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Beanie Babies


Ty Warner's Marketing Strategies

What was a Beanie Baby?
     A Beanie Baby was a line of small low-cost plush toys intended for kids to purchase with their allowance money.

What is a Beanie Baby?
     A Beanie Baby is a small highly collectible plush that has attracted buyers of all ages, some even fetch $1,000's on the secondary markets.

How did Beanie Babies become what they are today? When did they hit the status as a collectible and not just a toy for children? The success of Beanie Babies is really a remarkable one, rarely does a craze such as this ever happen, but when it does it is big and due to some unique tactics in marketing.

What are some of Ty's marketing strategies anyways?

     Aim for a price everyone can afford.
     Be secretive and lack advertising.
     Surprises: Add fuel to the fire when needed.
     Limit Production
     Avoid large chain retailers.
     Simplicity
     Personification
     Variety
     Retirements
     Risk

The above 10 strategies are what made Beanie Babies what they are. It wasn't anyone of these strategies it was a combination of each and everyone one of them! Lets examine each in more detail;

Aim for a price everyone can afford.

When Ty Warner began designing plush toys he had envisioned a plush that would be affordable for children to purchase with allowance money. Which sounds simple enough right? After all how much can a stuffed animal cost anyways? You are right they cost very little to make but that is usually because a company will mass produce them and sell them to every retail chain out there (ex. Toys R Us). But Ty doesn't do this, if he did he wouldn't be following strategy's 4 and 5.

Ty only sells his line directly to the smaller gift shops and collectible stores. Each store who is lucky enough to sell Ty's lines is given a "Pricing Philosophy Guide" to follow stating how much they should be selling Ty products for.

Because Ty followed strategies 4 and 5 he was able to get away with 1. If he had only followed 5 and not 4, and had mass produced his product they would not have sold out and created a demand as a collectible. After all who wants to collect something that is mass produced and available everywhere for long periods of time.

Of course other strategies fall into this category as well, pricing could not have been as low had it not been for #6 simplicity, #7 variety and others.

Be secretive and lack advertising.

Most popular toys on the market today become that way due to advertising and association. Associating a particular toy with a T.V. show, popular action or kids movie is a proven effective tactic in marketing today. Advertising is usually seen in major newspapers, magazines, radio and T.V. and cost the company millions of dollars a year. Ty avoids advertising all together and relies on his other marketing strategies to hold him up and do his advertising for him. Ty's philosophy, get them hooked and keep them coming, hope they tell their friends and their friends tell more friends. And amazingly enough that is exactly what happen with Beanie Babies. Word of mouth did the job, millions around the world are hooked!

Unlike other companies Ty also aloud customers to create their own websites to display their beanies, effectively advertising for Ty Warner. Large companies such as Mattel have fought to keep personal websites dedicated to toys like Barbie's off the net. Ty even aloud unofficial magazines to be published dedicated to Ty Beanie Babies.

This lack of advertising made the company appear secretive and mysterious which certainly helped reel people in. Beanie Baby popularity was almost magic!

Ty's first and almost only form of advertising was his creation of www.ty.com, the company website. But it wasn't like any other company website out there! The Ty website was packed full of information about beanies, it gave the world a forum for communicating with collectors all over the world. The site announced beanie retirements, announced new product lines and Beanie Babies and even held contests. It brought people together. The site made Ty seem as though he was personally interacting with his customers, or should we say fans!

Surprises: Add fuel to the fire when needed.

Ty has become famous for surprises! The main goal of each surprise was to add fuel to the fire of the beanie frenzy! Ty would retire certain beanies without warning, causing people to actively search out the last few remaining ones on retailers shelves. Collectors would than have to be sure to collect every beanie made just in case one was retired and worth many times its purchase price the following day! This solved the problem of beanies shelf sitting!

Ty would tease people on the website and leave clues and possible hits as to who would retire next! Than of course the biggest surprise came when Ty claimed he would retire all beanie babies on Dec 31, 1999. At the time it sounded like Ty was going to end the Beanie Babies line all together! Thousands upon thousands of people flooded the website, phones of Ty Inc. and retailers with questions of why! It would soon be announced that Ty would let people vote as to whether beanies would stay or go! Wow what a marketing ploy! Not only did everyone buy up all the beanies that "Might Retire on Dec. 31" but they actively proved they were willing to put up with these tactics and were dying to buy more!

Ty has done many other things over the years to keep the market going, as we are over half way through 2001 and the beanie market has slowed down considerably, there are still a lot of collectors out there watching Ty's every move! His latest move was offering a Ty MasterCard that would give you a special free MasterCard Beanie Baby! This caused uproar of both good and bad! Once again Ty added more fuel to the fire! What will be next? Ty only knows!

Limit Production

As mentioned above limited production has played a large role in Beanie Babies success. Making some more rarer than others keeps people excited, keeps the thrill of the hunt going and keeps people actively searching for them all, after all you never know who will be the next Royal Blue Peanut!

Under the strategy of limited production I would like to include Exclusive Beanie Babies, these are beanie with a very limited production run and available only in select countries! These really added to the market! Especially the secondary market which is where you would have to get these if you don't happen to live in the country the beanie was offered!

Avoid large chain retailers.

By not selling to large retail chains Ty made his product look exclusive and special. Even though it was cheap it appeared "upper class." It was above Toys R Us, it was Hallmark! It was a collectible not a toy! This strategy I believe is what helped bring in the older generation of collectors. Shopping at Toy R Us, vs. Hallmark was a very big difference. This made Beanie Babies not seem too childish.

This tactic keep beanie babies from getting out of control and ending up in bargain bins and $0.99 cent stores due to over producing.

Simplicity

Simplicity is another key factor to the success of Beanie Babies. Not only does creating a simple (yet high quality) product make production cheaper it also appeals to a larger range of people. Each Beanie was made with a few colors of fabric ifthat! Have you ever heard the term KISS? Keep is Simple Stupid! This is exactly what Ty did! To many details often clutter a product and make it more unappealing to some. Beanies were cute and simple!

Personification

Personification is a very important part of Beanie Babies! By giving each Beanie a special name, birthday and poem, Ty was able to connect with the kids (and adults!). This made the plush seem more alive and real, this gave you reason to interact with them. This made each style seem unique and fun. Kids can even go online to the Ty website and check out more information about their beanie, sometimes they could find out more details of their beanies life, their likes and dislikes.

Hunting for that special Beanie with a birthday the same or close to yours is a popular thing! Hunting for grandkids birthdays and the like!

Variety

Without variety collectors would not stick around. Ty had to constantly release new ones if he expected collectors to stay. There are several hundred different beanie babies today! Many collectors have goals of collecting them all!

When it comes to collecting them all sometimes that includes variations on beanies, for example Spangle has a Blue face, Red Face and a White Face which do you want? All three of course! This was another good ploy by Ty. Several beanies have variations that collectors attempt to get. A popular one right now is the Beanie Baby Issy, which is a bear that was created for charity, the catch is there is currently 63 different Issy bears! Each of these different bears has a different city printed on their hang and tush tag representing a location of a Four Seasons Hotel! He sure keeps the collectors busy!

Retirements

Ty retires beanies, which means they will no longer be produced and sold to retailers. This creates a supply and demand, the demand goes up when a beanie retires and its supply goes down! Ty creates a shortage! People would gobble up beanies hopping that they would retire tomorrow and become worth a lot more!

Risk

Risk is very important to Ty's success. Had he not imposed the above tactics, which were large risks in the retail industry, he would not have succeeded as he did. He wanted something new, new requires risk. The risk to selectively sell to higher end gift stores, the risk to price his plush cheap (cheap items rarely become collectibles), the risk to push his collectors with retirements, shortages, schemes of ending all Beanie Babies, each of these risks were key factors in Ty's success.

Overall I would have to say, as many others have said, Ty Warner is a marketing Genius! Who will be the next Ty Warner? I believe we will not see another like Ty Warner in this generation!

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