengthen brand loyalty. Today’s 21st century youth spend most of their time on the internet like social networking sites, online games and music. This as seen as a shift in the trend from the traditional toys to electronic media. This will be a major hindrance to Mattel if it continues with its current product line. Mattel should expand to international distribution networks apart from its dependency on Wal-Mart and Target. There are high potential distributors in Asia and Europe like Giant (Malaysia), Carrefour (France) and Cold Storage to name a few. Along with this, distribution to key local toy retailers would make Mattel’s products as the customers preferred choice. Mattel should also try and provide customized products which cater to the specific needs of foreign markets. By conducting a market research, Mattel can know about the demands of the foreign markets and thereby customize its products. One of Mattel’s biggest threats is the increasing competition. The Bratz Toy maker has slowly but surely made a place for itself in this industry and now Mattel faces stiff competition from Bratz. More influence of social media on the youth and limited distribution networks are the threats that can trigger Mattel’s decline. A sharp decline in Mattel’s stock price from a healthy $45 to an all time low of $10 will cause instability in the minds of the Investors and stake holders. This will in turn bring down the revenue and the market share of Mattel Inc.
4. The one recommendation that I would give Mattel is expand and venture into the Technology market. This is in my opinions one of the key aspects which needs to be fulfilled in order to stay alive in this industry. Mattel’s major revenue generators are the youth, be it toddlers or teens or adolescent youngsters. It is of utmost importance to keep this target market constantly griped towards Mattel products. If Mattel can redesign their products and add some innovative tech savvy features, then their products can last in the market. With other competitors fast arising, there is a constant need to keep Mattel’s products updated with the current technology. Mattel will have to shift the focus of the youth from the electronic media back to its flagship products. In short, Mattel will have to do whatever it can to regain some of its lost Brand recognition and Brand loyalty. Mattel should also make new innovations in their best selling core brand Barbie. For example, Barbie could have hands and legs that moves, the doll can be incorporated with voice recognition software which would make the doll interactive. Mattel can introduce the Barbie doll in a character of a MNC’s CEO. By doing so, girls who dream of leading the corporate world will be able to play out their dreams through the Barbie CEO doll.
5. Mattel has as such only a handful of brands out of which Barbie is their best seller accounting for more than 50 % of their annual revenue. Due to the social and demographic changes taking place as far as the youth are concerned, Mattel will have difficulty in reversing the decline in Barbie’s sales. The only strategy that Mattel can exploit is to invest heavily in R&D. Mattel can conduct market surveys to get an idea of what today’s youth wants. A strong point in favor of Mattel is its legacy and rich history, along with its brand recognition on a global scale. One aspect which is a concern to Mattel is the slipping popularity of the Barbie core brand. A brand which once the top selling brand in the children’s toy industry was out of the top 5 best selling toys in 2002. There is a need for a serious brand re haul if Mattel wants to continue to be the leader in the industry. Mattel has tried a few innovations by introducing accessories including clothing lines for Barbie, introducing a number of Barbie characters. But keeping in mind the threat from competitors, Mattel will have to come out with a unique and brilliant innovation in the Barbie flagship brand which will recapture all of its lost brand loyalty and revenue.