High Grill Marks - Coleman, gas grill launch and marketing strategy - Brief Article - Statistical Data Included

Brandweek, May 21, 2001 by Michael Applebaum

When Coleman introduced its first gas grill two years ago, the launch marked the beginning of a major push out of the woods at the 100-year-old camping gear company Marketers had been seeking hunting ground beyond Coleman's lineup of rugged lanterns and tents, and found it in the $4 billion backyard products industry. A restructuring of its outdoor recreation group paved the way for the 2001 launch of Coleman BackHome, a line of outdoor lights, fireplaces, heaters, patio furniture and accessories.

To many, the home was a logical place to extend the brand." It was an obvious choice for us: consumers already thought there were Coleman products for the backyard," said svp-product marketing Dan Glidden.

"We've been looking to update the Coleman brand and make it more relevant to people's day-to-day lives," said Danene Jaffe, senior dir-new product development at parent Sunbeam.

For Sunbeam, the strategy spelled a more urgent need to get out of the woods. In February the Boca Raton, Fla.-based household appliance company, whose brands include Oster blenders and Mr. Coffee, filed for bankruptcy protection to cover its $1.7 billion debt. Much of that red ink had come from acquisitions including the Wichita, Kan.-based Coleman, which it purchased in March 1998 for $160 million. Now, Sunbeam is planning to sell off its own outdoor cooking unit, and is projecting a 1.8% net sales drop in 2002. At the same time, it is forecasting a 8.2% net sales increase in 2003 based on new revenue streams from initiatives like Coleman BackHome.

In August 2000, Sunbeam merged its outdoor cooking group with Coleman's outdoor recreation unit, while the latter maintained its operating base in the Midwest. At the time, Sunbeam CEO Jerry Levin described the move as a way to combine the Coleman name, which has tremendous consumer awareness in the category with our outdoor cooking business' expertise in grill manufacturing and distribution."

It was also a way to revive the company's lessthan-smoking grill business under the Coleman badge. "We needed to stop the share decline in our outdoor grill business and Sunbeam was not getting us over the hump," said vp-marketing Dan Murphy "Sunbeam has strong recognition at the $99-299 price point, but the growth we were looking for was in the $300-600 range."

Achieving that growth hinged on consumers' willingness to trade up in the overall $1.3 billion grill market. Marketers saw an opportunity to carve out a niche in the middle, positioning Coleman above the crowded field of low-end gas grills and below Weber's high-priced cooking models.

"Gas grills are a mature and highly competitive market, but there are not a lot of well-respected brand names out there," offered Glidden. "Consumers expect high quality and are willing to pay for it."

Coleman tapped Boston-based consultancy Design Continuum to formulate the grill's design and market positioning. Focus group research confirmed perceptions that the Coleman brand name evoked attributes such as "durable," "reliable" and "time-honored" attributes that lead designer Mark Bates wanted to incorporate along with Coleman's signature hunter green in a modern design.

"We're calling it contemporary country," said Bates. "We looked back through Coleman's product catalogs of 40-50 years and considered which design elements to keep from the stoves, lanterns, coolers and flashlights. We broke each of these down by color, materials and finish. It was a demanding project: We weren't just coming up with a new [grill] hood; we had to provide platform solutions."

Three positionings led to the 2000,3000 and 4000 product series. The higher-order grills boast more heating capacity and a larger cooking surface, though all have core features such as electronic ignition and side burners. According to Murphy the biggest differentiator is the grills' ability to evenly distribute heat, a key selling point played up in print ads themed, "Inspired by Nature,"

"No one has completely even heat distribution, but we've developed a more consistent cooling surface to significantly minimize hot and cold spots," Murphy said.

The grills were introduced at the Chicago Hardware Show in August '99, and distributed via home centers and mass retailers, including Wal-Mart, early in 2000. A modest print campaign via FCB Worldwide, Detroit, backed the launch with ads timed to the key spring barbecuing season. (Recently Coleman BackHome extended the effort to TV.) In a tie-in with Nascar executed by sports promo agency GMR, Charlotte, N.C., Coleman camped out at rallies with products signage and an inflatable balloon in the shape of a grill. Among the highlights: a grill-assembly obstacle course and product demonstrations by PBS grill chef George Hirsch.

This year, Coleman is expanding its cross-promotional activity to include outdoor concerts and a tie-in with Operation Bass' FLW fishing tours.

The launch was not all smooth sailing, however. Last summer, Coleman initiated a recall of some 86,000 grills due to a potentially dangerous metal edge on the heat shield above the propane burner. Murphy said that complaints came mainly from in-store assemblers, prompting the company to dispatch repair kits to retailers with a protective rubber strip. Later grills were tweaked at the manufacturer to include a bended edge that was no longer exposed.