Toys R Us Case Study SOLUTIONS/ANSWERS
Toys ‘R’ Us is the world’s largest supplier of toys, with over 1,000 chain stores around the world. It stocks toys that are based on all the latest and classic trends, such as Barbie dolls, and Star Wars and Disney characters. The toy industry is a massive business. CNN reported in late 2006 that Americans spend over $221 billion a year on toys – and that’s just the figure for children aged between 8 and 12 years (known as preteens or ‘tweens’). Toy manufacturers are often keen to investigate the television programs and movies watched by children and the magazines that they read.
Explain why Toys ‘R’ Us might be interested in the television programs or magazines viewed by children. (4 marks)
Toys R Us might be interested in the television programs or magazines viewed by children because they know it will help promote their products into a wider market and more effectively because it directly promotes to their target customers (children). By researching about these television programs and magazines viewed the most by the children, the business will be able to also save money because they can promote their products during that slot so that as many children as possible can get interested to buy the product. Toys R Us might also be interested in the TV programs and magazines because they want to know what is currently trending for children so that they can sell what is currently popular.
Analyze how market research can allow Toys ‘R’ Us to differentiate itself from its competitors. (6 marks)
Market research can allow Toys R Us to differentiate itself from its competitors by getting an advantage. Since market research refers to the act of finding and collecting data from the current conditions of the market or the customers, the business will be able to use the data to predict the needs and wants of the customers. This is an advantage for the business because it enables them to know which products are currently in high demand and so they know what to stock and sell. Other than that it enables the business to strategize on maintaining and increasing market share. Doing the market research also allows for better marketing for the company therefore at the end gaining more potential customers. Market research can also be used to understand the strategies of rival businesses therefore Toys R Us can compete with them. At the end, it allows the business to reduce business risk in the massive toy industry market because the market research information can help with surviving.