Mattel Company: Company Performance and Key Reasons for the Failure

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Table of Contents

Introduction
Success or Failure
Changes Made to Firm’s Original Foreign Expansion Plan
Alternative Approaches
Response of Other Companies
Conclusion
Works Cited

Introduction

The market of Barbie dolls in China was subjected to unique development rules, and Mattel Company faced unique challenges associated with the proper promotion and sales of this product. The reasons for failure were numerous, and the paper aims to analyze the company’s performance, as well as analyze the key reasons for its failure.

Success or Failure

As it is stated in the project description, the company had to close all its departments in China in two years after presenting Barbie in China. Even though this doll is of great popularity all over the world and it is regarded as the pattern of style and fashion. Even regardless of its western view, it did not distract the Chinese target audience. The key failure factor was the demographic policy help by the Chinese government, as well as the low average income that made the price for the doll comparatively high.

Changes Made to Firm’s Original Foreign Expansion Plan

The changes that the company had to perform in their expansion plan were mainly associated with the cultural background of the audience, as well as the marketing situation. The cultural differences of the Chinese audience are closely linked with the demographic and economic state of the population. The company had to adapt to the business climate of China. As it is stated by Gupta and Wang (2):

It is impossible to win in China by either complete localization or zero localization. The trick lies in figuring out the right blend between localization and incorporating global concepts and standards. Companies can significantly increase the odds of success, however, by starting with simpler products and services, engaging in lots of rapid and low-cost localization experiments, and adding complexity to their business models as they learn from these experiments.

Alternative Approaches

By the research by Stone and McCall (56), the only solution possible for penetrating the Chinese market is to implement reasonable fragmentation of the efforts. Because this country is very fragmented, and the density of its population differs, it will be reasonable to focus on the most highly populated regions and cities. This would create the optimal balance for the commercial costs, and effectiveness of sales. Additionally, the adaptive strategy would be the only solution, especially for the company that had to break through the different cultural traditions that created new marketing background. Hence, as Oyedijo et.al. (69) emphasized:

When Wal-Mart entered China in 1996, it experimented with different store formats to figure out which would have the greatest customer appeal. Similar experiments regarding target customer segments and merchandise mix played a useful role in helping Wal-Mart reduce the risk of failure as it rolled out store expansion and ramped up investment.

Response of Other Companies

Because Barbie is more well known all over the world in comparison with HelloKitty, and Yue-SaiWaWa doll collections, the other companies had to improve their advertisement efforts, as well as apply more efforts for promoting their collections. This was the necessary step for increasing the competitive advantage for these goods, as well as attracting the attention of the target audience.

Conclusion

The marketing strategy performed by Mattel Company for promoting Barbie dolls collection in China had to be adapted for the realities of the Chinese marketing background. The changes that were performed are based on cultural, demographic, and business differences.

Works Cited

Gupta, Anil. Hayan Wang. Why Barbie Flopped in Shanghai. Bloomberg Business Week. 2011.

Oyedijo, Ade, Olawale Ibrahim Olateju, Mustapha Abiodun Okunnu, and Oludare Tolulope Adeyemi. “Impact of Size, Industry Structure and Strategy on Marketing Challenges of Globalization.” Global Business and Management Research: An International Journal 2.1 (2010): 69.

Stone, Marilyn A., and J. B. McCall. International Strategic Marketing: A[n] European Perspective. London: Routledge, 2004.

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