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Brave New World
August 16, 2007
Wow! My phone has been ringing off the hook since the latest Mattel recall. I have been interviewed on the subject by anyone from ABC News to China Press. What concerns me in much of the press coverage and in some of the questions I have been asked is the underlying notion that toy companies go to China because by buying product cheaper, and, by inference, putting children at risk, they are making more money.
If you want to get a flavor of this, check out this interview with Mattel CEO, Bob Eckert by Chris Cuomo of ABC News. Cuomo repeatedly asks Eckert times how much money Mattel was saving by having toys made in China.
Well, we all know that toy companies don’t go to China to save money. They go to China in order to make products that will meet the price expectations of American consumers and the retailer buyers who select products for them. These consumers and buyers look at the perceived value of the product and place an anticipated retail value on that product. If the two are out of sync, they don’t buy.
Greed is not driving the move to China. Satisfying the US consumer is. Safety is going to improve (it has to) and as a result prices for toys are undoubtedly going to go up as well. All of us are going to have to recalibrate our price expectations accordingly. It's a "brave new world."
Posted by Richard Gottlieb on August 16, 2007 | Comments (2)
