Lessons: Pay Attention to the Consumer and Think Outside the Box

One of the lessons to be learned from the success of EZ Change is to listen to your consumers and carefully observe their actions. Look for negatives that they may be experiencing in your category, as these might be the keys to identifying an innovation that could substantially improve your position in the market. As the EZ Change research showed, consumer needs and wants are not always obvious from simply asking questions. Hearing aid users typically said that they did not have a problem changing their batteries. Observing their behavior, however, showed otherwise . The identification of this unarticulated need resulted in a major marketing success.

Another important lesson from EZ Change is that you should allow yourself to think outside the box. A year before the launch of EZ Change, many industry experts would have argued that Energizer would fail if it were to try to introduce a hearing aid battery on a large card that would take up much more space than traditional cards in the crowded battery section. Energizer would also have been criticized for attempting to advertise a small specialty category like hearing aid batteries on television. The company s success shows that these critics would have been wrong. Good consumer communication proved to be one of the reasons for the success of EZ Change. ^[2]

Summary Marketing Plan for: Energizer EZ Change Hearing Aid Batteries Eveready Battery Company, Inc. ^{[3 ]} 2000

MARKETING PLAN SUMMARY

1. BACKGROUND. In March 1999, Energizer was in last place in the hearing aid battery market and was going nowhere. Through some clever research, the company discovered a significant negative that users of hearing aid batteries were unaware of, but that was present every time they changed their hearing aid batteries. This observation resulted in the development of EZ Change, a new product that virtually eliminated this negative. This new product, coupled with a brilliant marketing plan, resulted in an explosion of sales that is rapidly moving Energizer to the number one position in the hearing aid battery category. Sales of Energizer s hearing aid batteries have increased 89 percent since the launch of EZ Change.

2. MARKET REVIEW. Hearing aid batteries are sold to consumers through three different types of retail distribution channels. One is the professional channel, where consumers buy their hearing aid batteries through audiologists. The second is through major retail stores, where sales are measured by A. C. Nielsen & Co. with scan data. These include most supermarkets, drugstores, and mass merchants . The third is through direct mail or through retailers that don t report their sales to Nielsen, such as warehouse clubs. There are approximately 12,500 audiologists in the United States. The 70,000 retail stores measured by Nielsen make up the largest segment of the total hearing aid battery category. A small but significant segment of the market is the direct mail and Internet business.

3. CONSUMER USAGE AND ATTITUDES. The distribution of hearing aid battery consumers is heavily skewed toward the aging population. Approximately 70 percent of these consumers are seventy-five years of age or older. A key finding from the observational and focus group research was that hearing aid batteries were difficult for the user to change, although this was an unarticulated problem. Users of hearing aids dealt with this problem all the time, so when they were asked if they had a problem changing their hearing aid batteries, they typically said no. It was a different story, however, when they were asked to describe or demonstrate the process.

4. PLANNING ASSUMPTIONS. Energizer management assumed that the introduction of EZ Change would result in a significant increase in the company s sales of hearing aid batteries. The results of the BASES model indicated that, with the advertising planned for the product, EZ Change would double Energizer s sales of hearing aid batteries. Management also assumed that customers would like this solution because they had clearly said so in the consumer research. When EZ Change was showed to consumers, most of them loved the product. Management further believed that retailers would take on this new hearing aid battery. This was based on a belief that retailers generally wanted to be part of innovative new solutions to consumer problems. Management also felt that retailers would be interested because of the heavy television advertising planned for EZ Change. A final major assumption was that the hearing aid battery category would not change during the initial period following the launch of EZ Change.

5. KEY STRATEGIC MARKETING OBJECTIVES. Energizer had three primary objectives in launching EZ Change. First, it wanted to become the number one brand of hearing aid batteries. Prior to EZ Change, Energizer was number three in a three-way race, and it wanted to completely change that positioning. Second, it wanted to separate itself from the competition by providing a solution that would give the company a leadership place in the hearing aid battery category. Third, it wanted to strengthen the overall franchise of the entire Energizer brand. The hundred-year-old company had developed the first flashlight battery and had introduced numerous innovations in portable power. A major driver was to continue this tradition.

6. MARKETING PLAN ELEMENTS

   1. Brand name . The brand name selected for the new hearing aid batteries was EZ Change. During one of the focus groups, a respondent determined that the magnet on the dispenser could help the user remove the existing battery as well as load the new battery. The respondent then made the comment that this new dispenser does more than just make it easy to load the new battery. It makes it easy to load and unload the battery, or to change the battery. This made it obvious to the venture team that it was really making it easy for the user to do the entire changeover, so the team settled on the name EZ Change.

   2. Product line. The product itself was based on a revolutionary new dispenser that would help the user achieve precise placement of the battery every time without even touching the battery. A total of only four products were included in the EZ Change product line. In the hearing aid battery market, there are four battery sizes that account for 100 percent of the sales. EZ Change provided one product, or stock-keeping unit (SKU), for each of these sizes. For each of the three smaller hearing aid batteries, Energizer provided an eight-pack, and then it provided a six-pack for the largest size .

   3. Packaging. The EZ Change packaging used a much larger card, two and a half times the size of traditional packaging. This larger card size enabled the designers to use larger fonts to communicate with the elderly market, and it enabled them to use a lot of pictures. The pictures were very effective in explaining how the device works. The card included a picture of the device that was about to be inserted into the hearing aid. To enable even more communication, the new package opened up to provide room for printing on four different surfaces.

   4. Pricing strategy. Because of its unique advantages and higher cost to produce, it was decided to sell EZ Change at a retail price that represented a premium to other brands. At the time of this writing, the consumer was paying about $7.99 for a traditional spin pack of eight units. The initial price structure resulted in a retail price of approximately $8.99 for an eight-pack of EZ Change. In the focus groups, many respondents said that they would pay an extra dollar for a product with all of the advantages of EZ Change.

   5. Sales and distribution methods . EZ Change was to be sold through the regular Energizer retail distribution system. The new product would be introduced to the larger retailers by the Energizer sales force, and in some cases could receive attention at retail by the Energizer in-store detailing force. Specialty distributors would be used to sell the product to audiologists. EZ Change representatives would also attend trade shows aimed at audiologists in order to communicate directly with them about the benefits of EZ Change.

   6. Advertising copy strategy. ˜ ˜Precise placement every time tested out to be the best message for clear communication. This statement clearly tells the consumer about the benefits of the new product without getting into any sensitive areas. This slogan was to be used in all advertisements and on the packaging. A secondary point to be made in the advertising was that EZ Change batteries work in all styles of hearing aids.

   7. Advertising media strategy. A key objective of the media plan was to visually show the product and give the hearing aid user the motivation to buy this new solution. Television was selected as the primary advertising medium for EZ Change. The goal was to reach 90 percent of all hearing aid users with the TV advertising once, and to reach 65 percent of the target audience three times. Television would be supplemented with print media. The print media would include magazines such as Reader s Digest and the AARP s Modern Maturity . Parade and Sunday supplements would also be used. Newspaper advertisements would be included through retailer promotions.

   8. Customer support. The EZ Change marketing plan provided a clear link from the manufacturer to the consumer to ensure complete customer satisfaction. There was to be an 800 number on the package that would link to a customer hot line where EZ Change representatives would help customers with any problems that they might be having with the product. There would also be a web address printed on the package along with the statement, ˜ ˜To learn more about the dispenser and to see it in action, visit our web site at www.energizer-ezchange.com. The web site would include a video on how EZ Change works. EZ Change would also guarantee complete satisfaction to the consumer.

   9. In-store merchandising . It was decided that corrugated off-shelf displays would be used to facilitate rapid distribution of EZ Change during the initial launch of the product. There would be several versions of these displays, including a counter display and a wing rack. These displays would also help the company communicate with consumers by highlighting the new hearing aid battery solution at the point of purchase. Each preloaded display would provide brochures to help educate the consumer on how this innovative new product works. In many cases a one-dollar in-store coupon would be included during the initial product launch

   10. Test marketing. The final test before the launch of EZ Change was a quantitative test through BASES. This is a procedure in which the complete marketing plan is subjected to a process that is designed to determine the success of the new product. The input for this model includes a number of factors, such as consumers intent to purchase based on market research, pricing of the new and existing products, distribution estimates, and each element of the marketing plan, including the amount of advertising planned. It also includes detailed information on the market. Based on all of this input, the BASES model predicts the impact that the new product will have on the category.

   11. Timetable. The development of EZ Change began in March 2000. After completing the consumer research, developing the product, completing the marketing plan, and testing the overall venture, the company launched the product in September 2001.

7. FINANCIAL RESULTS. As predicted by BASES, Energizer has almost doubled its sales of hearing aid batteries in the Nielsen-measured marketplace since the launch of EZ Change. Energizer s sales of hearing aid batteries have increased 89 percent since the launch of EZ Change, and the trend is still positive. Energizer s market share has also increased substantially, and the shares of both of Energizer s main competitors have declined.

 

^[2] Energizer and EZ Change are trademarks of Eveready Battery Company, Inc., and are used with permission.

^{[3 ]} Energizer and EZ Change are registered trademarks of Eveready Battery Company, Inc and are used with permission.