MAN105- Principles of Marketing
Final Marketing Plan
December 12, 2010
Company: Sanrio Co. Ltd. I. Executive summary
Hello Kitty was the name of a cartoon cat developed in 1974 by Sanrio Co. Ltd. (Sanrio), a Japanese company that sold character-branded goods in Japan and other parts of the world. Sanrio initially used the character to adorn petty merchandise like coin purses and pencil boxes targeted at small girls. However, after Hello Kitty became hugely popular, Sanrio extended the brand to a variety of other products. Sanrio Company, Ltd., based in Tokyo and with distribution throughout Japan and Southeast Asia, the Americas and Europe. In the Americas today, over 4,000 stores to sell Sanrio character merchandise. This includes Sanrio boutique stores Sanrio merchandise has many different kinds of categories including stationery, school supplies, bags, accessories, room décor, candy, and plush characters.
The global toys and games market grew by 2.7% in 2008 to reach a value of $60.8 billion. In 2013, the global toys and games market is forecast to have a value of $69.1 billion, an increase of 13.7% since 2008. Sanrio’s marketing strategy is to raise the sale revenues in the increasing market condition as well as to maintain our loyal customers and attract more male customers; Sanrio will create different kinds of images of products to fit into different range of age, and repackage the old neutral characters such as Badtz-Maru (a male penguin), Keroppi(a frog), Shinkansen (a bullet train) to increase the male market on the seasonal promotion. There are so many competitors in the industry. Therefore, Sanrio’s products must be fresh and various thereby increase the competitiveness.
Sanrio’s price strategy is conservative; it sets the price range similar with the main competitors. The promotion budget is around $313000 which includes advertising and decoration in malls, and other promotion activities are membership reward, brand crossover and advertising.
The marketing objectives are increasing the competitiveness, maintaining the target consumers, reducing the prime cost and steady the selling price, spreading the male market and increasing the awareness in new and developing market.

II. Situational Analysis Company Descroption
Sanrio is a global designer and distributor of character-branded stationery, school supplies, gifts, and accessories. Hello Kitty is the star character and corporate icon of Sanrio. Sanrio was founded in 1960 by Mr. Shintaro Tsuji. Mr. Tsuji created a line of character merchandise designed around gift-giving occasions. Sanrio Company, Ltd., based in Tokyo and with distribution throughout Japan and Southeast Asia, the Americas and Europe. In the Americas today, over 4,000 stores to sell Sanrio character merchandise. This includes Sanrio boutique stores Sanrio merchandise has many different kinds of categories including stationery, school supplies, bags, accessories, room décor, candy, and plush characters..
Sanrio boutique stores, where the environment of the stores and the promotions are attractive, and create the atmosphere that people really want to walk in. These stores sell more than 2,500 items decorated with Hello Kitty and the other trademarked Sanrio character designs. Every month, over 100 new products are introduced so there’s always something new to see. Plus, Sanrio's bonus cards reward customers for paying frequent visits to their local store.
Sanrio gifts are various, from birthdays to Christmas, other holidays, graduation, good grades, visits with friends or relatives, and more. From backpacks and lunchboxes for kids, to cell phone cases, fashion bags, and accessories for teens and adults, Sanrio has something for everyone.
Core competencies
The core competencies of Sanrio is to provide a vehicle for the young and young-at-heart to express their feelings to friends and family-- each Sanrio product brings a message of friendship and happiness. Giving someone a cute Hello Kitty letter set doesn’t just say “let’s stay in touch”-- it gives them a means to do so. Sanrio believes “A small gift does bring a big smile to people of all ages”

Product attributes and highlights features
Product attributes: Cute, Sanrio made Hello Kitty the 'Queen of cute' for many female consumers worldwide.
Sanrio initially used the character to adorn petty merchandise like coin purses and pencil boxes targeted at small girls. However, after Hello Kitty became hugely popular, Sanrio extended the brand to a variety of other products. Hello Kitty featured on products ranging from vacuum cleaners to DVD players, toilet paper to cars, and computers to candy, and was thought to be one of the most powerful brands in the world.
Innovative designs:
Sanrio created many characters. The most popular character of Sanrio is Hello Kitty, it also has other popular characters such as The Little Twin Stars, My Melody, Kerropi, Tuxedo Sum, Cinnamonroll and many more.
Imaginative and effective marketing:
Every character that Sanrio created also has a line of bags, accessories and apparels and is also marketed separately. Aside from the characters created and marketed. It also ventured into movie production and publishing. The company also has Hello Kitty restaurants in Japan. Sanrio also has another company branch called Kokoro Company Ltd. That creates animatronics. And it also has two theme parks in Japan namely the Sanrio Puroland and Harmonyland.

Benefits and competitive advantage
Sanrio is a big brand corporation. The corporate name is dominant in all products. This brand owns a group of loyal customers and so this Japanese company, Sanrio, receives wide support from those young women in Japan who prefer to prettiness. The young women yearn to those cartoon characters during their childhood. The advantages that it will get are since the consumers are already loyal to the products of Sanrio the new product will be easily marketed and sold, the time consumed in establishing and marketing the product will be reduced.
Industry analysis
Sanrio Company Ltd. was classified as 511130 - Book Publishers, 33993-Doll, Toy, and Game Manufacturing, 451130 - Sewing, Needlework and Piece Goods Stores and 511110 - Newspaper Publishers. This marketing plan focuses on East Asia so the primary industry of Sanrio is Doll, Toy, and Game Manufacturing.
Size
According to the International Council of Toy Industries (ICTI), in 2003 sales of traditional toys around the world was US$59.4 billion. While the toy market always had an international flavor--the creations of German toy makers delighted U.S. children in the nineteenth century--by the 1990s the industry had become truly global. This continued to be the case in the mid-2000s. Giant toy makers, such as the Mattel Inc. in the United States, Lego in Denmark, and Nintendo in Japan, generated much, if not most, of their revenues overseas. Indeed, parents in Moscow sometimes spent a month's wages to buy their daughters Mattel's Barbie, which was the most popular doll in the world with US$1.5 billion annual revenues worldwide.
The majority of manufacturing facilities for both industries are in China, although these are primarily third-party manufacturers doing contract work for companies from other countries as so-called outsourcing. By 2005, according to the ICTI, 75 percent of the world's toys were being produced in China.
The largest source for toys was China. In 2004, according to the China Plastics and Rubber Journal, China's more than 6,000 toy manufacturers were producing 70 percent of the world's toys. However, approximately two-thirds of the toys produced used designs and raw materials supplied by other countries, and a large share of the revenues come from contract manufacturing, or outsourcing, for large toy companies and license holders.
The four large companies that dominated the global toy manufacturing scene were Mattel, LEGO, Bandai, and Hasbro, with Bandai and Mattel having a marketing alliance. However, the industry overall was very fragmented and regionally based rather than global. In addition, many toys were produced on behalf of license holders, including Disney, Warner Brothers, and McDonalds.
According to business researchers from INSEAD, about 95 percent of toys were sold via retail outlets and few manufacturers sold directly to the final consumer. However, by 2005 there were an increasing number of partnerships between manufacturers and fast-food chains, cinemas, and direct-sellers, including Avon. In addition to traditional retailers, an increasing number of sales were being made through new Internet-based companies.
In Japan, however, a non-doll toy that appealed to girls was the electronic organizer. The petite digital assistants featured not only appointment calendars and phone directories, but also fortune-telling and computer-animated virtual pets. The primary market for the digital assistants was girls in the fourth and fifth grades.

Growth
The global toys and games market grew by 2.7% in 2008 to reach a value of $60.8 billion. In 2013, the global toys and games market is forecast to have a value of $69.1 billion, an increase of 13.7% since 2008. Infant/pre-school toy sales generated 17% of the global toys and games market's total revenues. Americas accounts for 44.4% of the global toys and games market's value.
Trends
The current trend in the toy industry is changing quite rapidly and the industry is growing at a robust rate. New trends which includes cyber concept, linking the toy industry with the gaming industry.
The linkage of toys with the internet is considered to be the rising trend of today’s world and this trend actually initiated from the Asian region. The demands of toys are increasing and children are more attracted by the electronic components of toys and they love to buy those toys which are technologically enriched. Children of the current era are technologically savvy that is why they are more attracted towards toys who’s software’s are available on the internet . The internet link of these toys allows children to keep in touch with the toys and they can share their feelings about that toy on the internet.

Target Market The target market of Sanrio focuses on Easy Asia, such as Japan, China, Hong Kong, Taiwan, South Korea, Malaysia, Singapore, and the target consumers are the young female.. The age range of the target consumers is 1-49. Most of the consumers are students. These consumers need great quantities of school supplies and stationery, and they like the cute and delicate products.

Buyer persona
1. Fiona Wong is a fourteen year old girl. She is a high school student in Hong Kong. She reads teenager’ magazines and Japanese comic books, and watches Japanese animates. At leisure time, she hands out with friends and goes shopping. She uses Facebook and MSN to communicate with her friends, has an iPhone and uses public transportation.
Fiona recently needs to prepare some school supplies because the summer vacation almost finish. She wants some cute stationary products that can represent her personality.

2. May Yeung is a thirty-six year old housewife. She likes plain style. She is Hello Kitty’s loyal fans since she is four years old. She has two daughters, and those daughters are in kindergarten, and they are affected by their mother to become Hello Kitty’ fans. May takes care her children, bring them to school and make three meals every day. She likes watching TV dramas, shopping, cooking, and buying with coupons. She likes go to high tea to communicate with her friends, has an iPhone, and uses public transportation. May’s daughters are going to school picnic next week. She is looking for some bakery tools to make the cookies, and she wants to make the cookies more attractive. And also she recently bought a new iPhone and she wants to buy a case to protect the new phone, but the Hello Kitty’ cute style doesn’t fit her; she is looking for some simple and elegant products.

Marketing Survey
Objective: To know what the consumers’ habits and need, such as products’ style, prices, thereby Sanrio can produce the exact products to satisfy consumers’want.

Survey analysis
Most of the interviewees spent $101-200 on the character- based products in last year. People do not really want to spend too much money on character- based products. So Sanrio would set the affordable prices to stabilize the sale revenue. The popular products are the stationery as well as the most people are in 0-18 age of group and 19-25 age of group, and those people are the students so the demand of the school supplies are really high. Therefore, Sanrio can create more different kinds of school supplies to satisfy the demand of market. Most people like the cute style products, and also some people like the Bling products which also are the fashion trend. People are also like other popular characters such as Waltz Disney characters. In the survey, Marie is the most popular so Sanrio can make the gimmick to raise the consumers’ attention that makes the crossover with Marie.

Competitive Analysis Competitor | Product Description | Strengths | Weaknesses | Sanrio’s competitive advantage | 1. Disney Store | An international chain of specialty stores selling only Disney related items, many of them exclusive. Disney Store is a business unit of Disney Consumer Products. | Many loyal fans, popular brand name, popular characters | Excessive research & development, limited range of target group | Wide range of target group, not only kids, age 1-49 of female | 2. Muji | A Japanese retail company which sells a wide variety of household and consumer goods. Muji is distinguished by its design minimalism, emphasis on recycling, avoidance of waste in production and packaging, and no-logo or "no-brand" policy. | Recycled-material products, diversification, good image of Japanese companies, popular stationary | Not exquisiteness, the price is little bit high caused by the Japanese currency rate | Exquisite package and design | 3.The Warner Bros. Studio Store | A chain of retail stores carrying Looney Tunes and other merchandise based on Warner Bros. films. | At least have some loyal fans from the movie’s audiences, popular characters | The US is its primary market (narrow regional market). Over 80% of its total revenues come from the US. The slumping US economy may negatively impact demand for the Time Warner’s products and services. | World -wide market, Sanrio’s characters are more popular in East Asia. | 4. Swarovski | The brand name for a range of precisely-cut crystal glass and related luxury products produced by Swarovski AG of Wattens, Austria. | Luxury brand, target on middle class consumers, exquisite products, price is less than diamond, but looks similar. | Products are less diversification | As a gift, Sanrio’s products are more affordable and various | 5. Stationary stores | Many different kinds of stationary stores that they sell different brands and kinds of stationary. | Price less, more practicality, many options, good location (usually locate near the schools) | Less attraction of the appearance, low quality | Big brand, more attraction of the products |

SWOT Analysis
Internal factors Strengths | Weaknesses | Many loyal fans | Rely on feminine market heavily | The image of product is cute and attractive | Products are input from Japan, price is affected by the Japanese currency rate | The price is reasonable and affordable ,and good quality | They don’t have their own factory, so it is not easy to control the quality and cost | The high visibility of products, facilitate customers to buy | The range of image is narrow | Product image that fits in with the needs of customers | On every kind of products, many lower-quality, lower-price competitors | Work with many agencies in many countries, world-wide brand | | The image is trendy and popular, so it creates many opportunities and benefits | | Products are various | |

External factors Opportunities | Threats | Because of popularity, to have a partnership with other industries e.g. transportation, hotels | More different character brands appear that affect the Kitty’s popularity | Collectivist cultures like in China and Japan, where group behavior is the norm. Kitty’s popularity—at least in Asia—in terms of a need for social conformance there rather than as a response to an appealing brand personality. | The slack economics reduces customers’ purchasing power | Technical breakthrough that develops the virtual world market, create more software products such as online games | When target customers grow up, the cute image doesn’t fit in with those customers, it will lose the target customers | Different festivals in different regions are the good opportunities to promote the products | Piracy problems is serious and lack of regulation in Asia | GDP of some Asian countries increase | Degeneracy of Japan and China relationship that leads Chinese to cease buying Japanese products |

Critical issues 1. Many competitors

There are so many Japanese animated characters that are popular in Asia such as Doraemon (robot cat), Sailormoon as well as the western popular Disney characters such as Mickey Mouse, Marie, Winnie the Pooh. In order to absorb other characters’ fans so the promoting will have a crossover with other characters and produce the limited edition.

2. Losing target customers

When target customers grow up, the cute image doesn’t fit in with those customers, it will lose the target customers. So we create more mature image of the products for the mature women. The image of the products will be less cute, more mature, and the background color will be dark and plain.

3. Price is affected by the Japanese currency rate

Some products are made in Japan and output to other regions. So if Sanrio increase more manufacturers in each region, it will make the price stable, and reduce the prime cost. 4. Lack of the male market

Sanrio relies on feminine market heavily. So Sanrio should create more masculine image of products such as car, robot to expand the young male market.

III. The Marketing Program:
Marketing objectives 1. Increase competitiveness:

The market is large, but there are so many competitors. The status of Hello Kitty in Asia is same as Mickey Mouse in North America that both of them are popular, classic and ageless. Therefore, Sanrio maintains the popularity of Hello Kitty perpetually. The images of the products must be fresh and various, thereby make more people to love Hello Kitty.

2. Maintain the target consumers:

When the target consumers grow up, they are not little girls, and they may think the style of Sanrio’s products do not fit on their age. Therefore, the image and style are important, Sanrio create different image and style to attract different consumers. The goal is less than 5% target consumers losing.

3. Reduce the prime cost and steady the price:
Because of the unsteady Japanese currency rate, Sanrio cooperates with many factories in different regions thereby reduce the prime cost and the selling price. To Increase the production in oversea, and decease the imports from Japan. 4. Spread the male market:
The goal is increasing sales by 5% on the male market. The old neutral characters such as Badtz-Maru (a male penguin), Keroppi(a frog), Shinkansen (a bullet train),those were popular and good selling when they were new characters, so it is time to repackage them to attract more male market. 5. Increase the brand awareness:
In some regions such as Malaysia and Singapore, the awareness of Hello Kitty is not that wide, so Sanrio should make more advertising in those regions to increase the awareness and attractiveness.

Price strategy
Sanrio‘s target market is student and young people so the price must be affordable and reasonable. The prices are same level with Disney Store and The Warner Bros. Studio Store, higher than Muji and stationery stores, and lower than Swarovski.
The price level of Sanrio is same with Disney Store and The Warner Bros. Studio Store because those brands have the similar background with Sanrio, and have popular characters.
The price level of Sanrio is higher than Muji and stationery stores because the quality and package of Sanrio’s products are higher than the Muji and no brand products.
The price level of Sanrio is lower than Swarovski because Swarovski’s key products are crystal, and their prime cost must be higher than Sanrio.
Because of the unsteady Japanese currency rate, Sanrio cooperates with many factories in different regions thereby reduce the prime cost and the selling price.
Main Products Prices
Stationery: <$15
Jewelry :< $150(depends on material)
Clothes: <$90

Promotion 1. Membership. Members of the Sanrio obtain especial sales that Sanrio only offers for members. Rewards that members purchase certain money, they will get the gift. 2. Attraction. To attract more consumers to shop the stores. Sanrio can cooperate with the shopping mall to decorate the mall with Hello Kitty, thereby increase the floating population of the malls as well as Sanrio stores.

3. Seasonal value packages. To create different festival themes value packages so consumers may think this is bargain. 4. Advertising. To advertise on teenager magazines, popular websites and public place such as subway stations and bus stops. 5. Brands crossover. To create products with other brands, and made the products changeful, thereby consumers think the products fresher and more interesting.

Promotion budget

Membership and Seasonal value packages may not spend so much money, and brands crossover has to confer with other brands so this budget doesn’t include for brand crossover. The promotion budget is for decoration in malls, advertising and brands crossover mainly.
Decoration in malls: $300,000($1,000,000, share with the mall, Sanrio may pay one third of the fee)
Advertising: $13,000 (on 3 magazines and public place)
Total: $313000

Distribution strategy
Shopping malls can reach different kinds of consumers, and Sanrio’s target consumers are students. Shopping malls around school are the best location to sell Sanrio products. Therefore, Most of Sanrio stores locate in shopping malls. Moreover, Sanrio has an official websites to sell the products and shows the new arrival.
Implementation plan Promotional activity | Start date | End date | 1. Spring promotion | March | May | 2. Summer promotion | June | July | 3. School supply promotion | August | September | 4. Halloweens promotion | October 1 | October 31 | 5. Christmas and New year promotion | November | February |

1. Spring promotion: Sanrio’s products and the display window have a spring atmospheres. On April, the promotion focuses on Melody (rabbit) at Easter. There is a seasonal sale at the end of May. 2. Summer promotion: to promote summer atmospheres products such as swimsuit, fan, an ice shavings maker. There is a seasonal sale at the end of July. 3. School supplies promotion: summer vacation is almost over so it is time for student to prepare some stationeries and school bag. Therefore, the promotion focuses on school supplies. 4. Halloweens promotion: the promotion focuses on Halloweens’ costumes, decoration and Hello Kitty shape candy. 5. Christmas and New Year promotion: To sell Christmas decoration and to attract more consumers to shop the stores. Sanrio can cooperate with the shopping mall to decorate the mall with Hello Kitty Christmas tree. There is a big sale on the middle of December. The Asian New Year is on January or February so the promotion focuses on New Year decoration. There is a clearance big sale on the middle of February.