MATTEL TOYS Made in China

Case Study Analysis

MATTEL
Worlds

leading manufacturer in toys. Headquarters- El Segundo, California , USA. Sales revenue : $ 5.65 billion (2006) Presence: 150 countries Major market US with 50-55% of revenue. 100 registered brands (incl. Barbie, hot wheels etc.) Number of units sold: more than 800 m/yr

Mattel products
Outsource

production to Asia. Wholly owned, tightly controlled factories in China, Indonesia, Thailand and Mexico. High quality High safety standards Huge product line

Mattel in china
Since

2007 Manufacturing and subcontracting.

65%

of Mattel toys made in China

Production units. principal contract manufacturer.

37

Corporate social responsibility

The

true goal behind these Corporate Social Responsibility (CSR) campaigns is to improve the image of the company. A recent study by the Natural Marketing Institute (NMI), almost 90% of the U.S. population state that it is important for companies to not just be profitable, but to be mindful of their impact on the environment and society.

Corporate social responsibility

Societal

Marketing Concept Good working condition for the workers. Importance given to Product safety. Supplies & Raw materiel is checked in contractors factory. Mattel again test them on receiving the product from the contractors. Separate test facility for this in Shenzhen.

Lee der industrial company

cheung

Shu-hung and Xie Yu-guang founded in Foshan city, Guangdong province, China. 1993 exclusive contract supplier to Mattel.

From

In

2007 2500 workers in 3 plants. Annual sales 26 millions.

Problems in china

Like the CPSC(Consumer Product Safety commission) in USA , the Chinese government didnt have an effective enforcement system to check the quality of the products manufactured in China Due to the huge competition in the Chinese markets for foreign contracts, contractors resort to reducing the quality of the products The bad perception of Chinese toys in USA and Europe

Product recalls
During

the year 2000-06, nearly 30-43% of the products in US were recalled due to different reasons(safety , design , hazard materials) People loose faith in the company. From 1991- 2006, Mattel total of 6 product, which cost the company a loss of appox. $107 million.

Companies problems to product recall

Mass

communication to the public Reverse distribution logistics Writing-off the value of the defective goods Paying compensation to the customers Affects the reputation of the Company

Problem with Lee Der

In

2007, Fisher toy made by Lee Der was recalled Due to lead content in the paint. Recall of 1million shipped to US and half million to Europe. Dongxing New Energy Co. regular supplier of paint to Lee Der. Shortage of yellow paint made them to borrow from a third party through internet. This had lead content higher than the standard mentioned by CPSC.

What happened?
Mattel

stopped accepting any shipment from Lee

Der. Lee Der left with $16 million of toys. On 9th August, Chinas Administration of quality banned Lee Der from exporting. Evacuated one factory to sell equipment raise cash. Cheung Shu-hung committed suicide on 13th August 2007.

Importance of CSR
CSR

is very important if the company wishes to go Globally. Building up the image of the company is very important in this age of social marketing Example sweatshop condition in Indonesian factory of PUMA and Chinese factory of NIKE These created a bad image of the company. And they immediately address the problem to loose image

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