WASHINGTON Hasbro's Playskool and the digital entertainment company Creative Labs formed a partnership to introduce a new MP3 player targeted at the parents of infants from birth to 3, which will hit store shelves Sept. 1.
Both companies look to gain strategic benefits from the partnership, which can serve as a guide for other marketers. Playskool wants Creative's technological expertise to reach tech-savvy new parents, while Creative not only links its name with a well-known brand, but also taps Playskool's knowledge of a demographic that it has not targeted before.
"The insight for the Playskool 'Made for Me' line is about delivering a unique system of toys and gear that resonate with new parents," says Nancy Kufferman, Playskool's senior brand manager. "These parents are primarily Gen X and Y and technology is typically a big part of their world. They not only embrace new technology, but they seek out ways to maximize its potential into their everyday lives."
The MP3 player is one of three products the company will introduce as part of its "Made for Me" infant product line. Parents use the products to stimulate or soothe their infants by choosing to play classic lullabies that come with the digital music player, or customizing it by transferring songs from CDs or downloading tunes from the Internet. The other products include an infant gym and a Day to Dream Soother, which uses lights and music to stimulate or soothe infants.
Playskool had two primary goals when it formed the partnership. The company wanted a product that would allow parents access to music from legal Internet providers, and it wanted to develop products quickly to beat out any potential competition. "Innovation in the digital media environment is rapid," Kufferman says. "This relationship has allowed us to bring innovation to this product line and this category that wouldn't be possible otherwise."
Playskool determined that a partnership was necessary when it realized that even though it could develop an MP3 player internally, it would require considerable
money for a project that would have to happen almost immediately. "By the time we actually did develop it in-house, the product would likely be obsolete," Kufferman says.
Playskool also lacked the licenses needed to allow users to legally download music from the Internet. The fact that Creative had the needed licenses made it attractive to Playskool.
For Lisa O'Malley, Creative's senior brand manager, the arrangement was all about "the ability to work with an established brand such as Playskool and [getting] an insider look at their knowledge of the market and consumers. It not only gives us information, but it puts our brand in front of this target demo, which we have not previously worked with. So when these parents go looking for a product for a slightly older child, they think of Creative."
O'Malley says the growing partnership trend is a result of a marketer's desire to concentrate on its core competencies and to not try and be all things to all people. "By engaging in partnerships, it shortcuts the product life cycle process and you deliver the best possible product to the consumer," she says. "And it is certainly less expensive. I don't want to hazard a guess about how Hasbro would have gone about developing an MP3 player in-house."
The partnership trend is "all tied to convergence in the marketplace," says Michael Megalli, a partner at Group 1066, a New York-based marketing strategy firm. "You have the need to have content partners, technology partners and marketing partners, and you are finding that the marketplace is more inter-corporate."
Playskool and Creative also included the design firm Evo in the partnership, which reflects the growing trend to make sure that components used from different companies look like they belong together in the final product.
Design was also a key factor for Playskool, which wanted a "fashion-forward," more "contemporary-looking" product rather than just the traditional animal theme that many toymakers use to appeal to young children. "This generation is all about expressing themselves through fashion, from how they decorate their home to how they express their individual personalities," Kufferman says. "This generation made tattoos and piercings mainstream and we wanted to appeal to their design interests."
The downside to the partnership arrangement is that one side can get burned. Take Microsoft's announcement of the new Windows Media Player 11 in January 2006 at the Consumer Electronics Show. The device was a result of a partnership with Viacom's MTV Networks, which would give consumers access to MTV's URGE catalog of more than 2 million songs. Six months later, Microsoft said it would create its own line of music players and software under the Zune banner. URGE was out.
"Companies are no longer operating as closed systems where they have full control over the way products are brought to market," Megalli says. "There is risk in that because you have to trust your partners on the outside."
Kufferman says there is no magic formula for choosing a partner, but companies should look for firms that can bring a new expertise to the table and have an established reputation of their own. Because Playskool considers Creative to be a leader in digital entertainment, it will put Creative's logo on the product and packaging. "It is really about bringing in expertise in a mutually beneficial way," she says.
Megalli sees the partnership trend stemming from the growing willingness of companies to accept the idea of open innovation. "Companies now realize that with the ability to quickly partner with someone who has the technological know-how, they can make better products for consumers," he says. "Ultimately, it's about bundling products into a valuable whole."