Energizer Holdings : advertising & marketing profile

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Diversified group Energizer Holdings split into two separate companies in 2015, with the spin-off to shareholders of its power business. The new Energizer Holdings business is now focused exclusively on batteries and lighting products. Its predecessor company was the first to commercialise dry cell batteries at the end of the 19th century and it now claims to be the overall global leader by share in portable power with the Energizer and Eveready brands. In the more valuable segment of alkaline batteries it ranks #2 behind arch-rival Duracell, but will narrow that gap in 2018 with the purchase of rival brands Varta and Rayovac. However the old Energizer company had also extended its range with a series of acquisitions in other sectors. In 2003, it became the global #2 in blades and razors following the purchase of the Schick and Wilkinson Sword brands, and further strengthened its position in 2010 with the acquisition of #3 player American Safety Razor. The group entered the general personal care sector in 2007 with the acquisition of Playtex Products, whose brands include Playtex tampons and rubber gloves as well as Banana Boat and Hawaiian Tropic sunscreens. Following the spin-off of the battery business, the personal care company adopted the new name Edgewell Personal Care.

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Adbrands Weekly Update 18th Jan 2018: Energizer is doubling down on the battery business with a deal to acquire the competing units of rival Spectrum Brands for $2bn. The latter owns Varta and Rayovac batteries, which have a significant following in Europe and Latin America. Combined sales are around $870m, a little over half the sum generated by Energizer's existing battery business. In the US, the addition of Rayovac will lift Energizer's market share to around 40% (compared to 46% for Duracell). Spectrum is still seeking a buyer for its collection of home appliance brands, including Remington, George Foreman and Russell Hobbs.


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History of Energizer

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The first "dry-cell" batteries were invented in the late 1880s by a German scientist, Carl Gassner, who found a way of converting the conductive liquids used in wet cell batteries developed earlier in the century into a paste, and then sealed the surrounding container to make it safer and more portable. The technology, however, was more or less the same, whereby the chemical reaction created by the transfer of electrons between negative and positive metals was harnessed to provide an immediate source of electricity. In 1896, The National Carbon Company, later Union Carbide, began to market these dry cells commercially for the first time in the US under the Columbia brandname. Two years later, Conrad Hubert used such a cell to power the first "electric hand torch", and he set up the American Ever Ready Company to market his invention. He took on Union Carbide as his partner in 1906, before selling up altogether in 1913. After that point, Union Carbide adopted the simplified brandname Eveready for all its batteries.

Union Carbide was involved in the development of various different forms of battery power over the following decades, mainly for industrial use. During the 1950s, however, advances in the creation of miniaturised transistors led to a huge boom in demand for household batteries to power new portable radios and other battery-operated toys and gadgets. Eveready introduced the first rectangular 9 volt batteries, designed primarily for transistor radios, as well as the first miniature batteries for consumer hearing aids and watches. In 1959, a researcher at Eveready also developed a much longer lasting battery by increasing the alkaline level of the conductive material. This reduced the speed at which it used up its electrical charge, but also made it more expensive to produce and could not be protected by patent. As a result Eveready was slow to market this technology, favouring instead its more old-fashioned carbon zinc batteries.

This error of judgment created a singular opportunity for competitor PR Mallory & Company, which at the time specialised mainly in industrial battery production. It launched its own consumer-oriented alkaline battery brand in 1964 under the name Duracell. This proved very popular with consumers because of its longer life, but the high costs of production created significant financial problems for Mallory. Despite the erosion in sales of the Eveready brand, Union Carbide waited for another 16 years before finally introducing its own alkaline battery, which launched in 1980 under the new brandname Energizer. Supported by advertising which featured Olympic gymnast Mary Lou Retton ("It's super-charged!"), this proved to be a worthy competitor to Duracell, and reclaimed much of the ground Eveready had lost to its competitor by mid-decade.

However, by now Union Carbide was having to contend with serious problems in other parts of its diversified range of businesses. It was involved in numerous chemical engineering endeavours including plastics and pesticides, as well as production of consumer items including Glad plastic bags and STP automobile products. In 1984, a catastrophic industrial disaster at a Union Carbide factory in Bhopal, India, led to the tragic death of 3,800 innocent civilians, leading to a huge lawsuit. Union Carbide's stock plunged, making it a target for hostile takeover. The group sought to defend itself by selling off some of its more lucrative but non-core subsidiaries. The Energizer and Eveready batteries division was sold to Ralston Purina in 1986 for $1.4bn. This was seen as a bizarre diversification for a petfood manufacturer, but the company argued that one consumer product was little different from another, and that the move into batteries was a natural progression towards a broader consumer goods portfolio. However at the same time, the continuing proliferation of battery-powered electronics products had made the retail battery market even more competitive. Over the next three years, Energizer and Eveready's market share began to slip once again.

Finally, almost in desperation, the company agreed to try a more aggressive marketing approach, and it signed off on a new advertising campaign conceived by Californian agency Chiat/Day. The new ads were a direct spoof of an ad already running on behalf of Duracell, which depicted a group of tiny battery-powered toy rabbits playing snare drums. When the others ran out of power, the Duracell rabbit was still working. Chiat/Day's ad looked at first like another Duracell ad, before being interrupted by a much bigger bright pink bunny, wearing sunglasses and banging a giant drum. This bunny outlasted not just the Duracell rabbit but also the surrounding ad. It was immediately followed by a series of fake ads for other unrelated products, which were in turn interrupted by the Energizer bunny, while the voiceover explained that the bunny just "keeps going... and going.. and going". The campaign was a big hit with consumers, so much so that the Energizer Bunny term entered the vernacular as a shorthand description for an unstoppable force. The company also scored a notable success by filing a trademark claim for use of a battery bunny in its advertising in North America, thereby preventing Duracell from responding in kind. The rival instead filed its own trademark application for a battery bunny elsewhere. Those restrictions continue to this day, so that Energizer uses the bunny character in North America while Duracell has it in Europe. Instead, Energizer's most familiar brand mascot in Europe is Mr Energizer, an anthropomorphic battery with muscular arms.

US sales responded favourably to the Energizer Bunny campaigns over the first half of the 1990s, and other battery manufacturers were gradually squeezed aside by the fierce competition between the two leaders. Yet despite spending huge sums on product development and marketing, Energizer was unable to overturn the lead established by Duracell in alkaline batteries. In a typical face-off between the two brands, Energizer introduced testing strips in 1996 on its batteries to allow users to see how much power was left. Within months, virtually the identical system was introduced by Duracell because of a clerical error in the US Patent Office which allowed both inventions to be approved. The frustration had become palpable by 1999. That year, Duracell successfully sued Energizer over a series of increasingly violent ads in which the Energizer bunny torched, crushed and pummelled competitive batteries. By now, Ralston Purina had tired of its portable power subsidiary. Finally, it took the decision to spin off the business as an independent company. The Eveready Battery Company was spun off to shareholders in April 2000 under the new name of Energizer Holdings.

Competition between the two brands became, if anything, even more intense. In what seemed like a rerun of the 1999 court battle, Energizer sued its rival in 2002 over an ad in which a Duracell-powered robotic duck trashed opponents containing "heavy duty" batteries, perceived as a reference to its Eveready brand, which used that descriptor. The following year, responding belatedly to the purchase of Duracell by Gillette in 1996, Energizer bulked up with the purchase of Gillette's principal global competitor in the shaving market, Schick Wilkinson Sword. Four years later, Energizer Holdings opened another front in its long-running rivalry with Duracell and its latest owner Procter & Gamble, by acquiring Playtex Products, whose biggest-selling brand was the main competitor to P&G's Tampax.

In a reversal of that strategy, the portable power and personal care businesses were separated once more in 2015 with the spin-off of Energizer as a separate company, which then adopted the Energizer Holdings name. See full profile for current activities


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