First of all, thank you to everyone in the above thread who helped answer the questions I came up with while writing this!
I did get an "A" in my Brand Management course - with a term paper on MotU how could I not, right? I graduated in mid-May (MBA with concentrations in Marketing and Strategic Management/Consulting), which is why it's taken this long for me to post the paper. Sorry for the delay! As you're reading, keep in mind that this was written for a professor in his late 50s whose only child is currently in high school - I had to assume he knew almost nothing about MotU. We also had a firm 7 page limit. So if you notice certain details being left out or glossed over, it's likely due to that. It's certainly one of the few times I've wished the page limit had been longer!
Thanks again to everyone - I knew I could count on the community here at the Org to help.
The Strongest Brand in the Universe:
Brand Equity Transfer in the Male Action Figure Category
The Male Action Figure Category
The Male Action Figure (MAF) category differs from many other consumer product categories in that entire product lines in the MAF category often have very short lifespans. What was popular in the category the previous year is often what clogs shelves the next. Product lines tend to hit or miss and then fade quickly as the children targeted by marketing efforts age. As the targeted children lose interest, they are replaced by new children who do not respond to marketing efforts in the same way the previous group. This ultimately leads to companies in the category needing to constantly develop and market new product lines.
The Major MAF Players
In the early 1980’s, the MAF category was dominated by a small number of companies, each with a flagship MAF product line. Hasbro was an established children’s toy company whose 12 inch GI Joe doll had dominated the category since its introduction. Their new 3 ¾ inch GI Joe line, which debuted in 1982, would help the GI Joe brand withstand the law of short MAF brand lifespans. In fact, the 3 ¾ inch incarnation has since been produced continuously except for a brief two year hiatus (yojoe.com 2009). Kenner was also a major player in the MAF category. Their efforts were focused on their exclusive license to produce action figures tied to the incredibly popular trilogy of Star Wars movies (Sweet and Wecker 2005).
Mattel and the MAF Category
Mattel, Inc. (NYSE: MAT; www.mattel.com) is a global children’s toy company that currently employs over 25,000 people worldwide. Mattel specializes in toys targeted to girls, most notably with their enormously successful Barbie line. However, they have struggled to have any significant success in the MAF category. In fact, Mattel’s 2008 annual report (investor.shareholder.com 2009) lacks any direct reference to the company’s “Boys Toys” products. Due to the success of Barbie in the 1980’s, Mattel had little room to grow without increasing their share of the MAF category. Adding additional pressure to penetrate the MAF market was the knowledge that in the 1970’s managers at Mattel passed on a license to produce Star Wars action figures. This same deal was then accepted by their competitor Kenner and used to capture a large segment of the MAF market (Sweet and Wecker 2005).
Masters of the Universe
Prior to the 1980’s, Mattel did not have a track record of success in the MAF category. In 1982, Mattel launched the Masters of the Universe (MotU; Exhibit I) product line (Exhibit III). The line was centered on a struggle of good versus evil and featured characters that were barbarian and animalistic, yet often high-tech. The main character was the heroic champion “He-Man”, who was touted as “The most powerful man in the universe”. With He-Man’s help, Mattel was took the MAF category by storm. Standard industry estimates for a successful first year of a new toy line in the range of 10 to 15 million, and Mattel’s internal estimates for MotU’s first year domestic sales were set at 19 million (Sweet and Wecker 2005). Surprisingly, domestic first year sales were twice that figure (Exhibit II). Sales continued to rise over the next four years, peaking at an astounding 400 million in 1986. Following that year, the line saw equally amazing drop off (Exhibit II). Masters of the Universe was discontinued in 1987 (Exhibit III).
Transferring Brand Equity
Customer-Based Brand Equity
The customer-base theory of brand equity involves designing, building, and evaluating brands from the point of view of the consumer (Keller 2008). Because the strength of the brand is ultimately decided by the consumer, it makes sense to structure brands by considering the consumer frame of mind first. Increased brand equity confers several advantages to a brand. In the case of the MotU brand, stronger brand loyalty and enhanced effectiveness of marketing communications would prove to be highly important. In addition, “… brand equity allows a marketer to charge a premium…” over comparable products (www.sdrnet.com/article12.html). Perhaps most important of all, brand equity is a means to connect Mattel’s current MAF products with consumers’ past experiences with the MotU brand and the MAF category (Keller 2008).
Brand Equity Transfer Strategies
Mattel’s primary goal for transferring equity from the original MotU brand to a new product line is to develop a means of transfer that draws sales from consumers who were branded to the MotU line as children. To do this, Mattel had to identify sources of brand equity that could be leveraged. Consumer awareness and familiarity was one major target of Mattel’s equity transfer efforts, as were consumer associations with the MotU brand. Through several re-launches of the MotU brand, Mattel would slowly come to recognize the value of triggering consumers’ brand recognition and recall as forces that can be instrumental in driving sales. Further, Mattel would find that tapping into positive feelings consumers had toward the MotU brand image could help sales while also lowering the intensity needed from marketing efforts.
Re-Launches of the Masters of the Universe Brand
The New Adventures of He-Man
After the historic rise and fall of the Masters of the Universe line, Mattel still owned a brand with considerable brand equity. However, there was no way to capitalize on this equity without a Masters of the Universe line available for sale. Mattel decided to re-launch the brand as “The New Adventures of He-Man” (New Adventures) two years after the original line was canceled (Exhibit III). This move indicates how quickly Mattel understood that there was un-captured value in the MotU brand. Unfortunately for Mattel, the New Adventures line did not benefit from the same level of success that the MotU line did. In their attempt to make the New Adventure line an innovative update of the MotU line, Mattel ignored many of the sources of brand awareness and aspects of the brand image that had been integral to the MotU brand. The New Adventures toys were a marked departure from the MotU line in design and sculpt (Exhibit IV). Further, both the logo (Exhibit VI) and packaging (Exhibit V) bore almost no resemblance to those of MotU. New Adventures lasted four years, but never achieved MotU’s level of sales.
Masters of the Universe - Commemorative Series
Mattel would find that, as discussed by Keller (2008), any changes in marketing programs affects the success of future marketing efforts. It would be another eight years (Exhibit III) before Mattel and retailers felt consumers would be open to another re-launch of their core MAF brand. In order to bypass the issues they experienced with their attempts to transfer MotU’s brand equity to the New Adventures line, Mattel released a commemorative series of MotU figures (Commemorative). Just as the New Adventures line was a substantial departure from the MotU brand, the Commemorative line was essentially no departure at all. The product line was comprised entirely of re-issues of MotU figures that, aside from additional protective packaging (Exhibit V), were virtually identical to the original MotU toys. The Commemorative line only ran for two years, but paved the way for the MotU brand back onto retailers’ shelves.
Masters of the Universe (2002-2003)
In the wake of the Commemorative line’s moderate success, Mattel again re-launched the MotU brand. In 2002, Mattel introduced a new MotU toy line (Neo-MotU; Exhibit III). This re-envisioning restored many of the storyline aspects that had been missing with the New Adventures line. Neo-MotU utilized taller, more modern sculpts (Exhibit IV), a departure due to the design of the line being outsourced to Four Horsemen Studios (http://fourhorsemen.biz/index.htm).
As described by Keller (2008), brand equity management can often lead to managing a single brand across several different customer segments, each with their own perceptions and needs. Neo-MotU was a fine example of a product line that was designed to appeal to too many market segments, and, in doing so, failed to completely resonate with any segment. The new figure design appealed to younger children, while the return to vintage MotU storyline cannon was aimed at young adults who grew up with MotU. Mattel also commissioned a cartoon to support the brand (Exhibit VIII). This, too, was targeted younger consumers, as it was televised in an “afterschool” timeslot on the Cartoon Network channel. At the same time, Mattel sanctioned a Neo-MotU comic book with a more adult take on the brand (mvcreations.com). Ultimately, the Neo-MotU line failed to win over the MAF category with the same success as MotU and older consumers of the MotU brand were often frustrated by Mattel’s changes. Even with the support of a comic book, cartoon series (Exhibit VIII), and national retailer distribution (Exhibit VII), Neo-MotU lasted only two years.
Masters of the Universe - Static Action Figures
Soon after the Neo-MotU line was canceled, the comic book and cartoon were also discontinued. Mattel had licensed the right to produce Neo-MotU statues and busts to Four Horsemen Studios, in addition to the action figure design. Interestingly, Four Horsemen Studios decided to produce a series of action figure-sized statues identical in design and scale to Neo-MotU line. As per the agreement with Mattel, the toys lacked articulation and were known as “static” action figures (Staction). Despite switching to a direct-to-consumer channel comprised exclusively of online purchases, as well as an increase to $20 per figure (Exhibit VII), the Staction line lasted a surprising three years (Exhibit III). This would prove indicative of the equity left in the MotU brand.
Masters of the Universe Classics
The Current Re-Launch
In 2008, Mattel announced the launch of a new Masters of the Universe toy line designed specifically for collectors. The announcement coincided with the opening of Mattel’s new collector webstore (mattycollector.com), which relayed news and updates to collectors while also serving as a direct-to-consumer sales platform similar to that of the Staction line. The new line debuted under the banner “Masters of the Universe Classics” (Classics). Figures were released at a rate of one per month and were available for sale until the production run was exhausted. Each figure was priced that the $20 price point established by the Staction line (Exhibit VII).
Transferring Brand Equity to Masters of the Universe Classics
The first point of emphasis in Mattel’s effort to transfer brand equity to the Classics line was the selection of the new line’s name. By choosing a name that directly referenced the original brand, Mattel avoided unnecessarily requiring consumers to make an additional mental connection between MotU and the new line. The logo for the line was also easily the most similar to the MotU line of any of the re-launch efforts other than the Commemorative line. The Classics name and logo make the connection to the original brand clear, while also distinguishing the line as a separate entity.
The figures themselves were also designed to capitalize on the MotU brand’s equity. The style and sculpting of the Classics line was again outsourced to Four Horsemen Studios. This gave the Classics line the same level of intricate detail consumers had come to expect with the Neo-MotU and Staction lines. At the same time, the Classics products are stylized to be more similar to the MotU versions. The Classics figures are six inches tall, the middle point between the MotU and Neo-MotU lines (Exhibit IV). They also feature a bulkier physique very reminiscent of the original product line. Finally, for characters that were part of both MotU and Neo-MotU lines, Mattel leveraged the equity of the brand through an innovative product concept. Rather than choose a version to include with the figure and risk alienating consumers who preferred one style of the character over the other, Mattle included two versions of the character’s heads with the figure. One version was derived from the MotU line and one from Neo-MotU. While both versions were included with the figure, it is worth noting that these Classics figures with interchangeable heads were packaged with the original MotU head in place.
Each successive re-launch of the Masters of the Universe brand has illustrated some of the major difficulties faced when attempting to transfer brand equity from one product line to another. Mattel has learned from their mistakes in re-launching the Masters of the Universe brand. Mattel seems to have finally identified a formula that allows them to capture some of the MotU brand value that their earlier marketing efforts have built with consumers.
Mattel has benefited from transferring the brand equity accumulated under the Masters of the Universe brand. As described previously, the greater brand equity has allowed Mattel to confidently position the Classics line at a high price point for the MAF category. The equity also increases the effectiveness of Mattel’s marketing communications. Advertising for the Classics line is largely done through messages directly to consumers posted on the MattyCollector website and central fan websites like He-Man.org (www.he-man.org). This has been sufficient to drive sellouts of each Classics figure Mattel has released so far. The amount of equity Mattel has cultivated into brand loyalty is such that the production run of the latest Classics figure release was doubled and it still sold out on the first day it was available for sale. While the process has taken over twenty years and spanned five separate re-launches, Mattel appears to finally be prepared to harness the equity of what is proving to be the most powerful brand in the universe.
Exhibit I and II
Exhibit VII and VIII
Keller K. “Strategic Brand Management 3E.” 2008. Prentis-Hall Inc.
Sweet R and Wecker D. “Mastering the Universe.” 2005. Emmis Books.
“Toyfare Magazine.” December 2000. 20; 42-44.