Toys R US is a global retailing company specialized in the production of clothing, toy, and baby products. The company established in April 1949 under the management of Tru Kids, Inc. The company is currently repositioning to come back into operation after experiencing bankruptcy. The paper focuses on Toys R US' products repositioning, current marketing trends, and profile of the consumer in the market segments.
Profile of the Consumers in the Market and Product Repositioning
As stated earlier, Toys R US is an international retail company that provides a full range of baby play products such as stuffed animals, baby dolls, fashion dolls, miniature, and collective dolls, doll playsets, doll clothing and accessories, doll furniture, and house accessories among other related product. Samples of the products are placed on the shelves for displays while the rest of the product kept in the store. The product serves a wide range of consumers, mostly targeting children under 14 years of age within and regions(Fassett,2018).
The brands are known and recognized globally based on whether the products meet need and requirement of the consumer. The company is currently putting and investing more in consumer need identification to remind its clients that are the utmost priority of the company. An elaborative and expand consumer insight team focus on the desires of the client and propose effective delivery approaches. It will help to establish what the client needs at different seasons, such as festivals and during the vocational period. When they invest in the identification of consumer needs, it will attract new and long-term clients who had utilized its products before, regardless of the company's experienced bankruptcy in 2017 as a result of substantial financial debts.
Customers view Toys R US products as products with long term benefits. By providing children with toys, the products need to stand out to prevent customers from switching to competitors. To maintain this, the company has to offer the latest and unique gadgets to gain competitive edge hence minimizing switching costs to Walmart, their closest rival. With large toy varieties, the company will draw in a lot of customers from all corners of the world (Bolton et.al,2019). Currently, customers view the company's toys as quality ones because of the existence of many groups within it who work tirelessly to maintain its favored status among the toy stores. They also view the company as a transparent one because Toys R US has built a relationship with its customers by maintaining the integrity of the highest level. However, some of the customers view the products as expensive ones hence the need for repositioning.
During previous operations, the company management made a severe fault in private equity, leading to severe disruption of business operation. Besides, the company lost its high profile employees as a result of the lack of jobs and enough salary to pay and retain its competent and proficient human resource team. Based on these unique and desperate circumstances, it calls for a unique solution to restore business operations. The private equity sponsors, Bain Capital and KKR, are currently making it right by contributing funds to reposition and stabilize company equity.
Therefore, in repositioning, the lenders plan on expanding its international presence and developing its private business brands. Because the company was found bankrupt in the United States, its main focus is on selling its operations in Europe, Canada, and Asia and close its service within the United States.
Description and Justification of Toys R US New Target Market Segment
Major Competitors for Toys R US Market
Toys R Us Company operates in an extreme environment; therefore, the company is under critical position calling for the need for the establishment of a comprehensive strategic plan to enable the company to operate and compete with intense arising competitions. The company lost its competitive advantages in 2017 when it experienced bankruptcy, opening an avenue for its business rival to establish and becoming strong. Besides, the uniqueness of its products was exposed.
The major business rival for the company is Amazon, Walmart, Macy's Build -a -bear, Kmart, Best Buys, Sears, and Target, among others. These companies took advantage of the Toys R Us bankruptcy situation to start investing in Toys enterprise after the company failed to meet the demand and needs of its consumers globally. Among this least, Toys R US Company experience stiff competition from Walmart, Target, and Amazon based on their financial stability, innovation, and capability of manufacturing Toys and related products. The companies are positioned and ready to take Toys R Us position if the company will fail to reposition itself through the establishment of strategic plans to address and save the image of the company, which had deteriorated as a result of instances of bankruptcy. These three rivals recently are encroaching and taking significant market shares, approximately 15% of the market shares (Deep Drive.com,2020).
Positioning of Competitors
Each of Toys R Us's market competitors had its specific and unique strategies to position and competitors. Amazon had positioned itself by using technological innovation to provide its products and services via online and application software to take most of Toys R Us's client. The increase of the internet connection the main competitive advantage for Amazon products. Currently, children can watch and play video games and cartoons, which uses the physical image of the toys produced by Toys R Us company. Besides, parents download application software from Amazon Websites at a low cost compared to buying of real dolls. Also, online video games are more interactive compared to toys making it be loved and cherished by children does increase its competitive advantage leading to the fall of the Toys R Us company. According to a financial report by eMarket projected established recently, 77% of United States online shoppers searched Amazon products and was reported that Amazon listed more 630 toys and its products as exclusive to its websites (Deep Drive.com,2020). With increased cases of Coronavirus globally and most people staying indoor and fear of handling cash and other products, Amazon is more likely to increase client base and expand its marketing segments.
Walmart is currently the leading competitor to the Toys R Us company in terms of products. It provides similar products produced by Toys R Us at a low price to attract more clients. With the absence of Toys R Us, Walmart has started rebranding and referring itself as America's best Toys production and selling organization. IBISWorld reports that the company holds the largest market share of 23.1% in the retailing of toys and its products. It positions itself by the production of favorite and top "rated toys by Kids." (Townsend &Deaux,2019) In October 2019, the company positioned itself by rolling back prices of 200 and more toys available in its store and online and a total of 400 and more items on discount. Therefore, product quality and price is the positioning strategy for Walmart to disrupts its competitors.
The target company is the third force competitor, regardless of partnering with Toys R Us recently. The company is positioning itself by opening up more stores and retail shops to promote the accessibility and availability of its products. The partnership is also a Target positioning strategy to market its image and brand using well known Toys R Us name and brand. The company also makes more sale and research clients since when customers search Toys R Us product, they get access to Target's product, by doing so, the company increases its total sales and accumulate more profits.
Gaps in the Market That Can Be Exploited
Regardless of the stiff competition, there is an existing gap that can be exploited by Toys R Us company. Most of its competitors have invested heavily in the United States market. Demographic diversification and relocation can improve the company. Therefore, if the company reposition itself in United Arab Emirates countries such as Ras Al Khaimah, Umm Al Quwain, Ajman, Fujairah, and Dubai, there is a high possibility of gain more clients and make drastic come back into toys business. Besides, the entertainment platform has not been adequately exploited. Therefore, the company needs to venture into entertainment to a partnership with a mass media platform to have kid's show programmers to markets its programs and gain more subscribers into their channels to watch programs.
Marketing Trends, Product Attributes, and Consumer Attitudes
Market trend plays a critical role in brand reposition, so Toys R Us is monitoring and evaluating the market to the established most appropriate time to come back to business. When the company withdrew last year, most people and industry wondered about the future for the toy industry. Still, currently, the toy industry is taking a different movie with the advancement in technological innovation. Most of the marketing process is done online by focusing on a new experience that enabling interaction with toys items outside packaging stores. Shifting to smart marketing makes entire toy retail enterprises adopt a new move.
The essential beliefs existing on the market that favors coming back to business is based on the fact, it had been known decades producing quality toys that meet consumer needs. Therefore, most clients expect the company to stabilize with its new face outlook. The new brands have salient attributes such as social interaction and reflection of the past that make the brand to be more liked by children and parents. In most cases, parents buy toys based on experience. Therefore, the company takes into consideration some of the salient attributes to manufacture dolls.
Most importantly, the physical store had been used as the first impression and attraction to most of the local consumers. Parents like taking their children into the store to select an item based on the ire interest, which ends up becoming a routine to visit the store to shop and purchase toy items. These kinds of attributes significantly influence consumer purchasing decisions. Therefore, they had been having a positive attitude towards the brands based on the quality of the toy items.
In the future, the most attractive consumer will still be the usual under-five children and under 14 years old based on the fact that these age groups like and cherish interactive toys and games, respectively. If the company increase its investment in online marketing and innovation of application, automatically it will manage to capture teenagers who like playing online games such as war game, temple ran, snipers and among others. These make youths and children the most attractive consumers in the future.
Achieving all these require unique strategic plans. The company needs to invest heavily in internal and external marketing search after a long period out of business to establish more information since they are influenced by several factors brand image that determines their purchasing power. The use of external research facilitates gathering information from the general public regarding perception. It also searches consumer interest and prior knowledge of the consumers about the brand. On the other hand, internal search establishes vital information such as human resource relations and challenges that affect the production process. External search plays a critical role in interpreting consumer characteristics to identify the best delivery method by use of either an accidental, or intentional approac...
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