Rayovac Case Essay Example

through its own acquisitions); o Duracell and Energizer each held 39% of global market and 35% of Canadian market vs. 14% and 20% for Rayovac.

• Company Analysis o Third largest global consumer battery manufacturer; o Rayovac responded to competitor leveraging across brands through acquisitions under the Spectrum Brands Alliance umbrella; • The Rechargeable Opportunity Company seeking alternative ways to grow its brand name without engaging in head-to-head battles with the leaders; o Rechargeables = 10% of Canadian battery market, but interest increasing due to rising cost of alkaline batteries and need for better battery performance and growing environmentalism; o NiMH batteries can be recharged up to 500 times vs. alkaline;

 Problems include lack of consumer awareness, high initial cost of batteries and chargers, initial charging required, and poor performance of earlier rechargeables; o Duracell and Energizer reluctant to promote and cannibalize, as well as being unable to produce the product themselves (import suppliers); o Rayovac had done well holding 20% market share with rechargeables in Canada and had done well with faster-adopting, more environmentally conscious European consumers; o Rayovac wanted to expand presence and awareness in rechargeable segment and gain increased alkaline share;

Target family segment (much larger market than Techies), but may require considerable advertising efforts to educate and encourage switching;  Mass marketers mainly focused on proven alkaline category and accompanying price demands (40% projected contribution level) and company might still be seen as a value brand with rechargeables, too, in that environment; Requires larger advertising expenditures and little help from retailer salespeople; ? Volume would be much larger due to number of retailers and reach within their markets, and

could position Rayovac as the rechargeable market brand leader; ? Projected profit of $48. 8m by 2010, with less profit in earlier years due to higher expenses and lower contribution, but volume generated in later years would make up for it;

Brand awareness generated through mass retailers inline with Rayovac’s larger objectives of enhancing brand image of other products and increasing sales and profits; o Status Quo Maintain current course of action to “avoid waking the sleeping giant” competitors, but given their position vs. Energizer and Duracell, an aggressive course of action is necessary (competitors looking to grow, especially as potentially dangerous a marketer as Proctor and Gamble with Duracell); With slow growth in alkalines, Rayovac can best grow share by stealing business from smaller competitors; Company needs to gain market presence and grow to remain viable in the battery industry long-term; o Risks Competitive reaction to an aggressive stance by Rayovac in rechargeables;

 Existing majors will not want to cannibalize alkaline sales, and would likely offer special discounts and promotions for alkalines to try to limit effectiveness of Rayovac’s efforts, or may increase otherwise low-profile promotion of their own rechargeables if Rayovac becomes successful in that segment; However, time lag for their response should give Rayovac enough awareness to be the leader in this category (not first-to-market but a leader in it);  As the only manufacturer-suppliers, Japanese and Chinese manufacturers could enter the market with their own brands.