Top toymakers act to soup up hyper car sales

Discount Store News, Feb 12, 1990 by Mark Brown

Top Toymakers Act to Soup Up Hyper Car Sales

NEW YORK -- The momentum of hyper cars, after blasting off the starting line, appears to be downshifting.

While some manufacturers are still high on these souped-up toy cars and are working to expand their lines, others have taken a more discreet approach in their marketing strategies. And, one major player in the radio-control field has decided not to touch the product.

Hyper cars caught the immediate attention of major manufacturers at their introduction at the 1989 Toy Fair. Because the cars did so phenomenally well in Japan, American toymakers were quick to invest manpower, time and resources in bringing the cars to the domestic marketplace. Consumer response, however, has been less than enthusiastic and sales among the major players has been measured.

Early last year, the field was crowded with models and manufacturers but now, the major players have dwindled to two--Hasbro, America's leading toy concern, and Tonka, a distant second.

Coming off the Toy Fair excitement, Tonka, Hasbro, Matchbox, Nikko, Bandai and Mattel rushed to market the product. From the start, however, two significant developments hindered eventual sales.

First, vendors had no major samples at the Toy Fair and thus could not show buyers and retailers what the cars could do, nor could they show how the vehicles could be customized and accessorized. In reality, what transpired was essentially a word-of-mouth campaign and a combined promise from the makers for a $15 million to $20 million national advertising blitz.

Second, and perhaps the biggest fault manufacturers faced, was misinterpretation of the American market. Both vendors and retailers stress differences between Japanese and American youth and therein provided a significant factor in overall sluggish American sales.

"Japanese kids are far more mechanical, they like to take things apart, add, subtract, transform," said Marsha Chaety, advertising director for Nikko's operation in the United States.

"American kids have no patience, they're spoiled and have shorter attention spans. They want to be in control and basically desire things done for them. The kids in Japan could take these cars apart and customize them whereas American kids do not have the patience for that. For Americans, the cars had little play value," Chaety said.

In regard to all overall development, the key term "play value" is repeated. Most believe limitations in this area spelled demise from the start. As a result, Tyco, the leader in radio-controlled cars had no interest in the vehicles at all.

"The product just had none of the so-called `play value' for which we look," said James Alley, senior vice president of marketing for Tyco.

"We also determined that the product was devoid of any sociability, that kids had a problem playing among themselves. At first, there were no tracks, so major settings for vehicles did not exist. Kids found themselves smashing the cars into walls or running in haphazard positions.

"Because of this limited play value, we felt the vehicles held no promise for the American marketplace. We then made the decision not to get involved."

To address the "play value" question, American manufacturers introduced a modified track system. Hasbro, for example, produced two models, a 25-foot design with eight possible configurations and an 18-foot oval.

Another contributing factor to the slight play value was utilization of the product in Japan. Huge, ambitious tracks were elaborately constructed in highly visible locations, such as town squares, shopping malls and large public areas. In these places, Japanese youth could buy their vehicles at the sites, customize cars immediately and engage in competitive activities within a clear social setting.

So far, there has been no such construction of tracks in the United States although Hasbro is attempting to organize nationwide shows in malls and other such locations.

Hasbro, indeed, remains the significant player from a once-crowded field, with Tonka still attempting to remain competitive.

While managing to corner the 1989 market on the hyper cars, Hasbro still faces, for its product, an unknown and uncertain future. On Jan. 12, 1990, The Wall Street Journal reported that the product could have represented a $300 million item split many ways. Instead, Hasbro's sales are expected to reach $30 million to $40 million on the line.

In early 1989, Hasbro was looking to diversify and decided to gamble on the hyper cars. In the process, the Pawtucket, R.I., toy giant dramatically increased its national ad budget. Advertising Age reported that Hasbro had jumped from 67th to 58th among the top 100 leading advertisers in the nation. Hasbro reportedly spent $165.5 million in advertising with just over $127 million going to television and $6 million directly on Record Breakers, its version of the hyper cars. Hasbro's revenue for the year was estimated at between $1.4 billion and $1.43 billion, up from the $1.36 billion in 1988.

"We succeeded in what we set out," said Wayne Charness, Hasbro's vice president of public relations.