INTEROFFICE MEMORANDUM TO: STEVE RAQUEL FROM: BLAKE CHANGNON SUBJECT: ASSIGNMENT #1: AMERICAN GIRL BRAND ANALYSIS DATE: SEPTEMBER 3, 2015 This memorandum outlines the brand analysis for the American Girl brand that I have selected to work on for Advertising 283: Introduction to Advertising and Brand Strategy. This memorandum will provide information of the American Girl brand in the following sections: • Brand Origins • Customer Demographics and Life Style • Current Products Offered • Distribution • Product Category • Product Attributes • Competitors • Current Advertising • Personal Assessment of Brand Brand Origins American Girl is one of the leading toy companies that manufactures and sells high quality dolls, doll clothing, accessories, along with book and movies. Originally the dolls were focused on telling stories about various times in American history, but they have branched out to contemporary characters of today, and baby dolls. American Girl was founded by Pleasant Rowland in 1986 and located in Middleton, Wisconsin. According to Rowland herself, she created American Girl, originally known as Pleasant Company, because she wanted to giver her nieces a doll for Christmas, but didn’t want to give them a Barbie or Cabbage Patch doll. However, it was during a trip to Williamsburg, Virginia that Rowland thought of the idea. The idea was a historical doll from an American time period, with historically accurate clothing and accessories that would be accompanied by a book from the dolls point of view (Rowland, 2004). Pleasant Rowland sold American Girl to Mattel, which owns the Barbie and Hot Wheel brands, in 1998 (References for Businesses). Customer Demographics and Life Style American Girl is primarily targeted towards young girls, ages 9-12 years old, however it is most likely the parents of these young children who will be purchasing the dolls for them. In that aspect, American Girl is targeting parents, both females and males. They are usually 25 years or older, and are either working parents or stay at home parents. American Girl usually targets parents who have college degree or higher, and with a household income of $75,000 or more a year. American Girl targets all ethnics and cultures and a household that has children (MRI+ MediaMark). Most parents of children who own American Girl dolls usually live in large populated cities and suburbs, where parents can take their children to one of American Girls many stores. However, any parent living anywhere in the world can order an American Girl doll by ordering online or calling 800-845-0005 (“Our Company,” 2015). Since American Girl is a high quality brand that sells expensive products, families tend to want to teach their children the value of life through historical and contemporary books. Current Products Offered American Girl offers a wide range of dolls, clothes, accessories, books and movies. Below is a chart of the current products offered and their current price offerings (American Girl, 2015). Product Price Range Product Price Range BeForever Dolls $115 Doll clothes $24 - $50 Truly Me Dolls $115 Doll Accessories $6 - $68 Girl of the Year Doll $120 Doll Furniture $26 - $500 Bitty Baby Dolls $60 Books and Movies $9.99 - $37.99 Bitty Twins Dolls $125 Girl’s clothes $14 - $68 Distribution American Girl products are sold and distrusted through American Girl retail stores located throughout the nation, as well as in specialty stores in Indigo and Chapter stores in Canada and most recently at El Palacio de Hierro stores in Mexico. Customers can purchase American Girl products through their direct mail catalogs, online at americangirl.com, and by calling 800-845-0005 (“Our Company,” 2015). Product Category Size of Market 2 American Girl and its competitors are apart of the toy and doll category. The Toy Industry Association, Inc. currently estimates the total toy industry for 2014 at $18.11 billion, which is an increase of 4%, which in 2013 was at $17.47 billion. Of that, the annual sale of dolls in 2014 was $2.32 billion, which was an increase of 4%, which in 2013 was at $2.22 billion (Toy Industry Association, Inc., 2014). According to American Girl, since it’s beginning in 1986, over 27 million American Girl dolls have been sold (“Fast Facts,” 2015). According to Mattel, Barbie dolls are sold around the world in at least 150 countries (Mattel, 2012). Monster High has been a huge success for Mattel, which could be why Barbie sales have been down. 2015 Sales Figures Mattel has not released its 2015 full year sales figure for many of its brands. However, Mattel has reported its second quarter sales results for the American Girl brand. According to PR Newswire, “second quarter gross sales for American Girl Brands current sales were $84.2 million…were $84.2 million, up 1% versus the prior year in constant currency” (PR Newswire, 2015). Mattel, Inc., which owns the Barbie and Monster High brands, which are apart of the Boys and Girls toy category were both down this quarter. According to PR Newswire, Barbie sales were down 11% and Monster High sales (apart of Other Girl brands) “were down 6% in constant currency” (PR Newswire, 2015). Growth Over a Period of Time Within the appendix of this memoradnum there are two charts. One chart shows American Girl’s annual gross sales from 2003 through 2014. When looking at this chart, one can tell that American Girl has had increasing sales over the years. The other chart shows the gross annual sales for American Girl, Barbie, and Montser High from the past three years. When looking at this chart, one can tell that American Girl has more sales than both Barbie and Monster High. However, Monster High, a relative new brand of dolls, has more sales than Barbie. From looking at the chart, Barbie sales have been decreasing over the years which couls result in how she is portaryed in the media. Note: All data found within charts in the appendix is from Mattel, Inc. and citied within the Reference section of this memorandum. Product Attributes Within the appendix, there is a current picture of the current collection of dolls sold through American Girl (“Product Diversity,” 2015). • The first four rows down represent the “Truly Me” line, which allows girls to choose a doll that looks like them or someone else. 3 • The fifth row down represents the “BeForever” line, which represents girls growing up through different time in America, such as the Civil War and the Great Depression. • The sixth row down represents the “Bitty Baby” and “Bitty Twin” line, which allows girls to choose a baby doll of their liking. Picture located at the end of this memorandum. The following lists benefits of the American Girl brand: • High quality dolls, clothing, accessories that help girls tell stories about America’s past, present and future. • Books are the core of the American Girl brand. American Girl wants to express reading before playtime. • American Girl is committed to diversity. They offer dolls without hair, doll sized hearing aids, wheelchairs, and even an allergy free lunch set that includes an allergy shot. • The packaging of the products is very durable and presented nicely. • Launched the American Girl magazine, which is marketed towards teenage girls and gives advice, recipes, and craft ideas. • With technology becoming accessible to children at young ages, American Girl has launched mobile Apps that girls can interact with American Girl products. • Launched a Doll Hospital where “loved” dolls can get fixed. What differentiates American Girl from other dolls is that these dolls are considered “heirloom dolls” for the family. These dolls can be passed down from mothers to daughters for years to come. Most inexpensive dolls, such as Our Generation, Journey Girls, are cheaply made and will not last long and are sold in stores such as Target, Walmart, and Toys R Us. American Girl dolls are created to last for hours of play and can be purchased at American Girl stores around the country, online or through American Girl catalogs. American Girl stores aren’t like any ordinary store. They are a wonderful retail experience for the entire family. Girls and their families can visit American Girl stores and dine in the Café for lunch or dinner, create doll-sized clothes and girl sized backpacks at the Truly Me Signature studio, and even get their dolls hair done at the Hair Salon. For parents, there are Personal Shoppers to help make your purchases go smoothly. Competitors Below is a list of American Girl’s main competitors: • Barbie dolls • Monster High dolls • Our Generation dolls • Journey Girls dolls • Madame Alexander dolls 4 Current Advertising American Girl interacts with their customers through a wide range of platforms. They include: • Facebook: https://www.facebook.com/americangirl#fb • Twitter: https://twitter.com/american_girl • Pinterest: https://www.pinterest.com/agofficial/ • Instagram: https://instagram.com/americangirlbrand/ • YouTube: https://www.youtube.com/user/AmericanGirl I believe that American Girl’s Facebook, Twitter, and YouTube accounts have been most effective for different reasons. American Girl’s Facebook and Twitter accounts give customers insights of what is happening right now such as new character and product releases, character archrivals, as well as current sales and promotion. Facebook and Twitter are also great ways of answering questions or concerns for parents and customers quickly and in a timely manner. American Girl’s YouTube account give customers a wide variety of videos. They include: craft videos, movie trailers, character trailers, doll hair styling tutorials, commercials, and behind the scenes videos at Corporate Headquarters. With the increase of technology and children who use technology, I believe that American Girl could use other channels to get their products in front of consumers.