Rayovac Case Analysis

Topics: Rechargeable battery, Marketing, Primary cell Pages: 6 (1366 words) Published: March 15, 2012


As the use of household batteries is on the rise due to increased development of high-drain devices such as cameras, Bob Falconi, vice-president of sales and marketing for Spectrum Brands Canada Inc, is considering whether or not to pursue the not yet well developed market of rechargeable batteries in order to increase its presence and brand name recognition in this very highly competitive market of disposable batteries dominated by Duracell and Energizer. The major competitors of Rayovac- a division of Spectrum Brands Canada Inc, are not focusing on this category for fear that it would cannibalize their sales of disposable batteries, as this can be a good opportunity for Rayovac, they have many factors to consider before focusing their resources on the rechargeable battery category.

The Household Market:
-The household battery market consists of AAA, AA, C, D, and 9volt used in everyday electronics and high use standard devices. Sales have continued to grow in this category because the use of camera’s, PDA’s, and portable music players are on the rise. However consumers are now demanding improved battery technology. - In 2005 Alkaline technology has become the most popular however growth has flattened out but due to the market size, it still remains the main focus for the next 5-10 years. - In Canada the overall battery market is 300 million; 70% of which is the alkaline category, 20% other, and only 10% the rechargeable category. In order for a company to be successful they needed to be involved in the alkaline segment. Consumers:

Light Users: $25 average/year
Heavy Users (Families and Techies): $250 average/year
Families: $200 million per year of the market
- one or more children, $60,000 income, but lower level of disposable income
- price and value important
- batteries used for household items but not high-drain items Techies: $75 million per year of the market
- 15-30 years of age
-early adopters
-heavy users of high-drain devices
-$20,000-40,000 per year income but more disposable income

-Mass merchandisers generated the largest volume of sales within a market segment Mass merchandisers and grocery stores focus on price sensitive and families consumers

Drugstores focus on seniors and tween consumers
Hardware and homegarden stores focus on males 30 to 35
Niche stores focus on the techies
Rayovac is 3rd largest consumer battery manufacturer and marketer in the world. Largest seller of hearing aid batteries in the world. Product Line up: alkaline (14% globally and 20% market share in Canada for Rayovac)

Bought Remington Products Inc to enhance their retail presence
Bought a lawn company in order to have access to hardware and homegarden stores
Greater ability to compete
Rayovac positioned themselves as a value brand. They reduced their price although offered same quality products as the main competitors. Targeted value conscious shoppers looking for high quality at a lower price. They manufactured a large portion of their products but also outsourced- rechargeable line The Competitive Landscape:

-Highly competitive market
-Retailers chose one supplier over the other due to brand name recognition, perceived quality, price, performance, design, marketing, and promotion. Main competition: Duracell (39% of the market, and 35% in Canada) and Energizer (39% of the market share, and 35% in Canada). Both companies have been in the business a long time and are able to compete through strong advertising, discounts, promotions, brand recognition, and their relationships with retailers. Rechargeable Batteries:

-No dominant leader in this market category
- identical size and look of disposable batteries
-can be recharged and reused
Why should consumers purchase them?
-rising cost of one time use batteries
-increasing consumer demand for better technology
-growing environmental concerns
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