1. Introduction

From the market size perspective, the global trendy toy market is still in the stage of rapid development. This sector encompasses a wide range of products that appeal to children and collectors alike, including action figures, educational toys, and interactive gadgets. The increasing influence of social media platforms and online marketing strategies has significantly contributed to the popularity of these toys among younger demographics. Overall, as consumer preferences continue evolving alongside technological advancements, the global trendy toy market is poised for sustained growth over the coming years—particularly within regions like China where economic factors favor expansion. A report by Frost & Sullivan indicates that the retail market for pop toys in China expanded from RMB 6.3 billion in 2015 to RMB 20.7 billion in 2019, reflecting a compound annual growth rate (CAGR) of 34.6%. Given the rising popularity of pop toys nationwide, it is anticipated that this market will reach RMB 76.3 billion by 2024 [1].

POP MART is a leading cultural entertainment company in China, functioning as an all-encompassing operational platform that covers the entire trendy toy value chain. Founded in 2010, it opened its first store in Beijing, China, in November to promote the distribution of fashionable products. By 2022, POP MART had made significant strides in international expansion, with nearly 10% of its revenue coming from overseas and establishing operations across 23 countries or regions globally—including Seoul (South Korea), Tokyo (Japan), Australia, the United States, and Singapore. Moreover, as a pioneer in the trendy toys industry, the Frost & Sullivan Report reveals that in 2019, Pop Mart rapidly growing pop toy company in China, securing an 8.5% market share and experiencing significant revenue growth from 2017 to 2019 [1]. Besides, Qiu’s financial analysis of POP MART showed that in 2018 and 2019, POP MART reported revenues of 514.5 million yuan and 1,683.4 million yuan, reflecting year-on-year growth rates of 225.5% and 227.2%, respectively. What’s more, it’s notable that in 2020, although the pandemic had a great negative effect on offline spending and the speed of growing decelerated to 50.5%, the company's revenue was still increasing [2].

Since POP MART is a successful trendy toy brand, in order to analyze the marketing strategies of these brands, this research take POP MART as an example and employ the methodology of case analysis. Case analysis of POP MART in this report entails a thorough examination of specific individuals, groups, or events through meticulous observation and documentation of real-world scenarios to gather rich qualitative data. This article undertakes a comprehensive analysis of each case to discern critical factors and patterns, synthesizing these insights with theoretical frameworks to more effectively illuminate the underlying causes of the observed phenomena. By utilizing case analysis as the principal research approach, this report elucidates complex issues from multiple perspectives and levels, thereby offering readers a comprehensive and nuanced understanding. Moreover, this approach also establishes a robust foundation for future inquiries, enhancing the efficacy of communication between the academic community and practical domains.

Overall, this report will focus on analyzing the marketing strategies of POP MART based on STP as well as 4P theory and offer some suggestions to POP MART and hope it can offer some help to the academic field of marketing.

2. STP Marketing Strategy

Alfons explained that a marketing strategy consists of various initiatives aimed at promoting a product, whether it be goods or services, to consumers. This is achieved through specific tactics and plans designed to boost sales figures [3]. The STP marketing strategy forms the basis of modern marketing practices, consisting of three essential phases: segmentation, targeting, and positioning.

Market segmentation is the process of dividing customers in a marketplace into specific groups that share similar needs based on defined criteria. Target market selection involves pinpointing one or more segments to concentrate the company's efforts on. Market positioning focuses on creating a unique brand identity and product characteristics within the selected target market to effectively meet its requirements.

The importance of the STP marketing strategy lies in its ability to help companies better comprehend market needs, develop customized marketing tactics, react efficiently to changes in the market, and maintain a competitive advantage. Utilizing the STP model allows organizations to implement personalized marketing efforts that address the varied requirements of different consumer segments, adjust their strategies swiftly, and preserve their edge over competitors.

By employing this comprehensive framework throughout the analysis of the market situation for POP MART, this report aim to provide actionable insights that can inform strategic decision-making processes moving forward.

2.1. Segmentation

Ningrum explained that market segmentation involves the process of categorizing a market into distinct groups of consumers, each with unique needs, traits, or behaviors [4]. Furthermore, Hakiki elucidated that market segmentation can be understood as the systematic process of identifying and analyzing consumers within the product market, while also examining the variances among these buyers [5]. Overall, the market segmentation of POP MART is mainly realized through demographic, behavioristic and psychographic segmentation.

Angelo noted that categorizing people based on their age facilitates the identification of trends and shared characteristics. This approach is particularly beneficial for businesses, as it allows companies to swiftly identify their target audience and create tailored advertisements aimed at those consumers [6]. In the context of demographic segmentation, POP MART's market predominantly targets young consumers, with a specific focus on Generation Z. This cohort, typically defined as individuals born from the mid-to-late 1990s to the early 2010s, is distinguished by its distinctive preferences and behaviors that have been shaped by their upbringing in a digital environment. This generation places a high value on authenticity and transparency in brand communications. They are more inclined to support companies that exhibit a genuine commitment to social issues and sustainable practices. In response, POP MART has tailored its messaging to align with these values by emphasizing initiatives focused on environmental responsibility and community engagement.

Within the framework of behavioral and psychological segmentation, POP MART's main sales are driven by a form of spiritual consumption that is expressed through physical purchases. This phenomenon highlights a transformation among modern consumers who value emotional and psychological satisfaction more than simple material gain during their shopping journeys. These consumers often display strong individualistic tendencies and seek to represent distinctive lifestyles while engaging with new cultural trends. Additionally, the main consumers of POP MART take pleasure in collecting or buying mystery boxes; these individuals find joy in the surprise element of unboxing as well as the fulfillment associated with completing a collection series.

2.2. Targeting

Kotler defines targeting as the process of selecting one or several market segments to engage with, or how a company enhances its presence in a particular market [7]. The process of selecting a target market entails the identification of one or more particularly attractive and promising segments derived from market segmentation analysis. The chosen target market should exhibit sufficient size, growth potential, and profit margins while being congruent with the company's core competencies and available resources. By precisely delineating this target market, businesses can more effectively customize their marketing strategies, thereby enhancing both market penetration and sales performance.

POP MART's main target market is the young group of 15-30 years old, specifically, the female consumer group of 15-30 years old. This age group of women is usually at a crucial stage of learning, working, and social activities, with strong consumption ability and independent consciousness. When choosing products, they not only pay attention to the quality and price of the goods, but also value the brand image, design style, and personalized experience. This type of consumer group has a strong willingness to pay, and is often willing to pay a premium for their favorite brands or limited edition products. In addition, they have a high acceptance of new things and are willing to try new trends and styles, making them an important driving force in the market. With the development of social media, this group of consumers is also more easily influenced by online culture and trends, thus forming a new type of consumption pattern that spreads rapidly. At the same time, this age group of women generally has a high brand loyalty. Once they identify with a brand, they will promote it by word of mouth, share their usage experience, etc., to attract more potential customers.

2.3. Positioning

Kotler defines positioning as the process of crafting a company's products and brand image to ensure it holds a unique place in the perceptions of target customers, especially when compared to its competitors [8]. Positioning entails the identification of a distinctive niche or competitive advantage for a company's products or brand within a target market, informed by the specific needs and competitive dynamics of that market. This can be accomplished through various strategies, including product attributes, brand identity, pricing tactics, and marketing communications. Effective positioning enables consumers to develop a clear impression and perception of a company's offerings, thereby facilitating market differentiation and enhancing brand equity.

2.3.1. Product Attributes

POP MART provides a diverse array of products, including blind boxes, figurines, toys, and more. This extensive product range has facilitated POP MART's expansion of its customer base within an increasingly competitive market by leveraging its robust intellectual property assets.

2.3.2. Brand Perception

POP MART positions itself as a contemporary toy brand that resonates with young consumers by offering innovative and distinctive products. The brand's slogan, 'To light up passion and bring joy,' aims to inspire enthusiasm and happiness in life through unique designs and high-quality toys. POP MART endeavors to integrate innovation with artistry, emphasizing not only the products themselves but also the enhancement of user experience. Additionally, POP MART actively participates in various cultural initiatives and collaborates with renowned artists and designers to perpetually cultivate a fashionable and artistic brand identity, thereby continuously enhancing its brand value.

2.3.3. Price and Quality

POP MART provides a wide variety of products across multiple series and themes, resulting in a diverse price range. Items are priced between 59 yuan and 2,900 yuan, allowing consumers to choose options that align with their preferences and budgets. This flexible pricing strategy enables POP MART to appeal to a broad audience, including both younger individuals and adults, ensuring there are offerings suitable for different tastes.

3. 4Ps Marketing Theory

The idea of the marketing mix was first presented by Niel Borden in 1953 [9]. He suggested that a marketing strategy consists of various elements or control variables that can be adjusted to respond to market demands. Later, McCarthy expanded on this concept by formulating the 4P framework: product, price, place, and promotion [10]. The 4Ps outline four separate, clearly defined, and autonomous management processes. It examines marketing challenges through the lens of management decision-making. From this perspective, various factors influencing a company's marketing activities can be categorized into two groups: uncontrollable factors, which encompass the market elements beyond the marketer's influence—including both micro and macro environments—and controllable factors, which consist of products, trademarks, brands, pricing strategies, advertising efforts, channels, and other elements that marketers can directly manage. The 4Ps framework serves as a comprehensive summary of all these controllable variables.

3.1. Product Strategy

Product strategy mainly pertains to how a company seeks to fulfill its marketing goals by offering consumers an array of appropriate products, both physical and non-physical, that satisfy their requirements. This encompasses the integration and application of manageable elements such as product diversity, specifications, design, quality standards, packaging options, features, trademarks, branding, and various service initiatives.

POP MART offers a diverse array of products, featuring various series such as blind boxes, figurines, toys, and other merchandise. These items are not only creatively designed but also reflect elements of popular culture, making them appealing to consumers. In particular, blind boxes provide a unique purchasing experience filled with randomness that introduces an element of surprise and thrill; the unpredictability associated with each unboxing moment enhances the enjoyment factor. Furthermore, figurines have gained popularity among collectors due to their exceptional craftsmanship and intricate designs; the narratives and character backgrounds tied to these pieces further boost their allure. Beyond its primary product offerings, POP MART showcases several well-known IP characters like Molly and Pucky—each possessing unique traits and stories—which gives consumers a wider range of choices. For instance, Molly is characterized by her adorable appearance and youthful energy, while Pucky embodies a more fantastical and whimsical essence. These IPs extend beyond mere toys to encompass animations, comics, and various related products, thereby establishing a comprehensive brand ecosystem.

3.1.1. Multiple IPs

Su examined the substantial profits and ongoing growth of POP MART. She utilized various net profit figures and growth rates to illustrate the brand's remarkable expansion. Additionally, Su identified IP as a key factor contributing to this rapid growth. Furthermore, she expressed her views on the future prospects of the blind box market and discussed some competitive dynamics involving POP MART, highlighting its significant reliance on IP [11]. As of June 30, 2020, POP MART managed a total of 93 IPs, comprising 12 proprietary IPs, 25 exclusive IPs, and 56 non-exclusive IPs. These IPs span various domains such as toys, animation, and gaming, reflecting rich cultural connotations and significant market potential. POP MART effectively captures a wide range of consumers with its varied IPs, catering to different interests and preferences. For example, the brand has launched a trendy toy collection aimed at younger audiences, while its products for children feature more playful and charming designs. This broad assortment not only meets the aesthetic needs of various consumer segments but also enables the brand to establish a unique position in a highly competitive market. In 2019, Pop Mart had 85 distinct IPs, yet the company's annual report reveals that nearly 50% of its revenue was generated from Molly and Pucky [12]. This underscores the critical importance of popular intellectual properties and their fanbase to the revenue generation of POP MART. Furthermore, the strategic aggregation of diverse intellectual properties can enhance internal profitability. Concurrently, the audience cultivated by each IP offers the brand increased marketing opportunities, enabling the company to capitalize on its existing user base when launching new products and facilitating more efficient and targeted market penetration.

3.1.2. Blind box economy

Conversely, the innovative design of trendy toys presented as blind boxes constitutes a significant factor contributing to POP MART's success. In the field of consumer psychology, the phenomenon where increased demand for products leads to a perception of rarity is referred to as the "scarcity effect [13]." The blind box rules indicate that the chance of finding hidden money is 1 in 144. This often leads to consumers needing to make several purchases, and some individuals may even opt to buy an entire box due to a sense of pressure or desire for collection. Consequently, many people choose to acquire the whole set. Collecting such items not only provides customers with a feeling of achievement but also offers them an opportunity to showcase their finds to others [14]. Ji demonstrates that the popularity of the blind box economy can be attributed to factors such as the products themselves, consumer behavior, and market dynamics. Notably, the psychological aspects of consumption play a crucial role. Contemporary consumers, particularly younger demographics, have a strong inclination towards novelty-seeking. The inherent uncertainty associated with blind boxes attracts a large consumer base [15]. Numerous individuals, even those who do not identify as enthusiasts of any specific POPMART intellectual property, are nonetheless attracted to the concept of blind boxes and make purchases driven by curiosity. This phenomenon exemplifies the effectiveness of POP MART's marketing strategy.

3.2. Price strategy

Pricing strategy fundamentally encompasses the methodologies through which a business leverages market principles to establish and modify prices, thereby fulfilling its marketing objectives. This includes the integration and application of diverse pricing methods and techniques.

3.2.1. 3Cs pricing strategy

The generic 3Cs model of analyzing the pricing situation outlines three areas of analysis: Consumer demand, Costs, and Competition. Company efforts to set a price for a particular product or service can have a strong impact on related products and services that the same company offers [16].

POP MART primarily employs a value-added pricing strategy as its customer value-based pricing strategy. In recent years, POP MART has gained significant popularity, coinciding with a growing trend among young consumers to collect fashion toys. This demographic is increasingly inclined to purchase trendy toys. Furthermore, the incorporation of a virtual interactive system enhances the playability of POP MART's products beyond mere display on shelves. Unlike other contemporary brands, POP MART offers distinct services that add value to their offerings. Although there was a previous increase in the prices of POP MART's trendy toys, many consumers remain willing to make purchases.

POP MART employs a cost-based pricing strategy primarily characterized by a cost-plus approach. This method involves determining product prices by adding a predetermined profit margin to the total production costs. Its simplicity and ease of implementation contribute to its widespread adoption in various industries. The main reason of POP MART employs a cost-plus pricing strategy is that its demand is relatively price inelastic as well as stable, and the customers are not that sensitive to the price change. Therefore, cost-plus pricing approach is also very suitable for POP MART.

As for the competition-based pricing strategy, in comparison to other competitors, the pricing of POP MART is positioned between that of Bearbricks and Kaws, which are relatively high, and Miniso’s blind boxes, which are comparatively low. This strategic pricing approach allows for a broader customer base.

3.2.2. Psychological pricing

The pricing strategy employed by POP MART is a notable example of psychological pricing, which aims to influence consumer perception and behavior. For almost all the products offered by POP MART, their prices consistently end with the digit 9, such as 59, 69, and 79. This practice is commonly referred to as "charm pricing," where prices are set just below a round number. For instance, a price of 69 can create an impression of being significantly lower than 70 due to the way consumers process numerical information. Research in behavioral economics suggests that consumers tend to focus more on the leftmost digits when evaluating prices. As a result, when presented with the price of 69 instead of 70, many individuals may perceive it as being closer to 60 rather than rounding up to its nearest whole number. This cognitive bias can lead customers to feel they are making a better deal or finding greater value in purchasing items priced at these charm points.

3.3. Promotion strategy

The promotion strategy primarily encompasses the methods by which a company employs various channels of information dissemination to enhance consumer purchasing intent and drive product sales, thereby achieving its marketing objectives. This includes the strategic integration and application of controllable promotional factors such as advertising, personal selling, sales promotions, and public relations.

POP MART has a great promotion strategy especially through both traditional and digital channel. There are a lot of advertisements on different gates of those famous shopping malls in China. Moreover, POP MART set up a great number of offline pop-up stores. These pop-up stores showcase a variety of themes, with each store's decor being remarkably intricate. They regularly attract a significant number of visitors who take photographs and share them on their social media platforms. This strategy not only effectively expands the reach of marketing efforts but also enhances engagement between the brand and its customers, fostering closer connections with consumers and boosting customer loyalty, making it an exceptionally effective promotional tactic.

Additionally, POP MART has achieved remarkable success in its digital promotion endeavors. It has publicized its brand through multiple means that are not only novel and captivating but also imposing and efficacious. Regarding the promotional strategies, POP MART has already adopted several beneficial approaches. Firstly, POP MART frequently conducts propaganda sales, which involves selling products while introducing them during live streams on several popular social platforms. This enables the users of these social platforms to be acquainted with POP MART and its products, thereby enhancing brand recognition and expanding the customer base. Furthermore, this strategy can achieve product visualization and strong customer engagement. This is because the anchors can directly showcase the products to the audiences and interact with them through real-time interactions, such as Q&A, snapping up coupons, voting, etc., providing the audiences with a better understanding of the products' features and effects, and thereby improving their sense of participation and purchase intention. Secondly, the collaboration with influencers is also an effective promotional strategy for POP MART, and the first type of it is product placement, which implies embedding their paid advertisements in the influencers' videos and posts. The advertisements that are seamlessly integrated into the plot can minimize the interference for the audience during their viewing or reading and unconsciously establish perceived trust and authenticity, thus making it easier for the audiences to accept and trust the advertising information. Also, the product information can directly reach the followers of these influencers through product placements, and the celebrity effect prompts them to imitate consumption.

In addition, several measures were implemented when imposing Pop Mart's influencer marketing strategies, particularly involving celebrities, and the primary actions included endorsements and collaborations. Firstly, regarding endorsements, Pop Mart would distribute its products to a multitude of celebrities, who would then take photos with them and post on their social media accounts. Furthermore, it is worth noting that the celebrities selected by it are all relatively young and highly fashionable stars. Besides, Pop Mart collaborates with some artists and stars to launch new products. They posted numerous online advertisements with links on both its official account and the celebrity accounts. For instance, Pop Mart collaborated with Jackson Wang and Nicholas Tse, who are globally renowned, and these products are designed to resemble them, thus these are also an intriguing series of products compared to the regular ones.

Obviously, there are several advantages of influencer marketing. Research by Social Publi (2018) indicated that 89% of marketers believe that the Return On Investment (ROI) from influencer marketing is comparable to or superior to other marketing channels [17]. Additionally, by analyzing the factors that drive influencer marketing ROI, it has been discovered that Pop Mart has a relatively superior ROI. It primarily manifests in the significant number of its followers, a high degree of follower-brand fit, and positive content. Moreover, influencers have established a following that aligns with specific demographics, interests, or niches, enabling brands to target their marketing efforts more precisely. Additionally, since the majority of the influencers that Pop Mart has cooperated with are mega influencers, who have more than 1 million followers, collaborating with these influencers can assist Pop Mart in enhancing its visibility and reaching new audiences, especially among younger demographics who might be more challenging to reach through traditional advertising. Furthermore, cooperating with influencers can also result in valuable backlinks and mentions, which can have a positive impact on a brand’s Search Engine Optimization (SEO) efforts.

3.4. Place strategy

Placing strategy involves the process by which a company identifies suitable distribution channels to ensure that products effectively reach their intended market. This includes various elements such as distribution networks, warehousing facilities, and transportation systems. The organization must coordinate and oversee these channels to facilitate the seamless delivery of products to consumers.

POP MART's sales channels are highly diversified, encompassing both online and offline platforms, and boast an extensive coverage. Consequently, every consumer group is presented with the opportunity to make a purchase. Let's commence with the offline channels. POP MART not only possesses a considerable number of offline retail stores but also establishes numerous offline vending machines. Its offline retail stores are predominantly concentrated in the core business districts of first- and second-tier cities, and each store is elaborately decorated. These physical stores are capable of enhancing the in-store experience and augmenting brand loyalty. The offline vending machines feature a low initial investment and high operational efficiency, and the purchase modality is highly convenient. They are frequently set up, thus being prone to attracting potential customers passing by. In the aspect of online channels, POP MART not only has its own official website but also has entered many renowned online shopping platforms and social media software, such as Tmall, JD.com, Xiaohongshu, and Tiktok. POP MART not only maintains its official flagship stores on these platforms but also has established an online blind box drawing program. Customers can make payments and draw blind boxes directly on their mobile phones, replicating the experience of offline blind box drawing. This renders the payment process more convenient and simultaneously boosts the sales probability. The diverse sales channels of POP MART are endeavoring to facilitate the purchase process of the target customer group, which can stimulate higher sales.

4. Suggestions

Despite the fact that POP MART is a highly successful brand and is achieving increasing success, there still exist certain aspects that require improvement and offer scope for enhancement.

From the product aspect, in the recent period, numerous consumers of POP MART have alleged that the formaldehyde content in the blind box figurines of the company is exceptionally high, which can inflict significant harm on people's health. This has resulted in a reduction in the purchasing capacity of a portion of POP MART's consumer group. Hence, the suggestion offered in this article is to substitute the product materials and replace the original ones with other eco-friendly materials. This not only mitigates the harm to the body and alleviates consumers' concerns but also conforms to the concept of environmental protection and sustainable development, further enhancing the brand image and attracting more potential consumers.

From a marketing perspective, POP MART has the opportunity to enhance its promotional efforts for products beyond just blind boxes, including associated theme toys, stationery items, apparel, and home accessories. By implementing a variety of promotional tactics, the brand can effectively engage different consumer segments. For instance, it could share video and visual content on social media platforms to highlight the uniqueness and functionality of these offerings. Moreover, hosting in-person events such as exhibitions or experiential sessions allows consumers to interact directly with the products, thereby significantly increasing brand visibility.

In addition, partnering with other brands to launch co-branded merchandise represents another effective strategy. This approach not only expands market reach but also leverages the existing customer base of partner brands to enhance visibility. Creating a specific promotion area on e-commerce sites and bundling blind boxes with complementary peripheral items may help increase overall sales while boosting consumer purchasing motivation. Through these strategies, POP MART can more thoroughly showcase its varied product range and further strengthen its position in the market.

Ultimately, with the aim of establishing a fashionable brand image and enticing a greater number of consumers who have an affinity for emerging culture, particularly Generation Z, POPMART could persist in leveraging the concept of the metaverse and continuously introduce novel activities. For instance, POPMART might introduce an IP image interaction system, within which consumers are enabled to interact with the collectibles they have purchased via their mobile phones. This not only serves to narrow the gap between the brand and consumers, enhance brand loyalty, but also attracts the attention of a wider range of people.

5. Conclusion

In summary, POPMART has successfully seized opportunities and opened up China's trendy toy market. Over the past decade, the trendy toy market in China and globally has continued to evolve, and the blind box economy has flourished. This phenomenon not only reflects the growing demand of consumers for emerging cultures and personalized products, but also has powerfully driven the development of related industries, including design, production, sales, and second-hand trading.

With the young consumer group gradually becoming the dominant force in the market, their pursuit of fashion and uniqueness has led the trendy toy market to display a diversified development trend. Under this situation, this paper conducts a thorough analysis of POP MART's market positioning and marketing strategies based on the STP (market segmentation, target market selection, and market positioning) and 4P (product, price, channel, and promotion) theories, and puts forward a series of constructive suggestions.

Based on the STP theory, the target customer group of POP MART is mainly focused on the younger generation, especially women aged 15 to 30. Since this group has a strong willingness to pay and high user stickiness, their consumption is mainly driven by spirit and tends to be physical consumption, which is highly consistent with POP MART's market positioning. POP MART's market positioning is in the middle to upper level, neither too high-end nor too low-end, which means that its customer coverage range is more extensive than other competing companies, thus having more development opportunities. POP MART's product strategy is mainly composed of the blind box economy and rich IP shaping. POP MART has successfully leveraged the blind box by cleverly utilizing consumer psychology. Through analyzing POP MART's pricing strategy using the 3C pricing strategy, this paper finds that POP MART is equally skilled at understanding consumer psychology in pricing, as it sets the last digit of all product prices to 9, making them look more affordable and attracting consumers to purchase. POP MART's promotion strategy is diverse and rich, both online and offline, with many innovative promotion forms. Whether it is the offline pop-up store or the online advertising. It’s obvious that POP MART is a successful trendy toy brand, however, there are still something need to be improved. The suggestions that this report offer are updating the materials of the product and implement the concept of sustainable development, launching more co-branded products to attract more potential customers, and trying to launch an interactive system, penetrating the concept of metaverse. In these ways, POP MART can attract more attention from younger people, the main consumer group of the brand.