Are You Surrounding Your Market?
The Marketing Genius of American Girl
February 2008 By Denny Hatch
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In the News
Mattel Signs Agency for Entertainment MarketingMattel Inc. has signed with Creative Artists Agency to develop entertainment-based marketing programs for the company’s toy brands, the company said Tuesday. Through the deal, CAA Marketing will identify and create opportunities to expand the Mattel brands, ranging from movies and digital media to music, video games, television and others, according to a release. Terms of the deal, which is part of Mattel’s brand extension strategy, were not disclosed. El Segundo-based Mattel (NYSE: MAT) designs, manufactures and markets toys and family products under its brands including Barbie, Hot Wheels, Matchbox, American Girl and Fisher-Price.
—Los Angeles Business, February 5, 2008
Everything about the restaurant was world-class—the décor, service, food, wine and vodka (Grey Goose). Dining doesn’t get any better than that, and I would recommend it to anybody who has plenty of money or a fat expense account.
The next table was set for three. Lunching there were a most stylish young suburban matron, her equally stylish daughter—age about 9—and the daughter’s doll, which was continually being fussed over by both. The three of them were having a grand time together.
As they were leaving, I asked the lady if the doll was from American Girl.
“Oh, yes,” was the reply. “We have a 2 o’clock appointment at American Girl Place to do some shopping for clothes and accessories.”
The idea that Mattel signed the prestigious Creative Artists Agency to extend its toy brands—presumably to create games, DVDs, films, Internet action and TV specials for Barbie and the Fisher-Price line—is fascinating. Most intriguing is what they might do for American Girl.
My bet is nothing.
American Girl has already done it.
Background
Sometime in the late 1970s, I submitted a fanciful article to Folio: The Magazine of Magazine Management on the subject of direct mail. To my surprise, it was accepted, and the editor, Chuck Tannen, invited me to lunch at a restaurant near his offices in New Canaan, Conn., just up the pike from my house in Stamford.
Tannen was a lovely, civilized guy; short with a mop of curly hair and owlish glasses. In the 1990s, Tannen invested in Jay Walker’s Priceline.com and walked away with a tidy $23 million, which delighted me.
As we settled down for lunch, I asked Chuck if Folio was profitable. He wagged his flat right hand and indicated the answer was comme ci comme ça, or so-so. He then went on to explain:
Folio is the flagship. It spawns books, special reports, the Folio conference, consulting assignments, list rentals and card decks. When someone in the magazine business buys something from us or attends the Folio Show, it is our license to go after him and sell him anything and everything we have. It is our intention to surround the industry.
Takeaway Points to Consider:
* Check out the American Girl Web site for ideas that could be applied to your own endeavors. I think it is a marvel—easy to navigate, first-rate at persuading visitors to part with their money, brimming with offers and opportunities.* Are you surrounding your industry or marketplace?
* What can you do to profitably extend your brand? Test products or services that will enable you to generate more revenue from your existing customers (i.e., get a larger share of wallet).
* A case in point is the story in today’s Philadelphia Inquirer about the Web game, Scrabulous—a knockoff of Scrabble developed in India that has 610,000 players and is generating up to $25,000 a month in advertising revenue. Hasbro, owner of the board game, has sent a “cease and desist” order. In point of fact, Hasbro—by failing to preemptively create its own online version of the game—is guilty of cumbrous corporate constipation. Don’t let this happen to you. Search the world for inspired creative people, nurture them and reward them well when they perform for you.
* Do you have products or services that could be enhanced, repackaged and offered to folks just outside your normal universe, enabling you to get a larger share of market?
* By all means extend your brand, but not to the point where you are outside your core competency and no longer in complete control.
* Old rule of thumb: It costs five times as much to acquire a new customer than to sell an existing one. My hunch is the old 5x multiple is more like 8x to 10x today.
* American Girl makes it easy to order. The WHO’S MAILING WHAT! Archive of direct mail samples received seven American Girl catalogs during 2007, ranging from 64 to 104 pages. In addition, it sells over the Internet and in retail stores. Its bill-me-later option on the Web site is intriguing; most companies want a credit card number or no deal.
Web Sites Related to Today's Edition:
NoMI Restauranthttp://tinyurl.com/fvyww
American Girl
http://www.americangirl.com/
American Girl, Company Profile
http://www.americangirl.com/corp/html/aboutpc.html
Pleasant T. Rowland Biography
http://tinyurl.com/2or7la
Sewing Patterns for American Girl Dolls
http://www.infinitefreedom.com/
http://www.ccoriginals.com/
Doll Clothes, Shoes, Accessories
http://www.terraexperience.com/DC_doll_outfits.html
http://tinyurl.com/398dqx
http://www.necessaryextras.com/
http://tinyurl.com/36zyvw
Matching Mother, Daughter and Doll Outfits
http://www.dollyandme.com/
http://www.plowsharesltd.com/
American Girl Place Travel Packages
http://tinyurl.com/2okmcb
http://www.msnbc.msn.com/id/22921208/
http://tinyurl.com/2r9clk
http://tinyurl.com/38lhes
BillMeLater® Payment System
http://www.bill-me-later.com/
Scrabulous in today’s Philadelphia Inquirer
http://tinyurl.com/ywztya
Scrabulous, the Web site
http://www.scrabulous.com/
Companies Mentioned:
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