The market for educational toys can be divided into two distinct segments:
ToyLearn has decided to sell direct to the consumer instead of using the traditional layered distribution system that uses wholesalers to sell to retailers. While this creates more work for ToyLearn in terms of generating sales, it provides better margins. Additionally, this process will be more costly for the first few years, however, once relationships are developed with individual consumers as well as the wholesale purchasers, the marketing cost per sale will dramatically decrease as the original customers become familiar with ToyLearn's outstanding product line and continue to make purchases.
As mentioned in the previous section ToyLearn has segmented the market into two distinct customers, individuals and businesses.
ToyLearn will focus on individual consumers and wholesale customers for several good reasons:
The toy industry is characterized by many different toy manufacturers. Within the larger toy industry, there is a niche of educational toy manufacturers. This niche is fairly new (within the last five years) as the convergence of toys and educational tools becomes more legitimized. For years there was no awareness that a toy could have educational value, it was assumed that a toy was a mindless way of occupying a child's time and attention, giving the parent a break. Only recently has there been studies published that clearly show the ability to design a toy that captivates a child's attention while teaching them constructive skills.
The small niche educational toy industry is comprised of two market leaders and several smaller, primarily regional manufacturers. The two main competitors are:
In addition, ToyLearn competes with products produced by large game manufacturers.
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