Mattel.

Inc
Debbie Thorne, Texas State University

Mattel Inc. is one of the worlds leaders in the design, manufacture, and
marketing of childrens toys. The companys major toys brands include
Barbie (with more than 120 different Barbie dolls), Fisher-Price, Disney
entertainment lines, Hot Wheels and Matchbox cars, Tyco Toys, American
Girl, and games such as UNO. In addition, Mattel promotes international sales
by tailoring toys for specific international markets instead of simply
modifying favorites from United States. The companys headquarter is in El
Segundo, California, but has offices in 36 countries and markets its products
in more than 155 nations throughout the world.
History of Mattel
In 1945, a garage workshop housed the beginnings of Mattel. Harold Matson
and Elliot Handler combined their names and their ideas to form Mattel.
Although picture frames were the first Mattel products, Handler soon began
making dollhouse furniture out of picture frame scraps. Shortly thereafter,
Matson sold out to Handler, who along with his wife, Ruth, expanded the
product line.
The companys emphasis switched to toys due to the success of the
dollhouse furniture. For the first time the company advertised toys on The
Mickey Mouse club over a period of 52 weeks. After seeing her daughters
fascination with paper dolls, Ruth suggested that a three-dimensional doll
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should be produced so that young girls could live out their dreams and
fantasies. This doll was named Barbie, the nickname of Ruth and Elliot
Handlers daughter. Mattel went public in 1960 and within five years was
ranked in Fortunes list of the 500 largest US Industrial companies. Mattel
went global during the 1960s. Favourable responses to test marketing
prompted the company to grant licensing agreements in England, France,
Germany, South Africa, Italy and Mexico. In 1968 Hot Wheel was introduced,
and boys imaginations were captured in the same way that Barbie captured
girls imaginations.
The Handlers left the Mattel organization in the mid-1970s, and the new
management expanded into electronics but was not successful because
pirates of the technology produced a plethora of cheap imitation software.
The failure of Intellivision caused significant change at the company as
manufacturing plants, and overhead spending were all reduced.
In 1988 Mattel revived its association with The Walt Disney Company and
began to make baby products and toys based on famous Disney characters.
Mattel began to see more and more success due to this strategy, and a
merger with Fisher-Price in 1993 further strengthen the strategy. As many as
four out of ten people said that if they were shopping for toys, Mattel would
be the brand that they most prefer. Retailers also single out Mattel as a solid
performer. This survey clearly proved that both children and adults are
enthused about Mattel and its line of products.
Over the years from 1990s until 2015, Mattel maintained to be the favourite
toys among the children. Barbie and Hot Wheel were frequently mentioned in
any survey report of toys top brands. With the introduction of electronic
games on hand-phone and tabs over the last few years, Mattel began to face
real challenges to its toys among the young children.
Barbie

Barbie is Mattels flagship brand and its number one seller routinely
accounting for more than 50 percent of Mattels sales revenue. The first
Barbie doll sported open-toed shoes, a ponytail, sunglasses, earrings, and a
zebra-striped bathing suit. Barbies toys is not just about one particular
image. It has been projected to be a fair girl with multiple dressing forms.
Fashion and accessories were also available for the doll. As such children can
continue to purchase not only the toy but also the fashion accessories of
their choice. The Barbie character has also acquired numerous male and
female friends and family over the years. They are Ken, Midge, Skipper and
Christie. It toys are mainly popular with children below seven years of age.
Barbies popularity has broken stereotypes. Retrofitted versions of Barbie
dolls, on sale in selected San Francisco stores, feature Hooker Barbie,
Trailer Trash Barbie and Drag Barbie.
There are also numerous alternative Barbies such as Big Dyke Barbie,
but Mattel does not want the Barbie name to be used in these sales.
Redressed and accessorized Barbie are alright with Mattel as long as no one
practices trademark infringement. Altogether the Barbie line has sold more
than one billion dolls in four decades. This make Barbie the best-selling
fashion doll in most global markets, which involves about USD $ 2 billion in
worldwide sales annually. According to Associated Press, more than 100
different Barbie dolls are sold on the average of two per second.
Barbie has expanded into the realm of young girls clothing. Barbie clothes
are now available for children, and Barbie herself received a makeover. In
response to criticism and the need to keep the brand strong, the company
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developed a more modern version of Barbie, with a smaller chest, larger

waist, and softer hairstyle, which more accurately reflect a natural female
body. More in-style clothes are availbale for the doll, and a belly button is
now available on the doll. The Barbie line is even being expanded into
computers, which are designed with a Barbie theme and include a digital
camera. This is all being done in an effort to recapture more of a customer
base and even to expand the market by attracting older girls to the Barbie
product line.
Although Barbies is a popular branded toy in the world but its popularity
slipped over the years and failed to make the top five selling dolls. This
decline is due to new and innovative competition, including the Bratz doll
line that has gained significant market share. Sales were also not promising.
American Girl

In 1998 Mattel acquired Pleasant Company, maker of the American Girl

collection a well-known line of historical dolls, books and accessories to its
basket of branded toys. Originally, American Girl products were sold
exclusively through catalogues. Mattel extended that base by selling
American Girl accessories (not the doll) in major chain stores like Wal-Mart
and Target. Effort to increase the brand awareness include the opening of
American Girl Place shops in New York, Chicago and Los Angeles. The
American Girl collection is wildly popular with girls in the seven to twelve
year-old demographic. The dolls have a wholesome and educational image
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the antithesis to Barbie. This move by Mattel represented a long-term

strategy to reduce reliance on traditional products and to take away the
stigma surrounding the perfect image of Barbie. Each American Girl doll
lives during a specific time in American history, and all have stories that
describes the hardships they face while maturing into young adults.
Social Responsibility
Like

any

other

organization,

Mattel

has

recognized

the

different

responsibilities that it has to various stakeholders including customers,

employees, investors, suppliers and community. For example, because the
companys products are designed primary for children, it must be sensitive
to societal concerns about childrens rights. It has taken steps to strengthen
its commitment to business ethics and social responsibility. The company has
published its first Corporate Social Responsibility report, including strong
statement about Mattels commitment to economic, legal, ethical and
philanthropic responsibilities.
Global Manufacturing Principles
Beyond concerns about marketing to children, Mattel takes its commitment
to business ethics very seriously. The company conduct full ethics audit of
each of its manufacturing sites and those facilities of primary contractors. It
also to ensure that contractors were not using any child labor or forced labor.
Those found in violation of Mattels standards were forced to change their
operations or lose Mattels significant business. Thus Mattel instituted a code
of conduct called Global Manufacturing Principles (GMP). Other principles
included are related to safety, wages and adherence to local laws. Thus a
key challenge is the certification of business partners and potential partners
with respect to its manufacturing principles.
Mattel

published

MIMCOs

findings

of

the

audits

conducted

at

the

manufacturing facilities in Indonesia, Malaysia, and Thailand. The results

revealed satisfactory and, on occasion, exemplary findings such as

addressing

employee

health

needs

and

providing

job-related

skill-

enhancement programs.
The Mattel Foundation
In another effort to demonstrate a strong commitment to its stakeholders,
Mattel established the Mattel Foundation, which promotes philanthropy and
community involvement among Mattels employees and makes charitable
investments to help children in need. The work of the Mattel Foundation is
funded primarily through a percentage of Mattels pretax corporate profits.
For example, the foundation was able to provide for the construction of
Mattel Children Hospital at the University of California, Los Angeles. It also
supports annual fundraising events such as the children affected by Aids
Foundation, the Mattel Family Learning Program, and the annual giving
campaign targeted toward Mattel employees.
Many of the Mattel contribution includes providing grants to projects in
environmental education for elementary school children, Madison Childrens
Museum, various cultural programs, and a performing arts series for children.
The Barbie brand debuted a worldwide cause-related program called Barbie
Cares: Supporting Children in the Arts dedicated to supporting arts
education for children. It include creation of innovative, relevant products to
expose girls to the world of arts education and creative exploration.
Mattels Employee Volunteer Program was established to provide all
members of the Mattel family with opportunities to give back to the
communities. Every year, Mattel employees contribute many hours of
volunteer services to the lives of needy children. It offers a generous
Employee Matching Gifts Program, matching dollar for dollar the charitable
gifts made by employees to qualified nonprofit organizations. Mattels
combination of responsibility and personal involvement is the basis for the
companys philanthropic vision and its deeply held commitment to helping
children.

Moving Forward
With the beginning of the twenty-first century continues to challenge Mattels
executive leadership and financing standing, the company also made strong
strides. Today, Mattel faces many market opportunities and threats including
the rate at which children are growing up and leaving toys, the role of
technology in consumer products, and purchasing power and consumer
needs in global markets. Many children and teens prefer to spend time with
music, movies, internet and mobile phone games. The phenomenal success
of the iPod, iPad, iPhone and social networking are a testament to this shift.
These young consumers have less time to spend with traditional toys. This
shift has created challenges for all toy makers.
Mattel Barbies worldwide sales, in particular, have been declining over the
past several years due to changes in the market situation. Despite these
concerns, Mattel has a lot to offer both children and investors. Barbie
remains the number-one doll in the United States and worldwide. And
Barbie.com, the number one website for girls, routinely get over 50 million
visit per month. Furthermore, all of Mattels core brands are instantly
recognizable around the world. Hence, the ability to leverage one or all of
these brands is high. A few remaining issues including Mattels reliance on
Wal-Mart and Target, volatile oil prices, and increasing competition on a
global scale. The next few years, however will test the firms resolve and
strategy within the highly competitive yet lucrative toy market.

Malaysia
Mattel has been in Malaysia for many years, marketing Barbie through many
major retailers such as Parkson, Jusco and Sogo. It presences is strong in
urban areas where the major stores are located. In addition, the price of
Mattel toys is also priced higher than other branded toys thus making it more
difficult to market in smaller town where most families earned much less
than families in bigger cities.

Cheaper toys make in China from the

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competitors are flooding the smaller towns making the competition much
more intense.

QUESTIONS
Q1. Discuss how Mattel plays its role in fulfilling its social responsibility to
consumers and society.
Q2. Evaluate the strengths and weaknesses of Barbie.
Q3. Did American Girl collection cannibalized sales from Barbie? Explain.
Q4. What are the opportunities and threats that Mattel faces as it look
ahead?
Q5. If you are the Marketing Manager for Mattel Malaysia, what are your
strategies to increase
the sales of Barbie?