Fisher Price Case Study

1890 Words8 Pages
I. Problem Fisher-Price is planning to launch a new riding toy, the ATV Explorer. The retail price was originally set at $12. With further investigation into the types of molding, additional costs were revealed, increasing the retail price from $12 to $18.50. This new pricing model for the Explorer is much higher than the usual moderate pricing that Fisher-Price has set in the past, typically pricing below $5 for product lines. Will customers still buy the Explorer at a higher price? II. Situational Analysis Strengths: • The ATV Explorer is a top quality riding toy that is stylish, safe, durable, and educational. • While testing the ATV prototype in nursery schools, the toy commanded 20-min attention span of youngsters and a high level of repeat usage from kids 2-5yrs. • The ATV prototype has been receiving remarkable acceptance from trade and parents. • F-P has a strong brand reputation, 64.7% of people said Fisher-Price was the best-known brand for preschool toys. • Fisher-Price’s product line has received strong acceptance; 82.7% of customers buy Fisher-Price brand preschool toys, and 60.5% buy just one brand most often. • 66% of Fisher-Price’s sales are from items priced $5 and up. • Fisher-Price has had previous success with higher priced items (Creative Coaster: $6.95 retail, Family Farm: $13 retail, and Play House:$14 retail). Weaknesses: • Initial costs of the ATV Explorer toy are to be considerably higher than expected (primarily due to the additional investment in the mold and special tooling costs increasing). • It is believed by some that a moon-themed toy may be outdated. • The launch of a previous high priced item, the Fisher-Price Circus, was a complete failure ($13.95 retail) • The number of children 6 and under is decreasing in the upcoming years. Opportunities: • Fisher-Price planned advertising budget for 1970 has
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