This paper examines how Mattel Corporation can use targeted market research strategies to assess and recover from the brand damage caused by its 2007 lead paint toy recall, which affected approximately 9 million products. Following the recall and Mattel's public apology to both American consumers and the Chinese government, the company faced an urgent need to gauge consumer trust before the critical holiday selling season. The paper recommends a coordinated approach involving perceptual audits using multidimensional scaling, Voice of the Customer programs to re-engage consumers and channel partners, and an upgraded Partner Relationship Management system to track the financial and relational impact of the crisis across distribution channels.
Throughout August and September 2007, Mattel Corporation disclosed that its manufacturing partner in mainland China had used lead-based paint in the production of Fisher-Price toys, as well as toys from several other brands (Associated Press, 2007). Chinese manufacturers countered that it was Mattel's own lack of safety and quality standards with suppliers that set the stage for lead paint being procured from unreliable and unqualified third-party suppliers. As a result, Mattel apologized to both the Chinese government and American consumers, with extensive media coverage of both events (Thottam, 2007).
With 9 million toys recalled within two months and the reputation of their brand in jeopardy, Mattel must develop and execute a market research campaign to understand the extent of the damage done to their reputation. The recalls came just before the beginning of the most profitable selling season of the year — the year-end holidays. This paper covers the specific market research strategies the company can use to assess how extensive the damage to their brand has been, and what specific steps they can take to overcome the challenges faced.
The perceptions of customers globally have been permanently changed, and it is up to Mattel to determine the extent to which those perceptions of quality and safety will impact the sales of their products throughout the remainder of 2007. It is also critical for Mattel to complete a unit forecast of its toy lines not involved in the recall, and to create marketing strategies for those unaffected products as well. The PR challenges for Mattel are daunting, and the use of market research to define the scope of those challenges is critical for the company to achieve sales during the holiday selling season.
Mattel faces an uphill battle in winning back the trust of consumers who had previously been very loyal, active purchasers of their products. The challenge is to retain these most loyal customers while demonstrating to other potential customers that the company is trustworthy. The market research strategy must therefore focus on measuring the current perception of Mattel following the recalls, and on measuring the level of credibility generated by the apologies. These two points are critical for the company to firmly understand before making any further decisions.
In addition to these two perceptual elements from their customer base and prospects, Mattel also needs to assess the extent to which the recalls have impacted sales. Furthermore, Mattel must obtain feedback from its dealers and distributors regarding how the recall is affecting them, both from a supply chain and a financial standpoint. Market research can provide insights into all of these specific areas, and the following sections provide recommendations for addressing these issues and reversing the decline in sales.
Most critical for Mattel's success going forward is the development of perceptual audits to measure how much damage has been caused by the product recalls and the eventual admission that Mattel's supplier management strategies lacked adequate quality control measures and standards. The use of web-based surveys sent to each customer segment — incorporating attitudinally-based questionnaires that can be analyzed within the context of perceptual maps — is a critical first step in understanding how much trust Mattel has lost as a result of the quality problems in China.
Using a Likert scale to organize the response options for each question on the questionnaire, with a concentration on interval-level measures between each value, ensures that the data is robust enough to draw meaningful conclusions from and that distances are accurate once plotted onto a perceptual map. The use of multidimensional scaling as a measurement technique for attitudinally based questions could then be processed through SPSS to produce both correlation matrices and a perceptual map. This map would show the idealized point of trust for all toy brands, the point at which Mattel encountered its quality problems in China, and the position following the global apology.
The decline in trust will most likely be quite significant, given that Mattel initially allowed the Chinese manufacturers to shoulder blame on a global scale. This further undermined consumer trust worldwide. Figure 1 shows an example of how a perceptual map is constructed (Vivalogo, 2007).
Figure 1: Example of a perceptual map showing idealized points (Source: Vivalogo, 2007)
"Re-engaging consumers and channel partners"
"PRM system to track channel financial impact"
"Four prioritized action steps for Mattel"
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