Advertising Experiments at the Ohio Art Company

29116132 / YP55A

Veronika Dyah Setiati

Advertising Experiments at the Ohio Art Company

Background of the case

Ohio Art Company is an American manufacturing company established in 1908. The headquarter  located in Bryan, Ohio. The company have two lines of business, the first is toys and the second is metal lithography. Ohio Art Company receive 25% of revenue from toys for writing and drawing sales. Its flagship products is a classic drawing toy, Etch a Sketch,  and one of the other popular toys is Betty Spaghetty.[pic 1]

Product Information

Ohio Art Company have 2 main products :

1. Etch a Sketch

Etch a Sketch is a drawing toy create by Andre Cassagnes in 1960. In 1999, Etch a Sketch come up on 1st Toy Story movie.

[pic 2][pic 3][pic 4]

1. Betty Spaghetty

Betty Sphagetty is a bendable doll that have fun loving teenager spirit invent by Elonne Dantzer. Betty Spaghetty’s tagline : “She’s funky. She’s different. She’s certainly not Barbie”.

[pic 5][pic 6][pic 7]

Business/Industry Situation

Business/Industry Situation of Ohio Art Company can be determined using Porter’s Five Forces

[pic 8]

• 1998 : Ohio Art Company record increasing in sales 27% as they launched the new product, Betty Spaghetty.
•  1998 : Ohio Art Company costs $ 1,8 million because of the major retailer annul its toys order in the amount of $ 15,2 million.
• 1999 : Ohio Art Company mark profit in the amount of $ 356,000 and its revenue increased 16% affected by the release of Toy Story (included Etch a Sketch as a character) as a free advertisement.
• 2001 : Shifted production of Etch a Sketch from Ohio to China. This strategy reduced production cost  about 20%-30% and record $ 3,1 million profit.

Competition Situation

Ohio Art Comany have to compete with the other toys retailer in mass merchant. Mass  merchant have major power controlling the distribution channel.

Marketing Mix

1. Product        

Etch a Sketch, Betty Spaghetty

1. Price

$12,99 to Etch a Sketch

$ 5,99 to $ 19,99 to Betty Spaghetty

1. Place

• Walmart                : 25% of market share (the highest)
• Toys”R”US                : 17% of market share
• Target                        : 12% of market share
• Speciality stores        : 20% of market share

(KB Toys, FAO Schwarz, K’s kids)

• Online sales                : revenue recorded about $1,3 billion toy sales

1. Promotion

Advertisement via :

• TV commercial
• Radio commercial
• Come up on Toy Story movie.

Problem Definition. Please focus your effort just in 1 issue.

Is it the right move to allocate million budget and focuse on advertising campaigns to increase the sales based on the previous advertising experiments?