“Foundations of World Class Marketing” Development Review
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Transcript “Foundations of World Class Marketing” Development Review
Cover Page
Mattel Global Marketing Training
Training Style
Interactive
Activity based
Flexible
Learn from facilitators - and each other
Pace
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Your Expectations
These 3 days will have been an outstanding success for me if...
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Ground Rules…
Cell phones / Blackberrys off
Everybody participates
Keep to time
So what?
Keep it simple
Commitment to action
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“Foundations Of World Class Marketing”
Day 1
OVERVIEW
What is Consumer
Marketing?
Toys & Mattel
The Mattel Marketing
Process
Day 2
The Mattel Product
Development Process
Product
Selection & Quota
Setting
Day 3
PLACE
Brand Strategy &
Positioning
Using Insights to
Understand Consumers
& Shoppers
Developing a Customer
Proposition
Media
Consumer Promotion
Marketing at the POP
Public Relations
Working with Agencies
Integrated Marketing Pulling it all together
PRICE
PRODUCT
Shoppers, Channels &
Customers
Day 4
Mattel Profit Drivers
Managing a Brand P&L
Pricing
Forecasting
Customer Plans
(MSAP) and
Presentations
PROMOTION
The Integrated
Marketing Plan
TV Advertising
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OVERVIEW
Overview of Marketing
Fundamentals of Brand Marketing
Basic concepts (4P’s)
Examples from outside (e.g., Coke, Nike, BMW,
Starbucks, Apple)
Exercises
Toys / Mattel Marketing - Differences Mattel vs. FMCG
Mattel Marketing Process
Mattel Marketing Roles
Who leads
Who supports
2 Hours
30 Minutes
1 Hour
1 Hour
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Marketing Global Brands
Global
Brand Positioning
Product Portfolio
Communications Strategy
Strategy
Insight
Pricing
Placement
Promotions
Local
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The Four “P’s” Of Successful Marketing
Product
Pricing
Placement
Promotion
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Great Brands
Which of the four “P’s” have made these brands great:
Apple
Coke
Starbucks
Nike
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Key Differences vs. Other Consumer Products
Key differences between Mattel and most other marketers:
Unpredictability
Massive and rapid SKU churn
Need to define and sell the Category proposition to different
customers
High level of detail planning required
Seasonality/Events
Sell the portfolio and not just the item
Few direct item by item competitors
Highly responsive to advertising (“FSI-like” response)
Advertise the item, build the brand
People like shopping for toys
Mattel Global Marketing Training
The Mattel Marketing Cycle
Aug.
‘05
Spring
‘07
Global
Activity
Sub
Activity
Sep
’05
Oct
‘05
Nov
‘05
Dec
‘05
Jan
‘06
Feb
‘06
Mar
‘06
Apr
‘06
May
‘06
Jun
‘06
Jul
‘06
Global
Line
Review
LRP/
BDO
Aug
‘06
PreToy
Fair
Sep‘
06
Oct
‘06
Ship
Spring
Nov
‘06
Dec‘
06
Ja.
‘07
Feb.
’07
Mar.
‘07
Apr
‘07
May
‘07
Jun.
‘07
Jul
‘07
Aug.
’07
Spring Marketing
Product Development
Input
Pricing/Placement
LRP/
BDO
Fall ‘07
Global
Activity
Sub
Activity
Promotion
Market Insight – Kids, Trends
Execution
Global
Line
Review
Toy
Fair
Ship
Fall
Fall
Marketing
Product Development
Input
Pricing/Placement
Promotion
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Execution
The Mattel Marketing Process
Key Objectives
Toy Fair
Advertising
Development
Line
Review
Marketing Plan
Development
Product
Development
BDO
/ LRP
Brand
Strategy
Insight
Marketing Plan
Execution
Customer
Presentations
(Toy Fair)
Channel &
Customer Plans
Integrated
Marketing Plan
Quota, Pricing,
P&L
Product
Selection
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The Marketing Cycle Is A Coordinating
Framework For Developing The Marketing Mix
Toy Fair
Marketing Plan
Execution
Customer
Presentations
(Toy Fair)
Channel &
Customer Plans
Integrated
Marketing Plan
Quota, Pricing,
P&L
Product
Selection
Mattel Global Marketing Training
Advertising
Development
Line
Review
Marketing Plan
Development
Product
Development
BDO
/ LRP
Brand
Strategy
Insight
Product
Pricing
Placement
Promotion
Marketing Roles At Mattel
Product
Price
Placement
Promotion
Execution
Global
Local
Lead
Input
Input
Lead
Input
Lead
Input
Lead
Input
Lead
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Key Tasks Within Marketing Mix
Product
Pricing
Insight
Pricing
Brand Strategy
Managing the
Brand P&L
BDO / LRP
Product
Development
Line Review &
Product
Selection
Placement
Shoppers,
Channels,
Customers
Promotion
Integrated
Brand Plan
• Advertising
Customer
Propositions
Customer
Presentations
• Media
• Promotions
• Public
Relations
• Execution
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Group Exercise
Objective
To build knowledge of Global and local marketing responsibilities
within Mattel
Method
Working in groups of 3-5
Consider the list of tasks within the marketing mix (previous slide)
Discuss and agree which of these should be led by the Global team, or
led by the local team
Timing
30 minutes
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Key Tasks Within Marketing Mix
“Who Leads?”
Product
Pricing
Insight
Pricing
Brand Strategy
Managing the
Brand P&L
BDO / LRP
Product
Development
Line Review &
Product
Selection
Placement
Shoppers,
Channels,
Customers
Promotion
Integrated
Brand Plan
• Advertising
Customer
Propositions
Customer
Presentations
• Media
• Promotions
• Public
Relations
• Execution
Mattel Global Marketing Training
Key Tasks Within Marketing Mix
“Who Leads?”
Product
Pricing
Insight
Pricing
Brand Strategy
Managing the
Brand P&L
BDO / LRP
Placement
Promotion
Shoppers,
Channels,
Customers
Integrated
Brand Plan
Advertising
• Advertising
Customer
Propositions
Product
Development
• Media
Customer
Presentations
Line Review &
Line Review &
Product
Product
Selection
Selection
• Promotions
• Public
Relations
• Execution
Global Lead
Local Lead
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Product
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PRODUCT - Overview
Brand Strategy
Proposition / Personality / Positioning
Examples of Mattel Brand Positionings (Barbie...)
2 Hours
Consumer Insights
Data vs. insights
Overview / Examples of Mattel Research
1 Hour
Product Development
Brands and products
Role of packaging
Mattel product development process – follow an example throughout
the process
2 Hours
1 Hour
Product Selection
Product Selection
Setting Quota's
Exercise
Brainstorm “Critical Success Factors” - What makes a successful
toy?
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1 Hour
Brand Strategy – Traditional Versus Mattel
Traditional approach
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The difference at Mattel
Defining A Product
A product can be defined by set of ATTRIBUTES
An attribute is a statement expressing what the product is (Features)
or does (Benefits)
Attributes (real or perceived) drive a consumers product choice
Understanding your product attributes helps identify product
improvement areas
Mattel Global Marketing Training
Attributes - Why Do Consumers Choose The
Petrol They Do?
The station is on my way to work
I don’t have to turn across busy
traffic
There is a shop
The toilets are clean
I collect the loyalty points
Best for my engine
Cleans my engine
Improves my car’s performance
Gives me the best Fuel
economy
Seems to be the cheapest
How would you improve the product to
sell more, for more? (i.e. Add Value)
Mattel Global Marketing Training
Understanding Your Brand’s Product Attributes
Attributes
All the characteristics of the product (as defined by the consumer)
Important Attributes
The characteristics the product must have to be acceptable to the
consumer
Differentiating Attributes
The characteristics that consumers believe make your product
different
Performance Driver Attributes
The characteristics that, if positively improved, would drive greater
consumer acceptance, value and usage
Where do the Petrol attributes fit?
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Two Basic Product Types
Commodity
Added Value
Has no value
beyond the cost of
inputs
Has a value greater
than the cost of
inputs
Has a “Name”
Can be a “Brand”
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Effective Marketing Builds Added Value Products
And Links Them To A Brand
Sugar,
Phosphoric Acid,
Flavourings,
Carbonated Water,
Colour
Coca-Cola
Costs $X per litre
Sells for $X+y per litre
Mattel Global Marketing Training
“Added Value” Can Deliver Tangible or Intangible
Benefits
Coca-Cola
Price per ml
(Price of a Can)
Coca-Cola
Price per ml
(2litre Supermarket
Price)
Coca-Cola
Price per ml
(Price of 500ml bottle)
Coca-Cola
Price per ml
(Price of 1.5l bottle)
Coca-Cola
Price per ml
(Restaurant Price)
Mattel Global Marketing Training
Why do
consumers pay
more for the same
“product”?
Brand Image, Not Identity, Sets The Consumer’s
Value Perception
Proposition
Perception
Communication
The BRAND
Positioning
Brand Identity
£$€
Personality
Brand Image
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Brand Value
Coke vs Pepsi
What the Product does
The added value of Coke
In the 1980’s Pepsi
conducted a huge research
project that confirmed, in
blind taste tests, 55% of
consumers preferred Pepsi
to their main competitors
In “branded” tests, 65% of
respondents preferred
Coca-Cola
Tangible Benefits
Intangible Benefits
Mattel Global Marketing Training
Benefits Of Added Value Brands
Tangible Benefits
Real, observable, functional benefits derived from a brand
Typically “what the product does”
Intangible Benefits
Emotional benefits beyond “what the product does” to
“What it means to me”
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Products Must Deliver The Brand Promise, Not
Just An Improved Functional Benefit
Coca-Cola
Consumer
Research
New Coke
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Consumer
Protest
Coca-Cola
Classic
Consumer Insights – Traditional Versus Mattel
Traditional approach
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The difference at Mattel
What’s A Trend?
Traditionally:
Deducting information about future
behaviour and attitude of stakeholders
from a series of data
In Toys:
Combining intuition and fact-based
insight to ‘paint the future’
Mattel Global Marketing Training
Example: Ford Motor Company
Intuition
Current trends
Henry
Ford
“What
do
people
need?”
Faster horses
Cars
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Sources Of Relevant Market Trends Information
Internal / Business Data
External / Market Data
Lifestyle
Social behaviour
Family trends / aspirations
Play patterns
Educational
Demographic
Economic
Fashion
Music
Home decor
Technological development
Internet
Market / segment sizes
Brand health - awareness
and equity
Company shares and sales
- toy & licensing
Competitive shares and
sales
Retailer sales and shares
Channel sales
Technology trends /
products
Financial performance
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Mattel Insights Gathering
Include examples of ongoing Mattel research (State of Girls, Stage of
Boys, A&U / tracking...)
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The Difference Between Data And Insight
€
1. Data can be
used to produce
insight
Action
Insight
Data
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2. Insight highlights
opportunities and
leads to action
Producing Insight
Persuade
Chart
insight
Convert
data to
insight
Process data
Gather data
Step 5 : Sell it!
Step 4: Chart the Data
To visually convey the
information and its key
message
Step 3: Convert the Data into insight
So we turn the data into information
Trends and conclusions
Step 2: Process the Data
To turn the raw data into something more meaningful
– totals, ratios, averages etc.
Step 1: Get the right data
What is the question we are trying to answer?
Select relevant data
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Product Development – Traditional Versus Mattel
Traditional approach
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The difference at Mattel
Product
Delivering the Proposition
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Product Management
Product management involves the development, delivery and
enhancement of the brand through the real and perceived
performance of products and packaging that carries the brand identity
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Opening Discussion
What is a product?
Something that can be owned and/or experienced by a
consumer
What does a product do?
Delivers a set of benefits
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Exercise
To identify the 4 levels of PRODUCT attributes for 3 key Mattel brands
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Role of Packaging
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What Does Packaging Do?
Packaging is a means of:
Protection
Supply
Brand Identity (Why not Image?)
Communication
Product enhancement
??
What examples do we know of each?
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Packaging Can Be An Integral Part Of
The Brand’s Image
Packaging led attributes:
Easy to find
Easy to use
Safe to store
Stays fresh for longer
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Exercise
Identify Packaging led attributes from some toy
products
Discuss the contribution of these to selection /
purchase or usage of the toy/brand
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Product Management
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Why Products Must Be Managed
Brainstorm reasons
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EXAMPLE
Mattel Product Development
This section is under development (not complete) but
should give you a flavor of how we will work in Mattel
examples
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The Idea – Case Study – Follow A Product
Through To Completion
General Research (example)
Brand Strategy (example)
BDO/LRP
Explain the BDO – why / what / who
Focus on particular segment (e.g.,
learning)
Design & Development
Brief to design team need for a toy
(age, play pattern, price etc.)
Design concepts (photos of 3D
models)
How many briefs, how many
prototypes, how may emerge
What products are fully researched (TV
Drivers, new brands / products,
Qualitative research
show how research is conducted &
results
What is it for - feedback / learning /
ideas / “likes”, “don’t likes”) research &
results
Quantitative research
show how research is done and results
For - Why girls like / don’t like, how
much they like (vs. category
benchmarks, vs. competitive products)
Where - US, Mexico, Europe..
Viability test
Line Review – Frequently Asked Questions
Toy Fair
Shelf & Results
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Trends – Research – Insight – Brand
Market
Insight
Marketing
Strategy
BDO / LRP
Product
Development
Basic Trend – Learning is growing!
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Line
Review
Trends – Research – Insight – Brand
Market
Insight
Marketing
Strategy
BDO / LRP
Product
Development
Basic Trend – Learning is growing!
Consumer research - Key Insight =
Moms want learning to be fun
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Line
Review
Key Product Development Steps
1.
MARKETING RESEARCH
Confidential
2.
COPIES:
DATE:
July 23, 2003
TO:
Dianna Dunn-Graves
Gary Weber
FROM:
Regis O’Connor
SUBJECT:
Research Review – Infant Learning Toys
K. Alexander
K. Alfano
E. Blatto
K. Curran
K. Fine
K. Gill
S. Glick Gryfe
M. Kelley
L. Krisel
L. Mancuso
K. Morton
T. Murray
G. Rainstein
C. Scothon
S. Schoenfelder
G. Sirard
C. Spitzer
D. Weber
M. Weppner
T. Zinter-Chahin
MRD has reviewed consumer research done over the past two years on infant
learning toys and brands. This review covers on-line product reviews, mom talks,
focus groups, concept screens, viability tests and segmentation studies.
3.
4.
Six themes emerged.
Consumers use the term “learning toy” loosely. While ”educational” is a word
they may use in place of “learning,” they apply both to developmental toys as well as
academic toys. Consumers do not limit the words “learning” or “educational” to toys
that feature academic icons like letters, numbers, shapes or colors. Moms define
“learning” toys as a range of items, from balls to Sparkling Symphony. Moms even
list “educational” and “learning” benefits as the reason why they love basic infant
toys like Rock-a-Stack and Snap Lock Beads.
Consumer expectations for learning toys extend beyond academic skills.
Consumers expect all infant toys to deliver developmental benefits at the onset. Few
think academic content is appropriate for infants. Academic learning, however, is a
plus because this feature might be explored and appreciated later, by a toddler. In
the meantime, moms expect an infant learning toy to entertain baby with stimulating
activities that encourage discovery and physical coordination.
5.
6.
Consumers use the term “learning
toy” loosely.
Consumer expectations for learning
toys extend beyond academic skills.
Successful learning toys have
organic play patterns that are
recognizable and familiar and will
adapt as baby develops
Successful learning toys also have
warmth or charm
Light and sound effects are a cost of
entry.
Finally, consumer friendly
engineering promotes consumer
satisfaction and keeps moms and
babies interested.
Mattel Global Marketing Training
Trends – Research – Insight – Brand
Market
Insight
Marketing
Strategy
BDO / LRP
Product
Development
Basic Trend – Learning is growing!
Consumer research - Key Insight =
Moms want learning to be fun
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Line
Review
Marketing Strategy / BDO-LRP
Explanation of the BDO Process
Actual Example of an LRP (to be inserted)
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The Mattel Marketing Cycle
Aug.
‘05
Sep
’05
Oct
‘05
Spring
‘07
Global
Activity
Nov
‘05
Dec
‘05
Jan
‘06
Feb
‘06
Mar
‘06
Apr
‘06
May
‘06
Jun
‘06
Jul
‘06
Global
Line
Review
LRP/
BDO
Aug
‘06
PreToy
Fair
Sep‘
06
Oct
‘06
Ship
Spring
Nov
‘06
Dec‘
06
Ja.
‘07
Feb.
’07
Mar.
‘07
Apr
‘07
May
‘07
Jun.
‘07
Jul
‘07
Aug.
’07
Spring Marketing
Product Development
Input
Sub
Activity
Pricing/Placement
LRP/
BDO
Fall ‘07
Execution
Market Insight – Kids, Trends
Global
Activity
Sub
Activity
Promotion
Global
Line
Review
Toy
Fair
Ship
Fall
Fall
Marketing
Product Development
Input
Pricing/Placement
Market
Insight
Marketing
Strategy
BDO / LRP
Product
Promotion
Development
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Line
Review
Execution
Typical Research Path
Market
Insight
Marketing
Strategy
Product
Development
BDO / LRP
Line
Review
Ideation
Exploration
Initial Concept
Test
Market Testing
Stimuli
Early Stage
Concepts
Tangible
Concepts
Developed
Concepts
Developed
Concepts
Research
“Mom Talk”
Focus Groups
Axiom
Axiom
Type
Qual
Qual
Quant +
Qual
Quant +
Qual
Output
Ideas
Insight
“some tank”
Purchase
Intent /
Attributes
(Like, Fun..)
Relative
Appeal
Stage
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( UK, France,
Germany, Italy,
Spain Mexico)
Laugh ‘n Learn House
Late Summer 2003 – Spelunker, followed by
Mom Talk
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What Is A Viability Test
What
– A simulated in-store environment
– 200 pairs (moms & kid)
– “chips” to simulate shopping
– A “more rigorous BASIS test, ”
When
– Run twice per year (PTF for in/out,
Full Year - for priority)
Outcomes =
– Viability (Yes / No)
– Priority
– Volume predictions
Stimuli = pictures, boards, pricing, ads
Where = US, Mexico, Europe
Predictability = 70%
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Fall 2003 – Viability Test &
Volumetric Projection
Results - Viability Test
Table 1 - Liking & Purchase Intent (top box %)
Product
Liking
Purchase
Intent
Drivers
FP Laugh & Learn Home
($59.99)
40
40
16
FP Laugh & Learn Table ($34.99)
LeapFrog Pretend & Learn Shopping Cart ($49.99)
38
23
LeapFrog LeapStart Learning Table ($44.99)
LT Activity Garden ($69.99)
44
36
21
13
LT Discover Sounds Kitchen ($29.99)
34
32
LT Discover Sounds Workshop ($29.99)
32
19
31
Support Sku’s
FP Laugh & Learn Plush Puppy ($19.99)
41
36
FP Laugh & Learn Garden ($19.99)
23
31
FP Laugh & Learn Phone ($12.99)
23
34
LeapFrog Baby Tad ($24.99)
43
28
LeapFrog Learning Drum ($19.99)
26
29
LeapFrog Discovery Ball ($19.99)
30
25
LeapFrog Alphabet Pal ($19.99)
32
29
LT Buzz Mailbox ($19.99)
24
24
LT Discover Sounds Toolbox ($9.99)
Table 6 – Median Age Appropriateness (months)
Product
FP Laugh & Learn Home
($59.99)
Youngest
Oldest
Age Window
8
25
17
FP Laugh & Learn Table ($34.99)
13
37
24
LeapFrog Pretend & Learn Shopping
Cart ($49.99)
13
37
24
LeapFrog LeapStart Learning Table
($44.99)
10
37
27
LT Activity Garden ($69.99)
8
29
21
Table 4 – Price Sensitivity ($)
Product
22
37
FP Laugh & Learn Home ($59.99)
Minimum
Optimum
Maximum
$20.00
$20.00
$27.50
$22.50
$46.00
$42.50
LeapFrog Pretend & Learn Shopping Cart
($49.99)
$18.50
$26.00
$39.00
LeapFrog LeapStart Learning Table ($44.99)
$19.00
$22.50
$28.50
$34.00
$45.00
$47.50
FP Laugh & Learn Table ($34.99)
LT Activity Garden ($69.99)
Mattel Global Marketing Training
CASE STUDY - Laugh ‘n Learn House
International testing, typically
UK
Germany
France
Spain
Italy
Mexico
Winter 2003 – Playlab Packaging
Interviews
European Focus Groups
Typical Results
Relative appeal of product in
market
Indications of volume / pricing
Insight into attributes
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Testing In International Markets
European Reaction to 2005 Concepts at a Glance
Infant Core Concepts
France
Germany
UK
Axiom
score
Crawl 'n Cruise Playwall
?
A
Peek-A-Blocks Cube
?
NA
Dance Stand
?
NA
Crawl 'n Play Tunnel
?
?
?
LeapFrog Table
?
?
?
Hoptopus
?
?
F
Infant Learning Table
?
?
D
Toddler Trampoline
B
Learning House
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NA
B
B
Performance Key
Star
Strong
?
Mixed
Poor
Price
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PRICE - Overview
Profitability
Price, Volume or Cost (What’s the best route to profitability)
Profit Exercise
Understanding the Mattel P&L
Structure
Key Terms (definitions)
Key Calculations
Practice exercise
1 Hour
1 Hour
Setting the Price
Pricing Methodologies (Cost Plus, Marginal. Market based, Value
based)
Competitive Pricing Strategies (Price leadership, Skimming,
Penetration, Follower)
The Mattel Pricing Development Process
Practice exercise “What should XXX sell for?”
Forecasting
Key issues at Mattel
Forecasting Process
Best Practices
1 Hour
1 Hour
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Focus on Profit
Mattel Global Marketing Training
Let’s Begin With A Basic Question
What causes a
stock to rise?
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More Of What?
Sales?
Products?
Earnings?
Good News?
Innovation?
Customers?
Change?
People?
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Consider Company ‘A’
‘A’
Company
Revenue
100.0%
Cost of Goods Sold
66.0%
Gross Profit
34.0%
SG&A
23.9%
Depr. & Amort.
2.7%
Other Expense
0.0%
Operating Income
7.3%
Non Op Expense
1.2%
Pre-Tax Income
6.1%
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How Well Is It Performing?
Why?
Let’s add a few more…who’s performing the
best? Why?
Company
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
100%
100%
100%
100%
100%
100%
100%
Cost of good sold
66%
76%
77.5%
67.9%
47.3%
38.2%
47.1%
Gross profit
34%
24%
22.5%
32.1%
52.7%
61.8%
52.9%
SG&A
23.9%
17.5%
17.9%
26.1%
33%
45.6%
30.9%
Depr. & Amort.
2.7%
1.5%
23%
3%
3.7%
5.2%
3.9%
Other expense
0%
0%
-
0.7%
0.1%
0%
0%
Operating income
7.3%
4.9%
4.6%
2.3%
15.8%
11%
18.1%
Non op expense
1.2%
4%
7%
1.1%
0.9%
3.2%
0.7%
Pre-tax income
6.1%
5.5%
4.1%
1.2%
14.9%
7.8%
17.4%
Revenue
Mattel Global Marketing Training
Which Stock Would You Want To Own Now?
Company
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
48,163
256,329
88,474
11,566
4,960
3,139
43,377
Cost of good sold
66%
76%
77.5%
67.9%
47.3%
38.2%
47.1%
Gross profit
34%
24%
22.5%
32.1%
52.7%
61.8%
52.9%
23.9%
17.5%
17.9%
26.1%
33%
45.6%
30.9%
Depr. & Amort.
2.7%
1.5%
23%
3%
3.7%
5.2%
3.9%
Other expense
0%
0%
-
0.7%
0.1%
0%
0%
Operating income
7.3%
4.9%
4.6%
2.3%
15.8%
11%
18.1%
Non op expense
1.2%
4%
7%
1.1%
0.9%
3.2%
0.7%
Pre-tax income
6.1%
5.5%
4.1%
1.2%
14.9%
7.8%
17.4%
PRE-TAX ($M)
2,960
14,193
3,633
138
741
244
7,530
REVENUE ($M)
SG&A
Mattel Global Marketing Training
And now?
Who are these companies?
Company
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
48,163
256,329
88,474
11,566
4,960
3,139
43,377
Cost of good sold
66%
76%
77.5%
67.9%
47.3%
38.2%
47.1%
Gross profit
34%
24%
22.5%
32.1%
52.7%
61.8%
52.9%
23.9%
17.5%
17.9%
26.1%
33%
45.6%
30.9%
Depr. & Amort.
2.7%
1.5%
23%
3%
3.7%
5.2%
3.9%
Other expense
0%
0%
-
0.7%
0.1%
0%
0%
Operating income
7.3%
4.9%
4.6%
2.3%
15.8%
11%
18.1%
Non op expense
1.2%
4%
7%
1.1%
0.9%
3.2%
0.7%
Pre-tax income
6.1%
5.5%
4.1%
1.2%
14.9%
7.8%
17.4%
PRE-TAX ($M)
2,960
14,193
3,633
138
741
244
7,530
INV TURNS
5.95
7.32
12.4
3.70
6.04
7.10
5.61
BASIC EPS
$3.26
$2.21
$3.55
$0.64
$1.18
$1.00
$2.32
REVENUE ($M)
SG&A
Mattel Global Marketing Training
Household names…
Company
Target
Walmart
Carrefour
TRU
Mattel
Hasbro
P&G
REVENUE ($M)
48,163
256,329
88,474
11,566
4,960
3,139
51,407
Revenue
100%
100%
100%
100%
100%
100%
100%
Cost of Good Sold
66%
76%
77.5%
67.9%
47.3%
38.2%
45.4%
Gross Profit
34%
24%
22.5%
32.1%
52.7%
61.8%
54.6%
23.9%
17.5%
17.9%
26.1%
33%
45.6%
32.1%
Depr. & Amort.
2.7%
1.5%
2.3%
3%
3.7%
5.2%
3.4%
Other Expense
0%
0%
0.7%
0.1%
0%
0%
Operating income
7.3%
4.9%
4.6%
2.3%
15.8%
11%
19.1%
Non Op Expense
1.2%
0.4%
0.7%
1.1%
0.9%
3.2%
1.2%
Pre-Tax Income
6.1%
5.5%
4.1%
1.2%
14.9%
7.8%
18.2%
PRE-TAX ($M)
2,960
14,193
3,633
138
741
244
9,350
INV TURNS
5.95
7.32
12.4
3.70
6.04
7.10
11.7
BASIC EPS
$3.26
$2.21
$3.55
$0.64
$1.18
$1.00
$2.32
SG&A
2003 Fiscal Year
Mattel Global Marketing Training
Source: Company Reports and
Hoovers
Once Upon a Time, Two Partners Went Into the
Watermelon Business…
Mattel Global Marketing Training
Managing Profitability
Mattel Global Marketing Training
Profit Improvement Strategies
Profit = (Volume x Price) - Costs
Increase Price
Increase Volume
Reduce Costs
Mattel Global Marketing Training
What Route To Profit?
Consider a business that
Sells 100 000 toys
At a price of €1 each
That cost €0.75 each
What’s required to improve profits by 15%?
Mattel Global Marketing Training
Comparing the Options
Current Business
Option 1
Drive Volume
Option 2
Raise Price
Option 3
Reduce Costs
Sales Units
100000
115000
100000
100000
Price per unit
€1
€1
€1.0375
€1
Cost per unit
€0.75
€0.75
€0.75
€0.7125
Profit per unit
€0.25
€0.25
€0.2875
€0.2875
Total Sales
€100000
€115000
€103750
€100000
Total Profit
€25000
€28750
€28750
€28750
Increase Volume by
15%
Increase prices by
3.75%
Reduce Costs by
5%
Profit Strategy
Options
Mattel Global Marketing Training
“Ready Reckoner”
What
price increase is needed to deliver the same profit improvement
as a given volume increase?
What
volume increase will bring the same profit improvement as a given
price increase?
% Gross Margin x % Volume Increase
100
% Price Increase x 100
% Gross Margin
= % price increase required
= % Volume Increase required
Mattel Global Marketing Training
In Real Life, These Options Are Interrelated
To drive volume
Do we need to reduce price
Do we need to invest ( raise costs)
Will the additional volume reduce our costs?
To raise price
Will we lose volume
To reduce costs
Will this reduce volume (Why would this happen?
Mattel Global Marketing Training
Mattel Finance & Performance Measures
Mattel Global Marketing Training
The Pressure On Mattel Is Immense
Adapting to
Modern Trade
Powerful
Multiples
Other Brands
Ill Disciplined Non
Branded Retailers
Customer Specific
Promotion
More Margin
Own Label
Implementation
of Agreements
No.3 Brands
Mattel
Pressure
Points
Better Service
Stockholding
Legislation
High Production
Costs
Changing
Consumers
J.I.T.
Space
Productivity
Economy
Channel
Balance
Shareholders
Extended Credit
Bad Debts
Mattel Global Marketing Training
The Mattel Brand P&L Structure – Managed at
Two Levels – By Country / By Brand
International
International
MUSA
Europe
Asia
Mattel
Brands
Boys
UK
Boys
Fisher
Price
Girls
France
Girls
Hot Wheel
P&L
FP
Hot
Wheels
SKU
SKU
Mattel Global Marketing Training
Mattel P&L (TLP to Props)
Gross Sales
FP Pre-School
14500
Net Sales
13274
Prime Cost
Prime % (of Net)
8034
60.5%
Total Royalty
Marketing Contribution
MC% (of Net)
D&D
24
4942
37.2%
250
Advertising
ADV% (of Net)
1068
8.0%
Overhead
OH% (of Net)
1626
12.2%
Operating Income
OI% (of Net)
1837
13.8%
Mattel Global Marketing Training
At several levels
(Subsidiary, Boys, Brand,
sub-brand, SKU
Sales at list
- DFI
- Accrued
Customers
- MDF
= Net Sales
Manufactured Cost
Allocated
Brand Managed
Managed at Sub Level
Mattel P&L (TLP to Props)
FP Pre-School
14500
Gross Sales
Net Sales
13274
Prime Cost
Prime % (of Net)
8034
60.5%
24
Total Royalty
Marketing Contribution
MC% (of Net)
4942
37.2%
250
D&D
Advertising
ADV% (of Net)
1068
8.0%
Overhead
OH% (of Net)
1626
12.2%
Operating Income
OI% (of Net)
1837
13.8%
TLP to Props
Mattel Global Marketing Training
Brand Managed
• Advertising Media (typically at
Director level)
•
•
•
•
•
•
Promotion
Public Relations
Program Development
Internet
Events
....
Local Systems
Placeholder page for one level down of report (per Wody’s note)
Mattel Global Marketing Training
Mattel P&L (TLP to Props)
Gross Sales
FP Pre-School
14500
Net Sales
13274
Prime Cost
Prime % (of Net)
8034
60.5%
Total Royalty
Marketing Contribution
MC% (of Net)
D&D
TLP
Primarily a Planning tool
Full Year & YTD
24
To
4942
37.2%
250
Advertising
ADV% (of Net)
1068
8.0%
Overhead
OH% (of Net)
1626
12.2%
Operating Income
OI% (of Net)
1837
13.8%
PROPS
Full Year, YTD & Monthly
Planning & Management Tools
What ifs?
Added dimensions
Mattel Global Marketing Training
Mattel Financial Planning Milestones
Mattel International
Key Business Planning Milestones
"Before"
Apr 05
May 05
Jun 05
Jul 05
Aug 05
Sept 05
Oct 05
Nov 05
Dec 05
Jan 06
Feb 06
Mar 06
Apr 06
May 06
Jun 06
Jul 06
Aug 06
Sept 06
Oct 06
Nov 06
'05 Planning
Submissions
Internal
Product Rvw
FCST2
FCST3
FCST4
'06 Planning
Submissions
Internal
Product Rvw
Strat Plan
Pre Plan
Pricing/Margin
Spr Line Rvw
PTF
Pricing/Margin
Fall Line Rvw
Toy Fair
PLAN/FCST1
FCST2
FCST3
FCST4
NY/HK TF
'07 Planning
Submissions
Internal
Product Rvw
Strat Plan
Pricing/Margin
Spr Line Rvw
[BDO]
PTF
Pricing/Margin
Fall Line Rvw
Need to fix this graphic
Mattel Global Marketing Training
Toy Fair
Dec 06
We may move the selection
suggestions)
and quota section here (as per
Mattel Global Marketing Training
What is Direct Import?
Mattel Global Marketing Training
What Is A Direct Import? A Technical Definition
Sold directly to the customer Asia.
FOB Hong Kong/China
Customer pays supplier on
Letter of Credit:
Payment in US Dollars
Payment at time of shipment
Customer owns the inventory
Customer is responsible for all costs
and managing all logistics from China
to their stores.
Mattel Global Marketing Training
Framework
Cost
to
Serve
Direct Warehouse
(DW/DDI)
Domestic/Trade
REVENUE BY CATEGORY
US
JIT
Direct Import
HIGH COST
FOB/Import
Orient
LOW COST
Non-Ad
Trade:
DI:
DW:
FOB:
$ 1,200 million
$ 150 million
$ 150 million
$ 20 million
EARLY $
Ad
Mattel Global Marketing Training
Cost
to Sell
Direct Imports Come in Two Varieties
- Branded and Unbranded
Unbranded
Branded (e.g., Mattel)
Strong, well known brand
High consumer recognition and
appeal
Top quality product
Strong features
Media and promo support
Complements TV Drivers
Good turns
Unknown Brand
Little consumer recognition and
appeal
Variable quality
Few features
No support
No link to TV Drivers
Slower turns
Mattel Global Marketing Training
Direct Import Exercise
Break into to 2 groups
Group 1 = the retailer
Group 2 = Mattel
•15 Minutes in
groups
•15 minutes review
and discussion
Brainstorm – why (Branded) Direct Imports?
Group 1 from Retailer perspective
Group 2 from Mattel perspective
On a flip chart, list the reasons for selling / carrying Direct Imports
Mattel Global Marketing Training
DI Shared Benefits
For Retailer
For Mattel
Makes product mix more
profitable for customers = more
support for Mattel brands
Incremental space / market share
Extends Brand presence on shelf
Rounds out product line
Competes with Private Label, unbranded DI, knock- offs
Competes for lower “price
points”
Captures more “Open to Buy”
dollars
No Inventory costs / risk
No bad debt
High % gross margins on
branded toys / brand support
from Mattel
Combine with to TV Drivers to
create profitable mix
Fill out product lines with
complementary items – (Barbie
clothes with Barbie dolls)
Ability to hit key retail price
points
Price/Value for consumers
Better “trip capture”
Direct Imports often perceived as
a better deal
Mattel Global Marketing Training
Selling Items DI allows Mattel To Tap Into Two
Sources Of The Retailer’s Budget
Domestic
Open to Buy
Direct Import
Open to Buy
$
$
Mattel Global Marketing Training
Direct Import – A Definition
Direct Imports are a marketing
strategy that enables Mattel to
provide retailers with a better
margin mix and extend our brand
presence.
Mattel Global Marketing Training
Direct Import vs. Domestic Distinctions
Domestic
Direct Imports
Brand
Stronger
Strong
Media Support
Media Support
Items not supported but
supported by brand
advertising
Turns
Better
Good
Features
Unique Features
Strong Features
Differentiation
Yes+
Yes
Retailer Margin
Medium/Low
High
Mattel Margin
Very High / High
High / Medium
Domestic / Direct Imports vary by brand and by market
but, in general, have these distinctions.
Mattel Global Marketing Training
Why Are DI Product Higher Margin For The
Retailer?
Retailer buys directly from Asia
Mattel takes mark-up off a lower base
Retailer pays all shipping costs
Lower Handling Costs
Domestic
Cost in Asia
DI
%
$10.00
$10.00
--
$2.00
Ocean Ship
$3.00
$3.00
Domestic Ship
$4.00
$2.00
Mattel Markup
$3.50
--
$20.50
$17.00
Mattel Mark-up
Cost to Retailer
Mattel Global Marketing Training
20%
20%
Pricing & Selection
Mattel Global Marketing Training
Product Selection – Traditional Versus Mattel
Traditional approach
Mattel Global Marketing Training
The difference at Mattel
Product Selection & Quota
Line Review – Total Line
Global Line
• Research Results
• global
• region
• Volume Estimates
• TV Support Options
• Global priorities
Local Line
• History
•category / brand in this market
(>=< than ROW)
•History of price point in local
market
•Size / strength of local Sub
•CDI
• BDI
• Region / Market priorities
• Sales goals
• Distribution
• Marketing Support Levels
No tools identified, more judgments
• Local Product Line
• Quota
Mattel Global Marketing Training
Global TV Drivers
Local
• Market conditions
•Legal considerations
• Business goals
• Media Budget
Line Pricing Vs. SKU Pricing
Mattel Global Marketing Training
Euro N pricing model
Mattel Global Marketing Training
Tips On Selection of Line & TV Drives & Setting
Quotas
Groups make better decisions than individuals
Perennial slots (segment / price) as a guide
Coverage of key segments & price points
How do will I support
Umbrella strategy (e.g., “Hot 100”
Flagship (e.g. Accelerators)
What are my business priorities?
Andres is getting some examples
Mattel Global Marketing Training
Different Market Approach to Line Selection
Global
Line
Global
Line
Global
Line
US / Canada
Europe
LATAM
Global
Line
Country
Line
Region
Line
Must Carry
Option to Carry
Not in Region
Country
Line
Mattel Global Marketing Training
Finding The “Right Price”
Cost Plus Pricing
Marginal Pricing
Market Based
Value Pricing
Define and discuss the pros and cons of
these different pricing strategies
Mattel Global Marketing Training
Setting The Price
Global price, based on research
“A” Price
Local Market
Landed Cost
Local Trade Spend Structure
Competition
Mattel Margin Mix
Retailer Margin
Local Price
Mattel Global Marketing Training
Need to Add
TV Drivers vs. Non-Driver / DI
Local Pricing Models
Mattel Global Marketing Training
Managing - POS
- Need to add this section
Mattel Global Marketing Training
Forecasting Processes
Mattel Global Marketing Training
Refresher: Lead Time Summary
Material
60
Production
30
Transit
30
120 days
Mattel Global Marketing Training
How Mattel Manages Demands
Demand Forecasts
Monthly quantity requirements submitted to manufacturing
sources
Quota Reviews
Monthly review of demand forecasts by item
Measurements
Demand Measurements
Inventory Measurements
Mattel Global Marketing Training
Planning And Forecasting:
The Ideal Forecasting Process!
Marketing
(Top Down)
Sales
(Bottom Up)
Planning
Fulfillment
Quota
Forecast
Marketing
Sales
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Planning and Forecasting:
A process perception?
Marketing
(Top Down)
Sales
(Bottom Up)
Planning
Fulfillment
Quota
Forecast
Marketing
Sales
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Exercise: Forecasting Process
Objective
Method
Timing
To discuss the subtle process nuances between desired
forecasting process and perceived forecasting reality
• Beak into groups of three (3)
• Compare and contrast the forecasting process
diagrams, discuss
• How are they different?
• Is perception reality?
• Is the ideal possible?
• What should change?
• What is Sales role in change?
• Capture team thoughts on flipcharts
30 min to discuss and prepare
15 min to present
Mattel Global Marketing Training
Create a Bridge from Base Plan to Forecast
Market Forecast
Base
Plan
+
Add
Events /
Activities
=
Custome
r Specific
Forecast
Spread
Forecast
over time
Agree with customer
Mattel Global Marketing Training
Monitor and Manage
Quantify the Impact of Events and Activities
Market Forecast
Base
Plan
+
Add
Events /
Activities
=
Custome
r Specific
Forecast
Spread
Forecast
over time
Agree with customer
Mattel Global Marketing Training
Monitor and Manage
Events and Activities
RETAILER
Product in stock
Product to support promotions
Coordinate with TV Advertising
Helps Control Retailer Inventory
Costs
Measure Retailer Performance with
Mattel
Drives the replenishment plan
Identify and Act on issues early
Developed Through Dialog
With Your Customers!
MATTEL
Products in-stock
Product to support promotion
Coordinate with TV Advertising
Helps Control Mattel Inventory Costs
Measure Mattel’s performance
Drives the replenishment plan
Identify and Act on issues early
Allocate the ‘HITS’
Move the ‘DOGS’ out early
Estimates that impact production
Information to Marketing
Timely information that you need to
manage your account
Am I going to make my target?
Is there a gap?
What can I do to close the gap
Mattel Global Marketing Training
Quantify the Impact of Events and Activities
Market Forecast
Base
Plan
+
Add
Events /
Activities
=
Custome
r Specific
Forecast
Spread
Forecast
over time
Agree with customer
Mattel Global Marketing Training
Monitor and Manage
Base Plan and Events/Activities Drive the
Forecast!
Estimate Volume impacts by Customer by SKU by EVENT
Base
New Item
Lost Space
Hot Wheels
Extra Ad
Store Closings
Mattel Global Marketing Training
Extra Space
Barbie
End Cap
Hot Wheels
Customer
Forecast
Account for Timing
Market Forecast
Base
Plan
+
Add
Events /
Activities
=
Custome
r Specific
Forecast
Spread
Forecast
over time
Agree with customer
Mattel Global Marketing Training
Monitor and Manage
Spread The Forecast
Jun
Jul
1
POS
2
Shipments
Initial Fill
Aug
Sep
Oct
White
Space
Nov
Display
Dec
TV
Replenishment
Seasonality Trends
Mattel Global Marketing Training
Jan
Include the Customer and Monitor Accuracy
Market Forecast
Base
Plan
+
Add
Events /
Activities
=
Custome
r Specific
Forecast
Spread
Forecast
over time
Agree with customer
Mattel Global Marketing Training
Monitor and Manage
Managing Forecast Changes
Mattel Global Marketing Training
Planning and Forecasting:
A process perception?
Marketing
(Top Down)
Sales
(Bottom Up)
Planning
Fulfillment
Quota
Forecast
Marketing
Sales
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Planning and Forecasting:
A process perception?
Marketing
(Top Down)
Sales
(Bottom Up)
Planning
Fulfillment
Quota
Forecast
Marketing
Sales
Faster, Furious
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Planning and Forecasting:
A process perception?
Marketing
(Top Down)
Quota
Marketing
Slower, Powerful
Sales
(Bottom Up)
Planning
Fulfillment
Forecast
Sales
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Planning and Forecasting:
A process perception?
Marketing
(Top Down)
Quota
Marketing
Slower, Powerful
Sales
(Bottom Up)
Planning
Fulfillment
Forecast
Sales
Faster, Furious
Reconciled Production
Plan
Production
Mattel Global Marketing Training
Retailer
Consumer
Forecasting Can Be Like a Hurricane…
…As the season progresses, the storm builds!
Month 0
Month 3
Mattel Global Marketing Training
Month 5
Focus on the Slower, More Powerful “Winds of
Change”
WEEKLY FOCUS
Slower, Powerful
MONTHLY FOCUS
Faster, Furious
Mattel Global Marketing Training
Exercise: Supply Chain
Objective
Method
Timing
To better appreciate the impact schedule changes have on
Mattel supply chain performance and overall financials
•
•
•
•
•
Beak into groups of three (3)
Review the 2x2 forecasting matrix
Identify market rationale behind each scenario (4 total)
Assess each scenarios impact on Mattel
Present views to group
15 min to discuss
30 min to present
Mattel Global Marketing Training
Inaccurate Forecasts: Reasons & Reaction
Over
Planned
RATIONALE?
IMPACT?
RATIONALE?
IMPACT?
RATIONALE?
IMPACT?
RATIONALE?
IMPACT?
LT
4 Months
GT
4 Months
Initial
Forecast
Under
Planned
Adjustment Lead Time
Mattel Global Marketing Training
Inaccurate Forecasts Cost Everyone
•
•
Impact
Excess
Inventory
Excess
Warehouse
WIP/Interest $
Cutbacks
•
•
•
•
Impact
Production $
Logistics $
Raw Material $
Crowding Out
•
Over
Planned
Initial
Forecast
Under
Planned
•
LT
4 Months
Remember…
FREE
FREE
Inaccurate forecasting costs
Lost revenue
Increase costs
Lower margin
Lower EPS
Focus on improving upfront accuracy
Keep large changes to a minimum
When in doubt, ASK
GT
4 Months
Adjustment Lead Time
Mattel Global Marketing Training
Forecast Changes Are Ripples…
They Most Often Start Out Small…
Mattel Global Marketing Training
That Quickly Grow Out-of-Control!
How to stop the wave?
Proactively manage change
Constantly monitor customer
expectations
Communicate changes both
externally AND internally
Mattel Global Marketing Training
Do’s and Don’t
DON’T
DO
Use prior year data as a
reference/starting point
Reconcile quota gaps to
improve accuracy
Focus on BIG changes first
and frequently
Pay attention to details
Update forecasts based on
consumer demand AND
customer interests
Create a logical rationale to
guide customer discussions
Wait until the last minute to input
changes
Take the easy way by assuming
others have a better view of YOUR
customers needs
Be too risk adverse, rather learn by
embracing the forecasting
challenge
Begin with a self-constrained
forecasts, then “lead the
customer” to this view
Mattel Global Marketing Training
Place
Mattel Global Marketing Training
PLACE - Overview
Shoppers, Channels, Customers
The Occasion, The Shopper, The Channel, The Outlet, The Customer
Shoppers vs. Consumers
Mattel Channel Examples
Developing a Customer Proposition
Customer Needs
Retail Economics
The Commercial Proposition
Customer Plans & Presentations
Plans vs. presentations
MSAP / GAP Plans – process / example
Exercise “Persuasive Presentation” (turning an existing “deck” into a
simple but effective presentation)
Supporting the Sales Team - checklist of what Sales need from
Marketing to do their job
Mattel Global Marketing Training
1 Hour
1 Hour
2 Hours
Taking The Insight And Proposition To The POP Is
Critical
Aware
Above
The
Line
Intention
To
Purchase
Understand
Believe
Cost
New Users
Total Target Market
Point
Of Purchase
Experience
Trial
Find
Buy
Repeat
Revenue
Like
Prefer
Mattel Global Marketing Training
Profit
Loyal Users
Want
Shoppers vs. Consumers
Mattel Global Marketing Training
Identified Shopping Habits Will Change
Planned
Immediate
Expert
Social
Constrained
Opportunistic
I need to get / we always buy
I need it now
I need something special
I want something more
It’s all I can get
I might as well buy
%
40
35
30
25
Planned
Immediate
20
Opportunistic
15
Expert
Constrained
10
5
Social
0
2000
2015
Source: Research International, The Store 2001
Mattel Global Marketing Training
Mattel Global Marketing Training
Driving The Need For Effective Management Of
Consumer And Shopper Dynamics
Recognize that shoppers differ from consumers
Understand the differences
Understand the similarities
Ensure that there are strategies for both
Ensure that these strategies are complementary
Consumers
Shoppers
Mattel Global Marketing Training
The Shopper Understanding Decision Model
Who?
A profile of the purchaser of the category (demographics, lifestage,
lifestyle, composition of shopping party) and whom they purchase for
What?
Identification of products and quantities purchased, amount
spent, product switching and price paid
When?
Identification of purchase frequency, seasonality, time spent in
store / at fixture, time of purchase
Where?
Identification of which stores the purchaser shops for the category
(could be channel, banner, or outlet specific, e.g. Discount channel,
Wal-Mart banner, or Store No. 486
How?
Description of how the purchaser responds to various stimuli in the
purchase environment (assortment, price, promotion, shelf
presentation and location)
Why?
Understanding the motivations of why the purchaser shops, responds,
and makes decisions as identified above e.g. includes shopper
attitudinal typologies, need states segments, etc.)
Mattel Global Marketing Training
Shopper Exercise / Discussion
Mattel Global Marketing Training
The Role And Importance Of Channels
Mattel Global Marketing Training
The routes to the final consumer are made up of
many different channels
Distribution
Cash &
Carry
Retail
Toy shop
Planned
Wholesaler
Department Store
Seasonal
Special
Occasion
Mass /
Grocery
Mattel Global Marketing Training
But what is a channel?
A group of points of purchase that satisfy the
same consumer/shopper needs or requirements.
Mattel Global Marketing Training
For example…
Shops
Markets
Kiosks
Theatres
Cinemas
Bars
Restaurants
Airports
Bus stations
Railway stations
Factories
Mattel Global Marketing Training
Internet
Mail order
Newspapers
Magazines
Vending machines
Private houses
Offices
Aeroplanes
Buses
Trains
Street vendors
Why do we need channels?
Treating them all
the same however
would not allow
our brands to
reach their full
potential
In an ideal world
we would manage
every POP
individually.
However, in reality
this would not be
cost effective
So, we create channels so that
we can manage them in
groups!
Mattel Global Marketing Training
Why do we need channels?
Channels provide a convenient and
effective way of grouping points of
purchase so that we can
Assess their size and growth
potential
Assess their opportunity for the
company’s brands
Produce strategies to develop
these opportunities
Maximise the use of our
resources
… but only if we define our
channels correctly!
Mattel Global Marketing Training
What is an accurate channel definition?
Reflects consumer/shopper usage,
needs and/or requirements
Considers the total universe
Not just channels that
currently sell the company’s
brands
Not just channels that the
company calls on currently
Provides tangible information that
can be translated into actions
Will change over time
Mattel Global Marketing Training
Commercial Benefits Of A Channel Strategy
Better return on human and financial investment
Competitive advantage - focusing on big wins
Barriers to entry for competition
Sustainable growth strategy
Mattel Global Marketing Training
Channel Strategies
Case Study MUSA - CDO Workshop
We will need to get an updated version
Mattel Global Marketing Training
Background
Wal-mart
Target
TRU
Kmart
‘The Full Line’
Marketing Driven
‘Big Five’
KB
Everyone Else!
Mattel US had not traditionally taken a channel-oriented approach to managing customers
It has been a marketing – driven process - They created the full line - most appropriate for a
dedicated toy store (e.g., TRU) - and support program to drive line
But that wasn’t working any more!
Our business was increasingly concentrated with the big 4 customers and yet they didn’t
feel that we gave them a program tailored to their needs
Meanwhile – we weren't getting much traction with the other channels
Mattel Global Marketing Training
Roles
CONSUMER
CHANNEL
CUSTOMER
BRAND MARKETING
CUSTOMER MARKETING
SALES
CONSUMER INSIGHT
CHANNEL SHOPPER INSIGHT
ACCOUNT SHOPPER INSIGHT
CATEGORY STRATEGY
CHANNEL STRATEGY
CUSTOMER STRATEGY
BRAND STRATEGY
CHANNEL IN-STORE
BRAND STRATEGY
ACCOUNT PLAN
BDO
CDO
ADO
BRAND
DIRECTIONAL
OUTLINE
CHANNEL
DIRECTIONAL
OUTLINE
ACCOUNT
DIRECTIONAL
OUTLINE
Mattel Global Marketing Training
But What Is A Channel?
Definition of a Channel
A group of points of
purchase that satisfy the
same consumer /
shopper needs or
requirements
What is an accurate channel
definition?
Reflects consumer / shopper
usage, needs and / or
requirements
Considers the total universe
– Not just channels that
currently sell the
company’s brands
– Not just channels that the
company calls on currently
Provides tangible information
that can be translated into
actions
Will change over time
Mattel Global Marketing Training
We Knew The Alternative Channels Were A Big
Opportunity For Mattel
US Toy Market
The Alternative or “Growth
Channels” represent 1/3 of the
toy market – but only 15% of
MUSA’s business
Big Five
66%
Big 5
66%
Alternate channel
34%
Alternate Channel
34%
To these channels, which
included Grocery, Drug,
Department and Dollar Stores
among others, had different
needs and requirements than
our traditional customers.
Mattel Global Marketing Training
But there were obstacles!
Best Practice Approach
We wanted to work against
a best practice approach –
but we did not have a fully
developed understanding
of the category and our
knowledge of shoppers
was patchy - particularly
in regard to the ‘growth’
channels
Channel
Definition
• Agree
category
definition
• Agree
channel
definitions
• Produce
Channel
Reference
Guides
• Validate
channel
definitions
Consumer
Category Strategy
Shopper
Channel Strategy
Customer
Customer Strategy
Point Of
Purchase
Build New
Channel
Database
Channel
Opportunity
Assessment
• Agree
channel
evaluation
criteria
• Identify data
requirements
• Source data
and create
database
• Generate key
insights from
channel
database
• Develop top
line channel
prioritisation
Channel
Strategy
• Channel
SWOT
• Set channel
objectives
• Develop
strategic
options
• Develop
channel POP
vision
• Develop
channel
action plan
Mattel Global Marketing Training
Sales Strategy
• Consolidate
channel strategies
into sales strategy
• Organisation
• Coverage
• Capability
• Technology
• Customer
service
• Customer
development
plans
Implementation
Implementation
• Develop channel
implementation
plans
The CDO Process
Mattel US’ ultimate objective was to develop a comprehensive channel
strategy that cascades into specific customer strategies.
Our immediate objective was to use the existing research and information
on channel and customers to develop a channel strategy that can be used
as a guideline for the fall 05 line selection by customer and also to help
define the right:
customized product line lists
space planning recommendations
merchandising and promotional programs
packaging and case packs decisions
Mattel Global Marketing Training
Channels (Traditional Definition)
Supermarkets / Grocery
Kroger, Safeway, Albertson's
Electronic Stores
Best Buy, Circuit City, Fry’s
Drug
Walgreen’s, CVS, Rite Aid
DIY Hardware
Home Depot, Lowe’s, Ace
Super Centers & Mass Discount
Wal-mart, Target, Kmart
Office Supply
Staples, Office Depot
Convenience Discount
Dollar General, Family Dollar, Freds
Department
Kohl’s, Sears, Nordstroms
Dollar Stores (.99 & lower)
Dollar Tree, 99¢, Supervalu
Auto
AutoZone, Advance, Pep Boys
Club Stores
Costco, Sam’s, BJ’s
Large Toys
TRU, Kaybee, Learning Express
C-Stores & Gas
7-11, AM-PM, Wawa
Small Toy
Independents
Craft / Hobby
Hobby Town, Micheals, Jo-Ann
Stores
Discount Outlets
Big Lots, Value City
Mattel Global Marketing Training
CDO Process
AUG
04
Channel Definition and Segmentation
• Matrix of Channels vs. Differentiators (data input)
• Channel and Customer Attractiveness and Prioritization
SEP
04
Channel Summary
• Channel Role for the Category
• Mattel Role for the Channel
• Line Selection Principles
• Opportunity Assessment
• Outline Channel Strategies (1st Cut)
OCT
04
Top Line Customer Strategies Fall 05
Mattel Global Marketing Training
Channel Differentiators
Shoppers’ Propensity to Buy Toys
Retail Experience
Primary / Secondary / Impulse
Poor / Average / Good / Great
Perception of Price / Value
Service
High / Medium / Low
Poor / Average / Good / Great
Range of Toys
Toy Transaction Size
Minimum / Low / Medium / High
Low / Medium / High / V. High
(<100) / (100-400) / (400-700) / (700-1,000)
Type of Trip
Store Image
Convenience / Bulk / Recreational / Replenish
Basic-Boring / Average / Hot-Cool
Seasonality of Toys
Promotion
All Year / Hols-Season / Other
Low / Medium / High
How did we select these Channel Differentiators?
• Materially distinguish the reason shoppers chose certain channels to buy toys
• Rated low medium high etc. by group
• Based on available data / judgment of team
Mattel Global Marketing Training
Channel Database – CDO Matrix Created For All
Channels
CDO Matrix
1
2
Supermarket (Grocery Stores)
Drugstores
Channel Directional Outline 05-06
CHANNE
August 26, 2004
Top 10 (MVI 80/20)
Toys
Margin
Current/Go
al
DOM/DI
Stores 04
04 Sales
05 Plan
var 0405
Top 10
Kroger
Publix
Albertsons
35%-45%
35%-45%
35%-45%
100/0
95/5
3,700
800
2,500
$ 9,300,000
$
750,000
$
-
$10,695,000
15%
$
937,500
25%
$
- #DIV/0!
1 Walgreens
2 CVS
3 Rite Aid
and the Total Store across ALL channels
4
Safeway
35%-45%
90/10
1,800
$
3,400,000
$ 3,910,000
15%
4 Brooks
5
Ahold (Stop&Shop)
35%-45%
90/10
1,500
$
3,800,000
$ 4,370,000
15%
5 Longs
6
H. E. Butt (HEB)
35%-45%
85/15
300
$
4,000,000
$ 4,600,000
15%
6 Albertsons/Sav On
7
Delhaize Group (Food Lion)
35%-45%
85/15
1,100
$
811,000
$
932,650
15%
7 Happy Harry
Notes:
8
Winn Dixie
35%-45%
85/15
1,050
$
1,300,000
$ 1,495,000
15%
8 Bartell
Open Large Toys / Small Toys
9
Wakefern Food Corp. (Shop Rite) 35%-45%
90/10
200
$
1,400,000
$ 1,610,000
15%
# Customize Items divided by: merchandising
product, etc.
10 A&P
90/10
600
13,550
$ 1,800,000
$ 26,561,000
$ 2,070,000
$30,620,150
15%
15%
Top 10 is MVI 80/20 and Mattel TOP 25 based
CUSTOMERS
Criteria Selection is Based on the Shopper
Perspective & Perception of the Toy Category
1
2
3
35%-45%
TOTAL
PRICING LIMITS
Footage
Channel
Summary
9 Duane Reade
10 Marcs
TOTAL
PRICING LIMITS
Slim
Low
Med
High
Frequent Shopper Visits, large format stores, small toy section, clean/bright enviroment,
love hate relationship, in-stock-availability, merchandise by inmediate demographics,
food focus, ancilliary business, competition is supercenters, getting into other
categories, operate in low margins.
Footage
High Frequency of Visists, Impulse Purchase Oriented, L
Basket, Large # of Doors, Highly Promotional, Replenish &
Hibrid, Low to Medium Price Value Perception, Predomina
Toys (-$9.99), 40% Marging Expectation, Destination Sto
Categories, Younger Age, Grading, Smaller Packages, Abu
Time, Seasonal Merchandise, Very Topical
SHOPPER CRITERIA
CRITERIA
DESCRIPTION
Propensity to
Buy Toys
How probable?
Its toys the
primary
purchase?
WEIGHT
H
Please color the appropiate criteria box for each customer
Scott, Data Check at
Channel Level
SCALE
Impulse
SCALE
Secondary
Primary
1 Kroger
2 Publix
1 Walgreens
2 CVS
3 Albertsons
3 Rite Aid
4 Safeway
4 Brooks
5 Ahold (Stop&Shop)
5 Longs
6 H. E. Butt (HEB)
6 Albertsons/Sav On
7 Delhaize Group (Food Lion)
7 Happy Harry
8 Winn
DixieFood Corp. (Shop
Wakefern
9 Rite)
8 Bartell
10 A&P
Mattel Global Marketing Training
9 Duane Reade
10 Marcs
Channel Differentiators
Shoppers’ Propensity to Buy Toys
Primary / Secondary / Impulse
Retail Experience
WALGREENS
KROGER
Poor / Average / Good / Great
COSTCO
Perception of Price / JC
Value
PENNY
High / Medium / Low
Service
Poor / Average / Good / Great
SAMS
Range of Toys
Toy Transaction Size
SEARS
Minimum / Low / Medium / High
Low / Medium / High / V. High
(<100) / (100-400) / (400-700) / (700-1,000)
TRU
Type of Trip
Store Image
WAL-MART
Convenience / Bulk / Recreational
/ Replenish
HOBBY
Basic-Boring
/ Average / Hot-Cool
TARGET
K-MART
Seasonality of Toys
Promotion
All Year / Hols-Season / Other
Low / Medium / High
How did we select these Channel Differentiators?
• Materially distinguish the reason shoppers chose certain channels to buy toys
• Rated low medium high etc. by group
• Based on available data / judgment of team
Mattel Global Marketing Training
Channel Priority – Focus On A&B
Channel
Toys
Mattel
Growth
Fit
Profit
Priority
Super Centers & Discount
10,650
2,035
+
=
+
A
Large Toys
3,050
640
-
+
-
A
Department Stores
376
60
=
+
=
A
Super Market / Grocery
143
17
+
=
=
B
Hi – Po
28
+
=
+
B
Drug
365
33
+
=
=
B
Club
281
25
+
+
+
A
Hi - Po
7
+
=
+
B
Small Toys
411
50
=
+
-
C
Electronic Stores
398
6
=
=
-
C
Auto Stores
Low
Low
=
+
=
C
Dollar Stores
Low/Med
2
+
=
+
C
DIY & Hardware
Low
Low
+
=
=
C
Office Supply
Low
Low
-
-
=
D
C-Store & Gas
Low
Low
=
-
-
D
Craft & Hobby
665
3
+
-
=
C
Discount Outlets
Convenience Discount
Mattel Global Marketing Training
Mattel Channel – Account Quadrant
.
STUDENTS
PARTNERS
LARGE TOYS TRU
TOYS KAY BEE
DEPARTMENTJC PENNY
MASS WAL-MART
NORDSTROM, MERVINS, MAY, SAKS INC.
SCALE
MILITARY AAFES, US NAVY
TRANSACTIONAL
PARKS AND AIRPORTS
HARDWARE
TOY DISTRIBUTORS
TOYS FAO INC.
CONVENIENCE
GIFT STORES
MEDIA & QVC
COLLECTOR
HOBBY FRONT LINE
B2B
SPECILATY DIST.
TARGET
K-MART
MEIJER
DRUG WALGREENS, LONGS
DEPARTMENT KOHLS, SEARS
DISCOUNT BIGLOTS
GROCERY KROGER
TEACHERS
CLUBS SAMS, BJS, COSTCO
GROCERY FRED MAYER, RALPHS, HEB
DRUG RIGHT AID, CVS
CATALOGUES AVON, JC PENNY
ELECTRONICS RADIO SHACK,
CIRCUIT CITY, BEST BUY
DISCOUNT VALUE CITY, ODD JOB,
DLL STORES FAMILIY$, $ GRL.
AUTOMOTIVE AUTOZONE
DEPARTMENT SHOPKO, BOSCOVS,
PAMIDA
INTERNET KAY BEE, TRU, WM
Mattel
Marketing Training
Growth
=Global
Capabilities
(With Mattel)
Based on
MVI
Quadrant
Shopper Modes
Opportunistic…
“I might as well”
Social…
“I want something
more than just
shopping”
WALGREENS
The Treasure Hunt!
KROGER
COSTCO
JC PENNY
SAMS
SEARS
TRU
WAL-MART
HOBBY
TARGET
K-MART
Planned…
“We always buy”
Mattel Global Marketing Training
Expert…
“I need something
special”
Shopper Modes
Opportunistic…
“I might as well”
Social…
“I want something
more than just
shopping”
WALGREENS
The Treasure Hunt!
KROGER
COSTCO
JC PENNY
SAMS
SEARS
TRU
WAL-MART
HOBBY
TARGET
K-MART
Planned…
“We always buy”
Mattel Global Marketing Training
Expert…
“I need something
special”
Mass Merchandising Solutions
Mattel Global Marketing Training
Channel Database Summary – Initial Definitions
Indicate Distinct Channel
Channel
SC & Mass
Large Toys
Dept
Grocery
Disc
Outlets
Drug
Club
Conv.
Disc.
Example
Target
TRU
Kohl’s
Kroger
Big Lots
CVS
Costco
Dollar
General
Buy Toys
Second
Primary
Impulse
Impulse
Impulse
Impulse
Impulse
Impulse
Price/
Value
High
Medium
Medium/
Low
Medium
High
Medium
High
High
Range
Medium
High
Low
Medium
Medium
Low
Low
Low
Replenish
Replenish
Recreation
Replenish
Replenish
Convenience
Replenish
Replenish
All Year
All Year /
Full
Holidays /
Seasonal
All Year
All Year
All Year
Holidays /
Seasonal
All Year
Good
Average
Good
Good
Average
Average
Good
Average
Service
Average
Poor
Good
Good
Poor
Average
Average
Poor
Ticket
Medium
High
High
Low
Medium
Low
High
Low
Image
Basic/
Boring
Average
Average
Average
Basic /
Boring
Basic/
Boring
Basic/
Boring
Basic/
Boring
Promo
Low & High
High
Medium
High
Low
High
Medium
Low
Trip
Season
Experience
Notes - Some similarities in Drug / Grocery. Potential to look split Department Stores.
Mattel Global Marketing Training
Channel Strategy Summary
Channel
SC & Mass
Large
Toy
Department
Grocery
Disc.
Outlets
Drug
Club
Example
Target
TRU
Kohl’s
Kroger
Big Lots
CVS
Costco
Dollar
General
Line
Main Line
Full Line
Theme / Fashion
Gift / Holiday +
Impulse
Value at low price
point
Gift
Special
Select Value
Main Line
Full line
“Brought to Life” /
Innovation
Depth not breadth
Gift coverage +
S.U.T. (price point /
age)
Full DI +
“Stripped down”
exclusives
Gift Coverage
(price point, age,
gender)
Narrow - Special
Packs
Narrow
Secondary
Items/Low
Price/Small Size
Full Line & Push
the Limits Up
Add on + higher
end
($15 - $30+)
$5 - $15
Focus on $10 and
below
$5 - $15
Big Ticket
$10 and below
Full Year planned
purchases,
Enhanced Toy
Experience,
Platform for
Innovation
Showcase
Frequency / share
of pocket money
purchases
Reach specific
consumer segment
/ Volume at low
cost to serve
Frequency
Share of $ wallet
Reach Consumer
Segment Where
They Shop +
Volume
Support strategies
for differentiation
on selection &
merchandising /
Profit
Enhance family
shopping
experience
Margin / basket
opportunities,
upgrade toy
selection to be
more in line
w/store image
Brands at value
reinforces value /
treasure hunt
strategies
Support “Gift
Destination”
Strategy
Support Treasure
Hunt Strategy
Brands at value for
their Shopper
(Family / Hispanic
shoppers)
Selection
Criteria
Price
Main Line
Channel Role
for Mattel
Volume / Profit /
Growth
Mattel role for
Channel
Seasonal Category
Growth / Basket
Mattel Global Marketing Training
Conv.
Discount
The Benefits Of A Channel Strategy for Mattel
Clarity on highest priorities
Sustainable growth strategy
More balance against the top 4 accounts
A more focused, effective organization
Guidelines for line selection and promotional activities
Efficiency - better return on human and financial investment
Improved communication - a common language for strategic planning
Mattel Global Marketing Training
Results (add the latest)
What Was Accomplished
What still needs to be done....
Mattel Global Marketing Training
Games Sold Where we Sell our Toys
- A Little Less Toy Channel
-A Little More Mass Channel
UK
France
Germany
Italy
Total Toy
Games
Total Toy
Games
Total Toy
Games
Total Toy
Games
28%
20.3%
43.3%
42.3%
41.7%
42.3%
28.4%
24.0%
Catalogue/Mail Order
26.1%
28.3%
4.0%
4.9%
7.2%
4.8%
Department Store
3.2%
4.3%
2.4%
2.0%
15.8%
17.3%
7.5%
10.0%
Mixed
27%
30.8%
9.4%*
8.3%*
39.4%
42.1%
0.4%
0.3%
4.5%
5.3%
10.2%
10.0%
Toy Shop
Hyper/Super
42.7%
Grocery
9.8%
10.9%
Electr&VideoGames
0.2%
0.4%
Internet
1.3%
1.3%
Discounter
2.5%
47.6%
1.2%
Cash & Carry
Book/Gift Stores
All Other
4.3%
3.7%
0.9%
0.6%
4.3%
1.3%
14.9%
4.6%
4.6%
0.9%
1.0%
14.9%
*Includes Clothing and Toys shop in Italy
Distribution of sales by channels for Total Traditional Toys and Games FY 2004
Source: NPD Consumer Panel
Mattel Global Marketing Training
15.8%
14.2%
In the UK, Argos(20.6%) and Woolworths(22.1%) are the leading retailers for Games, while the Hyper/Supermarkets, Carrefour(13.0%) and Leclerc(13.3%) are the most important channels
in France. Karstadt(7.4%) and Kaufhof(6.0%) represent important channels in Germany
333
% of
Sales
Toy Shop
ELC
Toymaster
Toys R US
All Other
20.3%
2.1%
2.4%
7.2%
8.6%
Catalog Showrooms
Argos
Index
All Other
24.6%
20.6%
3.7%
0.3%
Department Store
Debenhams
John Lewis
All Other
4.3%
0.9%
1.0%
2.4%
Mixed
WH Smith
Woolworths
All Other
30.8%
4.9%
22.1%
3.8%
Super/Cash & Carry
Asda
Tesco
All Other
10.9%
3.4%
6.2%
1.3%
Internet
1.3%
All Other
7.8%
% of Sales
% of Sales
Hyper/Super
Auchan
Carrefour
Leclerc
All Other
47.6%
9.0%
13.0%
13.3%
12.3%
Toy Shop
Toys R Us
Rofu
Spiele Max
All Other
42.3%
7.9%
2.7%
1.4%
30.3%
Toy Specialists
Jouet Club
Grande Recre
Maxi Toys
Toys R Us
King Jouet
All Other
42.3%
5.9%
5.6%
1.6%
12.8%
3.8%
12.6%
Department Store
Karstadt
Kaufhof
Woolworth
All Other
17.3%
7.4%
6.0%
1.3%
2.6%
Mail Order
Eveil et Jeux
All Other
4.9%
3.7%
1.2%
Discounter
Aldi
All Other
4.6%
1.4%
3.2%
All Other
5.2%
Cash & Carry
Metro
All Other
1.0%
0.7%
0.7%
Mail Order
Quelle
All Other
4.8%
1.4%
3.4%
All Other
Buchhandel
All Other
14.2%
3.9%
10.3%
Distribution of sales by retailer for Games FY 2004
Mattel Global Marketing Training
Customer Marketing
Mattel Global Marketing Training
It Used To Be Simple!
Sales
Marketing
Sales
Planning
owns
owns
Customers
Mattel Global Marketing Training
Consumers
Customers Have Become Bigger And More
Sophisticated; The Lines Become Less Clear
Tasks
Account
Management
Category Management
Space Planning
Merchandisers
Channel Strategy
Shopper Research
Promotions
Sales support materials
Promotion evaluation…
owns
Customers
Marketing
owns
“The Shopping Experience
For Our Brands”
Mattel Global Marketing Training
Consumers
Appendix - Defining The Evolution Of Customer
Marketing
Evolutionary Development
Service
Provide Sales Support
Material
Supply Information
Administer Budgets
Firefight Logistics
Issues
Advisory
Provide Trade
Feedback On Needs
Interpret Market
Research Data and
Provide Directional
Advice
Communication of
Brand / Sector Plans To
Sales in Functional
Format
Evaluate Promotions
Provide Business
Analysis
Produce Generic and
Key Customer
Planograms
Planning
Design Customer
Specific Activity
Develop Quality New
Product Introduction
Methodologies
Formulate
Merchandising
Strategies
Develop Systems
Strategy
Short/Medium Term
Tactical Planning
Strategic
Channel Brand /
Segment Volume,
Value, Profit
Management
Insights to Medium /
Long Term Demand
Strategy Development
Evaluate Category
Performance at
Channel and Customer
levels
Implement strategies
via Joint Working and
In-Store Initiatives
Lead Role in Strategic Category Marketing
The speed of development is conditioned by the pace of development in the market place
and among key customers
As roles are developed, these are additional to the existing activities. There should be
no implication that roles are dropped as the function evolves
Mattel Global Marketing Training
The Customer Business Team - From Bow Tie
Approach To...
Logistics
Marketing
Services
Logistics
Sales
Buyer
Marketing
Stock Levels
Finance
Finance
Sales
Logistics
Logistics
Marketing
Marketing
Services
Buyer
Stock Levels
Finance
Finance
T
Specialists
Buyer
E
A
Specialists
Seller
M
Joint
Working
Mattel Global Marketing Training
Retail Economics
Mattel Global Marketing Training
Levels Of Product Performance Assessment
Level 3
Level 2
Level 1
Conventional
Productivity
Comprehensive
Profitability
Space & Inventory
Financial
Gross Profit / Unit
(Cash Profit)
% Gross Margin (POR)
Gross Profit / Wk
Adjusted Gross Profit
(Net Net)
$ Sales / Foot
Gross Profit / Foot
Day's Supply
Turns
GMROI
Mattel Global Marketing Training
RONA
Level 1
Conventional Profitability
Measurements
Gross Profit / Unit ($ Profit )
Gross Margin % (POR)
Gross Profit / Week
Adjusted Gross Profit (Net Net)
Mattel Global Marketing Training
Clarifying Terminology
Gross PROFIT is measured in dollars $
$ per unit
Total $ (price x volume)
Unit Gross Profit will differ from Total Gross Profit
Gross MARGIN is calculated as a %
% per unit
% total $ (volume impacted)
Unit Gross Margin is the same as Total Gross Margin
Mattel Global Marketing Training
Conventional Profitability
Gross Profit / Unit
(Cash Profit)
% Gross Margin
Gross Profit / Week
Retail Price
$12.00
Gross Profit
$2.00
Gross Profit
$2.00
Minus
-
Divided By
÷
Times
x
Cost
$10.00
Retail Price
12.00
Movement /
Wk
Equals
=
Equals
=
Equals
$2.00
Gross
Margin %
Gross Profit
Baseline Metrics:
– 100
Retail Price - $ 12.00
16.7%
Gross Profit
/ Wk
List Price - $ 10.00
Mattel Global Marketing Training
100/Wk
=
$ 200
Wkly Unit Volume
Conventional Profitability (cont.)
Adjusted Gross
Profit
Retail Price
12.00
Minus
Cost
10.00
Plus
+
Allowances
Discounts
0.48
Equal
s
=
Adjusted
Gross Profit
2.48
Per Unit View
Mattel Global Marketing Training
Baseline Metrics
Retail Price
COGS
Net A&D
$ 12.00
$ 10.00
$ .48
-
Retail Measures - Fill In The Blanks
Selling Price
Cost Price
1.49
.97
.99
.52
% Margin
1.79
30.1%
2/$3.00
17.0%
Cash Margin
1.25
0.44
1.25
0.74
22.0%
0.44
50.0%
0.50
Mattel Global Marketing Training
Level 2
Productivity, Space & Inventory
Measurements
$ Sales / Foot
Gross Profit / Foot
Day's Supply
Turns
Gross Margin Return on Inventory
Investment (GMROI)
Mattel Global Marketing Training
Productivity, Space & Inventory
$ Sales / Foot
Important
Measurement to
maximize Sales to
Space
performance
Improve sales per foot by
Sales / Wk
Divided By
Item's Shelf
Ft
Baseline Metrics
Retail Price
Weekly Vol.
Facing
$ 12.00
100
8 ft
$ 1,200
Driving more volume from
same space
÷
8 ft
Equals
=
Sales / Ft.
$ 150
Maintaining volume using
less space
Increase prices and
maintain volume and
space
Reduce space and do not
lose volume pro-rata
Mattel Global Marketing Training
Productivity, Space & Inventory
$ Gross Profit / Foot
Improve profit per foot
Important
Measurement to
maximize Profit to
Space performance
by
Gross Profit
/ Wk
$ 200
Divided By
÷
Item's Shelf
footage
8
Increasing gross
margin per unit and
maintain volume and
space
Increase volume at
Baseline Metrics
Retail Price
COGS
Weekly Vol.
Facing
$ 12.00
$ 10.00
100
8 ft
Equals
=
Gross
Profit / Ft.
$ 25
same margin through
same space
Reduce space and
maintain volume at
same margin
Mattel Global Marketing Training
Productivity, Space & Inventory
Days Of Supply
Important
Measurement to
maximize Profit to
Space performance
Baseline Metrics
Full Shelf Inv. 300 units
Weekly Vol. 100 units
Full Shelf
Inventory
Improve days of supply
by
300
Divided By
÷
Unit
Movement/Wk
100
Times
x
7
(days/wk)
7
Equals
=
Days of
Supply
21
Mattel Global Marketing Training
Reduce full shelf
inventory and maintain
sales
Increase movement per
week from same full shelf
inventory
Increase full shelf
inventory and increase
unit movement per week
by a higher factor
Productivity, Space & Inventory
Turns
Improve turns by
Important
Measurement to
manage Inventory
and Cash Flow
performance
Unit Movement
/ Yr
5,200
Divided By
÷
Full Shelf
Inventory
Baseline Metrics
Full Shelf Inv. 300 units
Weekly Vol. 100 units
300
Equals
=
Turns / Yr
17.3
Mattel Global Marketing Training
Increase movement
per year from same
full shelf inventory
Reduce full shelf
inventory and
maintain movement
per year
Increase movement
per year and increase
full shelf inventory by
a lower factor
Exercise: Metric Analysis
Objective
Method
Timing
Demonstrate understanding of metrics and associated
customer applications
Break into (4) four teams
Team 1 – Gross Sales/Foot
Team 2 – Gross Profit/Foot
Team 3 – Days Supply
Team 4 – Turns
Describe metric in words
Define levers for customer with “issue”
Analysis & Preparation – 15 min
Presentation – 15 min
Mattel Global Marketing Training
Productivity Exercise
Example A
Example B
Retail Price
2.69
1.21
Cost
1.63
0.93
18
47
Gross Profit / Unit
Gross Margin %
Unit Movement / Wk
Gross Profit / Wk
Gross Profit / Yr.
Full Shelf Inventory
30
Days of Supply
Inventory ( At Retail)
Unit Movement / Yr.
Turns
NB 6 days / week
Mattel Global Marketing Training
22
Productivity, Space & Inventory
Definition
GMROI
Gross
Profit / Yr
Divided By
The Customer's gross profit return on
each Dollar invested in inventory per year
(assuming full shelf inventory)
$10,400
Profit
÷
Notes:
Full Shelf
Inventory
300
Times
x
Cost / Unit
$10.00
Equals
=
GMROI
3.47
Inventory
Investment
* Shaded area equals brackets, therefore
do this calculation first.
GMROI is affected positively by
•
Low shelf inventory
•
High gross profit / unit
•
High unit movement
•
High inventory turns
This one measure alone helps the customer
assess the productivity of space, inventory
and gross profit contribution
Mattel Global Marketing Training
Gross Margin Return On Inventory Investment
GMROI measures how much gross profit is generated per year compared to
the money invested in stock
In the last example GMROI is 433%. This means for each $ of stock
held, the business makes $ 4.33 profit per year.
Mattel Global Marketing Training
Productivity Measures - Retailer Applications
Items with High GMROI Space Productivity
•
•
•
Preferred shelf position
Additional display support
Greater promotional support
The business manager helps the retailer improve total category
productivity through
• Proper balance of inventory
• Sale of high profit items
Mattel Global Marketing Training
Category Based Commercial Arguments
Mattel Global Marketing Training
The Commercial Argument
Definition :
A Commercial Argument is (usually) a data based sales
proposition with a numeric value which should help to satisfy the
commercial criteria and the required performance levels of the
customer.
Customers will make decisions based on how supplier proposals
influence these commercial criteria.
The Commercial Argument should look at steal versus
incremental performance from a category and customer
perspective.
Mattel Global Marketing Training
Steal Versus Incremental
Category
Today
Size of
Initiative
Steal
Category
Tomorrow
Incremental
Look at the incremental impact on Revenue, Profit, etc
Mattel Global Marketing Training
The Impact On A Customer’s Business
Mattel Proposal:- _______________________
Measurement
RSP
Volume
Revenue
Current Category
46.0
100
4600
25.0
1150
47.0
25
1175
23.0
270.25
A
30.0
5
150
24.0
36
B
55.0
5
275
25.0
68.8
C
40.0
10
400
27.0
108
41.3
20
825
25.8
212.80
+5
+350
105
4950
Steal Effect
Proposed Initiative
% Margin
Cash
Margin
D
Total Steal
Incremental
Category Forecast
47.1
Mattel Global Marketing Training
+57.2
24.4
1207.2
The Impact On A Customer’s Business
Mattel Proposal:_______________________
Measurement
RSP
Volume
Revenue
Current Category
20
200
4000
30
1200
Proposed Initiative
30
40
1200
31
372.0
A
15
5
75
35
26.25
B
25
15
375
32
120.0
35
15
525
28
147
27.86
35
975
30.1
293.25
+5
+225
205
4225
Steal Effect
C
% Margin
Cash
Margin
D
Total Steal
Incremental
Category Forecast
20.6
Mattel Global Marketing Training
+78.75
30.3
1278.75
The Impact On A Customer’s Business
Mattel Proposal:_______________________
Measurement
RSP
Volume
Revenue
Current Category
20
200
4000
30
1200
Proposed Initiative
16
40
640
32
204.8
A
19
25
475
31
147.25
B
21
15
315
30
94.5
19.75
40
790
30.6
241.75
-
-150
200
3850
Steal Effect
% Margin
Cash
Margin
C
D
Total Steal
Incremental
Category Forecast
19.75
Mattel Global Marketing Training
-36.98
30.2
1163
Demonstrating Commercial Arguments
Mattel Proposal
Cash Margin
120
The numeric
100
value of the
80
Proposition
will be
60
somewhere on
40
the line
20
0
Worst Case
100% Steal
5%
Incremental
10%
Incremental
Mattel Global Marketing Training
Best Case
20% Incremental
Commercial Argument
Golden Rules
Your argument will have the best chance of success if:
It helps to satisfy the customer needs.
It meets the performance levels of the Customer Decision Making
Criteria.
It is important therefore that you constantly cross check your
argument against the Driving Needs and the Decision Making
Criteria.
Quantify the customer benefits of your proposal from a category
perspective.
Mattel Global Marketing Training
MSAP
Mattel Global Marketing Training
The MSAP concept
Negotiation
Negotiating
Selling
Selling
Planning
Planning
Mattel Global Marketing Training
The strategic account planning and selling
business model
Not for presentation; may help trainers articulate the flow
How can I
integrate brand and
customer opportunities
DRIVEN BY INSIGHT
to beat my
objectives?
Why is our
category unique?
How have I done?
How is my
customer doing?
CATEGORY
INSIGHT
STRATEGIC
PLANNING
CUSTOMER
INSIGHT
What is my
customer’s strategy?
How do they
operate?
SELLING
TO
CUSTOMERS
MONITOR
AND
REVIEW
FEEDBACK LOOP
What skills
and tools will help me
SELL THE PLAN
to the
customer?
Mattel Global Marketing Training
Strategy development overview
1
Data gathering
2
Identifying vision
3
Analysis /
interpretation of
information
8
Implementation
7
Creating Action
Plans
6
Evaluating
strategic options
9
Performance
Review
Mattel Global Marketing Training
4
Objective
setting
5
Developing
strategic options
Case Study (I have several good ones)
Mattel Global Marketing Training
Presentations
Storyboarding
Mattel Global Marketing Training
Set up a storyboard
Purpose
Background
Message
Message
Message
Message
Message
Message
Mattel Global Marketing Training
Message
Set up a visual outline of your presentation and build
the storyboard as you complete the analysis
Identify the topics to be analyzed
Keep track of what
remains to be done
summarize each section
Roadmap
Draw a key message
Fill in the blanks as you
obtain
the required information
Extract a
message
for each visual
Message
Message
Message
Summary
Message
Message
Message
Message
Message
Prepare an extra
visual to summarize
long sections
SUMMARY
NEXT STEPS
Prepare “back-ups”
to anticipate questions or
discussion
Mattel Global Marketing Training
Global Sales Training
11 Commandments of Customer Presentations
Mattel Global Marketing Training
The 11 Commandments Of Customer
Presentations
The 11 Commandments
1
2
3
Logical Structure And Flow
Compelling Customer, Shopper,
Category Insights
Re-enforce The Brand’s Needs
Keep it simple, straightforward and understandable for the customer
Base your arguments
on compelling consumer
shopper / category
insights
Move from background through objectives to actions
Build your arguments on a
platform of customer and
shopper insight
Demonstrate your
understanding of
bra nd needs early
in the presentation
Profit
Primary Need
Action Plan
Background
Customer
Understanding
Presentation
Objectives
Why we
are here?
Why you
should
listen?
What is the
point of
today?
Brand
Opportunities
Demonstrate
our unique
insight
–
Channel
–
Customer
–
Shopper
–
Category
How do we
realize this
opportunity
together?
Next steps
Close
What is in it
for the
brand?
Identify
where
the greatest
opportunities
lie
Supplier
Maximise
Returns
Supporting Needs Penetration Loyalty
Consumer
The 11 Commandments
Efficiency
The 11 Commandments
The 11 Commandments
6
7
The Consumer / Shopper Is King
Insight Not Data
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m w)
Keep It Real For The Brands
Identify The Opportunities For Brands
Demonstrate the link
betwee n your
propos als
and bra nd nee ds
Strategic Drivers
5
4
75
Link insights and opportunities to
the Brand drivers
Bra nds buy opportunities!
Identify oppor tunity
by sizing the prize
Increase
Revenue
Demonstrate your unique
knowledge of consumer,
shopper category and
customer
Retailer
Foc us on the k ey insights
for the brand
What are the implications / indicated
actions for
Sell brands on the opportunity
for them and they are far more
like ly to support y our propos als
–
The prize m us t be a c redible,
logical and supported by
Category / Consume r and Shopper
Insight
The consum er (not S ales ) sa ys ……..
Promotions
–
Innovation
–
Distribution
Involve the bra nd in
developing indicat ed
actions
According to the c onsumer (not Sales)
…… …
Involve the brand in the discussion
Formulate an action plan designed
to build brand sales and profit
Highlight opportunities for
increm ent al sales and profit s
Use da ta to support the
conclusions
Our ins ight (not S ales ) sugge sts ………
From our res earch (not Sales) we have
learned tha t … …..
Identify areas for joint working
Eac h chart m ust pass the
“so what test”
Provide the brand with insight
on their pe rformance within the
customer
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m w)
The 11 Commandments
The 11 Commandments
76
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m w)
The 11 Commandments
© G lendinning Management
Consult ants 2002
78
Ref: Unilever/US /001 (P S-m w)
The 11 Commandments
79
11
8
9
10
Don’t Forget The Sizzle
Focus On Benefits Not Features
Don’t Forget The Close
Deliver With Impact
You are still s elling!
Agree next steps with
deadlines a nd
responsibilities
Talk brand, not Sa les
language
Com municate with
style and flair
Sugges t some thing sma ll
and simple as a next step
Link the benefits of
your proposals to
customer nee ds
Make it me morable,
stand out from the
crowd
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m w)
Cre ate a joint action plan
Bra nds buy be nef its
not feat ures
Visualise and
dra matise
your key insights
Re-cap to check for
understanding
Follow- up w ith written
confirmation
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m
80 w)
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P
81S-m w)
Mattel Global Marketing Training
© G lendinning Management Consult ants 2002
Ref: Unilever/US /001 (P S-m w)
82
Plan for success
– Materials
– Attendance
– Roles
– Venue
Rehearse / edit
Consider
– Smartmaster, typeface
– Style
– Tone
– Speed
– Delivery style
– Props
Manage discussion
– Listen
– Rephrase / recap
– Capture action points
83
The 11 Commandments
1
Logical Structure And Flow
Keep it simple, straightforward and understandable for the customer
Move from background through objectives to actions
Action Plan
Background
Presentation
Objectives
Customer
Understanding
•
•
•
•
Why we are
here?
Why you
should
listen?
What is the
point of
today?
Brand
Opportunities
Demonstrate
our unique
insight
•
What is in it
for the
brand?
•
Identify
where
the greatest
opportunities
lie
– Channel
– Customer
– Shopper
– Category
Mattel Global Marketing Training
•
How do we
realize this
opportunity
together?
•
Next steps
•
Close
The 11 Commandments
2
Compelling Customer, Shopper,
Category Insights
Base your arguments
on compelling consumer
shopper / category
insights
Retailer
Supplier
Build your arguments on a
platform of customer and
shopper insight
Demonstrate your unique
knowledge of consumer,
shopper category and
customer
Consumer
Mattel Global Marketing Training
The 11 Commandments
3
Re-enforce The Brand’s Needs
Demonstrate your
understanding of
brand needs early
in the presentation
Profit
Primary Need
Increase
Revenue
Supporting Needs Penetration
Maximize
Returns
Loyalty
Efficiency
Strategic Drivers
Mattel Global Marketing Training
Demonstrate the link
between your
proposals
and brand needs
The 11 Commandments
4
Identify The Opportunities For Brands
Brands buy opportunities!
Identify opportunity
by sizing the prize
Sell brands on the opportunity
for them and they are far more
likely to support your proposals
The prize must be a credible,
logical and supported by
Category / Consumer and Shopper
Insight
Highlight opportunities for
incremental sales and profits
Provide the brand with insight
on their performance within the
customer
Mattel Global Marketing Training
The 11 Commandments
5
Keep It Real For The Brands
Link insights and opportunities to
the Brand drivers
What are the implications / indicated
actions for
Promotions
Innovation
Distribution
Involve the brand in the discussion
Formulate an action plan designed
to build brand sales and profit
Identify areas for joint working
Mattel Global Marketing Training
The 11 Commandments
6
The Consumer / Shopper Is King
The consumer (not Sales) says ……..
Our insight (not Sales) suggests ………
According to the consumer (not Sales)
………
From our research (not Sales) we have
learned that ……..
Mattel Global Marketing Training
The 11 Commandments
7
Insight Not Data
Focus on the key insights
for the brand
Use data to support the
conclusions
Involve the brand in
developing indicated
actions
Each chart must pass the
“so what test”
Mattel Global Marketing Training
The 11 commandments
8
Don’t Forget The Sizzle
Visualize and
dramatize
your key insights
Communicate with
style and flair
Make it memorable,
stand out from the
crowd
Mattel Global Marketing Training
The 11 Commandments
9
Focus On Benefits Not Features
Brands buy benefits
not features
Talk brand, not Sales
language
Link the benefits of
your proposals to
customer needs
Mattel Global Marketing Training
The 11 Commandments
10
Don’t Forget The Close
You are still selling!
Create a joint action plan
Agree next steps with
deadlines and
responsibilities
Suggest something small
and simple as a next step
Re-cap to check for
understanding
Follow-up with written
confirmation
Mattel Global Marketing Training
The 11 Commandments
11
Deliver With Impact
Plan for success
Materials
Attendance
Roles
Venue
Rehearse / edit
Consider
Smartmaster, typeface
Style
Tone
Speed
Delivery style
Props
Manage discussion
Listen
Rephrase / recap
Capture action points
Mattel Global Marketing Training
The Presentation Scorecard (Worksheet 13)
Commandment
Where Are We?
Logical Structure And Flow
Compelling Customer, Shopper, Category Insights
Re-enforce The Brand’s Needs
Identify The Opportunities For Brands
Keep It Real For Your Brands
The Consumer / Shopper Is King
Insight Not Data
Don’t Forget The Sizzle
Focus On Benefits Not Features
Don’t Forget The Close
Deliver With Impact
Mattel Global Marketing Training
Exercise “Persuasive Presentation”
turning
an existing “deck” into a simple but effective presentation
Mattel Global Marketing Training
Supporting the Sales Team
Discussion of how Sales needs from Marketing very by market
Mattel Global Marketing Training
Promotion
Mattel Global Marketing Training
PROMOTION – The Integrated Marketing Plan
Overview
Examples throughout
What an Integrated Marketing Plan?
Marketing objectives
Integrated Communications
Role of Message, Medium and Mechanic
TV Advertising
– Global development and testing
– Local do and don’ts
Media
Media Choice – Pro’s and Con’s
Media Exercise
The Role of Entertainment
Consumer Promotions
Marketing at the POP
1.5 Hours
Public Relations
30 Minutes
Working with Agencies / the Brief
Potential Integrated Marketing Case Study
2 Hour
30 Minutes
2 Hours
1.5 Hours
Mattel Global Marketing Training
1 Hour
??
Promotion
What is Promotion?
Promotions objectives
Integrated Communications
Role of Message, Medium and Mechanic
Advertising
– Global development and testing
– Local do and don’ts
Media Choice – Pro’s and Con’s
Working with Agencies
Integrated Marketing Plan
Setting Clear Objectives
Developing the message
Selecting Media
Consumer Promotions
Communicating the Plan
Will need lots of market examples to bring to life
Mattel Global Marketing Training
“Promotion” covers all forms of Brand
communication and interaction with the Market
Insert the Mattel Integrated Communications model
Mattel Global Marketing Training
There are a number of levels at which the
integrated communications model must succeed
Target Market
Aware
Understand
Believe
Want
Find
Buy
Use
Prefer
Mattel Global Marketing Training
Why Promote?
Grow the category
Grow brand volume
Grow brand share
Improve distribution
Build awareness
etc
Brainstorm exercise
Mattel Global Marketing Training
The Ultimate Purpose Of Promotions Is To Drive
Sales
A promotions campaign can have multiple objectives, which result in a
desired sales impact
A promotions activity SHOULD, ideally, have one clear objective which
results in a sales impact
Mattel Global Marketing Training
Successful Promotions
A clear objective
Target a specific market (consumer, shopper, customer)
Simple, motivating message
Effective and efficient use of media
Simple, engaging mechanics
The right time period
A measurable, positive result
Mattel Global Marketing Training
What People Hear Is More Important Than What
You Say
What a pushy,
arrogant ……
Buy ME!!
Mattel Global Marketing Training
..And A Lot Of Other Messages Are Trying To Get
Through
Buy ME!!
What a bunch of
pushy, arrogant
……
Buy ME!!
Buy ME!!
Buy ME!!
Mattel Global Marketing Training
Promotions Require Effective Communication
Reaches the target audience
Captures their attention
Communicates the intended message
Ties the message to the brand
Achieves the desired response
Mattel Global Marketing Training
Key Components
Market
Who the brand wants to talk to
Message
What the brand wants to say and how the brand
talks to the market
Medium
How, when and where the message is delivered
Mechanic
How the market is engaged
Mattel Global Marketing Training
The Market
Who does the brand need to communicate with?
Consumers?
Shoppers?
Customers?
Suppliers?
Competitors?
Mattel Global Marketing Training
Mattel Target Markets
Show the consumer, shopper, customer target markets for Barbie, Hot
Wheels and F-P
Mattel Global Marketing Training
The Message
Proposition
What do we need to
say?
How should we say it?
The BRAND
Positioning
Personality
Brand Identity
Brand Image
Mattel Global Marketing Training
Mattel Examples
Show / play recent brand Messages (TV, Audio, Print etc)
Ask participants to
Identify the brand
Identify the message
Identify what it makes them think about the brand
What would they do?
Mattel Global Marketing Training
TV Advertising
Role of TV Advertising and how it is different at Mattel
“instant response” vs. steady brand build
Why TV – analysis of effectiveness / efficiency
Case Study development of a TV Ad (Lisa G is getting this)
Product Concept
Strategy
Agency Brief
Story Board
Testing (and results / benchmarks
Shooting Board
TV Commercial
On-Air Testing (& Results / benchmarks)
Mattel Global Marketing Training
TV Ads - Local Do’s & Don’ts
Legal Changes - Yes
Translation – Yes
Cultural Adaptation – If Necessary
Other Edits – No
We may want to support this position with data / anecdotes / examples
Mattel Global Marketing Training
The Medium
How, where and when should the message be delivered?
TV
Radio
Print (National, Specialist, Trade)
Outdoor
Direct Mail
Internet
Tele Sales
Exhibitions
Sponsorship
Product Placement
PR
Point of Sale
Direct Sales
Mattel Global Marketing Training
Media Strengths and Weaknesses
Identify Strengths and Weaknesses of each
Brainstorm / moderated discussion
I can provide a “model” answer if needed
Mattel Global Marketing Training
Evaluating Media
How is media measured
Insert how Mattel do this (Chris is developing this)
– Efficiency Measures
– Effectiveness Measures
Mattel Global Marketing Training
The Mechanic
How will the market be engaged?
An event?
An activity?
An offer?
A once off?
A loyalty programme?
What do they have to do?
Buy?
Recommend?
Tell?
Understand?
Believe?
Mattel Global Marketing Training
Evaluating Mechanics
Show recent mechanics used in different markets
Ask
What was the objective?
How else might you have achieved the objective?
What would make you choose this mechanic?
Mattel Global Marketing Training
Evaluating Mechanics
Draft example of 3 / 4 mechanics showing impact on a
particular objective ( sales?), and cost associated
What are the total costs associated with each mechanic?
What mechanic offers the best ROI
Mattel Global Marketing Training
Defining The Promotion
Why
Why do you want to run the promotion?
Who
Who do you want to achieve this with?
When
When do you need to achieve this
What
What do you need to tell them
Where
Where do you need to tell them
How
How will you engage them?
This should form the basis of the agency brief
Mattel Global Marketing Training
Opening Exercise
Objective: Define “Integrated” Marketing
Method:
Group Discussion
Facilitator captures comments on a flip charts
Timing: 10 Minutes
Mattel Global Marketing Training
Why Integrated Marketing?
The Whole > the Sum!
“Fragmented” Marketing
TV
Impact
2
Promotion
Impact
+
2
PR
Impact
+
POP
Impact
2
+
2
=
8
Integrated Marketing
TV
Impact
2
Promotion
Impact
X
2
PR
Impact
X
2
POP
Impact
X
Mattel Global Marketing Training
2
=
16
The Mattel Integrated Marketing Plan
TV
Advertisin
g
Retail
Promotion
Consumer
Promotion
Brand
Entertainment
Internet
Public
Relations
Licensing
Mattel Global Marketing Training
Integrated Marketing Communications Model
Succeeds At Several Levels
Target Market
Aware
Understand
Believe
Want
Find
Buy
Use
Prefer
Mattel Global Marketing Training
Integrated Marketing Exercise
Objective: Identify how different elements of an integrated marketing
plan impact a consumer
Method:
In small groups – review the steps in communicating a brand message
Discuss how different methods (e.g., TV, promotions, etc.) impact
different steps in the “persuasion” process
Construct an integrated marketing plan for a new Girls brand
Timing
30 Minutes
Mattel Global Marketing Training
Hot Wheels™ Licensing
Advertising and Promotion, Plans 2004
Public Relations:
HWCP product focused press releases
• Summer Fun
• Holiday
Retail Promotions:
• Zellers
• Wal*Mart
• Sears
• SDM
Licensee Support:
• Summit
• Sales sheets
• VIL meetings
• Trade shows
Promotional Partnerships:
Family Channel HWCP promotion
• Home furnishings
In-store Merchandising:
• All retailers – signage refresh
• Canadian Tire – Sporting goods
Mattel Global Marketing Training
Integrated Communications Objectives
Target Market
Aware
Understand
Believe
Want
Find
Buy
Use
Prefer
Mattel Global Marketing Training
Exercise
Referencing Integrated Communications objectives slide
Put actual numbers into the chart (% of Target Market) – one each
for Barbie, Hot Wheels, F-P
Set up teams to consider each scenario
Ask them to draft a Promotions definition for their scenario
Mattel Global Marketing Training
Working With Agencies
Mattel Global Marketing Training
Selecting and Briefing
Evaluating Responses
Mattel Global Marketing Training
Why Do You Work With The Agency You Do?
Reputation
Price
Size
Personal Chemistry
Experience
Mattel Global Marketing Training
The One Fundamental
Trust
You must believe the agency can deliver the
assignment to the standard your brand needs
Mattel Global Marketing Training
What The Agency Needs To Know
Context
Specifics
Trends, Dynamics, Issues
– The Market
– The Category
– Consumers
– Shoppers
– Customers
– Competitors
– Previous activity
– Brand Identity
Proposition
Personality
Positioning
– Brand Image
Mattel Global Marketing Training
Target Market (Who)
Objective (Why)
Proposition (What)
Timing (When)
Preferred Media (Where)
Preferred Mechanics (How)
Budgets
Requirements of the Agency
Briefing the Agency
Allow sufficient time
Provide written copies
Be specific on all key points
What is information
What is pre determined
What you want them to do
When you expect their response
In what form they should respond
Encourage questions
Check for understanding
Ensure you are “Helping” not “Testing”
Mattel Global Marketing Training
Exercise
Could role play this, and the next section
Mattel Global Marketing Training
Agency Responses
Allow the time needed
Restate the objectives
Ask the agency to show how their proposals would achieve your
objectives
What you “like” is not important – what you think will work or nor
is critical
Clarify critical success factors
Confirm cost estimates (Design, Production, Placement)
Revise the brief to include what is already agreed and what still needs to
be done
Mattel Global Marketing Training
Could role play a debrief
Mattel Global Marketing Training
Integrated Marketing Plans
Mattel Global Marketing Training
Show what they look like
Show the development process (i.e. typical Mattel approach)
Walk through, highlighting the key components discussed in the
materials
Mattel Global Marketing Training
Integrated Marketing plans could be discussed at the beginning of the
promotions section – and used to define the issues that are covered in
more detail in this presentation ( Best Practice)
Mattel Global Marketing Training
Opening Exercise
Objective: Define “Integrated” Marketing
Method:
Group Discussion
Facilitator captures comments on a flip charts
Timing: 10 Minutes
Mattel Global Marketing Training
Why Integrated Marketing?
The Whole > the Sum!
“Fragmented” Marketing
TV
Impact
2
Promotion
Impact
+
2
PR
Impact
+
POP
Impact
2
+
2
=
8
Integrated Marketing
TV
Impact
2
Promotion
Impact
X
2
PR
Impact
X
2
POP
Impact
X
Mattel Global Marketing Training
2
=
16
The Mattel Integrated Marketing Plan
TV
Advertisin
g
Retail
Promotion
Consumer
Promotion
Brand
Entertainment
Internet
Public
Relations
Licensing
Mattel Global Marketing Training
Integrated Marketing Communications Model
Succeeds At Several Levels
Target Market
Aware
Understand
Believe
Want
Find
Buy
Use
Prefer
Mattel Global Marketing Training
Integrated Marketing Exercise
Objective: Identify how different elements of an integrated marketing
plan impact a consumer
Method:
In small groups – review the steps in communicating a brand message
Discuss how different methods (e.g., TV, promotions, etc.) impact
different steps in the “persuasion” process
Construct an integrated marketing plan for a new Girls brand
Timing
30 Minutes
Mattel Global Marketing Training
Hot Wheels™ Licensing
Advertising and Promotion, Plans 2004
Public Relations:
HWCP product focused press releases
• Summer Fun
• Holiday
Retail Promotions:
• Zellers
• Wal*Mart
• Sears
• SDM
Licensee Support:
• Summit
• Sales sheets
• VIL meetings
• Trade shows
Promotional Partnerships:
Family Channel HWCP promotion
• Home furnishings
In-store Merchandising:
• All retailers – signage refresh
• Canadian Tire – Sporting goods
Mattel Global Marketing Training
Next Steps
Mattel Global Marketing Training
What’s Missing?
Examples of Brand Strategies
Example of BDO / LRP
Examples of Mattel Marketing Positioning Statements
Best Practice examples from different markets – in particular,
integrated marketing plans, visual merchandising...
Mattel Global Marketing Training
Proposed Pilot
Objective: Validate Foundations of Marketing Training Program
Approach:
Working session / Interactive
Review / Challenge / Revise
Attendee's
Small Group (8 – 10)
50% Senior Marketers
50% Target (Brand Managers / ABMs)
Nominees?
Where: Amsterdam or London
When: Sept 26 - 29
Mattel Global Marketing Training
Appendix
Module Examples
Mattel Global Marketing Training
EXAMPLE Mattel Marketing Process
Mattel Global Marketing Training
Draft for IMC Aug 12
“Foundations of World Class Marketing”
Objective: To provide an overview of all the marketing tools and processes used at Mattel
Target Audience: Assistant Managers, Brand Managers and New Hires
Day 1
OVERVIEW
What is Consumer
Marketing?
Toys & Mattel
The Mattel Marketing
Process
Day 2
The Mattel Product
Development Process
Product
Selection & Quota
Setting
Day 3
PLACE
Brand Strategy &
Positioning
Using Insights to
Understand Consumers
& Shoppers
Developing a Customer
Proposition
Media
Consumer Promotion
Marketing at the POP
Public Relations
Working with Agencies
Integrated Marketing Pulling it all together
PRICE
PRODUCT
Shoppers, Channels &
Customers
Day 4
Mattel Profit Drivers
Managing a Brand P&L
Pricing
Forecasting
Customer Plans
(MSAP) and
Presentations
PROMOTION
The Integrated
Marketing Plan
TV Advertising
Mattel Global Marketing Training
EXAMPLE MODULE
Integrated Marketing Plans
Mattel Global Marketing Training
Draft for IMC Aug 12
“Foundations of World Class Marketing”
Objective: To provide an overview of all the marketing tools and processes used at Mattel
Target Audience: Assistant Managers, Brand Managers and New Hires
Day 1
OVERVIEW
What is Consumer
Marketing?
Toys & Mattel
The Mattel Marketing
Process
Day 2
The Mattel Product
Development Process
Product
Selection & Quota
Setting
Day 3
PLACE
Brand Strategy &
Positioning
Using Insights to
Understand Consumers
& Shoppers
Developing a Customer
Proposition
Media
Consumer Promotion
Marketing at the POP
Public Relations
Working with Agencies
Integrated Marketing Pulling it all together
PRICE
PRODUCT
Shoppers, Channels &
Customers
Day 4
Mattel Profit Drivers
Managing a Brand P&L
Pricing
Forecasting
Customer Plans
(MSAP) and
Presentations
PROMOTION
The Integrated
Marketing Plan
TV Advertising
Mattel Global Marketing Training
Mattel Lingo
Quota
MARKETING estimate of full
year quantity per item
Forecast
SALES estimate of customer
shipments by item
Demands
quantity PLANNING asks to
receive each month
Avails
quantity SOURCE plans to
deliver each month
PS
Short /Shortage
AVAILS less than DEMANDS
Excess / Overage
AVAILS greater than DEMANDS
Pull Forward
quantity produced ahead of
DEMANDS
Allocation
worldwide capacity cannot meet
worldwide DEMANDS
CIT (Company Inv. Transfer)
Finished goods transfer between
markets
production start
Mattel Global Marketing Training