ENERGIZER PUTS AD POWER BEHIND ITS NEW BATTERIES: $15O MIL PUSH ACCOMPANIES MOVE TOWARD LONGER-LASTING PRODUCT LINE

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Energizer Battery Co. is betting that its marketing strategy will keep it going and going in the battle for a bigger piece of the $1.7 billion battery market.

This week, the company launches a $150 million global ad effort backing its advanced-formula alkaline batteries. In advertising, the Energizer bunny gets a pit crew to follow him around, replacing his necessary parts -- sunglasses and the sticks he uses to beat his drum.

Energizer claims the advanced-formula batteries, introduced this year, last 60% longer than ordinary alkaline batteries and as much as twice as long as the alkaline batteries it sold two years ago.

DURACELL STRATEGY

Beyond the ad campaign, Energizer has a markedly different strategy from prime competitor Duracell, which has about 40% of the battery market, as does Energizer.

In its marketing, Duracell has switched to a two-tier pricing structure in the tradition of parent Gillette Co., and has introduced an Ultra line of AA and AAA batteries.

Energizer is switching all its batteries in the five, prime cell groups -- through size D -- to the new formulation. It is sticking to a one-price strategy.

CONSUMERS LIKE SIMPLICITY

If there is a battery war going on, "We're dropping the atomic bomb," said Mark Larsen, category manager-communications for Energizer brand batteries.

He said the company rejected a two-tier price structure because of research it had done showing consumers like simplicity.

"Our research with consumers found out that they didn't want to think too hard," he said.

Some analysts also question Duracell's two-tier approach.

"I think most people buy batteries and put them into a drawer and pick them up without really much attention to what they're putting them into," said William Steele, analyst with Buckingham Research Group.

Mr. Steele added that Gillette's international weakness in the third quarter should have been offset by the launches of both Duracell Ultra and Mach3 shaving products, but wasn't.

That, he said, calls "into question the success of these launches."

Duracell and Energizer's bunny, now in its 10th year from agency TBWA Chiat/Day, Playa del Rey, Calif., won't have the marketing court all to themselves.

Rayovac, which holds an 8% share of market, recently stepped up its marketing with a $30 million campaign utilizing spokesman Michael Jordan (AA, Oct. 5). Y&R Advertising, Chicago, handles.

8% CATEGORY GROWTH

The category is growing about 8% annually, thanks to new demands on batteries from energy-draining high-tech devices such as digital cameras, handheld TVs, camcorders and palmtop computers.

Currently, alkaline AA and AAA batteries used in these devices account for more than 20% of sales; by 2002, demand is expected to increase by an additional 60%, Energizer officials estimate.

Contributing: Jack Neff.

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