Answer 1: Chris Down, the Senior VP and Global Head of Design and Development at Mattel, was seeking to solve a

key business problem by introducing a "mixed-play" Hot Wheels experience. This problem was the declining sales of

traditional physical toys, As mentioned in Exhibit 2 which shows the sales have declined from $6484892 to $4514810

between 2013 to 2018, which were losing ground to digital and electronic toys. Mattel wanted to find a way to make

physical toys more appealing to children who were increasingly drawn to digital play experiences, As mentioned in

Exhibit 1,appeal for digital toys increased from 76% to 87% between the age group of 2 and 10 years old children

versus the physical toys that decreased from 80% to 39% between the same age group, and that’s what coddled him to

ponder around creating a new Hot Wheels product that would appeal to modern children's play preferences and offer a

mixed-play experience that combined physical and digital play. To address this challenge, Chris Down and his team

designed a new Hot Wheels product that combined physical and digital play. The product included a physical track and

vehicles that could be customized and enhanced using digital components, such as a digital portal and augmented reality

(AR) technology. The idea was to provide a more immersive and engaging play experience that would capture the

attention of children and inspire their creativity and imagination.

By introducing a mixed-play experience, Mattel should be able to tap into the growing trend of combining physical and

digital play, which would help revitalize the Hot Wheels brand and attract a new generation of customers. Albeit, the

mixed-play features and customizable design are innovative and appear to be aligned with modern children's play

preferences. If the product is successful in resonating with its target audience, it could help Mattel revitalize the Hot

Wheels brand and reverse declining sales. The success of the "mixed-play" concept will ultimately depend on factors

such as the quality of the digital experience, the appeal of the physical toys, and the effectiveness of the marketing

campaign.

Answer 2: Introducing a mixed-play experience to the Hot Wheels brand did carry some risk of damaging the brand's

reputation and alienating existing and older fans and collectors of the traditional physical play experience. However,

Mattel likely felt that it had little choice but to adapt to changes in the way children play today, as digital play

experiences have become increasingly popular and are now a significant competitor to physical toys. Hence, it is also

possible that the new mixed-play experience could attract a new generation of children and families to the brand,

ultimately expanding its reach and revenue potential. So, we can say that by introducing a mixed-play experience,

Mattel could position Hot Wheels as a modern brand that meets the needs of today's children while still retaining the

nostalgia and appeal that older fans and collectors associate with the brand. To mitigate the risk of damaging the brand,
Mattel likely conducted extensive market research including surveys, focus groups, and interviews with parents and

collectors and testing to understand how the new mixed-play experience would be perceived by different groups of

consumers, including existing fans of the traditional Hot Wheels toys, As mentioned in Exhibit 8, 74% respondents said

they loved the product,24% said it’s Okay and the remaining 2% didn’t like it. This research helped the company to

identify key trends and preferences among these groups and to develop a product that met their needs and expectations.

Additionally, Mattel likely focused on emphasizing the benefits of mixed play rather than trying to completely replace

the traditional physical play experience with a digital one. By positioning the new product as a complementary play

experience that enhances creativity and imagination, Mattel may have been able to maintain the loyalty of existing fans

while also attracting new customers who are interested in mixed play. It's also possible that Mattel leveraged the

nostalgia factor associated with the Hot Wheels brand to generate excitement and interest in the new mixed-play

experience among adults who make toy-buying decisions. By tapping into the emotional connection that many adults

have with the brand, Mattel may have been able to position the new product as an evolution of the Hot Wheels

experience that still stays true to its roots. Overall, while there may have been some risk involved in introducing a

mixed-play experience to Hot Wheels, it seems that Mattel approached the introduction of mixed-play to Hot Wheels

thoughtfully and strategically, with a focus on balancing the needs and preferences of different customer groups and

maintaining the integrity of the Hot Wheels brand. Whether the new product will ultimately be successful will depend

on a variety of factors, including the quality of the digital experience, the appeal of the physical toys, and the

effectiveness of the marketing campaign

Answer 3: Mattel likely hired IDEO to conduct research on the new mixed-play Hot Wheels experience because of

their expertise in human-centered design and innovation. IDEO has a reputation for being able to deeply understand

and empathize with consumers, and for developing creative and effective solutions that meet their needs and desires.

IDEO’s long history of working on projects with designing products and experiences that resonate with people, and

their expertise in this area would be invaluable in helping Mattel to create a successful mixed-play experience for Hot

Wheels

IDEO's design thinking approach and research are also unique and are grounded in empathy for users, meaning that the

firm would have likely spent a significant amount of time observing and interviewing children, parents, and other

potential users of the mixed-play experience. This research would have helped Mattel to gain a deeper understanding

of the needs, desires, and preferences of its target audience, and to design a product that met those needs in a meaningful

way. Additionally, IDEO has experience in designing both physical and digital products and experiences, which would
have been valuable in creating a seamless integration between the physical and digital components of the mixed-play

experience. IDEO's expertise in combining qualitative and quantitative data with observation and analysis to gain a

holistic understanding of the customer experience and designing for both the physical and digital realms may have

given them a unique perspective that industry experts or Mattel's own team may not have had,or we can say that while

Mattel may have had its own internal experts and industry consultants, IDEO likely brought a fresh perspective and

expertise in human-centered design and innovation that complemented Mattel's existing capabilities. In addition,

IDEO's reputation and track record in design and innovation may have helped to lend credibility and legitimacy to the

new mixed-play Hot Wheels experience, particularly among parents and other stakeholders who may have been

skeptical of the idea.

Answer 4: Before jumping into one aspect of product design that creates an ‘aha’ moment, let’s first discuss how every

component in itself has created an ‘aha’ moment.

The Cars, being the physical component of the mixed-play experience, are a critical element of the platform's appeal.

By leveraging the nostalgia and brand recognition associated with Hot Wheels, the physical cars provide a tangible

connection to the brand that could attract collectors and older fans while also appealing to younger children who enjoy

playing with physical toys. The Race Portal is another key component that adds value to the platform. By allowing

players to scan their physical cars and unlock digital versions of them in the app, the Race Portal provides seamless

integration between physical and digital play that could increase engagement and encourage players to collect more

physical cars. The Smart Track, which is designed to work with physical cars and provide a range of different track

configurations, adds an element of customization and creativity to the platform. This could appeal to both younger

children who enjoy building and customizing their own tracks, as well as older fans and collectors who enjoy creating

intricate and challenging tracks. Finally, the App provides a digital component to the mixed-play experience that is

critical to attracting younger children and their parents who may be more familiar with digital play. By offering a range

of virtual tracks and other features that complement the physical play experience, the app extends the appeal of the

platform beyond just physical play and could potentially attract a new generation of Hot Wheels fans.

One aspect of the product design that stands out as potentially extending its appeal is the integration of physical and

digital play through the Smart Track and the App. This design decision not only enhances the play experience for kids

by providing interactive features and opportunities for customization, but it also expands the product's appeal to tech-

savvy parents who may be looking for toys that incorporate digital technology. Moreover, the use of augmented reality

(AR) technology in the App component enables users to interact with digital content in a more immersive and engaging
way, which can enhance the play experience and appeal to a broader range of users, including those who are more

digitally savvy. By integrating AR technology into the App component, Mattel may have been able to attract users who

are interested in mixed-play experiences that combine physical and digital elements. Additionally, the decision to make

the Cars compatible with both the Smart Track and traditional Hot Wheels tracks extends the product's appeal to a

larger target market. This means that kids who already have a collection of Hot Wheels tracks can still use the new Cars

with their existing tracks, while also experiencing the mixed-play features of the Smart Track and App. Overall, each

component of the new platform is critical to its success and potential to extend its appeal to a broader target market, the

combination of physical and digital play, and the compatibility with existing Hot Wheels tracks make the new Hot

Wheels platform a more versatile and innovative product than traditional Hot Wheels. This design decision has the

potential to extend the product's appeal to a larger target market and ensure a longer life for the product.

Answer 5: The statement from EVP & CTO, Sven Gerjets, about Mattel's culture of "move on" highlights a potential

challenge that many companies face when it comes to innovation and creativity: the tendency to abandon ideas that

don't immediately show success. This apprises that the company may have a low tolerance for failure and may be less

willing to take risks or experiment with new ideas. While it's important for companies to be efficient and strategic with

their resources, this approach can have a negative impact on innovation and creativity. Innovation often requires a

process of trial and error, where ideas are tested, refined, and improved over time, and taking risks and exploring new

ideas, even if they may not immediately yield positive results. By cutting losses and moving on too quickly, a company

may miss out on opportunities to learn from failure and make necessary adjustments to improve a product or idea. This

"move on" culture can be detrimental to innovation and creativity, as it can discourage risk-taking and experimentation

and can result in a lack of progress and stagnation in the company's growth.

The culture of "move on" can also create a sense of fear or risk-aversion among employees, which can stifle creativity

and discourage them from taking risks or proposing new ideas. In contrast, a culture of experimentation and learning

can create an environment where employees feel empowered to take risks, try new things, and learn from their failures

which will lead to increased creativity, innovation, and ultimately, more successful products and ideas. Hence, when a

company is too focused on immediate success and quick wins, it may limit the company's ability to explore new

opportunities and markets and overlook potentially valuable opportunities that require longer-term investment and

exploration. This will further impede a company's ability to stay ahead of the curve and adapt to changing market

conditions.
The concept of "exploration vs. exploitation" comes into play here. In terms of the exploration-exploitation tradeoff, a

culture of "move on" can create a bias toward exploitation, where a company focuses on optimizing its existing products

and processes rather than exploring new ideas and opportunities. This can limit a company's ability to discover new

markets and technologies, and ultimately hinder its ability to remain competitive over the long term. In contrast, a

company that is also focused on exploration, or experimenting with new ideas and taking risks, may be more likely to

identify and capitalize on emerging trends and opportunities for growth. In summary, while it's important for companies

to be efficient and strategic with their resources, a culture of "move on" can have a negative impact on innovation,

creativity,

Answer 6: The need to appeal to both kids and parents, as well as adult collectors, likely had an impact on the naming

process for the new Hot Wheels product. Mattel would need to choose a name that is not just catchy and memorable

for the kids but also resonates with them. It also must communicate the value proposition of the new mixed-play

experience to parents and adult collectors.

One possible name for the new Hot Wheels product could be "Hot Wheels MixTrack". This name combines the classic

"Hot Wheels" brand name with the new concept of a mixed-play experience, as represented by the "MixTrack"

component of the platform. The name also has a modern, tech-savvy feel that may appeal to both kids and adult

collectors. "Rev up your playtime with the ultimate mixed-play experience" can be the tagline to appeal to both kids and

parents. "Hot Wheels Fusion" could also be used as a name, signifying the combination of physical and digital play

experiences. A tagline for this name might be "Race, create, and explore like never before" or "Rev up your playtime

with the ultimate fusion experience" to appeal to both kids and parents. Either of the taglines communicate the key

benefits of the mixed-play or fusion experience - the ability to race cars, create custom tracks, and explore new worlds

through the app. It also emphasizes the idea that this is a new and innovative experience that takes Hot Wheels to the

next level. Ultimately, the most important factor in choosing a name and tagline will be extensive testing with the target

audience to ensure that it resonates and communicates the right message. Mattel could use focus groups, surveys, and

other forms of market research to gather feedback and refine its messaging until they find the perfect combination that

appeals to both kids and adult buyers. In the end, the name and tagline should be memorable, catchy, and clearly

enunciate the mixed-play aspect of the product to both kids and parents.

Answer 7: There are several pricing strategies that Mattel could consider for the launch of the new mixed-play Hot

Wheels experience. Here are a few options:

Penetration Pricing: This involves setting a low initial price to gain market share quickly. This could be an effective

strategy for Mattel if they want to generate buzz around the new product and encourage trial among consumers. Once

they have established a customer base, they could gradually increase prices. However, this strategy may not be

sustainable in the long run if the costs of producing the product are high. As mentioned in Exhibit 9A,9B, and 9C

respectively, the penetration pricing for the Car, Race Portal, and Smart Track could be $4.99, $39.99, and $159.99 to

get traction in the market.

Premium Pricing: This involves setting a high price to convey exclusivity and luxury. This could be a good strategy

for Mattel if they want to appeal to adult collectors who are willing to pay a premium for high-quality, unique products.

However, this strategy may not be effective for appealing to families or children who may be more price-sensitive. As

mentioned in Exhibit 9A,9B, and 9C respectively, the premium pricing for the Car, Race Portal, and Smart Track could

be $8.99, $59.99, and $199.99

Bundle Pricing: This involves offering a discount for purchasing multiple products together. For example, Mattel could

offer a discount for purchasing the Cars, Race Portal, and Smart Track together. This could incentivize consumers to

purchase all the 3 products and increase overall sales. However, this strategy may not be effective if consumers only

want to purchase one of the products. As mentioned in Exhibit 9C,9B, and 9A respectively, the price for the smart track

with the highest likelihood to buy is $159.99, for the race portal is $39.99, and for the car is $4.99.Hence all the 3

products can be offered at a bundled price of $199.99. This will give consumers a feeling that they are getting a deal

with 2 cars for free. Also, different bundled prices can be created if Race Portal and Smart Track are bought together

but no cars.

Value-Based Pricing: This involves setting prices based on the perceived value of the product to the consumer. Mattel

could conduct market research to understand how much consumers are willing to pay for the new mixed-play Hot

Wheels experience and set prices accordingly. This could be an effective strategy for balancing profitability with

consumer demand.

However, when choosing a pricing strategy for the launch of the new Hot Wheels product, there are a few factors to

consider, including the target audience, the competition, and the perceived value of the product, and based on these

factors, I would recommend a skimming pricing strategy. A skimming pricing strategy involves setting a relatively high

price for a new product in order to capture early adopters and maximize profits before competitors enter the market.

This strategy is particularly effective when the product offers a unique value proposition and has a relatively low level
of competition. In the case of the new Hot Wheels product, the mixed-play experience and the integration of physical

and digital components is a unique value proposition that is not currently offered by many other toy products. This

suggests that there may be a high level of demand among innovators, early adopters, and early majority buyers who are

willing to pay a premium price for this experience. Additionally, the Hot Wheels brand has a strong reputation among

collectors and fans, which may further enhance the perceived value of the new product and support a premium price

point. However, it's important to note that a skimming pricing strategy may limit the product's appeal to a narrower,

more affluent audience. Therefore, Mattel could consider introducing lower-priced options, such as a basic version of

the product, in order to appeal to a broader range of customers and increase overall sales. A combination of strategies

could also be used, such as a skimming approach followed by penetration pricing once initial demand has been met.

Overall, a skimming pricing strategy may be a good fit for the launch of the new Hot Wheels product, but it should be

accompanied by a clear marketing strategy that communicates the unique value proposition of the product and justifies

the higher price point. It should be chosen on a variety of factors, including the target market, competition, and the

perceived value of the mixed-play features.

Answer 8: When considering the retail channels to use for the launch of the new Hot Wheels product, there are a few

factors to consider, including the target audience, the level of competition, and the distribution network of each retailer.

Based on these factors, I would recommend a multi-channel retail strategy that includes both traditional in-store and

online retailers, as well as exclusive deals with select retailers. By partnering with multiple retailers, Mattel can reach

a wider audience and increase the visibility of the new product. It can also help to build brand awareness and generate

buzz around the launch by having the product available in a variety of different locations, thus enhancing market

penetration and proximity with customers. However, Mattel could also consider partnering exclusively with a selected

few retailers who have a strong track record of success with similar products. This strategy could help to build a more

focused and targeted marketing campaign around the product, and may also lead to stronger relationships with key

retailers. One key consideration would be the target market for the product. Since the mixed-play experience is designed

to appeal to both kids and parents, retailers that cater to both demographics would be ideal. This could include major

toy retailers such as Toys "R" Us, Walmart(4000 stores), and Target(1800 stores), as well as online retailers like

Amazon(accounts for 50% of ecommerce sales in the USA). An exclusive deal with a major retailer could also be

effective in generating buzz and initial demand for the product. However, it's important to ensure that the retailer's

values and customer base align with the product and target market. As mentioned in Exhibit 10, 83% of buyers expect

the products to be sold from Walmart, 81% from Amazon, and 78% from Target.
While Apple stores(270 stores) may offer a distribution network(not as strong as other retailers) and a decent level of

visibility, it may not be the best fit for the new Hot Wheels product. Apple stores tend to focus on premium products

and high-end electronics, which may not align with the audience and price point of the new Hot Wheels product.

Traditional toy retailers may be better equipped to showcase the product and provide an engaging in-store experience.

So, the choice of retail channels will depend on factors such as target market, competition, and the perceived value of

the product in each channel which can be achieved through a multi-channel retail strategy that includes both traditional

in-store and online retailers, as well as exclusive deals with selected retailers, and this will prove to be the best fit for

the launch of the new Hot Wheels product. This approach would allow Mattel to reach a wide audience, build strong

relationships with key retailers, and generate excitement around the launch.

Answer 9: It is true that a 30-second TV ad may not be enough time to fully explain the benefits of mixed play and the

new features of the Hot Wheels product. However, it is still possible to convey the message effectively in a short amount

of time by using clear and concise language and focusing on the key benefits that are most important to the target

audience. One effective way to do this is to use storytelling to demonstrate how the new Hot Wheels product can inspire

creativity and imagination beyond traditional play. For example, the ad could feature a child playing with the new Hot

Wheels product, using it to build a custom track that incorporates elements from other toys or household items. As the

child plays, the ad could highlight the various features of the product, such as its ability to connect to other toys, its

customizable design, and its versatility for different types of play. The ad could also emphasize the social and

developmental benefits of mixed play, such as encouraging collaboration, problem-solving, and experimentation. By

showcasing the product's unique features in action and highlighting its potential for mixed play, the ad could capture

the attention of viewers and persuade them to consider the product as more than just a traditional Hot Wheels toy.

Hence, the goal of the ad would be to position the new Hot Wheels product as a fun and innovative way to inspire

creativity and imagination in children of all ages.

As the advertising agency creative director for Mattel, I would focus on highlighting the unique features and benefits

of the new Hot Wheels product in a clear and simple way. Here is an example of a 30-second TV ad message that could

effectively convey the benefits of mixed play:

Scene: Children playing with both physical and digital Hot Wheels toys

Voiceover: "Introducing the new Hot Wheels, the ultimate mixed-play experience. With physical cars that you can race

on the track, and a digital world that brings your imagination to life."
Scene: Children using the race portal and smart track

Voiceover: "Unlock endless possibilities with the race portal and smart track, where you can create your own tracks

and race your friends in the real world and the digital world."

Scene: Children interacting with the app

Voiceover: "And with the app, you can customize your cars and track performance, making every race an adventure."

Scene: Adult collectors displaying their collection

Voiceover: "For adult collectors, the new Hot Wheels brings a new level of excitement to your collection, with cars

that come to life in the digital world."

Scene: Final shot of the product

Voiceover: "Experience the ultimate mixed-play with the new Hot Wheels. Available now."

By focusing on the unique features and benefits of the new Hot Wheels product, this 30-second TV ad could effectively

convey the message to the target audience and generate excitement around the launch.