Assignment on

Analysis of Imaginarium case

Submitted By: Sweta Patel (094255) Submitted To: Prof. Rajnish Jain

MBA FB&E - 2(B)

Background of the Case:

Mr. Felix Tena, after completing Business Administration from Spain continued his studies in US.
On his return to Spain he launched Publijuego, a business in educational toy sector. He had
partnership with Italian partners which didnt worked well. He was a majority shareholder and
president of Step Two, S.A., a company with headquarters in Zaragoza that owned and operated
Imaginarium. Because of intense competition from mass merchandisers, Mr. Tena came out with
an idea of stocking those toys that impart educational value among childrens and named it as
Imaginarium.

Business Concept:

On November 1992, Tena started first Imaginarium retail outlet in Zaragozas old town district as a
pilot store. It included full details of lighting, shelving, size and distribution of retail store, range of
toys offered and so on.

Mission:

IMAGINARIUM is about making a joyful contribution to the human development of boys and girls
throughout the world.

Target Market:

The store had toys for children aged between birth till eight or nine years old, with activity areas
like preschool, games, music and theatre, dolls etc. Toys were available at different prices.

Procurement and Supply Strategy:

Toys were bought from other manufacturers initially after a careful selection. He attended
specialized international toy trade shows. He used contacts for good quality toys procurement.
Stocking was done automatically and not by the orders placed by store managers. Imaginarium
had 110 different suppliers.

Growth Strategy:

For increasing number of retail stores he identified that design details and operating procedure
needs to be standardized.
In 1993, he decided to franchise the store, where in all the decisions regarding logistics,
operations etc was to be made by company headquarters. Further he opened two stores in
Madrid and two in Barcelona with an investment of about euro 90,000 for each store.

In 1994, Imaginarium has seven new toy stores, five owned and two franchised. People
themselves came to take the franchise of the store based on the reputation the store has earned.

In 1996, two entrepreneurs one from Colombia and another from Portugal requested for master
franchise. Tena first gave priority to southern Europe and opened ten stores in France, out of
which nine were owned and another franchised. In Italy he had four stores, of which only one was
franchised. Second priority was given to Latin America and had master franchise agreements with
entrepreneurs and had five stores in Colombia, five in Venezuela, two in Dominican Republic, one
in Mexico, one in El Salvador and two in Argentina.

Product Department Strategy:

The age of target market was taken in to consideration for the toys to stock that were not racist or
violent and imparts educational value. Toys sent by toy manufacturers as samples were stored in
sample file shelves. They developed and launched two toy collections per year, in spring-summer
and in fall-winter made up of 1200 SKUs each.

Operations and Logistics Strategy:

Stores were set up at premium locations without storeroom so all products were displayed on the
sales floor. Orders are first sent to central warehouse from where it is dispatched and most
Imaginarium stores were staffed between 8:30 am to 10:30 am. Automatic sales records are
maintained for placing order for each store. Resupply to stores in France or Italy was done every
2-3 days and in Latin America full container load was sent.

Marketing Strategy:

It had limited media advertising with such a powerful business concept. In 2000 they were
considering internet with the goal of promoting its multichannel sales. In spite of a fear of
negative effect coming from franchised store owners Tena insisted on internet sales.

Differentiating Factor:

Data card was given to attendants and customers that provided information regarding the
use of toys, recommended child age, child development with the use of toy etc.

Shop attendants were called as juegologas i.e. toy expert, who gave advice to the parents
regarding suitable toy for the child. They were hired on the basis of policies and were given
training. They were qualified personnel who were graduates.
 Certain Imaginarium toys were such that could not be seen in any other shop than this,
which were made with special specifications given, with its own trademark and packaging
to get an exclusivity in what the store offers to its customers, to attract them.

Club Imaginarium was created whose main purpose is to maintain guest database and the
members are identified when they went to Imaginarium store in response to an invitation.
It also offered a birthday gift to its members or free copy of new seasonal toy catalogue or
a coded coupon.

Answers to the Questions:

Business can be expanded on the basis of the adaptability of the target market. New
markets should be target starting with those that have similar culture, habit, likings, etc as
those of the home country.

Stores should be located in the heart of any city.

Till the economic and political situations are favourable of any place owned stores can be
opened.

Master franchise is a better option than individual as a strict and standardized control from
a centre point can be maintained whereas the same cannot be maintained where a single
individual can act in his/her own favour.

Until the market is not saturated in the ten countries the company should further try to
penetrate in the same countries.

Internet can play a major role in imparting knowledge regarding the company and its
product to the customers and also can help in tapping the untapped market.

Better relations with members of club Imaginarium can be maintained by continuously

guiding and providing them information regarding various small and big events and
providing them more attractive incentives for being loyal.