*projected
WHAT THE EXPERTS SAY
OBSERVER
Larry Carlat
Editor, Toy & Hobby World Magazine
The best-friend concept is not, in my estimation, unique. Almost every toy company has a best-friend toy. So I don't think it is a good point of differentiation. The rest of the concept, the acronyms, and the dream fulfillment also are not points of differentiation. Lots of toys on the market do pretty much the same thing. I'm not sure that little kids really care about a message. So the question is, Is this message for a parent or a child? If Carolyne Greene is looking for mass-market exposure other than preschoolers, she has to draw the kids in. But I'm not sure this message will do the trick. Having F.A.O. Schwarz as a customer is all well and fine and can only be a plus, but F.A.O. Schwarz is not Toys "R" Us. It is a good endorsement but not exactly a sign that this is going to snowball. I do like the grass-roots strategy, but it sounds as if the company is still barking up the wrong tree. A large part of the toy-retailing community has made its decision. If Toys "R" Us and the others didn't want to reorder, I think she will have one tough row to hoe to persuade them to change their minds.
Now, she can go for the small retailers, but in the scheme of things we're not talking megahit status. She definitely does have a chance to get a new property out there. But she's going to have to scale back her expectations. On the licensing stuff, she's hitting the right people. This is what I would have done in the beginning. Or I would have hired a licensing consultant and let that person do the job for me.
INDUSTRY ANALYST
Sean McGowan
Analyst at Gerard Klauer Mattison & Co., a securities brokerage firm in New York City
I think it was Sigmund Freud who was once asked if his cigar was a phallic symbol. He said, "Sometimes a cigar is just a cigar." When toy companies repeatedly turn you down, it's not because your toy is a hit. Sometimes it's because the product won't be a hit.
I think the whole idea that this lovable character can be created in someone's mind and be made successful is false. The correct approach is to say, We don't know what's going to be successful, but we'll come to the market with many new toys, and if one goes, then we'll go with it. If it's not going to work, you can't make it work. I think that the grass-roots approach is the most expensive way to launch a product. You're just not making that many impressions when you make appearances or demonstrations. It's the last resort. What you're saying is that you haven't created mass appeal and you're just trying something else.
On the positive side, the Greenes haven't gone crazy building a company. But the projections don't make any sense when so much of toy sales is going to video games and you have 50 large dolls out there competing. I think the Greenes have come up with a marketing concept that sounds good but doesn't translate well in execution.
COMPETITOR
Sheldon Morick
Former senior vice-president of sales and distribution for Mattel Inc.; cofounder of General Consumer Electronics Inc., a manufacturer of video games
I think Greene was incorrect to try to sell F.R.O.Y.D. to children and through the mass market. There's a basic positioning problem. I don't think children can relate to dreams. That's too abstract a concept. It's more young-adult oriented.
She's on the right track now, going after the giftware and department-store markets, but she should have gone that way first and then possibly crossed over into the toy business. Gift shops and department stores tend to deal with an older market than toy stores do, and tend to sell on a low-volume, high-margin basis without requiring a lot of advertising backup.
I also think Greene will have a difficult time licensing F.R.O.Y.D. It's a single product with no real line extensions. And generally speaking, products become licensable only after the product becomes somewhat in demand. The product has to have value in the marketplace before it's a licensable commodity. She did well to get distribution with Toys "R" Us and the others; the fact that she didn't do well there is a bad sign.
FINANCIER
Tony Miadich
Managing general partner, Orien Venture Capital, Portland, Ore., an investor in Intelligy, an educational-toy series
In venture capital, there's an old truism that you don't want to be in the position of pioneering a market. But that's exactly the position Carolyne Greene is now in. All the response that's come from the marketplace has been negative. The tests she had with Toys "R" Us and other retailers have failed. Her marketing through gift stores has also not done too well. That is very important to investors. It really hurts the chances of F.R.O.Y.D. Inc.'s getting institutional investment.
Now Greene has to go out and educate the market about her concept, and I think that's tough to do in any business. Especially with the toy marketplace, which is more of a crapshoot than it is a process of educating the market.
LICENSER
Betts Fitzgerald
Director of licensing for Jim Henson Productions, in New York City
Greene has an interesting concept. The one thing I certainly learned about licensing over the years is that one never knows what's going to capture the fancy of the retailers. Many a company turned down Teenage Mutant Ninja Turtles and Cabbage Patch Kids, and we know what happened with those.
Going the gift-market route makes a lot of sense because F.R.O.Y.D. is such a specialized product. I think the mass market is made up of people going into Toys "R" Us knowing what they're going to buy for a child. Whereas in a gift situation, you don't really know what you're going to walk out of the store with.
I have to say, I really admire her for sticking with it. I think in this industry that's what you have to do.
