Marketing and commercialization in international environment

KING JOUET CASE

Questions

1. In terms of channel design decisions, explain what market coverage strategy have put in place both
King Jouet and the other toy manufacturers. Do you think that their (KJ) business strategy is in line
with the current market trend? Justify your answer.

King Jouet use an exclusive distribution channel with an integrated vertical structure, taking
advantage of the power and capacity in logistics of the whole Groupe King Jouet.

For their exclusive brands they use a direct channel strategy and for the other manufacturers the
channel is an indirect short.

King Jouet has many physical stores, but also offers drive, online sales, click and collect and in-store
ordering terminals. Instead, the other manufacturers (at least the bigger ones) are using a
multichannel distribution strategy selling direct and indirect with some retailers and wholesalers.

King Jouet is following a different strategy than the current market trend but is a strategy they
designed to allow customers to have a real experience in their physical stores, King Jouet applies a
different user experience to customers on the stores like hosting events, activities, contests, and
workshops trying to avoid the seasonality of their business. King Jouet wants to get as close to their
customers as possible so they can profit off from the experience of great customer service that they
can offer, which, other companies with intensive or selective market coverage strategies cannot
provide.

2. Identify the type of distribution channel or channels used by King Jouet. Highlight its main
advantages and disadvantages in relation to the sale of exclusive brands and manufacturer brands.

King Jouet has designed and implemented an exclusive and direct channel with the help of “Geydon
and Kjlogistic” (as the group has its own central purchasing and logistics platform where they
purchase, store, distribute and manage all the logistic of the group) and after that, the products are
sold in more than 190 (KJ) shops around France, Switzerland, and Spain where they not only sell their
24 exclusive marks but also other games and toys manufacturers competing directly with their own
brands.

INTEGRATED VERTICAL (STRUCTURE) - DIRECT CHANNEL – EXCLUSIVE DISTRIBUTION

 PROS AND CONS

✓ Benefit from experience, infrastructure,  The initial costs of the structure are
and salesforce of other group brands significant.
improving logistic.
✓ Lower transportation costs and  Times of response for customers
turnaround times
✓ Lower costs through economies of scale  High degree of skill requirements
✓ Reduced risk  Need of intensive intrachannel
coordination
✓ Improved profitability  No diversification
✓ Maximize control over service level/output  Limited reach
✓ Promotes loyalty, better forecasting,  Increased Dependency
inventory, and merchandising control.

Andres Jaramillo B.
International MBA Student