The First Tentative Steps

By Kim S. Nash 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

Mattel did take tentative steps in 1999 and 2000 to address tweens' changing tastes with dolls such as Diva Starz, but the moves didn't click. Diva Starz' bright facial features and hipper clothing, for instance, stopped short of the new provocative styles being blasted on TV and in magazines.

Mattel, says Jim Silver, an advisor to the Toy Industry Association, a trade group, didn't act swiftly and forcefully enough to insulate its cash cow. The company, he says, "thought [Bratz] would come and go," just another challenger without endurance. In 1991, for example, Mattel beat Hasbro's blonde, busty Miss America doll by introducing its own American Beauty Queen Barbie. Likewise, Tyco Toys' Little Mermaid doll initially skyrocketed but eventually drowned under a wave of mermaid Barbies from Mattel.

Now, Mattel finds itself fully engaged in a no-holds-barred attempt to outmarket Bratz, incite new doll merchandising trends and keep Barbie on her throne. Mattel says it won't let up.

It can't.

Last year, Barbie, a perennial top seller, accounted for 30% of Mattel's $5.1 billion in sales and an estimated 40% of its $573 million profit. In the past 30 years, the Barbie product line has produced approximately $24 billion in sales.

When Barbie is at risk, Mattel is at risk.

"This is what happens when you get blindsided," Day says.

The Mattel-MGA battle holds lessons for any company trying to create an effective market intelligence system. Any company can develop accurate research and sophisticated technology to manipulate it, Stein points out: "The key is in how data is interpreted and, secondly, management's willingness to respond to it."

  • 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: A Body at Rest Stays at Rest.

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    This article was originally published on 2005-08-04
    Senior Writer
    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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