Brand is the big key in marketing and business these days; it is how you interface with customers. Everyone interacts with your brand on a daily basis in the consumer goods world. But what happens when you screw up and the mask is pulled back and we find, the brand is more smoke and mirrors than reality?
I saw the interview of the Mattel CEO talking about “our products.” I had a little smile on my face when I heard that, because they don’t actually make the products, they manage the brand! As long as nobody looks beyond the brand the illusion works just fine, but when you have a major screw up like millions of toys being recalled, people are going to look beyond the brand and take a close look at the nuts and bolts and realize, there is a disconnect between brand and product. Mattel is not a toy manufacturer anymore; they are a branding company of toy products. They used to make toys, but in the case of the recalls items in question, they are a branding company, must like Nike is. The design a toy, send it off to a 3rd party who manufactures that product, that’s Mattel.
There is nothing wrong with being a brand company as long as you have a good brand message that is authentic to who you really are. But in this case, it appears many consumers do not see Mattel as a brand company but a manufacturing company, it may really come back to hurt Mattel. Mattel built its brand on the good name of its past. The brand said “you can trust us to make quality toys for your children that are safe and reliable.” We all grew up with a Mattel toy, we all have fond memories of those toys and Mattel knows this and plays it up. That’s why it cost them 35 cents to a dollar to have made a Barbie doll yet sell it for $20 to $40 dollars. The brand works well enough to demand that kind of mark up. But now, we see the brand and the product are not the same.
Over the weekend I had my Google alert going to see what people were saying on this recall issue. A lot of people feel mislead. They feel they were lied to and they don’t like it. Mattel was supposed to ensure quality and it didn’t. Mattel created the image that they product their products, when in fact they do not. People have a right to be mad at Mattel, they built up this brand relationship with consumers and now that image they painted for people looks a lot like a forgery.
Keep in mind, Mattel is NOT the only one doing this; I am only singling them out because they are the latest to get caught. I remember shopping for kitchen appliances last month and seeing a logo on a product that said “An American Company!” It had American flags on the box and gave the impression that the product was American made. But on closer inspection, it was made in China. So this is not just Mattel, this is pretty widespread; I just don’t have the resources to go into it all.
The root of the problem is two fold; one is the race for the bottom in terms of cost. This has pushed manufacturing overseas and into 3rd party producers to lower costs. The more this happens, the more the brand image becomes important. Nobody thinks of China when they remember their memories of playing with Hot Wheels or Barbie, so the brand becomes more an illusion than reality but at the same time it becomes more important as a means to sell the ideals the company wants to express, not so much the reality. The benefit is profits. Remember 5 years ago, Mattel had some rocky numbers, now they are doing just great. This is mainly because of the lower cost of production. Instead of producing goods themselves, they outsource it, it costs them less yet I believe the prices haven’t gone down, so no savings for consumers.
So you have another corporate victim of their own desire to reduce costs without thinking things through. Many consumer posts I read said they will not by Mattel products and want American made toys now. I some how do not think Mattel is going to build a plant in the US to meet these new consumer demands. Which raises the point that the brand is an illusion and the real goal is profit, not toys. Now don’t get me wrong, I do know the people at Mattel and many of them love the toys they help sell. It is not Mattel as this bad apple in the bunch. It is the system itself where the big box retailers demand low prices and something has to give. The leadership at Mattel could have taken a stand and not shipped jobs overseas and risk not having their products sold in Wal Mart or Target. Now thousands of jobs are at risk as a result. That’s a hard pill to swallow as a CEO. Which leads me to the other root cause.
As consumers, we have a power to influence the market. Cheap products are great, I like a deal like anyone else. But we have to look at the situation beyond the basic cost up front. A study years ago, showed that those cheap bikes on sale at Wal Mart for $100, lasted a year or two. An American bike for $300 would last years. At the end of 5 years, the American bike with the higher price tag up front ended up costing less in the long run. The repair and replacement cost of the cheaper bikes ended up costing more. Low prices alone should not be your driving factor. If you want to save money, think long term use. A quality made product with a longer life is often going to save you money in the long run.
Also, think about where you money goes. I always buy local, I like to go to lunch at locally owned restaurants, for example. Why? Because more of the money is staying locally. Even better is the place that sources their ingredients from local farms. When you keep your money local, you help improve the quality of life over all. When you buy, think about where they dollar is going and how it is going to be used. Is it going to China? Wal Mart’s bank account? Or the local shop owner who is then going to turn around and use that dollar to buy something else locally? The latter often helps a lot more for you and your community. Be proactive in your consuming of products! Be an informed consumer, because informed consumers make informed decisions, and that will help prevent another Mattel situation.