Hard Analysis Gets

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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Mattel can record such observations in content analysis software, like Nvivo from QSR International of Australia, which scans for keywords, analyzes their context and weights them for importance. For example, each toy identified in an interview can become a data point, as can the order in which a girl names her favorites. Analyze enough of those interviews, and a toy company can see what girls think of its own and its competitors' products.

Mattel recently has added to its mix business-analysis products from Hyperion Software, Business Objects and others. Analysts use these products to answer questions about a data set, such as "How many Cali Girl Barbies did we sell in the first nine months of last year, and how does that compare to the sales level we're ramping so far this year?"

The products also can be used to produce executive "dashboards" that distill current data on sales, profitability, operating costs and other metrics to produce color-coded reports and alerts for senior managers.

Finally, Mattel casts a wide net to understand the overall marketplace, so it can determine how societal trends, such as 12-year-olds downloading music, might affect Barbie sales. (Say, should Mattel approach Apple Computer about an iPod cross-licensing deal?)

Mattel works with ACNielsen to track TV viewing habits but also consumption of other media. For example, ACNielsen monitors magazine readership statistics and Internet traffic to better understand what girls do when they're not buying toys.

Its NetRatings Internet analysis service functions a bit like its TV ratings service. Families volunteer to have their online activities tracked and recorded. When a member of a Nielsen family sits down at the computer, a screen displays the names of members of the household. If 8-year-old Ariana clicks on her name, NetRatings, with parental permission, tracks wherever she goes online using software installed on the machine.

"We'll tell them, 'Here are the most popular shows for 8-year-old girls, here's where they're going online, here's what they're reading and here's where you should spend your advertising dollars,'" says Corey Jeffery, a senior analyst at Nielsen/NetRatings.

In response to the popularity of the American Idol TV show and Web site among older girls, Mattel launched American Idol Barbie in January.

The company also uses software tools from Cognos, SAS Institute and SPSS to mix and match internal findings with outside market or economic statistics.

Using Cognos analytic tools, for example, Mattel can track the income level of families that buy traditional Barbie products or newer My Scene dolls by triangulating point-of-sale data from different stores, such as Sears or Target or KB Toys, with U.S. Census data on household incomes by ZIP code.

It can also determine, say, whether Internet traffic by geographical region is a leading or lagging indicator of sales for Barbie. If click counts at Barbie.com's American Idol section soar in California in September, but show no similar spikes in Florida, Mattel has a strong indication of where it needs American Idol products on shelves and where to punch up marketing before the holiday shopping season.

With statistics tools from SAS and SPSS, Mattel's consumer research managers use regression analysis—modeling what-if scenarios by figuring out the relationships among variables such as disposable income, retail locations, weekly sales trends, price fluctuations for the soft plastic of which Barbie is made in Indonesian factories—to get a sense of future trends.

One kind of question: "If Wal-Mart will allow My Scene dolls 12 feet more shelf space in half of its 3,000 stores and we run a $3-off consumer coupon in Nickelodeon magazine, how many points of market share could we steal back from Bratz next quarter?"

The combined intelligence—numerical, observational and aggregated information, from both outside research firms and Mattel itself—helps Mattel's strategic planning group fill in what Mattel Brands president Matthew Bousquette calls a "pyramid" of products aimed at girls of different ages and tastes.

Fairytopia Barbies, for instance, include dolls dressed as fairies with light-up wings for little girls, and $15 bottles of eau de toilette created by perfumer partner Puig Beauty and Fashion Group, for older girls.

To get a feel for the future, Mattel designers create sketches and foam-core prototypes to show to prospective customers of different ages. Researchers then pose a simply worded but critical question, says Patricia Lewis, former director of marketing for Barbie in the mid-1980s and, later, an executive at several competing toy companies.

"We would ask girls, 'Are you ready for this type of doll?'" she recalls.

The answers reveal what girls view as a step beyond them in maturity—and what they may reach for as they grow, she says. Asking mothers the same thing gives a glimpse of the support or resistance Mattel might encounter with new dolls. "You do need to keep the moms in consideration," she notes.

  • 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: Mattel Upgrades IT to Crunch Better Barbie Numbers.

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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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