Mattel's response to toy recall good, but will hurt the entire toy industry, professor says

David Strutton
David Strutton, professor of marketing.
Thursday, August 23, 2007

Earlier this week, the nation's largest toymaker, Mattel, Inc., announced that it was recalling more than 18 million Chinese-made toys, and warned that more recalls may be in the offing because some toys have possible lead-paint hazards and tiny magnets that children may swallow. Less than two weeks ago, Mattel recalled 1.5 million Fisher-Price infant toys, which were also made in China, because of possible lead-paint hazards.

A professor of marketing and logistics at the University of North Texas says the problems with the toys isn't with Mattel - it's with the company's Chinese vendors, who are cutting corners.

"A lot of what is happening is pushback towards China, and there are those in other nations who are happy to take potshots at the country over this," says Dr. David Strutton, director of UNT's New Product Development Scholars Program.

However, he says, it's clear that China is to blame for the problems with the toys, just as Chinese vendors were to blame for recalls of products earlier this year. In March, many brands of dog and cat foods were pulled from shelves because they contaminated rice protein from a source in China that was identified as being associated with kidney failure in pets. In June, the U.S. Food and Drug Administration announced it would block sales of Chinese catfish, basa, dace, shrimp and eel, after repeated testing turned up contamination with drugs not approved in the U.S. for farmed seafood.

About 65 percent of Mattel's toy products are made in China, and Strutton says that Mattel doesn't have any options to move its toy production out of that country.

"The lowest cost manufacturers are in that part of the world and that won't change. Unless consumers are willing to pay more for toys, that's where the companies are going to locate," he says. He says that Mattel's response to the recall has been good, just as Johnson & Johnson's response was good following the Tylenol tampering scare of the 1980s. In the wake of the recalls, Mattel apologized to consumers, announced it will begin to stringently test the paint used in its toys and the finished toy products, and promised to tighten controls at its Chinese vendor factories.

"If you are culpable, the best thing a company can do is own up to the problem and make it right. Long term, Mattel will be better off by continuing to be proactive," Strutton says.

Mattel's recall announcements come as the 2007 holiday shopping season looms, and Strutton thinks the entire toy industry may be hurt by the recalls. He says consumers may opt to buy other products instead of toys to give as holiday gifts.

"If you're not going to buy Chinese-made toys, the fact of the matter is you're not going to be buying hardly any toys," he says.

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