Analysis of Toys "R" Us

Toys "R" Us was founded in 1948. The company operated successfully for 18 years, before being acquired by Interstate Stores in 1966. In 1974, Interstate Stores declared bankruptcy, and, in a reorganization plan implemented in 1978, Interstate Stores changed its name to Toys "R" Us (Kotik 1717). Since 1978, the reorganized company has flourished.

Toys "R" Us is the world's largest children's specialty retail chain (Kotik 1717). The firm operates both Toys "R" Us stores, which, as the name implies, specializes in the retailing of toys, and Kids "R" Us stores, which retail children's clothing (Kotik 1717). Technically, Toys "R" Us participates in the retail industry, and in the special lines segment of that industry (Markey 1665). The firm's activities, however, are also closely associated with the toy industry, the industry that manufactures the toys sold by Toys "R" Us (Sullivan 1550).

Hasbro and Mattel are the largest toy producers, with Hasbro by far the largest (Sullivan 1550). In 1991, Hasbro acquired Tonka, a competitor, which increased its size by approximately 40 percent (Sullivan 1550).

In terms of sheer size, there are no competitors for Toys "R" Us in the retailing of toys in the United States. All of the other retail toy store chains together do not have as many retail outlets as does Toys "R" Us. The other toy store chains, as a group, however, do provide the principal competition for Toys "R" Us toy s

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d Woodside 407). Consumers typically recognize five distinctive product characteristics quality level, features, styling, brand name, and packaging. Depending upon the type of product involvedphysical, service, and so forth, not all of these characteristics will be applicable in each instance. Brand name is of particular significance in the marketing mix at Toys "R" Us. Quality level, features, and packaging are also important considerations at Toys "R" Us. Pricing strategy is the overall task of defining the price range and price movement through the time period required to support the organizational sales and profit objectives and to support product positioning decisions (Kotler 374). Pricing tactics, on the other hand, is the task of setting the specific price levels, together with the conditions for altering the specific prices, for specific products (Kotler 375). The initial step which must be taken by a marketing organization in the development of a pricing strategy is the establishing of pricing objectives. Pricing objectives may be categorized as follows (Kotler 376): 1. Profitmaximization pricing. This pricing objective refers to the extraction of the maximum profit over the shortest possible time period. 2.
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Approximate Word count = 2540
Approximate Pages = 10 (250 words per page)

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