It is very apparent that the target market for Mattel’s Hot Wheels and Barbie doll products are children. More specifically, the majority of its market would be in children aged 8-12 years old. While there are adult collectors who still purchase these Mattel products into their adulthood, one would be hard pressed to put forth the notion that these adult buyers are what Mattel has in mind when it designs, builds and markets their products.
What is interesting is the fact that Mattel’s target market has no purchasing power. It is actually the parents of these children who have the power to purchase Mattel products. With this in mind, other companies who manufacture products for children have marketed to parents. For these companies, their message would center around the benefits of their products to the children, either in increased nutritional value (for food products), or to improve academic performance (for educational toy products). Mattel on the other hand, directly markets is children’s products to the children.
Mattel’s marketing is heavy on TV advertising. This is to be expected as television acts as the primary way of reaching their target market. Children don’t exactly read magazines, attend trade fairs, or peruse the daily newspaper. Targeted TV ads showcase Mattel Hot Wheels and Barbie products during commercial breaks for popular children’s shows. Other ways of doing their marketing involve promotional material situated at toy stores for the children to see. With the increasing prevalence of the Internet and the ease by which young people go online, Mattel has also expanded its efforts to cyberspace. Apart from these mediums, Mattel has also created a line of DVDs and TV series specifically targeted to reach the children’s market (Edmunds, 2008).
In addition to TV ads, Mattel has also relied on mix-marketing for its Hot Wheels line of miniature cars. Mattel found great success in selling their Hot Wheels products in 72 car packs. The contents of these car packs would vary from week to week. This addresses Mattel’s perceived notion that variety is what will drive consumer purchasing. The rolling mix of the Hot Wheels cars allowed Mattel to seamlessly introduce new product offerings and retire old products without much effort (Johnson & Clock, 2002).
Mattel has addressed corporate social responsibility in various ways. The company has taken steps to address global manufacturing standards, environmental concerns, transparency and product safety. In its global citizenship report, Mattel has committed itself to “competitive wages, benefits, and safe and healthy working conditions”. This addresses Mattel’s use of outsourced manufacturing facilities in Asia and other low wage countries. Mattel manufacturing facilities are audited every year to check for violations including employees below the minimum age and wage, failed safety measures, unpaid overtime, delays in paying wages, among others. This zero tolerance policy extends to third party licensees who manufacture some aspects of Mattel products (Mattel Inc, 2007).
Mattel has also taken proactive steps in its environmental policies. This is specially important in the wake of the lead toys controversy. One way Mattel has taken steps to be more environmentally responsible is to phase out the use of cadmium batteries which are linked to widespread environmental harm and health issues in China. While cadmium batteries are safe for the users, people employed in its manufacturing are exposed to a wide variety of toxic chemicals. These can result in a variety of illnesses from kidney failure to lung problems (Spencer, 2008).
Lastly, Mattel has also partnered with various NGOs which promote the welfare of children and factory workers. From New York to Guangdong China, Mattel has extended its charity arm to fund projects from hospital outreach programs in California, to improving quality of life for the handicapped in North Carolina to funding homes for Children who have been victims of HIV/AIDS in Mexico (Mattel, Inc., 2007)
The modern challenges for Mattel include movement of its Market as well as developments in the supply chain. In the 21st century, Mattel’s market is now moving away from traditional toys for entertainment. Video games have taken a big chunk of the spending for children’s entertainment – a market which Mattel does not have a particularly strong presence. Thus, Mattel now faces a wider competition for each dollar spent on toys, now having to fend off video game makers apart from other toy makers. However, this is also an opportunity for Mattel to leverage its strong brand portfolio. Mattel has already hinted at its intent to enter and capitalize on the video game market with its acquisition of Radica Games in 2006. Indeed, Mattel had already tried to enter the video game market with its introduction of the intellivision game console in 1978. Today, Mattel markets a variety of video games for different consoles built around its many successful toy brands. Some examples include Barbie Super Sports, and UNO for the game boy (Kolb, 2008).
Lastly, another challenge for Mattel is the evolution of the retail channels for toys. Traditionally, Mattel has had a limited set of distributors, selling their products through a limited number of big box stores. This select number of distributors has reduced the bargaining power of Mattel from a marketing forces perspective, giving its distributors great leeway in negotiating sales prices for Mattel products. The growth of the discount/merchant channel, particularly over the internet, may serve as a spine to the hegemony of companies like Toys R Us. Mattel should be prepared to address and take advantage of this rising trend (Kolb, 2008).
Edmunds, M. (April 3, 2008). MIPTV: Advertisers, producers rethinking marketing strategies . In Inside Branded Entertainment. Retrieved September 3, 2008
Kolb, E. (April 14, 2008). Mattel: Still in the Game. In Business Week. Retrieved September 3, 2008
Johnson, E. & Clock, T. (2002). Mattel, Inc: Vendor Operations in Asia. In Tuck School of Business at Dartmouth. Retrieved September 3, 2008
Mattel Inc. (2007). 2007 Global Citizenship Report. In Social Funds. Retrieved September 3, 2008
Spencer, J. (February 19, 2008). Toys ‘R’ Us, Mattel Phase Out Cadmium Batteries. In Wall Street Journal. Retrieved September 3, 2008