Marvel Case Presentation

Soviljot Singh Behl Chetan Dua

Survhi Rathi Meera Thakker

Ishaan Srivastava Anurag Yelkur

Original & Historic

• Born in October 1939 - SUBMARINER & HUMAN TORCH set the world alight!

• 60 years of story telling by Stan Lee and the mighty Marvel bullpen

• 40 years of animation, toys and consumer products

Rich & Complex

• 45 years of continuous plot evolution

• Single fictional universe of inter- relating characters and inter- twining stories all under one brand

• 5,500 characters: Heroes & Villains, Friends & Relations

Young & Old

• Adults: Grew up with Marvel characters

• Buy fashion apparel, collectibles, accessories…

• Adults love the comics

• Kids: Exposed to the movies, animation, books and video games

• Buy toys, school accessories, casual apparel, sleepwear, novelties…

• Kids love the comics

“CRADLE TO GRAVE” APPEAL

Here & Now

• Movies: • worth in excess of $4.5bn at Box Office

• Toys: • Hasbro – global toy partner

• Comics: • 400% uplift in 5 years

• Video Games: • Activision - over 20 million sold in 3 years

• Consumer Products: • over $6bn in sales at retail

FANTASTIC FOUR

Recognized projects till date…

Recognized projects till date…

THE INCREDIBLE HULK

Recognized projects till date…

THOR

Recognized projects till date…

CAPTAIN AMERICA

Recognized projects till date…

MARVEL

Comic Book Publishing Toys Licensing

DIVISIONS

In 2001, Entered into five and a half year exclusive licensing agreement with TBM, a Hong Kong based company.

TBM licensed the rights to manufacture and sell action figures that featured Marvel.

Toys

•Prices for end customers-$ 7 for average action figure & $15- $20 for role-play toys.

•Used to drive customer traffic for other products-T-Shirts, backpack etc.

Products

•Target Age group – 4to 12 years old boys.

•Collector Segment-for adults who have grown up with action figure.

Customers

•Specialty toy retailers, mass merchandisers , mail-order companies, independent distributors.

•66 % of sale by top 5 customers- Walmart , Toys ‘R’ Us ,Target , Kay-Bee Toy Stores and Kmart

Distribution

•Contributed 10% of total revenue in 2001.

•35% of the total revenue was from toys division in 2002.

Market Performance

Toys

Licensing

Marvel StudiosMarvel’s

Consumer Media Group

Licensing

Licensed Marvel Characters

Feature FilmsTelevision programsVideo GamesAnimationsDestination Based entertainment(Theme parks)

Pursued a diversified base of studio partners.

Marvel Studios’ executives were closely involved in film development process.

Two types of revenue sharing agreements with studios

Revenue participationProfit participation

Spider Man-most successful in terms of box-office performance.

Licensed its characters for other media also such as animated shows, video games.

Licensing – Motion Pictures

Sold licenses for a variety of consumer products- toys, apparels , accessories, footwear , collectibles , and food products

Till 2003, it had over 450 active license contracts.

Royalty typically ranged from 8%-15% but could go upto 30 % also.

Total Revenue from licensing -$ 318,000 in 2003.

Toys, Appeals and video games generated 50% of the Marvel’s licensing revenue.

Goal was to secure “best in class “ licensing partners in all major categories.

Licensing-Consumer Products

• To diversify geographically

• To carry out a market research of its audiences psyche from a superhero prospective

• To capitalize on the strength of prominent characters but at the same time also focus on the lesser known characters and try to turn them into potential blockbusters.

Company Objectives

StrengthsWeaknesses

OpportunitiesThreats

S.W.O.T. Analysis

Strengths

Film Production Films by Marvel:

Year(s) Series

1994–1998 Spider-Man: The Animated Series

1992–1997 X-Men

1996–1997 The Incredible Hulk

1994–1996Fantastic Four

Iron Man

Strong brand equityRank Licensor Sales

1 Disney Consumer Products $28.6Bn

2 Iconix Brand Group $12.0Bn

3 Phillips-Van Heusen $8.7Bn

4 Mattel $7.0Bn

5 Warner Bros Consumer Products $6.0Bn

6 Marvel Entertainment $5.6Bn

7 Nickelodean Consumer Products $5.5Bn

8 Sanrio $5.0Bn

9 Major League Baseball $5.0Bn

10 The Collegiate Licensing Company $4.3Bn

Strengths

• Publisher of comics

• Marvel Entertainment: a)Reach b)Visibility

Strengths

Weaknesses

• Monotonous themes, products and services

• Only handful of characters obtained the level of ‘SUPERHEROES’

Opportunities

• Innovation

• Online Marketing

• Product line expansion

• Capitalize on the Low Market share

Threats

• DC Comics

• Torrent usage – less sales of movies and comics

• Intellectual property risks

FUTURE & POTENTIAL THREATSTO MARVEL

CEO ACTIO

NS

•Elimination of unprofitable business lines

•Acquisition of other publishers and diversification outside of comic book core

CONSEQUEN

CES

•Streamlining of operations

•However, mismanagement in non core areas

RESULT

•MARVEL FILED FOR BANKRUPTCY

THE PROBLEM

TAKEOVER

•Toys Inc. took over Marvel after it filed for bankruptcy.

TAKEOVER

•Monetizing the content library by licensing products

•Managing for long term value

•Quality and Consistency in publishing division

3 Fold Strategy

•Toy design and marketing activities dictated by upcoming movie releases

•Earnings severely affected if child dislikes character

•Rivalry with DC – poaching of employees

FAILURE

NEW IDEAS

STOP LICENSING

DIVERSIFY PORTFOLIO

MORE AGGRESSIVE MARKETING STRATEGIES

STRATEGIC ALLIANCESNEW CHARACTERS

MANUFACTURING OF PRODUCTS BY MARVEL

SOLUTIONSCREATION OF

NEW CHARACTERS

Old characters lack connect

Monetary Value has been milked

Keep Manufacturing

Greater share in sales

Artists and Editors to have exclusivity

contracts

Characters to be licensed for

movies

LICENSING•Led to 15% increase in market share•Led to 20% jump in stock price

MOTION PICTURES•Marvel has to capitalize on the motion pictures

licensing and distribution•Of the business lines, motion pictures is the

fastest growing line•However Marvel retains only 7% of sales

Marvel Universe•Marvel Universe is greatest strength•It is a brand in itself, not a house of brands•Marvel should go ahead with new characters

and slowly phase out older ones – or introduce them sporadically to create novely

ADVANTAGES