Crisis Management: Dealing with a Product Crisis

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Case Details:

Case Code : MKTG182
Case Length : 11 Pages
Period : 2006-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : Nokia Corporation; Bausch & Lomb; Mattel Inc.
Industry : Telecom; Eye Care; Toys
Countries : Europe, USA, Asia

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Caselet 3: Mattel's Voluntary Safety Recall

"During our recent product recalls, we have taken a variety of prompt, corrective actions. We've strengthened our organization to maintain the place we have long held at the forefront of responsible corporate citizenship... Our recent challenges have presented an opportunity to again be an industry leader."25

- Robert A. Eckert, Chairman and Chief Executive Officer, Mattel Inc., in August 2007.

"Mattel takes full responsibility for those recalls and I would like to apologise personally to you, the Chinese people and all of the customers who received toys that have been manufactured."26

- Thomas Debrowski, Executive Vice President of worldwide operations, Mattel Inc., in September 2007.

Mattel Inc. (Mattel),27 the world's leading toy maker, had to deal with the worst ever product crisis in its history in mid-2007. On August 2, 2007, Mattel announced the recall of about 1.5 million Chinese-made Fisher-Price infant toys that featured characters such as Dora the Explorer, Elmo and Big Bird. Mattel feared that these toys had toxic lead content higher than the permissible level and might put kids at a risk of health hazards. Soon afterwards the company issued a second recall on August 14, 2007 withdrawing nearly 9.3 million Chinese-made toy sets, fearing that it contained small magnets and other parts that could be lethal if swallowed by kids.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

These included popular toys such as Barbie, Polly Pocket Dolls, Tanner play sets, Doggie Day Care, Batman and a few action figures. Mattel also recalled 4,36,000 die-cast 'Sarge' toy cars from different parts of the world, of which 49,000 toy cars were recalled from the UK and Ireland, 2,53,000 from the US and remaining toys were from rest of the world. After a fortnight, on September 4, 2007, the company announced a third recall of its toys stating withdrawal of more than 800,000 toys across the globe. It included the 675,000 accessories of the iconic 'Barbie' brand, 25,000 locomotive and 'Bongo Band' toys and three toy models of Fisher-Price...


Exhibit VI: Mattel INC's Financials

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25] "Mattel Creates Corporate Responsibility Group,", August 12, 2007.

26] "Mattel Apologises to China over Toy Recalls,", September 21, 2007.

27] Mattel, Inc was founded in 1945 and headquartered in El Segundo, California. The company designs, manufactures, and markets toys worldwide. Its well known brands include Barbie dolls, Fisher-Price items, American Girl dolls, Hot Wheels, Matchbox, and others.


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