Fischer-Price Toys, Inc.

Group 5
Formula for Success
• Gained high consumer acceptance by focussing on five qualities: intrinsic
play value, ingenuity, strong construction, good value for money and action

• Avoided competition with the mainstream of the toy industry by making

specialty toys of wood lithograph variety

• Believed in continuous expansion of product line with an average net

increase of six toys yearly. Makes toys that last for years and were available
at moderate prices
• Umbrella strategy of promoting an entire product line rather than pushing
single items as was customary in the toy industry

• Advertisement and promotion efforts were all designed around the

umbrella strategy and were focussed on adult purchasers(mothers &
grandmothers) rather than to child consumers

• Effective product testing by operating a licensed on-premise nursery school

Impact of change in industry and
consumer landscape on Fischer
• Products priced >$5 were not high sellers during 1962 (FP Circus failed
miserably at a retail price of $13.95)

• Between 1963-1967 number of hobby and toy and game shops decline 18%
although total sales increased more than one-fourth

• Foreign imports were growing for less expensive toys in 1967

• Prior to 1969, corporate advertising were confined to print media and

advertising budgets were unrealistically small

• Number of children under six years of age has decreased by 12.5%

• Number of first births has been on a 13.33% increase

• Over the years, a huge spend on the advertising budget was being done
(from $202,000 in 1962 to $643,000 in 1969), primarily on TV
 Analysis
• Case 1: RP $12, units sold to be 1 million
Breakeven even reached at 337,736 units, leads to a net loss

• Case 2: RP $18.5, units sold 5 hundred thousand

Breakeven reached at 42,019 units, leads to a profit of $69,000

• Case 3: RP $18.5, units sold 1 million

Breakeven reached at 84,038 units leads to a profit of 1.6 million
Recommendations
• Should be marketed as riding toys due to success of creative coaster,
this was further backed by salesperson and buyers for major retailer
• Large number of players in this category were unknown firms

• ATV should be advertised separately in order to make consumers

understand of its superior quality

• Also in our view, going with RP of $18.5 and one mold is the best
option as products demand at the given price remains a mystery.
• Also if it fails we avoid huge capital investment. And if it’s a success
we make a profit and can invest in the second mold the coming year