Market Feasibility Analysis - Toy Industry - Assignment Example

Executive Summary The report looks into the potential of developing an educational toy which looks towards improving the writing and learning skills for students whose native language is not English. The analysis shows that the product will be successful as it is different from other products in the market. The toy industry is growing at a fast rate and it thereby provides an opportunity through which the product can be sold easily. The market shows a high degree of competition but since the product is different from other available in the market it increases the chances of the product being successful. The company has also priced the product in such a manner that they are able to attract all section of the society. This has been matched by the development of product which aims to achieve the different aspect of the marketing mix. Thus, the overall analysis shows that the product will be successful and will be accepted by the people. Table of Contents Introduction 3 Australian Educational Toy Industry 3 Key Success Factor of Educational Toy Industry 5 Target Market 5 Competitor Analysis 8 Targeted Niche Market 9 Product Information 9 Marketing Mix 10 Market Feasibility of the Idea 12 Conclusion 13 References 14 Introduction The success of any business is largely dependent on the innovation and development of new products so that a niche market can be aimed at. Organizations based on the customer needs develop a product which helps to increase the level of satisfaction and increases the chances of being successful in the future. This report looks into manner in which developing an educational toy program will help to improve efficiency in the manner in which services are rendered. This thereby looks into the Australian educational toy industry so that the different aspect which can help the new player to be successful can be identified. Based on the market information the target market for the product is identified so that steps can be taken to attract customers towards the product. The report further looks into the competitor that are working in the market and evaluates the marketing mix so that proposition for the success of the business venture can be identified. This will thereby help to understand whether the business idea of having an educational toy program will be successful or not. Based on the different findings analysis will be developed through which the success of the business venture can be identified. Australian Educational Toy Industry The toy industry is growing at a rapid pace and includes all type of toys. It is estimated that the global toy market is 84 billion US dollars in 2012 (Toy Industry, 2013). Out of the total toy industry the Australian toy industry is around 15 billion dollars and helps to contribute immensely towards the employment opportunity in the country. The toy sector has helped to generate over 250 thousand jobs and is constantly growing at a rapid pace. Australia is seen as one of the major markets where toys are imported from other countries. The majority of the toys is imported from China and contributes immensely towards the toy industry in Australia. The toy market is dominated by players like Hasbro, Mattel, JAKKS Pacific, LEGO, and Namco Bandai to name a few. This shows that the demand for toys is immense and looks towards providing customers both with the fun of playing with the toys and also an opportunity to learn new things. A breakdown of the spending pattern towards educational toys in Australia shows that on an average $401 was spent per child in 2009 which increased to $486 in 2010 showing that the demand for toys is increasing continuously. The increase in the spending pattern presents an opportunity where development of new products which will help to improve the learning style is greatly demanded (Brassington and Pettitt, 2001). This has been aided by the development of products which even look to attract grown up as they provide an opportunity through which the learning style develops and helps to provide the fun of toys. The future trend greatly shows an increase in the demand for toys which can be used for educational purpose and developing better tools which facilitates those will be helpful. This provides an opportunity for the existing and new players to develop products which will increase the experience of learning and will thereby greatly contribute towards the long term success of the organization. This shows that players who are innovative and look to develop new products through which they are able to target the niche market will be able to bring the required efficiency in the system. This will thereby ensure that the different opportunities which is present in the market can be used to tap the niche market and ensure growth for the future. Key Success Factor of Educational Toy Industry The success of the educational toy industry has been attributed to different factors which has led to the success of the industry and provides a future direction based on which the different players can be successful. The different driving forces and the key success factors which has led to the success of the educational toy industry is as follows The increase in the demand for educational toys as the change in consumer perception has made the society to look towards toys which is educative. This has increased the rate of penetration and has made more and more people to look towards educational toys (Coughlan, Stern & Adl Ansary, 2006) The availability of different type of educational toys meeting the needs of the different section of society has helped to increase its demand. This has been aided by the fact that the toys which are available in the market helps to meet the needs of different individuals which has thereby ensured that the demand for educational toys increases (Coughlan, Stern & Adl Ansary, 2006). The toys which are available in the market are priced differently which has thereby ensured that all section of the society can be captured. This has thereby enabled to provide a scope through which the educational toy industry is able to sell products to different section of the society (Coughlan, Stern & Adl Ansary, 2006) Target Market The company looks to target customers based on the products they are looking to sell in the market. Since, the company looks to sell educational toys which will help to improve the reading and writing skills of ESL students this will thereby ensure that they target a niche market. The target audience has been determined based on different factors which contributes towards identifying the target market. The product which the company looks to offer will attract customers who want to improve the reading and writing skills and is different from the traditional educational toys which are available will thereby help to ensure that the targeted market is properly determined. The target market which has thereby been identified for the products are as Individual Customers: The product will be directly catered towards direct purchaser who looks to purchase educational toy to improve the reading and writing skills so that they are able to develop their skills. Since, the company looks to sell products like Quicksmart which will tap a niche market so the target audience has been decided as English learning students. The product has its differentiation from others in the market and aims to maximize the satisfaction level of customers by improving their experince and ensuring that the students are able to improve their learning skills and learn English faster (Coughlan, Stern & Adl Ansary, 2006) Wholesale Purchaser: The organization also looks to sell the products directly to the wholeseller from where the products will sold to the end user. This will help the organization to penetrate deeper as the already existing network will ensure that the products are directly sold to a large number of customers. The mechanism of selling products to the wholesellers will help to understand the needs of the customers better and will help to maximize the chances of being successful The organization looks to use both the method to reach the end customers i.e. directly selling the products to the end users are students who look to purchase the product for improving their Ensglis skills by directly selling to the customers through their websites or through the availability in stores (Chew, Cheng & Petrovic-Lazarevi, 2006). In addition to it the organization also looks to use the traditional method where they look to sell the products to the whole sellers through which the goods will be sold to the final customers through the different retail players. The organization has preferred to use both the methods as it will help to keep the cost low and ensure that maximum number of customers is reached with the product. This will help to ensure that the correct targeted customers can be aimed at and will help at improving the chances of being successful (Chew, Cheng & Petrovic-Lazarevi, 2006). This will also ensure that the organization is able to differentiate their services and target a niche market which will multiply their opportunity to be successful in the future. The market for educational toys has further been divided based on different market segment and is as Individuals: This segment consist of individual customers who are looking to purchase the educational toy so that it helps to improve the English learning skills and will be aimed at people who are weak in English (Chew, Cheng & Petrovic-Lazarevi, 2006). Since, Australia looks to attract a large number of people for studying purpose so looking to tap individual customers who are looking for education products which will help them to learn English. Businesses: This segment consist of business group who are looking to purchase the educational toy so that they can sell the products to other players from whom the products will be sold to the final customers. Since, Australia looks to attract a large number of people for studying purpose so looking to tap individual customers through business groups will be easy and will provide an opportunity through which better market penetration takes place and customers are attracted towards the product. Competitor Analysis The educational toy industry is highly competitive due to the present of different players who look to supply educational tool and is aimed at attracting customers towards their products. The toy market is dominated by players like Hasbro, Mattel, JAKKS Pacific, LEGO, and Namco Bandai along with other players. The fact that the market is highly competitive and each company looks to differentiate their products from others has intensified the degree of competition. Hasbro, Mattel, JAKKS Pacific, LEGO, and Namco Bandai has ensured that the products which are offered by them works on the fundamentals of key success factors which has thereby helped to ensure that they are able to grow. All the competitors have ensured that the products offered by them are according to the customer requirements which have ensured their success. In addition to it the products which are offered are priced in such a manner that they are able to attract all section of the society (Czinkota & Ronkainen, 2004). This has provided the required framework through which the different players in the market are able to increase their reach and ensure that the products are available at all locations. The products which different players like Hasbro, Mattel, JAKKS Pacific, LEGO, and Namco Bandai offer in the market is educative and is different from the one which the organization looks to offer. This will thereby act as a differentiating factors as most of the products which is supplied by Hasbro, Mattel, JAKKS Pacific, LEGO, and Namco Bandai are aimed at children. The new product which the organization is looking to offer will be aimed at students who want to improve their English learning skills and will thereby focus on a different section of the customers. This will act as a differentiating factor and will help to reduce the level of competition. Targeted Niche Market The organization looks to target a very small niche market where they look to attract students who want to improve their English learning skills. The organizations look towards targeting around 20% of the market. The chances of being successful is high as the product is differentiated from others in the market and looks to bring a complete transformation in a particular section of the society. Product Information The organization looks to sell a differentiated product which will help them to ensure that the product is different from the competitors. The company looks to sell products like Quicksmart which will tap a niche market so the target audience has been decided as English learning students. The product which the company looks to sell to the niche market is a tool which will help to facilitate the learning style and ensure that students are learning English are able to develop their skills faster (Chrisan, 2001). The organization also looks to sell educational toys which are totally different from others in the market. The customers will thereby be greatly benefitted from the product as it will help to provide different benefits as on the first instance it will help the students to learn English which will include both reading and writing skills. This will thereby ensure development of the skills of the students and will provide a platform through which the person will be able to understand the language better (Alvarez & Casielles, 2005). The educational toy will further provide complete instruction regarding the manner in which it has to be used. This will help the user to ensure that the user will be able to understand the product and the manner it has to be used. This will thereby develop the required framework through which the user will be able to use the product efficiently. Further, the product will have designated passwords so that person who has bought the product can use it and will reduce the chances of others using the same. The product will also provide the required warranty which will ensure that the product that has been purchased by the user ensure authenticity. The color of the product has been further chosen in such a manner that it ensures maximum pleasure as the customers and provides satisfaction to the eye. This will help to improve the overall effectiveness of the product and will thereby help to multiply the effectiveness for the user. Thus, the overall product has been developed in such a manner that it ensures maximum customer satisfaction and multiplies the fun for the user and provides educational learning as well. Marketing Mix Apart from the product mix which has been discussed above the other aspect of marketing mix are as Price: The organization has priced the products differently. The company looks towards a pricing mechanism where the students purchasing different level of the entire toys have to pay accordingly. For example if a person purchases 2 levels then the price will be charged accordingly and if the user purchases 3 levels then the price that will be charged will be such. The pricing which has been determined has been developed to ensure that margins are not very high as it is a differentiating product (Bateman & Snell, 2004). The company has ensured that the profits are not very high and the company looks towards increased penetration with the product. Keeping the price within affordable limits will help to ensure that students can afford the product and will be thereby ensure that the chances of the products being successful are high. Promotion: The organization also looks to spread awareness about the product by developing marketing strategies which will help to ensure that awareness about the product is created. The organization will look to advertise about the product and will contact different institutes and universities so that they are able to spread knowledge about the product. This will help the organization to reach different people. In addition to it the organization further looks towards having a mechanism through which the website will provide the required information about the product and help to improve awareness about the product (Awni, 2008). This strategy will also help to ensure that the organization is able to sell the products directly to the customers and will thereby ensure that the overall growth of the organization increases. Distribution: The organization has identified a mechanism through which the products will be distributed to the customers. The product will be directly catered towards direct purchaser who looks to purchase educational toy to improve the reading and writing skills so that they are able to develop their skills. Since, the company looks to sell products like Quicksmart which will tap a niche market so the target audience has been decided as English learning students. The product has its differentiation from others in the market and aims to maximize the satisfaction level of customers by improving their experience and ensuring that the students are able to improve their learning skills and learn English faster. The organization also looks to sell the products directly to the whole sellers from where the products will sold to the end user (Berkman & Gilson, 2001). This will help the organization to penetrate deeper as the already existing network will ensure that the products are directly sold to a large number of customers. The mechanism of selling products to the wholeselles will help to understand the needs of the customers better and will help to maximize the chances of being successful Market Feasibility of the Idea The market feasibility of developing a product, Quicksmart will tap a niche market so the target audience has been decided as English learning students. The chances of the product being successful are high as there is an increase demand of products which will facilitate students to learn English. This increases the chances of the product being successful and increases the chances of the idea being successful. Conclusion This report shows the manner in which developing an educational toy program will help to improve efficiency in the manner in which services are rendered. The Australian educational toy industry is growing rapidly and having a product which helps people to read and write English will be successful. Based on the market information the target market for the product is identified so that steps can be taken to attract customers towards the product. The competitor also look to work on the same business fundamental but has a differentiating factor which will help to ensure that the product becomes successful. This will thereby help to understand whether the business idea of having an educational toy program will be successful or not. Based on the different findings analysis will be developed through which the success of the business venture can be identified References Awni, R. (2008). Strategic position indicating. Translated by SeyedAmir Poya seyfzadeh, Management Selected Monthly, no.78, p.70. Alvarez, B. & Casielles, R. (2005). Consumer evaluations of sales promotion: the effect on brand choice, European Journal of Marketing, 39 (1/2), pp. 54-70. Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassington, J. and Pettitt, M. (2001). Principles of Marketing, 2nd Edition, Prentice Hall Bateman, T. & Snell, S. (2004). Management: The New Competitive Landscape. 6th Edition, McGraw Hill, New York Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Czinkota, M.R. & Ronkainen, I. A. (2004). International Marketing, 7th edn. South-WesternPublishing:Australia. Cateora, P.R. & Mary, C. G. & Graham, J.L. (2009). International Marketing, 14th edn. Irwin: McGraw-Hill. Chew, M.M.M., Cheng, J.S.L. & S. Petrovic-Lazarevic, (2006). Managers’ Role in Implementing Organizational Change, Journal of Global Business and Technology, Vol. 2, No. 1 Coughlan, A., Stern, W. & Adl Ansary, E. (2006). Marketing Channels, 7e, ISBN 9780131913462 ISBN 10:0131913468 , Pearson Education Toy Industry. (2013). Statistics & Facts of Toy Industry. Retrieved on April 20, 2013 from http://www.statista.com/topics/1108/toy-industry/#chapter1 Read More