Build a Bear

Build-A-Bear WorkshopMB103 Marketing in the 21st Century

Ho Leong Chee, Lee Xin Fei, Im Eun Bee, Timothy Boey, Ng Swee Loong Steven, Kanika Bansai

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Background

• Build-A-Bear opened its first store in 1996 by founder and CEO Maxine Clark

• Today, Build-A-Bear has over 370 stores worldwide and has custom-made tens of millions of teddy bears and other stuffed animals

• Maxine Clark recently won the Fast Company’s Customer-Centered Leader Award, and Build-A-Bear earned 25th spot on BusinessWeek’s Hot Growth list of fast-expanding small companies.

Situation Analysis



Decisions

The Build-A-Bear Experience

The Build-A-Bear mission is to bring the Teddy Bear to life.

Step 1: Choose an unstuffed animal to build

Step 2: Stuff the bear by operating the stuffing machine and decide how much stuffing to include

Step 3: Decide if you want to include a voice box

Step 4: Stitch up the stuffed animal

Step 5: Give the stuffed animal a blow-dry spa treatment

Step 6: Choose a name for your stuffed animal and you’ll be issued a birth certificate

Step 7: Dress and accessorize your stuffed animal

Situation Analysis



Decisions

The Product

Each product is:

• Customizable

• Washable

• Option available to add accessorize and personalize your clothes

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Decisions

Nature of Demand: Stores and Locations

Singapore

• Currently THREE stores

• Plaza Singapura

• Vivocity

• United Square

Worldwide

• Total of over 370 stores in countries like

• Australia

• Japan

• South Korea

• Thailand

• France

• Germany

• Ireland

• Norway

• Russia

• Sweden

• United Kingdom

• United States

• South Africa

Situation Analysis



Decisions

Nature of Demand: Sources of Product Information

• Singapore stores are located in convenient shopping malls with high traffic volume with facilities like the stuffing machine in clear and open view for all to see; and this attracts passerbys

• Build-A-Bear websites has in-depth information available; information like the steps and process of building your own personalized bear, and the inventory of clothes and accessories available at these stores

• Word-of-mouth: Buzz and awareness created by customers who have patronized the store before and spread the word through conversations with others

Situation Analysis



Decisions

Nature of Demand: Decision Influencers

• Build-A-Bear targets children who are looking for toys to play with during their free time – these children are the ones who are most attracted by the experience of making the bears and persuade their parents who have spending power to make the purchase

• Build-A-Bear also appeals to parents who are looking for toys or gift ideas for their children; and looking for ways to give their kids an opportunity to be creative and make something their own

Situation Analysis



Decisions

Extent of Demand: Build-A-Bear Revenue

• Build-A-Bear announced recently that its total revenue in the first quarter of 2010 (until Apr 3) was $101.4 million

• Other market leaders like traditional toys proved the most lucrative for the global toys and games market in 2008, generating a total revenue of $59.7 billion, equivalent to 61.8% of the market’s overall value

Source: http://sg.finance.yahoo.com/news/BuildaBear-Workshop-Inc-bw-538257884.html?x=0&.v=1

Situation Analysis



Decisions

Extent of Demand: Analysis of Market Trends

• Analysis of current consumer goods trends show how leading products are giving the consumer the power to customize and make products unique and personal

• Examples of this include Google Themes, MSN Messenger Skins, iPhone cases, etc

• With more and more consumers enjoying this new-found power, Build-A-Bear is likely to continue attracting consumers with the experience of making their own personal toy

Situation Analysis



Decisions

Direct Competitors in Singapore: Cool Bears Workstation

• In Singapore, a quick scan shows one direct competitor in terms of concept: Cool Bear Workstation

• Located in popular Singapore icon Esplanade

• Prices start from $49.90 onwards

• Offers the consumers choice in bears, clothes and accessories; but variety not as extensive as Build-A-Bear

• Only one outlet with very minimal information available on the website

• Very minimal promotion and awareness among Singaporeans

Situation Analysis



Decisions

Indirect Competitors in Singapore: The Popular Brands

• Singaporeans may not know about the concept of personalizing their bears; and may turn to off-the-shelves toys available

• These have an advantage in being more reputable

Me to You Bear

Paddington Bear

Situation Analysis



Decisions

Indirect Competitors in Singapore: Diversified Toy Stores

• In addition, competition comes from stores that offers a wide range of toys; not just bears:

• Toys R Us

• Mini Toons

Situation Analysis



Decisions

Competition: Marketing & Production Resources

• Level playing field among the competitors (Toys R Us, Mini Toons, Kalm’s) in terms of marketing resources as all are franchises and are unlikely to have a dedicated marketing department

• As these are franchises, likely that there are minimal or no media budget available; i.e. no money to purchase advertising space

• Brochures are either given out or available in-store during the holidays

• Toys R Us are the only store to have discounts or brochures attached with Straits Times to show the best buys of the holiday season

Situation Analysis



Decisions

Opportunity for another competitor? An analysis…

• It is relatively easy to compete with Build-A-Bear as there is a low barrier to entry

• Build-A-Bear’s “experience” concept is not patented and can be copied by competitors

• All competitors need is simply to buy the necessary equipment (e.g. the stuffing machine); and contacts to manufacture fashionable clothes and accessorizes

Situation Analysis



Decisions

Customer Relationship Management (CRM): Promoting Brand Loyalty

• CEO and Founder Maxine Clark practices CRM to increase brand loyalty and repeat purchases

• She visits the stores regularly to interact with customers

• Even adds preteens on buddy lists and receives thousands of emails each week

Maxine Clark with children in Korea

Situation Analysis



Decisions

Environmental Climate: External

Political

Economical

Social

Technological

Singapore’s political arena is stable; with stable legislation

Disposable income rising among adults; economy is currently booming

Herd mentality, greater sense of community involvement

Greater number of IT savvy consumers

Situation Analysis



Decisions

Environmental Climate: Internal

Strengths

Weaknesses

Opportunities

Threats

Add-on options (accessories) will help increase repeat purchases and traffic

Costs: more expensive than an off-the-shelf bear

Open market for this “experience” concept; Use of social media

Competition from other toys and activities (e.g. wired culture, electronic gaming)

Situation Analysis



Decisions

Skills of the Firm

• Employees as Ambassadors• Passionate about building

excitement in the consumers• Enhancing the experience

Situation Analysis



Decisions

Distribution Structure

• Direct Sales

• Build-A-Bear Website• Updated regularly (Eg. Spring 2010, Summer 2010)• Highly Accessible• Interactive

• 3 Stores• Town Area• Convenient locations• High Human Traffic

Situation Analysis



Decisions

Recap: The 4Ps

Product

Price

Place

Promotion

The experience of personalizing your very own stuffed animal.

$17.90 onwards

Three convenient high-traffic shopping malls in Singapore; and the WWW

Word-of-mouth publicity

Situation Analysis



Decisions

Problem #1

• Insufficient brand awareness

• Appeal for marketing budget may not be easily approved by HQ in US

• Buying bears are not a popular culture in Singapore as well

Solution

• Select a more cost-effective alternative to promote Build-A-Bear

Situation Analysis



Decisions

Problem #2

• Declining birth rates

• Hectic work life

Solution

• Expand the target market group from just children and adults with children

• Increase market penetration and market development

Situation Analysis



Decisions

Problem #3

• Current product lines appeal mostly to females

• Males do not usually relate or purchase bears

Solution

• Product Development; introduce new products to the existing female market so as to encourage repeat purchases to sustain revenue

• Diversification: using Build-A-Bear’s brand name to introduce new product lines to cater to the male audience

Situation Analysis



Decisions

Opportunities

• Social media is currently one of the hottest trends in Singapore among the target market; especially the children and pre teens

• Many have a Facebook account used to connect with friends, play online Facebook games and applications and interact with each other on an online presence

• Creating a Singapore Facebook group for Build-A-Bear users may be viable, especially since setting one up doesn’t cost much marketing dollars

• Furthermore, children love to play the free games on Facebook, e.g. Mousehunt

• Build-A-Bear can tap on this to develop something similar, i.e. Bearhunt, where users can accumulate points and exchange these for accessories for their bears at the three brick-and-mortar stores in Singapore

Situation Analysis



Decisions

Opportunities

• Currently, stores in the United States have a Virtual Cub Advisory Council where consumers who have purchased the bear can suggest new ideas to Maxine Clark to implement

• This isn’t evident in Singapore as Singapore outlets are franchises

• Set up a similar “feedback/suggestion” group where Singaporeans can suggest ideas for localized accessories (e.g. SIA girls)

Situation Analysis



Decisions

• The use and implementation of social media (Facebook) to promote and increase brand awareness and loyalty among Singaporeans

• Engage other well-known brands for co-branding to hype up more awareness for Build-A-Bear

• Start up a Singaporean version of the Virtual Cub Advisory Council so consumers in Singapore can feel more involved with the brand

• Corporate Social Responsibility: Donate a certain percentage of sales to a charity; this will garner media hype and increase brand awareness

• Product development: Add more variety to the product to the product line with the option for consumers who have bought a bear before to “add on” to the bear family

Possible Marketing Initiatives

Situation Analysis



Decisions

• Before selecting which option to execute, one must remember that the Build-A-Bear outlets in Singapore are franchises, and some options will need approval from the HQ or CEO Maxine Clark

• Being a franchise, marketing dollars are limited

• Therefore one has to choose the most critical need to be met

Considerations

Based on the consideration and factors, Build-A-Bear should:

Final Decision:

Reach out to the target market using a “budget” platform which engages them in a channel that

they regularly use and are exposed to; thus generating more awareness

Rationale: Consumers are not bored of the product and need some new refreshing idea to inject into the brand. Rather, many consumers in Singapore do not know about Build-A-Bear as there is minimal publicity. So the most critical and necessary option is to generate more awareness and increase top-of-mind brand recall for Build-A-Bear.

Situation Analysis



Decisions

• Build-A-Bear should update the target market to

• Consumers aged 8 and above who frequently use Facebook

• These include opinion leaders who have some form on influence on their peers

• Children

• Parents

Target Market Segment

Situation Analysis



Decisions

• Increase awareness of Build-A-Bear in Singapore, as with more awareness, sales will rise

• Increase top-of-mind recall of Build-A-Bear so that when people think of buying a stuffed toy as a gift for others, Build-A-Bear is number ONE.

• KPI: 3,000 fans on Singapore Facebook page within the next three months

• 3,000 is a feasible number, such that:

• If we get a 10% return on investments, consumers buying a bear worth an average of $50, that will result in $15,000 in revenue

• To attract the fans to the Facebook group, you will need exciting and interactive applications and content, which would cost an estimated $3,000 to develop and maintain

• Therefore the value for this = $15,000 (benefit) - $3,000 (cost)

Objectives Defined: Key Performance Indicators

Situation Analysis



Decisions

• To attract users to join the group, and regular check the page, we propose the following content:

• Facebook application (Bearhunt) – a game where the results are uploaded on the user’s news feeds which act as a promotional tool to others; resulting in brand awareness in the feeds of users’ friends

• Give-A-Bear: Similar to the popular Starbucks application, users can send “bear gifts” to friends which will once again act as a means to promote the brand

• Constant status updates, news, and uploading of photos of new accessories, clothes etc

• Quizzes where users answer 20 questions, spread the word to five friends and find out which bear personality fits them most; results will appear on the users’ profiles and news feed, which is promotion to others

All the above help increase brand awareness among Facebook users

Possible Facebook Content

Situation Analysis



Decisions

• Product decision: Nationwide branding

• Distribution decision: Status quo as stores are sitting on prime locations with high traffic volume

• Promotion decision: Advertising and branding (increase brand awareness); Message (the “experience” concept)

• Price decision: Price leadership (more affordable and more conveniently located than the only competitor – Cool Bear Workstation)

Decisions

Situation Analysis



Decisions

• Recruit application developers to create Facebook application Bearhunt and other Facebook content (photos of new accessories etc)

• Set up the Facebook group for Singaporeans

• Promote the Facebook group URL in stores, and get ALL staff members to join this group and act as ambassadors

• Monitor Facebook group for emerging trends and marketing opportunities to exploit to Build-A-Bear’s advantage

Implementation / Next Steps

Situation Analysis



Decisions

Documents

Build a Bear