Question

The Toy-Time Company makes and sells a line of popular children’s toys. Over the next few months, retail stores will begin buying the company’s products in large quantities in preparation for the holiday shopping season. Every year, Toy-Time introduces one or two new toys designed to attract the attention and interest of children and their parents and get them into the stores at holiday time. Then they design in-store displays and promotions for the company’s new toys as well as those that have been popular for many years, bringing in a high volume of sales of both new and traditional toys. Jacob Marks, the marketing manager, has recently reviewed the results of research on this year’s newest toy. The toy received the most positive customer response of any toy the company has introduced in the past five years. Based on that research, Marks and his staff have projected that sales will be 10 percent higher this year than last. As a result of these estimates, he has committed funds for an advertising blitz to introduce the new toy. Several additional salespeople have been hired to begin early work with retailers to make sure both the national chains and independent stores are prepared with adequate inventory for the upcoming holiday sales period.
While Jacob Marks has been working on the expanded marketing efforts, Janice McConklin, the production manager, has been running into problems. She has had difficulty getting an adequate supply of one of the key raw materials from the firm’s only supplier. Production levels for the new toy have been 10 percent below plans during the last two months. McConklin could have devoted additional production time to increasing the inventory of the company’s traditional products. However, she was not aware of the recent marketing research or marketing plans. The production plans, developed three months ago, were to keep inventory levels of those toys just slightly above last year’s level. In discussions with the raw-materials supplier, it appears that the supply problem may be solved in two weeks. If so, she might be able to meet the production goals for the new toys but labor costs will have to increase and product deliveries will be delayed to retailers. She knows that retailers like to have the new toys early, but there is little she can do about it right now.
10 Questions
1. Why does Toy-Time introduce new toys each year during the months before the holiday season?
2. What did the marketing research reveal about this year’s new toy?
3. How did Jacob Marks respond to the positive research results? List at least two actions he took.
4. Why were new salespeople hired before the holiday shopping season?
5. What production problem has Janice McConklin been facing?
6. How did the shortage of a key raw material affect production levels for the new toy?
7. Why didn’t Janice increase production of the company’s traditional toys during the shortage?
8. What does Janice learn from her supplier about when the material shortage might be resolved?
9. What are the potential consequences if Janice pushes the production schedule to catch up?
10. How might better communication between the marketing and production departments have
prevented the problem described in the case.

Answer 1

1. To attract children and parents into stores at holiday time, generate excitement, and boost sales: new toys draw attention, support special in-store displays and promotions, and increase overall holiday sales.

2. The research showed this year’s new toy received the most positive customer response of any toy the company has introduced in the past five years.

3. Actions Jacob Marks took:
- Projected sales 10% higher than last year based on the research.
- Committed funds for an advertising blitz to introduce the new toy.
- Hired several additional salespeople to work with retailers (see Q4).

4. New salespeople were hired to begin early work with national chains and independent stores so retailers would be prepared with adequate inventory for the holiday sales period.

5. Janice McConklin has faced difficulty getting an adequate supply of one key raw material from the firm’s only supplier.

6. The raw-material shortage caused production levels for the new toy to run about 10% below plan during the last two months.

7. Janice didn’t increase production of the traditional toys because she was unaware of the marketing research and marketing plans; production plans made three months earlier called for maintaining traditional-toy inventory only slightly above last year’s level.

8. Her supplier indicated the supply problem may be solved in two weeks.

9. Potential consequences if Janice pushes the production schedule to catch up:
- Higher labor costs (overtime, added shifts).
- Delayed product deliveries to retailers, risking retailer dissatisfaction or missed promotional windows.
- Possible increased operating strain: quality problems, higher error rates, expedited shipping costs, inventory imbalances.

10. How better marketing–production communication could have prevented the problem:
- Marketing sharing its positive forecast and planned advertising/sales efforts would have allowed production to increase inventory of the new toy or prioritize it earlier.
- Joint demand forecasting and regular coordination would enable procurement to anticipate higher material needs and arrange alternate suppliers or safety stock.
- Cross-functional planning (shared schedules, contingency sourcing, buffer inventory, flexible staffing) would reduce the risk of shortages and missed holiday sales opportunities.