Andi Ahmad Fauzan

29115661

Advertising Experiments at the Art Company Case Analysis

1. Background of the case
Late 1990s, toy sales sluggish
December 2000, strategic decision to outsource production of Etch A Sketch to Kin Ki
Industrial
2. Product Information
Etc A Sketch
Target audience; adults and kids
The market share of the mass merchant
ranged from 15% to 30%
The average gross margin was 58%
The average retail margin was 36%

Betty Spaghetty
Two products; Color Crazy and Go Go
Glam
Aimed at girls between ages 2 and 11
Had a national market share ranged from
10% to 15%
The average gross margin was 56%
The average retail margin was 36%

3. Business / Industry Situation

Ohio Art Company
Founded in 1908, to manufacture metal oval frames
Incorporated in 1930, making metal toys
Located in Bryan, Ohio
One of the oldest toy companies in the business
Manufactures games, toys, childrens vehicles
4. Competition Situation
Ohio Art Company is a manufacturer of childrens toys. Product marketing through
advertisements on television and radio. Competition is between retailers. Among retailers, there
are Wal-Mart, Target, toysRUs, Kmart, KB Toys and Walgreens.
5. Marketing Mix
Product
Etch A Sketch
Betty Spaghetty

Price
Place
Suggested
retail Retailer; Wal-Mart,
price range from
Target, toysRUs,
$2.99 - $ 12.99,
Kmart, KB Toys
depends on kind of
and Walgreens
product (Etch A
Sketch)
Suggested
retail
price range $5.99 $19.99, depends on
kind of product
(Betty Spaghetty)

Promotion
Television
advertising
Radio
(Betty
Spaghetty)

6. Problem Definition :
Is it justified to allocate a $2 million budget of national advertising campaigns for Etch A
sketch and Betty Spaghetty?

How will Ohio Art company justify the shelf space allotted to Betty Spaghetty to the
merchandise managers?

7. Formulate alternatives & analyze

Difference between Nov 2006 and Dec 2006 Etch A Sketch sales in Cincinnati
Etch A Sketch sales in Cincinnati during Dec 2006 versus corresponding sales in other 4
control cities
Comparing Dec 2006 sales to December 2005 Etch A Sketch sales for Cincinnati
Comparing Etch A Sketch sales with that of Doodle Doug in Dec 2006 for Cincinnati
Comparing Pre and Post Advertising sales data of Cincinnati with the control cities
Comparing pre and Post advertisement sales in Arizona
Comparing the sales per store per week of test and control cities
8. Recommend one solution and prepare the contingency plan
After deciding to advertise the product, with big budget, on television and radio, Ohio Art
Company should monitor product sales per week and comparing sales between retailers.