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Playmobil and the importance of long-term thinking

The stars of the holiday season (1)


This is the first article in a series in which we will focus on a dozen key players for the upcoming holiday season, including companies, brands, and market trends. We begin with an iconic name: Playmobil , a company that has been making its 7.5 cm. figures and its playsets since 1974.

Playmobil is optimistic about this next campaign, in which the industry will make about 60% of the yearly revenues: "The Christmas season will be better than last year -says Carlos Cases, marketing director of the company in Spain-. We expect at least a slight increase”. Concerning other markets, “perhaps these were not as affected by the crisis as Spain, so everything should stay the same."

The company expects to "continue strengthening the preschool line 1.2.3., which shows a very big growth year after year, and to continue growing in toys for boys and girls, as there are increasingly more girls who play with Playmobil toys."

This 1.2.3 product range allows reaching a younger audience than the classic Playmobil players (4-9 years), while other product lines, such as the animals ranges and the Princess Fantasy Castle, are addressed at girls. In order extend the age of play to older kids, Playmobil offers universes oriented virtual worlds and technology, as Secret Agents.

The roadmap is clear: to have a very flexible offer and adapt it to each customer, taking into account the need to "think not just in the current year, but in the long term."

This strategy allowed Playmobil to grow by 5.3 % in 2012, reaching sales of €531 million and 61.3 million toys, surpassing the record set in 2011. In Spain, growth reached double digits.

Having a long-term approach is essential for the company: there has been no change in the figures’ measures in the last 39 years: the children of today can play with current figures and sets from their parents, or vice versa.

This is crucial for Playmobil, since parents often buy these toys for their children because they played with them as kids, and in fact it is common to pass them from generation to generation.

Playmobil has manufactured since 1974 some 2.5 billion clicks - 3.2 are made every second. By comparison, fewer people are born per second: 2.6. All these figures and playsets are made in Europe.

The bulk of production is done in Playmobil’s factory in Dietenhofen. This factory has 110,000 square meters where 1,200 people work with 420 injection molding machines, which can produce one million pieces per day, completing around 65,000 packages.

However, this plant cannot meet all the demand, so the company will open in 2014 a new logistics center at about 25 kilometers from the current factory. The owner, Horst Brandstatter, has stressed the importance for the firm to stay in the area.

But Playmobil does not only manufacture in Germany – the toy maker has a production plant in Malta, in which all figures are made, in addition to the the Playmobil 1.2.3 preschool line. In Onil (Alicante) there is another factory that handles some product lines, and in the Czech town of Cheb, the company opened a plant in 2006 where the individual pieces are assembled, although they are not packed.

Playmobil is one of the few toy makers that does not manufacture in China, even though 80% of worldwide toys are made in this country. As Andrea Schauer, CEO, explains, “costs were not significantly lower”, Also manufacturing in China "required supervision and control", in addition to longer production times, that forced the company “to plan well in advance, especially in the case of new products, which made us lose flexibility to the response of children to the launching of toys, both positive and negative.”
Schauer does not rule out the possibility of opening a production plant outside Europem but that would be in Latin America, "if we continue to expand in the US market."

Playmobil faces the holiday season with good prospects, despite the difficulties in the market. And it has many factors in its favour: it is a well-recognized brand, it counts with the approval of parents, and it has adapted its product to market trends, while remaining true to its origins.

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