I. Problem Definition
Fisher Price, a market leader in toys for preschool has traditionally sold quality toys at moderate price. The company has plans to introduce product in riding toy product line segment, research shows optimistic forecast at the projected price of $12. Unforeseen manufacturing cost has resulted in increase in retail price to $18. The Marketing VP is now faced with a dilemma regarding go-to market strategy of the product.
II. Situation Analysis
•Customer Loyalty , 82.7% of the people surveyed buy Fisher-Price products •Value for Money
•Brand Equity , 64.7% voted Fisher Price as the best brand for Fisher Toys (Exhibit 9) •Focus on Product Innovation and Design
•Proven Production Cost Control Process
•Established channel of retail and distribution
•Established Sales Team
•Well versed with Consumer Buying Psychology
•Not open to new ideas on product pricing front (following decade old pricing strategy) •Weak Product Strategy Team, demonstrated by improper forecasting of the mark-up price •Launching products in the new price segment ($18) has never been validated by Fischer Price in the Market.
•Growing Market for Riding Toys
•Traditionally consumer psychology for Fischer Price Toys is quality product for low price; this is an opportunity to introduce products belonging to new price segment. •Personal Income growth (72% between 1960 and 1968) is a good indicator of the revised consumer spending power.
•Supply and Demand Dilemma , if the product is a success in market and Fischer does not have stock of adequate ATV’s this would bring bad name to its brand , excess inventory would be a retailers headache •Quality Compromise (remove some product features) would mean a compromise with the companies mission statement would impact the brand equity and put...