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Case: Rayovac Corporation The Rechargeable Battery Opportunity Due on 14th October 2011 Student Name Student ID Course

Name Semester Faculty : Vinayak Bhat : 201184108 : Business 8106 Marketing : Fall 2011 : Thomas Clift

Marketing Analysis of Rayovac Corp. Introduction The case study was about the inception of the Rayovac Corporation to be part of providing innovative products like the rechargeable batteries to be offered in the world market, specifically in North America. In this regard, the marketing analysis needs to be conducted to see and validate all the opportunities and strengths of this business in the market. The main question is should Rayovac proceed with this idea or not, and if they do what strategy should they choose for market entry. It is very important that if Rayovac are to go ahead with pursuing the rechargeable battery market, that the project does not generate any negative cash flows to the business, as it is something the company simply can't support. If Rayovac go ahead with this new business idea, what strategy would be best for Rayovac to pursue? Should they become a niche or a volume player in the market, or should they decide to run with this idea at all? Industrial Analysis The Rayovac Corp is known to be the largest manufacturer and marketer of consumer battery in the world. The business is selling batteries for different household as well as commercial uses. Furthermore, the product lines of Rayovac consists alkaline batteries, in all standard sizes to be able to effectively compete in the highly saturated but profitable household market. Apart from dealing with the not so good Canadian consumer`s perception about rechargeable batteries, there is an intensified competition within North America and from outside countries as well and the vice president is unsure of how and on what strategies should company spend the marketing budget. The aim of the company is to be the number one choice of the customers in the battery and rechargeable battery market in the world. Their purpose is to provide quality and standard batteries that would provide and satisfy the needs of the market in terms of a new trend of energy from both household and industrial use.

Environmental Analysis According to the case study, the major changes that is happening in the global market is the existence of the context of rechargeable market to meet the changing needs of the consumer from both household and commercial uses. To be able to analyse the external and internal environment of Rayovac, marketing tools like PEST Analysis and SWOT Analysis can be used. PEST Analysis Political Firstly, the political environment concerns the role of the government concerns the political and government role and its influence in a business. It also includes the extent to which the government intervenes in the economy. The North American government has been very supportive with the rechargeable battery industry. Since the government of the North America believes that these industries will be beneficial for the region, the government of North America is also open for other possibilities of considering the products of Rayovac that will meet the needs of both the household and commercial clients. Economical Secondly, the amount of economic activity in the economic environment is extremely an important aspect. Whilst assessing the economic environment in which battery industry operates. The government tries to terminate the level of economic activity to provide positive and friendly environment for the battery industry like Rayovac. It can be said that North American economic situation is strong and stable. With this, North America is able to sustain good relation with battery industry. The economic stability of the region has helped the battery industry to have a good economic performance. Socio-Cultural Social environment is of great importance when being applied to different organisations, in case the battery industry. North America has been considered as one of the regions in US which is considered to have a strong market for rechargeable batteries, it can be said that the battery industry have a greater opportunity to grow even more in North America. The demographic changes and the psychographics of North American society have open more chances for the battery industry like Rayovac to achieve its goal and mission.

Technological Technological factor has helped in reducing the barriers of entry for other battery industry. It has also supplemented in the cost of capital in other areas, to enhance the products provided by battery industries. Through the use of more advanced and efficient technology, battery industries have been able to provide innovative products like rechargeable batteries to meet the needs of their target market with lesser development time spans. SWOT ANALYSIS Strengths One of its strength of Rayovac Corp is its being a very profitable company, in both its domestic and international branches. In addition, Rayovac is a global brand established upon a reputation of quality products and services with branches in different regions. In addition, the key strength of the company include their unique management style and technological infrastructure. The strategies used by the Rayovac include intensive strategy, which aims to competently position and promote their battery products in North America and other parts of the region. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company. Weaknesses According to the given case, one of the perceived weaknesses of Rayovac is their inability to outgrow their competitors like Duracell and Energizer which dominates the market, especially North American market in terms of prices. In addition, one of the weaknesses of the Rayovac is their inability to market efficiently their new battery products in the market.

Opportunities With the management system of the Rayovac, the company has bigger opportunities to enter and lead the North American market in terms of providing battery and rechargeable batteries to its residents, commercial and industrial clients or even have an opportunity to be the number one battery company in the whole region. With the continuous innovation of the company, the company can gain loyalty from their customers to make them more competitive in the marketplace. The continuous initiatives of the company in diversification of its products also open new opportunities to make the business become stronger to outgrow all its rival companies.

Threats Fast paced technological advancement may be a threat to Rayovac Corporation as a whole. In terms of the competitors, the company should be able to provide unique and more technologically advanced products and services to be able to survive in the stiff competition in the battery industry. Product Life Cycle As an innovative and unique product, the life cycle of the rechargeable battery is expected to be extensive. With the current interest of the consumers for innovative battery products and their increasing openness towards technology, the rechargeable battery is expected to go through years of strong market impact. However, this product life cycle can be affected by several factors. For instance, considering that competitors are also equipped with innovative skills and technologies, it is likely that similar products will be manufactured in the future in North America or Asian countries. This could possibly shorten the products life cycle. Market Challenger Strategies In this case, it can be said that in order for Rayovac to compete well in the North American market, they must use a market challenger strategy. In the case of Rayovac, they have been able to use the guerrilla tactic, in terms of providing cheaper prices and quality products. Since, the North American market has price-conscious clients, Rayovac as the challenger, offer a low price for their batteries and rechargeable battery products than what the Rayovac competitors (Duracell, Energizer and other industry in North America). Although this guerrilla tactic is regarded as more harassing than other strategies, Rayovac will be assured that they would have small increments of share in the market or they can force their competitor to spend additional cost for promotional activities. Defensive Strategies To be able to compete well in the North American market, the Rayovac Corp has been able to use defensive strategies like counter offensive. In terms of counter offensive, they used their core competencies to position the rechargeable battery products in North America and in line with their counter offensive strategy; the company has been able to use strategic marketing approach to outgrow their rival companies and to gain competitive advantage.

Marketing Mix Products The main products of the Rayovac Corp. which will be available for the target market both for households and commercial used will be the rechargeable batteries. The product will be different in other competition in a way that the company will maximize quality but minimize the cost to be affordable for all types of consumers. Through the use of demographics and psychographics, all needs and demands of target market will be known by the company in order to provide the customers in the utmost time. Due to the existing relationships between manufacturers and retailers best channels and retailers for the brand needs to be finalised. Niche Strategy: At the moment most rechargeable batteries are sold through niche retailers. The positives of this are that it would allow Rayovac to charge a higher price, and obtain a margin of around 60% of retail price. Also there would be less variable costs like advertising and promotion. This would be due to the fact that niche-market shops employ knowledgeable staff who will help the consumer, and this will help promote the product when you compare it with the sales staff of the mass-merchandiser. However the downside is that niche retailers represent a much smaller portion of sales, and also distribution would be lower, and therefore lower possible sales volume. Also, it is unlikely that the mass-merchandisers will ignore this technology if it becomes popular, so would Rayovac be as well off to get in there first? It is certain that Rayovac will not make enough profit to cover costs unless they charge a higher than average market price. Therefore a niche strategy is not effective for them, and they would be better off to not pursue the idea at all then to use a niche strategy. Volume Strategy: Rather the outcomes of Rayovac Corporations decision to take a volume approach to selling its rechargeable batteries in Canada would be more profitable. The rechargeable battery is a product that Bob Falconi feels could be very successful if it was marketed effectively. It could be also used as a competitive advantage to gain an increased presence in shops and increase brand awareness, rather than competing directly with the existing manufacturers of ordinary alkaline, un-rechargeable batteries. As of 2005, the rechargeable segment of Canadas battery market is 10% of total sales, which in total is worth $300 million. But Falconi believes that given the success of rechargeable batteries in Europe (as a result of their

concerns for the environment and cost), they could be successful in Canada also. Although the advertising expense would be 10% of the estimated contribution as against 7% for Niche strategy, Volume strategy would still serve better fruits down the line. While competitors also offered rechargeable batteries, they were backed by very little advertising or didnt provide the consumer with many options in terms of size. Consumers are beginning to realize the benefits associated with recharging batteries, as one-use batteries are becoming more expensive, consumers are demanding greater performance, and growing environmental concerns. Rechargeable batteries perform very well in high-drain devices, they last 3 times longer, are non-toxic and help to save consumers money in the longrun. It is also likely that technology would improve to develop this technology even further. Given all the benefits associated with rechargeable batteries, it would seem logical to take a volume approach to production. In 2005, the Canadian rechargeable battery market is worth $40 million, however it is expected to be worth $100 million by 2010, which is a huge amount of growth in a relatively short period of time, Rayovac have an opportunity to capitalize on this growth by increasing their presence in the market. Using their volume strategy, Rayovac could obtain 45% of this market. In terms of distribution, Rayovac would need to ensure that their products were available in the mass-merchandisers and traditional grocery stores, as this is where 57% of the market buys their batteries. Rayovac could position themselves as leaders in technology of the industry given that they would be one of the first major players in that industry, and could bring their prices closer in line to Duracell and Energizer if they were to compete with them. Price In terms of pricing, the company must be able to use an effective pricing strategy to ensure that they will meet the demands of their consumers of having a cheaper and affordable rechargeable battery products. Because of the strategic pricing of the product the consumer might be able to decide in availing the product rather than buying other products. The company is also suggested to use perceived-value pricing as their pricing strategy to ensure that the cost of the product will meet the demands of the target market.

Promotion/Communication In order for the company to promote their rechargeable batteries in North America, the most successful advertising will be banner ads, and TV ads with information regarding the performance of their rechargeable batteries. In the given case, the strategy of the company in launching and promoting the products might be able to attract the attention of the consumer like their strategy in buying it with a lower price than other competitors. Communication activities will also be done by the company so as to market its Rechargeable batteries effectively. Distribution Rechargeable batteries of Rayovac will be distributed through retail and wholesale stores and supermarkets where customers (household and commercial) can easily avail these products. Market Segmentation As mentioned above, the rechargeable batteries of the Rayovac target both the commercial and household markets in North America. Plan the Implementation, Activities and Programmes Offerings The company can use new marketing strategy to offer their products in the market. The rechargeable batteries are considered as a new technology or new products in the market and only few believe in this product. In this regard, Rayovac should be able to use effective marketing strategy to offer and provide their products in the market. People The company should be able to recruit efficient human resources through their new leader Bob Falconi. With these effective human resources, the company must implement new marketing strategy to meet the objectives and goals of Rayovac. Systems In terms of systems, the company must determine which marketing and management systems should be implemented. For Rayovac, the company should use a diversification strategy and information technology to ensure that all their operations will run smoothly and effectively. The company may also use focus strategy. Focus strategy is aimed at a segment of the market from a product rather than at the whole market or many markets. The successful way using focus strategy is to tailor a broad of product development strengths to a relatively narrow market segment that they know very well.

Conclusion All in all, it can be said that in order for Rayovac to conquer the North American market, they must be able to consider a new marketing and management strategy to ensure competitive position and long-term sustainable advantage in the market. In addition, it can also be concluded that Rayovac Corp is in need of a strategic market entry plan to ensure success in North American market.