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

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Since its inception in 1945, Mattel has been collecting market intelligence in some form. While systems and procedures have been upgraded, refined and enhanced, the basics have remained the same.

Mattel's market research department mixes and analyzes data that comes from the company's own financial and inventory systems, plus outside trend and demographic information from at least five market research firms, including ACNielsen; anecdotal research from focus groups; statistics from large consumer surveys; studies of children's play patterns; and sales figures from Wal-Mart and other giants.

Mattel also continuously collects aggregate sales at hundreds of smaller retailers from market researcher NPD Group, which gathers monthly sales figures on Mattel's 107 product lines from store owners across the U.S. and Canada.

Mattel seeds its Oracle and IBM DB2 databases with data on units sold, models, prices and dates, and analyzes past and present sales patterns by brand, geography and other categories—all to help forecast the future.

Analysts at Mattel can run database queries to spot sales trends and conduct profit-and-loss studies by product. Marketing managers like to measure the effectiveness of TV commercials by looking at store-level sales data before and after an ad campaign begins, says Jennifer Caveza, a former marketing brand manager for Mattel's Fisher-Price division.

The numbers also are analyzed in light of observational data from outside researchers and Mattel's own scientists, including "mall intercept" interviews with girls and anecdotes about the competition collected from Mattel's field sales agents, who chat up buyers at the big retail chains.

Employees up and down the Mattel hierarchy are expected to collect and discuss intelligence, using e-mailed updates, text reports filed at private Web sites, and monthly meetings among brand marketers, market researchers, sales managers and product designers.

Even the part-timers Mattel hires in the busy fall season to drive from store to store to set up merchandise and ensure that stores are giving Mattel its negotiated shelf space file daily reports to headquarters on what they find, via a secured Web site.

CEO Eckert himself visits toy stores to eyeball inventory levels of competing products.

Meanwhile, senior consumer research analysts with MBA degrees conduct focus groups and interviews with girls, and then speak as the "voice of the consumer" in presentations to senior managers in the consumer research department. Senior associates in the company's corporate strategic planning group—positions that require not just MBAs but Ivy League MBAs—assess competitors to determine whether to try to beat them or buy them out.

These senior associates, according to job descriptions at Mattel's Web site, also track market shifts in toy categories such as fashion dolls, baby dolls and ride-on vehicles to improve brand sales and profits, and regularly prepare material for Eckert, chief financial officer Kevin Farr and senior vice presidents.

One source of valuable hands-on information is visits by Mattel researchers to children's homes (with parents' OK, of course) to observe and understand play patterns.

For example, if researchers see Barbie dolls displayed on a shelf above a girl's dresser, even if the girls like them, it's an indication they don't play with them regularly. They may even be forgotten, says Zwiers, the former Barbie marketing executive, who founded Funosophy, a toy-brand consulting firm in Long Beach, Calif., after leaving Mattel in 1999.

It's more encouraging to see dolls lying on a pillow on the bed, which indicates they are loved and held. Similarly, dolls seen on the floor next to a box of doll clothes indicates active play.

Seeing what else is in the room also tells a story. Mattel doesn't want to find Barbie on the closet floor and Sasha and Yasmin Bratz on the pillow.

"Having girls tell you in their own words what they have on their bed and why, and what they have stuffed away in their toy box and why, can be so much more revealing than asking a lot of canned questions," she says.

  • 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: Hard Analysis Gets Answers on Soft Subjects.

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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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