The importance of the global market to the growth of Mattel
The importance of the global market to the overall growth and sustainability of Mattel can be seen the manner in which it handle the recall incident which had put it in the unfavourable position of having to make tough decisions. It should be illustrative to appreciate the fact that Mattel was confronted with the stringent regulations in the United States of America that served to reflect the manufacturing regime differences between the United States of America. While the contest involved merely simplistic regulations as to the high content of lead paint in its toys, that it was acceptable in China and unacceptable in the United States of America presented an onerous challenge to Mattel even threatening to lead to its eventual collapse. However, the importance of the global market was seen in the dual approach pursued by Mattel in the address of the situation.
First, Mattel engaged in a costly recall process that consumed millions of dollars running into a total of nineteen million toys. The motivation lied in the need to assuage the American market which was threatening to boycott Mattel products. Mattel had to do it right in the eyes of the American market in appreciation of its essential role and contribution. This demonstrated Mattel’s reliance on the American market and the extent to which it was determined to save its image and restore its brand. On the other hand, the Mattel ran the unprecedented event of miscommunication of the Chinese manufacturing products. The fact that the products had been acceptable in the Chinese market sent messages that the Chinese regulators were not concerned with the quality and safety of products. This unprecedented miscommunication occasioned the publicized apology to the Chinese regulators by Mattel in a bid to retain the Chinese market. This is essential for the overall retention of the large Chinese market. The two reactions can be used illustrative to show the reliance by Mattel on the global market.
Marketing strategy used by Mattel globally
It is essential to notes that Mattel employs a number of strategies in the overall global market. This is in its pursuit of gaining a strategic advantage over its rivals in the competitive market. However, of all the marketing strategies employed, Mattel places most reliance on cost leadership that affects pricing as its main marketing strategy. In that vein, it ensures that the costs of operations are at their lowest and this saving in expenses is transferred into lower prices for their products. This way, they are able to attract the larger segment of the market which is often price sensitive.
In support of this assertion, it is essential to examine the decision to locate its plants in China despite the fact that most of its targeted consumers are out of China. The fact that Chinese production costs are low has been employed to ensure that the company experiences lower costs in operations. With the establishment in China, production is low and consequently, Mattel can comfortably float low prices in the market that enable it compete favourably in the market. The eventual consequence is that Mattel is able to maintain a cost leadership in the market. This gives them a competitive hedge in the market as they are able to tap a larger portion of the market.
References
Bridgepoint Education, Inc. (2012). Managerial Marketing. San Diego: Bridgepoint Education, Inc.
Teagarden, M. B. (2009). Mattel's China Experience: A Crisis in Toyland. Havard Business Review, 1-17.
