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Advertising Experiments at Ohio Art Company

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on 21 December 2013

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Transcript of Advertising Experiments at Ohio Art Company

Advertising Experiments at Ohio Art Company
"making creativity fun!!"

Background
Headquartered in Bryne, Ohio, USA
President - Martin Killgallon II
Majority of sales from toys and one-third from custom metal lithography
Flagship product - Etch a sketch
Other popular toys - Betty Sphagetty line of dolls, water toys, drum sets, sports sets
Alternating between profits and losses throughout 1990s & up through much of 2006
Etch a sketch
Flagship product; Endured for more than 40 years
Sold over 100 million units
Product placement via hit animated film franchise "ToyStory" & TV commercials
In 1998, a major retailer abruptly cancelled a $15.2 million toy order leading to excess inventory but the 30 second attendant free advertisement in "Toy Story 2" boosted sales by 20% and revenues for 1999 increased by 16%
Took on a strategic initiative for a national TV advertising campaign that lasted for 3 weeks
Holiday shopping season accounted for 45% of annual sales
Betty Sphagetty
"She's funky. She's different. She's certainly not barbie"
A popular line of dolls aimed at girls aged 4 and above
Features: Interchangable limbs, sphagetti like hair, accessories like cellphone, Laptop, in-line skates
In mid 2007, field experiment was conducted to test: (1) Whether advertising could increase sales for redesigned Betty Sphagetty (2) Justifying the shelf space to the merchandise manager of a mass merchant chain
TV and radio commercials aired for 4 weeks in Arizona (Nickelodeon and Cartoon Network)
Impact of the experiments
Etch a sketch experiment:

Toy industry
Major retailers
Walmart- 25%
Toys"R"Us- 17%
Target- 12%

Traditional specialty stores
20% Market share
KB Toys
FAO Schwarz
K's kids product line was designed for such retailers
$1.3Billion of overall sales
Online Toys sales
Shifting production
Shifted production from Bryan to China in 2001
Company cost reduced to 20-30%.
As a result, recorded highest profit-$3.1million
Full transcript