Fisher Price Case Analysis
FISHER-PRICE CASE ANALYSIS
I. PROBLEM
The main problem facing Jack Asthalter, Fisher-Price’s marketing vice president is whether or not to move forward with the production of a new ATV Explorer toy. The extensive market research that Fisher-Price performed with children and their parents was very positive in favor of producing the ATV Explorer. Unfortunately, the production costs were going to exceed initial estimates of $12.00 retail and instead require a wholesale price of $9.20 per unit and retail price of $18.50. Typical Fisher-Price toys were under $5 retail and similar competitor products to the ATV Explorer were in the $12 retail range. Retailers and consumers may not support the higher priced product.
II. SITUATIONAL ANALYSIS
• Strengths (Internal) o Brand – It is the best known brand name in preschool toys (64.7%) and scored 75% on brand awareness in the survey. o Brand loyalty – 60.5% Buy one brand most often and the brand purchased most often is Fisher-Price o Strong culture and corporate creed – intrinsic play value, ingenuity, strong construction, good value, and action. o Experience – four decades of designing and building toys and promoting from within. o A professional management team from multiple industries. o Recent acquisition of Fisher-Price from Quaker Oat’s company allowed financial stability and support. o Profitability – 742% increase in last 10 years; consistent margins o Onsite preschool test center allows for extensive market testing & research o Product variety o Innovation o Successful marketing campaigns
• Weaknesses (Internal) o Existing management is reluctant to embrace change. o Existing managers are very risk averse in pricing any toy over $5 retail. o Television is a new medium for Fisher-Price. It allows more exposure but it also requires a larger expense. o Marketing the entire product line has been successful to this point but may need to be changed to promote the new toy.
I. PROBLEM
The main problem facing Jack Asthalter, Fisher-Price’s marketing vice president is whether or not to move forward with the production of a new ATV Explorer toy. The extensive market research that Fisher-Price performed with children and their parents was very positive in favor of producing the ATV Explorer. Unfortunately, the production costs were going to exceed initial estimates of $12.00 retail and instead require a wholesale price of $9.20 per unit and retail price of $18.50. Typical Fisher-Price toys were under $5 retail and similar competitor products to the ATV Explorer were in the $12 retail range. Retailers and consumers may not support the higher priced product.
II. SITUATIONAL ANALYSIS
• Strengths (Internal) o Brand – It is the best known brand name in preschool toys (64.7%) and scored 75% on brand awareness in the survey. o Brand loyalty – 60.5% Buy one brand most often and the brand purchased most often is Fisher-Price o Strong culture and corporate creed – intrinsic play value, ingenuity, strong construction, good value, and action. o Experience – four decades of designing and building toys and promoting from within. o A professional management team from multiple industries. o Recent acquisition of Fisher-Price from Quaker Oat’s company allowed financial stability and support. o Profitability – 742% increase in last 10 years; consistent margins o Onsite preschool test center allows for extensive market testing & research o Product variety o Innovation o Successful marketing campaigns
• Weaknesses (Internal) o Existing management is reluctant to embrace change. o Existing managers are very risk averse in pricing any toy over $5 retail. o Television is a new medium for Fisher-Price. It allows more exposure but it also requires a larger expense. o Marketing the entire product line has been successful to this point but may need to be changed to promote the new toy.