Bear Market

How one company repositioned itself for a plush success story
Magazine Contributor
2 min read

This story appears in the September 2002 issue of Entrepreneur. Subscribe »

Want to give your customers the warm fuzzies? Then look deep into your company to find the right positioning.


The Vermont Teddy Bear Company was founded in 1981 to craft cuddly teddy bears. Sales were in hibernation for years until 1990, when the company started promoting its Bear-Gram-a delivery service via a toll-free phone number-and sales roared to life.


By 1995, management was building the brand as a teddy bear retailer with three stores. The problem? Consumers selected the bears as gifts and shipped them-just as they could have over the phone! At the same time, the catalog expanded to include all sorts of bear paraphernalia. Both strategies caused the company to lose focus.

Elisabeth Robert was named CEO in 1997 and quickly repositioned the business as a gift-delivery company. The stores were shuttered, catalog offerings restricted to stuffed bears, and radio ads broadcast the Bear-Gram as the convenient, creative alternative to flowers. Meanwhile, the company created a "wow!" experience for recipients, starting with the box: an air hole for the bear, a warning not to turn it upside down lest your bear get a headache, a colorful drawing of headquarters and all the employees' first names. Other soft touches include Bear Counselors, who assist customers with the selection and personalization of their bears; an invitation to visit the factory; and free bear repairs at the Vermont Teddy Bear Hospital.


Today, some 500,000 customers are enrolled in the company's PreFur'd customer loyalty program, and 2001 sales exceeded $37 million. The company's position in the gift-giving business has enabled it to launch two new companies: The Pajamagram Company and SendAmerica. Remember, understand your position, and you can profit from it.

Elizabeth J. Goodgold is CEO/chief nuancer of The Nuancing Group, a brand consulting firm in San Diego, and author of the monthly newsletter Duh! Marketing.

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