Building an Edgier Barbie to Revive Franchise Sales
The Wall Street Journal
December 24, 2008
Barbie turns 50 next year, and her luster has faded over the years. Now, Mattel Inc. executives have begun a sweeping makeover of the doll's marketing in advance of her birthday.
The company wants to return the doll to her roots, doing everything from revamping the corporate structure that oversees Barbie to changing the way the doll is photographed for ads. The goal: to make Barbie fashionable again with older girls, who are dropping her for other, edgier playthings like video games.
The Barbie franchise has been an anchor of Mattel's business for decades, and sales of everything from Barbie DVDs to clothes will bring in an estimated $1.2 billion in revenue this year, accounting for about a fifth of the company's overall sales.
But Barbie sales have been either flat or down for five of the past seven years, and analysts expect sales to remain flat this year. "You could say that we lost our way," says Richard Dickson, the brand's new general manager.
For years after her introduction in 1959, Barbie reflected and even shaped fashion trends with her bell-bottom pants and power suits. But the Barbie empire started to lose its focus in the past decade as Mattel put the Barbie name on everything from animated cartoons to golf clubs.
That meant Mattel wasn't relying solely on doll revenue for the brand, but it also spawned inconsistency. For example, when executives reviewed Barbie's packaging and ads, they found five different logos. Barbie's color, pink, also ran the gamut, with 15 different shades.
The variety of products will stay, but executives have now chosen a single logo that looks like Barbie's scripted signature. And the pinks have been reduced to a single hue, PMS219, to which the company owns the rights.
The marketing overhaul coincides with new designs for the dolls themselves celebrating the anniversary, to be released next year.
Goosing Barbie's appeal is crucial for Mattel. The world's largest toy maker is suffering from weakening consumer demand as the industry prepares for what's expected to be more than a 5% drop in toy sales for the Christmas season, the worst in a decade.
Sean McGowan, an analyst at Needham & Co., recently reduced his estimate of Mattel's fourth-quarter sales by $21 million to about $2.28 billion, citing weak sales before Thanksgiving. "They needed to be smokin' hot and they weren't," he says.
Video games and iPods aren't the only cause of Barbie's declining appeal. MGA Entertainment Inc.'s teenage Bratz line and, more recently, the Hannah Montana line, a Walt Disney Co. license whose dolls are made by Jakks Pacific Inc., have moved into Barbie's turf with sexy outfits and cutting-edge fashions.
The holiday season brought Mattel one unexpected gift. The company won an intellectual-property suit that alleged that MGA had stolen early Bratz designs. A judge ruled that the Bratz franchise, which had estimated sales of $300 million this year, should effectively be turned over to Mattel in February.
But MGA has said it plans to appeal, and Mattel hasn't figured out what to do with the line if it ends up with the dolls.
Mattel first started examining why Barbie was stumbling as its long-running spat with Bratz dragged on. "Frankly, we were distracted and we were also hit" by the competition, Mr. Dickson says of the company's findings.
Barbie had largely ceded the "tween" customer -- kids eight to 12 -- to Bratz and other toys, instead making do with an audience that skewed younger and younger.
"We had lost a whole piece of the business, the older girl," he says.
Around the time of the Bratz dolls' arrival in 2001, Mattel launched a new line with Barbie dressed as Clara, a character from "The Nutcracker." The new fantasy tack proved a boon to the company, leading to new characters each winter and spring. But it also pigeonholed Barbie as a doll associated with younger girls.
In the future, Mr. Dickson says, the company plans to anchor the brand more firmly in the world of fashion. Mockup ads for 2009 include close-up shots of Barbie's face and show the doll posing as a model in what Mr. Dickson says is a deliberate nod to fashion magazines like Vogue.
The company hopes to regain the "tween" customers with the edgier look, while holding on to the younger girls, who like to copy older siblings.
As he takes on his new responsibilities, Mr. Dickson is drawing on his experience managing brands aimed at women during his stints at Estée Lauder Inc. and Bloomingdales Inc. He joined Mattel in 2000 to head consumer-products licensing.
This past fall, when Mattel placed Mr. Dickson in the Barbie general manager role, it also added two other executive positions -- in marketing and design -- for the brand. The move consolidated Barbie's operations, which used to sprawl across several different arms of Mattel.
"Now we have a structure and a vision," says Neil Friedman, president of Mattel brands.
Mattel is also investing in creating a unique Barbie retail experience, a strategy it has successfully used with its American Girl brand. Next month, the company will open an eight-story flagship store in Shanghai that it hopes will help lift Barbie's international sales, which at $809 million are already more than twice U.S. sales.
In China, Mattel believes it will be able to market not only to children but also to adults who appreciate the brand's kitsch factor, Mr. Dickson says. At the new store, Mattel will offer everything from a Barbie-themed spa to a $20,000 dress designed by Vera Wang.