Supply and Demand and Mattel

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I would argue that Mattel's winning criteria are product quality and flexibility. What seems to have made Mattel successful throughout the years has been its ability to offer a variety of different products. Mattel offers consumers a level of variety not matched by any other manufacturer. In fact, toy sales are directly related to the number of new product introduction, and Mattel has introduced roughly 300 new, non-core toys a year. Mattel is also a marketing driven company that demands high product quality and precise conformance from its vendors. A product that represents Mattel's commitment to variety and quality is the Barbie Doll. The Barbie Doll offers variety with her ever changing look (50 different dolls plus accessories) and has become an American icon with 95% of all girls in the United States aged 3 to 11 owning a Barbie. In terms of its logistical orientation, Mattel is user-oriented as it focuses on the final costumers by offering them a variety of options and relying heavily on marketing promotions to sell its product, e.g., advertising on ABC's Micky Mouse Club and using a rolling mix strategy.

An important companies need to concentrate on in order to be successful is understanding the nature of the demand for their product and to devise a supply chain that bests suits that demand. This is especially important in the toy industry, where manufacturers try to determine the appropriate inventory level based on their forecasted demand. In the case with Mattel, I argue that its product falls under innovative because of its non-core toys market life is typically less than a year, often based on popular movie characters. Another reason falls under is characterized as innovative, rather than functional, is because of the variety of different products Mattel offers. With innovative products, the demand for the products tend to be very unpredictable and as a result companies often deal with market mediation costs when supply and demand do...
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