Rayovac was a well established brand which had two main competitors that it had fallen behind, since it had not aggressively marketed the brand for many years. The main competitors were Duracell and Energizer, which had come out with a new line of batteries called e2. They had also fallen behind in market share and consumer awareness, while the company switched hands several times. The Tomas H. Lee Group of Boston acquired the company in 1996 and, attempting to turn the company around, the group brought in David A. Jones as the new CEO. He had experience in turning around other top companies such as GE, Electrolux, Regina, and Thermoscan, and the Tomas H.
Lee Group was hoping that his experience at various different types of companies would help build a stronger company.Jones’s main focus was on changing the marketing strategies, a sufficient distribution change, orient the company globally, and increasing the product lines. Jones stepped up the advertisement campaigns by obtaining credible spokespersons, such as Michael Jordan and Brett Favre, and a more sustained focus on Arnold Palmer. He also recognized the need to target national mass merchandisers for distribution since they were congruent with Rayovac’s value pricing strategy. He directed the company towards international ventures in Latin America and Asia, and continued the operations in Europe. New product lines were introduced in such areas in the medical instruments and health services, as well as photo and keyless entry batteries in 1997 and 1998.The products that were offered by Rayovac in late 90’s were alkaline batteries that consisted of maximum and Renewal (even though it was made with alkaline technology, Renewal falls under the rechargeable product type), Rayovac Heavy Duty that was discontinued, Hearing aid batteries such as Loud n’ Clear and AIRPOWER, along with other specialty batteries. They also offered lighting products and lantern batteries that fell into a different product line.
Overall the alkaline product type brought in the most net sales out of all of the other types.The future for the product Renewal as a main contributor for the Rayovac Corporation looks dim. The introduction of Ultra, an advanced rechargeable battery that has the capability of recharging 1000 times compared to the 25 times of Renewal, gives the technology and ability to replace the outdated product. Even though Ultra falls into a different price category, premium, than that of Renewal’s value price, the out performance of Ultra’s technology would outweigh the price differences associated with each respective battery.The hearing aid market is expected to quadruple in the next 10 years because of the baby boom generation that is getting older, and since Rayovac is number one in hearing aid batteries in the US and number one manufacturer in the world, we propose that they continue their marketing strategies in the same manner. However, we suggest that they intensify their promotional strategies by continuing to use Arnold Palmer in their advertising, who is a role model for the targeted generation, and focusing their distributional strategies through traditional routes such as hearing aid professionals and through retail channels. In addition, only 20% of the people that need hearing aids actually use one, therefore by increasing awareness about the benefits of continued use of a hearing aid, Rayovac can expect its sales to increase.
There are two main segments of consumers that Rayovac’s advertisements tended to ignore; teenagers and women. Teenagers should be focused on since they are a large influence towards their mothers’ purchase decisions, but also because they are a large purchasing group in themselves and growing. There is a trend starting to occur in the teenage consumer population towards technologically advanced game systems and mobile technology, which all require batteries to operate. The age range that is being looked at is between 12 years of age to 20 years old; predominately male.The new advertisements, directed towards teenagers, proposed would focus on extreme sports, co-branded with Gatorade, and celebrities that appeal to the younger generation, and the campaign would be called XXX.
Extreme sports were chosen for its relationship with power and the speed that could be correlated with the image of the lightning bolt. The lightning bolt is already directly connected to Gatorade as well as Rayovac, therefore decreasing the need to reinforce the associations between the brands and relies on the reconstruction schema theory for relating both brands to one symbol.Appendix 1 represents the associations between the two brands relative to extreme sports, and shows the links to be established with the proposed strategy.
Famous celebrities like Vin Diesel and Shaquille O’Neal, were chosen to be the representatives directed at the American teenage population, whom could be associated with power and exceptional performance. The athletic appeal of these gentlemen could easily be connected to Gatorade, and Shaq, also being a part of the hip-hop scene with his rap album releases, could be linked up with such electronic gear as MP3 players and other portable music players that would require the use of batteries.When it comes to the Asian market, continuation of the marketing strategies that target the younger market that is emerging in Asia will feature Yao Ming, the famous Chinese NBA player. Yao Ming is the ideal spokesperson for the target market because he is seen as a role model and represents power and energy. He is already associated with our co-brand Gatorade, therefore allowing an easier association between the two brands. In the teenage spreading activation chart in Appendix 1, Yao would fall under the sports figures category which is directly connected to Gatorade and teenage interests, allowing an easier establishment of a linkage to Rayovac.As far as the European market is concerned, Europeans use similar technologically advanced equipment as those in the US, with a greater emphasis on the use of cell phones and instant text messaging, especially by teenagers.
Europeans are quite familiar with Yao Ming and Shaquille O’Neal who are viewed as symbols of extreme power and energy; therefore it would be wise to use these two athletes in a European advertising campaign. Furthermore, Gatorade has been sponsoring many sports events in Europe, especially soccer, the most popular sport on the continent, therefore allowing Rayovac to capitalize on the already established link between Gatorade and the soccer fan population. Finally, studies have shown that Europeans are more environmentally conscious than US consumers, therefore making it easier for Rayovac to push into Europe the concept of environmental friendliness with its rechargeable batteries.As stated in the case the main purchasers of batteries are women. There is a discrepancy in this fact concerning the promotions and advertisements of Rayovac and its top brand competitors. There was some attempt to indirectly influence women purchases through advertisements that were aimed at children around Christmas time. However, Rayovac’s promotional strategies should have been directed more towards women consumers.Women are a major player when it comes to purchasing power over batteries.
To appeal to this market segment the purposed strategy is to attain famous celebrities that would have a connection with younger children (ages 5-12) and with women (Appendix 2). Serena and Venus Williams could take on this challenge of appeals. They are seen as role models for younger children whom influence purchasing behaviors of their mothers, and could be seen as strong motivated attractive women appealing to the women population. Serena and Venus also tie in well with the co-branding of Gatorade with Rayovac. Both of these athletes have been seen several times putting on their headsets (which apparently use batteries) during a break in the game.
Therefore it would be a very good idea if they took part in a commercial with their headphones on, enjoying their time, all thanks to Rayovac batteries.The proposed promotional strategy would rely mainly on influencing peoples’ behaviors through affect, by stimulating target consumers’ senses with the attraction of sports figures and the excitement that is portrayed in the extreme sports field. Using attention getters such as bright colors and the attractiveness of spokespersons to trigger the peripheral route of persuasion, Rayovac can influence consumers’ buying habits at the time of purchase. For example, Rayovac could place a life size replica of Yao Ming, holding a box containing different sizes of Rayovac batteries, and putting it in strategic locations within stores. This would gain the attention of the consumers at the time of purchase, a purchase that would be impulse and not analytically processed. There is a trend in the battery market for consumers to impulse buy the battery products that are needed, instead of using a pre-purchase plan for the items.
Using this data, affectively influencing the target markets through advertisements and point of sale promotions should increase the sales potential for the brand.In conclusion, Rayovac had a broad history of differing marketing strategies, however they failed to focus on the main purchasing groups of batteries. To compete with Energizer’s new e2 battery, the XXX strategy reaching out to teenagers should keep the competition hopping. There could be a new product introduced corresponding with this marketing strategy that would also compete with Energizer, called Rayovac X. Influencing the purchasing habits of women is a necessity for the new campaign strategy as it would allow a more focused approach towards the purchasers of Rayovac’s products.
Finally, the current distribution strategy that emphasizes further penetration into retail distribution channels is considered as successful and thus should continue in order to provide further availability of the product to as more consumers as possible.