King Jouet, founded in 1987, at present has more than 190 shops located in France, Spain and

Switzerland. It develops a concept of fully assorted shops, in games and toys, installed mainly
in the commercial areas of the cities. King Jouet tries to make its shops accessible, friendly and
near to the customer, with the purpose to maximize the comfort of purchase.

The company entered in the Spanish market in 2004 and currently, it has 11 shops, spread
across Catalonia and Comunidad Valenciana. Its shops, which are organised by universes: boys,
girls, mixed and season, measure between 600 and 1800 m2. In Spain King Jouet has a total of
10.000 m2 of available surface and the headquarters in Massalfassar (Valencia), with more
than 80 employees.

Exclusive brands

King Jouet manages 24 exclusive marks, aiming for the best relation in terms of quality-price
without neglecting innovation. These toys and games, manufactured in China, have been
selected and designed by experts, using the following criteria: accessibility, price, quality and
value. King Jouet owns brands divided among the following categories: stuffed animals, first
age, boy, girl, creative/educational and sports / outdoors.

Games and toys of manufacturers like Giochi Preziosi, Mattel, Famous, Hasbro, Simba, Smoby,
Playmobil, Bequeath, Vtech and IMC, among others, are distributed through King Jouet,
competing directly on the shelves with its own brands

Distribution Strategy

It should be emphasized that King Jouet belongs to the French group Groupe King Jouet which
owns the following brands:

§ Bébé King: specialized in baby care, with 70 stores in France.

§ Joupi: specialized in toys, located in cities and / or surroundings (France).
§ King discount: the discounter retail stores of the group. The establishments are located
in commercial zones of the periphery.
§ Logi toys: responsible for the purchase of the products of their exclusive brands. It acts
as a purchasing group in Asia.
§ Geydon. Central purchasing both manufacturer brands, as exclusive brands of Logi
toys.
§ Kjlogistic. It is the first toy distributor in France. Stores and distributes with more than
24,000 m2 of warehouse, being the logistics platform of the group.
Due to the fact that the group has its own central purchasing and logistics platform (Geydon
and Kjlogistic respectively), regarding to the Spainish market stores, they centralise the orders
from the group's headquarters in Massalfassar. They place orders for the items that are later
on sent to each store of the peninsula, using different procedures depending on whether the
origin of the product is domestic or foreign:

§ For domestic suppliers, the request is made directly to the manufacturer based in
Spain. Once the order has been negotiated, the manufacturer hires the transport
service to abide in time and place (warehouse of each shop) to king Jouet requests.
§ For the rest of suppliers, Geydon plays de main part of the procedure since the
purchase, both exclusive brands to Logi toys, as of foreign manufacturers’ brands. In
this case, it follows a monthly planning of requests where the deliveries are already
established to the peninsular shops. Goods depart from Kjlogistic and are carried by
outsourced transports arranged by King Jouet France.

The commitment taken by King Jouet

On his website, King Jouet says his commitment implies that the customer always wins out in
their relation of exchange. For this reason, they offer a range of more than 10,000 skus of
various brands, claiming to offer the best value for money one could find.

For the firm , the toy has to contribute to the intellectual and educational development of
children . Moreover, amongst their assortment, have over 1,000 items with a price below 15
euros and direct discounts of up to 50 % in different promotions throughout the whole year.

The company offers a home delivery service, both when shopping in physical stores, as on its
website (www.kingjouet.es). As well as an after-sales service that offers the possibility to
return any game or toy that was purchased in any of the King Jouet stores in Spain within a
maximum of 15 working days from the date of purchase.

King Jouet hosts events every weekend in their establishments. These events are dedicated to
the world of games and toys: contests with prizes, workshops, storytelling, etc... With all these
activities, King Jouet aims to change the seasonality of their products (Christmas, birthdays and
local festivities).

Hard times for the industry

The toy industry is not an exception of the tough competition that the distribution is subject
to. According to data collected by NPD, 43% of total industry sales were concentrated in
hypermarkets in 2010. The remaining 57% is distributed in traditional channels including
specialists such as Toys 'R' Us or department stores such as El Corte Ingles

Compared to its rivals, King Jouet has a small market share, making it difficult to compete
against large specialist like Toys ' R ' Us , or Diverdrack Toy Planet.

Amongst them Toys ' R ' Us is the leading company in Spain. In the last year he got a result of
6.341 million euros, with a turnover of around 300 million € and 1,656 employees. Well
established in 35 countries, has over 70,000 employees and 1,623 stores around the world and
receives an average of 6 million weekly visits.

Just like King Jouet and Toy Planet, Toys ' R ' Us also sells its own brands brands. Toy Planet, a
toy store chain with over 180 stores and a turnover of 80 million euros, aims to position its
shops as ‘the proximity toy store’. Locating their stores in city centres and shopping centres,
taking advantage from the size of its stores (250-300 m2), which allows for greater customer
proximity, with its slogan "We like to see you happy”.

Bibliography:

- Asociación Española de Fabricantes de Juguetes (2012). Website available at

http://www.aefj.es

- El Corte Inglés, corporate info (2012). Website available at:

http://www.elcorteinglescorporativo.es

- King Jouet (2012). Website available at: www.kingjouet.es

- NPD Group (2012). Website available at: https://www.npdgroup.es

- Ramos, D. (2010). ”Juguetes para crecer”, ‘Emprendedores Magazine’, November the 29th.
Website available at: http://www.emprendedores.es/empresa/empresas_de_exito/toy_planet

- Toys ‘R’ Us (2012). Website available at: http://www.toysrus.es

- Toy planet (2012). Website available at: http://www.toyplanet.es/

Questions (choose 2)

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.
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.