The toy retailer utilizes a variety of marketing and advertising channels to reach its target audiences. Its mass marketing programs include email marketing, national television and radio spots, direct mail, targeted magazine advertisements, catalogues and ads in national or local newspapers. Other strategies include targeted door-to-door distribution, direct mailings to loyalty program members, and in-store marketing.
What differentiates ToysUs as a specialty toy retailer is the memorable shopping experience we provide for our customers, said Andre Javes, managing director, Greater China and Southeast Asia. He added. â€œThis includes a combination of the widest assortment of toys and baby products, including exclusive items not available anywhere else in the market, fun store layouts, interactive in-store experiences, product displays and demonstrations, activities and more.
The retailer's revenue tumbled 5% to $11.8 billion in fiscal 2016 (ended January 30, 2016), mostly because of unfavourable foreign exchange rates tied to the stronger US dollar. Excluding foreign currency impacts, however, net sales increased slightly thanks to new International store openings and comparable International store sales growth of 3.2%, driven by higher baby gear/apparel and construction toy sales.
Toys "R" Us has experienced declining sales despite its being the only truly global toy store chain and a strong brand name. It has suffered from declining demand in most mature markets as population ages and birth rate fall. Furthermore, new competition has arisen with pure players and grocery retailers expanding their range of toys and baby products. The company had faced huge competition from specialist toys stores and retail superstores like Tesco, Walmart (Asda) etc in its major international operations.
To turn around its situation and set the company up for long-term profitability, the retailer in 2016 reiterated its customer convenience-oriented strategy to integrate both its online and brick-and-mortar offerings by utilizing its "In-Store Pick Up," "Ship from Store," and "Ship to Store" fulfilment channels.
Since then company has introduced its Transformation strategy. A new service model will also be introduced into Babies R Us stores to help first-time parents have a better shopping experience, along with expanded parenting classes. In addition, mobile devices will be rolled out to store associates, in recognition of the growing importance of this channel. Toys R Us is putting more emphasis on becoming a customer-centric company, giving the retailer a competitive advantage over big-box discounters such as Walmart, Tesco, Target and Amazon. Toys R Us will take customer insight into consideration to make the in-store and online services an exceptional experience for multichannel shoppers.
Future International Strategic focus
The toy retailer also continues to expand its stores globally as the US market continues to mature, opening its 100th store in China in January 2016.In terms of international growth, Emerging markets, Southeast Asia and China remain the key areas of focus. "International growth remains an important area of investment for the company and we continue to see significant opportunities for expansion, said Antonio Urcelay, Chairman of the Board and CEO, Toys"R"Us, Inc.
Expansion into international markets is crucial for Toys"R"Us, However, the questions are how and where? The company is exploring its options to expand into ONE of four major markets, namely India, Sri Lanka, Nigeria and Russia.
1: Analyse the macro and competitive factors that impact global Toys Industry.
2: Analyse internal business environment of Toys"R"Us using Porter Value Chain.
Global macro-Toys industry
Global Competitive factors -Toys industry
Internal business environment of Toys"R"Us
3 : Evaluate the potential target markets of India, Sri Lanka, Nigeria and Russia using the 12 Cs framework and then select ONE of the target markets and justify choice.
4. Recommend to Toys"R"Us an appropriate mode of entering the chosen country and justify your choice based on your analysis and theory.
Task 5: Analyse the targeted country socio-cultural factors. Develop appropriate marketing mix for Toys"R"Us to succeed in your selected target market.