all of the Lots-o'-Huggin' Bear Commercial (circa 1983) confuses me

there was no toy story in 1983 so how was there a 1983 Lots-o'-Huggin' Bear ?

The retro commercial is fake. Pixar created it and is included on the dvd of the movie. The bear didn't actually exist in the 1980s, or the commercial for it. Apparently there's a lawsuit over the bear itself tho, as some company claims Disney stole the name and concept from a line of bears they've been creating for a while.