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31 Jan – 4 Feb 2018
Spielwarenmesse®: Mr Sieber, judging by your age you could belong to
generation Y, which, according to experts, is changing the world of work with its expectations. Are things in Göppingen already as relaxed as they are at Google in Zurich?
Florian Sieber: Märklin is a traditional company that over the years has developed to a very high technical level, at which there is still a need, however, for a great deal of work done by hand. So of course, we select our employees according to different criteria than an IT company. As well as having know-how specific to this sector and to the products, plus the love of detail, interest in new technologies plays an important role in our firm too. As do the “classic virtues” – for example reliability, commitment and the ability to work in a team. If we’re going to conquer the challenges ahead, it will certainly be even more important in the future to have creativity and to think “outside the box” – in that respect we’re no different to Google.
Your generation is generally regarded as adept at texting, while up to now it’s been less known for its passion for model railways. What do you find so fascinating about these “toys” that makes you think you can infect others with your enthusiasm?
F.S.: We were immediately fascinated when we saw the whole production chain at Märklin for the first time. The whole creative process – from development and planning, construction, tool-making and development of the electronics to delivering the end product to the retailers – is very expensive and calls for a very high degree of vertical integration. In my opinion, there’s no other toy in the world where so much time and dedication go into its manufacture as at Märklin. In the meantime, we’ve opened our factory to guests so that outsiders can share this fascination. I can assure you that after a visit they’re all “infected” by Märklin. The development of our digital system will also help to enthuse younger target groups.
Märklin wants to stimulate the interplay of young and old. Several generations under one roof is a real challenge in the office, because you often find there’s a clash between different ways of thinking and working. What sort of solution have you devised for collaboration in the case of model railways?
F.S.: We’ve got a great product that meets all the conditions for the interplay of young and old. We appeal to older target groups primarily at an emotional and nostalgic level.Younger customers are fascinated by the many technical adjustments you can make.This means putting a layout together is a wonderful project that the whole family can take part in. The interplay of manual skills, creativity and electronics calls for genuine teamwork where everyone can make a contribution according to his abilities. The principle is: the way is the goal, and what you have learned creates understanding of everyday situations and challenges. Quite apart from the classic model railway, I’m personally very keen on building a garden railway. If I have my own garden and a family one day, I’ll certainly install an LGB layout – with tunnels and mountains, over bridges and valleys. I don’t know any child who wouldn’t be thrilled by that!
You want to get back into the heads of younger people. Do they really want that and, if they do, how are you going to keep their interest? Are the sales of “Märklin my world” rising at a time when the number of collectors is tending to decline?
F.S.: “Märklin my world” is already very successful in the toy market. This year we’ve also managed to open up more distribution channels. Parents really appreciate this line because it’s child-friendly and easy to handle – with our customary high quality. And the children like all the themes around trains and railways. This is proved by characters like “Thomas the Train” or “Chuggington”, two of the most successful pre-school licenses worldwide. Also, big brands like Duplo, Lego, Playmobil and Brio are extremely successful with their train products. In the case of the pre-school target group, parents make the important purchasing decisions. We benefit because parents associate attributes like quality, safety and the pleasure derived from play with the Märklin brand.
Generation X are an important target group as well. They’ve got age, maturity and the financial resources to afford a series 41. What gives you the hope that they will come back to model railways?
F.S.: We know that many people in this generation came into contact with Märklin when they were children. Now it’s the job of our marketing to convince this target group that model railways are a great hobby. I’m sure we’ll be helped by our development of the digital world, which will thrill the technology-savvy generation X. And we often manage to “re-infect” our guests with the Märklin fascination when they come on the production tours I mentioned earlier.
Exporting also plays a big role in your strategy. With the marketing power of the Simba Dickie Group behind you, what progress has Märklin made? “Märklin my world“ is surely predestined for markets abroad.
F.S.: Our classic Märklin products are hardly comparable to the range of the Simba-Dickie Group (SDG): the target groups are fundamentally different, the sales and distribution channels are different, and there’s a huge gap between the price points. Moreover, with SDG, our sales – at least outside our core markets – are primarily with the bigger chains. But for our professional segment we need retailers who will provide those things that are so important to us, like advising customers, repairs and a replacement parts service. The situation with “Märklin my world” and “Märklin Start up” is, however, somewhat different, because we’ve been able to create synergies with our subsidiaries abroad. And we’ve set up our first cooperation agreements with partners in Russia, Spain, Italy, the UK, the Czech Republic and Poland.
In recent years, the specialist trade in Germany has proved to be the eye of the needle for model railways. Is Märklin succeeding in regaining lost ground with the way it’s focusing on target groups.
F.S.: The specialist trade continues to be our most important partner, with the right know-how and able to offer the service our customers want. This isn’t going to change in the short term. With new segments like “Märklin my world”, “Märklin Start up” and LGB, we’ve nevertheless got to exploit more sales channels. This is particularly important in the so-called emerging markets, where the classic structures with a bricks-and-mortar specialist toy trade such as we find in Germany doesn’t exist. Given this situation, we’ve got to create products with a consistent focus: “plug and play” will become increasingly important.
Let’s talk about the product. The trade’s view of “Märklin my world” , as far as we can see, has been almost unanimously positive. Now we’re hearing that you shouldn’t have gone in for tracks made of plastic. Why no longer the classic C-track?
F.S.: To be quite honest, with every sale of “Märklin my world” we’ve burned money.
If you come from the specialist trade, you know how high-quality our C-tracks are and what price they are sold for. Similarly, you can calculate the huge subsidy of the “my world” package. But – and we mustn’t forget this – it has helped us to get a foothold in the pre-school market. Nevertheless, it’s of course essential to create a certain margin.
That’s the only way we can invest in new products and innovations. So we were faced with the decision either to raise prices by a huge amount or to tailor it consistently for children. As you know, we decided on the latter strategy, since this enables us to guarantee that it’s relatively inexpensive for a child to extend his rail network. And that raises the play value of our product immensely.
Increasingly realistic, increasingly perfect, increasingly digital – this is the impression you get when you see on displays a railcar with passengers getting on and off or a tender in which the level of the coal goes down under its own weight. Would you please reveal what technical innovations Märklin has in store for us or where the next challenges lie in getting even closer to the originals.
F.S.: We’re investing in our digital technology in the long term, and we’re designing it to be noticeably simpler and more user-friendly. We regard this approach as an important precondition for appealing to both new customer groups at the international level and for attracting the interest of younger target groups. But, so that we can keep on surprising our regular clientele with innovative ideas, we’re working continuously on more technical gimmicks, like the display doors and the level-adjusting coal tender.
I’m convinced that developments like these make model railways appreciably more attractive. In the same vein, we’ll continue developing our devotion to detail and being faithful to the originals and in this way captivate our customers. However, I’m not prepared to tell you anymore about that at the moment.