Beanie Baby phenomenon has really opened a lot of eyes in the toys industry, especially, because this phenomenon was sustained in an industry that is known to be very turbulent based on the fact that, there are a lot of substitutes that come into the industry everyday, moreover, the excitement that these toys create, only can last for a short period of time as buyers in this market (usually children) tend to have an inconsistent buying behaviour and unpredictable majority of the time. This was not the case for Beanie Babies. How did TY Warner achieve that?
Production of the Beanie Babies have started with the original collection of nine Beanies (Spot (the dog), squealer (the pig), Patti (the platypus), Cubbies (the bear), Chocolate (the mouse), pinchers (the lobster), Splash (the killer whale), legs (the frog), flash (the dolphin) . Those Beanies had certain characteristics that were considered unique and different: Design, price and quality. Warner himself designs the product with great care that children and adults can identify with them and build strong attachment to those beanies. The most risky but successful production tactic: Limited production . In other words, Warner chose to retire some Beanie Babies every year, so he will discontinue some designs and introduce some new designs to maintain the craze for them. This tactic led to the opening of the second market for Beanie Babies mainly for collectors. The more one design of Beanie babies is limited, the higher the demand, and the higher its price in the secondary market. In terms of production locations, Warner started his production in the Us market serving mainly Chicago market and then expanded to include Us market as whole and finally expanded globally through FDI in China and Korea by setting up manufacturing facilities to be able to serve the global market in attempt to keep his market share and maintain his competitive advantage. Following the life cycle of the beanie babies (using product life cycle theory) will show the different stages of growth and how is that translated into different manufacturing (production) strategies.
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INTRODCUTION STAGE: In 1994 when the Beanie Babies first hit the stores cost savings were achieved through changing design of the product or enhancing the looks of different Beanie Babies. 2.
GROWTH STAGE: for example in 1996 Beanie Babies have generated sales, more development and marketing tactics are needed for Beanie Babies to saturate the market. Very important event to mention in August 1996, the official website was launched which really helped to boost the sales and strengthened the development and growth for secondary market for collectors. 3.
MATURITY STAGE: For instance, Dec 1999 was a very important year in TY WARNER’S history, as Warner announced that he will retire the Beanie Babies line. This was a clever move on his behalf, as he realized at that point that Beanie Babies have actually saturated the market and there was a drop in Sales. He was aggressive enough to initiate that move but that guaranteed him enough attention from both buyers and collectors to hunt even more for Beanie Babies. 4.
DECLINE STAGE: Warner himself decided to enter luxury hotel market by buying the four season hotel in New York City in 1999. TY WARNER had focused a lot on the Quality control as he viewed that as a tool to maintain high quality for Beanie Babies as that one of the most important attributes the customer identifies with and also it contributes to the image of Beanie Babies. Quality control measures were very strict to keep the quality of the material used up to its highest level. On the other hand, Quality Control was never applied on the production mistakes because that means that a rare Beanie was created which probably will hold a high trading value in the secondary market. MARKETING:
Warner was a successful marketing icon that was able to...
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