Mattel’s China Experience: a Crisis in Toyland
Mattel is a high profile company and the world's largest toy company with its leading toy brands falling under the Mattel Girls & Boys, American Girl and Fisher Price groups. Established in 1944, the company has grown tremendously and, for a long time now, has been the best performing company in terms of revenue among toy manufactures. The success can be attributed to Mattel's commitment in production of a wide variety of high quality and modern toys evolving according to the trends. However, the company's success story has not been without setbacks, and one of the major crises Mattel had to deal with was the recall of more than 18.6 million toys manufactured in China.
The motivation behind the voluntary recall was inconsistency in production requirements since about 463,000 die-cast "sarge" toys were found to contain more than the allowed amount of lead in the paint used in their finishing. Mattel's vice president, Tom Debrowski, blamed the issue on a subcontractor who was tasked with the decorating parts of the Sarge toys. The vendor substituted the specified paint without alerting Mattel about the change. It is known that Mattel's rule of thumb is to produce safe, cost-friendly and fun toys but this case puts its safety assurance policy into question. With increasing global awareness regarding the environment and health, the usage of lead has been prohibited in many industries including its use in children playthings.
Concerning the remaining batch of the recalled toys, Mattel cited a fault which was inclusion of small magnets that could loosen with time. The United States Consumer Products Safety Commission reported that Mattel got information concerning magnets getting loose from the mentioned toys. Research shows that ingestion of small magnetic components and their movement within the human body can cause choking or intestinal perforation. The two cases have generated a public outcry from consumers threatening to boycott Mattel's products due to rising worries on safety. This shows that the company realizes that the global market is well aware of the problems lead and ingested magnetic objects can cause. However, keen to protect its reputation and restore client confidence, the company explains that the recall was done to protect its customers from further damage or risk. In addition, the company promised to deal with the paint problem and redesign the toys affected by the loose magnets fault (Ogando, 2007).
The company's vice president announced that they had developed a new fix to enhance magnet retention in their toys. The mere fact of Debrowski making a public apology on behalf of the company to China, China's quality overseer and all the customers that got the defected toys shows that Mattel was concerned about the possibility of losing its market.
Mattel has acknowledged decline in its stock price to the tune of $40 million due to the recalls. However, the situation has since improved for the company that occupies markets in over 150 countries. This would not have been accomplished without proper management of its marketing strategies. When it comes to product marketing, Mattel is a world-wide leader. 80 percent of its product offerings is directed to the global market and only 20 percent is directed to the individual country audiences. Its best-selling brands include Barbie, American Girl, Fisher Price as well as Hot Wheels worldwide.
The company has a culture of launching its product on a global scale. For instance, when the company introduced Rapunza Barbie, it was launched on the same day via television advertisement in 35 languages within 59 nations.
Diversity has been and will continue to be Mattel's key to global market expansion. Starting with the basics, the company ensures that its employees come from diverse backgrounds in terms of gender, ethnicity, race and religion. This provides a wide array in experience, intellect, perspectives and ideas that enhances the company's ability to meet the customers' dynamic tastes. For example, Mattel has a position of the head of diversity in its structure that was deliberately created to expand the company's global marketing plan. The company put it that it foresees a growth in sales outside the United States to a point that they exceed the local sales in the next four years. The company also attributes its success to consistent invention of its brands to fit the market's evolving needs and keep the brand's promise.