Character Merchandising - UK: Industry Report

Character Merchandising - UK

Product Type: Market Research Report
Published by: Mintel International Group Ltd.
Published: July 2006
Product Code: R560-2188

Description

The previous Mintel Special Report on Character merchandising was published in 2002 and examined the use of character merchandising across a broad spectrum of markets; media-led products such as books, videos/DVD, and non-media items such as toys, games, clothing, homewares and food and drink products. The previous report analyzed the issue of kids getting older younger (KGOY) and assessed the impact of this in terms of market size, pester power, and population changes. More recently, Mintel examined the subject in Character merchandising in Food and Drink, Market Intelligence - UK Report, December 2005.

At first glance the character license market is full of appeal. There is a seemingly endless supply of new and exciting movies, many of which are based on characters, and there are a large number of television programmes generating yet more license opportunities. With so many characters and so much industry marketing ‘noise’ surely the market is buoyant. In reality the market is in trouble. According to market estimates generated by Mintel, the UK character license market is estimated at £3.3 billion in 2005 and market values have been falling consistently since 1999. This pattern is mirrored in the US. This is significant as the UK and US markets combined account for almost three-quarters of the world market. The prevalence of counterfeit goods in Australasia depresses market values in the region and mainland European countries trail significantly in their market sizes when compared to the UK.

Of course, the market estimates may be inaccurate. Certainly some industry data-houses are more optimistic, but a key problem for the character license industry is that there is no definitive market measure. No two sources agree on market size. Without this basic information, marketers and business planners are blind as to the actual state of the market; how can competitive threats be identified and quantified, how can the market evolve, how can the market be restructured to grow?

Mintel has attempted to answer each of these questions by addressing four key themes. The first examines the role of technology and mobile media in the character license industry. This area is full of jargon; many adults over the age of 35 may feel a degree of unease because they are not part of the early adopter generation, which defines how applications and media evolves. By understanding the impact of technology, companies can harness its power and bring growth into the character license market. Secondly, Mintel explores the issue of consumer target. The character license industry has come to rely too heavily on children aged below 8, and in particular the pre-school sector. By the age of 8-9 years, when children begin to morph into ‘tween’s’ they are leaving the character licence market. Mintel looks at the reasons and identifies how to entice older consumers, and different attitudes, into the market.

Thirdly, the competition is identified. A seemingly obvious necessity for a market, but Mintel has found that there is a general lack of awareness amongst licensees as to where the competition is coming from, particularly from the consumer point of view. By using research commissioned especially for this report, Mintel has found some key barriers to consumer purchase and identified other markets, which have more relevance to consumers as they age out of the character license market. Finally, Mintel draws together these related themes and examines the role of the extended marketing mix. Looking beyond the text book 4 P’s (product, packaging, price and place), Mintel reviews the role of PR, celebrity endorsement, product placement, mobile media channels, and experiential marketing events as part of the extended marketing mix.

Table of Contents

INTRODUCTION AND ABBREVIATIONS: ABBREVIATIONS
PREMIER INSIGHT: Sport, health and children; Character licensed clothing represents just 15% of the total clothing market; Using new media channels: 80% of 11-14-year-olds own a mobile phone handset
EXECUTIVE SUMMARY: A market in need of a rethink; What’s hot, what’s not?; Own label a core competitor; A double Whammy; The engine room - technology vital; Downloads are coming - learn from music; Techno babble; Consumer stretch - the teens; Consumer stretch - the ‘oldies’; Extending the market mix; Loyalty in the experience; Teaming up with other licensees; A rosy future
MARKET DRIVERS: SOCIAL AND CULTURAL SUMMARY; SOCIAL AND CULTURAL INFLUENCES
TECHNOLOGY SUMMARY: TECHNOLOGY INFLUENCES; A CLOSE LOOK AT THE INTERNET
MOBILE PHONES AND 3G (THIRD GENERATION): A rite of passage, but do parents ‘get it’?; Tweens and teens break free; Ringtones lead the way; A catch 22; Operators seek differentiation - fmcg rules emerge; 3G phones
GAMING: Who’s playing?; Kids develop; Teens are slightly different; Technology convergence
ECONOMIC FACTORS: ECONOMIC SUMMARY
DISTRIBUTION: Distribution challenges; First to market at any cost?; No brainer listing decisions; Retailers change the supply chain; In-store theatre; New trade channels emerge; Punch above weight; Table License exposure; Counterfeit Goods - a question of culture; Extending the marketing mix; The role of celebrity; Product placement works; Cross-category promotions - but in-store issues; Experiential events; Willy Wonka worked - then waned; Managing sales peaks and troughs
POLITICAL AND LEGAL FACTORS: Summary; Licensee agreements; Leave us alone!; Bring in Brussels; Advertising and the obesity issue; A loophole exists; Too hot to handle; Policing self-constraint; Using advertising proactively
MARKET SIZE AND SEGMENTATION: SUMMARY OF KEY THEMES
THE SUPPLY STRUCTURE: Summary; The supply chain; Creator/inventor; Additional consideration; Significant licensors; 4 Kids Entertainment; AT Mobile Media Limited; BBC Worldwide; Chorion; Disney Consumer Products; Entertainment Rights; Hasbro Incorporated; Hit Entertainment; Lucas Licensing; Marvel Entertainment Inc; Mattel; MGA Entertainment; Nickelodeon & Viacom Consumer Products (N&VCP); Warner Brothers Consumer Products (UK) Limited (WBCP)
PRODUCT ACTIVITY: SUMMARY PRODUCT ACTIVITY; ENGAGING ADULTS; NEW DISTRIBUTION CHANNELS
THE CONSUMER: THE 7-10-YEAR-OLD MARKET; THE 11-14-YEAR-OLD MARKET
CHILDREN’S PRODUCT CHOICE AND BUYING BEHAVIOUR: Summary children’s product choice and buying behaviour; Comedy cuts through; Pop music plummets; The information generation; Celebrities shine through; Printed media; Widespread popularity; Teens get independent; Clothes shopping; Tweens take control; Teens milking parents?; Girls may pose a problem
APPENDIX: SUPPLEMENTARY INFORMATION PRODUCT CHOICE AND BUYING: WEEKLY SPEND; SUMMARY OF CHILDREN’S ATTITUDES
CHILDREN’S ATTITUDES: Teens shift from cartoons to celebrities; Cartoons for younger kids; Consumer Cluster ‘Unaffected’ (31% of sample); Some licenses are preferred in certain markets; Films good for food and drink; Food & drink for character licenses; Pestering doesn’t work; Consumer cluster ‘Parent Pesterers’ (31% of sample); Consumer cluster “Not for the Want of Trying” (35% of sample); Consumer clusters have impact; Hungry for entertainment; Longevity issue for films?; Large repertoires exist
APPENDIX: CONSUMER CLUSTERS
DETAILED DEMOGRAPHICS
APPENDIX: REPERTOIRE INFORMATION AND CROSS-TABULATIONS
ADULT ATTITUDES: SUMMARY OF ADULT ATTITUDES
APPENDIX: ADULT ATTITUDES - DETAILED DEMOGRAPHICS
APPENDIX: CONSUMER CLUSTERS
MULTIPLE GROCER OPPORTUNITIES: Celebrities for Asda, Films for Sainsbury’s; Morrisons shoppers don’t resort to peer pressure
THE FUTURE: SUMMARY OF FUTURE POTENTIAL
APPENDIX: RESEARCH METHODOLOGY

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