Case Study

Build-A-BearBuild-A-Memory

Amir AbdollahiHesam’oddin Pourpirali

Morteza AhmadiMohammad Mostafavi

Sharif University of TechMarketing Course

The late 1990s

• Dot-coms era• VCs poured into high tech

A very bad time to start a mall store selling stuffed

animals.

Indeed,...

• Maxine Clark founded Build-A-Bear workshop in 1996.

• And came 25th on Hot Growth list of fast expanding small companies of BusinessWeek.

And since then...

+200 Stores

+30 million teddy bears

%20 annually

+$359m annual revenue(2005)

$600/ftdouble the US average

2

Also...

30 new stores in US and Canada each year.

Franchise 20 stores per year internationally.

Internet sales are exploding.

56% since 2004 in stock market

Success is not in tangible objects

What Build-A-Bear is selling is the experience of participating in the creation of personalized entertainment.

BUILD-A-BEAR WORKSHOP

• Children step in a cartoon land.

• A genuine fantasy world

• Organized child-friendly assembly line

• Comprised of clearly labled workstations.

CHOOSE MEGuests are introduced to all the furry characters in the store and select one, which soon becomes their new best friend

HEAR MEGuests may select from several sound choices to place inside their stuffed animal to further personalize their new friend

STUFF MEWith the help of the master Bear Builder associates, guests fill their new friend with stuffing for just the right amount of hug-ability

The last seam is neatly pulled shut, nearly completing each new best friend

STITCH ME

The guest brushes the animal at the bear spa to make sure his or her new friend is well groomed and pawfectly huggable!

FLUFF ME

Guests then stop at the computer, where they answer several questions about their new furry friend, including the birth date and of course, the name of their new pal

NAME ME

Guests may dress their new friend in the beary latest furry fashions. The bear apparel boutique features clothes and accessories for all occasions

DRESS ME

Guests wrap up their bear-making adventure at the final station, where they are given their customized birth certificate and a special Buy Stuff Club® card to apply towards future purchases

TAKE ME HOME

Personalization

“[Customization feature] builds fiercely loyal customers”

Jason BlairResearch analyst for Rchdale securities

It let’s customers to express themselves. It provides far more value for customer than mass-produced products. “It’s empowerment- It lets the customer do something in their control”

Maxine Clark

An Experience

• Vermont Teddy Bear “Only bear made in america and guaranteed for life”

• Hand makes all its bears.• Quality is key selling point.• Sells direct to consumer.• + Customization.

Receiving in mailbox.• Start at $50 top to $90.

• Maxine Clark : “Most things today are high-tech and hard-touch. We are soft-touch.”

• “We don’t think of ourselves as a toy store- we think of ourselves as an experience.”

• This involvement in personalization is more of the “product” than the resulting item.

More than strategy

• Clarck attributes her success to “never forgetting what is like to be a customer”

• Every week she visits 2 or 3 of more than 200 stores.

• To take the opportunity to interact with customers by chatting with kids and parents.

• Putting herself on the front line.

• Assisting employees in serving customers.

• Even handing out business card.

“Virtual Club Advisory Council”

• Clarks receives thousands of emails each week and she’s added to buddy lists.

• She tries to respond to as many of them via her BlackBerry.

• To capitalize these communications she created “Virtual Club Advisory Council”

• A panel of children on her e-mail list, to get ideas from kids.

Ideas by kids for kids

• From location to accessories, as some ideas come in

• Clark polls the Club Council to get real-time feedback.

• Great potential in future as more ideas are being considered.

• Bear-sized furnitures.• NASCAR, NBA, NHL,

NFL, MLB licence agreements.

• “Friends 2B Made” new line of stores with concept of personalization of dolls rather than stuffed animals.

Strengths

• Waiting in line enhances the experience and fun

• Children have a product they have created, unlike any other one.

• More than just a stuffed animal, a memory is created on their visit.

• Kids love Build-A-Bear. Parents love it too.

• Cost of experience starts as low as $10. And options can push it to $25.

• Parents see how each of these dollars translates into their child’s delight.

Strengths

• Sales do not peak during the holiday season, but evenly distributed throughout the year.

• Making customization a key driver for customer value.

• Customer loyalty.• Broad customers from 3

generations.

• Not a toy industry fad. Although accessories are trendy.

• Commitment to community.

• Online shopping.

Opportunities/Threats

• Opportunities:– More store locations– Expand out of malls– Extend the brand

• Threats:– Russ Berrie– Vermont Teddy Bear Co.– Toys R US– Disney Store– Mass retailers (Wal-Mart,

Target)– Changing fads in youth

culture

Discussion 1 of 5

• Give examples of needs, wants and demands that Build-A-Bear customers demonstrate.

• What are the implications of each on Build-A-Bear’s actions?

Discussion 2

• In detail, describe all facets of Build-A-Bear’s product.

• What is being exchanged in a Build-A-Bear transaction?

Discussion 3

• Which of the 5 marketing management concepts best describes Build-A-Bear Workshop?

Discussion 4

• Discuss in detail the value that Build-A-Bear creates for its costumers.

Discussion 5

• Is Build-A-Bear likely to be successful in continuing to build customer relationships?

• Why or why not?

Thank you!