Within this coursework essay, I hope to address the concepts of marketing and operations management and apply it to the Build-A-Bear case study. I will include an example of a transformation process model and explain how it is relevant to this particular company by including the transforming/transformed inputs, the transformation process, and the outputs. Also, I will identify the unique communication method used between Maxine Clark and her customers. Moreover, I will explain how Build-A-Bear contrasts with traditional toy shops by exploring the different marketing strategies used; specifically customer relationships. Finally, I will evaluate the facets of the Build-A-Bear product and describe the transaction that takes place. Introduction
Build-A-Bear is a toy shop which sells fully customisable bears and accessories which are created and manufactured by the customer and put together by staff. The company has opened more than 200 stores and has custom-made more than 30 million teddy bears. Annual revenues reached 262 million Euro’s in 2005 and it is predicted that the company will experience a 20% annual growth. The share price has increased by 56% since it went public. Build-A-Bear hopes to franchise 20 stores per year, internationally. This coursework looks at the operations in detail, specifically the inputs, processes and outputs of the company using a process model to illustrate. This also helps to show how the company uses a unique manufacturing technique (allowing the customers to get involved). Moreover, I will look at how Build-A-Bear differentiates itself from traditional toy shops in order to gain an insight into how its sales growth has survived when other, similar, toy shops have failed. I hope to analyse the customer relationships that the company has built up and why it has input so much into retaining its customers, using the idea of customer equity and customer lifetime value. Finally, I will review the actual aspects of the Build-A-Bear product in detail and what makes their product special. This will also include an explanation of the transaction that takes place between the customer and the company, exploring the idea that an experience is being sold and not just a product.
The following diagram is a Transformation Process Model. It is used to illustrate and describe “operations in terms of their input resources, transforming processes and outputs of goods and services” (Slack, 2007). The model consists of Input Resources. One element is Transformed Resources, these are the resources which are changed or converted in the process, and an example would be materials. Materials could be transformed in the manner of; its physical property, in the case of a manufacturing facility. Moreover, materials could be transformed in the sense of their location (delivery companies) also; the possession could be changed as in the case of retail outlets. Finally, operations can store materials e.g. in warehouses. The other input component is Transforming Resources. These are the inputs which are used on the transformed resources, for example facilities and staff. After these inputs have been transformed, the outputs consist of tangible products and intangible services which ultimately are transferred onto customers. In relation to the Build-A-Bear case study, the model differs slightly to the normal layout. For example, within the transformed resources input, there is no input of information because no information has changed possession, been stored, changed purpose/form, or changed location. Materials are a transformed resource because the toy needs the material, garments, voice boxes, etc. to be manufactured into the end product, a bear. The customers’ psychological states of mind are transformed due to the personalised entertainment factor of the Build-A-Bear experience. In addition, the transforming resources are the facilities, such...