The main problem facing Jack Asthalter, Fisher-Price’s marketing vice president is whether or not to move forward with the production of a new ATV Explorer toy. The extensive market research that Fisher-Price performed with children and their parents was very positive in favor of producing the ATV Explorer. Unfortunately, the production costs were going to exceed initial estimates of $12. 00 retail and instead require a wholesale price of $9. 20 per unit and retail price of $18. 50.
Typical Fisher-Price toys were under $5 retail and similar competitor products to the ATV Explorer were in the $12 retail range. Retailers and consumers may not support the higher priced product.
The ATV should be packaged and placed with the entire Fisher-Price line and still carry a catalog of other products. A second mold should be purchased to guarantee that there will be enough inventory to satisfy demand. My recommendation is based on several factors; one is that the initial research done by Fisher-Price shows that the ATV Explorer will be popular among children and parents. It is expected among consumers that riding toys are on the higher end of pricing (Riding toys constitute 22% of approximate dollar sales at retail and toys $15 and over are 33% of dollar sales).
With a higher price point there is a higher level of involvement in the purchase; when there is higher involvement in a purchase there is additional research in the product. Fisher-Price has enormous respect, popularity and integrity in its brand. Parents, namely mothers and grandmothers will compare the ATV Explorer to similar riding toys in the category and find it has better options and the durability that Fisher-Price is best known. Also, with an increase in first-borns expected in the coming years parents may be less sensitive to price as long as they are convinced the product will last during the years of its use.
India represents an economic opportunity on a massive scale, both as a global base and as a domestic market. Indian Retail sector consists of small family-owned stores, located in residential areas, with a shop floor of less than 500 square feet. At present the organized sector accounts for only 2 to 4% of the total market although this is expected to rise by 20 to 25% by next 3 years. Retail ...
With the recent advent of television advertising in Fisher-Price’s marketing campaigns they can begin the “pull” strategy in the toy business that Quaker Oats advocates. Not to mention a moving toy would appear to the advantage on television ads versus print. Quaker Oats understands that Fisher-Price is a well-run organization, but would like for them to become less conservative. This new venture into a higher priced toy would be fully supported by Quaker Oats and most likely applauded for making the effort to contribute to substantial growth in the over $5 toy market.