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Licensed merchandise turning Toyland on its head

Ever since the debut of Mickey Mouse, movie studios have dominated sales of licensed merchandise using characters like Mickey to sell everything from plush dolls to lunch boxes. But that dominance is starting to wane now that TV networks, publishing companies and toy makers are using the same formula to grab a share of the market.

Nickelodeon Enterprises, which is expected to generate $3.9 billion in revenue in 2004, has developed a stable of characters that have become a cash cow for licensed merchandise, headed by SpongeBob SquarePants, Blue's Clues and Dora the Explorer. Nickelodeon has teamed with dozens of licensees like toy maker Fisher-Price to create a brand that's now familiar enough to stand on its own at retail.

Last fall, Nickelodeon opened its NickZone program at JC Penney on a trial basis that gave the network its own departments in hundreds of stores. The brightly colored boutiques have the familiar Nickelodeon colors and logo and carry a wide array of merchandise that includes toys, clothing and accessories.

And last month, it launched its new EverGirl brand with an exclusive at Kohl's. More than 20 licensees are on board ranging from clothing to home decor for the brand that targets girls aged 8 to 13. EverGirl marks a departure for Nickelodeon, since it's being launched without a TV show to support it. Nickelodeon is opting instead to use "Webisodes" on its Web site to introduce the characters and story lines.

Other companies using the studio formula include publisher Scholastic Entertainment. In the late 1990s, it resurrected "Clifford the Big Red Dog" through a small licensing program that grew to more than $300 million in sales in 2002 on the strength of dozens of licensees and two popular cartoons. The company is hoping the same formula works for its new animated show "Maya & Miguel" with a line of merchandise due early next year.

And toy maker MGA Entertainment is leveraging the popularity of its "Bratz Doll" line through a straight-to-DVD movie release and a feature film it's developing with 20th Century Fox. MGA will follow a path blazed by Mattel, which has sold millions of "Barbie" straight-to-video DVD titles and has another on the way through its partnership with Lion's Gate.

One advantage animated cartoons have on movies is consistency. While movie merchandise has a short shelf life driven by a film's release in theaters, TV merchandise gets daily exposure on cartoon networks that kids watch every day.

"If you were shopping for GREETING CARDS
in a discount store or superstore, which brand would you want?"

                       2003      2004

HALLMARK                  81%    86%
AMERICAN GREETINGS        8       4
SHOE BOX                  3       2
GIBSON                    1       1
EXPRESSIONS               1       1

SOURCE: Leo J. Shapiro for DSN Retailing Today

Hallmark continues
its overwhelming
dominance in
greeting cards
virtually untouchable
by any competitor.

"If you were shopping for TOYS
in a discount store of superstore, which brand would you want?"

                        2003      2004

FISHER-PRICE              12%      12%
BARBIE                    13        8
MATTEL                    11        7
SONY/PLAYSTATION           8        7
HOT WHEELS                 8        6
TONKA                      5        6
MILTON BRADLEY             5        5
LEAPFROG                   3        5
CRAYOLA                    1        3
LEGO                       2        3

SOURCE: Leo J. Shapiro for DSN Retailing Today

Fisher-Price
knocked Mattel out
of the top spot this
year and also leaped
over last year's No.
2 Barbie.

"If you were shopping for CHILDREN'S APPAREL
in a discount store or superstore, which brand would you want?"

                        2003      2004

HANES                     16%       14%
GAP                        3         8
LEVI'S                    10         1
CARTER'S                   5         1
NIKE                       9         6
OSH-KOSH                   4         6
FRUIT OF THE LOOM          5         4
WRANGLER                   4         4
OLD NAVY                   4         4
DOCKERS                    2         4

SOURCE: Leo J. Shapiro for DSN Retailing Today

Gap's marketing
efforts are paying
off. A no-show on
last year's list, the
brand shot to the
No. 2 spot in 2004.

"If you were shopping for CONSUMER ELECTRONICS
in a discount store or superstore, which brand would you want?"

                         2003      2004

SONY                       29%       15%
SANYO                       2        10
PANASONIC                   9         9
DELL                        4         8
DURACELL                    4         1
HEWLETT PACKARD             8         6
ENERGIZER                   0         6
RCA                         6         5
GENERAL ELECTRIC            4         4
MICROSOFT                   3         4

SOURCE: Leo J. Shapiro for DSN Retailing Today

Sony retained its No.
1 ranking despite the
fact that only half as
many consumers
picked it as their
preferred brand.

"If you were shopping for COMPUTER SOFTWARE OR ENTERTAINMENT
SOFTWARE PRODUCTS
in a discount store or superstore, which brand would you want?"

                         2003      2004

MICROSOFT/X-BOX            13%       13%
SONY/PLAYSTATION           10        11
HEWLETT PACKARD            15        10
DELL                        5         8
LEXMARK                     5         4
CANON                       3         4
EA SPORTS                   4         3
NINTENDO/GAMEBOY            3         3
GATEWAY                     2         2
DISNEY                      3         2

SOURCE: Leo J. Shapiro for DSN Retailing Today

MicroSoft/X-Box and
Sony/Playstation
each moved up one
spot, knocking last
year's No. 1 HP into
third place.

"If you were shopping for COSMETICS
in a discount store or superstore, which brand would you want?"

                          2003      2004

MAYBELLINE                  19%       22%
COVER GIRL                  21        19
REVLON                      11        15
L'OREAL                     14         8
MAX FACTOR                   3         6
CLINIQUE                     2         5
ALMAY                        3         3
LANCOME                      0         3
0LAY                         2         3
NEUTROGENA                   2         2

SOURCE: Leo J. Shapiro for DSN Retailing Today

Last year's value
brands, such as
Suave were squeezed
out by higher-end
lines, such as Clinique
and Lancome.

"If you were shopping for HEALTH AND BEAUTY AIDS
in a discount store or superstore, which brand would you want?"

                            2003    2004

SUAVE                       12%       11%
CREST                       11         8
PANTENE                      9         8
DOVE                         5         6
COVER GIRL                   4         5
HEAD & SHOULDERS             4         5
COLGATE                      1         4
GILLETTE                     6         4
OIL OF OLAY                  6         4
MAYBELLINE                   3         4

SOURCE: Leo J. Shapiro for DSN Retailing Today

Expanded product
lines and hipper
marketing helped
Dove climb from
No. 7 in 2003 to
No. 4 this year.

"If you were shopping for DOMESTICS, INCLUDING BEDDING,
BATH AND LINES
in a discount store or superstore, which brand would you want?"

                          2003      2004

CANNON                     29%       20%
MARTHA STEWART             18        20
POLO/RALPH LAUREN           5         8
MARTEX                      3         4
WAMSUTTA                    3         2
FIELDCREST                  6         1
DAN RIVER ('02=1%)          0         1
SEARS                       2         1
PEPPEREL/LADY               1         1

SOURCE: Leo J. Shapiro for DSN Retailing Today

Cannon hung on to
the No. 1 spot
despite 10% fewer
customers naming it
as their preferred
brands in domestics.

"If you were shopping for MEN'S APPAREL
in a discount store or superstore, which brand would you want?"

                          2003      2004

HANES                      30%       20%
LEVI'S                     15        14
FRUIT OF THE LOOM          11        11
WRANGLER                   10        11
DOCKERS                     7        10
POLO/RALPH LAUREN           3         8
LEE                         1         3
NIKE                        4         3
TOMMY HILFIGER              4         2
JOCKEY                      1         2

SOURCE: Leo J. Shapiro for DSN Retailing Today

Hanes retains the top
spot in men's, but the
biggest climber was
Polo/Ralph Lauren
which rose from 3%
to 8%.

"If you were shopping for WOMEN'S APPAREL
in a discount store or superstore, which brand would you want?"

                              2003      2004

HANES                          19%       12%
LEE                             2        12
LEVI'S                          7        10
FADED GLORY (WAL-MART)          5         4
BASIC ADDITION                  2         4
LIZ CLAIBORNE                   2         3
CHEROKEE                        4         2
ALFRED DUNNER                   2         2
L' EGGS                         2         2
FRUIT OF THE LOOM               0         2

SOURCE: Leo J. Shapiro for DSN Retailing Today

Lee made an impressive
debut this year
at No. 2. High-end
brand Polo, ranked
fifth last year, was a
no-show in 2004.

"If you were shopping for INTIMATE APPAREL
in a discount store or superstore, which brand would you want?"

                             2003      2004

HANES                          39%       32%
PLAYTEX                        16        17
VICTORIA'S SECRET               6        10
JOCKEY                          4         9
MAIDENFORM                      0         7
L' EGGS                         5         6
FRUIT OF THE LOOM               2         4
BALI                            2         4
VANITY FAIR                     5         3
SECRET TREASURES                0         3

SOURCE: Leo J. Shapiro for DSN Retailing Today

Intimate apparel has
gained widespread
acceptance at mass,
and Victoria's Secret
has emerged as the
top vertical player.

"If you were shopping for BEVERAGES
in a discount store or superstore, which brand would you want?"

                          2003      2004

COKE                        32%       32%
PEPSI                       27        24
TROPICANA                    5         5
MOUNTAIN DEW                 3         4
DR.PEPPER                    3         4
LIPTON                       3         4
JUICY JUICE                  1         3
BUD/BUD LIGHT                3         3
SPRITE                       3         3
FOLGERS                      2         2
WATER BRANDS (NET):          8         6

Source: Leo J. Shapiro for DSN Retailing Today

Welch's fell off the list
this year after ranking
No. 4 in 2003.
Libby's JuicyJuice,
unranked last year,
landed at No. 7.

"If you were shopping for SNACKS
in a discount store or superstore, which brand would you want?"

                           2003      2004

FRITO LAY (NET)             31%       31%
  FRITO LAY/LAYS            24        23
  DORITOS                    7         7
NABISCO (NET)               23        15
  NABISCO                    8         4
  CHIPS AHOY                 2         3
  PLANTERS                   7         4
COCA COLA                    7         9
HERSHEY'S                    8         6
LITTLE DEBBIE                2         4
KEEBLER                      3         3
SNICKERS                     2         3

SOURCE: Leo J. Shapiro for DSN Retailing Today

Dropped Out '04: Tostitos, Oreos, Pepsi,
Orville Redenbacher

Frito Lay continues
its annual dominance
of the snack
category, where
overall changes
over last year
were minimal.

"If you were shopping for FILM
in a discount store or superstore, which brand would you want?"

                     2003      2004

KODAK                 72%       63%
FUJI                  14        18
SONY (1)               2         6
CANON (1)              2         3
OLYMPUS                1         2
POLAROID               4         1
ENERGIZER              3         1
PANASONIC (2)          2         1
EVEREADY               1         1

SOURCE: Leo J. Shapiro for DSN Retailing Today

Kodak remains
dominant despite
slipping 9% as a
brand preference.
Sony ousted Polaroid
from the No. 3 spot.

"If you were shopping for CAMERA supplies
in a discount store or superstore, which brand would you want?"

                     2003      2004

KODAK                 58%       54%
SONY                   5        16
FUJI                  20        10
MINOLTA                2         4
CANON                  9         3
DURACELL               6         3
JVC                    1         2
POLAROID               3         2
HP                     0         1
OLYMPUS                2         1

SOURCE: Leo J. Shapiro for DSN Retailing Today

Sony rose to the No.
2 spot, more than
tripling its brand
preference from 5%
in 2003 to 16% in
the current survey.

"If you were shopping for GROCERIES AND CANNED GOODS
in a discount store or superstore, which brand would you want?"

                         2003      2004

DEL MONTE                  13%       16%
CAMPBELL'S                 15        12
KRAFT                       2         5
GREEN GIANT                 1         4
LIBBY'S                     4         4
GENERAL MILLS               2         4
KELLOGG'S                   5         3
PROGRESSO                   2         3
WONDER BREAD                0         3
DOLE                        2         3

SOURCE: Leo J. Shapiro for DSN Retailing Today

Kraft, barely missing
the list in 2003, shot,
up to the No. 3 spot,
this year. Progresso
and Wonder Bread
debuted in 8th and 9th.

"If you were shopping for CANDY
in a discount store or superstore, which brand would you want?"

                          2003      2004

HERSHEY'S (NET)            46%       42%
  HERSHEY                  31        29
  REESE'S                  10         8
  TWIZZLERS                 5         2
  JOLLY RANCHER             1         1
M&M/MARS (NET)             25        18
  M&M/MARS                 14        10
  SNICKERS                 12         9
BRACH'S                     3         6
NESTLE                      8         4
LIFESAVERS                  5         3
WRIGLEY                     5         2

SOURCE: Leo J. Shapiro for DSN Retailing Today

Carb-conscious
consumers' brand
preferences in the
candy category
lagged overall in
2004, with the
exception of Brach's.

COPYRIGHT 2004 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2004 Gale Group





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