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Pricing Decisions — Chapter 9

McDonald's Australia: no lightweight, p266

Q1. Is the salads plus menu a product line extension, a modified product or a new

product for McDonald's?

The McDonald's phenomenon started with the opening of the first McDonald's store in Des

Plaines, Illinois, USA, in 1955 (MacPac, 2006). However, it wasn't until 1971 that this

phenomenon was introduced to Australia with the opening of the first store on Australian

shores in Yagoona, NSW, in 1971 (MacPac, 2006). On 26 September 2006, it was revealed

that McDonald's ranks No. 318 on FORTUNE'S list of the World's Largest Companies (CNN

Money, 2006), and is one of the largest employers of people in Australia, employing more

than 56,000 people nationwide (MacPac, 2006).

With approximately 31 % of Australians aged 14 and over having purchased McDonalds in a 4

week period (Roy Morgan International, 2006), it is obvious that McDonald's has had to

evolve to respond to changing consumer tastes to remain competitive. In response to the

trend of Australians becoming more health conscious, the Salads Plus Menu was launched

as a new product in 2003, which included eight products with no more than 10 grams of fat

per serve (Pride et al., 2006, p266). The introduction of the Salads Plus Menu was classified

as a new product as the products offered were not only different and distinctly better, but they

were also viewed as new in the context of the restaurant chain (Pride et al., 2006, p232). j

With this new product launch, McDonald's was attempting to attract not only new customers,

but to attract former customers and retain existing customers (Pride et al., 2006, p266). It

provided enhancement to the marketing mix and assisted McDonald's in identifying a new

niche market.

It was a risky move for McDonald's, as 95% of new products never reach the market with less

than 3% of those that do surviving for 5 years (Pride et al., 2006, p232). To minimise the

possibility of these outcomes, before any new product is introduced, it goes through the

Seven-Phases of the New Product Development Process (Pride et al., 2006, p232). The

phases are as follows —

1. Idea Generation — which is defined as "seeking product ideas to achieve objectives"

(Pride et al., 2006, p232). McDonald's was able to generate new product ideas

from many sources including - internal sources (such as marketing managers,

researchers, and sales personnel), through intraorganisational devices such as

brainstorming and incentives, through external sources outside the company (such

as customers, complaints received, competitors, advertising agencies, and market

research organisations), and through research and development undertaken by

McDonalds (Pride et al., 2006, pp232-233);

2. Screening - which is defined as "choosing the most promising ideas for further

review" (Pride et al., 2006, p233). Once the new product ideas had been

generated, McDonalds was able to focus on the ideas that had the greatest

potential, which were selected for further review, in this case it was the Salads Plus

Menu. McDonalds then analysed its overall ability to produce and market the

Salads Plus Menu (Pride et al., 2006, p233). Other factors considered during this

phase were the wants of the consumers and possible environmental changes

(Pride et al., 2006, p233);

3. Concept Testing - which is defined as "seeking potential buyers' responses to a

product idea" (Pride et al., 2006, p233). During concept testing, the concept is

briefly described to the test audience and then a series of questions is presented

(Pride et al., 2006, p233). McDonalds actively sought out responses, and tested

initial reactions, from the public to the new Salads Plus Menu idea;

4. Business Analysis - which is defined as "assessing the potential of a product idea

for the company's sales, costs and profits" (Pride et al., 2006, p234). During this

phase McDonalds sought market information to help predict the potential sales,

costs and profits of the Salads Plus Menu (Pride et al., 2006, p234).

5. Product Development - which is defined as "determining whether producing a

product is feasible and cost effective" (Pride et al., 2006, p234). This was the

phase where the number crunching for the Salads Plus Menu began and the

2

feasibility of the idea was assessed at length. The cost of production was analysed

to ensure that the Menu could be produced at a reasonable price while ensuring a

profit for McDonalds. Based on all this information, prototypes were developed

(Pride et al., 2006, p234), as were computer generated images relating to items on

the new menu. The Salads Plus Menu was in this Product Development phase for

nine months (Pride et al., 2006, p266);

6. Test Marketing - which is defined as "introducing a product on a limited basis to

measure the extent to which potential customers will actually buy it" (Pride et al.,

2006, p235). McDonalds used this phase to select appropriate test areas in

different geographical locations to test the sales performance and weaknesses of

the new Menu, and in doing so, lessened the risk of product failure (Pride et al.,

2006, p235);

7. Commercialisation - which is defined as "deciding on full scale manufacturing and

marketing plans and preparing budgets" (Pride et al., 2006, p236). Based on the

feedback received and observations made during the Test Marketing phase,

necessary changes were made to Salads Plus Menu before the product fully

entered the market in August of 2003 through an aggressive marketing campaign

(Pride et al., 2006, p266).

All these phases increased the chance of success for the New Salads Plus Menu and helped

identify any weaknesses or faults before vast amounts of money were spent on production of

the new product idea.

C3

yam.

4

Q2. Describe the positioning of the salads plus menu?

Product positioning is defined as "creating and maintaining a certain concept of a product in

the customers' minds" (Pride et al., 2006, p242). This product positioning is relative to not

only to their competitor brands, but also to their own products, and whose aim is to make that

product "top of mind" at the time of the purchase decision (MG1 702/2702: Developing and

Managing Goods and Services, week 8 notes, 2006). j

McDonald's major competitors in Australia include KFC, Subway, Hungry Jack's and

Domino's Pizza (Roy Morgan International, 2006). With this in mind, through the launch of

their Salads Plus Menu, McDonald's focused on positioning itself away from the other

competitors (versus competing head on with another brand) while avoiding cannibalisation of

its existing market through the attribution of different traits (healthy fresh food) to the new

Salads Plus Menu (MG1702/2702: Developing and Managing Goods and Services, week 8

notes, 2006). McDonald's correctly identified that almost three quarters of Australians aged

25-34 years and those aged 35-49 years purchase fast food. in a 4 week period (Roy Morgan

International, 2006), with McDonald's attempting to target parents as well as teenagers with

their new range of Salads Plus options (Pride et al., 2006, p266).

Negative publicity also affects the positioning of McDonalds, and in turn the Salads Plus

Menu, in the marketplace. Such negative publicity has appeared in the form of the dismissed

case of Pelman v McDonalds. lawsuit of 2003 (where two children claimed they were harmed

by consuming McDonald's fare) (Morris, 2006), and the highly controversial film "Super Size

Me" (which looked at the legal, financial and physical costs of America's hunger for fast food)

(Super Size Me, 2006). These negative experiences have prompted McDonalds to

increasingly push the Salads Plus Menu as a healthy fresh food alternative in the eye of the

consumer, in order to help negate the damage.

The introduction of the Salads Plus Menu demonstrated that McDonald's understands its

customers and can adapt to meet its customers' changing needs (Pride et al., 2006, p32).

Other initiatives that reflect this adaptability, specifically to the obesity epidemic, include the

Tutorial Group - Julie Carmody, Tuesday 2-3pm

commitment by McDonald's Ireland to reduce the salt content of their French fries by.50%

(Ireland Online, 2006). Further in September 2006 McDonalds Australia made the

commitment to increase nutritional labelling on their products with Percentage Daily Intake

(%Dl) information, which is due to come into effect this month (Knowles, 2006).

McDonalds is attempting to position itself as a "protector of the environment', through

initiatives such as reduced energy consumption, improved energy efficiency, exploration into

solar power, reduced water pressure to minimise water loss, and recycled paper cups

(MacPac, 2006). These initiatives show that McDonalds, and the Salads Plus Menu, are

practising what they preach and promoting a healthier way of life.

( jfteL PA p c wJi kov H 9 Qc1c cvr4

t4cc co ?4l JL'tqso 1C

-5

Q3. Assess McDonald's strategy for differentiating its product from those of its

competitors in the fast food industry.

Product differentiation is defined as "creating and designing products so that customers

perceive them as different from competing products" (Pride et al., 2006, p238). New

products, including the Salads Plus Menu, predominately need to be differentiated so that the

new product can lead to an additional source of revenue for the company. The Salads Plus

Menu would ideally be perceived as different not only from its competitors, but also from

McDonalds other products so as to avoid cannibalisation of its existing market, and so the

Salads Plus Menu has its own special space in the minds of the consumers (MG1702/2702:

Developing and Managing Goods and Services, week 8 notes, 2006). Areas of differentiation

that companies must consider when offering products for sale include (Pride et al., 2006,

p238) —

1. The quality of the product (and the consistency of that quality) — where quality is

defined as "the overall characteristics of a product that allow it to perform as

expected in satisfying customer needs" (Pride et al., 2006, p239);

2. The design and/or features of the product — where product design is defined as

"how a product is conceived, planned and produced" (Pride et al., 2006, p240), and

where product features are defined as "specific design characteristics that allow a

product to perform certain tasks" (Pride et al., 2006, p240); and

3. The support services for the product — where customer service is defined as

"human or mechanical efforts or activities that add value to a product" (Pride et al.,

2006, p241). V

With McDonald's major competitors in Australia including KFC, Subway, Hungry Jack's and

Domino's Pizza (Roy Morgan International, 2006), it is clear that McDonalds chose to

differentiate its Salads Plus Menu based on a number of factors involving all areas listed

above. Firstly, McDonald's hoped to create a competitive advantage with their new Menu by

creating a healthy fast food alternative, unlike their major competitors. McDonalds

differentiated their image by focusing on the freshness and quality of the produce used to

1.1

create the new Menu and by emphasising the health component with the produce being low

in fat. This in turn affected the packaging of the Salads Plus Menu which was redesigned to

reflect how McDonalds wanted the product to be perceived. McDonalds decided to make the

new Menu items fresh while you wait, adding to the healthy image and level of style

associated with the Menu items, while differentiating themselves on the basis of the service

experience (Pride et al., 2006, p246).

McDonalds used its brand "McDonalds" to offer customers the same level of quality and

consistency with the new Menu all over the world — so the same level of expectation could be

experienced in one country to the next, and offered that consistency over time (ongoing

menu). McDonalds further ensured that the price was in line with customer expectations so

as not to limit their customer base

McDonalds offered support services for the product through the McDonald's restaurants

having convenient hours of operation, as well as adequate parking (Pride et al., 2006, p241).

By doing all this, the McDonalds Salads Plus Menu was able to differentiate itself from its

major competitors in Australia and appeal to their target market, that being parents as well as

teenagers (Pride et al., 2006, p266). ,

7

Q 4. How do the service characteristics create challenges for McDonalds? Identify &

discuss 3 only.

In today's environment, the element of service is of increasing importance. Service can be

defined as a "product involving a deed, a performance or an effort that cannot be physically

possessed" (Pride et al., 2006, p245). McDonalds offers a mixture of both tangible goods and

intangible service. So important is the service element that McDonalds must focus on certain

service characteristics on an ongoing basis that may create challenges for the company so as

to minimise their negative impacts. The service characteristics are as follows (Pride et al.,

2006, p246) —

1. Perishability — which is defined as "the inability of unused service capacity to be

stored for future use" (Pride et al., 2006, p247). McDonalds must delicately

balance supply and demand in respect of their service capacity and plan for

demand that fluctuates according to the time of the day, the time of the week

and the time of the year (Pride et al., 2006, p248);

2. Heterogeneity — which is defined as "Variation to quality" (Pride et al., 2006,

p248). It is a challenge for McDonalds to maintain a consistent quality of

service delivery due to the very nature of human behaviour (Pride et al., 2006,

p248). This variation of quality can occur from store to store or even within the

same store. McDonalds has aimed to minimise variability in service quality

through the introduction of employee awards, including the "Employee of the

Month" to encourage employees to deliver high quality service (Pride et al.,

2006, p248). Further, a large percentage of the annual turnover is invested in

training and development of staff to provide the tools for improved performance

and to standardise the service delivery (MacPac, 2006). Further, different skills

are involved in working in McCafe versus the general restaurant. Each McCafe

staff member must be specifically trained, including the art of making espresso

coffee (MacPac, 2006). Therefore the level of training differs even within the

same store; and

8

3. Customer contact — which is defined as "the level of interaction between

provider and customer needed to deliver the service" (Pride et al., 2006, p249).

McDonalds strives to strike a balance between lowering costs without

compromising the level of customer satisfaction (Pride et al., 2006, p251).

Satisfied employees lead to satisfied customers,. therefore McDonalds must

continue to meet the needs of the employees by providing adequate training, so

as to reduce the problems that customer contact can create and to reward high

quality service behaviour to ensure that it is repeated (Pride et al., 2006, p249) .

It is important that McDonalds not only identify these areas of challenges when managing

their services as products, but they should be at the forefront in the development and

management of the marketing mixes for their services (Pride et al., 2006, p250). f

Er7

Reference) "P

• CNN Money. (2006). McDonald's ranks No. 318 on FORTUNE's list of the World's

Largest Companies.

[Online]. Available:

http://money.cnn.com/2006/09/22/news/companies/mcdonalds.fortune/index . htm

[2006, October 1 ].

• Ireland Online. (2006). McDonalds commits to 50% salt reduction.

[Online] Available:

http://breakingnews.iol.ie/news/story business island.asp?i=195193468&p=y95y94y7

4/ [2006, September 25].

• Knowles, J. (2006). New nutrition labelling for McDonalds Australia.

[Online]. Available:

http://www.ap-foodtechnology.com/news/printNewsBis.asp?id=70838 [2006, October.

1].

• McDonalds. (2006). Retrieved 25 September 2006.

[Online] Available:

http://www.mcdonalds. com.au/

• McDonalds. (2006). MacPac. Retrieved 25 September 2006.

[Online] Available:

http://www.mcdonalds.com.au/

• Morris, R. (2006). McDonalds Flip-Flops on Food Quality.

[Online]. Available:

http://www.commonvoice.com/article.asp?colid=5896 [2006, September 25].

• Pride, W.M., Elliott, G., Rundle-Thiele, S., Waller, D., Paladino, A. & Ferrell, O.C.

(2006). Marketing: core concepts and applications (asia pacific edition). Milton, Qld:

John Wiley & Sons Australia, Ltd.

• Rose, J. (2006). MG1702/2702: Developing and Managing Goods and Services,

week 8 notes. Retrieved 5 October 2006, from

http://learnicu. 4cu.edu.au/webapps/portal/frameset . isp?tab=courses&url=%2Fbin%2Fc

ommon%2Fcourse.pl%3Fcourse id%3D_19737_1

i[i

• Roy Morgan International. (2006). Majority Of Australians Have Bought Fast Food In

Last Four Weeks.

[Online]. Available:

http://www.roymorgan.com/news/press-releases/2006/555/ [2006, September 25].

• Super Size Me. (2006). About the Movie. Retrieved 1 October 2006.

[Online] Available:

http://www.supersizeme.com/home.aspx?page=aboutmovie J

11

Bibliography for McDonalds

CNN Money. (2006). McDonald's ranks No. 318 on FORTUNE's list of the World's

Largest Companies.

[Online]. Available:

http://money.cnn.com/2006/09/22/news/companies/mcdonalds.fortunefindex.htm

[2006, October 1].

• Ferret. (2006). Big standards from McDonalds.

[Online]. Available:

http://www.ferret.com.au/articles/f7/OcO458f7.asp [2006, September 25].

• Ireland Online. (2006). McDonalds commits to 50% salt reduction.

[Online] Available:

http://breakingnews.iol.ie/news/story business island.asp?i=195193468&p=y95y94y7

4/ [2006, September 25].

• Knowles, J. (2006). New nutrition labelling for McDonalds Australia.

[Online]. Available:

http://www.ap-foodtechnology.com/news/printNewsBis.asp?id=70838 [2006, October

1].

• McDonalds. (2006).

[Online]. Available:

http://www.mcdonalds.com.au/ [2006, September 25].

• McDonalds. (2006). MacPac.

[Online]. Available:

http://www.mcdonaids.com.au/ [2006, September 25].

• Morris, R. (2006). McDonalds Flip-Flops on Food Quality.

[Online]. Available:

http://www.commonvoice.com/article.asp?colid=5896 [2006, September 25].

• Pride, W.M., Elliott, G., Rundle-Thiele, S., Waller, D., Pala ddino, A. & Ferrell, O.C.

(2006). Marketing: core concepts and applications (asia pacific edition). Milton, Old:

John Wiley & Sons Australia, Ltd.

12

• Rose, J. (2006). MG1702/2702: Developing and Managing Goods and Services,

week 8 notes. Retrieved 5 October 2006, from

http://learnicu.icu.edu.au/webapps/portal/frameset . isp?tab=courses&url=%2 Fbin%2Fc

ommon%2Fcourse.pl%3Fcourse id%3D 19737 1

• Roy Morgan International. (2006). Majority Of Australians Have Bought Fast Food In

Last Four Weeks.

[Online]. Available:

http ://www.roymorgan.com/news/press-releases/2006/555/ [2006, September 25].

• Roy Morgan International. (2006). 80% Of Americans Have Bought Fast Food In Last

4 Weeks - 45% Have Bought McDonald's In Last 4 Weeks.

[Online]. Available:

http ://www.roymorgan.com/news/press-releases/2006/556/ [2006, September 25].

• Super Size Me. (2006). About the Movie.

[Online]. Available:

http ://www.supersizeme.com/home.aspx?paqe=aboutmovie [2006, October 1].

13

Fisher Price Online Exercise, p292

Q1. What products has Fisher Price developed and introduced recently? How does

fisher price use its web site to communicate information about its toy range and their

suitability for children of different ages?

Fisher Price was founded in 1930 in New York, USA, by Hermann Guy Fisher, Irving R. Price

and Helen M. Schelle; and in 1993, was merged with Mattel (Mattel, 2006). Fisher Price is

today one of the top 10 most recognised brands in the world and had US sales alone of $1.2

billion in the year 2000 (Fisher Price, About Us, 2006).

Throughout this time, Fisher Price has been synonymous with high quality, innovative toys

and products designed specifically for young children (Mattel, 2006). Fisher Price has

developed many products during this time, the latest of which according to its website include

the following —

1. Birth to 12 months - Peek-a-BlockSTM

lncrediBlockTM , Laugh & LearnTM Learning

HomeTM, Laugh & LearnTM Learning TableTM , Dance Baby Dance! TM Dancin'

BandstandTM , Miracles & Milestones TM Musical Panda, Miracles & MilestonesTM

Peek-a-Boo PianoTM , Miracles & Milestones TM Mix & Match TM Musical Mobile,

Miracles & MilestonesTM My First Book, Miracles & Milestones TM Magical MobileTM

Gym, Miracles & Milestones TM Take-Along Sensory SwingTM , and the Miracles &

MilestonesTM Playful;

2. 18 months and up - Little Mommy TM Doll, E-L-M-OTM , POP-ONZTM Building System

Pop 'n Twirl TM Building Table, and Learn Through Music;

3. 2 years and up - Rail & Road System Tracktown RailwayTM , GEOTRAXTM Rail &

Road System High Chimes ClockTM Tower, GEOTRAXTM Rail & Road System Sky

High Suspension Bridge, and the Little People@ Discovery VillageTM;

4. 3 years and up - Doodle Pro TM , and Rescue Heroes® Robotz Off-Road CruiserTM

14

These products are all clearly listed and visible on the Fisher Price website as is the "What's

New" link. Once at the "New Products" page, it is very easy to navigate to the individual

products with individual links to further product information.

Other new products that have recently been developed and introduced by Fisher Price and

have made the news but that do not appear on their website include —

1. The Fisher-Price Kid Tough Digital Camera launched in the USA in September

2006 (MSNBC, 2006); and

2. The debut of T.M.X. Elmo in September 2006, which was timed to the 10th

anniversary of Tickle Me Elmo (Thompson, 2006).

These new products by Fisher Price constitute two of the twelve hottest Christmas gifts for

2006, according to Toy Wishes magazine's article of October 4, 2006 (Moore, 2006).

Fisher Price has obviously put a lot of thought into the design of its website, and this is

reflected in the fact that while it is very basic in appearance, it is very easy to read and

navigate through. It feels fun and light hearted, and through its basic appearance Fisher

Price can effectively communicate information without confusion. An example of this is on the

home page for Fisher Price, where there are clearly identified links indicating "toys by age"

and "toys by type". This very clearly and quickly allows Fisher Price to communicate product

information on their toy range and their overall suitability for children of different ages to a

wide audience. In addition to the link indicating "toys by age", Fisher Price also uses a

prominent and visually appealing icon on their homepage that has the same function as the

link. This provides the customer with two avenues with which to access this information. The

different age categories contain information on developmental milestones which lead into a

section on age appropriate ways the child should be playing. To add the marketing element,

the next section is "toys that are right for this age" coupled with "top toys for this age". This is

a clever way of communicating and leading into the information about their toy range and its

suitability to the different age categories. In addition to that, there is an "Expert Advice and

Articles" section that offers interaction with an online child care experts to answer questions

15

relating to such issues as family ma tters, sleeping solutions, social / emotional development,

language and lea rning, health / safety, playtime and toys as well as offering stand alone

articles produced by the child care experts to assist parents and parents to be. This is a great

resource for parents and adds to the credibility of the products and exceeds customers

expectations. Fisher Price does seem to have taken that extra step, and offer a

comprehensive parenting resource site that offers ongoing support. Further to this, there is

an option on the website to receive updates via email on toys, offers and parenting advice.

In addition to the Parenting Resource section, there is a Play and Learn Family Activities

section. This section provides parents and children the opportunity to engage in fun and

educational activities online (Fisher Price, 2006). This is a nice feature and reinforces Fisher

Price's commitment to supporting families.

The website also allows the communication of information about its toy range and their

suitability for children of different ages through the ability to click on a product and then email

that product information to a friend. In addition to this, the website has online ordering

capabilities.

Overall, Fisher Price has been ve ry clever in the design of its website, which is designed to

communicate as much information about their products to the widest possible audience while

offering ongoing support to parents and young children.

J ^^

16

Q2. What role do research and an understanding of customer needs play in fisher

price's success? Is this similar to the role of its parent company Mattel?

A look at Fisher Price's Mission statement "To support today's families with young children

through a breadth of products and services that make early childhood more fun and

enriching" (Fisher Price, 2006), indicates that continual research is essential to for this

company to keep their products and services relevant, appropriate and successful. Further, a

fundamental and ongoing understanding of current and changing customer needs is

particularly essential for the success and competitiveness of this company.

While Fisher Price is synonymous with high quality, innovative toys and products designed

specifically for young children, through licensing agreements, the Fisher Price brand also

appears on many categories of children's products including software, books, eyewear, and

bicycles (Fisher Price, 2006). It is obvious that Fisher Price has evolved to meet changing

needs of the customers through the years and has diversified their product range to grow and

expand their business cycle.

Constant research must be undertaken to ensure their products are safe and developmentally

appropriate, while remaining receptive to the latest "developments" in the field. They can do

this by monitoring their competitor's actions, by listening to their customers and keeping true

to their core values. An example of Fisher Price using research to stay true to their core

values included the commencement of the phasing out of the chemical Phthalates in their

plastic teething toys in .1998 in response to public debate on the subject (Mattel History,

2006), when it was suspected that certain compounds, including two phthalates, caused

reproductive disorders, cancer or genetic mutations (Los Angeles Times, 2006).

In addition, it can be very costly for Fisher Price to neglect their research or to not stay in tune

with their customer's needs. This cost can be in the form of monetary terms and / or damage

to their overall reputation, which directly affect the level of success of the company. An

example of which was evidenced in 2001 when Fisher Price agreed to pay the US

government $1.1 million in the biggest civil penalty ever levied against a toy company to settle

17

charges relating to the failure to notify regulators in a timely fashion of the fact that their

Power Wheels toy cars could catch fire. Not only were the motorised ride on cars recalled in

1998 in response to this action, but Fisher Price also received a lot of negative publicity which

temporarily damaged their overall reputation in the eyes of the public and potentially

compromised their long term success (CNN Money, 2006).

Further, in 2005, Fisher Price released a "Little Mommy Bath Baby Doll", that came with a

bottle whose parts posed a choking hazard for young children. These hazardous parts came

to the attention of, and were identified by, the World Against Toys Causing Harm

Organisation (W.A.T.C.H) (Wong, 2006). This failure to properly research the characteristics

of this toy caused a drop in consumer confidence for Fisher Price products and was in

deference to its core values.

As recently as 8th October 2006, an article revealed that Fisher Price had still not totally

phased out the chemical phthalates from their products (the phasing out of which began in

1998), and a promise was made that all its products would comply with the European Union

rules (that being the total ban of phthalates in products for babies and toddlers) by the end of

this year (Los Angeles Times, 2006). Further research and a commitment to this area of

development would have ensured that Fisher Price did not receive this negative publicity

which could damage its reputation and long term success.

As can be seen above, it is essential for Fisher Price to commit to ongoing research and to

continue to have an understanding of customer needs in order to remain successful.

As for Fisher Price's parent company, Mattel, the same is relatively true. Mattel's family of

products include Barbie, Hot Wheels, Fisher Price, and American Girl. Their vision is to be

"The World's Premier Toy Brands — Today and Tomorrow" (Mattel, 2006). Mattel are listening

to their customer's needs by ensuring that all Mattel products are designed and manufactured

to meet or exceed all applicable safety standards from around the world (Mattel, 2006). While

it is important for Mattel to commit to ongoing research and to continue to have an

understanding of customer needs in order for the individual units to be successful on an

18

Q3. Find Fisher Price's mission statement. Are fisher price's web site design and key

features consistent with the vision and positioning of the company? Why or why not?

Fisher Price's Mission Statement is "To support today's families with young children through a

breadth of products and services that make early childhood more fun and enriching" (Fisher

Price, 2006).

In support of the Mission Statement, Fisher Price's Values include offering "products and

services consumers can trust to improve their family's lives" (Fisher Price, 2006). This is

further reinforced through Mattel's vision which is to be "The World's Premier Toy Brands -

Today and Tomorrow" (Mattel, 2006). The Fisher Price website design and key features

reflect these core concepts and are consistent with the vision and positioning of the company.

Not only is the site easy to navigate, but it offers a wide range of products and services

geared towards enriching young children's lives. It supports parents through the many

additional features of the site including parenting advice and has a light-hearted and fun feel

to the website, which is evidenced by the "Games Online" section. The website and features

convey a level of superiority and boost confidence in their products and credibility. Fisher

Price does seem to have taken that extra step, and do not just utilise the website for

conveying product information, but really offer a comprehensive parenting site that offers

ongoing support.

Overall, Fisher Price has been very clever in the design of its website, and through the use of

its key features, which are designed to communicate as much information about their

products to the widest possible audience while offering a level of support to parents above

that which would be expected. The addition of the Parenting Resource Section and the Play

and Learn Family Activities section serve to sustain the image of Fisher Price as being

associated with high quality, innovative toys and products that support today's families.

20

ongoing basis, their specific Mission Statement is "Mattel's (the "Company") Board of (Directors (the "Board") strives to ensure good corporate management and governance. It

selects, monitors, evaluates and supports the Chief Executive Officer and oversees the -- -

development and pursuit of corporate policies and strategies. It serves the Company's

stockholders through a strong commitment to the effective and ethical management of the

Company in a manner which optimizes sustainable long-term profitability and is responsive to `VI

the legitimate interests of other corporate constituencies, such as employees, customers,

suppliers and the communities in which the Company operates" (Mattel, 2006). As can be

seen from the Mission Statement, Mattel's focus is centred more around their internal fmanagement, governance and profitability versus Fisher Price whose focus is on the external

market.

Therefore, while ongoing research and an understanding of the needs of the customer are

important to both Fisher Price and Mattel, Fisher Price can channel all their efforts into their

company only while Mattel must share their efforts with their many companies and brandings.

19

[Online]. Available:

http://www. marketwatch.com/news/story/story.aspx?quid=%7B3210B972-9964-4E09-

BC8C-F0C257686023%7D [2006, October 5].

• MSNBC. (2006). Mattel builds buzz with Elmo makeover.

[Online]. Available:

http://msnbc.msn.com/id/l4853580/ [2006, September 25].

• Pride, W.M., Elliott, G., Rundle-Thiele, S., Waller, D., Paladino, A. & Ferrell, O.C.

(2006). Marketing: core concepts and applications (asia pacific edition). Milton, Old:

John Wiley & Sons Australia, Ltd.

• Thompson, C. (2006). Fisher Price unveils T.M.X Elmo.

[Online]. Available:

http://www.businessweek.com/ap/financialnews/D8K7UM680.htm [2006, September

25].

• Wong, G. (2006). 10 most dangerous toys.

[Online]. Available:

http://money.enn.com/2005/11/17/news/midcaps/dangerous toys/index.htm [2006,

September 25].

22

Reference r

• Chatterjee, C. (2006). Our Daily Faves.

[Online]. Available:

http://www.parenting.com/parenting/article/0,19840,1532523.5,00.html [2006,

October 1 ].

• CNN Money. (2006). Fisher-Price fined $1. 1M.

[Online]. Available:

http://money.cnn.com/2001/06/07/news/fisherprice /index.htm! [2006, September 25].

• Fisher Price. (2006).

[Online]. Available:

http://www.fisher-price.com/au/default.asp?donotpup=l [2006, September 25].

• Fisher Price. (2006). About Us.

[Online]. Available:

http://www.fisher-price.com/au/hr/aboutus.asp#3 [2006, September 25].

• Los Angeles Times. (2006). Banned Elsewhere, Compounds Still Used In U.S..

[Online]. Available:

http://www.latimes.com/features/health/medicine/la-me-

dumpingside8oct08,1,5354806.story?colt=la-health-medicine&ctrack=1 &cset=true

[2006, October 9]

• Mattel. (2006). Mattel History.

[Online]. Available:

http://www.mattel.com/about us/history/default.asp?f=true [2006, September 25].

• Mattel. (2006). Corporate Social Responsibility.

[Online]. Available:

http://www.mattel.com/about us/Corp_ Responsibility/default.asp [2006, September

25].

• Mattel. (2006). Governance Guidelines.

[Online]. Available:

http://www.mattel.com/about us/Corp Governance! uicLde_asp [2006, September 25].

• Moore, A. (2006). This season's must-have toys.

21

http://www.mattel.com/about us/history/default.asp?f=true [2006, September 25].

• Mattel. (2006). Corporate Social Responsibility.

[Online]. Available:

http://www.mattel.com/about us/Corp [2006, September

25].

• Mattel. (2006). Governance Guidelines.

[Online].Available:

http://www.mattel .com/about_us/Corp_Governance/ciuide.asp [2006, September 25].

• Moore, A. (2006). This season's must-have toys.

[Online]. Available:

http://www.marketwatch.com/news/sto ry/story.aspx?quid=%7B3210B972-9964-4E09-

BC8C-F0C257686023%7D [2006, October 5].

• MSNBC. (2006). Mattel builds buzz with Elmo makeover.

[Online]. Available:

http://msnbc.msn.com/id/l4853580/ [2006, September 25].

• Pride, W.M., Elliott, G., Rundle-Thiele, S., Waller, D., Paladino, A. & Ferrell, O.C.

(2006). Marketing: core concepts and applications (asia pacific edition). Milton, Qld:

John Wiley & Sons Australia, Ltd.

• Stuff. (2006). Review: Fisher-Price Star-Station.

[Online]. Available:

http://www.stuff.co.nz/stuff/0,2106,3811684al8335,00.html [2006, October 1].

• Wong, G. (2006). 10 most dangerous toys.

[Online]. Available:

http://money.cnn.com/2005/11 /17/news/midcaps/dangerous toys/index.htm [2006,

September 25].

24

Bibliography for Fisher Price

• AdNews. (2006).

[Online]. Available:

http://www.adrews.com.au/ [2006, September 25]

• Canton Rep. (206). Old-fashioned toys still remain popular among toddlers.

[Online]. Available\

[2006, October 4]

• Chatterjee, C. (2006). 'Our Daily Faves.

[Online]. Available:

http://www.parenting.com/parenting/article/0, 1 9840,1 532523_5,00. html [2006,

October 1].

• Chicago SunTimes. (2006). Glad tidings for retailers.

[Online]. Available:

http://www.suntimes.com/business/87788,CST-FlN-retail08.article [2006, October 9]

• CNN Money. (2006). Fisher-Price fined $1. 1M.

[Online]. Available:

http://money.cnn.com/2001/06/07/news/fisherprice /index.htm/ [2006, September 251.

• Fisher Price. (2006).

[Online]. Available:

http://www.fisher-price.com/au/default.asp?donotpup=l [2006, September 25].

• Fisher Price. (2006). About Us.

[Online]. Available:

http://www.fisher-price.com/au/hr/aboutus.asp#3 [2006, September 25].

• Los Angeles Times. (2006). Banned Elsewhere, Compounds Still Used In U.S.

[Online]. Available:

http://www.latimes.com/features/health/medicine/la-me-

dumpingside8oct08,1,5354806.story?coll=la-health-medicine&ctrack=1 &cset=true

[2006, October 9].

• Mattel. (2006). Mattel History.

[Online]. Available:

23

MG1702/MG2702: Written Case & Online Exercise: Assessment Feedback Sheet

I Student Name: Tc 2 - 3 1

35 Marks Poor Fair Average Good Excellent

Content - Case Study> Breadth and depth to answers. Sound

justification (when required). Relevance

Explanation & application of marketingconcepts

Zp> Scope and quality of research

120Content - Online Exercise> Breadth and depth to answers. Sound

Relevancejustification (when required).

> Explanation & application of marketingconcepts

> Scope and quality of research

15Process 15 Marks

Presentation & Layout J> Assignment is professionally presented

> Figures, tables, appendices are neat,accurate & labelled /4

Communication Style

> Sentences & paragraphs are wellconstructed; clear & concise ideas d

â The assignment demonstrates a goodgrasp of the standard writingconventions (i.e. spelling, punctuation,grammar) /4

Referencing

â APA conventions are correctly applied 1when citing sources in text

> The reference list is presentedalphabetically using correct APA syntax /7

TOTAL ASSESSMENT S3 150 Marks _Z!3 5 MARKS

ADDITIONAL COMMENTS