Research Report
Gerald, a father to a nine year old daughter, recently invented a toy that enabled dolls to sit on the swing with his daughter. Gerald has named the toy “swing a majig” but he is open to other ideas. Gerald has selected a location for his business and is working on a budget of between 2500 and 3000 USD. Gerald is looking to create a website, use social media sites, and air a TV commercial on Saturdays that will run for 30 seconds. He wishes to have a manual for the product and have it design packaged. He has set the price for the toy at 12 USD and is looking to conduct a Business to Customer (B2C) campaign. Gerald presented his idea to my group and is waiting on us to make some decision based on our research findings. This research was conducted to study various aspects of the business such as competition, a SWOT analysis and communication’s audit which will help determine the best practices to adopt for this campaign. This is a synopsis of the secondary research on Gerald’s business idea.
Secondary research is conducted by analyzing secondary sources of data. These secondary sources include books, articles, print media and government reports among others. Secondary data is prepared from primary sources of data such as interviews and questionnaires. These materials are then analyzed and presented in more presentable methods such as graphs, charts, and percentages in books, journals, articles, literature reviews, case studies and reports . Secondary sources of data are advantageous in that they provide more data, are easy to interpret and are cost efficient. It is important to ensure that secondary sources of data are valid and accurate, or else they may end up being inefficient.
As a group we were at first convinced that the target audience should be kids aged between 2 and 7 years, and parents who have kids around this age. However, it is important to note that this product will be more preferred by girls than boys. At this age, most boys prefer cars to dolls. It is also important to note that most kids between 12 months and 18 months all have a preference for dolls. In this case, boys between the age of 12 months and 18 months are a viable target for the doll swing toy. The choice of color is also known to have a great influence on kids, and toy manufacturers use certain color preferences to break gender barriers in kids . Toys that are meaningful to the development of children, for example those that help them acquire cognitive skills, are known to be preferred by both genders. This toy involves an actual activity that could help develop kids’ physical and artistic skills . Both boys and girls are known to prefer red toys to blue toys despite the common belief that girls prefer red toys while boys prefer blue toys. Children have been found to look longer at objects in red and pink, irrespective of their gender. Color effects that produce high quality color effects will also increase the probability of kids acquiring toys. Kids, both boys and girls, were also found to prefer round toys to angular ones. This is attributed to the emotional attachment of warmth associated with round shapes as compared to the threat depicted by angular shapes. Size does not determine toy preference across genders as this was known to vary from one kid to another depending on personal likes.
The cost of production is an important aspect for every business venture. 60% of toys are manufactured in China because of their low manufacturing costs. For example, the cost of manufacturing a product in china can be 30 cents, but the same product will be manufactured for 1 dollar in the United States . The toy will be priced at 12 dollars, and based on the low cost of manufacturing in china, the total cost of production will be around 3 dollars. This means that the business can be termed as a viable business idea since it is profitable. The sale price of 12 dollars is appropriate as the average cost of toys in USA is 10 dollars and above. In the world of business, pricing is never a threat as long as the product in question has a competitive advantage. The toy is a new invention that enables a doll to attach itself on the swing. This toy is unique and not provided by any other toy manufacturer yet. A proper campaign will ensure that this brand has properly established itself in the market and secured a part of the market share before competition starts to manufacture similar toys.
The major problem facing the toy industry manufacturing is the common toy recalls by government censors. These are attributed to contamination with chemicals such as lead and loose magnets. Low priced manufacturing is associated with low quality products causing the needs for constant recalls by the government. For example in 2007, Mattel, a major player in the toy industry in USA, experienced the largest number of toy recalls which caused the company to lose a large number of customers due to lack of trust . As part of strategies to regain their customers trust, the company started outsourcing manufacturing services to china.
The name suggested for the toy “swing a majig” should be given more thought before being endorsed. A brand name has a lot of value and benefit for the brand owner. The search of a brand name involve the expertise of specialists who find a brand name based on strategy, objectives and a name criteria which are used to generate various name ideas which are screened to come up with a brand name . Brand names assist companies to secure market positions which assist to keep competition at bay. A good brand name should be simple and web friendly such that users over the web can find it with ease. It should also have both the logo and the business in mind as well as be unique in order to stand out from the crowd . Consumers should be able to distinguish one brand from the other, as a mix up of brands could cost a business a part of its market share. A good example of a good brand name is coca cola.
The business to customer (B2C) campaign mainly involves the use of social media and websites. The general objectives are to create brand awareness of the toy, acquire customer, make sales, create web traffic and engage customers. It is also widely known as content marketing. This campaign will be aimed at creating awareness of a toy in the market, which will then be translated into sales. Web traffic creates more awareness to potential buyers through social networks. In web traffic, referrals are common and most referrals end up in sales. These include mobile application such as pinterest, mobile content and magazines because of their high quality photography. Most popular social media websites are Facebook, Twitter, YouTube and Google+ for brand awareness while Linkedin offers a great deal in terms of creating credibility and acquiring human resources . Instagram is also effective with content awareness for people below the age 25 years. The TV commercial on Saturdays is well justified, since most kids who are the key target market to the new toy are more likely to be watching TV on Saturday. Most parents are also more likely to be at home on Saturdays as compared to weekdays when they are more likely to be at work. TV commercials are also a more visual form of advertising, which is more likely to be appealing to kids as compared to other forms of advertising such as print and broad cast media. TV adverts are the most popular form of advertising since they reach large volumes of audience and involve both sound and images. They are also a good medium to create brand awareness.
A SWOT analysis is an analysis into a business’s strength, weaknesses, opportunities and threats. Strengths and weaknesses are internal factors influencing the success of a company, while, opportunities and threats are external.
In 2015 the toy industry in the US made a 7% increase in sales. The toy market is characterized by numerable toy manufacturers and retailers. Due to the high cost of manufacturing in USA, 80% of toy retailers in the country import their toys from china. This explains the high profit margins in the US market and the global toy market in general, since the cost of manufacturing in China is less by more than 60% as compared to the cost of manufacturing in the United States. The average expenditure by kids on toys is estimated at 309 USD per child . Children perception of toys changes often from physical toys to virtual toys such as video games, and even treasures offered to them by adults. In order to stay in business toy manufacturers ought to be more dynamic and quick to catch on to new ideas that are children friendly, which they can use to come up with newer inventions for kids’ toys. It also requires a keen study into kid’s behavior. For example, “the swing a magic invention” is from Gerald’s daughter desire to swing her doll on the swing, which was made possible by Gerald’s keenness. The most popular kid’s toys include puzzles, games, building sets, accessories and action figures. This success in sales of kid’s toys is attributed to media content. For example in 1999, a similar rise of 7% was achieved in the toy market. This is the same year that the first episode of “Star Wars” the “Phantom Menace” was released . The most popular toys are those that are inspired by media content such as movies. An increase in sales is also noted during festivities especially during the Christmas season and it is important for toy manufacturers to time their inventions in order to maximize sales. The size of the global market is a rough 84 million USD, with the USA toy market accounting for 20 million USD of this value. The toy market is responsible injecting 29 billion USD in the US economy and provides over 250,000 employment opportunities to the US citizens. China is a leading importer of toys from US, with the total imports accounting for 18 billion USD of the country’s economy in 2012. The global toy market leaders are Mattel, Hasbro, JAKKS Pacific, Namco Bandai and LEGO, 3 of which are based in the United States.
In conclusion the toy market in the USA is rapidly growing and has a high potential for growth in the future. This industry is characterized by various challenges with most toys being recalled by government censors on grounds of lead contamination and loose magnets. Manufacturing in the United States is very expensive and, as a result, most toy retailers opt to import their toys from china. These low cost manufactures are, however, more likely to produce low quality goods. As a new invention, the new toy has a lot of potential which can be reinforced using a proper campaign. Conducted properly, the B2C campaign can ensure the success of the product in the market. Other marketing programs such as the TV adverts on Saturdays will reach out to many kids who are the key target of the new toy. The manufacture of the toy should also manipulate colors, size and shape to maximize the preference of the toy to both boys and girls. This can be made possible by opting for red and pink colors, and round shapes. The cost of production of toys is relatively low and the suggested sale price will ensure that the business stays profitable. The name of the toy, “Swing a majig” should be changed. A brand name has a lot of value and benefit to the brand owner, and it is, therefore, important to employ the expertise of specialists to conduct a proper search name.
References
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