JAKKS Pacific Competition
Now Viewing JAKKS Pacific's competition in: Toy Manufacture (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company’s main customers? - Typical customers include major toy retailers, mass merchandisers, specialty toy stores, department stores, warehouse clubs, food and drug stores, wholesalers, distributors, and Internet retailers.
Who is the company’s target market? - Children 5 and under are responsible for about half of retail toy sales, according to the Toy Industry Association (TIA).
What types of marketing and promotion are the most effective for the company? - Marketing and promotional vehicles include TV, magazine, radio, and newspaper advertising, and in-store displays.
What are the company’s most important brands? - Brand names, like Barbie, Hot Wheels, and LEGO, are extremely important.
What are some of the company’s most successful promotions? - Promotions include sweepstakes and joint events with companies with complementary products.
What type of sales force does the company use? - Most large companies use a direct sales force, while small companies may use manufacturer representative firms.
How important is licensing to the company? - Licensing allows companies to leverage the popularity of developed characters, like Winnie-the-Pooh and Batman. Companies may also license in-house characters to other companies.
What is the company’s Internet strategy? - Companies may use the Internet for retail operations or to offer specialty or limited edition products, accessories, or replacement parts.
What is the average price of the company’s toys? - Branded toys (like Barbie and Hot Wheels) typically retail for under $10, media-licensed toys for under $8, and all other toys for just over $5, according to NPD Group.
Competitive Landscape
Growth in the population of children age 12 and younger drives demand. The profitability of individual companies depends on identifying market trends and marketing effectively. Large companies can offer a wide selection of toys, and have scale advantages in purchasing, manufacturing, distributing, selling, and marketing. Small companies compete effectively by specializing in a product segment, such as educational toys, or responding faster to market trends. The industry is labor-intensive: average annual revenue per US worker is $220,000.
Business Challenges
CRITICAL ISSUES
Reliance on Foreign Manufacture - Companies depend greatly on Chinese contract manufacturers, which produce the majority of the world’s toys. Imports are almost 95 percent of the US doll and stuffed toy market, and almost 80 percent of the toy, game, and children’s vehicle market. China’s low labor costs have driven decreases in the number of US doll and stuffed toy manufacturers, and in total US toy manufacturing employment. Reliance on foreign manufacture exposes companies to political, economic, foreign exchange, and shipping risks.
Competition from Electronic Entertainment - As part of the phenomenon “Kids Getting Older Younger,” children are maturing faster and switching from traditional toys to consumer electronics and video games. Between 2005 and 2006, ownership of digital cameras and MP3 players among children under 14 doubled and ownership of cell phones increased 50 percent, according to NPD Group. Toy manufacturers also compete with the increasing time children spend watching TV and using the Internet.
Industries Where JAKKS Pacific Competes
- Consumer Products Manufacturers
- Toys & Games(primary)
- Pet Products
