Fisher-Price Toys Case

FISHER-PRICE TOYS CASE

I. Problem Definition

* Define go-to market strategy for a new product that has:

* high potential sales (very well evaluated)

* price above company´s standard (if it fails retailers will have to bear the burden and relationship/trust with be damaged)

II. Situation Analysis

Fisher Price has traditionally sold quality toys at moderate price.

Research showed optimistic forecast for a new riding toy product at projected price of $12.

Unseen costs resulted in a real projected price of $18,5.

(SWOT)

Strengths

• Brand Equity

• Quality of the products

• Company with focus on Innovation and Design

• High customer loyalty

• Perception of “value for money”

• Established channel of retail and distribution

* Fisher higher-priced entries were selling very well

Weaknesses

• Risk averse environment

• Not open to new ideas on product pricing front

Opportunities

• Growing Market for Riding Toys

• Optimistic forecast for number of first births

Threats

* Fierce competition in the riding toy area

* Playskool had long dominated riding toy market and had 6 such items

* Small/unknown firms were offering products at $3/$4 retail price with strong appeal to many retailers

* Toy sales were becoming more concentrated (discount chains) in last years

ALTERNATIVES

1: Retail Price of $12, fewer features, high margin

PROS

• More adequate/ideal price

CONS

• Inconsistent with company policie (quality/reduce features)

* Product with less features hasn´t been tested and evaluated.

RISK: LOW

2: Retail Price of $18, all features, with single item campaign

PROS

• Historical data suggested effectiveness on TV campaign

* Product has already been tested and well evaluated.

CONS

• Inconsistent with company´s communication strategy (umbrella)

* High price for company´s standards, risks trust with trade

RISK: MEDIUM

3: Retail Price of $12, all features,...