Toy Company: New Product Development and Branding


The most recognized manufacturers of toys in the world are Hong Kong’s companies. This is due to their efficiency and this has promoted their market share in the industry. Its original company was the Original Engineering Manufacturing (OEM) which had a strong customer base due to the extensive research and development that the company used to undertake. The introduction of modified toys by the company will boost the sale of the company. These types of toys are much more portable as compared to other toys produced by other companies. The prices of this product are very attractive to customers hence there is a possibility that it will capture the minds and the hearts of the customers.

The company’s main target is the European, the US market and the Mainland China market. Another possible market would be exporting the product to other countries which have potential customers. The company is likely to gain a lot of advantages as compared due to its good reputation in the public domain (Alba, 2000).

Executive summary

Hong Kong Company is very famous for production of variety of electronics products especially electrical appliances. The company is also known for the production of products that calls for high technology which is sold in the international markets. The company is interested in expanding its operations by introducing modified toy products. These are already existing product which is experiencing low sales. The product needs to be branded to create outstanding features that are attractive to customers. The main aim of the company is to gain greater market share hence can survive in the industry. The company will also get a good reputation in the public domain. The other company’s concern is to make more profit that can promote their growth in the international market since the profit realized will be used to expand the company’s operations.

Situation analysis

Hong Kong is a well known company that offers a wide variety of products and it has been operating very efficiently. The focus of the company in terms of the market situation has been to offer the best to their clients both in the international and domestic market. It has also focused on ways of conserving the environment by adopting high-technology techniques of production that do not endanger the living things surrounding its industries. The introduction of the new modified toy products is the major factor for the adoption of superior technologies. The company is so interested and strategizing to offer superior toy products that are operated by electrical means to their chief customers such as European and the China Mainland and global markets in the long run. The company is planning to take branded toy products to these markets. The company has to be very cautious to ensure that it exerts great pressure on the global markets. It has to take control of major toy markets to outwit its competitors. The company must take all the necessary steps to penetrate the global market in a very easy and inexpensive way without incurring a lot of costs.

. Branding is very vital to any company and the Hong Kong Company is not exceptional as it brings out the outstanding characteristics of one product from the others. Most marketers think that branding is aimed at targeting the market to outwit competitors. Branding is generally aimed at identifying the product of one seller or group of sellers from those of other sellers. It is about getting the prospects to view a seller as the only person who can offer solutions to the consumers (Kapferer, 2004)

Brand managers of the company must understand the characteristic of a good brand. Associations have postulated the following as qualities of a good brand:

  • A good brand should deliver message in a very brief way and it should be easy to be understood by the relevant target
  • It should depict the credibility of a particular seller
  • It should motivate the buyers to retain them
  • Concretes User Loyalty

Basic market description of the toy company

The toy industry has had a lot of challenges that require intense modification of processing procedures to capture diverse opportunities. This can be efficiently achieved through effective accounting software in the company. The accounting software helps in creating new sources of revenue and aid in cost reduction enhancing the profitability of the company.

Market size

The Toy industry is the most significant manufacturing industry as it plays a very great role in the economy of most countries across the globe. The Hong Kong Toy company is the leading toy exporter in the world. The industry has undergone drastic changes i.e. from Original Engineering Manufacturers which initially produce in mass. The company’s main target is the European, the US market and the Mainland China market. The market share of this company has increased significantly due to its exceptional flexibility and adaptability that has been depicted over time. The industry relies also on the neighboring countries as their main market for their exports. The robust global economy has enhanced the growth of the market share of the company. The major US and European markets are estimated to have contributed 34% and 31% of the export value of the Hong Kong toy manufacturers (Kapferer, 2004).

According to research and other discoveries of the team, domestic selling is not much profitable as compared to international selling such as European markets. Due to intense competition in the domestic markets, the company is not in a position to reduce its prices to attract and retain customers. The company could not reduce the prices of the toy products because of the cost of operations. The team found that US markets are more profitable than even European markets because of their economy. The introduction of the branded toys was less costly due to high skilled labor present in most parts of the US country

The company experienced a severe economic blow when there was attack in the US as the economic climate was not favorable. It leads to the lagging of the manufacturing industry. Following the drastic economic depression in the US economy, the Hong Kong toy industry was forced to explore markets from other economical prospects around the world. It took initiative of exploring the Chinese and Asian markets. After exploring these markets, the company realizes that there was need for diversification of business and that reliance on single clients is no longer profitable. The company made a lot of market expansion through network improvement which resulted in increased sales in all the product types. The company did a lot of marketing strategies by implementation of new brands that could capture the minds and hearts of the customers. There was a need to strategize ways of reducing costs and streamlining management to increase profitability of the company. Soliciting of new clients and maintenance of existing relationships with clients was paramount even if there were resource constraints (Kapferer, 2004).


The manufacturing company is currently facing intense competition from upcoming companies such as Mainland China. The company is forced to invest in research and development in order to come up with outstanding designs which are of more added-value. This will enable customers to be attracted to the product and that they cannot easily substitute the company’s product for those of other companies. The crucial success factors for research and development that can be adopted by the toy industry should be adopted by the company. For the company to outwit the competitors, it is imperative that company identify areas which call for improvement either by adopting new technology or designing products in a very outstanding way.

Product design is sometime very expensive hence it is important for the top management of the company to be very cautious when adopting any mode of design that should be implemented in the company. For the company to be competitive, it is necessary that new products to be created in the company. Creation of new product and changing of the existing brands can be hazardous to the profitability of the company. These processes are both expensive hence the company should in all ways minimize costs. Decision making process should be delegated to poor decision makers as it can lead to economic damage to the company.

Market Environment

There are various internal and external forces that the company is encountering when carrying marketing operations. The market environment is very turbulent. The company should established ways and methods of controlling these forces since they are very important to the growth of the company. The forces are very essential for the proper implementation of the new product strategies as they are very paramount in objectives realization. The company has to analyze all these internal and external forces as it enable the company to solve certain marketing problems that has a far reaching influence on overall marketing performance.

  • Economic Forces: The Company’s main market is the European and the China Mainland. The economy of these countries has the major impact on the operations of the company’s business. The income of these countries is quite substantial hence the company is in position to make more sales due to high purchasing power of these countries. The fall in GDP of the major countries that offer major market to the company’s product has adverse effects on the sales made by the company. The variances in the economic base of the US after 9/11 attack was very dangerous to the company’s operations. It leads to lagging of the manufacturing industry. Following the drastic economic depression in the US economy, the Hong Kong toy industry was forced to explore markets from other economical prospects around the world. It took initiative of exploring the Chinese and Asian markets
  • Demographic forces: The population of a country in which there are potential customers is very paramount to the toy manufacturers. The company markets are very promising since the European and China Mainland is very populated. The market of the company’s product is sold mainly in these two countries which are estimated to be having a population of around 1.7 million. This very substantial in terms of market that the two countries can offer
  • Technology: The Company is utilizing the modern technology in the production of the modified toy products. The toys that are operated electronically are very significant in the market and it will boost the sales of the company. Inability of any company to adopt new technologies means that it cannot gain competitive edge over its competitors. The toy industry is adopting the most modern and efficient technology.

It is very important to understand the uncontrollable forces that the toy companies face. The company should strategies that can used to combat the effect of these forces. If these are not properly handled, the long term effect can be very adverse to the company. It might ruin the company’s the plans and strategies of the company. If proper strategies are put in place, the company’s market share might increase substantially and the company might realize substantial profits in the long run.

Special aspects of the Toy manufacturing industry

The Hong Kong toy manufacturing company has gain greater market share compared to other competing industries. It produces high quality toys which enable the company to have good reputation in the public. The intelligent toys that are currently dominating the market is been made by this company. Some of the items that the company makes are; battery operated cars, radio controlled planes, walking and talking robots. The company is gaining positive image from the public due to their strong position to produce very effective and products of high quality. The company is well armed with International Organization of Standardization (ISO) 900. The company is well equipped with modern equipments that facilitate efficient production of these products. These modern tools and equipment used enhances low cost of creating new products and branding of already existing items. The company has expanded its business operations by engaging in licensing and contract manufacturing (Russel, 2000)

Issues and concerns of the company

It is very imperative for the company to identify the strengths, weakness and threats of the company. Some of these aspects are attributed to internal operations of the company. The company is operating in a very turbulent environment which is changing now and then. There are business revolutions hence the company should strategize on how to cope up with these changes. The company can identify the challenges and opportunities through SWOT analysis. The strengths of the company include:

  • Hong Kong company has customer base since it is well established in global market
  • The company can produce the product at a low cost due to the fact that it can adopt the modern technology.
  • The company has strategize to invest a lot of money in advertisement hence can capture more customers
  • Hong Kong company is well connected in terms of distribution channels

The company has some limitations that exert a lot of pressure. The company is faced with the following problems

  • The fact that the company should invest a lot of resources on advertisement increases cost of operations
  • The company has to invest a lot in employee training so as to place in a position to effectively use new technologies
  • Market segmentation might troublesome to the company as this might not be very attractive to many thought potential customers.

Challenges in that the company might face in introduction of the modified toys

Companies are faced with a lot of problems in developing new product or branding. The toy company might be faced by certain factors that are either controllable or uncontrollable. The company can be faced limited ideas that are very useful to certain aspects of new product development. Another shortcomings that the industry might face is the fact that markets for the new products are fragmented hence it cannot be easily predicted. Other problems that organization faced when developing new product are:

  • High cost of development that might lead to financial constraints by the organization
  • There are social and government regulations that government various business operations
  • Length of time required for the branded products to gain market
  • Shorter product life cycles

Concept generation in the toy industry

Concept generation involves five step processes and it is essential for the company to follow all these steps in order to arrive at better idea to be generated. The steps are:

  • Problem clarification by the group members: Problems should be decomposed into sub problems and priorities are considered. Before creating or developing new product, the organization should know the problems or the needs for the process to be carried out.
  • External solutions for the existing problems should be recommended
  • Group and individuals can act as useful internal resources for solutions of the external problems
  • Systematic exploration should be done by group members using concept fragments.

Reflection and evaluation of the generated ideas so as to know whether it can be of useful

Generating Design Concept

These are concepts that are adopted by the company to express the functions of the product to be developed or branded. This can be sourced from external evidence within the design team. The method also best describes the morprphological and combining concept.

Evaluation methods

Evaluation methods are very paramount when designing products that are to be developed into finished products. These methods are very relevant during the unstructured process of concept development. Evaluation is a very important aspect of concept generation as it enhances faster decision making.

Concept testing

Concept testing is very imperative to any organization which intents to develop new products. Toy industry should at all times identify the most potential products that can lead to success of the organization.

Ideas that are not valuable to the organization are excluded before conducting any concept testing. If there are ideas that are effective in any way, then these are eliminated. Products that call for certain superior technologies that may not be present in the organization are eradicated to guard the organization against any pressure on the resources of the organization. The Hong Kong Company has the obligation of ensuring that customers have knowledge on the new products to be sold after launching. If in case the consumers do not have the knowledge on the ideas to be generated, then it is recommendable that the industry relegates some of these ideas as it may not contribute positively. Some ideas require high level of innovation that may call for experts who may be very expensive hence increasing the costs to the organization (Asker, 1998)

Ways of conducting concept testing by the toy industry

They toy industry can conduct concept testing through the focus groups which are small in size to facilitate faster decision making. The company can also conduct the concepts interviewing individuals at personal level. One on one personal interview is the prime way of conducting the concept testing. It is also relevant to note that concept testing can be efficiently conducted through phone interviews and postal surveys. Companies can adopt internet surveys as away of conducting concept testing (Asker, 1998)

Purpose of concept testing

Concept testing is very important to the organization has the following purposes:

  • It is aimed at eradicating concepts that are redundant and not of much importance to the organization
  • To find rough estimate of the sales that could be made if a new product is introduced in the market. This is to ascertain the buying behavior of the consumers on the branded product.
  • Concept testing has the effect of making trade offs among the attributes of the ideas made.

Objectives and Strategies & Marketing Strategy

The company is dedicated at increasing the market share in the European countries and the US. The company aimed at improving its image by improving the quality of the products it offers. It should be in a position to compete very well with other companies that are producing the same products.

The product modification is aimed at provision of high quality products that are outstanding in the market. The company aimed at producing the product at a lower cost so that the prices are reduced to attract potential customers hence customer base. The company aimed at improving its public image through advertisement of the modified product. This enables the potential customers to get right information about the product that is being offered. The company also aimed at making a lot of profits from the sale of the branded product so as to gain substantial growth. The strategies that are put in place by the company is aimed at utilizing the modern technologies that can lead to efficient and cost effective operations of the company. These technologies are very essential as it can enable the company make a lot of money very fast.

The Hong Kong Toy company is strategizing on how to segment its markets so as to focus on certain class of customers. It focuses mostly on the younger generation who are potential customers for the modified toy products. The company also intents to broad cast the new product in the TVs so as to capture more customers

Products protocol

The toy industry has also faced economic challenge after most of their products were deemed unfit for consumers. The toy industry was then forced to adopt new measures that could enable restates the position of the toy company in terms of the market share. The company has to develop new products or brand the existing products in order to change its public image. The main denominator for their economic come back was to undertake product development and branding of the other already existing product. This calls for new measures and standards that can aid in achieving the efficiency in the product development process (Asker, 1998).

Changes should be made in the policies and regulations of the company as the first step towards reshaping its public image. It is very paramount for the company to ensure that all the toys that are ready to be sold should tested before been released for selling. Standards should be put in place to analyze the development processes that are to be used in creating new products that can capture the hearts and minds of the customers. Strict tests measures should be imposed so as to curb the issues of poor products produced. The company has to impose the safety standards which are being adopted by the rest industries. It is very paramount that the company takes an initiative of improving their mode of processing. The toy company has to adopt aggressive programs that that can boost their economic base before the challenge it faced when it was been decline to be producing products that are not up to standards (Benedetto and Crawford, 2008).


The business environment is very turbulent hence is quite imperative for all manufacturing industries to have strategies that can enable it gain competitive edge. The rapid changes in the business environment have necessitated new product development and branding of already manufactured products. Toy Company can effectively achieve the goals of branding and new product development if all the necessary procedures are adhered to (Asker, 1998).


  1. Asker, D 1998, Branding and Consumer Assessment. Journal of Brand Management, vol.6, no. 3, pp. 163-177.
  2. Russel, N 2000, Concept Testing and Product Branding. Journal of Marketing Research, vol. 12, pp. 214-228.
  3. Alba, J 2000, Co-branding: the science of alliance. 170-198.
  4. Kapferer, J 2004, Relevance of Brand Extension, Journal of Business and Psychology, vol. 16, no. 1, pp. 135-155.
  5. Benedetto, D and Crawford, M 2008. New Products Management, 140-180.

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