Brands and Value Perception Trump Price in Purchase Decisions

The Economy and Its Influence on Toys; Fourth and Final Installment in a Series Exploring the 4E's of 2009 Toy Trends

As seen at Toy Fair 2009, toy makers have responded en masse to the soft economy by serving up oodles of merchandise in the $25 and under retail range. Hasbro introduced a wide assortment of new products that sell for $10 or less, 80% of all Bandai America products retail for under $25; Wild Planet Entertainment only introduced items under $25 at mass retail, something CEO Danny Grossman is adamant about.

"Being in 'the fun business' now comes with a heightened sense of duty and obligation,” Grossman says. “While it's necessary for families to cut back on spending, that doesn't mean kids need to cut back on playtime.”

Although price is of obvious importance to cash-strapped parents, results of the 2009 Brand Keys Customer Loyalty Engagement Index indicate that consumers are not buying based on price alone. Instead, they are relying more on their perception of value when deciding which brands to stay loyal to during the recession.

Consumer expectations regarding brand value went up 20 percent, according to the survey. Those brands that aren't perceived as being “worth it” will fall to the wayside, said Brand Keys president Robert Passikoff.

The survey polled 26,000 consumers of 441 brands in 63 categories earlier this year, providing examples the toy industry can learn from. The brands that received the highest marks met or exceeded consumer expectations.

“There is a price-value formula consumers use to calculate brand differences and to decide which brands to buy,” said Passikoff. “Shopper consciousness has shifted from just trying to ferret out deals to looking for brands that provide value.”

A bright spot which has emerged in spite of a weakened economy is the toys for pets category, which seems to be recession resistant. In 2009, the American Pet Products Association (APPA) estimates that Americans will spend an approximate $45.4 billion on their pets - a $2.2 billion increase from 2008.

A number of TIA members have entered this category including Warner Bros. (under the Scooby Doo brand), Play Visions and JAKKS Pacific, which holds licenses for the American Kennel Club (AKC), Cat Fanciers Association and Animal Planet and also produces the Totally My Pet brand.

Reyne Rice, TIA Toy Trend Specialist explains: “Pet products are designed to promote active play and interaction between pets and their owners, which is in alignment with the youth toy market trend.”

Pure product innovation will also continue to lure consumers into stores even in tough times if the perceived brand value is present. Such is the case with I Can Do That Games, a three -year old company which has brought a fresh perspective to the preschool game category. The company' originative play model blends active engagement with classic board game moves, encourages cooperation and includes skill-level options - a bonus to parents. Furthermore, all are priced under $20 at retail.

"We launched the company in 2007 with the Dr. Seuss license and an exclusive retail partnership with Toys “R” Us,” explains Jacobe Chrisman, president. “Since then we have built out our retail channel to include full mass and specialty distribution. To date, same store sales are up 20% year over year."

In uncertain economic times, consumers and retailers gravitate toward tried and true brands that they know and trust. Companies and brands looking to succeed in this competitive marketplace need to communicate why their product is beneficial to consumers. Those who are able to do that at an affordable price point continue to be ahead of the curve.