Dedicated Toy And Youngster Products Marketing Essay

Toys “R” Us is the world’s leading company that dedicated toy and youngster products retailer. The company was first established in 1948 by Charles P. Lazarus at Washington DC. When the shops was first open, the name Toys “R” Us® is set with a backward “R.” to draw people attention.  Nowadays, the Headquartered of Toys “R” Us is located at Wayne, New Jersey. Geoffrey® the Giraff was introduced in February 1960 as the iconic mascot of Toys “R” Us.

Toys “R” Us had grown fast and now they manage to had more than 625 international stores and over 140 licensed stores in 35 countries including Australia, Canada, Germany, Portugal, Spain and the United Kingdom. As Toys “R” Us is the world’s leading toy retailer company, it had approximately 70,000 employees worldwide and they are committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need.

At Toys “R” Us, their vision is about the ‘R’ value, rapid, real, reliable and responsible, will best serve their customers, employees, shareholders, communities and kids. To maintain as the world leading toy and kid product retailer, Toys “R” Us work hard to fulfil their mission, achieve organizational success, drive growth over the long-term and help our constituents reach their goals. Toys “R” Us Inc focuses on creating the right environment to deliver results for our employees, customers, shareholders and community. The core value of Toys “R” Us, Inc is they not only offer parents and families a various selection of products to create wonderful playtime memories along with everyday essentials, but they also provides the right resources to keep kids safe.

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Type of product of the company

Toys “R” Us which known as the World’s leading Kids’ Brand and has a large variety of toy products. The products are categories into many section such as Action Figures, Arts & Crafts, Baby Toys, Bikes, Scooters & Riding Toys, Books, Music & DVDs, Electronics, Games & Puzzles, Learning Toys, Outdoor Play, Party Supplies, Video Games, Building Sets and so on.

The Company’s Market/ Market Segmentation

Demographic Segmentation

Demographic segmentation can defined as divides the market into groups based on variables such as age, gender, family size, income, religion and nationality. Babies, children, teenagers and adults are consumers of the company. Gender is important in demographic segmentation because it divided their market into three sections which is baby section, boy section and girl section. For example, some of the toys are especially just for girls section such as Barbie dolls. Besides that, each toy has clearly verified the age for the safety used of consumers. For example, Lego is for 3 years old, 6 years old, and 12 years old or above and so on. This is because some parts of the Lego are tiny and it will cause babies or children accidentally swallow it.

Geographic Segmentation

Geographical segmentation helps Toys “R” Us to identify and segregate the market into segment based on the size and population in a country. Toys “R” Us has 860 stores in United State of America and this amount of stores are almost half of the 1,650 stores of the company around the world. USA has more stores than other country because the people who lived in USA are wealthier due to the country’s stable economy. Toy “R” Us targeted cities such as New York, New Jersey, Wessington DC., Las Vegas, Miami, Los Angeles and so on which have large size and population. As an example, the company found that the people who lived in New York are willing to spend their money on toys for their kids. Thus, Toys “R” Us has opened at least 9 stores to segment the market in New York.

Psychographic Segmentation

Psychographic segmentation known as the dividing of market into groups based on social class, lifestyle and personality characteristics. Babies, children and teenagers from intermediate or rich family are able to afford the spending money on toys. Besides that, adults who collect toys as their hobby are willing to spend their money on toys. In current years, with the boom of superhero movies, animated CGI flicks and video game, toy collectors are integration into the society. Thus, it has become one of the lifestyle to people around the world. Besides that, Toys “R” Us do research on the personality characteristics of consumers whether is toy collectors or non-toy collectors. Toy collectors have passion, patience and aware of trends while non-toy collectors are buying toys for fun or as a gift to a person.

Behavioral Segmentation

Behavioral segmentation is based on the customer knowledge of particular products, uses of products, and responses to certain products. Consumers will do research about the toys before purchase it such as manufacturer, characteristics of the products, review of customers, price and other information. With the information collected, consumers will decide whether purchase for collections or presents. When Halloween or Christmas is near, consumers especially parents or friends will buy toys as present to their children or exchange present between friends. They will buy toys which is only available in a season or festival only.

Problem of logistics operation of Toys “R” Us

The first problem faced by Toys “R” Us is the poor management of the vendors which gives the wrong compliance on the timing and quantity of the products. The incorrect timing and quantity of logistics operation could loss at the high demand when meet the seasonal stock. The demand can change quickly but supply takes more time to change. This could overcome problem which makes the company fail in “first-to-shelf” which means that the company is the first to display and sell the latest product compared to their competitors. Besides that, the vendor performance level will affect the quality of service that provided to customers. With late delivery from vendor to the warehouse and store, the company may lose customers because they could not find the latest product at the company. Thus, this also will makes the company do not have competitive advantage with their competitors. The customers will find for other company such as Wal-Mart which known as the main competitors for Toys “R” Us.

Toys “R” Us also faced the problem of the poor management of private warehouse. The purpose of the warehouse is to keep the stock and goods from vendors before delivery to each store. The poor management of warehouse is due to the receiving and sending out the inventory to every store. Thus, the company afraid the inventory could not delivery in time to every store. With slow process of packaging and handling of the stock in the warehouse, it will make the goods to be late delivery and could not meet the demand of customers. This problem will become worst when meet the seasonal or festival month which has a large demand and will increase in inventory compared to non-seasonal month. Besides that, this problem also will increase the cost of the stock because the space for the warehouse is limited. Furthermore, the longer the inventory keeps in the warehouse, the higher the risk of the inventory such as damage or stolen.

The last problem that Toys “R” Us faced is the cost of processing returns goods from customers. This problem is part of the reverse logistic. Reverse logistic define as all activity associated with a product or service after the point of sale. The entire idea of reverse logistics can be time consuming and costly that will involve manufacturer, retailer and customer. Customers will return their goods to Toys “R” Us because customers realize something wrong with a product such as outdated, spoiled, broken or flawed. The company has to solve customers’ problem and it will take a lot of time to solve it. This will not only affect the entire logistic operation of Toys “R” Us and increase their cost. Besides that, Toys “R” Us also must return the spoiled product back to the manufacturer. It will take plenty of time for manufacturer to come out solutions to Toys “R” Us. The conclusion of this problem is once customers return good to Toys “R” Us, it will cause time consuming, affect the logistic operation of Toys “R” Us, the company’s reputation and profit margin.

Problems solving of logistics operation of Toys “R” Us

The solutions for the poor management of the vendors about incorrect timing and quantity of logistics operation has been solve by Toys “R” Us with the using of Agility logistic Company. Agility logistic Company is a publicly traded global logistics company and one of the world’s leading providers of integrated logistics with have about 22,000 employees in over 550 offices and 100 countries.

By using Agility Company, Toys “R” Us were able to deliver the correct amount of product at the correct timing to fulfil the allocation and meet the demand of a new release product of the store level. This company provides Toys “R” Us one point of contact for the entire component of the Directs-to-store and “vendor-to-shelf” supply chain. With the combination of technology, multiple strategic location and the proven of expertise have allow Agility logistics company to deliver the deploy product to the appoint store easier and faster. Furthermore, Toys “R” Us being able to process shipments the “same day” shipments provide a huge edge for Toys “R” Us regarding in-store availability. It can helps with shipping cost by allowing them to ship at a slightly slower pace. Besides that, Agility Company also using some logistics tools to further reduces the shipping costs such as Least Cost Routing (LCR). This service allows Agility to meet an in-store deadline and able to move approximately 65 % of the product from the reachable store and this helps to save a lot of freight cost.

Besides that, Toys “R” Us can choose another vendor to supply product for them. This is because failure of sending the product to the warehouse and store in time is the problem of the vendor, not Toys “R” Us. Thus, the company can pick another vendor which can supply stock and deliver the stock in time. This solution can help Toys “R” Us to save more time and costs since they are doing the business for a long terms.

The second problem faced by Toys “R” Us is fail to reach just-in-time to customer. However, this problem has been solved with the employ of Electronic Data Interchange (EDI) to perform effective cross docking. EDI is a standardized method for transferring data between different computer systems or computer networks. Cross docking is a distribution system where the item that received at the warehouse is straight been prepared for shipment purpose to another location or store.

Cross docking is suitable for Toys “R” Us because their products have high and stable demand. With the implement of this solution, it will help in reduces logistical costs and speed up products to markets. Furthermore, this also eliminates the needs to schedule and stage the shipment later, which save on labor costs. This method can prevent stock out at other retail store and leading Toys “R” Us more into a just-in-time mode. Besides that, this will also help to increase available sales space because the more fast the latest toy is on sales in the store, the more products can be sales to the customer .Cross docking will help in reducing handling cots, operating costs, and storage in the warehouse. With less handling and shipping of the product, the product will be more secure because accident will occur if the product keeps shipping to here and there.

The last problem which is the cost of processing return can be solve by Toys “R” Us with the improving of reverse logistic. Reverse logistic is a process of remanufacturing and refurbishing the product that given back by the customer to Toys “R” Us or from Toys “R” Us to vendor.

The improving of the reverse logistic help to increase customer satisfaction and loyalty by paying more attention to the breakdown goods and through the repairing of the products. This can help Toys “R” Us to gain feedback from their customer and make improvement and to understand more about the real reasons of the returning goods. Besides that, instead of wasting time, manpower and costs of raw materials to improve the product. The feedback from the customer will make a lot of help because there is much information that can be extracted from the return products. Furthermore, reverse logistic can minimizing the overall costs of organization. This is because the manufacture will sorted, reassembles or recycled the product that is taken back from the customer or sending back of unsold product. A good standing and reputation of being a responsible company that takes care of their waste and hazardous product will form in the eye of the customer.

Conclusion

Through out this assignment, we can conclude that Toys “R” Us is facing some logistics problems such as the poor management of the vendor and warehouse and the problem of reverse logistics. This problem had made the company undergo an unnecessary loss. Moreover, through this assignment, we have learnt that how Toys “R” Us overcome their logistic problem to maintain the company’s reputation and profit. This will help us gain the knowledge on how to deal with the problem about the business logistic operations we might face in the future.