Date: 2nd December, 2012
1. What were the considerations that Toys ‘R’ Us factored into their move to the Australian market? Answer: They found out that Australia is a high-income market of 17million consumers, known as a culture to be highly interested in its children. With a toy purchase rate 30 percent less than in the United States, Toys “R’ Us smelled market opportunity.
2. What aspect in all their marketing considerations did they fail to evaluate? Answer: Toys ‘R’ US was lacked in consumer insight into the consumption patterns ina nation that has mostly good weather all year. It achieved success for many years in the United States and Germany, but those nations are much colder than Australia. When children play outside, as they do in Australia, they don’t require as many toys. Also, Toys ‘R’ us also failed to understand the local competition.
3. TRU lost $100 million with their investment. Discuss in detail how the competition both in Australia and the USA created roadblocks. Answer: In Australia, Toys ‘R’ Us failed to understand the local competition. Coles Myer, operator of Kmart and Target in Australia, anticipated the threat and made large investments to fend off Toys “R” Us, developing a new chain of its own called “Just for Kids”. As Australia’s leading retailer, Coles Myer had better access to local real estate and moved quickly to get the nest locations. In U.S., Toys ‘R’ Us faced similar problems in dealing with Wal*Mart. Marketing strategy without consumer insight yields poor strategy.
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