$9.7B P&G ad spending
TTI Floor Care is the Unilever of the vacuum cleaner industry. Consumers may not be familiar with its corporate brand, but millions of people use its Hoover, Dirt Devil and Oreck products every day.
The company is already the revenue leader in the U.S. floor-care market, with a 32% volume market share of an almost $5 billion industry, according to Euromonitor. To expand that share, the company is putting more of a focus on marketing to communicate to consumers the differences among three products that do essentially the same thing. To that end, the company hired its first CMO in March and this month tapped a new agency in Johannes Leonardo.
The goal is not to build TTI's corporate profile, but rather to boost the individual brands under that umbrella, said Liz Cope, VP-global marketing.
"What's great about these brands is they're all in the same category, but they're really different. They [each] talk to a different consumer," Ms. Cope said. "Our approach to marketing uses the same tools, but the way we talk about what those brands stand for is very different."
In fact, social is expected to play a big role in the company's marketing going forward, based on comments by inaugural CMO Alan Gravely regarding TTI's agency selection. "Johannes Leonardo has extensive expertise with iconic brands and a philosophy that it's consumers, not the media, who control the conversation today," he said. "The idea of the consumer as the medium fits well with our vision for TTI Floor Care as an organization centered around the consumer."
Mr. Gravely joined TTI Floor Care, a subsidiary of $4.3 billion Techtronic Industries, four months ago from Yum Brands, where he oversaw Pizza Hut and KFC's global branding as CMO for Yum Brands International. His new role is key, considering the parent company garners 27% of its global revenue from floor care and appliances. (The remainder comes from its power- tool, equipment and accessory products under the Homelite, Milwaukee, Ryobi and AEG brands.)
"It's really about fundamentally understanding your consumer segmentation and managing each brand to a need state," Mr. Gravely said regarding the challenges of managing a portfolio of products in the same category. "This provides clear differentiation not only among your own portfolio but also the competition and therefore in the mind of the consumer."
TTI distinguishes its brands from each other by price, target audience and marketing position. Dirt Devil is the entry-level lower-priced brand aimed at a young audience with a fun and irreverent voice. Hoover plays in the middle-price range with an older, college-educated and family-minded consumer target. Its message is that it is a classic, trustworthy brand that's both innovative and modern. Oreck is the higher-priced end of its cleaning line, with a more affluent audience, which puts its brand emphasis on durability with a lightweight design.
Even in advance of its agency selection, TTI had begun accelerating marketing. According to Kantar Media, Oreck received $8.2 million in measured media for the first four months of last year compared with $12.5 million in 2014. Dirt Devil's measured-media spending between January and April of this year was $2.4 million, a tad more than the $2.3 million the brand received during all of last year. And Hoover's outlay in the first four months of 2014 was $25.8 million compared with $60 million in all of 2013.
Dirt Devil underwent a global brand refresh this spring. Along with adding new vibrant colors to the iconic red sweepers, simplifying product designs and packaging, the brand's voice was also tweaked via social-media and public-relations efforts. Its Tumblr page and Twitter account were populated with gifs, offbeat humor and pop-culture references such as a "Piper isn't the only one rockin' the orange jumpsuit" gif of a woman in orange vacuuming with her orange Dirt Devil (a nod to "Orange Is the New Black") and "Happy 10th anniversary Napoleon Dynamite. We wish we could trade you a Hand Vac 2.0 for a sweet drawing of a liger."
The Hoover brand, which Ms. Cope defined as a "modernized classic" brand, in May introduced the Air Cordless, a product TTI hopes will redefine the industry. It is Hoover's first full-size cordless vacuum, a direction which TTI believes the entire upright category is moving. The marketing campaign includes a TV spot using an updated aria from "Madame Butterfly," and social media built around the hashtag #RethinkCleaning.
TTI's biggest competitors in the U.S. are Bissell, with a 21% market share. and Electrolux's Eureka with an 11% share, according to Euromonitor. The Dyson brand has a 5.5% market share, good for the No. 6 position in the U.S., reflecting slow but steady growth.
The challenge for the industry as a whole is to increase sales in a category where the products last a long time. "Consumers today are looking for, 'How can I get the best vacuum I can [afford] and that will last?' They don't want to buy a new vacuum every couple of years," Debra Mednick, NPD executive director and home industry analyst said.
That's where TTI's newest brand, Oreck (acquired in a July 2013 U.S. bankruptcy auction for about $17.2 million), may find its fit. The brand used first in hotels has built its reputation on durability and light weight. TTI will launch new Oreck products later this year, Ms. Cope said.