Transformation of Marketing at the Ohio Art Company (a)

Abstract

This case is intended to be part of a first-year MBA marketing course or a second-year elective in advertising, integrated marketing communications, market research, or marketing analytics. It provides students with two real advertising experiments and the challenges involved in executing them. It allows for discussion of the need for advertising experiments, and, at a more general level, the need to measure the return on marketing. Biases surrounding the field experiments provide an opportunity for discussion about the problems with establishing a causal relationship between advertising and sales. Excerpt UVA-M-0833 Rev. May 27, 2014 Transformation of Marketing at the Ohio Art Company (A) Ohio Art Company History The Ohio Art Company—among America's oldest toymakers—was headquartered in Bryan, Ohio, a small town in the northwest part of the state. Although Ohio Art made over 50 toy varieties including dolls and water toys, its flagship product was a drawing toy it had been selling for more than 52 years: the Etch A Sketch (EAS®). In that time, over 100 million units had been sold to consumers in dozens of countries. Ohio Art's slogan, “Making Creativity Fun,” demonstrated the company's commitment to arts and crafts products. Although most of its sales came from its toy business, Ohio Art also produced and sold custom metal lithography, which contributed one-third of the company's revenues and a disproportionate share of profits. In recent years, Ohio Art's toy business had experienced a bumpy ride, alternating between profits and losses throughout the 1990s and up through 2011. Product placement of EAS in the hit animated movie Toy Story was a shot in the arm for Ohio Art in 1995. In 1998, the company introduced a new doll called Betty Spaghetty, which was an initial hit with consumers, but its popularity and sales had waned over time. “Aimed at girls ages four and up, the small doll featured interchangeable limbs, spaghetti-like hair, and a variety of accessories, such as a cell phone, a laptop computer, and in-line skates.” Toy Supply Chain and Seasonality . . .