Toy Marketing: Not Child's Play. `No kids, no kidding' when sales-minded manufacturers push their products at Toy Fair. INDUSTRY CONVENTION

AMERICA's toy business is often compared to the fashion industry. But a comparison to the movie business might be more apt. That was apparent at the industry's annual Toy Fair here a couple weeks ago. It was a land of what Hollywood talent agents call ``The Deal.'' (It wasn't a land of children. ``No Kids. No Kidding'' a sign said.)

Cardinal Industries introduced a Morton Downey Jr. game, called ``Loudmouth.'' Milton Bradley was touting ``Trump-The-Game'' (``You're on the brink of a multi-million dollar deal. Take charge!'').

KENNER HAS THE HITS, the Kenner press packet proclaimed.

Remember Babar, the elephant? He's coming back on cable TV. Soon to follow will be thermos bottles, bathroom rugs, and other products that, according to Nelvana Entertainment Inc., ``represent the warmth of the Babar classic tradition.''

Did somebody mention residuals?

``I don't agree with the toys,'' one buyer said candidly. ``But I agree with the dollars they bring in.''

In fairness, there were also toys made to be played with, not just to be sold. Tinker Toys, Legos, Flexible Flyer sleds with the neat eagle logo.

In an atmosphere resolutely upbeat, moreover, there were a few cautionary voices. Peter Reynolds, for example, who thinks the toy industry has reached ``the bottom of the barrel.''

Reynolds isn't one of the consumerist ``naysayers,'' as the attorney for the host Toy Manufacturers of America called them. He's president of a toy company, Brio of America. Brio's Swedish parent is the No. 1 manufacturer of wooden toys in the world.

Brio makes traditional toys of the kind you never see in Saturday morning TV ads. Other companies do too, of course. But Brio has become a symbol of sorts for those who think the industry has gone off the corporate deep end. ``Brio is the most socially conscious of all the suppliers we have,'' says Karen Holland, owner of the Wooden Horse in Los Gatos, Calif. ``They want to talk about what a good toy is.''

Fueled largely by television, toy sales have almost doubled during the '80s. In the process, the American toy industry has split in two.

On the one hand is the great mass marketing machine that begins with megacompanies like Hasbro and Mattel. It hits high gear with TV ads, and ends at outlets like Toys 'R Us, the warehouse-style chain that now controls a quarter of US toy sales.

News stories about this side of the toy industry usually quote Wall Street investment analysts, rather than people who work with children. Officials tend toward business school parlance. ``We are a classic-driven company,'' a Hasbro spokesman said.

The other side of the toy industry is found amid smaller manufacturers and toy shops. Some, of course, dream of scoring with the next Cabbage Patch doll. But others are uneasy with the pecuniary values they see dominating the majors. Meredith Brokaw, owner of the Penny Whistle stores in New York, thinks the big companies put ``business first, and children - if they think of them at all - second.''

Like many in this other toy industry, Mrs. Brokaw got involved through personal experience. She moved to New York from Washington in 1976, with three small daughters. (Her husband Tom is familiar to TV news viewers.) In her neighborhood, she says, ``there wasn't the creative plaything kind of store I expected to find in New York.''

SOME hold views that are downright heretical, not just in the toy industry but in American business generally. That there is such a thing as enough, for example. ``When you give a child too many things,'' says Holland of The Wooden Horse, ``he or she gets the message things are more important than people, that their worth is determined by how much one has acquired.

``We want to put the focus on the child instead of on the toy.''

The contrast between these two toy cultures was on display at the Toy Fair. The showrooms of the majors were muted and plush, with displays suggestive of professional design. Entrance was carefully controlled. A security guard confronted a visitor at Parker Brothers' modernesque reception area. Did he have an appointment?

There were leather briefcases and blue suits. Guides followed prepared outlines. ``It's simply a business atmosphere that doesn't even have pictures on the wall of kids playing with toys,'' Brokaw says. ``You wouldn't know you were dealing with children.''

At International Playthings, by contrast, the mood was that of a cheery rumpus room. The company imports quality toys such as Ravensburger puzzles and games, selling primarily to smaller shops like Brokaw's. There were more women here, even a man with a ponytail. One buyer sprawled on the floor, trying out a cement truck.

Don't look for Rambo dolls. ``There's virtually nothing with somebody else's face on it,'' says Ted Kiesewetter, the soft-spoken president.

The Brio showroom was similarly informal. The main attraction was a wooden train set on a kiddie-high table, a fixture in stores like Penny Whistle. On the shelves were brightly painted building kits and the like.

Brio toys are not cheap. Though train sets start at $25, a complete lay-out can cost $135 or more. Simpler toys for pre-schoolers start at around $15. Such prices, and the cachet surrounding them, have brought upon Brio the tag of ``Yuppie Toys.''

But yuppies aren't necessarily wrong. For the past nine years, a Los Angeles reporter named Tom Vacar has tested a wide assortment of toys at local day-care centers, ranging from wealthy to very poor neighborhoods. (See story on People page, Mar. 13.) Last year, Brio did so well that Vacar had to expand his top 10 list to 14 in order to make room for other companies.

``I've never been able to find a discernible difference'' between the likes of high- and low-income kids, Vacar says.

Dr. Suzanne Makuch, who runs the M.O.R.E for 2s, 3s, and 4s preschool in Camarillo, Calif., says Brio toys were ``absolutely the best, most played-with'' in the test. ``Here's a drawbridge that can take brutality and still be there.''

Peter Reynolds, the Brio president, has the ruddy face and focused quality of a regional director for the Sierra Club. His son wants to be a Rastafarian rock singer, a prospect Reynolds views with wry bemusement; he seems to enjoy being an outsider himself.

Reynolds is charitable towards the majors, some of which have good products ``in spite of themselves,'' he says. But he deplores the hype of today's toy business. ``If I put a Smurf or a Cabbage Patch [character] on this train it doesn't make any difference,'' he says. ``The toys are still the same. A ball is still a ball.''

The result of all the money spent on promotion is, he says, ``a more expensive and a cheaper [lower quality] toy.''

He's a fundamentalist on packaging as well. Brio toys come in compact boxes that are no bigger than they need to be. This distresses the discount stores, which favor big packages because customers think they are getting more.

Reynolds doesn't pretend to absolute purity. His parent company imports Masters of the Universe toys in Sweden, he acknowledges. (Few at the Toy Fair would even see a problem.)

But he tries. Most press releases at the fair were replete with show biz hyperbole. Brio's press packet, by contrast, included a pamphlet called ``The Good Toy Book,'' which makes not a mention of Brio toys. (These appear only in black and white pictures, in which the focus is on the kids.)

``Children do not need a lot of toys,'' it says, a thought not much heard in toy circles. ``They do need a lot of play experiences.''

``Everybody comes in and says, `What's new,''' Reynolds shrugs. ``Nothing's new. Just the same old thing.''

Actually, ``basics'' have been something of a toy industry mantra the last couple of years. Explanations are generally business ones: the lack of a Cabbage Patch-type ``megahit,'' for example, and the desire to avoid the boom-bust cycles that go along with these. (Coleco, which made Cabbage Patch, is now in bankruptcy.)

But it's possible that something more is involved - that at least some parents are rejecting the materialism of toybiz. At a Penny Whistle store one day during the show, a father stood watching his son play at the Brio train table.

He had been to a discount chain once, he said, and that was enough. ``I hate the place,'' he said. ``It's like a casino.''

Makers of quality toys feel a stake in the smaller shops. Hubert Ruether is chairman of Quadro, a German company that makes a life-size construction set that was the model for Hasbro's Pipeworks. He says his product ``needs more explanation than a warehouseman'' can provide.

Some major companies, in fact, are trying to get in on this action. McDonalds and Sears, for example, have formed a joint venture called ``McKids,'' to sell clothing and toys to an upscale clientele.

Kiesewetter doesn't think the days of shops like Penny Whistle are numbered, however. ``I'm not sure they can translate [the qualities of the smaller shops] on that scale,'' he says.

To people like Karen Holland, good toys aren't just a business. They're a cause. She does workshops, for example, for unwed mothers.

``These kids don't feel real good about themselves,'' she says. ``When I talk about a child's potential and what their children can become, I'm really making them believe in themselves.''

Reynolds is optimistic. His market, he thinks, could be twice its $30 million level. ``If I make a good product [and] add value to people's lives,'' he says, ``my stockholders will go smiling to the bank.''

Still, a big discounter has opened up down the street from a Penny Whistle shop. ``Its a lot to fight the majors,'' Brokaw says. ``It really is.''

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