A year or so ago Mattel had to call back certain products and lost in terms of brand equity when some of its products which had been manufactured in China were found to be high in lead content. Considering that Mattel products have a high emotional association, many consumers were justifiably upset over the lack of safety in products used by young children.
Other key issue in Mattel’s business is the short life-cycle of products that it produces. Mattel needs to respond quickly to the ever fickle demands of its target market. This means that Mattel needs to make investments in product development so that it is continuously churning out new products to keep the market hooked. Another issue is that of inventory management. Mattel needs to ensure that its not overstocked in any one brand and also needs to be prepared for the seasonality of its sales.
Mattel distributes its product through different channels. It sells through its own retailers which number around seven in America and around 3-4 in Latin America and Europe. The others are distributed through prominent wholesalers and retailers, Walmart for example is a significant customer of Mattel products. In countries where Mattel is not present distribution is assigned to agents.
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