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Cannibalization Sales Of American Girl From Barbie Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 3317 words Published: 1st Jan 2015

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Mattel, the globes elite toy organization, started in South California in a garage area class that produced mirrors. When the organization started selling doll house furniture made from picture frame waste, they noticed the industry potential and decided change to toy production. In 1959, Mattel designed their most well-known toy, the Barbie doll. Motivated by paper baby dolls, Barbie items was a 3D toy with which “little girls could play out their goals.” Throughout the decades Mattel has ongoing to create and industry well-known toys and games, (Hot Tires and He-man) combine with successful producers, (Fisher Price and Tyco) partner with kid’s program organizations, (Disney, Sesame Road, and Nickelodeon) obtain permits and rights to produce well-known collections (Cabbage Spot Dolls and John Knitter merchandise) and acquire other organizations (Pleasant Company).

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Since its perception, the Mattel Company has done a lot to create sure it is considered a reliable organization for kids and the community. The organization established a kid’s charitable organization, known as the Mattel Children’s Base. In 1997 the organization designed the International Manufacturing Concepts, making them the first organization to create a structure to ensure production would be performed through constant requirements on some sort of level. In 1998 they started a $25 million multi-year contribution to the UCLA kid’s medical center, which is now known as the Mattel Children’s Hospital at UCLA.

However, Mattel has not always been able to maintain their picture of child-like purity. The organization has had numerous problems that they have thieved ideas for their toy-lines from kids who have joined their contests. In the mid Seventies, it was discovered that organization authorities had protect in press announcements and financial information to create it look like the organization was continuing to grow corporately. The organization has also had its share of remembers. Based on who you ask, the number varies from 17 to 28. And from Aug to Sept of this season Mattel has experienced the greatest remember in the business’s history.

This case addresses the following five questions:

Q1. Do manufactures of products for children have social responsibilities to consumer and society? What are these responsibilities, and how well has Mattel met them? Provide evidence of Mattel’s strengths and weakness in the area?

Mattel as a company has grown into a big entity with their wide range of toy products which are imported worldwide.

Social Responsibility is one of the main initiatives with regards to safeguard and toxic free product produced by the Mattel’s. In the year 1991 Mattel’s initiated an employee volunteer program where they get to give back their bit to their community as a part of philanthropic vision, it also has many other commitments towards helping the children through its non-profit arm.

Few detailed initiative taken by the Mattel’s as a responsible organization in order to help the needy.

Mattel’s children Hospital, Los Angeles

Fundraising events for Children Affected from AIDS Association.

Barbie Cares: Supporting Children in the Arts.(Support for Art Education for children)

Providing free scholarships to children for education

Mattel’s view on philanthropy is an investment that demonstrates the same beliefs of compassionate outreach to children in need.

They have met to the expectation, Mattel clearly suggest that it’s not only about making money; it’s also about giving back to the needy. Few examples mentioned above gives a criteria that Mattel’s are committed towards philanthropy activities with regards to the society.

Mattel’s internal audit report indicated that the company was not using any child labor and those contractors who were found in violation of Mattel standards were forced to change their operations or quit the business.

Naturally Mattel instituted a code of conduct called” Global Manufacturing Principles” and its contracted with manufacturing facilities which Favors business partners who are committed to ethical standards that are compatible with Mattel’s Methodology.

Mattel usually communicates with parents about its marketing strategy. It takes legal steps to inform both children and adults regarding its Internet-based marketing tools.

Especially on Barbie.com website, parents are encouraged to read and follow suggestions on Internet safety by providing full explanation on how it collects information, how to take precautions on to protect information, and other issues relevant to parents and children.


Mattel does not have a policy to keep any information online from visitors or consumers until unless they are 13 years of age or older and volunteer it, except in limited circumstances authorized by law and described in the policy.

It strictly adheres to

Children’s Online Privacy Protection Act of 1998

Guidelines of the Children’s Advertising Review Unit.

Q2. Comment on the strengths and weaknesses of Mattel’s core brands (Barbie and American Girl). In looking at Barbie specifically, has Mattel’s Success with the American Girl collection cannibalized sales from Barbie? Explain?

Strengths of Brands-  

Barbie as a brand is Mattel’s flagship Venture and its number one with fetching great revenue for the Mattel’s.

In the Year 2002,Barbie was listed as the “Best 100 Global Brand”

American Girl is for Teenage girls Aged 7 to 12 years old. This is because of the variants in the Target market.

Girls aged 7 or below, which gradually resulted too high in demand and thus became popular.

The Sudden demand seen at the retail stores was not met according to expectations or forecast for several years.

The bestselling dolls in most global market with $2 billion in worldwide sales annually and more than 1 billion dolls sold in four decades.

Barbie has a line of clothing for children; computers and digital cameras with Barbie theme developed according to the years come by.

This Theory was implemented to expand their market and to attract girls after the age of 7 too.

When its American girl Product, they have books, accessories and café for girls.

This has resulted in an increase the product variety for both brands that generates more revenues.


Traditional Barbie has triggered the possibility of banned in Malaysia by the Malaysian Consumers Association of Penang, due to her non-Asian appearance and the lack of creativity but it was not success.

Mattel’s have been Very Ineffective in Foreign Market Customization

In Iran, and Middle East Islamic Countries, the non-Islamic characteristics of Barbie and western influences resulted in the confiscation of Barbie doll from toy stores.

Poor Global Strategy lead to failure in marketing the product.

Limited Distribution networks for America Girl Product, It’s just available through catalogs, and few stores across United States of America like


Los Angeles

New York

Even though there is product innovation in Barbie, its popularity Depreciated and thus the brand failed in to make the on the top-five-selling dolls due to Immense market competition globally.

Cannibalization sales of American girl from Barbie

Analysis suggests that American Girl has managed to out-perform the sales of Barbie due to many reasons like some are mentioned below.

Barbie was successful in targeting or capturing to those aged between 7 years old and below.

American Girl has a good image comparatively to Barbie. American Girl dolls have an educational image- In Contrast to Barbie.

American Girl provides a well-known line of historical dolls, books and accessories.

Due this success Mattel’s have been highly successful in capturing the attention of girls of the aged7 and above and it surely gives much prominence to the sentiments of the American Hysteria.

Q3. What are the opportunities and threats that Mattel faces as it looks ahead?


Firstly, brand recognition; Mattel’s brands are world’s best-known ones, especially Barbie, and it has become a famous and recognizable brand worldwide. So Mattel can take full advantage of its brands influence to avoid the fierce competition in the domestic market and expand its products and service into new world market.

Secondly, strategic alliance, after making an alliance with an Asian company, Mattel has access to the new market. In Asia, there are many countries which are huge and potential market for Mattel, and now it is easily approaching the market and makes profit.

Thirdly, innovation, the company has the ability to create the new products and toys following the new and changing technology, such as Ello which is used to compete with its main competitor. Moreover, according to the different cultures and customer requirement, for example, in Malaysia, Mattel should make the innovation and change its products’ style to adapt to different cultures and demands.

Lastly, promotion, Mattel can use the new technological method to promote its products. Like Barbie, it makes a stable and striking online promotion and can link the customers closely. Moreover, Internet, social media, and even electronic games are good way for Mattel to introduce the products and service.


Firstly, lifestyle shift, nowadays the American youth lifestyle is changing, and it can be a remarkable threat. The continuing lifestyle shift of American youth is of particular concern for Mattel. Actually, the young customers may have less time spending on traditional toys, and children and teens are more active in extracurricular activities than ever before and prefer to spend time with music, movies, or Internet. This shift has created challenges for Mattel, and some of Mattel’s key brands have been declining over the past several years.

Secondly, tough and intense competition, as a global company Mattel has many competitors. For example, the dolls of Bratz have affected the sale of Mattel’s leading fashion doll, Barbie.

Thirdly, distribution networks, this is an issue for Mattel because of Mattel’s reliance on Wal-Mart and Target, and as a result, it lessens Mattel’s pricing power.

Fourth, volatile oil prices, oil is used to make plastics and volatile oil prices affect the total cost of Mattel’s products, and finally the company may increase the toys’ price, decrease its profit, be less competitive, and lose customers.

Fifthly, stock price, due to change the leader, fail in new product, bad performance and other reason, the price level of Mattel’s stock is not stability for years. So the fluctuations may lead to lose investors and be trouble in obtaining funds.

Lastly, cultural barriers, in some countries, Mattel’s products meet the problems and the company fails in breaking cultural barriers. Moreover, some countries think that the dolls go against their religion, so Mattel needs to reset its entry strategy and product style.

Q4. If you could make only one recommendation to Mattel, what would it be?

Our group’s recommendation to Mattel is that the company should increase investment and attach great importance to product innovation. We all know that Mattel has a long operating history, a loyal customer base, and a great growth potential. However, Mattel makes many brands and products and did not make significant change since they were established while the customer’s lifestyle is changing dramatically.

Mattel has four key brands which are Barbie, Hot Wheels, Fischer Price, and American Girls. In order to expand to international market and keep the competitive advantage, Mattel may need to consider making the change and innovation to keep the company continually developing.

According to the data of Sales Growth Among Mattel’s Core Brands, Barbie’s growth rate reached the peak in 2002 which is 17%, but it came down every year and got the lowest point in 2005 which is -13%. Meanwhile, the brands of Hot Wheels and Fisher-Price met the lowest and the penultimate sales growth rate respectively in 2005 during the period from 2000 to 2005.

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Furthermore, the young customers prefer to spend time with music, movies, or Internet rather than traditional toys, so the children are moving further and further away from toys. New kinds of toys must be established to attract the new customers and maintain the attention of their target market. So, our group recommends the company creates the new product and make the innovation of existing product in order to follow the trend of the times.

Actually, there are several reasons for Mattel to make the innovation. Firstly, the production innovation can advertise the company and make a promotion. As stated above, Mattel is a well-known company, and has the loyal customers. So the customer will expect the creative products and be willing to purchase and play with them.

The other reason is that the company can enter into new market and increase its market share after making the innovation. The new products can create a huge potential target market, and it also can improve the company’s competitive advantage. For example, if Mattel can combine the toys and internet game it can access in the adult market, and they have higher level of purchasing power.

On the other hand, the change to Mattel also has some risk. Firstly, the customer may dislike and refuse the new products; secondly, the innovation may deviate from the customers’ real demand; lastly, the cost of the innovation is huge and it may influence the company’s financial stability.

Q5. How can Mattel reverse the decline in Barbie’s sales? Should Mattel give up on Barbie and accept the fact that the brand will never regain its former sales status? Explain.

As the largest toy company in the world, Mattel Inc achieved great successes in many of areas base on its revenue, especially for its Barbie product. However, in recent year, it can be clear seen that a trend is come from the sale of Barbie dropped markedly. Since 2001, the MGA launched the pop culture style—Bratz dolls series, which gain significant market share and compete directly with Mattel. At this time, although Mattel has a world-class think tank to help its company to make in-depth investigation of children’s taste and analysis of cultural trend base on a thorough analysis of sales report, there is still difficult to stop the declining sales momentum. As a result, there are two reasons lead to the decline of sale in Barbie which show as following:

• Slow to act

Just like mention in above, the main competitor of Mattel—MGA Company introduce a popular fashion doll Bratz to challenge Barbie. However, when faced with such situation, the Mattel express a very slowly reaction to market until after 14 months, Mattel still start to launch a branch of Barbie products—My Scene dolls, however, it is already too late. In fact, Mattel response slowly to this, probably is because the arrogant psychology of itself. They think the Barbie will always succeed no matter any situation. However, they are wrong.

• New and innovative competitive

On the other hand, the poor innovation on personal image of Barbie is also one of reason which leads to the sale decline of Barbie. For example, the same cases come from Bratz doll. Different with the Barbie’s dignified and noble perfect modeling, the Bratz doll emphasis on “street girl” style image to customer just like the British super singing group ” Spice Girls” which give people a refreshing feel , the realistic look of these dolls attracted kids and they started abandoning Barbie dolls. This can be seen that the MGA fully understand the girls who pursuing self-psychological in flaunt personality of the times. Bratz series aired distinctive personality, cynical attitude and walking in the forefront of the trend which result in its product become more and more popular even over than Barbie. At this time, the Barbie’s image stills same with before. On the face of it, it is a contest between Barbie and Bratz dolls product style. In fact, there has a deep-rooted cultural and social factor. As can be seen, the American culture is moving in a wide range of ethnic culture which encourages a big step forward in the pursuit of self-direction. Otherwise, the popular culture trend also changes rapidly. For instance, just like Britney Spears has already become a thing of the past, but the popular representative becomes the bad girl Lindsay Lohan. All of this means a change of value in society.

At this time, Mattel have to recognize the world already changing increasingly fast and they need to response immediately for any case of market change rather than ignore it if Mattel want to reverse the decline in Barbie’s sales. Furthermore, Mattel also need to pay attention on the value orientation and need to have a proper understanding of the mind of public if they want to leading in the market opportunities. On the other hand, Mattel should be most concerned is to consolidate existing customer loyalty for the Barbie rather than abruptly launched a new product just in order to cope with market. These existing customers are core strength of Barbie, so the Mattel should try to understand their needs and through interaction to provide the satisfied program to sustain and retain those customers. As a result, it will be help to consolidate the customer base, and prevent the competitors directly cut the market share. Finally, Mattel also need make an “innovation” for the Barbie; this does not mean a minor transformation such as the color of skin, hair and so on. This is means a completely reform. At this time, Mattel need to make a thorough study of the trends of the market and then looking for a suitable point to re-entry market again. Otherwise, it is necessary to hear the voices of loyalty customer because they expect Barbie. If they are now do not like today’s Barbie, what they like?

To sum up, it can be seen that Mattel shouldn’t give up on Barbie and accept the fact that the brand will never regain its former sales status. Base on the customer needs to renew their Barbie product, Barbie still have great chance to regain its former sales status.


Mattel as a company needs to address many issues before the strategy alternative is implemented. The biggest concern is the cost.

The creation of new product lines, and the adjustment of others, demands significant financial backing. Mattel not only needs to allocate funds to the research and design, raw materials, overhead and production costs, but they also need the managerial capacity to oversee the entire process. Although we did not choose to implement an increased advertising budget on current lines, advertising will be necessary for the new product lines.

All of the issues stated are over come able with the proper research, and the ability to make it happen. With the culture issues being addressed prior to entering there should be minimal résistance. With this Mattel’s case is concluded.


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