Reference no: EM132931207

The Case we are presented with...

• Canada Toys Co. (located in Ottawa) established in 2000, is a professional manufacturing and exporting corporation of plastic dolls, doll clothes and doll accessories. They also manufacture and export electrical toys, stuffed dolls, baby toys and festival toys. Their USP is, "good quality products with affordable prices" and they already have a presence in Central, South and North America, throughout Europe and are now exploring to the Asian market.
• Although their expertise lies in dolls, they also manufacture and export plush key chains, promotion toys, teddy bears, Christmas and Valentines toys. Their specialty is that they can transform any character into a stuffed toy according to the desired design and requirements. Canada Toys Co. is also responsible for implementing suggestions of their customers and solving their problems within 48 hours. They claim to have the best service possible as they always adhere to the principle of "once a client, forever a customer."
• Their products go through extensive research conducted by a team 20 R&D workers with many years of experience in product design. They can make samples according to the desired design or description provided to them. Their overall quality policy is well established with an inspection and control system. The Quality Management team ensures that every product passes through an inspection quality control system five times and twice through metal detection.
• Canada Toys Co. is now planning to enter the Chinese market. They have done some research and created the first brand named doll "Xian." This doll depicts the charm of Asian girls from Chinese classical culture and modern style influenced by international elements. With the image of being young, intelligent, trendy, "Xian" is the consistent pursuit for girls of confidence and good taste. "Xian" has also passed 3C certificate and EN-71 certificate with international leading craftsmanship.

This is what happened this year:

1. The company opened a 40,000 square foot doll store on Beijing' flashy Wángfujing Street.
2. When local residents were surveyed after the launch, the skinny plastic dolls were reportedly too frivolous of a pastime for their children. The toys were seen as an indulgence and not a necessity.
3. The survey further showed that parents emphasized the need for toys to have an educational element.
4. Disney managed to succeed in China by tying its entertainment to a chain of English learning centers. Children were not only playing with Donald Duck, they were also learning skills with it. If only dolls could also teach something to children.

Revenue from the "Xian" doll is not even able to cover the overhead costs of manufacturing and distribution.

Points to Consider

Question 1: As a product manager, identify ways to correct the mistake and re-launch the brand in the Chinese market. Identify what went wrong. Is it possible to save the brand or should they try another strategy? Research is an important factor, especially when it is a new market. Give your analysis on the importance of this aspect of market development keeping cultural understanding in mind.