Exercise - Scanning the Marketing Environment (12)

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Feb 20, 2024

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Exercise - Scanning the Marketing Environment Case Brief Since the 1940’s, this toy manufacturer (Quantum Toys) had built a reputation for high quality toys. Mainly they produced train sets, chemistry sets, and construction sets. Their customers saw their brand as providing great long-term value. While they were very expensive toys, consumers knew that they would last a long time. The toy manufacturer was a family owned business, with the son of the founder taking over in the early 1960’s. This was a difficult time for the toy business, as society was going through significant changes – in particular, there was a shift in lifestyle (from the ‘conservative 50’s’ to the ‘swinging 60’s’). This lifestyle change was reflected in the preference for toys. For instance, Barbie and Action Man were launched, as well as racing car sets becoming available for the first time. Advertising for toys also became more aggressive and more directly targeted at children (with TV viewing dramatically increasing over the previous decade). And there was also a shift in the retailing of toys – away from small independent toy stores and towards large (and lower-priced) discount stores. (Note: These stores were primarily interested in toys with a fast turnover.) As a consequence, at Christmas, instead of parents buying their children ONE special present, they started buying them lots of lower-priced presents. Therefore, it should have been no surprise when Quantum Toy’s sales revenue started to fall during this time (as their toys were primarily higher-priced toys). Questions 1. What were Quantum Toys’ competitive advantages (initially) in the marketplace (that is, what were they good at)? 1. They built high quality toys. 2. Speciality in products 3. Longlasting and durable products 4. Brand image and reputation(goodwill) Chapter 3 Scanning the Marketing Environment Page 1 of 2
2. Complete an environmental scan for Quantum Toys using the table below. Identify three Environmental forces you believe are most relevant based on the case. Environmental Force Explanation or Supporting Facts from Case Opportunity or Threat & Why? Changing in Lifestyle As society was going through significant changes – in particular, there was a shift in lifestyle (from the ‘conservative 50’s’ to the ‘swinging 60’s’). This lifestyle change was reflected in the preference for toys. For instance, Barbie and Action Man were launched, as well as racing car sets becoming available for the first time. Threat : The shift in lifestyle and also towards toys like Barbie and Action Man , racing cars poses a risk to Quantum Toys, which focuses on traditional specialty toys. Aggressive advertising and retailing of toys Advertising for toys also became more aggressive and more directly targeted at children . And there was also a shift in the retailing of toys – away from small independent toy stores and towards large (and lower-priced) discount stores. Threat: Aggressive advertising and the shift to lowered priced stores create challenges for Quantum Toys. Changes in consumer buyings Parents started buying lots of lower-priced presents, , instead of buying their children ONE special present Threat: The changes in consumer buyings, with parents opting for several low-priced toys, poses danger to Quantum Toys. Their premium pricing strategy might not fit in the low priced presents market. Chapter 3 Scanning the Marketing Environment Page 2 of 2
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