Laws of Attraction

It all began in 1998 when Claudio Vicentelli, a draftsman and designer at a manufacturer of magnetic-based devices, set his mind to creating a construction toy that used magnets instead of more traditional interlocking systems. His solution: plastic-coated rods, powerfully magnetic so as to attach to each other and to steel connecting balls. For a man with a designer's mind, the toy would be an ideal platform for learning and demonstrating the laws of geometry and physics, while also fostering creativity.

But nearly as soon as Geomag hit the market, things began to go awry. Shortly after it was introduced in the U.S. in 2003, its original global distributor, Sardinia, Italy's Plastwood S.r.l. was replaced in the U.S. and just as suddenly as the Geomag name had appeared, PlastWood was marketing its own version. Confusion ensued and Geomag has been a marginal player here ever since. PlastWood and others continue to market similar products, notably Rose Art, now part of Montreal's Mega Brands, which built a market-leading business around its version, Magnetix. In the past year, Magnetix kits have been recalled following deaths and injuries to children who swallowed magnets that had come loose from the system's sets, a situation that continues to bedevil the company and has tarnished the overall perception of the magnetic construction toy market.

As a result, Geomag has sought ways to shore up its own market share and now 2007 looks to be the year when the company begins to turn its U.S. fortunes around. Seeing competitors struggle with the aftershocks from the Magnetix situation, the company has looked at how to market and sell its toys in a way better suited to American tastes, plus it will introduce a new infant/preschool product line, G Baby, this summer that was among the new products with the loudest buzz at this past winter's international toy shows.

Playthings spoke with Chris Merakis, who joined Geomag from K'Nex in March 2006 to oversee its U.S. sales, about the company's renewed efforts to make a dent in the U.S. market amid a background of knock-offs, copycats and self-described missteps that have long left Geomag on the outside looking in.

Playthings: What is Geomag doing to grab a greater share of the U.S. magnetic construction toy business?

Merakis: It's been a tremendous challenge, but in the past year we've really tried to right the ship and figure out where we're missing the boat here. We know our original high-quality patented line should be a primary selection by buyers and consumers. But trying to penetrate the U.S. market is so different than doing so in Europe, and I think there was a little bit of naivete on our part when trying to do that—not having the experience in knowing what the needs are for the American retailer and consumer in terms of pricing, packaging, marketing. I think in the last year we've looked at all those issues, and made an effort to find out what we needed to be doing and where we needed to be regarding all those areas.

Playthings: What impact has the Magnetix recall had on your business?

Merakis: The Magnetix issues really put a damper on things. No one was sure where the fallout was going to be; how things were going to shake out. But having taken care of all the things that we could actually control...we've come full circle. It's clear that retailers are going to have to take a much greater interest in manufacturing and production processes for toys like ours. We've never had to worry about that from a quality standpoint; we knew we were the highest quality. From the buyer's standpoint, I think they knew we were the highest quality product, too, but we just didn't have all those other elements necessary to be competitive. Now we have them: We've changed our packaging to be more conducive to both retail and consumer sales. Our pricing now is competitive with Magnetix and the knockoffs that are of a much lesser quality and have all these production issues.

Playthings: What was the issue with pricing?

Merakis: We just realized that regardless of how high quality our product is, compared to the competition, the U.S. consumer doesn't see that value. They aren't willing to pay three times the price for the same amount of pieces in the box compared to a competitor. You can talk about how we're Swiss-made and high-quality and our safety, but that still doesn't do it. It's all about value and marketing to the U.S. consumer. We decided that if we're going to go in and try and grab market share in the U.S. this is what we have to realize. So, we came down comparatively in pricing, which made it a little easier to compare strictly on price from a retailer's standpoint. We looked at the packaging: when we first came to the U.S., it had that really specialty European flavor to it—it just didn't wow anybody. So we addressed that: it's more colorful, it's brighter, it's more attractive. We feel we have those two elements in line now.

Playthings I'd assumed the 'Swiss Made' logo was good for a few extra dollars…

Merakis: If the price difference had been $2, I think that the logo would have made a difference, but we were so far off compared to the competition it just wasn't even close. It definitely helps now, though. It's clear that the Swiss reputation for quality is having more impact.

Playthings: And the reaction to all the changes?

Merakis: People are getting behind the brand here in the United States on a national level and we're really excited about it. We are in line to start doing some serious business and do things the right way. It's good to see people start to see the value in the Geomag line versus the imitations and low-quality product that's infiltrated the market the last few years.

Playthings: And the G Baby line? It certainly was something we heard people talk about in Nuremberg.

Merakis: Clearly it was the buzz of the Toy Fair. People would tell us that it would come up in conversation over dinner as a must-see. It is unique and revolutionary—and there's no copycat out there.

Playthings: What are you doing to market the company and your brands in the U.S.?

Merakis: A lot of the plans for the Geomag brand will be dictated by the acceptance that we have in this coming year. Certainly, you have to have the distribution at the brick-and-mortar part of this business to spend against it. It really doesn't make sense to spend money and alert people to be aware of the name and how great a product it is if they can't easily go out and buy it. You have to make sure the distribution level that you need is there first, and we're certainly willing to do that when we have some commitments. We're starting to get a great deal of them now. There are a lot of exciting things starting to happen with people's realization about Geomag. We haven't had to change anything in regards to quality or production, and we're getting people to take a really close look at us again in comparison to some of the competing product. We've had a lot of obstacles and challenges over the last several years, which culminated in the Magnetix issue, but I think that right now people are looking at our product line in a more serious fashion.

In the next couple years, I can see us being in charge of this sub-category of the construction toy arena. It's where we should be. We just want our rightful place in a category that we created.