Rayovac Case Analysis
Introduction: 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.
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