The preschool market had always shown much more brand loyalty than other segments of the toy industry. Little Tikes toys were almost exclusively designed for pre-schoolers, an age when pressure to conform to fads is at a minimum. Murdough was convinced that advertising to kids was not only morally questionable, but was also not good business sense. This was important because Little Tikes relied almost exclusively on word of mouth to promote its large, and often pricey, plastic play equipment. In addition to keeping retailers happy, Murdough ’s approach to marketing allowed Little Tikes to create an up-scale, “boutique ” image for its products. In exchange, the company insisted that retailers stock the full range of the Little Tikes line. By discouraging deep discounting of its most popular toys, Little Tikes kept profit margins high for all its retailers. Murdough carefully nurtured his relationship with the small toy retailers. ![]() He was very careful not to flood the market with merchandise, ” said one retailing executive in a 1989 Business Week article. “Murdough had a good understanding of how not to go to market. Murdough avoided this pattern by simply declining to distribute through large discount stores. As their profit margins shrunk to unmanageable levels, they then put pressure on manufacturers to further lower wholesale costs. Small retailers were then faced with lowering their prices in order to compete. Large discount stores like Kmart tended to “cherry-pick ” the hottest items out of a given manufacturer ’s line and then sell them at or under cost in order to draw parents in. He was convinced that by restricting distribution of his products to independent toy stores and toy supermarkets he could avoid the deep discounting that had eventually forced other toy manufacturers to lower production costs and quality. In addition, the new process permitted the production of a variety of colors at the same time, adding versatility to the production process.įrom the start Murdough insisted on maintaining his own personal approach towards toy marketing. Fewer parts meant not only less assembly time on the factory floor, but also a more durable final product. By allowing for a large variety of shapes with large surface areas, fewer parts were needed to create each large toy. Rotational molding could produce larger, more durable products than the traditional blow molding that had been widely used in the toy industry. Little Tikes pioneered the use of rotational molding, an industrial process for molding plastic that had formerly been used mainly to produce large products like agricultural tanks and chemical containers. and, with nine employees, began to manufacture large plastic outdoor play equipment, toyboxes, and children ’s furniture in an old barn in Aurora, Ohio. Murdough saw a need for well-made plastic toys, as only the cheapest fabrication processes and forms of plastic raw materials were being used in toy manufacture at that time. He quit his marketing job at Wilson and set out to start his own company. Murdough was determined to buck this trend. ![]() This trend was exacerbated by the huge new discount retailers who often sold popular toys at a loss in order to bring people into their stores. According to an article in Fortune, Murdough felt that the toy manufacturers ’ sole aim was to bring toys to market at ever-cheaper prices. Murdough was reportedly appalled by the increasing shoddiness of toys. ![]() The late 1960s saw the toy industry undergo a period of intense transformation, as smaller companies and distributors found themselves being swallowed up by the big manufacturers. Murdough became interested in the toy business in 1968 when his then-employer, Wilson Sporting Goods, asked him to run marketing for its Wonder Products subsidiary. With the exception of a few print ads in parenting magazines, the company ’s promotional activities consist exclusively of catalogue distribution, very visible customer support services, and word of mouth. These enormous gains have occurred despite the company ’s steadfast refusal to advertise its products to kids. From annual sales of about $50 million in 1984, Little Tikes sales rose to over $400 million by 1995. A wholly owned subsidiary of Rubbermaid Inc., Little Tikes has enjoyed meteoric growth over the past decade. Little Tikes is the fourth-largest American toy manufacturer and one of the top three toy makers for the pre-school market. have become a staple for American children under the age of five. The distinctive, brightly colored plastic toys produced by the Little Tikes Co. SICs: 3944 Games, Toys & Children ’s Vehicles 2512 Upholstered Household Furniture. Wholly Owned Subsidiary of Rubbermaid Inc.
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