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The pricing strategy for DuraMax and Marathon light bulbs was to provide the consumer with a longer-life lightbulb, and to enable the consumer to save money at the same time. The strategy for Halogena was different.
Halogena was to be sold at a premium price because of its longer life and the uniqueness of the [...]

At the time this marketing effort was being planned, except for the privatelabel lightbulbs, there was mostly one brand per retail outlet. There were some exceptions. For example, at Home Depot, GE and Philips were the two major lightbulb brands, and then there were six other brands on the shelves, including Panasonic, Toshiba, and Westinghouse. [...]

Philips decided to manufacture the consumer product line in its own factories. Philips has enormous production capacity. The total consumer and industrial Philips product line includes over three thousand different types of lightbulbs. Philips has seven factories in the United States, one in Canada, and one in Mexico. It also has additional production facilities in [...]

Philips felt that this marketing effort gave the company an opportunity to create vibrant new packaging that told a better story to the consumer. It wanted to create packaging that would help sell the product off of the shelf without confusing the consumer. Philips felt that with its old packaging, and with the packaging of [...]

During the development stages of this marketing plan, Philips discovered that the design of a lightbulb (the shape of the bulb) is very important to consumers. Research was done with different shapes, and consumers said that they wanted their lightbulbs to have a traditional shape, except when they were using them for decorative purposes. This [...]

Marathon would be the ‘‘best’’ lightbulbs. They would have a minimum life of five to seven years, depending on the particular lightbulb selected. These lightbulbs are based on a technology that is very different from that of an incandescent lightbulb. They use fluorescent technology, where most of the energy is captured as light and not [...]

Halogena was the line of ‘‘better’’ light bulbs, with at least a two-year life. Halogena was a product line that had been made by Philips in Europe for several years, but had never been introduced into the United States. It was added to the mix to fill in the good, better, best strategy.
Halogen technology [...]

The consumer focus groups revealed that a typical consumer perception was that lightbulbs burn out too soon. Consumers wanted long-life lightbulbs, but they thought that current claims of long life were not believable. They felt that a better lightbulb would be one that lasted longer, and that this was the only benefit that would be [...]

In 1998 Philips conducted a series of market research projects to determine consumer perceptions of the most important benefits related to lightbulbs. This research began with a series of consumer focus groups held in various parts of the United States. Psychographic screening questionnaires were used to bring in males and females who demonstrated the ability [...]

As part of the overall strategy development process conducted in 1998, Philips completed a thorough review of the overall lightbulb market. By this time the company had become very fact-based and had an excellent market research department. The research department provided a review of all of the available data on the lightbulb market, as well [...]

DuraMax was the line of ‘‘good’’ light bulbs, which would have a minimum life of one year. These were incandescent lightbulbs that were comparable to GE incandescent lightbulbs, which typically had a life of six months.
Depending on the particular lightbulb, this longer life was achieved through the use of a larger coil, a different [...]

Over the past thirty years, long life has come up several times as the number one attribute that consumers look for when buying a lightbulb. In 1983, Philips substantially expanded its lightbulb business in the United States by purchasing all of the lamp divisions of the Westinghouse Electric Corporation. One of the things that came [...]

It is the coil and some of the chemicals inside that make one lightbulb last longer than another. There is a mix of inert gases, such as carbon, krypton, argon, and neon, inside of a lightbulb. The coil that is used in an incandescent lightbulb is made of tungsten, and if the coil were stretched [...]

Philips Marathon was the name used for the longest-lasting or ‘‘best’’ lightbulbs (guaranteed for five to seven years), Philips Halogena was the name used for the second-longest-lasting or ‘‘better’’ line of lightbulbs (guaranteed for two years), and Philips DuraMax was used for the entry-level or ‘‘good’’ line of lightbulbs (guaranteed for one year). Marathon and [...]

Based on these assumptions, the new marketing plan had two primary objectives. First, Philips would introduce a series of lines of long-life lightbulbs that would be significantly different from the lightbulbs offered by the competition. Second, because they were superior, these new product lines would be sold at premium prices, which would generate higher margins [...]

The results of Philips’s market research clearly indicated that long life was the most important feature that consumers would like to have in a lightbulb. Many consumers indicated that they simply did not want to have to climb up a ladder every two months to change a lightbulb. The management at Philips found this believable [...]

Except for gifts, people will rarely buy a new product or service unless they feel that it has some specific benefits that are important to them. Many business ventures have succeeded because they provided meaningful benefits that were clearly recognized by their customers. This chapter provides an example of how Philips identified its product’s most [...]

The Jumbo-Koter venture is a good example of the development of a successful new product by solving a consumer problem. The Wooster Brush Company identified the difficulty that painters were having because their minirollers were sticking after a few uses. The new Jumbo-Koter mini-rollers solved that problem by using a smooth-turning cage frame. Wooster Brush [...]

The engineering department prepared an estimate of the expenses that were anticipated for the Jumbo-Koter venture. These included the up-front investment in new equipment. The marketing department then prepared an initial and multiyear sales forecast, as well as forecasted profit and loss statements. The purpose of these financial projections was to show that the Jumbo-Koter [...]

The marketing of the Jumbo-Koter product line was implemented through the normal Wooster Brush Company organization. The management of the company believes that one of the keys to its success and longevity (the company is 151 years old) is its ability to operate with a lean organization. The company has no product managers and does [...]

There was no formal warranty on the Jumbo-Koter product line. TheWooster Brush Company does not have a formal warranty on any of its products. The company will, however, replace any returns involving normal and proper use. If a consumer has a problem with any product from theWooster Brush Company, he or she can bring it [...]

Jumbo-Koter advertising was designed to be run in trade publications such as Do-It-Yourself Retailing and other magazines targeted to paint and hardware stores. There was no consumer advertising of Jumbo-Koter. One- and twopage spreads were placed in these magazines at the time of the product launch. The advertising was not actually placed until Wooster Brush [...]

The objective of the Jumbo-Koter advertising was to communicate to paint and hardware stores that a new improved mini-roller was coming on the market and that this mini-roller would be available only from the Wooster Brush Company. The magazine advertising described the professional grip on the frame, which is important to the professional painter because [...]

It was felt that a key to success in getting the full Jumbo-Koter product line into retail stores was an in-store display program. The cornerstone of this program was a two-foot freestanding merchandiser that included the full Jumbo-Koter product line. Wooster Brush would give the rack free to retailers. Management felt that this would be [...]

The Jumbo-Koter product line was set up with a different price point for each of the different products in the line. The pricing strategy was to hit the price points of the low-priced imported competition. Wooster Brush management did not feel that the company had to match competitors’ prices exactly because Jumbo-Koter was a different [...]

The Wooster Brush Company basically sells its products through a national network of distributors and buying groups. It does have some direct accounts; Lowe’s and Home Depot, for example, are direct accounts. Most of its sales, however, go through distributors. These are typically traditional stocking distributors that take orders and then make shipments to the [...]

The decision was made to produce the majority of the Jumbo-Koter line in the Wooster Brush Company factories in Ohio. One of the reasons for this was to maintain tight control of the timing of the production. It was felt that manufacturing would have to keep up with distribution in order to maintain in-store inventories. [...]

Jumbo-Koter is a comprehensive line of twenty-four different mini-rollers and two different frames. The short-handle frame has a 14-inch handle, and the long-handle frame has a 261/2-inch handle. Both of these are cage frames, which turn much better than the traditional wire frames. Both the shorthandle frame and the long-handle frame have a 4-inch arm, [...]

The new mini-roller system was launched under the overall brand name Wooster Jumbo-Koter. This name appeared on all packaging and display header signs. Also, seven additional names were used to differentiate the different types of covers: Super Fab TM, Pro Doo-Z TM, Mohair Blend TM, 50/50 TM, Super Twist TM, Painter’s Choice TM, and Pro [...]

Based on these planning assumptions, the management of Wooster Brush set up a series of specific key strategic marketing objectives for the Jumbo-Koter venture. These objectives covered marketing communication goals, sales goals, distribution objectives, inventory planning, and the overall timetable for the launch of the venture. The following are the key strategic marketing objectives set [...]

Prior to launching Jumbo-Koter, the management of Wooster Brush made a series of assumptions regarding the outcome of the implementation. These planning assumptions were based on a long history of things that had happened during the launch of previous new products from Wooster Brush. The following is a list of the key planning assumptions made [...]