In May1920 the Liverpool based toy manufacturer, Meccano Ltd, introduced its ‘Hornby Clockwork Train’, a product that was to develop into a major element of the company’s activities; the brand is still significant today. The Hornby Train was not intended to be the beginning of a model railway system, it was originally designed as a constructional outfit, similar to a Meccano set; but, at the last minute, the company chose to launch it as a made-up model. The demands of a constructional outfit are very different from a made-up toy train. The play-value in the former is in building the outfit, in the latter it is running the train, which supposes load hauling and reliability. For this, the loco’s mechanism was severely deficient.
Meccano advertised their trademark as a ‘guarantee of quality and workmanship’, their customers took them at their word; a flood of returns were received by the company. A greatly improved model was hastily introduced in Spring 1921, but sales of the original had been so substantial that returns of these continued. In early 1922, in the context of an expanding range of new Hornby models and a steady stream of returns the Company took action to both maintain its reputation and save itself from having to provide free repairs to products that were now at least a year old. It introduced a formal guarantee.
The guarantee covered the 60 days following purchase. This allowed the Company to charge customers for repairs made to items returned after this time. However it did nothing to stem the flow of returns, particularly of the 1920-21 product, which, as components ran out, the company felt obliged to rebuild using a complicated mix of the returned and current. The ‘Service Department’ grew exponentially; at its height in the 1950s it processed about 2000 returns a week. Remarkably, it outlived the manufacture of the products it serviced by some five years.
In correspondence with Richard Lines, who was closely involved with the building of the Triang Railways brand that consumed Hornby in 1964-5, his comment was direct:
1) If you advertise a guarantee you will get plenty of people taking advantage of it.
2) If you don’t advertise a guarantee you will save yourself a lot of trouble and some money
3) If you offer “rebuilds” you are doomed!
In this analysis Meccano were doomed from an early date. This paper sets out to consider the economics of the willingness to offer repairs, the guarantee and its significance to reputation and brand identity. It sees Meccano as providing a particularly good example of reactive product management in the context of advanced advertising and branding techniques.
