To: Fluke Toy Corporation™ From: Rebecca Norman, Neel Bakshi, Elle Smyth Subject: Request for McDonald’s Happy Meal Toy Date: March 24, 2017 Proposal Evaluation Board:

Regarding the recent request from Fluke Toy Corporation,™ the EGR corporation created an innovative and entertaining new toy design to be placed in McDonald’s Happy Meals in late 2017. The leaders of the department have outlined the workings of a design that was created to efficiently fit the task. Executive Summary

The purpose of this memo is to describe the design and development of a Star Wars inspired lightsaber toy to be released in various worldwide locations as part of McDonald’s Happy Meal. Star Wars, with its continual popularity and global appeal, was selected as a lucrative theme to attract a widespread audience to McDonald’s. The toy is composed of 3 components – an extending cylinder and two outer shells. The ABS plastic shells come together to form the handle component of a lightsaber. This serves the dual purpose of a french fry holder for in-store customers and can then be repurposed for multiple uses after the store visit. The top cylinder is comprised of colored translucent ABS plastic and can be extended and locked into place to mimic a lightsaber using a simple twist mechanism. The toy will come in several iterations with different handle designs and colors that correspond to those used by the characters in the Star Wars Universe. This will incentivize customers to return and purchase additional Happy Meals in order to complete the collection, significantly increasing profits. Description of Approach

Upon receiving your request for a new toy design to be placed in McDonald’s Happy Meals, our engineers began the ideation process in order to create the most innovative and entertaining toy. The first ideation method we used included classic collaborative brainstorming sessions. We figured this would be a great approach because we could feed off of each other’s ideas in order to come up with a wide range of possibilities for our product. Our very first ideas included floating toys, lego batman themed toys, games, musical instruments, and Jedi utensil holders (see Appendix A). We also used mind mapping, shown in Figure 1 in Appendix B, in order to clearly see the relationship between our ideas and to easily add more information.

After partaking in both the collaborative brainstorming session and mind mapping, our team decided to vote on our top three design choices. The Jedi utensil holders, games, and musical instrument ideas won unanimously. While the other ideas were solid, we thought that these three ideas would be best at drawing people into McDonald’s and had more potential to expand for incentives. Initially, we planned on constructing a prototype of each toy idea and vote

afterwards on which design we preferred. However, the timing given to us for this project did not allow us to do so, and we decided to explore other idea selection techniques. First, we created a character map in order to see if our product designs reached a wide audience. For the character map and notes on how our final design would appeal to these characters, please see Table 1 in Appendix C.

The character map clarified for our team that all final three designs appealed to a wide audience, but we had to figure out which design would be most effective at drawing people into McDonald's. In order to decide this, all members of the team created their own value analysis matrix, shown in Table 2 in Appendix D, and compared results at the end to come to a consensus. After creating the value analysis matrix, we narrowed our options down to two: the lightsaber toy and the games. We then decided to vote on which toy we thought would best draw people into McDonald's. While we thought that kids would love how interactive game toys would be, we all agreed that Star Wars is captivating to a massive and diverse audience and therefore felt that the lightsaber would be more appealing to our international audience. Summary of Findings

A. Final Design The lightsaber is designed as three independent, injection-moldable plastic pieces. The

lightsaber handle consists of two cylindrical halves that fit together using a circular peg-in hole design, shown in Figure 2.

Figure 2: Designing Outer Shell of Toy

On the interior wall of each half, there is a groove running from the top of the part to the bottom and juts out along the circumference of the interior wall, 3.6mm below the top. This forms a track for the third piece of the lightsaber to slide up and down in the base of the toy. These

bottom pieces are made with a gray ABS plastic, and the details of the handle exterior design are then painted black to match each character’s individual lightsaber. The top of the toy, which is the actual “light” part, is a hollow, shelled cylinder with an open face on the bottom and closed top. There are two small, rectangular extrusions at the bottom of the cylinder that allow the top to slide into, out of, and lock into the base, shown in Figure 3.

Figure 3: Designing the Top Part of the Toy

This top piece is made with a clear ABS plastic that can be tinted different colors to match the chosen design. A 3D exploded assembly view of our toy is shown in Figure 4.

Figure 4: Assembling Components of Design

Once joined, the two bottom halves form the handle, and the outside is designed to look light a lightsaber with various cuts and extrusions that match the design of each character’s lightsaber. Our toy is multipurpose; it can not only be used as a lightsaber, but it can also be used as a french fry holder or crayon/pencil holder once customers return home. The extending cylinder part can be removed from the handle, allowing users to put their french fries in the handle of the lightsaber, making the toy interactive for food. Once children return home, they can put pencils, coins, candy, or anything of their choosing in this compartment. This allows children to decide when they want to be jedis-in-training or when they want to take a break from saving (or destroying) the world.

The peg-in-hole design is a critical-to-fit feature. The 6 pegs have a 1.5mm diameter with a ±.05mm tolerance and extend out at a length of 2.0mm with a ±.05mm tolerance. The holes have a 1.6mm diameter with a ±.05mm tolerance and cut into the base with a depth of 2.1mm with a ±.05mm tolerance, as shown in the drawing of the critical-to-fit dimensions in Figure 5.

Figure 5: Designing with Critical-to-Fit Features

These tolerances ensure that the maximum diameter of the hole will fit inside the minimum diameter of the peg, and that the peg will fit firmly in the cavity without being loose or falling out. For a full drawing of criticul-to-fit-features in the outside shell parts, see Figures 6-7 in Appendix E.

The sliding track, shown in Figure 9, for the top piece is also a critical-to-function feature.

Figure 9: Sliding Track

The small, rectangular extrusions on opposite sides of the top piece have a length of 2.0mm with a tolerance of ±.25mm, a width 2.0mm with a tolerance of ±.25mm, and a height of 2.0mm with a tolerance of ±.25mm, as shown in the drawing of the top piece in Figure 8 in Appendix E.

The vertical part of the track that the extrusions slide up (raises the top piece) has a critical to function width of 2.5mm with a tolerance of ±.25mm. The depth of this track is

2.25mm with a tolerance of ±.25mm. This depth dimension is not itself critical because the diameter of the top piece is 1.0mm smaller than the interior diameter of the handle, where the track begins, so the extrusions always fit in the track in this direction.

The perpendicular, horizontal part of the track that the extrusions slide along (locks the top piece into place) has a critical to function height of 3.5mm with a tolerance of ±.25mm. The CTF width and depth are the same as the vertical part of the track. These dimensions ensure that the top of the lightsaber will easily slide in and out of the handle, staying along the track. They also ensure that, when the top of the lightsaber is locked into place, the top piece will not fall out. A detailed drawing of the track, including these dimensions, can be seen in Figure 10 in Appendix E.

B. Manufacturing Plan

The total estimated cost of one lightsaber happy meal toy is $0.26, well below our budget of $0.50. The total part cost is $0.06 for the top extended cylinder part and is $0.10 for each of the two outer shell parts. The part material cost is $0.048 for the top cylinder, $0.063 for the female shell, and $0.064 for the male shell. We will be using three injection molding machines for the top part, and 7 machines for each of the shell parts. We are using this number of machines in order to produce at least 51.3 million Happy Meal Toys in one year. The injection molding machine sizes can range between 25 to 65 tons, having a press cost of $32/hour. Our machines will run 23.5 hours a day, 7 days a week for a year making our machine cost $4.6 million. The annual production capacity is 61,1588,184 top parts/year and 57,482,305 of each shell part/year. Our projected production run is one year, thus making our total cost to be $14,913,446. We project to sell 51.3 million toys throughout five countries - United States, United Kingdom, China, Australia, and Canada - during a two month period. We projected our revenue to be $205.2 million by comparing the number of McDonald’s stores in America with the number of restaurants in other locations and using proportions to figure out what percentage of Happy Meal Toys the other countries will sell in comparison to statistics of America (Refer to Appendix H for sources of our research). After subtracting our cost of goods sold, we figured our gross margin would be $190.3 million. We then took into account labor and machine costs. We figured we would need about 64 assembly workers to produce the needed quantity of toys at our factory in China earning $10.90 a day, the minimum wage in China. This will make our total labor cost for the full production year $179,959. After accounting for this labor cost and our machine cost mentioned earlier, we calculated our EBIT to be $185.5 million. We then added in a 39.1% corporate tax rate to calculate our final profit: $113 million. For a full cost calculator spreadsheet for our toy, see Figure 11 in Appendix F.

The three components are designed in accordance with the injection molding requirements put forth by Fluke Toy Corporation. The molds will be precision-machined to form the features of the handle shells, as well as the extendible cylinder. Each of the base injection-molding machines would have 4 cavities, and the top injection-molding machines

would have 10 cavities. The male and female shells and the cylinder do not possess any overhangs and can hence be removed using a simple sliding motion once the injection molding process is complete, thereby reducing manufacturing time and increasing efficiency. Our post injection molding process will be very simple. We will have assembly workers at our factory putting the pieces together and using a light-cure cyanoacrylate adhesive to secure our toy. After the pieces are assembled, we will also need to paint details on the lightsaber handle. This cost is included in the labor cost. Lastly, parents will not be concerned about the safety aspect of this toy since there are no small parts that could possibly be a choking hazard.

Marketing Analysis

The most unique aspect of our product is that it appeals to all audiences. We understand that the target customer for a Happy Meal Toy is a 6 year old child. We are very confident that not only will 6-year-olds want a Happy Meal lightsaber but that individuals of all ages will be excited with our toy. The first Star Wars movie was released in 1977 and made over $787 million in worldwide box office. The most recent Star Wars movie made over $2 billion (“Box Office History for Star Wars Movies”). This clearly shows that Star Wars is not only still a huge franchise, but that it is constantly growing, attracting a wider audience. Our lightsaber toy will not only appeal to the young generation of Star Wars fans but also to adults who have been loyal fans since the beginning of the franchise. Star Wars is multigenerational and major corporations are realizing its omnipresence in today’s society. For example, Disney recently purchased Star Wars for $4 billion (“50+ Amazing Star Wars Statistics and Fun Facts”). Disney World in Florida is in the process of creating a Star Wars land, expected to be completed in 2019. 20.5 million people visited one park alone in Disney World in 2015 (“How Many People Visit Disney Parks Each Year?”). This 20.5 million includes people of all different backgrounds from all over the world. Considering this, Disney knows that Star Wars will attract this wide audience. McDonald’s should capitalize on this opportunity to have a lightsaber Happy Meal Toy because it will attract children of all ages and adults all over the world and of all different ethnicities. Additionally, since our Happy Meal Toy will be a series of various different character’s lightsabers, it will attract all genders, and it will draw children back into McDonald’s to collect every design. McDonald’s will be able to release this Happy Meal Toy in various locations around the world, and this toy can constantly be re-released since there are many future Star Wars films. We believe that we should release the toy in the United States, Canada, United Kingdom, Australia, and China because of the strong McDonald’s presence and theatrical popularity of Star Wars in these locations. We also plan to release the two for two months from November to December leading up to Lucasfilm’s annual Star Wars release date. To see our marketing flyer, please see Figure 11 in Appendix G. Summary and Conclusions

A variety of factors were carefully considered before choosing to move forward with the lightsaber toy. Several other concept toy ideas were devised, but the lightsaber proved to be foremost in terms of incentive and global appeal. With Star Wars continuing its popularity through its acquisition by Disney and through subsequent film releases, the lightsaber promotion will be successful in generating significant profits for Mcdonald's. This is affirmed with the low manufacturing cost, at only $0.26. Different design iterations for various characters will further incentivize children to return, thereby creating an increase in demand. The toy, with its multifunctional form will succeed in becoming an iconic Happy Meal toy – one that can be reintroduced for successive promotions throughout the life cycle of each Star Wars movie release.

Appendix A- Brainstorming Ideas List ● Jedi utensil holders ● Musical instruments

○ Harmonica ○ Maracas ○ Flute ○ Horn ○ Hand drum ○ Marketing - instruments with strings

● Changeables ● Floating toys ● Lego batman theme ● Games

○ Bowling ○ Hockey stick and puck ○ Horseshoe ○ Basketball

● Different character straws ● Hot Wheels Cars ● Fighting/Punching Action Figures ● Wind-up moving characters

Appendix B - Mind Mapping

Figure 1: Brainstorming with Mind Mapping

Appendix C - Character Mapping

Table 1: Character Mapping

Name Antonio Rettore Victoria Hemingway Lizzie Bartlett

Location Milan, Italy New York City, New York

Miami, Florida

Age 9 47 5

Home Large Apartment Owns Townhome Small home

Favorite Item(s) His Playstation Artwork, classic novels Teddy bear

Personality Type A, spoiled, throws tantrums

High maintenance, hard-working

Shy, not the most vocal kid, still very sweet

Hobbies Sports (soccer, swimming), video games

Traveling with family, running marathons

Drawing/art

Miscellaneous Loves his grandmother, enjoys showing off to his friends, craves attention, has a pet dog

High income, drives a jeep wrangler

Loves children’s TV shows, watching cartoons, going outside and walking with her family, likes to read children’s books

1. Musical Instruments

● Antonio ○ Loud, craves attention, would want to show off to friends

● Victoria ○ Would keep kids occupied on travels, might get frustrated with noise since

she works long hours ● Lizzie

○ Artsy shy so would use alone in room - practice and look at is as an art 2. Games

● Antonio ○ Way to play with friends - very social. Loves sports

● Victoria ○ Is a way for kids to play together at home while she rests.

● Lizzie ○ Would be playing this alone, make sure games would be single-player as

well

3. Jedi Holder ● Antonio

○ Battles with other kids, would want entire set - into video games ● Victoria

○ Isn’t a star wars fan herself but entertained with children’s excitement over it

● Lizzie ○ Would use alone. Would use it more as a holder rather than light saber

Appendix D - Value Matrix Table 2: Idea Selection using Value Analysis Matrix

Key: + = Higher than average N = neutral/average - = lower than average

Lightsaber Musical Toys Games

Safety + + + + + + + + +

Incentive + + + N + + N N N

Annoyance Level N N N - - - N N N

Enjoyment + + + + + + + + +

Brings people together N N + N N N + + +

Complex/Innovative + + + + + + N N N

Global Appeal + + N N + + N + +

Simplicity N N N - - - + + +

Cost + + + + + + + + +

Total 6 6 6 2 4 4 5 6 6

Appendix E - Toy Design Drawings

Figure 6: Drawing of the male Lightsaber Handle piece, including three-view layout,

cross-section, and basic and CTF dimensions (mm)

Figure 7: Drawing of the female Lightsaber Handle piece, including three-view layout,

cross-section, and basic and CTF dimensions (mm)

Figure 8: Drawing of the Lightsaber Top piece, including three-view layout, cross-section, and

basic and CTF dimensions (mm)

Figure 10: Drawing of the critical-to-function features of the sliding track and sliding extrusions,

including basic and CTF dimensions (mm)

Appendix F - Cost Calculator Spreadsheet

Figure 11: Calculations Using Excel

Appendix G - Marketing Flyer

Figure 12: Marketing Lightsaber Toy

Appendix H - References

"50+ Amazing Star Wars Statistics and Fun Facts." DisneyNews. N.p., 09 Mar. 2017. Web. 22

Mar. 2017.

"Box Office History for Star Wars Movies." The Numbers - Where Data and Movies Meet. N.p.,

n.d. Web. 22 Mar. 2017.

"How Many People Visit Disney Parks Each Year?" DisneyNews. N.p., 06 Sept. 2016. Web. 22

Mar. 2017.

"McDonald's: Restaurants by Country Europe 2016 | Statistic." Statista. N.p., n.d. Web. 23 Mar.

2017.