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Zippo’s burning ambition lies in retail expansion

Monday, March 21, 2011

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Photo by: Keith Srakocic

ASSOCIATED PRESS

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In this photo made on Thursday, March 10, 2011, David Warfel, the director for global marketing for the Zippo Manufacturing Co., stands in front of a display for Zippo clothing in their model storefront at the company headquarters in Bradford, Pa. With pressure increasing on folks not to smoke, Zippo Manufacturing Co. is hoping to capitalize on its brand by offering a wider variety of products _ from watches to leisure clothing to cologne _ through kiosks and Zippo-brand specialty stores designed to showcase the durable image reinforced by each distinctive lid "click" of its brass-encased, lifetime-guaranteed lighters.

Associated Press

BRADFORD, Pa.

Zippo lighters have retained their retro cool even as the tiny northwestern Pennsylvania company that makes them gets ready to celebrate its 80th anniversary and 500 millionth lighter next year.

But with pressure increasing on folks not to smoke, Zippo Manufacturing Co. is hoping to capitalize on its brand by offering a wider variety of products — from watches to leisure clothing to cologne — through kiosks and Zippo-brand specialty stores designed to showcase the durable image reinforced by each distinctive lid “click” of its brass-encased, lifetime-guaranteed lighters.

Realizing that producing 18 million lighters a year in the mid-1990s was probably the company’s high-water mark — Zippo’s 550 employees will produce about 12 million lighters this year — the company started marketing research before president and chief executive officer Gregory Booth was hired 10 years ago.

The surveys asked consumers the question Booth must answer today: “What kind of products could we sell other than cigarette lighters that people would accept as Zippo products?”

The research shows the company — tucked into a valley above the Allegheny National Forest, some 130 miles northeast of Pittsburgh — could sell other products — if they fit Zippo’s image, which Booth describes as “rugged, durable, made in America, iconic.”

“It has to be something that feels like Zippo,” Booth said of the travel bags, backpacks, watches, sunglasses, jeans and leisure shirts, wallets, pens, liquor flasks, outdoor hand warmers, playing cards and even a fragrance. Manufactured by Italian perfumer Mavive, it comes in a lighter-shaped canister (and, yes, a lid that clicks).

Marketing experts said all that makes sense provided that Zippo’s new products stay true to the brand — and that the company learns quickly that selling jeans, or any other product, comes with a whole menu of unique business complexities.

Booth insists Zippo’s plans are built on solid market research and, perhaps as important, fueled by necessity.

“We recognize there’s a lot of pressure on smoking and it’s only gotten worse in the last 10 years,” Booth said, even though Zippo aggressively markets its lighters to collectors, aficionados and even nonsmokers, with more than a dozen models in hundreds of colors and unique designs. Although the lighters generally are plated with nickel chrome, some lighters are even covered with gold or platinum.

But Booth believes those varieties can take the company only so far.

Zippo hired David Warfel as its director of global marketing three years ago, to capitalize on his branding experience with Xerox, Kodak and Ray-Ban.

Zippo already sells its lighters in more than 160 countries — but it does so through wholesalers and other distributors. Warfel was hired to take control of the Zippo “brand” and expand it, at first overseas and then gradually in the United States.

The newest wing of the company’s headquarters is a showcase for Zippo’s plans. It features a Zippo kiosk and what’s known as a “shop-in-shop” — a tiny Zippo store meant to take up residence inside a larger department store — and a prototype Zippo specialty store, which the company plans to put in overseas shopping districts.

Zippo will push its expanded product line overseas, at first. Although there are plans for a Zippo kiosk at Kennedy International Airport in New York City by the end of April, most Zippo outlets will arrive first in China, other parts of Asia, or western Europe. It doesn’t hurt that Asia remains a key smoking market, with China consuming one-third of the world’s smoking tobacco, something Booth calls a “monstrous opportunity” to grow Zippo.