January 10th, 2018
Toy manufacturing industry – key success factors in the toy industry
Key success factors in the toy industry include high innovation potential, organized distribution channels, a well-outlined marketing strategy, and licensing. High innovation potential would help industry players to come up with new products within a short period. Since the product lifecycle in the toys industry is short due to rapidly changing customer preferences (Datamonitor, 2010a; 2010b), ability to develop new innovative products would help the firms to remain relevant in the market. Such new product could be in the form of entirely new products, products targeted to a different market, products that help to sell existing products (e.g. bundles) and improvements on existing products (Kotler, 2000, pp. 162 – 164).
Organized distribution channels also help the toy manufacturers to reach their customers in various locations. Currently, main distribution channels in the U.S. include big retailers such as Wal-Mart and Target. Other distributors that would help to increase the availability of an entity’s toys in the market are specialized stores such as Toys R Us. Additionally, manufacturers could embrace a forward integration strategy by selling their toys through their websites (Datamonitor, 2010a; 2010b).
A well-outlined marketing strategy also would help to enhance the sales and create brand loyalty for toy industry players. Specifically, promotion activities that reward customers for loyalty could help increase the sales for the entity by encouraging word-of-mouth promotion. Through market communications, industry players could also create a well-established brand that would serve as a tool to build customer loyalty. Marketing strategy would also involve the collection of customer feedback to inform the process of developing new products. Through such a process, the entities would ensure they capture the changing preferences of the customers in the products they develop. Licensing partnerships could also help industry players to achieve a high brand awareness thus helping it to access foreign markets where their distribution channels do not reach. Such licensing involves manufacturers allowing local players to use their brand name in locally manufactured products. This helps the customers in the local market to identify with the products of the entity allowing the use of its brand name. Go to part six here.