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Managing for Success

Out-Of-The-Box Toy Triumph

By GARY M. STERN, FOR INVESTOR'S BUSINESS DAILY Posted 04/01/2010 06:59 PM ET

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1" 2"

Consumers crave what they can't get. It's human nature.

Even before one of the latest toy fads, Zhu Zhu pets, arrived at stores in the summer of 2009, shoppers were clamoring for it. Where's my Zhu Zhu pet, they wanted to know?

How did Cepia, a 16-employee startup based in St. Louis, create the blockbuster toy of the year? It's a success story that carries vital pointers on making products thrive in an Internet age.

Wal-Mart toy manager Iviette Marin organizes Zhu Zhu pets as shoppers wait in line at outlet in Ocoee, Fla. AP

Wal-Mart toy manager Iviette Marin organizes Zhu Zhu pets as shoppers wait in line at outlet in Ocoee, Fla. AP View Enlarged Image

Hamsters look cute but their cages get messy and require constant cleaning. So Russell Hornsby, Cepia's CEO, developed Zhu Zhu pets, a battery-operated hamster that makes cooing sounds and looks cuddly and never needs cleaning. Even its name is soothing and is easily remembered by toddlers and kids.

Luring Mothers

In pre-Internet days, toy companies introduced a new product with an expensive media blitz. While Zhu Zhu used supplemental advertising, it took a different route to generate buzz: It employed viral marketing and social networking to whet consumer appetites for the new toy. A special target of the innovative marketing campaign was mothers.

Viral marketing enables start-ups like Cepia to compete with Mattel (MAT) and Hasbro (HAS), two major toy makers.

In the past, companies had to "buy attention for the product and that includes buying TV and radio ads, space in trade magazines, billboards and via direct mail," said David Meerman Scott, author of "The New Rules of Marketing and PR." Grass-roots campaigns are less costly and help level the playing field.

Cepia hired BSM Media, a Fort Lauderdale, Fla., firm that focuses on marketing to mothers, to complete its marketing strategy. BSM is led by Maria Bailey, who's also the author of "Marketing to Moms." BSM Media organized 50 "hamster parties" in Phoenix in August, 2009. It planned another 450 across the U.S. To spark word of mouth, the product was introduced one week before it hit the shelves.

BSM identified "influencers" as mothers who are bloggers with a following. Moms received a box of materials, including 10 Zhu Zhu pets, to distribute to children and a kit with instructions, games and recipes.

Why target the moms? "Even if the kids think the product is cool, the mom buys it. We knew it was a cool toy but we had to convince moms that the child would play with it after it left the store," Bailey said.

The kids at the party were captivated by the Zhu Zhus. "The toy pets did everything but poop. They made different noises, ran around the floor, interacted with other Zhu Zhus and the kids," Bailey said.

See Also
  • Wal-Mart 04/06/2010 06:26 PM ET
  • Clothing Chain Fills Niche For The Younger Set In Flyover Country 04/06/2010 05:57 PM ET
  • EBay 04/05/2010 06:29 PM ET
  • MercadoLibre Walks Fine Line 04/01/2010 08:02 PM ET
  • Court backs eBay in Tiffany suit 04/01/2010 06:46 PM ET
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