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Excerpts from the article prepared for The Licensing Journal, February, 2001 issue
By Carol Rehtmeyer
Where do toy companies get their ideas?
Most of the major toy companies have their own development group. Many ideas are initiated internally, however the more "breakthrough" ideas typically come from external sources. Small companies may not be able to afford internal development and may rely more heavily on external sources.
Why do toy companies have internal development staffs?
Internal staff is responsible for line development, product extensions, development of product based on licensed properties and more. Internal properties or "brands" may even have an entire development team.
If toy companies have internal development staff, do they prefer internal products over licensed inventor ideas?
Truthfully, yes. However the toy industry looks to noted leaders in toy development for the next "Tickle Me Elmo", "Furbie", "Cabbage Patch doll", "Super Soaker","Trivial Pursuit", "Pictionary", "Pretty, Pretty Princess", "Koosh", etc. All of these well-known products and many more came from inventors. Products that push the limit, offer technology and other features that the internal staff would be unlikely to come up with are far more likely to be licensed.
How do companies select product?
Each year (sometimes each quarter), toy companies assess their product line to determine which products have been successful and which have not. Based on sales information, retail feedback, retail climate, new movies, licenses, hot properties, facts and sometimes just best guesses, each company creates a marketing plan. This plan denotes exactly how many products in each specific category they will produce as well as the price-points, margins, etc. From this marketing plan, a "wish list" of product is generated. This "wish list" denotes the product categories, age grade, character license, price-point and more.
Can a product, not on a "wish list" be licensed?
For a large company the answer would typically be "no". Smaller companies often operate in a much looser, more entrepreneurial way, so the answer there may be "yes". Entire company budgets and forecasts are based largely on their predetermined marketing plan from which the "wish list" is derived. Therefore, it is difficult to deviate from the "wish list" created by the marketing plan. However a breakthrough technology or product that is so outstanding that it demands attention, often has an "open" opportunity (with some caveats). Products that demand a great deal of development, engineering, etc., may be moved to the next "open to buy" period or following years' product line. As entire company budgets and forecasts are based largely on their marketing plan. Therefore, it is difficult to deviate from the "wish list" created by the marketing plan.
Open to buy? Don't companies buy ideas year 'round?
Many companies will look at product concepts throughout the year, but there are specific seasons for product consideration due retail placement as well as required development and manufacturing time to produce and import product. Most companies look for product at least 18 months prior to the required quarter. Very small companies can turn product around more quickly and some very large companies seek product more than 2 years out.
How do I get a copy of a "wish list"?
"Wish lists" are restricted as they offer proprietary internal insight and information into a given toy company. To get a "wish list" or compiled "wish list" from many companies, you must either invent the "hottest" and most demanded toy of the year or work with a qualified Agent. Top Inventors (those individuals who have product concepts that have been requested for representation), with Rehtmeyer, Inc., get updated "wish lists".
What are some of the most noted inventor licensed products?
Most of the hottest, and best selling products have been initiated by inventors and entrepreneurs. Even "Barbie" was the idea of an inventor/entrepreneur. Other big name products include: "Hungry, Hungry Hippos", "Twister", "Toss Across", "Hippity Hop", "Chatty Cathy", "Hair Grow Dolly", "The Mickey Mouse Telephone", "Upsie Baby", "Magna Doodle", "Etch a Sketch", "Spin Art", "Nerf", "Pretty Pretty Princess", "Don't Wake Daddy", "Trivial Pursuit", "Micro Machines", "Furbie", "Tickle Me Elmo", "Bop-It", "Spin Pop", "Bubble Tape", "Tech Deck", "Tech Bike" and hundreds more!
Why are some products that seemed successful not deemed successful by the toy industry?
Success is determined on "sell-through" and not just "sell-in", so sometimes products that have been given a lot of media exposure or shelf placement may still be considered industry "bombs" (and that's not the good kind of "bomb").
Has the industry ever passed on a "hot" product?
Although the industry is pretty good at "weeding out" the "no-gos", there have certainly been many products that have been passed over many times before becoming a "hit". As no one really has a crystal ball, industry experts can only predict winners based on past statistical and intuitive information. Some of these products and the comments then made about them, include: "Monopoly" (What, it takes hours to play!), "Hula Hoop" (It's just a hoop and hoop and stick have been played since before 1800), "Cabbage Patch" (They're way too ugly), "Trivial Pursuit"(Way too expensive, strange packaging and adults don't play games) , "Pretty Pretty Princess" (Why would we market a game only to girls? That cuts out half our market!) and numerous more!
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