A tale of the two bears -- marketing and sales strategy in Toyland
There's battle being waged this Christmas season, a high-tech battle for the hearts and minds of not only kids but adults. For lack of a better name, let's call it ``Bear Wars.''Skip to next paragraph
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Most of the action centers around two teddy bears who talk -- well, one of them talks, the other mumbles -- through the use of high technology. Their paths have crossed repeatedly, not only in the aisles of Toys ``R'' Us and the pages of the Wall Street Journal, but in the lives of the two men who are promoting them, men who worked together at Atari Inc.
``Bear Wars'' has given new fuel to the $13 billion toy market in much the same way Cabbage Patch dolls did in 1983 and '84. It shows that even when flouting the traditional rules of the toy business, superior marketing and the ability to capture the imagination of the public -- specifically, parents -- can win the day.
The first high-tech bear to hit the toy stores was A. G. Bear, who sells for about $30. When you say something to A. G., he mumbles a response. A. G. is driven by a computer chip that recognizes voice and mimicks it, but at such a low fidelity that it sounds like a mumble, not words. The computer chip alone cost about $500,000 to develop, according to A. G. Bear's creator, Nolan Bushnell.
Mr. Bushnell is not new to the toy business. He started Atari with $250 and a home video game called Pong. After creating Pac Man, Asteroids, Space Invaders, and other video games, he sold Atari to Warner Communications for $28 million, of which he received $19 million.
Bushnell's new firm, Axlon Inc., has followed the rules of the toy industry. It presented A. G. Bear at the American International Toy Fair in February, where toymakers try to sell their wares to retailers ranging from K mart and Toys ``R'' Us to more expensive stores like F.A.O. Schwarz and Macy's. Axlon started shipping in July, and the bear was on store shelves in late July or early August -- not terribly early, but certainly in time for the Christmas season.
The company spent $2 million in advertising on spot (local) TV in the early mornings and early evenings -- prime time for kids, but not for adults. And the bear -- along with his friends like Pester, a cat that skitters right, left, forward, and back when you clap your hands -- is selling pretty well. Some 600,000 bears have been sold, and the company expects to have $12 million to $15 million in sales this year.
Enter Teddy Ruxpin, a story-telling bear (who, unlike A. G., has good diction). When Teddy tells a story, his mouth, eyes, and nose move in sync with his words. Kids can follow the story line with an accompanying book. Teddy, who is run by a four-track tape that fits into his back, cost about $2 million to develop, says Mark Bradlee, vice-president of sales at Worlds of Wonder, the bear's distributor.
At this point he has about a dozen different stories in his repertoire. By the end of 1986, there will be 30 more, including a tape of lullabies ``guaranteed to put the parents to sleep if not the child,'' says Mr. Bradlee.
Teddy's not cheap, ranging from $60 to $90. But the price may have helped him: It meant he could be sold not just in discount stores like Toys ``R'' Us, but also upscale stores like Macy's, which have their higher margins.