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Competition in the toy industry is forcing marketers to deploy two main tactics to sell their wares: branding campaigns and technological innovations.

As the Internet, organized sports and fragmented TV programming increasingly grab children's attention, toy companies have developed mature products and marketing strategies to support them.

"It's more competitive than it's ever been," says Matt Bousquette, president of Mattel's boys-entertainment unit. "Ten years ago, you created an ad, threw it on air and you were done. [Now] you need to build the brand, market the brand and innovate the product year after year. There's a graveyard of toy brands that either failed on one of two fronts -- marketing or innovation."

To stay on top of its game, Mattel has launched a number of branding efforts, such as this spring's "Welcome to our neighborhood" campaign for its Sesame Street licensed products. In addition, the company is also making sure its product names cross borders.

"We're all about extending the brand beyond toys," says Mr. Bousquette. Earlier this year, Mattel formed Wheels Group, a global marketing and licensing division as an umbrella over Matchbox, Hot Wheels and Ferrari units. In August, Mattel announced it would lend its name to launch personal computers for children branded with Barbie and Hot Wheels logos.

But Mattel isn't the only big toy company embracing innovative branding. Earlier this year, Hasbro lanched three umbrella campaigns to promote its Milton Bradley Co. and Parker Bros. board games.

Each integrated marketing effort included advertising, consumer promotions, PR and in-store components.

All categories were aggressively advertised. Hasbro President Herb Baum deems the branding effort a success story. Six months into the campaign, sales of Hasbro's board games jumped 12%.

In addition to branding efforts, Mr. Baum is looking for sales growth through product innovation.

"Everything that we're looking at [inventing] is right up that alley of things that talk, sing and move," says Mr. Baum. "That's a precursor to what the toy business is going to be over the next few years."

In August, Hasbro's Tiger Electronics unveiled a sextuplet of Furby Babies. The furry creatures talk and share retailers' shelves with a slew of chatty chums, including a speaking Mickey Mouse, a banjo-playing Barney and a joke-telling Winnie the Pooh.

"Technology attached to a power brand really equals winning," says Mr. Baum.

While microprocessors and silicon chips are helping to advance toys, marketers are working to advance sales with an increase in "Try Me" packaging. Before making a store purchase, consumer can squeeze and play with Mattel's Fisher Price Blues Clues and Kermit the Frog toys. Hasbro also is embracing the "You try it, you buy it" approach.

"There should be some type of try me feature that will be a decision maker for the potential purchaser," says Mr. Baum. "When you hit [consumers] at a point of

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