Mattel: How Barbie Lost Her Groove

By Kim S. Nash  |  Posted 2005-08-04 Email Print this article Print
 
 
 
 
 
 
 

Mattel's world-class competitive intelligence system crunches sales reports, children's play-pattern studies, and even findings on where kids go online. The system picked up signals that young girls, heavily influenced by the gyrations of pop star Britney

Bad news came with botoxed lips and belly shirts. In the summer of 2001, toymaker MGA Entertainment introduced Yasmin, Jade, Sasha and Cloe—the Bratz. The new fashion dolls came in a rainbow of skin tones, with pouting, street-smart expressions. African-American Sasha wore a hip-hop knit cap and low-rise jeans.

No blonde hair, sugary smile or impossible figure, which for four decades had defined Mattel's iconic Barbie doll. Girls who wanted attitude and ethnicity, not pert and pale, bought $20 million worth of Bratz dolls in the first six months they were out, and the doll line went on to win the People's Choice Toy of the Year award from the Toy Industry Association.

MGA had hit a coveted demographic—girls age 6 to 12—dead-on.

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And yet, Mattel was uncharacteristically sluggish in response. It would be a full 14 months before Mattel came out with a Barbie offshoot, the My Scene dolls, that featured the right mix of vivid makeup and edgy clothes that young girls now craved.

The gap was long enough for Bratz to get a platform-booted foot in the door and stay there.

Unlike doll makers before it, MGA was able to seize, and keep, market share.

Worldwide sales of Bratz reached $700 million last year —growing more than 45% over the previous 12 months, while Barbie has stagnated at the same $1.5 billion level since MGA introduced Bratz four years ago. Barbie's share of the fashion doll market has shrunk from 75% in 2000 to roughly 60% today, says Sean McGowan, a financial analyst at Harris Nesbitt Gerard in New York.

Today, new rivals—Janay and Friends from Integrity Toys, Girls on the Go from Tolly Tots, and the Princess line from Disney—are are all crowding into the doll aisle.

"It's a business that's more up for grabs than ever before," says Nancy Zwiers, who led worldwide marketing for Barbie for five years. "Now that Bratz has made inroads, it's become apparent to other companies that they can, too."

Mattel had the means to see it all coming. Yet it was still caught off guard.

The toymaker has a world-class corporate intelligence system that consists of teams of research scientists who manipulate internal and third-party data with statistical analysis and business intelligence software.

Pre-Bratz, they studied point-of-sale numbers from Wal-Mart and other key retailers that showed zigzagging sales for Barbie. The company also had "psychographic" data about how girls of different ages play, drawn from Mattel's private focus groups and observations at its own Child Test Center.

That data suggested, for instance, that older girls— age 8 to 12, known to marketers as "tweens"—were losing interest in traditional Barbie, attracted instead to pop stars in heavy makeup and trendy clothes.

Identifying threats early is the goal of a good business intelligence program.

But intelligence is only part of the equation, says George Day, a marketing professor at the University of Pennsylvania's Wharton School who has studied several industry giants that have missed cues from the marketplace and subsequently suffered. You need systems—human and technological—to interpret data, and then you need the wherewithal to act on it.

And that is where Mattel stumbled, according to consultants, such as Day, and several former Mattel managers, including Bruce Stein, who was chief operating officer and president of Mattel Worldwide from 1997 to 1999. Two factors blunted Mattel's reaction, they say: internal challenges that distracted management, and the company's disinclination to change its key product.

Mattel declined requests for interviews, citing busy executive schedules.

  • Story Guide:
    How Barbie Lost Her Groove Great product; historical franchise; huge market share; unbelievable customer affinity. And rapidly dropping popularity
  • The First Tentative Steps: Mattel did see signs of trouble and started to react; but not strongly enough.
  • A Body at Rest Stays at Rest: Mattel isn't the only company that failed to react quickly, even to clear warning signs.
  • Barbie's Eye for the Competition: From the beginning, the Barbie franchise was protected by intelligence gathering and analysis, which helped Mattel reinvent her for every generation of girls.
  • Hard Analysis Gets Answers on Soft Subjects: "Are you ready for this doll?" "Whatever." "Hello, connect me with Design...."
  • Mattel Upgrades IT to Crunch Better Barbie Numbers: You're not going to predict the future with a white-box desktop and an Excel file.
  • Recovering From a Bad Relationship: Acquiring The Learning Co. turned out not to be the best move Mattel ever made. CIO: Mattel was in a desperate time when I came on."
  • Barbie Fights Back: Mattel floods store shelves with new product, sues MCA and makes reviving Barbie its No. 1 corporate goal. Bratz still dominate toy-store shelves.
  • Barbie by the Numbers: Who's who and what's what at Mattel. Business stats paint a portrait of Barbie's creators.

    Operational Details on the Barbie Situation:

    Barbie's Heroes: Mattel's intelligence agents, their bosses, and who played what role in the problematic reinvention of Barbie.
    Roadblock: CEOs can be the Greatest Obstacle to Success. Mattel's intelligence told it kids wanted hipper Barbies; CEO Robert Eckert and Mattel reacted slowly, and paid the price.
    World Class Tool Box: Mattel uses a sophisticated set of data and intelligence tools to steer the Barbie franchise.
    Near-Sighted Corporate Intelligence Can Be as Deadly as the Competition. Rival companies with successful toys put Barbie in a tough spot. Politics, social pressures and fashion changes can sink you or—as Japanese car-makers demonstrated—make you a winner.
    ACNielsen: Retail Riches. Every day, ACNielsen gathers data associated with millions of retail purchases, from apples in Arizona and Barbies in Boston. It charges a bundle for the results. Is it worth it?
    Next page: The First Tentative Steps.



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    Senior Writer
    Kim_Nash@ziffdavisenterprise.com
    Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.
     
     
     
     
     
     

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