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RAS-AL-KHAIMAH, U.A.E
MBA
ASSIGNMENT-01
INDIVIDUAL REPORT
CRITICAL APPRAISAL OF GLOBAL MARKETING AND ONLINE BUSINESS PRACTICES OF MATTEL INC.
MODULE TITLE: GLOBAL MARKETING ANG DIGITAL BUSINESS
EMAIL:zuhairbaalavi777@gmail.com
Table of Contents
SECTION 1 INTRODUCTION………………………………………………………………………………………………………………………………………………………………………………5
INDUSTRY PROFILE ........................................................................................................................................................................................................................... 5
COMPANY ATMOSPHERE ................................................................................................................................................................................................................. 6
VALUE CHAIN ANALYSIS ................................................................................................................................................................................................... 6
SWOT ANALYSIS ........................................................................................................................................................................................................................... 7
SUMMARY ........................................................................................................................................................................................................................ 9
SECTION 2 CRITICAL ANALYSIS OF THE GLOBAL MARKETING PRACTICES OF THE MATTEL INC .................................................................................................
HOW MATTEL INC GLOBALLY EXPANDED ............................................................................................................................................................................................. 9
REASONS TO GO FOR INTERNATIONALIZATION ................................................................................................................................................................................ 10
PORTER’S DIAMOND MODEL- NATIONAL COMPETITIVE ANALYSIS ......................................................................................................................................... 10
PORTER’S FIVE FORCES MODEL- INDUSTRY COMPETITIVE ANALYSIS.................................................................................................................................................10
INDUSTRY ANALYSIS IN THE CHINA BY USING PORTER’S FIVE FORCES MODEL ................................................................................................................................. 16
STP MODEL ..................................................................................................................................................................................................................... 17
MARKET POSITIONING GRID – QUALITY VS PRICE .................................................................................................................................................................... 18
COMPANY’S MARKETING OBJECTIVE ................................................................................................................................................................................................. 18
MARKET SELECTION- INDUSTRY ATTRACTIVENESS VS RELATIVE COMPETITIVE STRENGTH............................................................................................... 18
MARKET ENTRY STRATEGY: .........................................................................................................................................................................................................
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INTRODUCTION
Mattel Inc commenced by the Harold, Elliot and Matson in 1945 known to be world toy manufacturer. Globally leading the market in
producing and planning toys is Mattel industry. The top and finest selling brands by Mattel which initiate towards children are
Barbie, Hot Wheels, and Power Wheels etc.
Directors accepted the venture, drifting change of marketing model manufacturing and practically augmenting the company’s
marketing in estimate of 3 years. Administrators blend Company’s achievement towards pioneering product, baptized in 1959. In
1968 Hot Wheels streak of expire-shed cars along with trimmings besieged for teenagers, and became crown vendor for the
company. The company penetrated the electronic games industry in 1977 of variegated approach, initiating television set, and
straight challenge. Regretting for the company buckled future and numerous non-core product projects were attracting generous
debits. To refocus their core business, they closed all non-toy related subsidiaries in 1984.
TOY INDUSTRY
The toy manufacturer is an eternally shifting and mounting company that is frequently revolutionizing innovative ideas which create
competition in marketplace. In the toy Industry, there are three main classes; they include the casino, conventional products and
video games. Dolls are universal in favour of similar industry and manufacture same kinds where as the video games have become
trendier. So it owed to the more reputation of customers who have pay for devices that permit online games. Major focus on Mattel
Inc in the doll manufacturer is conventional dolls.
In earlier years, toy manufactures stay watching for the vacation seasons approach. As the customers flinch at the worth of
commodities, toy manufacturer smirk because they knew toys were the largest stipulate for children. Although the mainstream of
toy industry made revenue every year, their leading sum of profits came during the vacation period. Conversely, this ancient times
vacation season would dissimilar the rest. The core motivation for the turn down in sales was supposed to be from the recognition
of online games. This affected the toy manufactures as well as transportation industry also.
COMPANY ATMOSPHERE
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The company has practiced 5 undistorted stations of flopping trade as well as omission income possibility, and notch the inventory
cost of the corporation in 2013. In 2000, a software company Mattel bought in 1999 a stock of $3.5 billion. In 2001, the company
benefited from doll cinema and produced 100 million dollar and above. At this moment Mattel has restructured its market share in a
ferociously competitive market and besieged to invigorate its core brands. Mattel faced solemn catastrophe regarding its
industrialized processes in 2007. In the 2010s, Mattel continued to be a motivating force of a toy producer and also publicizes
manufactured goods toward producing cinema. Moreover, the Mattel Inc ranked in corporate society's list of top 100 companies
and in a magazine, there was a statement that the Mattel is the world’s most ethical company and best corporate citizens.
It is the internal activities of a firm to transform inputs to outputs. The value chain analysis of Mattel Inc is technical systems that
support in evaluating business venture that can make aggressive leverage and importance to the business.
A value chain is the most important for Mattel Inc. In above figure, there are primary and derivative activities.
Page |7
SWOT ANALYSIS OF TOY INDUSTRY {Strengths, Weaknesses, Opportunity, Threats} SWOT analysis is a tool used to examine the
strength and weakness of the industry and also opportunities and threats facing by the industry. Here an attempt is made to
examine the toy industry.
Page |8
SUMMARY
It has negative and positive phases throughout the financial collapse. The company mechanized further genres of products, and
calibrated $1.5 million which engrossed awareness of the Disney Corporation by 1955.
SECTION 2
Page |9
Mattel, Inc. is situated all over the world. The countries are Asia, Europe, South America, North America and Central also. Being the
prevalent toy industry all over the world, Mattel made an excellent name and repute for itself. The company's centre of operations
was placed in California. With having locations all over the globe, it is necessary that Mattel has an extensive variety of corporate
ethics and culture that fits each entity country. The culture in California is dissimilar than the culture in Indonesia and so as to
achieve serviceability and integrity, Mattel struggle on the summit desires of each place. Robert Eckert, who is the current CEO of
Mattel states, “We have genuinely assembled a global source of power; we are the chief toy manufacturer in roughly every
marketplace around the globe.’’ {Mattel’s Global Marketing Strategy}.
Mattel Inc utilized the Porter’s Diamond Model to ascertain how they can transform countrywide compensation into global
advantages. The Porter Diamond Model proposes that the nationwide home base of an industry to show business a significant role
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in the manufacture of advantages on an international level. These home bases afford fundamental factors that maintain an industry,
including government hold up but they can also deter it from construction advantages an international rivalry.
Financial Analysis, in spite of a 5 quarter trade slouch company tranquil well-built monetary geography. They have controllable
liability stack, realistic with the copious asset.
2.1.3
Product market grid
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So while analyzing the company, it knows that M/S. Mattel Industry has followed market development strategy when extending to
China because they are focusing more on finding out new a market for the existing products.
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35%
30% 16%
25% 14%
12%
20%
10%
15% HASBRO
8%
10% 6% MATTEL
5% 4%
2%
0%
2005
2010
2007
2008
2009
2011
2012
2013
NET PROFIT MARGIN (%)
Empowering has a significant impact on the toy industry and drives the sales on toys globally. In the licensing agreement, the toys
sold on the market about 5.7 billion dollars. The sales increased up to 7% overall in more than 10 countries. The penetration of
licensed toys, US is the highest market in the world. The percentage of licensed toy sold increases from 2009-2014, therefore the
success has seen. It means Asian Pacific countries people should have more income for spending on toys.
When analyzing the company, it is understandable that the company has applied the Born Global Theory. The reason is the products
are not manufactured for a specific country or region; it is for all ages and all people around the world.
Traditionally, Mattel Inc strives toward division into distributions which ruined into tragedy. A second major risk is through
passionate rivalry market.
COMPETITIORS
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Hasbro Inc.
JAKKS Pacific Inc.
LEGO
2.2.1
Mattel Inc initiated in China "Violin Soloist" to goal Chinese parents who want their daughters to be "whiz kid", just like any
personality-relating to tiger mom. Mattel initiated to comprehend Chinese parents through children with well-academic sound and
well-brush up, times and days of Chinese children are crammed with homework, music lessons and private coaching for a test. To
those motivated parents, whether their children feel affection for violin or piano not imperative. What’s essential is that they know
improved that is superior and excellent for their children?
Chinese customers are basically value-seekers. That is the reason of Mattel Inc Dolls in China. Chinese customers would not give
more than that- except to stand for incredible considerable in their life. Chinese ethnicity is considerably unlike from of America.
Chinese think that “female” is more about charming and flexible rather than neat and well-built, more about being passive and
humble, rather than astounding and designer. The Chinese toy and games promote mounting at 14% in the last 5 years. The market
was previously about $10billion in 2012. On 2020, it will reach up to $20 trillion.
On the basis of Pestel analysis politically, socially, ecologically china is different from the US. However, the positive aspect is the
economic and technological development is taking place in China. It is the fastest growing economy in the world, which huge
discretionary income of the household. Since the country has adopted one child norms for the several years, the amount of money
spent for a child is very high which is popularly called has ‘Six Pocket Syndrome’.
A socio-cultural similarity between Home country and host country: (Hofstede Topology Analysis)
The graph given below shows the cultural similarity and difference between home country (US) and host country (China) in six
dimensions of cultural analysis. Marked differences exist between US and China with respect to authority remoteness, uniqueness,
ambiguity prevention, and extravagance.
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SOURCE: https://www.hofstede-insights.com/
2.2.3 Industry analysis in China by using a Michael Porter’s five force model: Five forces model is a useful analytical tool used for
industry analysis in strategic management. Here a brief attempt made to analyze the Toy industry in China by using the tool.
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Threat of entry
Mattel inc has various blockades to approach like an advantage of size, gradual mart
expansion, and the cost of fixed prices. Despite, their exit number of opportunities for people
to burglarize importer to some unsatisfied needs in the manufacturer. Everyone can
commence a toy industry and expand assembling while manufacturing a small product it may
cause huge amount.
Threat of substitution
According to kid’s attitude, they won’t prefer a fixed brand; usually, they want toys which will
be most trends at that time. Subsequently, interchanging brands don’t have backlash, the risk
is high. Nowadays, technology can be considered as a replacement right now. In future, the
research shows that there will be the great threat to toys and technological industries.
Supplier power
In the toy industry, there has been an increase in the usage of plastic materials before years.
The oil cost has a direct bang in revenue because the major chemical element of plastic mastic
is petroleum. The companies can either make a high profit or less their price because the
current price of oil is lower than other times.
Buyer power
The dimension of buyer influence is high. E.g. toys r us budgeted over 40% sales of Mattel
Company, so there will be a vital impact on the sales if it loses. When demand is being
increased for a product, they can give high prices and can earn huge profits.
Competition
In toy manufacturer, only little players are there for the competition. There is increasing in
challenge due to more interloper financial factors
The major players in the Chinese toy market have been positioned in the following order in the quality price market positioning grid
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Marketing objective is to gain a major share in the market for education, innovation, and family oriented toys. The company is
promoted with Barbie brand in China mainly to attract female children in China. The major competitors are not focusing on these
values.
On the basis of the above model, Mattel can select high-income segment of Chinese children .The size of the market is increasing
because of the economic progress and increasing upper-middle-income households.
Mode of entry refers to a collection of an access to an industry product as well as services keen on overseas advertising. Three rules
are generally followed namely, the same mode for all market, a workable model for different markets, and alternative mode in the
different market. As per Hollensen framework, mode of entry is suggested namely, external or export mode, intermediary mode,
and hierarchy mode or internal mode. The selection of a particular mode of entry into a market depends upon several internal
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factors such as firm’s size, international experience, product compensative and transactional cost, product differentiation, risk
control, and flexibility.
A number of internal factors and external factors persuade the choice of country mode. Risk criteria, control criteria, and flexibility
criteria are mainly important amongst internal and external factors. The Hierarchical methods have the maximum jeopardy;
organize, as well as small elasticity. Intermediary mode has an average risk, flexibility, and control. The Export mode has the lowest
risk, lowest control, along with maximum elasticity.
Studies of the entry mode of Mattel INC disclose that the company favours intermediary mode for the market entry. It is avoiding
the burden and risk from the entry strategy.
When analyzing on Mattel INC, they are following the Waterfall approach because it enters and spread in international market
sequentially.
Product:
Mattel was well-know ongoing in Barbie and Hot Wheels as nucleus products have a wealthy and assorted product in its marketing
mix. The brands initiate by Mattel are Barbie, DC Universe, Mattel Games. Mattel has freshly got an agreement to set up
industrialized toys connected to movie names like Jurassic Park. They have always alerted that toys are used by kids so they are not
dangerous in any way and the purchaser can share it with the existing feelings and like it in several ways. The factors influence
factors of Product-related factors, market-related factors, and consumer-related factors and other factors like channel availability,
basic marketing strategy, and government restrictions.
Branding
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Source: internet
Price:
They started floating their price in order to enlarge the sales. To increase their outcomes back they begin selling their products
online completely which saved their supply cost. The marketing mix costing policy of Mattel Inc also differ according to locality as
you can see the dissimilar choice of price for the similar branded product in the diverse area. One of the key reason for such a high
range in price of their products is they required to sell it its branded products in all market class.
People, Process and Physical evidence:
Mattel is proud of its success of workers, Employers are proud to say that they are working in a corporate innovative, technology-
based firm. Mattel provides the best condition to workers and all people are highly motivated. Regarding the process, it starts from
need identification, Product idea generation, concept development, product development, business analysis, packaging decision and
final commercialization. Physical evidence focuses visibility through Mattel shops.
Place:
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Mattel deals almost 130 countries all over the globe like India, China, Egypt, and UK with the marketing of their products usually
doesn’t deliberate on notching an elite store for marketing its products. They mostly depend on other retailers and distributors to
formulate products to get the consumers. So to augment the revelation and sell off their products surrounded by the digital era,
Mattel come completely commenced trading their products through online. This enlarged the trade but also condensed the cost of
dealers as Mattel was trading their products straight to the consumers. Through their own distribution website, many e-commerce
vendors, Mattel is presently centring to catch the disorganized market in up-and-coming countries which have a vast perspective.
SOURCE: https://milonimehta15.wordpress.com/2013/10/04/distribution-decision/
Promotion:
Advertising: Mattel Inc outline proposes a full study of the past and present operations of most important ads, society on worldwide,
and consist of a significant outline which recognize main potency and fault.
Personal selling: It has further returned over the online sales because customers have the chance to see the product, acquires
information on the manufactured goods and determines in case they desire the product or not. To attain a flourish in personal
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selling, there are definite steps that need to be pursued. They are: Generating guide, succeeding guide, impending the consumer to
snooping desires, mounting and suggesting solutions for management opposition, ultimate the trade and final follow up.
Mattel Inc pursues equally digital and traditional approach throughout such as TV commercial, journal, weekly and different social
sites. Throughout the website their characterization of all products point out and aided company to enlarge the market of both
offline and online. Mattel joins with few attire brands in order to cabinet their products besides with their brands such as business
events, fashion events etc. Move over they aim at doing hard-line marketing in the state where computers or internet is not
accessible, mainly in trade like India where there is a massive prospective and can flourish their trade to an immense scope.
Therefore, this concludes the marketing mix of Mattel Inc.
Organizational structure and control system of business ethics of Mattel INC
The Mattel Inc is following the flat organizational structure comparatively high level of the chain of command from apex to the
foundation from communication and decision making. It is structured in functional layer. People are grouped on the basis of
common maven and experience. Within the functional division perform a specialized set of task. The management style of a
company is based on McGregor’s Y theory “participatory management style”.
Regarding business, ethics is a set of attitude which an organization follows. It explains the firm’s response to different issues with
various stakeholders. ‘Use good judgments’ is a fundamental ethics of Mattel Inc. the mission statement says that ‘It is committed to
protecting environment ensure health and safety of works and global community. “Today and tomorrow” is the slogan of the
company.
SECTION-3
Mattel commenced marketing goods on Shop.Mattel.com. Andres Amezquita is the Vice President of the online business market at
Mattel Inc. They draw near consumer rendezvous counsellor “Concise Click” to aid evolution into online marketing. The technology
helps the company’s label for comfortable in videos and send customers to a buying point. Chief Executive officer of ConciseClick,
Nick Alt says that the company faced a problem which they were inflowing the online business sector actually behind in the game.
And also he says that they saw an instant matter that how do the ConciseClick enlarge consumer appointment and make it fewer
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about being behind and further about doing impressive pioneering to necessitate their access into the legroom. Cooperative or
communicating videos are further professionally renovating observers into sales, by trading a raise of up to 30% and in case some of
our customers up to more than 50%. Viewers can observe, feel and virtually savour the product in the video. Consumer appointment
range is more than 60% on Shop.Mattel.com and Mattel’s visitors watch the ConciseClick video are more than 32% of observers.
Viewers below 57% of watching Barbie video at least click on one product.
3.1.1 Company website- details, attractiveness, easiness to use, web distribution traffic, Website popularity
analysis-Average visit duration, Bounce rate, etc.
The design and structure of website and products are awesome; Mattel Inc strives toward build secure in favour of kids. Mattel Inc
looks toward diminish the ecological force and make services which remain elevated values. Mattel Inc has dedicated well-built
moral and ecological presentation inside the industry as well as the culture also.
The Mobile application StartApp develops the digital experience for Mattel Inc many brands like Hot-wheels and Barbie. It was
founded in 2010 and its head office is in New York. Under the multi-year agreement, the app became Mattel’s premier license to
create its own emojis, stickers, Gif and related apps for a Mattel’s global customers. It is an awareness energetic mobile resolutions
company that allows their partners to turn data into positively gratifying mobile junctures. The CEO of StartApp, Gil Dudkiewicz says
that “we are abnormally gitted to merge forces with Mattel Inc to aid them to amend their iconic brands for present worlds.
Through this alliance, we will formulate our massive experience in the mobile industry to elaborate and develop Mattel’s
achievement to bring their brand to an advanced and aggressively more coherent generation.”
Mattel Inc, which possesses international brands Fisher-Price and Barbie doll, newly broadcasted a shift to launch tactical connection
through China's social media company Tencent QQ. Managing director of Mattel Asia-pacific, Peter bogger said that "With the brisk
growth of digital technology in Asia and China Market, the internet has developed into a vital dais for youth to be in touch. As a
foremost brand in children's development and learning, this shift will permit QQ and Mattel Inc to collaborate to offer more
priceless social network comfortable and rich offline products for Chinese youth. Tencent QQ, the largest social media tools have a
copious amount of consumers, and it is also well-liked and accepted among Chinese youth."
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SECTION 4-(RECOMMENDATION)
The key disparity between Mattel and Hasbro is while observing a doll manufacturer like Hasbro has enveloped an entire practice.
Mattel also should think about the exposing out a timeworn stimulating extremely victorious in daily life
A tactic of centring on the crux of species where better-build designs to make profits
The industry is taking now the 1st ladder by recommending more ethnically assorted dolls of Barbie with a deeper collection of
realistic garments, except doll requirements an entire study. Escalating multiplicity diagonally in product lines will get better in
marketing along with the support of the toy industry’s centre trade name both locally along with globally.
Conclusion
The company arrived in an extensive way of sixty-seven years after it in progress elsewhere in carport practicum in California. The
Mattel Inc developed along with matured toward industries at the same time a toy manufacturer in the world. This corporate reveal
confidently and assertively on this problem and it goes to demonstrate how well the business did while it is positioned so extremely
around the world. For many years to come, the company should raise along construct the vision for appearing capable in favour of
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long life. Consequential of Mattel Inc’s grand recall in 2007, it is seen that their approach for redistributing brought about one of
their major losses and led to brand ruination and foremost fall in their market value.
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