Fisher Price Case Analysis Essay

1427 Words Nov 10th, 2012 6 Pages


The main problem facing Jack Asthalter, Fisher-Price’s marketing vice president is whether or not to move forward with the production of a new ATV Explorer toy. The extensive market research that Fisher-Price performed with children and their parents was very positive in favor of producing the ATV Explorer. Unfortunately, the production costs were going to exceed initial estimates of $12.00 retail and instead require a wholesale price of $9.20 per unit and retail price of $18.50. Typical Fisher-Price toys were under $5 retail and similar competitor products to the ATV Explorer were in the $12 retail range. Retailers and consumers may not support the higher priced product.

…show more content…
If the ATV Explorer does well in the market it may still be profitable, but if it fails Fisher-Price may not be able to recoup the costs.
 Management is concerned the decreased margins will send a message to production to relax its cost cutting efforts.
• Move forward and increase price o Pro –
 The increase of .50 cents or $1.00 in costs will create a greater profitability overall.
 The additional revenues would allow for an increased promotion budget.

o Con
 There are a few retail buyers that are not interested in the ATV Explorer based on the existing price, a higher price may lose even more esteem for the product.

V. RECOMMENDATION My recommendation to Jack Asthalter, Fisher-Price’s marketing vice president would be to move forward with producing the ATV Explorer with its existing options. The wholesale price should remain at $9.20 per unit and retail price of $18.50. The product should be promoted through television as a single product with the Fisher-Price brand. The ATV Explorer is a higher priced product and should enjoy the exclusivity and prestige that comes with a higher quality item. The ATV should be packaged and placed with the entire Fisher-Price line and still carry a catalog of other products. A second mold should be purchased to guarantee that there will be enough inventory to satisfy demand.

My recommendation is based on several factors; one is that the

Related Documents