Global Marketing 20018 Anirudh Singh Rathore

S0166432

Global Marketing

MRKT20018

Assignment 1

Tutor: - Daniel Frimpong

Submitted by: - Anirudh Singh Rathore

Student Id: - S0166432

Global Marketing 20018 Anirudh Singh Rathore
S0166432

TABLE OF CONTENTS

Executive Summary........................................................................................................................................................ 2
Introduction....................................................................................................................................................................... 4
Case Discussion................................................................................................................................................................ 4
RAY: The Man Who Kept the Business Going....................................................................................................... 4
Tiny Tots: Strengths and Weaknesses..................................................................................................................... 5
Tiny Tots : Going International?................................................................................................................................ 7
Tiny Tots : The Road Ahead......................................................................................................................................... 8
Recommendations........................................................................................................................................................... 9
Conclusion........................................................................................................................................................................ 10
References........................................................................................................................................................................ 10
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EXECUTIVE SUMMARY

The case is about Tiny Tots toy makers which made a humble beginning with ray as the head.
The company insisted on having strict quality provisions even though it operated on a small
budget and limited manpower. Later the company started operating in other parts of the
country as well as in Australia and Japan. Ray was very judicious as far as selection of his
suppliers is concerned and this has resulted in gaining customer confidence and positive word
of mouth. The company enjoyed a positive word of mouth but the main issues were limited
budget on which they were operating and the reach of the products. One of the main drivers
of this business was that Ray never looked at this job as one that as a source of income rather,
he just pursued his passion of toy making to make quality toys available to the market. This
change in focus on quality rather than profitability is one of the main reasons why this small
business still sustains in front of toy making giants. Having a small work force was an
advantage in hindsight for the company as Ray could personally interact with them and make
sure that all the problems could be sorted out in his presence. Even though the business faced
many problems that a small business is prone to, his passion to carry on ride the tide has been
the only reason why this business is still surviving in this age of huge capital investments and
multi national companies operating in the market. The company which was considered to be
a small toy manufacturer was able to export goods that were able to compete in the global
market. Here both the operational and marketing aspect of Ray needs a mention. Still the
company operates though five or six retail stores and a few number of retail outlets in Japan
and hence cannot be termed as a truly interantional in its operations but given the size of the
company this is a big achievement. They have many positives such as a good product line,
positive word of mouth, high safety standards compliance and little competition. But the
main problem for limited sales in the domestic market is because they spend very little on
advertising. The Case discussion ends with recommendation on the sales and marketing
aspect and the future ahead for Tiny Tots as in the way they should carry the business
forward.
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INTRODUCTION

Tiny Tots has been into wooden toy making wooden toys for the past 25 years. The owner
Ray has started it off more off as a hobby rather than a full time business in itself. The
business faced many financial constraints but was ably supported by his parents during
crucial intervals of time when it needed capital investments. The banks were also supportive
in holding the business with its liberal overdraft policies for the company. From being a small
business it rose to prominance by providing quality furniture to the stores. Ray never made
any compromise as far as quality was concerned. He kept the competitive advantage of high
skilled painting using non toxic paints for kids, which he developed over years and used high
quality timber which suited his budget to avoid any splinters or cracks in it. He was very
judicious as far as selection of his suppliers is concerned and this has resulted in gaining
customer confidence and positive word of mouth. One main thing that has to be noted here is
that the company spent minimal amount on marketing expenditure as they always relied on
word of mouth and repeat customers (Dascher, Harmon. 1984). So quality was one of the
main things that they had to maintain so that they maintain status quo. They operated pretty
much in the small scale and have started to export their products to Japan and other nations
which are likely to increase the demand for the product in future. This was a different product
that was made available in the market that was over crwoded with plastic toys that was
always a worry for the parents who felt that their kids might bite the toys which can be
harmful to them. If properly marketed in the new markets and existing markets, this product
have a great potential in gaining important market share in the toy market segment. Even
though these wooden toys cannot compete with advanced electronic toys that are available in
the market these days, but certainly they can pose a threat to ordinary toys made of plastic.
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CASE DISCUSSION

RAY: THE MAN WHO KEPT THE BUSINESS GOING

Ray started off this business when he found that after his graduation there was no agricultural
work available to him. He started wooden toy making as a part time job supplementing his
income. One of the main drivers of this business was that Ray never looked at this job as one
that as a source of income rather, he just pursued his passion of toy making to make quality
toys available to the market. This change in focus on quality rather than profitability is one of
the main reasons why this small business still sustains in front of toy making giants.

The positive word of mouth that is generated through the business has earned brownie points
for Tiny Tots as a brand in the eyes of new customers. Initially he had no written business
plan when he started this business which was one of the main reasons why it got rejected by
many venture capitalists. From the case we can say that he ran the business by instict rather
than sticking on to any pre written rules or theories which gave flexibility to the business
which is essential for a small company like Tiny Tots.

One drawback that can be derived from the case facts is that he was not ambitious enough not
in the beginning atleast because he was working part time in the business and he himself felt
during the intial stages that this business does not have a long term viability. He was
excellent at managing the business but he identified his weakness in sales and marketing and
always felt that he was not the right man for marketing his products. By identifying his
strengths and working on it rather than interfering in other functional domains in which he is
not strong have made the operations smoother as sales and marketing was entrusted upon
people where good at it(Dascher, Harmon. 1984).

Later his son took over the position and Tiny Tots went online, even though the response
from the online public was meagre. He had a knack of solving production problems very
effectively and this was evident when the company faced one of its greatest threats in terms
of quality, when the German timber supplier stopped supplying quality timber to him
(DuBrin, 2000). He was quick in searching for other options as he knew that quality is one
main proposition that he is offering to his customers and they would dsert him the moment
quality deteriorates. He was one who was responsible for training the employees and made
sure that he passed on the philosophy that the company believed in to the employees.
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Having a small work force was an advantage in hindsight for the company as Ray could
personally interact with them and make sure that all the problems could be sorted out in his
presence. He was involved in most of the operations of the company and made sure that there
is involvement from all others. One thing that comes out from the case was that he was an
excellent adminstator which had resulted in no-error operations as far as office working was
considered. Even though the business faced many problems that a small business is prone to,
his passion to carry on ride the tide has been the only reason why this business is still
surviving in this age of huge capital investments and multi national companies operating in
the market.

He has managed his time pretty well between the demanding schedules of production and
made sure that if he had to meet a supplier for any issues, he did without any fuss. The fact
that he was involved in sports and other charity works shows that this man is not running
after money alone but a guy who follows his hearts and thus lead the business in quite an
unconventional way (Dunn, 2002).

TINY TOTS: STRENGTHS AND WEAKNESSES

One of the main strengths of the business was that it was able to provide quality goods to its
customers. Quality was one of the major selling propositions with ingenious ways of painting
which was developed over years and usage of high quality timber for the purpose. They had
long term relationship with the suppliers and this resulted in quality inputs coming to their
factory. The quality of goods supplied by the suppliers was strictly checked and any good that
did not comply with the quality standards were not accepted. This is evident from the fact
that they have changed the suppliers from Germany when they found that the quality of the
goods supplied by them is no longer good in terms of quality even though they had a long
standing relationship with them (DuBrin, 2000). Tighter managerial control over the daily
production activities and stricter operations combined with excellent knowledge of Ray on
operations management meant that they managed this small businesses day to day activity
pretty smoothly. Ray had a small team to work with and he maintained an overall control on
all the operations which means that the company was nimble enough to adapt to the dynamic
needs of the market. For a small company like Tiny Tots it is essential that they have to be
flexible enough to adapt to the changes other wise they cannot survive the huge threat of
other players and unpredictable market forces. The business was stable through out its life
time and for a small business of this magnitude it is a matter of pride that they never had to
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take any assistance from Department of Work and Income. Another major strength of the
company was that they had customer confidence and a major chunk of their sales came in
repeat purchases and as a result of this if the company tries to leverage this when they come
out with new products and increase the advertising spending a little bit more, it can work
wonders. Customers are generally satisfied with their products and the products themselves
have a huge untapped market. It is just that they are not able to move out into the market at a
massive level.

As far as weaknesses go, the first major weakness that can spot in the case is the ambitious
nature of the owner itself. He was not ambitious enough at the beginning which to certain
extent restricted the companies operations at a limited level. It was mentioned in the case that
the sales rose when they employed three full time employees and hence they should actually
pursue to grow more aggressively by an increased scale of production. Ray by his nature
seems a little bit risk averse having little urged to take risks that can help him grow in a long
term. Another cause of worry is the sustainability of the business after Ray as his children
have not shown any keen interest in taking the business forward. The business came this far
just because of the passion Ray had for continuing this business and as a result of this the
perseverance and resilience that he has shown (DuBrin, 2000). If he is not able to find an able
successor for this business it is definitely going out of the business. Smaller scale of
operations is another problem that they cannot suitably implement newer technologies that
are available noe enabling businesses to streamline the operations and at the same time help
them in production at lower costs. They can be easily predated by other major giants once
they spot Tiny Tots as a threat to their market share. Fluctuating foreign exchange rates even
though have worked to their advantage in many cases also poses a significant threat to their
operations. They are not sure about their bottom lines due this and a weak financial
management system which takes note of the annual sales alone can make the business myopic
towards the long term market implications and hence is a major problem. Lack of proper
financial funding is another weakness. In previous cases it was Rays parents who took him
out of trouble and once even the bank refused to give him the rquire overdraft which lead to a
long laborious negotiaton with other bank. In case of any sudden emergency, a company of
this magnitude needs a strong back up in terms of funds that it has so as to keep the business
going which is absent in this case.
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TINY TOTS: GOING INTERNATIONAL?

Initially when the company was set up , it concentrated its operations on New Zealand alone
with a major share of the sales coming from regional retailers to whom Ray sold his products.
He concentrated on local sales initially as he found that it was the best strategy to go local
first rather than try to eat more than what he actually can by trying to go multi-national
(Dunn, 2002). The company also was not in a position initially to go global because of the
limited financial back up it had and hence it could not afford heavy capital investments. In
1985, they sold their products in Australia and later the products were exported to Japan.
Both of these happenned because of contacts of Ray and the sales in Australia took place
because of a sales agent who wanted to sell their pproducts because they were good in terms
of quality. When they started exporting their products to other nations, quality constraints
were even more as they have to be on a high scale in quality so that they are able to compete
in thes foreign market which gives them huge opporunities of growth. They depended on the
supply of hard wood which gave them a good and cheap option compared to that of maple in
toy making. Here again the managerial skills of Ray comes into picture, it was because of
him that the company which was considered to be a small toy manufacturer was able to
export goods that were able compete in the global market. Here both the operational and
marketing aspect of Ray needs a mention. Still the company operates though five or six retail
stores and a few number of retail outlets in Japan and hence cannot be termed as a truly
interantional in its operations but given the size of the company this is a big achievement. It is
up to the management to spread out its operations both in New Zealand and in other places
for which they need huge capital investments and a proper charted out plan while entering
these markets. They cannot afford to remain as a small player in these global markets which
they are not familiar with (DuBrin, 2000). They cannot afford to rely on this low budget word
of mouth marketing campaigns when they plan to attack thes markets as well. They have to
gain recognition in thes markets and make the customers aware of the superior product
quality when they plan to spread out in these markets. Thus overall it could be said that even
though Tiny Tots have made its presence in other markets as well, they cannot be said to be
true intternational company due its limited international presence and limited productive
capacity. But I believe that by a well laid out plan and given the demand for wooden toys in
many markets, they can mark its presence as an international company (Daigle, Morris and
Hayes. 2009).
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TINY TOTS: THE ROAD AHEAD

The business showed huge potential both in terms of domestic and international sales. The
only thing that is lacking now is a wide spread international presence and increased sales
which they are bound to get once they market their products properly. Till now they have
been operating in a limited budget and in order to make it large they need to get a sound
financial back up so that they can invest on caapital and technological assets that can help
them in having cost effective operations and hence better prices and value for their
customers. They may look for venture capitalists to fund them, now that they have a
successful business to show off to them it would be easy for them to get the funding. They
can also get into strategic alliances with partners overseas so as to distribute and market the
products in those markets (Daigle, Morris, Hayes, 2009). They can also enter into distribution
and marketing alliances with major retailers so as to get a better visibility for the brand. This
would help them in moving deep into the domestic market that they are not able to do right
now. One other advantage of these strategic alliances are thaat they would be able understand
the pulse of the customers and hence come out with new designs that the customers want.
This is not possible in the current scenario because being a small company they cannot afford
to spend huge amounts on marketing research. More over these retailers can actually give you
a real time on the ground information which can be of great help to the company. Moving
forward, they can also enter into alliances with some huge toy manufacturer helping them
reach to this market (Bressler, Bressler. 2006). This would be of mutual benefit as the bigger
firm can get access to this market without building up a new brand and other expenses and
Tiny Tots can increase their level of operations and get brand visibilty when they use such
associations. They can also improve the designs and then enter into other toy segments if they
find it profitable. This would reduce the risk to a great extend just because relying on one
product line can be risky for the long term viability of the business (Dunn, 2002.). With many
electronic games and other toys which are technologically improved dumped into the market
place, wooden toys are expected to loose their craze in some time and if the company doesnot
have a back up plan or other product lines to fall on then it is bound to cause problems.
Another thing that should be taken care of in future is increase in marketing expenditure.
Currently they spending very little on their marketing and this can lead to low brand loyalty
as customers treat tiny Tots products as cheap generic products (Bressler, Bressler. 2006).
They should communicate their superior quality and non toxic paints that they use in their
toys so that customers feel safe to buy Tiny Tots for their kids. But this can be done gradually
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only once they find a safe position as far as their financials are concerned. But when they are
going to operate in other markets, they should make sure that they ramp up the marketing
expenditure atleast in the initial phases so that a certain level of brand awareness is created
amongst the customers.
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RECOMMENDATIONS

The recommendations basically would be on the sales and marketing aspect only. This is
because the company has a very good operational background and given the tight control of
Ray in the near future, there is nothing much to worry about in this aspect. They have many
positives such as a good product line, positive word of mouth, high safety standards
compliance and little competition. But the main problem for limited sales in the domestic
market is because they spend very little on advertising. By this they give a wrong impression
of a generic product like image to the products thaat they sell. It was mentioned in the case
that the customers are more likely to return to their stores for their products. If they advertise
their superior quality then it is sure to increase the sales. Given the limited competition in the
domestic market it is ideal for tem to improve their performance domestically and then grow
globally. This can spread the positive word of mouth at a larger scale and at the same time by
creating brand awareness they can create a group of brand loyalists and thus charge a
premium for the products. They can enter into strategic agreements both at a domestic and
international level for sales and distribution which releases the marketing burden of their
shoulders and help them work on their core competancy of production and manufacture of
goods. They can enter into agreements with retailers for in store promotions and other sales
promotional offers so as to increase the short term sales. By entering in agreements with the
retailers they will get a feel about the ground reality and can change their products and
designs accordingly (Beard, Hoyle. 1976). They can choose markets similar to that of New
Zealand and hence can enter them without so much change in the product lines. By entering
into various markets they can diversify the risks that are associated with a single geographic
market. Even though they have launched an online website they were not ableto attract their
customers to the online space. They can make the contents of the sites much richer so that the
same online space may be used overseas also. By having an online presence they company
can afford to have limited number of outlets internationally during the initial phase atleast
because of their online presence. Their online website needs to be publicized properly so that
customers visit them and get a view on the product portfolio that they are offering them
(Baudoin, Luehlfing. 1997).
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CONCLUSION

The business grew this far just because of the resilliance and perseverance of Ray alone and
now needs to be taken forward to different level altogether. The company has been very
limited in its ambitions to say the least which is evident from the way they operate and the
level they are still on after 25 years of doing business. The Onus is on the management to
take it forward; this is posiible by having a long term vision of getting into strategic alliances
with partner companies and takes the domestic operations to a next level. Once they get
established as one of the main player in the Toy making industry (Baudoin, Luehlfing. 1997).
At the same time they should search for new opportunities in the foreign markets that are
similar to New Zealand so that there is not much of a shock for them in terms of adapting to
the new conditions (Bennett, 1948). Another major issue that the company should
immediately address is the succession planning of Ray. It is known that the company came
this far because of him, but the company have to look for other options too. His sons have not
made any long term commitment towrds the business. Ray has to mentor them to handle new
responsibilities or find an outsider who can be drafted into the system to take the mantle
forward. Lastly the mindset of management towards growth has to be changed. Rather than
being content with these small gains they should aim to grow aggresively in a market with
little competition.
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