Marketing Research Can Help Solve Mattel Term Paper

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Marketing Research Can Help Solve Mattel's Marketing Challenges

Defining a Market Research Strategy

Perceptual Mapping and Audits

Voice of the Customer Programs to Reconnect with Global Customers

Re-vamping the CRM system to be more Channel-Specific

Throughout August and September, 2007 Mattel Corporation disclosed that their manufacturing partner in mainland China had used lead-based paints in the production of Fischer-Price Toys in addition to toys from several other brands (Associated Press, 2007). Chinese manufacturers countered that is was Mattel's own lack of safety and quality standards with suppliers that set the stage for lead paint being procured from unreliable and unqualified third party suppliers. As a result, Mattel apologized to both the Chinese government and the American consumers with extensive media coverage of both (Thottam, 2007).

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With 9 million toys recalled in the last two months and the reputation of their own brand in jeopardy as a result, Mattel must develop and execute a market research campaign to understand just how much damage has been done to their reputation. The recalls come right before the beginning of the most profitable selling season of the year, the year-end holidays. This paper covers the specific aspects of the market research strategies the company can use to ascertain just how extensive the damage to their brand is, and second, what specific steps they can take to overcome the challenges faced. The perceptions of customers globally has forever been changed, and it's up to Mattel to find out to just what extent those perceptions of quality and safety will impact the sales of their products throughout the remainder of 2007. It is also critical for Mattel to complete a unit forecast of its toy lines that have not been involved in the recall, and create marketing strategies for those products unaffected by the recall as well. The PR challenges for Mattel are daunting, and the use of market research to define just how big the challenges are is critical for the company to attain sales in the holiday selling season.

Defining a Market Research Strategy

TOPIC: Term Paper on Marketing Research Can Help Solve Mattel's Marketing Assignment

Mattel faces an uphill battle of winning back the trust of consumers who had previously been very loyal, active consumers of their products. The challenge for Mattel is to retain these most loyal customers while proving to other potential customers that they are trustworthy. The market research strategy then needs to focus on how to measure the perception of Mattel today after the recalls, and also measure the level of credibility the apologies generated. These two points are critical for the company to have a firm grasp on before making any further decisions. In addition to these two perceptual elements from their customer base and prospects, Mattel also needs to see the extent to which the recalls have impacted their sales as well. In addition to these two critical factors, Mattel also must get an indication from its dealers and distributors how the recall is also affecting them both from a supply chain as well as a financial standpoint. Market research can provide insights into all of these specific areas of the company, and this paper provides recommendations of how these issues can be addressed and the goal of reversing the slide in sales achieved.

Perceptual Mapping and Audits

Most critical for the success of Mattel going forward is the development of perceptual audits of just how much damage has been done from the product recalls and eventual admission of Mattel that their supplier management strategies lacked quality control measures and standards. The use of web-based surveys sent to each customer segment that includes attitudinally-based questionnaires that can be analyzed in the context of perceptual maps is a critical first step in seeing how much trust Mattel has lost as a result of the quality problems in China. Using a Likert scale to organize the scales for each question on the questionnaire, with a concentration on having interval-level measures between each value in the questionnaire to ensure that the data is robust enough to draw conclusions from, and also to ensure once plotted into a perceptual map the distances are accurate. The use of multidimensional scaling as a measurement technique for attitudinally-based questions could then be processes by SPSS for have both correlation matrices and a perceptual map completed showing both the idealized point of trust for all toy brands, also showing the point at which Mattel encountered its problems with product quality in China, and then after the global apology. The decline in trust will most likely be quite significant as Mattel initially allowed the Chinese to take the blame on a global scale first. This further makes the company untrustworthy in many consumers' minds globally. Figure 1 shows an example of how a perceptual map is constructed (Vivalogo, 2007)

Figure 1: Example of a perceptual map showing idealized points (Source; Vivalogo, 2007)

Voice of the Customer Programs to Reconnect with Global Customers

The second aspect of Mattel's market research strategy has to focus on reconnecting with consumers and getting them involved in the product development process again. The fact that Mattel violated their trust by first blaming the Chinese and then taking responsibility for the lack of supplier quality control also needs to be fought against through the inclusion of consumers in the product development process. Called Voice of the Customer Programs, these strategies can involve focus groups, online panels, and the inclusion of distributors and dealers in face-to-face meetings with Mattel senior management and product development experts.

Mattel has to accomplish two critical tasks using the Voice of the Customer Program. First it has to get its key customers, distributors and dealers to have ownership in the product strategies now under development. Second and most importantly it must be focused entirely on the need for creating products that precisely align with their preferences and tastes, and for distributors and retailers, their need for moving the toys quickly through the channel. The series of Voice of the Customer Programs also must be used to find entirely new toy concepts and quickly turn them into new, salable toys. The concept of creating entirely new markets is defined in the book Blue Ocean Strategies and includes insights into how companies can re-invent their go-to-market strategies by concentrating on their customers' unmet and often unsaid needs (CRM Buyer 2005). The need for using Voice of the Customer programs to get face-time with the most important distributors, dealers and customers is critical for the company to overcome the manufacturing problems and regain the trust of these critical members of its customer base.

Re-vamping the CRM system to be more Channel-Specific

As Mattel is highly dependent on its distribution channels, and many distributors have the recalled products in their inventories today, it is critical that systems that can accurately track both shipments and activity with channel customers be put into place. Commonly referred to as Partner Relationship Management (PRM), it is one of the most critical aspects of a CRM system (Gartner, 2001). The focus inside Mattel now needs to be on listening to these distributors and quickly alleviating the financial pressures on them due to the massive toy recalls announced in the last sixty days. There is also the critical need for tracking who the competitors are throughout the channels, and completing competitive analysis of their pricing and strategy moves meant to capitalize on the massive recall.

Most importantly however, this PRM system must synchronize all pricing, price exception, returns, and also staying on top of what the distributors and dealers need to stay profitable. There is also the critical need of staying on top of the specific forecasts and the downfall in unit demand as a result of the recalls as well. The PRM system then needs to become a financial hub of information that combines market research data from the distributors and dealers to make sure Mattel takes care of their most critical business partners through this product crisis.

Finally the PRM system needs to be integrated to the existing CRM systems in place at Mattel to make sure that senior management can track all activity as it relates to product sales and returns, and also tracks the performance of the company over time. The use of the financial measurement aspects of the PRM system will also be an excellent barometer of changes in strategy are paying off and earning the company trust and sales again.

Recommendations

As Mattel's brand has been significantly damaged by the mishandling of the lead paint issues now impacting 9 million toys recalled, the company must move quickly to gauge just how badly the brands' image and trust in the company has been impacted by the events of the last ninety days. Here are the recommendations for Mattel to move immediately on:

Get a series of perceptual audits completed in each major geography served globally. This is a critical first step as it will show the distance from the idealized point of trust and credibility from customers, distributors and dealers and where Mattel is today.… [END OF PREVIEW] . . . READ MORE

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