The original strategy was to market a compact line of women’s one-size products in two styles (stockings and pantyhose). Hanes felt that this would avoid multiproduct confusion during the introduction of the program. There was to be consistent product quality, with all products delivering a single primary consumer benefit—good fit. When they were originally introduced, [...]
Monthly Archive for July, 2009
The new supermarket and drugstore hosiery venture was named L’eggs. One of the reasons that the name L’eggs was selected from a list of alternatives was that it worked well with a packaging concept that looked like an egg. The name also made interesting use of language by combining the word egg (which referred to [...]
Hanes management decided that there was an unusually good opportunity to create a dynamic, profitable, and timely new business for the company in the growing food and drug portion of the women’s hosiery market. It also believed that there was an opportunity to establish a consumer brand franchise that would give this new business a [...]
The initial trade meetings were positive. The in-depth discussions with personnel from major supermarkets and drug chains indicated strong receptivity to the idea. They could see a need for a heavily advertised and promoted national brand of pantyhose that would be sold in supermarkets and drugstores. Retailers widely felt that a national brand would result [...]
During the focus groups, many women said that their experience with supermarket hosiery purchases had been that they’d had problems with fit or had not been able to get the color they wanted. Most said that they would like to have a supermarket hosiery brand that they could believe in, as they do with so [...]
The national profile study of the hosiery market showed that total retail hosiery sales in 1970 were expected to be $1.7 billion and 144 million dozen units. Food stores were expected to account for 18 percent of the units, and drugstores were expected to account for 10 percent of the units. Privatelabel and unbranded merchandise [...]
The L’eggs venture began in May 1969 with the implementation of a series of research projects designed to identify the supermarket and drugstore opportunity for hosiery products. Hanes had no experience with the food and drug distribution channels, and there were many questions that it had to answer before it proceeded with a venture of [...]
The main lesson to be learned from the success of Philips’s long-life lightbulbs is to pay attention to the needs of your customers. This applies to both the consumer and the retailer. It is easy to simply look inside your company for the answers. Philips succeeded because it did a lot of consumer and trade [...]
Philips’s largest competitor is the General Electric Company. Philips does not believe that GE will come out with a major effort on long-life lightbulbs. Philips believes that GE would hurt itself if it focused on long life because it would shrink the incandescent market, of which it has an enormous market share. Philips feels that [...]
A detailed financial plan was created for the overall long-life strategy. Documentation on all of the planned expenditures and expected sales was presented to senior Philips management for approval prior to launching the program. These documents were then updated from time to time as the plan unfolded. Thus far the numbers on Marathon and Halogena [...]
If a lightbulb failed to last as long as Philips said it would last, the customer would be able to mail it back to Philips for a prompt refund. No questions would be asked. The customer would simply have to send the product back with a proof of purchase or register receipt. In sum, Philips [...]
Philips worked with each retailer to help that retailer customize the in-store displays for its light bulbs. A lot of retailers were very conscious of the look of their stores, and they wanted manufacturers to work within their framework. In most categories, things were done on an individual basis. For example, Philips found that Wegmans [...]
In addition to advertising, the Philips long-life lightbulb strategy was the basis of a highly successful public relations campaign. The campaign centered around Philips Halogena lightbulbs. When Philips heard that a new ball was being created for the Times Square New Year’s Eve celebration in New York City, it called the organization responsible and offered [...]
To introduce consumers to the new Philips long-life strategy, an advertising campaign called ‘‘light bulbs that last’’ was created. Philips’s advertising agency came up with a number of humorous television and radio commercials and magazine advertisements depicting situations in which a lightbulb had burned out. These advertisements were run in eight- to ten-week flights on [...]
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 [...]