Special Report on American International Toy Fair: Company Profiles: Tiger Electronics: ‘The product is king’

Although toys are the marquee product at the American International Toy Fair, they are really just the focal point of a much larger panorama of marketing strategies, entertainment programs and emerging cultural trends that are on display at the annual event...
February 1, 1998

Although toys are the marquee product at the American International Toy Fair, they are really just the focal point of a much larger panorama of marketing strategies, entertainment programs and emerging cultural trends that are on display at the annual event in New York City. Toy manufacturers are now closely associated with a variety of other industries, from production studios to marketing companies to ad agencies and retailers. As a result, Toy Fair has become a kind of bellwether of upcoming trends and a place where a wide cross-section of people come to shop not just for toys, but also for insights into what’s new and hot.

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Marc Rosenberg, vice president of public relations and promotions for Tiger Electronics, is preparing for his thirteenth Toy Fair.

‘When I started going to Toy Fair, it was a circus atmosphere,’ recalls Rosenberg. ‘It was a week-and-a-half-long party. Now, while there is still a lot of fun, the atmosphere has changed significantly because Toy Fair has become the place for closure for many toy manufacturers.’

So, while many of the major buyers have had a chance to preview new products, Toy Fair is now the time and place where it all comes together for them. Buyers see the new products, where the products are going in relation to line extensions, and all the marketing support, including a first-time screening of new commercials.

These demands have accelerated manufacturers’ planning cycles by as much as six months, says Rosenberg.

‘You now need all the marketing support materials, as well as fully developed products, because buyers expect to be able to interact with the toys. It used to be that you could bring fairly well-developed product, some of it on `life-support systems.’ Now, you need to have completed products because buyers are coming to Toy Fair ready to make their final decisions.’

Buyers’ increased decisiveness at Toy Fair is reflected in their habit, now, of providing manufacturers of offshore product with letters of credit, signed at Toy Fair. The money is usually held in an escrow account until the retailer takes delivery of the product in Hong Kong. This means that deals are now secured at Toy Fair, which forces manufacturers to come to the market better prepared, says Rosenberg.

This change reflects a general trend of caution among retail buyers.

‘Now, you really have to be confident of the product,’ says Rosenberg. ‘You [as a buyer] only order what you’re fairly confident that you’re going to sell. That’s also why we [as sellers] need to be able to show the buyer the product as well as all the marketing, promotional and advertising support that we intend to put behind it.’

(Tiger has a broad range of marketing partners supporting its product lines, including such companies and brands as Nabisco, General Mills, Kentucky Fried Chicken, Oscar Mayer Lunchables, Duracell, SPAGHETTIOs, Coca-Cola Foods, Kraft Jell-o Snacks and media partners Nickelodeon, MTV and Fox Kids Network.)

However, the toy business is still famous for its unpredictability. There is always that potential home run that you can never predict, and therefore, buyers and manufacturers need to be able to react to unforeseen and unexpected new trends.

A perfect example is virtual pets. Tiger’s line of Giga Pets, for example, was by far the company’s biggest product line last year, even though it was only launched in 1997.

Rosenberg says virtual pets are not a brand-new category. Tiger, for one, had introduced its own version of a virtual pet contained in an organizer kit several years ago. But when virtual pets started hitting the Asia-Pacific market in 1996 as stand-alone products, Tiger began paying close attention. By the time virtual pets were ready to launch in the U.S. in 1997, Tiger had prepared itself by applying its expertise in licensing to the category.

When the products hit the U.S. market, Tiger had its own version, which was a series of original products as well as brands attached to licensed properties, such as the T-Rex Giga Pet, derived from The Lost World franchise, and Little Mermaid, based on the Walt Disney movie.

Tiger is an 18-year-old, privately held company based in Vernon Hills, Illinois. It is among the top five toy companies in the U.S., spending up to US$50 million on television advertising alone. The company has around 280 products on the market, including line extensions. (Giga Pets alone have about 30 individual sub-brands.) About 180 of the 280 products are products returning to retail this year.

Rosenberg says Tiger has focused its attention on electronic toys. The company tried its hand at action figures briefly, but abandoned the category. ‘We really know where our strength is,’ says Rosenberg.

Tiger has also zeroed in on a particular demographic-six to 15 years of age-as its prime focus. Yet, while that is its core target, Tiger knows it must appeal in ancillary ways to kids below age six and teens over 15 years.

The ideal product-and the toughest challenge in the toy business, according to Rosenberg-’is to have a toy that a six-year-old can play with a 60-year-old grandfather, and a 12-year-old can play with as well and still think that it’s cool.’

If there is one message Tiger would like to convey in the way it markets itself at Toy Fair, it would be this, says Rosenberg: ‘The product is king.

‘We want anyone coming in to our showroom, whether a buyer or other people who are dealing with trends or media people, to explore our products. We want them to see and learn for themselves.

‘I can usually tell what’s going to be a home run by the end of the Toy Fair week,’ says Rosenberg. ‘People need to be able to experience the product because successful toys have to have a great tactile sense, a great color sense, and a great sense of sound. They really need to be able to draw people in.

‘The most gratifying part of the show is when you see people’s eyes light up. These [buyers] are people who have been, and still are, kids at heart. Yes, they’ve studied toys and they watch trends, but beyond that science, there is something else. There is something very special about these people. When they get together in meetings, there is usually a lot of yelling and a lot of screaming and a lot of laughing. They are definitely not corporate America. Of course, you never really know that a product is going to be a hit until it gets into the hands of the consumer. But these people [buyers] can get you 90 percent of the way there.’

The real key to today’s new relationship between toy manufacturer and retail buyer, according to Rosenberg, is flexibility.

‘Flexibility and the ability to back up a huge success. You need to be able to chase the home runs. When a product takes off, you need to be able to react to the demand so that neither the retailer nor the consumer feels disappointed. The consumer never wants to hear that there is no product supply.

‘That flexibility requires a true sense of team effort, and that team feeling has to extend across the entire company, from the people in accounting to the people in marketing, to engineering, to the warehouse.

‘At Tiger, we have tried to extend that pride of ownership across our entire organization, so that everyone, in every department and in every one of our offices, shares in the sense of wanting to do the best possible job. We try to foster a spirit of collegiality whereby anyone can contribute and no one is so proprietary about an idea that they can’t accept positive ideas and improvements when they come.

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