Build-A-Bear Workshop

MB103 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 Companys CustomerCentered Leader Award, and Build-A-Bear earned 25th spot on BusinessWeeks Hot Growth list of fast-expanding small companies.

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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 youll be issued a birth certificate Step 7: Dress and accessorize your stuffed animal

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

The Product
Each product is: Customizable Washable Option available to add accessorize and personalize your clothes

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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 markets overall value

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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

Decisions

Competition: Marketing & Production Resources

Level playing field among the competitors (Toys R Us, Mini Toons, Kalms) 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

Problems and Opportunities

Alternative Marketing Programs

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-Bears 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

Problems and Opportunities

Alternative Marketing Programs

Decisions

Customer Relationship Management (CRM): Promoting Brand Loyalty

C O and ounder Ma ine Clark practices CRM to increase brand loyalty and repeat purchases

She visits the stores regularly to interact ith customers ven adds preteens on buddy lists and receives thousands of emails each eek
Ma ine Clark ith children in Korea

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Environmental Climate: External

Political Singapores political arena is stable; with stable legislation

Economical

Disposable income rising among adults; economy is currently booming

Social

Herd mentality, greater sense of community involvement

Technological

Greater number of IT savvy consumers

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Environmental Climate: Internal

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

Weaknesses

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

Opportunities

Open market for this experience concept; Use of social media

Threats

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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Skills of the Firm

Employees as Ambassadors Passionate about building excitement in the consumers Enhancing the experience

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

Decisions

Recap: The 4Ps

Product The experience of personalizing your very own stuffed animal.

Price

$17.90 onwards

Place

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

Promotion

Word-of-mouth publicity

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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

Problems and Opportunities

Alternative Marketing Programs

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-Bears brand name to introduce new product lines to cater to the male audience

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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 doesnt 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 brickand-mortar stores in Singapore

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

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 isnt 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

Problems and Opportunities

Alternative Marketing Programs

Decisions

Possible Marketing Initiatives

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-ABear 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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Considerations
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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

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

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-ABear 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

Problems and Opportunities

Alternative Marketing Programs

Decisions

Target Market Segment

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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Objectives Defined: Key Performance Indicators

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)

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Possible Facebook Content

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 users 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

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

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)

Situation Analysis

Problems and Opportunities

Alternative Marketing Programs

Decisions

Implementation / Next Steps

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-Bears advantage