![Dolls represent the second largest chunk (17.3%) and plush toys represent 8.9% (Industry
Profile –Toys & Games in Brazil, 11). The Build-A-Bear product and its experience is a
combination of these 3 sectors. This is extremely important because the activity toys,
dolls and plush toys segments together represent 46.7% of the total toys and Games
market in Brazil. This huge potential market, along with forecasted market growth
provides support for our launch of Build-A-Bear in Brazil.
One trend in the market that will potentially contribute to our success is the
wealth of the grandparents of the baby-boomer generation. They are “more able to spoil
their grandchildren” (Industry Profile –Toys & Games in Brazil, 13). As well, demand for
new toys is always high, due to short-lived popularity inherent in toys (Industry Profile –
Toys & Games in Brazil, 13). Build-A-Bear offers thousands of different accessories,
which will hopefully extend the life of the product. Lastly, the growing economy and
rates of consumption in Brazil have seen a corresponding rise in wealth among a majority
of the population (Industry Profile –Toys & Games in Brazil, 14). Due to the increase in
affluence, “Demand for […] toys […] has increased and the choice of domestic and
foreign toys […] is plentiful” (Industry Profile –Toys & Games in Brazil, 14).
Competitor Analysis:
The competitive field in the Brazilian toy market is very fragmented. There are
multiple manufacturers producing toys in various sub-sectors. These range from the
traditional plush toys we plan on introducing to class dolls, board games, puzzles and
much more. In 2008, Mattel was the clear market leader. There are many other reputable
manufacturers, but none represent the market power of Mattel. Mattel is an international
manufacturer that, in 2008, had an estimated market share of 30.5% (Appendix). As](https://image.slidesharecdn.com/handthispart1in-111203184635-phpapp01/85/Build-A-Bear-Part-1-6-320.jpg)
Build-A-Bear Part 1
- 1. Group 6: Marketing Plan Part I – The Consumer and Market Profile MGCR 352, Section 006 Professor: Sameer Mathur Shan Chun Chak (David): 260321705 Laura Galin: 260315116 Sophia Herbst: 260353577 Stephanie Taras: 260302965 Rebecca Varon: 260425752 Aminata Wurie: 260299751 Monday November 1st 2010
- 2. Section 1: Our Product and its introduction into a new market Build-A-Bear Workshop, Inc. is a company based out of St. Louis, Missouri, that was founded in 1997 by Maxine Clark. It is the only global company that specializes in offering children an interactive experience in creating their own customized plush teddy bear. The company operates 21 stores in Canada and more than 400 stores worldwide (Build-A-Bear Workshop). Build-A-Bear Workshop offers fun, unique, and customized products. When a bear is created, the child goes through a number of steps – “choose me, hear me, stuff me, stitch me, fluff me (grooming), dress me, name me, and take me home.” These steps are not just steps; they are an experience, making our product comparable to dolls. Prices range from $12-$30CDN for the bears, with the clothes and accessories at an additional cost. Also, a free online service called CyBEAR Space is offered, which allows the child to create an online world for its bears (Build-A-Bear Workshop). We hope to capitalize on the currently stable Brazilian economy by franchising in Sao Paulo, Brazil’s largest and wealthiest metropolitan city (PricewaterhouseCoopers). The Brazilian toy and games market is expanding due to the increase in demand for these kinds of products. The reason for this is mainly the share of imported goods, which has increased almost five-fold within five years. Imports are responsible for 63% of the toys sold in Brazil, but national production has remained at a constant level for some years (World of Toys: Home). This growing demand illustrates that introducing Build-A-Bear Workshop in Sao Paulo will satisfy customer needs and wants. Additionally, plush and active toys encompass approximately one third of the toy market in Brazil (Industry Profile -Toys &
- 3. Games in Brazil, 11). Changing fashion and technological trends, cartoons, toys, and advent of corporate advertising in the gaming world are some of the major factors that influence the children’s toy and game choices. Introducing our product into the Brazilian market goes along with Build-A-Bear Workshop’s strategy to expand via franchising. We aim to bring the teddy bear to life for as many children as possible, all over the world. It is important that our products possess and incorporate an extensive understanding of the Brazilian culture. In order to effectively establish our product in the Brazilian market, our primary goal is to provide appropriate staff for in-store demonstrations, advertise and promote through television and street-side ads and launch on October 12th. October 12th is National Children’s Day, one of the most important dates for the Brazilian toy trade. This date and Christmas generate 70% of the total annual sales (World of Toys: Home). Section 2: Consumer Profile We aim to appeal to children ages 5-14, who make up about 25% of the Brazilian population, and is a relatively undeveloped niche in the market (Euromonitor, “Consumer”). Kids have become increasingly influential in family purchasing habits, and now influence 82% of overall purchasing decisions (Euromonitor, “Consumer”). We therefore plan to capitalize on this advantage by advertizing to both boys and girls in the Sao Paulo area, who ultimately control a large portion of their parents’ purchases in the toy realm. Also, in Sao Paulo, out of the 43% of mothers who bring their children ages 2- 14 to supermarkets, 61% of the children ask for specific products, and 32% ask for specific brands (Euromonitor, “Consumer”). Our secondary market is the working family of all income levels with fewer
- 4. children, particularly focusing on dual-income, middle and upper class families. We would also like to target baby-boomer grandparents in retirement who wish to buy our product as gifts for their grandchildren. Although game consoles do present a threat to our market, when grandparents go searching for toys for their children they “purchase toys and games based on the iconic image of their youths” (Euromonitor, “Global”). As children grow older, it becomes increasingly difficult for grandparents to purchase toys due to the generation gap; therefore, Build-a-Bear is ideal for them. The annual disposable income in Brazil has risen dramatically in recent years (Euromonitor, “Global”), and the average household size has shrunk to about three to four people in 2007, compared to the five person family in 1995 (Euromonitor, “Global”). Fewer children per family, and a higher household income results in a higher spending average per child. The bears are priced to be affordable for all income levels, and the unique option of buying additional accessories appeals to all income groups as a viable gift and toy. It is also important to note the growing trend of married, working mothers, who are delaying marriage and childbearing until they have established a career at about 26 years old, resulting in the working woman’s ability to spend more money on her children (Euromonitor, “Consumer”). Dual income families often compensate for being “absent parents” by purchasing toys; and all parents look for durable toys that are well-priced and stimulates their children’s imaginations (Euromonitor, “Consumer”). Build-a-Bear encompasses all of the said qualities, while offering quality parent-child time. The Sao Paulo metropolitan area is ideal for our company; it has an estimated 19,889,559 people in 2009 ("Estimated…"). It was named the 10th richest city in 2008, and currently the Brazilian economy is relatively stable, being the 9th largest in the world
- 5. (“Economy Watch”). Typically, households in urban areas have higher incomes than those in suburban or rural areas, therefore, Sao Paolo is perfect as our first stop in penetrating the Brazilian market. All of these facts can be summarized as follows: Our typical consumer would be a dual income, middle to upper class families in the greater Sao Paulo metropolitan area, with 1 or 2 kids, and possibly having a close relationship with one of their grandparents. Section 3: Market Profile Situation/ Market Analysis: As previously stated, Brazil is one of the world’s fastest growing economies. In 2009, Brazil’s total population was 194,578,500 (Brazil - Country Profile). Our target market, children under 14, comprised 26% of the Brazilian population as of 2009 (Brazil – Country Profile). Therefore, the total size of our primary market is 50, 590, 410. Within the Americas, the United States and Canada represent 85.2% of the toys & games market (Industry Profile –Toys & Games in Brazil, 12). Among the remaining 14.2%, Brazil accounts for 6% (Industry Profile –Toys & Games in Brazil, 12). This makes Brazil the largest consumer of toys & games throughout central and South America. This makes Brazil the perfect place for our launch. In 2009, the Brazil Toys and Games market had revenues of $1779.7 million. This is projected to reach $3251.2 million by the year 2014, representing a growth of 82.7% (Industry Profile –Toys & Games in Brazil, 2). However, intense competition serves as a barrier to entry for independent toy stores, as discussed in the following section (Industry Profile –Toys & Games in Brazil, 2). Activity toys represent the largest segment of the toys and games market in Brazil, with a 20.5% share of the market (Industry Profile –Toys & Games in Brazil, 11).
- 6. Dolls represent the second largest chunk (17.3%) and plush toys represent 8.9% (Industry Profile –Toys & Games in Brazil, 11). The Build-A-Bear product and its experience is a combination of these 3 sectors. This is extremely important because the activity toys, dolls and plush toys segments together represent 46.7% of the total toys and Games market in Brazil. This huge potential market, along with forecasted market growth provides support for our launch of Build-A-Bear in Brazil. One trend in the market that will potentially contribute to our success is the wealth of the grandparents of the baby-boomer generation. They are “more able to spoil their grandchildren” (Industry Profile –Toys & Games in Brazil, 13). As well, demand for new toys is always high, due to short-lived popularity inherent in toys (Industry Profile – Toys & Games in Brazil, 13). Build-A-Bear offers thousands of different accessories, which will hopefully extend the life of the product. Lastly, the growing economy and rates of consumption in Brazil have seen a corresponding rise in wealth among a majority of the population (Industry Profile –Toys & Games in Brazil, 14). Due to the increase in affluence, “Demand for […] toys […] has increased and the choice of domestic and foreign toys […] is plentiful” (Industry Profile –Toys & Games in Brazil, 14). Competitor Analysis: The competitive field in the Brazilian toy market is very fragmented. There are multiple manufacturers producing toys in various sub-sectors. These range from the traditional plush toys we plan on introducing to class dolls, board games, puzzles and much more. In 2008, Mattel was the clear market leader. There are many other reputable manufacturers, but none represent the market power of Mattel. Mattel is an international manufacturer that, in 2008, had an estimated market share of 30.5% (Appendix). As
- 7. Table 1a shows, there are many flaws in Mattel that will be advantageous to the launch of Build-A-Bear in Brazil. Piracy and product recalls weaken Mattel's market share and negatively affect the brand image. This is beneficial to us as we will be seen as a viable alternative. Despite this, Mattel's undeniable market size and brand loyalty are a significant threat. Multibrink will represent the second most serious threat to Build-A-Bear. This is because it focuses on the same market segment as our product, dolls and soft/plush toys (Multibrink, Toys and Game – Brazil). It also incorporates the use of licensed children's products in order to attract young consumers. This is a threat to us as we plan on doing something similar with our customization options. Furthermore, Multibrink positions itself as a manufacturer of low priced items which are distributed using various channels. The ease in purchasing this established product will deter interest in visiting our location. Indirect competition also exists in the market. This includes toy companies such as Estrela and Grow as well as video gaming companies. Leading manufacturers have been increasingly investing in the Brazilian market (Traditional Toys and Games – Brazil). For more information on all competition, please refer to Table 1a and 1b in the Appendix.
- 8. Bibliography: Build-A-Bear Workshop-Canada: Home Page. Web. Oct. 2010. <http://www.buildabear.ca/>. Toy Industry Association. (Feb 15, 2010). 2010 Toy Trends Get Straight “A's” at 107th American International Toy Fair. Earth Times. Retrieved Sept. 26, 2010 from earthtimes.org/articles/press. Industry Profile – Toys & Games in Brazil. DATAMONITOR. June 2010. Retrieved from Marketline Database. PricewaterhouseCoopers. "SP Sera 6a Cidade Mais Rica Do Mundo Ate 2025, Diz Ranking." O Estado De S. Paulo - Notícias, Vídeos, Fotos Do Brasil E Do Mundo,Online E Celular. 9 Nov. 2009. Web. 29 Oct. 2010. <http://www.estadao.com.br/noticias/geral,sp-sera-6-cidade-mais-rica-do-mundo-ate- 2025-diz-ranking,463359,0.htm>. World of Toys: Home. Rep. Web. 29 Oct. 2010. <http://www.world-of-toys.org/south- america/toy-market/?L=1>. Brazil – Country Profile. Euromonitor International. July 2010. Retrieved from Global Market Information Database. Grow Jogos e Brinquedos SA - Toys and Games – Brazil, Competitive Positioning. 30 Nov 2009. EUROMONITOR. Retrieved from Global Market Information Database. Gulliver Manufatura de Brinquedos SA - Toys and Games – Brazil, Company Background and Competitive Positioning. 30 Nov 2009. EUROMONITOR. Retrieved from Global Market Information Database. Industry Profile –Toys & Games in Brazil. DATAMONITOR. June 2010. Retrieved from Marketline Database. Manufatura de Brinquedos Estrela SA - Toys and Games – Brazil, Production and Competitive Positioning. 30 Nov 2009. EUROMONITOR. Retrieved from Global Market Information Database.
- 9. Multibrink Brindes e Brinquedos Ltda - Toys and Games – Brazil, Strategic Direction Competitive Positioning. 30 Nov 2009. EUROMONITOR. Retrieved from Global Market Information Database. Traditional Toys and Games – Brazil, Competitive Landscape. 30 Nov 2009. EUROMONITOR. Retrieved from Global Market Information Database. "Brazil Market." Economy Watch(2007): n. pag. Web. 29 Oct 2010. <http://www.economywatch.com/market/world-markets/brazil-market.html>. "Estimated population of municipalities in Brazil on 2008-07-01." Estimativas das Populações Residentes. Instituto Brasileiro de Geografia e Estatística, 2008. Web. <http://en.wikipedia.org/wiki/S%C3%A3o_Paulo>. Euromonitor. Consumer Lifestyles – Brazil (2009). Global Market Information database, McGill University 28 October, 2010. ---,Toy and Games: How Demographics and Income Shape Demand. Global Market Information database, McGill University 28 October, 2010.
- 10. Appendix:
- 12. Table 1a – Main Direct Competitors Manufacturer Information Market Share (2008) Mattel - an international manufacturer 30.50% - operates in many sub-sectors which include “dolls, action figures, model vehicles, games and puzzles, and infant and pre-school toys” - manufactures famous brands such as Barbie, Hot Wheels, and Fischer-Price - faces constant problems with piracy as well as recall problems with individual product lines (OPPORTUNITY = negatively affects the brand image of Mattel) Multibrink - focuses on the same market segment as our product, dolls and top 10 soft/plush toys (THREAT) - incorporates the use of licensed children's products in order to attract young consumers (THREAT) - positions itself as a manufacturer of low priced items which are distributed using vary channels - Super/hypermarkets account for nearly 20% of its sales, where it faces little competition. - also uses department stores and wholesalers, accounting for 21% and 25% of sales respectively Gulliver - focuses on the niche market of action figures and dolls 2.10% - has been experiencing a decline in market share since 2004 - planned to launch 13 new toys in 2009 which would stimulate a 10% growth in their market share. - focuses on selling toys with “slightly smaller unit prices than its competitors” - sales are heavily concentrated to the South-eastern region of Brazil, particularly in São Paulo (THREAT, this is where we plan to launch) Information retrieved from Global Market Information Database, Toys and Games – Brazil, EUROMONITOR. Compiled for this report.
- 13. Table 1b – Main Indirect Competitors Manufacturer Information Market Share (2008) Estrela - did not face product recalls 3.60% - restructured its operations and opened new factories in Itapira (São Paulo) - has a range of products targeting the middle and lower income classes - a large portion of Estrela's focus is on classic dolls, which it markets to higher- income consumers (OPPORTUNITY = can gain from the established market here if higher income consumers also desire our product) Grow - primary focus is on the market of puzzles 3.20% and board games - Board games account for approximately 50% of company sales. - targets both children and adults - strong in the infant and pre-school sub- sectors Video Games - many children move out of our market into this one - largely different product at a much higher price point Information retrieved from Global Market Information Database, Toys and Games – Brazil, EUROMONITOR. Compiled for this report. Table 2 = Market Share of Competition in Brazilian Toy Sector % retail value rsp 2004 2005 2006 2007 2008 Mattel do Brasil Ltda 9.5 10.2 35.1 31.4 30.5 Candide Indústria e Comércio Ltda 4.9 5.3 5.9 6.1 5.9 Manufatura de Brinquedos Estrela 6.0 3.9 3.8 3.8 3.6 SA Grow Jogos e Brinquedos SA 3.7 3.1 4.3 3 3.2 Gulliver SA 4.0 3.8 3.6 2.2 2.1
- 14. Others 71.9 73.7 47.4 53.5 54.7 Total 100 100 100 100 100