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Mattel: Global Crisis Communication at Play

Author: Stephanie Robinson

Case Objective

This case is designed to demonstrate the effectiveness of having a strategic communication plan in place to use in times of a crisis. The quality and timeliness of a company’s response in a situation determines how the public will perceive its dealings in the future.

Executive Summary

In August 2007, toy giant Mattel performed a voluntary recall of over 21 million products because of high levels of lead paint used in their manufacturing. Through a solid crisis communication plan, the company was able to take control of the situation and regain the trust of the public.

Background

The Start

1945 was the year of Mattel’s birth. The company was started by couple Ruth and Eliot Handler and business partner Harold Matson in sunny southern California. The initial products sold were wooden picture frames, but scraps from these would be used to develop furniture for dolls. The success gained from selling the furniture dolls would be the start of the world’s largest toy company. The first lines of toys brought the company acceptable profits and they were the first to advertise toys on television, which they began with the popular Mickey Mouse Club (Mattel Inc). Although the toys sold, they lacked quality and forced the Handlers to design toys that could be used for an extended period of time by children. Ten years later after it was founded, Mattel would see its profits reach $5 million.

An Era of Success Before Disaster Strikes

In 1959, Mattel introduced the Barbie doll, created by Ruth Handler to replace the popular paper dolls. This toy would change the industry forever, and it is still the top selling toy. The line of Barbies and the introduction of the first talking doll, Chatty Cathy, helped to put Mattel as a household name (Mattel Inc). Mattel began to expand through acquisitions, but the company would soon face its first major crisis since its inception. The company was found guilty of forging financial records, after some of its factories were destroyed. The Handlers were forced out of the company they founded, and replaced by outside executives.

Problem Statement

Between August and October of 2007, the toy giant Mattel issued voluntary recalls of products sold that were found to contain dangerous levels of lead paint. Failure to adequately supervise the manufacturing of its products in China forced the company to launch a campaign to save the brand and its reputation. During the time of the crisis, the CEO and corporate communication staff worked to craft a swift response and ensure that the message was communicated accurately and sincerely, as this was a global issue.

Key Issues

This case demonstrates the importance of having a crisis communication plan in place and selecting the best media to transmit information to all concerned parties. Mattel was able to shift the focus from the specifics of the crisis to the efforts in which the corporate communication executives handled the situation. Executives solicited the assistance of renowned PR firm Weber Shandwick to produce strategic communication tools to keep everyone aware as problems arose. Targeting consumers, stakeholders and media, Mattel sought to create a scenario that would provide the latest information on what the company was doing to improve the safety of its offerings (PR News). CEO Robert Eckert used the media to his advantage by voicing his personal dedication to product safety and appealing to parents worried about their children. Eckert’s most effective communication was the video message he posted online to “emphasize his concern as a parent and his personal responsibility” (PR News). It is important to deal with any crisis in a timely fashion to ensure that factual information is delivered to the public in the most appropriate sources. Mattel solicited the help of the agency Weber Shandwick to create a communication plan that would have global reach. With the help of one of Shandwick’s strategic communication firm, Powell Tate, Mattel was able to run a campaign detailing the toys being recalled, and what new safety measures were being implemented to check toys before they hit the shelves. The campaign included satellite interviews with Eckert and Bryan Stockton, the president of international operations, and various outlets to field any questions and concerns. The corporate communications staff at Mattel decided to treat this campaign similar to a marketing campaign for new products. The company spread the message of the toy recalls through full-page newspaper advertisements, a website, consumer hotlines, banner ads online directing parents to the recall website, and top executives participated in teleconferences and phone interviews with “top-tier media outlets” (PR News).

Mattel gained respect for its decision to recall products before any children were harmed to avoid complaints from consumers. There are companies who wait until after something goes wrong or someone gets hurt before action is taken to avoid financial losses that may seem unnecessary at the present time.

One of the biggest challenges the company faced was how to translate the message in multiple languages and assure that each country received the same message to eliminate confusion. In Corporate Communication, through a discussion of crises that organizations have faced over the years, Paul Argenti reveals the importance of staying constant with corporate philosophy and reaffirming values by handling a crisis in a particular manner (Chap. 10). Mattel worked to drive home the message that they were a responsible company concerned about the safety of their products. Argenti noted that is important to plan for a crisis, where the person in charge of corporate communications should work with a team to run through different scenarios that could possibly affect the company (227). The VP of corporate communication and director of corporate communications for Mattel worked to develop a crisis communication nine years prior to the 2007 crisis, which served as the foundation for the campaign executed during the voluntary recalls. Mattel continued to focus on product safety and its loyalty to parents who want to protect their kids from harm.

Potential Resolutions

To resolve this issue, Mattel issued voluntary recalls of products suspected of containing lead paint or magnets that could be easily swallowed by small children. They also took steps to prevent this issue from reoccurring by developing new testing methods that were implemented across the world, checking and re-checking for any safety concerns. The lesson to learn from this case is that it is important to know and understand who you are conducting business with. Barriers in communication between Mattel’s U.S. and China partners created an opening for this crisis to occur. Companies conducting business overseas should have appropriate supervision of activities to ensure they are fully aware of the processes involved in the production of their products. Mattel was the first company to firmly establish standards in global manufacturing to monitor safety practices in factories, but oversight led to high levels of lead paint and unsafe magnets being found in toys produced by their partners overseas (Mattel’s Blues).

Mattel was commended for the manner in which the executives and key communication personnel responded to the crisis, once the information was made public. The choice of communication channel often can reflect how sensitive a company is to its constituencies’ needs and emotions (228). Through well-coordinated communication efforts, Mattel utilized web technologies to promote exchanges with a global audience. Video messages and face-to-face interviews are more personal and allow you to connect with your viewers on a different level than emails and letters. “Every country has its own PR team. We were given all the facts from the U.S. and were then able to localize for our own markets, but with central coordination we were able to give a consistent message worldwide,” says Sarah Allen of Mattel UK (Collins).

Questions for Discussion

1. Why was Mattel able to regain consumer confidence after recalling close to a million of its toy products?

2. Why is the communication channel important in crisis communications? Global communications?

3. What steps should Mattel take to avoid a similar crisis?

Works Cited

Argenti, Paul. Corporate Communication. New York: McGraw-Hill, 2007. Print.

Collins, Josephine. “Safety Zone” License! Global 10.11(2007):47-48. Print.

Hajewski, Doris. "Mattel Leader Aims to Keep Trust: He speaks in state after word of another toy recall." Milwaukee Journal Sentinel, The (WI). EBSCO. 26 Oct. 2007. Newspaper Source.19 Feb. 2009.

“It’s All Fun and Games Until Somebody Gets Hurt: Mattel’s Toy Recall Redefines Global Crisis Communications”. PR News. 19 Jan.2009. Web. 18 Feb.2009.

“Mattel Inc.”International Directory of Company Histories. 61. St. James Press, 2004. Web. 6 Feb.2009. <http://www.fundinguniverse.com/company-histories/

Mattel-Inc-Company-History.

Walker, Joe. "Former Mattel workers say lead problems arose outside the plant." Paducah Sun, The (KY). EBSCO, 13 Nov. 2007. Newspaper Source. 19 Feb. 2009

Warner, Judy. "Mattel's Blues." Directorship 33.6 (2007): 30-34. Business Source Elite. EBSCO. 19 Feb.2009