Airfix flies again: Can the British toy company make its business model fly?
While producing 'Airfix: Britain's Next Top Model?', the Money Programme team interviewed...
While producing 'Airfix: Britain's Next Top Model?', the Money Programme team interviewed the Chief Executive of Hornby along with a number of industry experts. Here you can watch extended versions of several interviews.
- Duration: 15 mins
- Published on: Friday 22nd June 2007
- Introductory Level
- Posted under: Business Studies
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On buying Airfix
I think the first key thing is that it’s in a sector, a market sector that’s very closely related to the sector that we’re in. I mean, we’re in the hobby business with Hornby and Scalextric, and Airfix is very much a hobby brand. We share the same, broadly speaking, distribution channels in the UK. Many of our international distributors are the same and therefore the ability for us to add the brand Airfix and indeed Humbrol to our existing infrastructure, our existing distribution network, was very attractive to us.
Will children know what Airfix is?
They will know what Airfix is. I think one of the challenges that we have is to make it more appealing for kids to actually want to make kits. And you’re absolutely right in saying that the bulk of the Airfix product offered at the moment is focused looking backwards historically. One of the challenges we have, and we think we’re able to deal with that challenge, is to make the subject matter more directly appealing to today’s kids. One of the ways we’re looking to do that is to add licenses, for example. Although the Airfix product matter in the main is military, over the past few years some of the best-selling kits have been things like the Wallace and Gromit motorbike and side car, and the Wallace and Gromit Anti-Pesto van; and these are things that kids relate to directly, and our hope is that if we can actually broaden the offer in more up-to-date product, as kids play with those kits and make them up, they’re then more attracted to go on to make some of the perhaps more difficult and more historic product.
Who buys Airfix - children or adults?
Both - and indeed also kids are buying the product for themselves or asking for the products to be bought for themselves. We think it’s roughly 50/50 between adults and child purchase. In volume terms, still the largest volume is made in sales of kits of below £5 retail. And the adult modeller would not be buying those, generally speaking it would tend to be for kids.
On the future for Airfix
I think you’ll see first and foremost there is still a big market worldwide in the adult serious hobbyist. And so I think one of our key focuses has got to be to continue to invest in high quality upmarket kits for those hobbyists. There’s an almost guaranteed return in doing that, and it’s almost a flagship sort of thing that you have to do anyway. But as far as the lower end of the market is concerned, the entry level for kids, I mentioned the use of car licences, I can see a range of Formula One cars for example, I can see a range of touring cars, I can see a range of Le Mans-type products, all of which will be much more appealing than the Ford Escorts and the Triumph Heralds that we mentioned earlier. But I think the other thing, the key I think will be to introduce licenced product, because kids do respond to character licences nowadays.
We found this with Hornby and I think there’s an interesting comparison here. When I came to Hornby in 2001, really the hobby of model railways was seen to be something of a declining activity. People were reluctant to admit that they played with model railways. One of the first things that we did was to take the licence for Harry Potter, so we produced the Hogwarts Express Hornby railway layout. That was a huge success, but as much as anything else rather than in itself driving sales, it cast a sort of halo over the business in the sense of saying, Hornby is alive and kicking as it were, willing to take risks, willing to take new licences, and making a much more popular activity. So I think if we can apply the same sort of solution as it were to Airfix and use licences to raise the profile of the brand, hopefully at least we’ll achieve a similar sort of level of success.
John Baulch, Publisher of Toys 'n' Playthings, shares his views on Airfix's business model and the competition it faces.
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On the Airfix business model?
Well, I think if you're trying to run an entire business off a brand, you've got certain significant overheads and an infrastructure that you have to build, and therefore you need a critical mass. Whereas the advantage of Airfix now being part of an established company like Hornby, is that they have an existing infrastructure and therefore they can now bolt on incremental turnover, without adding significant incremental costs to their business infrastructure. So it makes it much easier to spend the money developing the range that you need to do to drive for sales.
On Hornby taking over Airfix
I thought it was great news for the industry because Hornby have a tremendous track record in looking after long-term established iconic brands. They have Hornby and they have Scalextrix. And both of those brands have a significant interest to an older hobbyist market. But both brands obviously also have to be introduced to children at a young age in order for them to start to become interested in those brands so that as they get older, they become that hobbyist collector.
On the challenge facing Airfix
Airfix goes back to 1949 as a company. The very first Spitfire was actually produced in 1953, so yes it's half a century old. And I think what you have to have is therefore a development of product. The older generation, perhaps the hobbyists, are still looking to recreate some of the models from their youth, so they are still interested in the aeroplanes, the spitfires, and the planes. But I think to interest children and some of the younger consumers, they have to take the basic principle of kit-building and perhaps change the style of product to make it appeal to a younger child, a younger audience.
On competition facing Airfix
I think their major competition these days is Revell, which is predominantly a US company. Ravel have made great strides in the market, possibly even greater strides because of the problems Airfix have been experiencing in the last year or two. There's also Tamiya, which is a Japanese brand, but I think Airfix still has a tremendous cachet amongst I think particularly the parental and grand parental generations. These are often the people that will buy the product for the child. This is very much gift-giving product. And if the parent can see the Airfix brand on the kit, or a grandparent can see the Airfix brand and they can remember back to their childhood, that is obviously going to help endorse that product to that generation of buyer.
Arthur Ward, Airfix historian and author, talks about the story of Airfix.
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On the beginning for Airfix
Airfix was founded in 1939 by an émigré Hungarian called Nicholas Cove, quite an entrepreneurial chap, and set up a business in England called Airfix. Contrary to what people might think, not to make Aircraft kits or fix aircraft kits, but actually they produced air filled toys, mostly made out of rubber; novelties, lilos, soft toys, dolls, that sort of thing. By the end of the war, they'd bought some state-of-the-art injection moulding machines and I think by 1947 they were actually the market leader in plastic combs in Britain.
On the "two-bob" spitfire
In 1953, Airfix produced their first Spitfire kit, and I guess the Spitfire model is the most iconic of all Airfix kits. The 1953 Airfix spitfire kit, which is perhaps their most iconic, and replicas of Spitfires, have always been in the Airfix range and repeated ever since, was produced at a time when World War 2 was fresh in the memory of most people and certainly children were talking about the war, talking about The Battle of Britain; films were being shown, it was something that Airfix had to do, and a lot of people working in the company had asked Cove, what we need to do is Airfix Spitfires, we need to do Messerschmitts, we need to do Lancaster Bombers, what have you.
Cove incidentally was still keen on just doing the classic ships range, which he loved. But he was persuaded to release a Spitfire kit and that sold like hot cakes. The first Spitfire wasn't very accurate. And they soon received letters from people saying, well actually, it's not a good representation of Britain's most famous aircraft. Soon after that was released, they got a challenge from a modeller called John Edwards who said, I could do better, I could design a much better, a more accurate aircraft. A few years after the first Spitfire, Airfix said, OK, put your money where your mouth is; they employed him, and John Edwards designed a Mark 9 Spitfire which is, I think, still in the Airfix range to this day.
On life in the 50s
Youngsters in the 1950s, an awful lot of them didn’t have television, and the only entertainment was the radio. Also it was a different time - children weren't allowed to roam the streets, they didn't have any spending money. There weren't places to go, so really after school, children stayed at home. So a model kit was the ideal toy to occupy them, keep them out of mum and dad's way, and make sure that they weren't up to no good on the streets. So it was the perfect toy.
Children weren't subjected to the barrage of media that they have today. They didn't have ready access to, obviously, television; some of them didn’t even listen to the radio.
There wasn't the music around, older teenagers may have some 78s to play, but for an 8- or 9-year-old boy, an Airfix kit was one of the most exciting things that he could have.
On Airfix in the 50s and 60s
Throughout the 50s, and the 1960s, Airfix grew and grew. More and more kits were released; they were able to produce larger ones, and the ranges varied enormously. So they were able to make model kits of almost everything. From figures to cars to trains to aircraft - you name it, sailing ships, there was a huge range. They also became quite acquisitional as well. So by the end of the 60s, they were becoming one of the largest companies around. By the early 70s, they'd won an award for some of the best packaging in the world, when they introduced a replacement for the famous plastic bag, which was a sort of blister pack moulding, and that won an international packaging award for design excellence
They also then started to acquire other companies and by the early 70s, Airfix was one of the largest toy companies in the world, and certainly really the largest in Britain. They were releasing not just one or two models a year, like most kit manufacturers manage to do today; they were releasing four or five new kits every month. There was an Airfix magazine which enthusiasts could buy, which told them about forthcoming kits, the Airfix catalogues were an annual affair and were eagerly awaited. And it was just becoming one of the largest companies in Britain - and certainly by the end of the 70s, it was.
Airfix models - successes and failures
The top models of all time, as far as Airfix is concerned, obviously include aircraft like the Spitfire and some of the German World War 2 aircraft like Messerschmitt and Heinkels and things like that. Some of their ships, sailing ships have been enormously popular. On the other hand, they have produced the occasional turkey.
They produced a model of a boy scout in the 1960s and they've produced models of steam engines and industrial tools and things like that which have never really been appealing, so-called museum models. Ironically these failures, because they weren't produced in large quantities because it was soon realised there was no market for them, are now perhaps some of the most collectable kits of all time for Airfix.
They've also tried in the past to appeal to girls, with only minor success really. I suppose at the end of the day, if you're balancing a little model of a kingfisher or blue tits or a field mouse with a Heinkel bomber laden with bombs and machine guns and things, there's really no contest. The kings and queens, which have also been kits that really I suppose have been aimed more at girls, haven't been terribly successful.
They did produce a model of a show jumper in the early 70s - a one-twelfth scale show jumper, which was quite successful. It looked an awful lot like Princess Anne and it was a time when Princess Anne was doing enormously well in various sporting events around the world. And most people thought it was a replica of Princess Anne. But Airfix soon had to retract any suggestion that they had indeed based it on a famous royal personage. But the show jumper kit was probably the only really successful model kit that Airfix had ever marketed at girls.
- These interviews were recorded exclusively for The Open University by the Money Programme team
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Copyright & revisions
Originally published: Friday, 22nd June 2007
Last updated on: Friday, 7th December 2007
- Body text - Creative-Commons: The Open University
- Video 1 - Copyrighted: BBC
- Video 2 - Copyrighted: BBC
- Video 3 - Copyrighted: BBC
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