The Level of Competition in the Toy Market - Case Study Example

Strategic Marketing – Jot Company Introduction The toy market can be considered to be one of the major players in the manufacturing industry as the demand for these products will not dwindle as the target market (that is, children) is a permanent part of the society. In this regard, there have been several companies that have emerged into the market on a global scale and thus the level of competition has continued to rise over the years (Goldstein & Lee, 2005). This has meant that the existing companies have had to develop new ways in which they can keep their market base as well as expand their reach so as to grow their sales. The number of toy companies that are in existence currently has meant that organizations have had to be creative in the way they approach this objective of expansion and one of the main activities that are involved in this agenda is marketing (Laermer & Simmons, 2007). Strategic marketing is an important part of the expansion plans of a company and requires conducting research and studies on the various issues that are affecting the company in relation to its activities and the nature of the industry (Kerin, 2012). This has to do with elements such as the direction that the industry is taking with regard to the current trends, the set up of connections and the established procedures that have taken over the last few years. By studying all these issues, a company is able to develop the most appropriate approach they can use in the achievement of their aim of growth of sales. Political Trends The political realm of the country has always been an influential factor in the operations of industries and the various companies involved. This means that their contributions in terms of their opinions and related policies that emerge from them have to be considered when a company is setting up its own policies and regulations that they will abide by (Kerin, 2012). One of the issues that can be highlighted in this area is the political landscape of the country because of the recent elections that have taken place. Elections often means the emergence of new individuals into the political arena and this usually comes with a change in the manner that factors such as the domestic and foreign markets are approached (Goldstein & Lee, 2005). This change will have an effect on the companies that are involved in these various markets and thus it is essential that an organization keep track of the happenings that take place during this period of time. The recent elections can be said to have affected the domestic and foreign markets in terms of a switch in concentration of the areas that are to be focused on (Kerin, 2012). The recent downturn in the economy has been a matter that the government has been trying to deal with and as a result many elected officials have focused on rejuvenating the domestic economy through the provision of new jobs and issuing of policies that assist in encouraging this. This has resulted in the officials urging companies to retain the various services and other job openings they are involved with within the country. In the case of Jot this has to do with the outsourcing of the manufacturing of their toys in a bid to create more employment opportunities within the country. The newly elected have favored regulations that encourage this trend of retaining jobs within the country as they have taken note of the large amount of jobs that have been outsourced to countries like China because of financial benefits (Goldstein & Lee, 2005). Their influence has revealed itself in the form of the suggestion of new tax laws that will make it more expensive for the companies to have these activities performed abroad than was previously the case. Jot Company has currently been striving to maintain good relations with the newly elected officials through showing their support for these objectives to an extent that will not result in the amassing of losses and slowly trying to maintain the employment opportunities present within the organization to within the country. These activities can be said to have been effective to an extent as the officials are able to take not of the company’s good intentions in relation to the objectives that they are aiming for and have appreciated this fact. The maintaining of these relationships is essential for the company as they go a long way in ensuring the willingness of the officials to help out where they can within legal boundaries (Kerin, 2012). The building of a good image in the eyes of these newly elected officials will make it easier for the toy company to get along with the various authorities that are involved in the various sectors and activities that they may be involved in. Legal and Regulatory Factors The legal section of a company’s activities can also be said to be very essential in the operations of a business as well (Kerin, 2012). This is due to the fact that should a company be found on the wrong side of these regulations, they stand the risk of having their operations and finances adversely affected through the potential punishments that they may incur as a result such as hefty fines that would take a large chunk out of the company’s funds and thus in this way hold back the various activities that this money would have been otherwise directed to (Laermer & Simmons, 2007). It is important that a company maintain a keen eye on the development of the various existing regulations as well as those with the potential of emerging into the industry so as to ascertain that they are not caught off their guard and suffer the consequences of their unknowing (or at times knowing) infringements. There are various changes in the laws and regulations that have been put in place and thus bring about the necessity of the company to ensure that their marketing activities are in line with these policies. Most of these regulations are mainly concerned with issues such as business ethics like ensuring advertisements are not misleading to the public in any way as well as the addition of new safety regulations for the goods that are introduced to the market (Kerin, 2012). Recent court decisions on cases of companies that have been found to be lacking in this factor have shown that the judicial system is serious about punishing those who violate these new laws thus extra precaution has to be taken to ensure that the company operates within the boundaries of these new regulations. This should not be difficult for the toy company as it is already serious about many of the matters that are addressed such as ensuring the safety of the products that they bring into the market. This is seen through the rigorous testing processes that take place on any new product that is proposed for the market and the attainment of the CE logo for all the products that can be found within the countries of the European Union. The ads that are placed on the various toys however should be closely scrutinized however to ensure that the company has not unknowingly provided false or inaccurate information on any of their products. Such mistakes can be found within a few simple words that may have been meant to simply promote the product to the target market with no ill intent in mind but this will not make a difference and thus the need for a closer look at items such as the wording as well as the depiction of the various products in the media so as clear up any mistakes that may be present. The recent rulings that have been made on such cases however do not necessarily advocate for a complete change in the marketing activities that the company is involved in as most of these actions are well within the bounds of the new as well as preexisting regulations that have been set in place (Goldstein & Lee, 2005). Another factor that should be observed is the changes that have been made in various global trade agreements that have emerged in recent times. This is because the changes have the potential of affecting the various international marketing opportunities that the toy company previously enjoyed. Changes in Technology Technology has continued to advance over the years and this has led to the development of new products and changes in various processes and procedures involving the manufacturing of the products of the company (Kerin, 2012). The surge in the availability of technological ability has meant that certain sectors have been affected as a result such as automation of products which has become easier to achieve as a result of the introduction of computer chips and other products (Anderson, 2006). It is essential that a company especially those involved in the manufacturing of commodities maintain a grip on the various new technologies that have been introduced in their area of expertise so as to ascertain that they are not left behind in these developments as this may result in the loss of the consumers leading to a reduction in the market share of the company as well as the inability for them to attract new consumers to their products. Though some traditional aspects may be kept in regard to maintaining an image as well as particular uses, a business should always strive to look for ways in which they can improve the products that are currently available in the market (Laermer & Simmons, 2007). The main way that a company is able to do this is through the incorporation of new technologies into their products. This incorporation may occur at various stages of the manufacturing process or may be found in the features of the product itself (Anderson, 2006). This is especially important in industries such as toy companies where the more advanced the technology the higher the potential of the product in question to garner interest within the target market leading to an increase in sales as a result. There are various ways that technology can be said to have affected the industry. One of the major ones is the effect it has had on consumers as many individuals now look for products that are more advanced in comparison to the former more traditional types (Laermer & Simmons, 2007). This can be seen in the study of consumer taste as Jot company has built their base upon the popularity of their more advanced toys that involve a good deal of technology in their functioning such as the interactive game boxes that have been designed for education purposes and their relating software. Technology has also had a consequence on the procedures of the company as well as the manufacturing of the products (Homburg, Kuester & Krohmer, 2009). Operations now involve a level of technology in almost every aspect with a good example being the means of communication and storage of records and information by the company. All these activities are done via the use of technology with ERP software used in maintaining track of the various activities that take place within the company and manufacturing involving the design of computer chips and relating software that are incorporated in the final product that is introduced to the market (Anderson, 2006). Marketing activities have also been affected by the introduction of technology such as the means of advertising and distribution that is utilized by many businesses. Ads are now placed on conventional and what can be considered as non traditional media such as the internet which have provided a new platform for companies wishing to promote their products, a good example being the pop-up ads that an individual comes across when surfing the web (Kotler & Keller, 2012). At the moment it cannot be said that there are existing technologies within the industry that the company is not using to its fullest potential. The amount of World Wide Web advertising can be increased but this will require funds and thus it can be said that the company is operating within its current economic limitations. There are a number of technologies that have emerged that can be seen as a potential threat to the company as there is a chance of them rendering their products obsolete in the long run (Kotler & Keller, 2012). These are mainly made up of software and encourage online interactions such as social games that may children have taken a liking to over the years. These games have taken the place of the traditional forms of play that involve physical toys (Laermer & Simmons, 2007). This can be said to not be such a serious threat to the Jot Company in particular as the age groups that their products target are not in a position to fully engage in these products (especially those aged between 3 and 5). Cultural Trends The demographics of the society as well as their values can be said to have been on a gradual but steady change over the years and this can be seen to have an effect on the sales that a company is able to accrue in accordance to the nature of their products. It is necessary for companies to change with the times if they are to remain pertinent in the industry (Kotler & Keller, 2012). Individuals are now more tech savvy and have also developed a following for popular TV programs and films which has enabled toy companies to exploit this aspect through selling of toys and other merchandise molded in the form of these characters. This has led to an increase in the sales of the toy company. These changes will affect the market offering in terms of the popularity of the products that are sold with a switch from the traditional toys to these new types. Marketing communication can also be said to have been affected by this change in culture as more people rely on the internet for their information and thus the company will need to focus more of their marketing energies to this new form of media (Homburg, Kuester & Krohmer, 2009). The cultural diversity may however bring about a problem in terms of terms of logistics as the company will now have to focus on the different types of individuals that are present in the market in order to ensure that all of their consumer bases are satisfied with their products. The main attitude towards the toy industry is that it is mainly aimed at children between the ages of 3 – 14 however there are several new products that have been made for individuals who are well past this age bracket such as video games that have trended in individuals of all ages especially amongst the male population. SWOT Analysis Strengths There are a number of strengths that can be found in the company and they include: 1. Jot has a strong base in modern toys that is those involving the incorporation of technology. 2. The company has also been able to build a strong brand name for itself within the toy industry. 3. The company has developed good relationships with its various retailers and distributors. These strengths help in meeting customer needs as they relate to the current trends of toys in demand while the strong brand name instills as sense of trust in the consumer while the good relationships ensures that the products are easily available in the market. Weaknesses The weaknesses of the company include: 1. The company is relatively small in comparison with other established toy companies. 2. The company is made up of few employees as a result of its size and thus there is a lot of work to be shared among few individuals. 3. The company focuses mainly on modern toys meaning it does not exploit the traditional toy market. This means that consumers looking for traditional toys do not have a wide range of products to choose from, which is an aspect that is not lacking in bigger rival companies. Opportunities The opportunities include: 1. There are still a number of regions that the company has not penetrated with their products. 2. There are a number of new TV programs and films that are in production which the company can attain licensing to produce related merchandise. 3. The company is able to utilize new technology that has been introduced in the making of their new toys. The company should take advantage of these opportunities via the expansion of the products that they have on offer. Threats These consist of; 1. The bigger companies are in a good position to steal the market share held by Jot should they fail to maintain their relevance in the industry. 2. The economic downturn being faced globally has led to the raise in costs and a decrease in sales. 3. Should the company fail to clear their debts with the bank they would face financial ruin. These threats can be dealt with through careful marketing strategies as well as financial planning that will allow them to clear their debts in good time. SWOT Matrix Strengths: Strong base in modern toys. Strong brand name. Good relationships. Weaknesses: Small size. Small number of employees. Unexplored sectors of the industry. Opportunities: Potential new regions. New material/ideas to base their designs upon. New technology. Threats: Rival companies. Global economic downturn. Financial debt. Matching, Converting, Minimizing, and Avoiding Strategies The company is able to match the strengths to the opportunities available to them through raising funds to develop new products by using the good relationships as well as the brand name of the company to attract investors. The weaknesses can be converted into strengths over a period of time through expansion and growth of the company. The threats and weaknesses that can not be successfully converted to positive factors can be avoided through the careful planning of the company’s finances as well as effective strategic marketing activities. It can be said that the company does not possess any major liabilities that cannot be converted if substantial effort is placed into this objective. References Anderson C. 2006.The Long Tail, Hyperion. Goldstein, D. & Lee, Y. 2005. The rise of right-time marketing, The Journal of Database Marketing & Customer Strategy Management 12 (3). Homburg, C., Kuester, S & Krohmer. H. 2009. Marketing Management - A Contemporary Perspective (1st ed.), McGraw-Hill Higher Education, London. Kerin, R. A. (2012). Marketing: The Core. McGaw-Hill, London. Kotler, Philip & Keller, L. Kevin. 2012. Marketing Management 14e. Pearson Education Limited, New York. Laermer, Richard & Simmons, Mark. (2007) Punk Marketing, Harper Collins, New York . Read More