The Revival of the Radio Flyer “Little Red Wagon”

1. The Revival of the Radio Flyer“Little Red Wagon” Presented by: Rich Duval, Rhonda Gulbranson, Rachelle Halverson and Deb Zindorf

2. America’s Dream Factory For Over 80 Years • Established in 1917 as Liberty Coaster Company by Antonio Pasin, • By 1930 the company operated under the name of Radio Steel & Manufacturing, • Mid-30’s new generation of ideas,

3. Marketing Plan • Company Analysis – Rich • Customer Analysis – Deb • Competitor Analysis – Deb • Marketing Information – Rachelle • Product – Rachelle • Place – Rhonda • Promotion – Rhonda • Price - Rich

4. Company Analysis • Company objectives and overall marketing objectives, • Company resources, • S.W.O.T. - Strengths, weaknesses, opportunities and threats.

5. Company Objectives/Overall Marketing Objectives • Consumer acceptance and approval, • Make a profit, • Repeat business, • A wagon “For every boy. For every girl.”, • Quality, safety and tradition.

6. Company Resources • Annual Sales 35 million, • Employee count 200, • One facility @ 300,000 square feet, • Financial strength based on great credit history.

7. S.W. O. T. • Strengths - Brand name, quality, safety features, adjust product lines to current trends (S.U.W.), 3rd generation company. • Weaknesses - Lack of marketing, one manufacturing facility, size of company. • Opportunities - Room for growth, allocate funds for marketing, better customer service, increase volume. • Threats - Economy, new-age technology, deep pocketed competition.

8. Possible Segmenting Dimensions, Customer Needs, Quality Dimensions, Determining Dimensions, Identification of Target Market, Operational Characteristics, Influences on Buying, Type of Buying Situation, Relationships with Customers. Customer Analysis

9. Possible Segmenting Dimensions • Generic Product Market: • Outdoor toys for children • Broad Product Market: • High quality, heirloom wagons.

10. Entertainment for children, High quality, long lasting, Relate to childhood memories Form of transportation Children, Home and garden, Goods such as plants at nurseries Customer Needs

11. Qualifying Dimensions • Have children in their lives, • Have access to yard, park, or other recreational areas, • Monetary means to make high-end gift purchase, • Access to retail outlet or Internet, • Business which would utilize this equipment.

12. Determining Dimensions • Appreciate high quality, heirloom type product, • “Old fashioned” or sentimental, • Recognize “Radio Flyer” and associate positive images with it, prestige.

13. Identification of Target Market • Babyboomers - Mostly female over 40, • Internet gift shoppers, • Senior Citizens, grandparents - Preferably Internet savy, • Geographic - Worldwide w/Internet

14. Operational Characteristics • Rural or Suburban America • Areas with yards, parks, or other outdoor activities such as gardens, • Growth Potential • 14% based on the distribution of marketing performance.

15. Key Psychological & Social Influences on Buying • Investment purchase - Well worth the price, • Status - Desire the best money can buy, • “American Made”

16. Type of Buying Situation • Child’s gift - Son or daughter, niece or nephew, grandchild, • Nurseries and garden centers for customer use.

17. Nature of Relationship with Customer • Mutual respect, • Heirloom quality, • An “American Standard” in children’s toys, • Nearly 85 years in the business.

18. Competitor Analysis • Nature of current or likely competitor, • Current and prospective competitors, • Competitive barriers to overcome, • Sources of competitive advantage.

19. Nature of Current or Likely Competitor • Other high quality metal wagons, • Molded plastic wagons, • Strollers, bike carts, push carts and bike trailers.

20. Current Competitors • Bobbybilt, strategy: • Hand-crafted in the U.S.A., • Extremely well-built, • 4 Colors, • “Last wagon you’ll ever buy”. • Step 2 Company & Today’s Kids, strategy: • Molded plastic - won’t rust, light weight, • Lower price point, • Positioning on Internet sites important for overall increase of visibility.

21. Competitive Barriers • High price tag, • Little brand recognition for those younger than the Babyboomers, • Electronic age, • Advantages of plastic Vs. metal - no rust, etc....

22. Sources of Competitive Advantage • Positive brand recognition - 85 year old American Company, • Set the standard for quality wagons, • Privately owned family company • Shared company values, • Quicker reaction to markets, • One vision.

23. Marketing Information Requirements • Marketing Research Needs, • Secondary and Primary Data Needs, • Marketing Information System Needs.

24. Marketing Research Needs • Identify the customer and their buying patterns, • Effectiveness of the marketing mix • Some product at a price with some promotion of the product and a way to reach the customer’s place. • External environment • Economic, technological, political/legal and cultural/social.

25. Secondary Data that is already available in various forms: Inside sales reps., Company files, Reports, Internet services Primary Data is received first-hand and is not easily obtained: Focus group interviews, Customer mailings, Telemarketing, Surveys, Personal observations. Secondary/Primary Data

26. Marketing Information System (MIS) • Localized small company not requiring large investments in software such as a DSS (Decision Support System) • Suggest using a MRP (Materials Reporting Process) system to assist in generating data for management decision making.

27. Product Class, Current Product Life Cycle Stage, New Product Development, Specification of Core Physical Good, Supporting Customer Services, Warranty, Branding, Packaging, Fit With Product Line. Product

28. Product Class • Consumer Product Class, • Specialty Product

29. Current Product Life Cycle: Market maturity as indicated by steady sales, but competition gets tougher, Wagon continues to have slight modifications but continues to be successful. New Product Development: Marketing plan related to revival of the “red wagon”, so therefore no development of new products required. Current Product Life-Cycle &New Product Development

30. Largest steel wagon Extra-long handle for easy pulling Durable steel wheels with real rubber tires for a quiet ride Handle folds under for easy storage No-pinch ball joint keeps fingers safe Controlled turning radius prevents tipping For ages over 1-1/2 Specification of Core Physical Good: Features & Benefits

31. Quality and Safety A) "No-pinch" ball joint keeps kids' fingers from being pinched between the handle and the wagon undercarriage. B) "Tip-free" turning radius restricts the front undercarriage's turning radius, so wagons won't "jackknife" and turn over. C) "No-scratch" rolled edges conceal metal edges to keep kids safe. D) Non-toxic baked enamel paint is electrostatically applied for durability. E) American hardwood body with sanded, non-toxic finish - smooth on kids' hands.

32. Supporting Customer Service & Warranty • Customer Service • 1-800 number, • Internet on-line help. • Warranty • One year warranty for normal usage, • Excessive use damage not covered.

33. Radio Flyer utilizes a well-known trademark, Family brand-same name used for several products, Manufacturer brand-named from the producers name. Brand familiarity-customer recognition of the brand, Brand insistence-customers insist on the branded product and are willing to search for it. Branding

34. Packaging & Fit With Product Line • Packaging • Wagon’s shipped out unassembled in heavy duty cardboard boxes. • Packaged to prevent damage. • Fit with Product Line • Good fit, original product, • Other accessories sold to enhance the wagon.

35. Objectives, Distribution Customer Service Level Required, Type Of Channel (Direct, Indirect), Degree Of Exposure, How Marketing Functions Are Shared, Coordination Needed In Company, Channel, and Supply Chain, Transportation Requirements, Inventory Product Handling, Facilities Required, Reverse Channels. Place

36. Place cont… Objective: Meet the demand through proper distribution. Distribution of Customer Service Level: • On time delivery, • Inventory available to meet demand, • Cost effective delivery.

37. Direct: Radio Flyer sends red wagons directly to retailers. Benefits: This form of distribution allows for Radio Flyer to have control over the entire process of distribution. Indirect: Radio Flyer works with redwagons.com for on-line orders. Benefits: Cost effective. Disadvantage: As the middleman, redwagon.com also sells for other companies. Type Of ChannelDirect/Indirect

38. Type Of Retailers Retailers • Small to medium chain store: Farm&Fleet, hardware stores. • High-end retailer: Target, branding product name. • Toy Stores • American Girl • Internet

39. Sharing Of Marketing Functions • Producer • Largest contributor • Retailer/Middlemen • Markets specifically for their business, choosing their own media tactics.

40. Coordination RequiredCompany, Channel, Supply Chain • Electronic data interchange (EDI) linked to and materials reporting system (MRP). • Intranet system to generate reports through queries. This activity would support market research data.

41. Transportation Requirements • Ground Transportation • Fast delivery speed, • Number of locations, • High frequency of stops, • Cheaper than flying. Redwagons.com currently ships all orders at no cost to the customer; extra incentive for ordering on-line.

42. Reverse Channels • Provide shipping cost and pickup for defective products, • Product automatically shipped back to warehouse, • Selective distribution agreement made with shipping company for special care of product returns, easier handling for customers.

43. Facilities Required • Currently maintains a 300,000 sq. ft. facility, • Will lease additional warehouse space as needed, until cost exceed the price of a new distribution center.

44. Promotion • Objectives, • Major Message Themes For Positioning, • Promotion Blend, • Mix Of Push and Pull, • Who Will Do The Work.

45. Promotion cont… Objective: Influence attitudes and behaviors through communication. Major Message Theme for Radio Flyer: • Quality, • Nostalgia, • Tradition, • Grandparents.

46. Promotion Blend Advertising: Newspapers, magazines, website, QVC. Personal Selling: Not part of strategy, not cost effective. Publicity: Oprah, 27’ Big Red Wagon. Partnership: American Girl – Same market. Interactive Media: Internet sales.

47. Push & Pull Push: Advertising and promotion in the channel. • Safety, quality, tradition, brand recognition. Pull: Customer demand. • If our promotion succeeds we will create a demand from consumer.

48. Who Will Do The Work?

49. Price Nature of Demand • Superior product at a valued price, • Target specialty stores or small chains, • Premium collectable brand Demand and Cost Analysis • Lower prices? • Excess plant capacity, declining market share, dominate the market.

50. Price cont… Markup Chain in Channel This change is limited by the use of: • Internet sales, • Internet retailers, • Limited use of wholesalers, • Direct to merchants Price Flexibility • No flexibility, the product is worth the price.