Passion for Learning
Passion for Learning
Helping Kids Become Amazing Students
CASE SUBMISSION 3
Presented to
Professor Ganesh N. Prabhu
[pic]
Indian Institute of Management, Bangalore
On July 26, 2011
Submitted By
Case Group – 2J:
Arit Kumar Mondal 1011084
Rajarshi Sarma 1011194
Nirupam Das 1011258
TOY DISTRIBUTION INDUSTRY IN USA
The toy distribution industry in USA is dominated by top five retailers (50% market share). Sales are seasonal towards the last quarter of the calendar year. The industry is attractive and the per capita contribution to toys is increasing. There has been a growing interest in the educational toys segment where educational value is the primary purchase driver.
DIRECT MAIL INDUSTRY
In 1993, over 40% of the Americans used mailed catalogs for purchases. Catalog consumers were well educated and had high incomes. Catalog sales were driven by mailing size, response rate & average order amount. Volume discounts, coupons & free gifts served as incentives. New products were extremely important in children’s catalog.
CHALLENGES FOR PASSION FOR LEARNING (PFL)
PFL’S market positioning is of a direct-mail company offering 100% educational products for 6-12 year old children. Its first catalog mail in 1994 resulted in a disappointing response rate of 0.77% which resulted in a loss of $145000 on revenues of $54000. There was also increasing competition from specialty chains focused on educational toys and big discount retailers. The firm also faces immediate challenge of designing its 1995 holiday catalog. Repositioning of the firm with the objective of breakeven in the short term and sustained profits in the long term is another major challenge.
INDUSTRY ANALYSIS
We briefly state the condition of five forces mentioned in Porter’s Framework for industry analysis here.
The toy industry has seen high competition due to presence of many medium and small players. Major players competing
Helping Kids Become Amazing Students
CASE SUBMISSION 3
Presented to
Professor Ganesh N. Prabhu
[pic]
Indian Institute of Management, Bangalore
On July 26, 2011
Submitted By
Case Group – 2J:
Arit Kumar Mondal 1011084
Rajarshi Sarma 1011194
Nirupam Das 1011258
TOY DISTRIBUTION INDUSTRY IN USA
The toy distribution industry in USA is dominated by top five retailers (50% market share). Sales are seasonal towards the last quarter of the calendar year. The industry is attractive and the per capita contribution to toys is increasing. There has been a growing interest in the educational toys segment where educational value is the primary purchase driver.
DIRECT MAIL INDUSTRY
In 1993, over 40% of the Americans used mailed catalogs for purchases. Catalog consumers were well educated and had high incomes. Catalog sales were driven by mailing size, response rate & average order amount. Volume discounts, coupons & free gifts served as incentives. New products were extremely important in children’s catalog.
CHALLENGES FOR PASSION FOR LEARNING (PFL)
PFL’S market positioning is of a direct-mail company offering 100% educational products for 6-12 year old children. Its first catalog mail in 1994 resulted in a disappointing response rate of 0.77% which resulted in a loss of $145000 on revenues of $54000. There was also increasing competition from specialty chains focused on educational toys and big discount retailers. The firm also faces immediate challenge of designing its 1995 holiday catalog. Repositioning of the firm with the objective of breakeven in the short term and sustained profits in the long term is another major challenge.
INDUSTRY ANALYSIS
We briefly state the condition of five forces mentioned in Porter’s Framework for industry analysis here.
The toy industry has seen high competition due to presence of many medium and small players. Major players competing