MTH- Smart Marketing or Product Sales slowing?

Don't know, but, I haven't received an email in ages until just this week when they started pouring in each day!

I've been getting daily emails for quite a while, so this is nothing new as far as I can tell.   Joe

I have a sense that the back-channel chatter is all about the biggest online Christmas ever, with Lionel doing landoffice sales. Amazon cannot keep up and UPS is struggling under the load.  FedEx has outsourced deliveries 3x over normal.  Could it be, therefore, that MTH is trying to wade in, mid-stream and catch their share of fish? I too am swamped with emails.  

Rigatoni Express Railroad posted:

I've been getting daily emails for quite a while, so this is nothing new as far as I can tell.   Joe

Yep, get one everyday.

prrhorseshoecurve posted:

I do not recal in years past seeing daily e-mails in December about MTH products- specifically premier products. IS this a new marketing ploy to buy MTH products? Or is this a sign that their product line sales are slowing - "The Choir" is borded with no new models as of late? What is your take?

I was a 100% MTH guy 10-15 years ago. Remember, they were cranking out newly tooled locos in each catalog, sometimes as many as 2-4 each catalog! They were making what I wanted, were good quality, and reliable. You "knew what you were getting" pretty much every time you opened the box.

I have shifted focus to nearly sole Lionel purchasing. Lionel is making what I want now and they are offering a much more exciting product line, to me at least. I'm a steam guy. Those that read my posts know my position on MTH steam with PS3. My current MTH order is about $500 (another 44 ton switcher and a boxcar) while my Lionel order is pushing the $5,000 mark (Polar Express, Legacy Atlantic, LionChief Plus Berks, etc).

 I get the impression MTH is very much on "cruise control" offering no newly tooled locos, no rolling stock, and just running the same stuff over and over. Compare the most recent catalog with the previous 2. You'll see tons of the SAME stuff repeated over and over. Same engines, same cars, same paint schemes. Maybe they aren't selling or they want to "spread the love" but......

I realize the MTH management team has been around forever. I have wondered, if "new blood" was to take the reigns, what things would look like. I'd wager exciting things would be happening. I have also wondered if they did ONE newly tooled loco per catalog back then and spread things out, what would happen and where things would be.

Lionel is also cleaning MTH's clock on features. MTH JUST put the smoking whistle in an O Gauge engine, at least a decade after they displayed an engine with the swinging bell and smoking whistle at York. Remember, they were the first to do these features, not Lionel. I remember the hub-bub at York when they showed the prototype loco with the swinging bell and smoking whistle. I can't think of an MTH engine ever offered with the swinging bell. As for the smoking whistle, I think only one or two G Gauge engines have been cataloged with it and the Big Boy is the only O Gauge engine with it. I realize there won't be room in every engine but I can't imagine why MTH would be missing the boat on this.

I also totally get the market isn't what it was 10-15 years ago but it is clear the market is there for newly tooled locos (look at that Brass Hybrid from Lionel, among others) and especially the smoking whistle and other features. Lots of people buying Vision Line locos, lots of excitement over Lionel engines with such features. The Lionel Legacy S2 NYC electric is a big hit and got lots of positive feedback on the forum - mostly around the swinging bell. Just one example.

Not saying Lionel is perfect but, comparing the two, Lionel is producing more exciting stuff, with, overall a bit better quality (I.E. Steam. Those that have read my posts know my position on PS3 steam), more variety and a LOT more features.

@SJC ... very well put. For my part, I too am seeing much more out of Lionel than MTH and here is my analysis: Mike Wolf is nearing 60 years of age, sitting atop a decent line of business that is highly salable. I bought and sold many businesses in my years at Microsoft and saw it time and time again: when the founder nears 60, they think about consolidating gains and bolstering their estates. He could be thinking about a sale. It is, after all, a private company and therefore shorn of the of the demands of a public company and any required disclosures around an intention to sell out. His friends in the business (childhood buddies as I have come to understand) could also be pressuring him.  And I would not blame any of them. With the run-up in the economy at present, NOW would be a good time to maximize his business valuation and get out. Why add speculative lines of business and new products at this point? Better to firm up the existing and profitable lines in advance of a sale.

But ... who would buy it? Not Lionel, I don't think, given the anti-trust concerns. Yes, even little-old model railroading companies are subject to Sherman Act considerations. Perhaps a smaller player with access to capital? But who? Maybe a Korean company? Or the principal Chinese manufacturers? They are, after all, buying up everything else on the planet.

I'd buy it but I have no desire to leave good old Laradise (as we call Laramie, Wyoming). :-)

Joe

SJC posted:

prrhorseshoecurve posted:

I do not recal in years past seeing daily e-mails in December about MTH products- specifically premier products. IS this a new marketing ploy to buy MTH products? Or is this a sign that their product line sales are slowing - "The Choir" is borded with no new models as of late? What is your take?

 

 

As for the smoking whistle, I think only one or two G Gauge engines have been cataloged with it and the Big Boy is the only O Gauge engine with it. I realize there won't be room in every engine but I can't imagine why MTH would be missing the boat on this.

 

Actually in the RailKing One-Gauge lineup 2 locomotives, The Triplex and the recent Big Boy  has smoking whistles and the GS-4 in current production will have whistle smoke. 

I think there is room for both, at the low end I buy Lionel, but in the mid range for value you can't beat MTH Imperial, at the high end MTH premier and Lionel are both on my shopping list, however although currently  I have more high end MTH in my lineup  new Lionel's are on my shopping list for 2018.

Lionel have made up a lot of ground in recent years but MTH have a nice product line

Joe I hear what you say but we are not talking Microsoft Apple etc, MTH is a private hobby business and like a pop star who would want to stop when you get paid for doing what you love.

Lets hope that they both keep going healthily 

Nicely put Eric. We definitely need both players in the market. My "dream ticket" would be to see some new Lionmaster as well!

MIKE

Everyone who should know has been saying for some years that market volume is strikingly down from 10-15 years ago (except for sets and the lower end of the price spectrum, but these two markets are almost exclusively Lionel).  This reality is presumably one reason Lionel introduced LionChief and LionChief+.  Focus on growing the beginner and first followup purchase market.  That's the only area of potential major growth I gather. 

Back in the 1990s MTH was selling everything they could make.  Those days are gone, obviously, and MTH leveraging the tooling investment of that period makes sense in a much smaller market, particularly at the high end, where volumes have shrunk a great deal I gather. 

Keeps costs and prices down but little or no innovation to speak of.  The only new thing, more or less, from MTH in recent years has been the use of wi-fi and smart devices.  While that's nice and attractive to many, MTH's sets are still prohibitively expensive for many families at close to $400 retail.  That initial set is what gets people into the hobby in most cases, and they've largely decided to cede the budget set market to Lionel as far as I can tell.

I sold off my last Lionel engine last year, and currently only use MTH Imperial steam and Premier Diesel as my largest curve is O48. The middle area is basically my demographic, and MTH is a home run in that area in my opinion. There is something to say for LionChief Plus, but for the same price I can get a better value out of MTH. (Yes, the lack of Lionmaster products was a decision maker for me)

With that said I hope MTH and Lionel prosper, would be a sad day if I couldn't buy an O scale train.

I had only Lionel at one time but I to have added MTH to my collection, I worked at a local hobby shop in Maryland near MTH when mike was just getting started and we used to get our catalogs and in them would be a list of how many of each piece you were getting, Sometimes you only get 2 or 3 of one item and you be calling asking for more. I know those days are gone but in my opinion its time to shrink the catalogs and focus on new items. I love both company's but with the market full of product and the amount of sales shrinking maybe we need to slow things down and take a breath, And maybe just maybe things can be better for both company's  

Nothing in this world is forever, nothing is constant, all businesses evolve and change. Ask GM and especially EMD.  Possibly MTH is setting things up to sell -to an investment group ??  Like Lionel??  Nowadays you can take your $$ or yen and buy a company with no personal experience in the product. I think the Lionel brass hybrid engine is a great idea and maybe a game changer. Will be interesting o see what happens.

I’m just catching this thread, and, just to offer my two cents...

I really hope MTH not only remains in the hobby, but also begins to innovate again. Just getting back into the hobby and choosing O-scale, I have begun gathering MTH units and would hate to see them sold to some investment group that doesn’t know a thing about the hobby.

Recently, I purchased the new Wi-Fi Explorer unit for our Christmas layout and it works very well. There have been a few updates to the iOS app that has added functionality and stability. I also  like the holiday locomotives with the added LEDs that mimic the prototypes, though they don’t fit my prototype (NS and CSX). And don’t overlook the new UP paint scheme coming out filling the military-inspired paint of the prototype. 

Maybe MTH is finding their own niche. Maybe it is a change in approach. Either way, I’m am still hoping MTH and Lionel continue to do well, as I am sure many others. 

-Carl

Carl Peduzzi posted:

I’m just catching this thread, and, just to offer my two cents...

I really hope MTH not only remains in the hobby, but also begins to innovate again. Just getting back into the hobby and choosing O-scale, I have begun gathering MTH units and would hate to see them sold to some investment group that doesn’t know a thing about the hobby.

Recently, I purchased the new Wi-Fi Explorer unit for our Christmas layout and it works very well. There have been a few updates to the iOS app that has added functionality and stability. I also  like the holiday locomotives with the added LEDs that mimic the prototypes, though they don’t fit my prototype (NS and CSX). And don’t overlook the new UP paint scheme coming out filling the military-inspired paint of the prototype. 

Maybe MTH is finding their own niche. Maybe it is a change in approach. Either way, I’m am still hoping MTH and Lionel continue to do well, as I am sure many others. 

-Carl

You have it. Unfortunately some like to constantly compare the 2 companies and force a comparison of who is better when they have different strategies and at some level different customer bases; evolving to stay profitable.  There are pros and cons to both companies and both are the best at what they do best; which is not the generic sell trains.  Some people can't wrap there hands around that in my opinion.  G

Lack of good marketing has always been an issue.

Factory control providing direct non MSRP sales and offering complete packages in a box is what I would be attempting. Not many dealers left and you just cant find the all the stuff needed to quickly build a layout today.

You have to provide both for the toy people and the serious modeler as well. But sales are low these days and retirement is close for the owners. The light is looking dim at the other end of the tunnel.

SIRT posted:

Lack of good marketing has always been an issue.

Factory control providing direct non MSRP sales and offering complete packages in a box is what I would be attempting. Not many dealers left and you just cant find the all the stuff needed to quickly build a layout today.

You have to provide both for the toy people and the serious modeler as well. But sales are low these days and retirement is close for the owners. The light is looking dim at the other end of the tunnel.

I do understand that the hobby is changing. And I do agree that complete sets marketed and sold where people can have ready access is important. At the same time, I’m not sure, personally, if the light is dimming. I believe there is a strong base and modelers are always returning to the hobby as they get older and more time is available to them. I think that can be overlooked. 

It really, REALLY, would be nice to have some input from the owners and upper management from all these companies: Atlas, Lionel, MTH, etc. what is their take on things?  What are they trying to do?  Where do they see the hobby now and in the future?  I’m not asking for trade secrets, just some input.

While I don’t see this occurring, it would be great. 

- Carl

I've been getting MTH emails daily for a long time now and nothing has changed on my end. With the up swing in the stock market though, I could only hope things may start looking brighter for our hobby.

Carl Peduzzi posted:

SIRT posted:

Lack of good marketing has always been an issue.

Factory control providing direct non MSRP sales and offering complete packages in a box is what I would be attempting. Not many dealers left and you just cant find the all the stuff needed to quickly build a layout today.

You have to provide both for the toy people and the serious modeler as well. But sales are low these days and retirement is close for the owners. The light is looking dim at the other end of the tunnel.

I do understand that the hobby is changing. And I do agree that complete sets marketed and sold where people can have ready access is important. At the same time, I’m not sure, personally, if the light is dimming. I believe there is a strong base and modelers are always returning to the hobby as they get older and more time is available to them. I think that can be overlooked. 

It really, REALLY, would be nice to have some input from the owners and upper management from all these companies: Atlas, Lionel, MTH, etc. what is their take on things?  What are they trying to do?  Where do they see the hobby now and in the future?  I’m not asking for trade secrets, just some input.

While I don’t see this occurring, it would be great. 

- Carl

You make a good point. With no Hobby Shops in many areas, what is there to spurn interest to newcomers who maybe unaware of our hobby? If they do find a train, were will he find tracks, accessories etc.? The one thing I see that helps with many areas lacking Hobby shops, or toy stores, is the Train Shows. They bring many newcomers every time and spurn interest for the dads and kids. In my area, when there is a Train Show, I let my friends know and several outside interest I have with groups. I been surprised, just amongst friends that are now in the hobby because of Train Shows. Would be nice also if the manufacturers would do some advertisement on TV also to get their products out there.

I'm sure the market is shrinking, but I'm sure there are still a few things MTH could reissue in new paint and find new customers...or modify tooling enough to do scale-wheeled versions...and either tool or use resin/urethane casting to do the HH shell component for some of these units.  Done right, will look just as good as injection molding, just as a strong, and much cheaper.

Here were my desires and ideas that I already sent MTH:

1.Rerun Scale Wheels FM Trainmasters in SOU black tux.

2. Adjust SD24 tooling to do scale-wheeled locomotives. Do SOU black tux and other 5 original roads + any secondary lines that bought these.

3. Make high-hood tooling for GP38-2 and rerun these scale wheels.  I want SOU black tux, but they could do SOU, NS, and N de M at minimum with the HH.

4. Adjust their SD40-2 tooling to be as prototypical as their SD45 tooling was.  Make high-hood tooling and scale wheels versions.   I would want SOU black tux, they could also use the HH tooling to N&W, NS, 2 CP Rail schemes, and even the Unstoppable Movie AWVR.

I also think any of the remaining companies should investigate other sources to create low-run freight cars out of urethane using SLA and mold-making/casting technologies.  Get away from expensive injection-molded plastic tooling.  You can then do more RR-specific cars at a lower break-even price point in the shrinking market. Continue to do lost-wax brass or etched metal detail parts for these as needed.

I'm a toy guy, not a modeler. I love both companies: I buy sets because I enjoy them, but I also have bought several Lionchief+ locos because of control on the same track. Up until now, if you were a toy collector and runner like me, you were really limited by MTH because you either had to go full DCS or be limited to one train running with a Remote Commander, or individual transformer loops.

Until now.

With the introduction of the Explorer, MTH has made a huge leap in innovation. I can now run three engines on one track, and that makes MTH a contender for my hobby dollars. In the last month I've purchased three MTH Railking engines. This is a game changer for a toy collector like me.

But, MTH needs new starter sets. I already have most of what is offered from when they were in sets as P2 locos. If they add even a new starter set each year, I'll be buying it.

Mike Wolf called me today and that subject was conversed about.  Things are great at MTH.   We are at a great time in the hobby.  Enjoy, buy trains, go to shows, and have fun.  Don't get caught up with the doom and gloom posts.