Toy market is a potential market with an abundant number of customers and high revenues. In 2010, the toy sale profit reached 83.3 billion dollars (Global and China Toy Industry Report 2010-2011, para.1). Today, there are many large toy manufacturers worldwide; they are Mattel, Lego, and others. All of them have to deal with the fierce competition that comes from cheaper price toys of China companies. In spite of it, Mattel is still one of the most famous toy company in the world including Barbie and Max Steel brand. Barbie is considered to be the flagship brand of Mattel because it contributes huge annual turnover (Kell 2012). This study will research Mattel’s marketing strategies and how it changes the ideas of the building character in order to adapt to the changing market like, achieve the highest revenue, and always keep the number one position in the world of toys (Mattel Responds to Ethical Challenges 2011).
Introduction and Market Situation
Mattel was established by Ruth and Elliott Handler and Harold "Matt" Matson in 1945. It is located in Hawthorne, California. At first, the company produced wood products and then manufactured toys. Dollhouse furniture was the first toy they manufactured, and it was made from the leftover pieces of wood from frame production (Mattel History 2001).
Mattel sold wooden and musical toys from the 1950s. Mattel introduced the Barbie brand in 1959 in New York. The company has a dynamic and intelligent marketing team that has created many effective marketing campaigns such as the use of advertising on children's television channel in order to prove that the Barbie brand along with their other products is created only to satisfy the entertainment needs of children. However, at the end of the 1960s, the popularity of Barbie reduced, Mattel almost went bankrupt. Fortunately, through the continuous re-invention of Barbie and many popular product lines (e.g. Hot Wheels), the company's revenue has increased and has been developing until todayAlpha (Patten n.d.).
Barbie is a fashion doll produced by Mattel and put on the market on March 1959. It is the head of Mattel dolls and accessories. Ruth Handler decided to make an adult doll when she noticed daughter playing with a paper doll. Spending a holiday in Germany, she got the doll exactly as the one she wanted and called it Bild Lilli (The World’s Premier Toy Brands Today and Tomorrow n.d.). Barbie has appeared in a series of cartoons. Being known as one of the most famous toys and family products company globally in the designing, manufacturing, and marketing, Mattel best-selling product is Barbie® - the most popular fashion doll of every era. On the other hand, Hot Wheels®, American Girl®, Thomas & Friends®, Monster High®, Fisher-Price® brands, including, Little People®, Power Wheels® are also toy lines of Mattel which are sold in more than 150 countries all over the world (About Mattel, n.d).
In 2011, the total revenue of Mattel was more than 3 billion dollars, and that was divided into four major markets: Europe held 51 percent equal with 1,6 billion dollars, Latin America held 30 percent equal with 991 million dollars, Asia Pacific held 12 percent equal to 384,2 million dollars and another held 7% equal to 228 million dollars (Mattel Annual Report 2011, p. 17). Nowadays, Barbie has lots of competitions including direct and indirect competitors, Lego is mentioned as Mattel indirect competitor, which is known as educational toys manufacturer, Lego has nearly developed ways with Mattel, it also launches the products with good designs and capture with the market; therefore, in 2011, the Lego Group sale profit increased 17 percent (Trangbæk 2011). In addition, Mattel tolerates with fierce competition from China toy companies, copycat productions and cheaper prices. Besides, in China, they do not like Barbie because Barbie products are not familiar with Chinese culture (Wang 2012, par.5). In addition, with the development of technology, especially interactive technology, children today tend to play video games, or games on mobile phones and iPad, which affects the turnover of Mattel (Schmidt 2013). Moreover, according to Chief Executive Officer of Mattel, Robert Eckert, a 35 percent rise in oil prices has also directly affected profitability of Mattel because this company has to increase their prices while other dolls, which are the same as Barbie, have cheap prices (Skariachan 2011).
Application of Theories
Mattel has been very clever in adding and creating appropriate advertisements that are appealing for each age division of its customers. According to Effective Events Theory (AET), when we receive an affective event (e.g. attending a movie that makes us happy or obtain poor service that makes us angry), this will lead to a feeling and attitude which direct us to buy DVDs or complain about bad service (Solomon 2009, p. 250). The products and advertising of Mattel hit on the psychology of their target customers with wonderful stories that contain all the characters like the beautiful toys they play in their life. All of the stories, films and toys are created by Mattel. Its motto was “No Waiting For The Toy Or The Movie” (Buss 2010). Mattel has free film series and TV shows such as Hot Wheels, Monters High Toys and Dolls, Max Steel; Mattel not only sells toys but also helps children live out their dreams. Children are easily influenced by what they see in their daily life and what they watch through the entertaining media (Solomon 2009, p. 86). Therefore, when getting in touch with the film product lines of Mattel, children are extremely excited and intrigued, and as the result, they will buy these toys. The main purpose of their purchase will be the ability to touch their favorite cartoon characters. Thus, the effect of a positive brand attitude leads to brand equity, and this brand equity represents an added value to a product in the consumer’s mind enhancing the overall value of that product well beyond its merely functional purpose. Ppositive brand attitude can bring good feeling to customers and lead them to brand equity, which represents brand value in customer’s minds. Moreover, it will help enhance brand value and product even in a positive way (Rosenbaum-Elliot , Percy & Pervan 2011).
Otherwise, children have a lot of dreams, and they always want to transform into the characters of the films that they watch. For example, the girls want to become one of the characters in historical vestiges as fairy princesses. Mattel meets the needs of girls by releasing a Barbie brand with the romance between Barbie and Ken (Barbie n.d.). Besides, the boys want to transform into the princes and the characters who have extraordinary power like superheroes, so Mattel creates Max Steel brand. The above mentioned factors prove that the children’s imagination and the transformation into cartoon characters depends on their age groups. When people reach different stages of their life, they share common needs with people who are of a similar age. When people become mature, they encounter new and different situations to those previously experienced so there is a need to adapt to cope with these changes. These changes could be physical (the onset of puberty), emotional (the loss of a spouse), or cognitive (stability in self-identity). Children have different levels of control in their lives that allow them to be masters of their own destiny.
Due to Erikson’s life span theory, we can see clearly how children choose their own brands to play because this theory explains how the development and behavior changes based on age. Because of having deep market research on customer psychology and their preferences by ages, Mattel produced several product lines for the Barbie brand to adapt to the needs of not only children but also adults. From 0-1 years, infants learn to trust or mistrust based on the way they are treated by care givers. Parents often seek toys that help them develop trust and bond with their children, so they choose a simple Barbie doll with dresses and shoes for babies to hold and play. From 2 years, toddlers seek to have independence from parents and do tasks independently. However, these early attempts can produce shame when the food ends up on the floor or on the family members. Products such as plastic floor mats to go underneath high chairs appeal to parents trying to encourage autonomy without the associated mess to clean up, so they choose “Barbie Glitter Glam Vacuum Dool”. From 3-5 years, children use fantasy, role-playing and make-believe to try out new roles and situations. They look to play-act the type of an adult they think they might want to be; however, if parents are too-controlling, the child experiences the negative outcomes. For example, if children want to transform into a princess, there is “Barbie Princess” collector with princess customs, rings, earrings, necklaces, bracelets, hair brushes, etc. If children want to imagine that they are going to picnic, Mattel produced “Vintage Barbie Picnic Set” with straw picnic basket, or Red & White Checked Body Blouse. From 6 to puberty, children are attending school and looking to build their competence at sport, cultural arts and academic pursuits. If they imagine that they are in school, they may choose the “Princess Charm School”. The notions of in-groups and out-groups have significant impacts on self-esteem, and being with the ‘cool kids’ is very important. So, Mattel establishes online Toylabs around the world that monitor the trends and encourage children to participate in online market research. When they become teens, they need to establish self-identity, or they will want to go to parties, music concerts, so, Mattel produces “Barbie goes Party” with Ken, and they have also designed “Barbie Teen Gym Bag”, “Barbie Teen Nail Files” for teens.
In addition to manufacturing dolls, Mattel also provides customs and accessories in order for children to dress up and build the characters they want. It helps to develop the imagination, thinking and also can help children turn their dreams into reality. Mattel always grasps the trends of each period of time.
In the 1950s, dolls did not have clear personality and they were produced in stereotyped style. Not only that, dolls were established in the form of a baby, so Mrs. Handler exploited a gap in a market: when she saw her daughter played a paper doll, she had an idea to make adult dolls (McDonough 2013), and with these dolls, children can change fashion clothes or accessories. It is a further step in building the image of the dolls. It is an incredible step in improving the playing methods of children, from one thing that the children only can hold dolls to look, now they can make dress up for their dolls in order to match with their imagination. For example, when watching the film “Barbie Princess”, children think they or dolls are a princess and go to the party, so, they will change princess’s clothes for their dolls. If they watch the film “Barbie goes camping”, they will replace other clothes for dolls again. Therefore, it can be noted that Mattel has a perfect change, and it also has a unique marketing strategy through changing in doll playing methods and building new images for dolls.
According to the abovementioned, due to the Effective Events theory, children are always affected by what they see on the social network, especially the fashion trends or the character, actor or actress they want to become. Catching those trends, Mattel has in-depth research into the tastes of children, and there are many significant changes in design, fashion styles, measurements of the dolls. AlphaBarbie's face has been renovated many times to agree with current fashion trends in hair and make-up styles and to conform to a changing market. Barbie's body has not changed in dimensions, but it has stuck out some changes in the innovation of junctions, models and moving parts based on new materials and techniques (Barros 1999, p. 10). In order to increase the diversity of Barbie brands, Mattel produces many collectors. Various styles of Barbie dolls reflected the 70s alternative lifestyles. Skirts were replaced from mini to maxi, and hair became long and loose. In 1971, people wished they could be California girls because of Malibu Barbie with brown skin, straight blonde hair. She wore simple tricot bathing suit, usually blue, with pink sunglasses and yellow beach towel; those things above were the sources of inspiration of “Beach Boys” hit song. In 1977, Mattel just released the “Superstar Barbie” with glitter dance floor, dress with luxurious and sparkling textures. In 1981, MTV first appeared and affected the music industry of the world, so, in 1986, Mattel produced “Barbie and the Rockers” based on the influence of MTV channel – and Barbie had big hair, big shoulder pads and all the other fashion faux pas like fashion trends in 1980s. Moreover, Mattel promotes their customers to keep up with and interact with Ken on his travel to win Barbie back through some social channels like Twitter, FourSquare and Facebook (Mattel Makes a Magical Connection Through Integrated Marketing Efforts, 2011).
Mattel has rewritten the marketing rules for toy industry on a world-wide scale. Every new product of Mattel is born, we can see clearly the company’s success in global marketing strategies. Toy developers are stimulated to think globally, act locally from the moment. When the company enters the global market, it must face different standards of quality, sets of demands and set up requirements to deal with the local environment (Grunig & Dirk 2012, p. 235). Mattel's research on global market, especially the children's preferences in different countries, has brought them problems in the way of collecting data and adapting to different perspectives. Nowadays, Mattel is one of toy producer giants, and 80 % of its profit come from world market meanwhile only 20% come from America. It also has a worldwide distribution through such alliance channel as Wal-Mart, Target and French-based Carrfour SA (the world second-largest retailer). For example, in 2002, when Mattel released Rapunzel cartoon, as well as Rapunzel Barbie, its advertisement was broadcasted in 30 languages at the same time.
In addition, Mattel has always followed the historic events and launched exclusive collector editions into the market. For example, Mattel released Barbie Astronaut to remember the event that Neil Armstrong stepped on the moon in 1965. Because of the round pace in capturing the market with the product line in accordance with the customer’s needs, Mattel has always been the most successful company in the field of manufacturing toys. Moreover, Mattel always has effectively long-term marketing strategies for them through the update the new trends for the products. Other toy companies should learn the global marketing strategy of Mattel because dividends of its global marketing orientation have been so massive (40 percent of the sale profit comes from other countries outside the United States, and one Barbie doll is sold each three seconds in somewhere around the world).
Although Mattel has undergone and developed for 67 years, it is still number one toy manufacturer in the world because of the good marketing strategies. Mattel takes the time to explore and find the changes of the market toys, as well as captures the special events taking place around the world to put into their products. That makes the customer (in this case children) always excited and always having new feeling when using the toys made by Mattel. The pressure of global competition, technology and changing in playing trend create both positive and negative impact on Mattel and Barbie doll. Now, the doll is not only a doll, but it must also be more interactive and fashionable. However, Mattel has a good reputation in making toys for decades, its products are shaped by experience and designed based on the customer’s interest. There is no reason for Barbie’s failure in the near future if Mattel keeps its marketing strategy and toy design on track.