After more than 10 years as president and CEO of Zippo Manufacturing Co., Greg Booth is still amazed by the product’s brand recognition.
In many places, there’s 90 percent brand awareness. When Japanese consumers were asked to name top American brands, their first responses were Coke, McDonald’s, Nike and Zippo.
“Prior to coming to work at Zippo, I worked for two large companies — a $2 billion and a $10 billion corporation — and on a regular and ongoing basis we worked hard to build our brand and increase brand awareness, and so forth,” Booth says. “And we were very successful in the category. But to get to the level of brand awareness that Zippo enjoys, that is Herculean at best.
“In the oil industry, if we had 25, 30, 35 percent brand awareness in a market, we were thrilled, and just wouldn’t think of spending the next umpteen-million to get to a level of 60 or 70 percent.”
Two of Zippo’s biggest challenges, however, stem from its name recognition — maintaining a strong presence in more than 160 countries while trying to diversify into new products.
Here’s how Booth and Zippo’s employees — 610 at Zippo and 300 at W.R. Case and Sons Cutlery Co. — are keeping the 82-year-old company growing today.
Protecting the brand
Hard work, determination and luck brought global success, and now Booth says the company’s No. 1 challenge is maintaining or protecting its brand.
“And I find it unfortunate, quite frankly, that we have to spend the time, the money and the energy we do just to protect something we already own,” Booth says.
“But trademark owners recognize that if you don’t aggressively protect your brand, you always stand a chance of losing it or having it diluted by others using all or a portion of your name.”
Booth, and owner George B. Duke, grandson of Zippo’s founder, fight an ongoing battle to protect Zippo’s name and shape. It’s something that comes across Booth’s desk weekly.
“Counterfeiters and knock-off artists build products that resemble ours and sell them either with our brand name on them, pure counterfeits, or sell them using as much of our trade dress as they possibly can to pass it off as a Zippo lighter,” Booth says.
The company employs people who spend nearly all of their time surfing the Web for trademark infringers. It also spends time lobbying in China and Washington, D.C.
Luckily, the fight has become easier, Booth says. China, now part of the World Trade Organization, is developing its own brands, thus getting a better feel for the plight of trademark owners.
Along with trademark registrations, Zippo has shape registration in about 60 countries. Booth says shape registration is difficult to obtain because other lighter manufacturers block them, saying that they make that shape, too.
“The brand is what’s worth all the money, not the metal we bend and the lighters we make. It’s Zippo — the trademark is worth who knows how much. We say the billion-dollar trademark. But that’s what you have to protect, and protect aggressively — and sometimes your hair gets grayer as a result of those kinds of battles,” he says.
Zippo’s business has grown nearly 60 percent in the past 10 years. More than 90 percent of its business is still lighters and fuel, even though tobacco-related products are declining.
Part of that is because of global sales — nearly 60 percent of Zippo’s sales are offshore. Zippo has only been in China since 1993, but that market is already about 40 percent the size of its U.S. market.
The other factor is becoming more of a lifestyle product.
When creating products in your brand family or category, or even when creating a new brand, Booth says you need to stay relevant with whoever your target audience may be.
When Booth first became CEO, the average age of a lighter buyer was 44 or 45 and rising, giving them an identity problem with younger generations.
“Most brands want to at least influence young people or people early in their lives so they continue to buy the brand later in life,” Booth says.
A 21-year-old who buys a pocket lighter now may purchase a candle lighter at 45.
But if you want to be relevant to a younger target audience, the execution is critical, he says. You want to talk to them how they want to be spoken to, socializing with them where they live, which today is via social media.
“We talk to them all the time,” Booth says. “We tell them what we’re doing, where we’re going, why we’re doing it.
“You want to be in their face electronically. You want to be involved with something that means something to them, something they enjoy.
“So, we’re involved in music — Live Nation for example,” he says. “We’ll sponsor 100 to 150 concerts around the country each year, and we have the Zippo booth and the Zippo people and everybody there, so the fans know who is sponsoring it.”
Another strategy is being conscious of what makes a lighter worth collecting. Several years ago, Zippo went to the Art Institute of Pittsburgh and asked students to create art to put on lighters. It was so successful Zippo now sponsors contests for student artists to create relevant art for products.
All that effort has paid-off. Today, the average age of a lighter buyer is in their mid-30s.
Launching new products
When Booth saw the buying trends in the tobacco category 10 years ago, the company started working on developing new products.
The strength of the brand name, however, has worked against the company. Booth says the more mature the market, the more challenging it is.
“So, in our oldest market, the good ol’ U.S., it’s harder to diversify because when you say to consumers, ‘What would you think about buying a hand warmer from Zippo?’ sometimes the reaction is: ‘You mean the guys that make lighters? Why would I buy a hand warmer from those guys?’
“If we do the same thing in a less mature market like Japan or China, consumers far more easily grasp the concept and accept the new products because they haven’t been tied to Zippo, the cigarette lighter, for 80 years,” Booth says.
It’s also a challenge coming into channels already crowded with competition. Booth says you have to get retailers on board with putting the product on shelf space that already has velocity and profit.
To keep from stretching its brand into something it shouldn’t, Booth says Zippo does a mountain of consumer research.
“Research is a monumental first step. You have to find what your brand will support by way of a product,” he says. “I’m sure there are 20 different things that we could go out and try to do that wouldn’t be very successful. But if we stay in the flame category, and categories or products that are normally lifestyle-related, the research we’ve done tells us we should do reasonably well.”
Stretching the brand led to a misstep a few years ago, when Zippo bought an Italian leather purse company called Zippo — for the trademark.
Zippo, unsuccessfully, tried to run the business for five or six years. There was a lack of good management, and Zippo just didn’t know enough about women’s leather purses. Booth says they ultimately discovered that Zippo purses weren’t fashion at all, but rather purses that women carried to work.
But research is just the first step. It also takes the right sales force, the right channel of distribution, the right public relations and media, and the correct level of dollar support, while not trying to launch too many new products at once.
“You have to be committed, and I think the other thing you have to be — other than well-organized and smart — you have to be incredibly patient,” Booth says.
Even with the challenges, Booth is excited about growing into more of a lifestyle brand, launching products in the outdoor recreational camper and patio categories. Zippo is looking to add grills and stoves to hand warmers, fire starters and lanterns in the coming months.
“We do these new product development sessions and come up with these potential products for market. We have a potential portfolio of products that could take us out five or six years, but you can’t do it all at once,” he says. “So, we do a couple here and a couple there, because it’s a handful getting them launched, and they are pricey when you build them from scratch.
“Yes, there’s lots of excitement and lots of opportunity as we’re going in a lifestyle direction,” Booth says. “But thank heavens Zippo lighters continue to sell in phenomenal volumes.” ●
- Aggressively protect your brand so others don’t dilute it.
- Stay relevant with your target audience by relating to them.
- Research thoroughly before launching new products.
The Booth File:
Name: Greg Booth
Title: President and CEO
Company: Zippo Manufacturing Co.
Born: Bradford, Pa.
Education: Bachelor’s degree in biology and chemistry from the Indiana University of Pennsylvania.
What was your first job and what did you learn from it? I was a paperboy for the Bradford Era, way back when. I was probably 13, 14 or something like that. I had to walk about a mile and a half to pick up the papers and start the route, and the route took another hour or hour and 15 minutes. I did that before I went to school.
You have to get up and go do the paper route no matter how bad you feel, or how good or bad the weather is. You have a responsibility to deliver these papers — I think at the time I had about 110 customers. You just had to get up.
What is the best business advice you ever received? One thing I was either told or learned over the years is that no matter who you work for or around — no matter what you think of the individual — if you listen and pay attention, you’re probably going to learn something from everybody. I remember in one case, I learned what not to do.
If you pay attention and are open-minded, you can learn something every day from your environment or the people you work around.
Do you have a favorite Zippo lighter? It’s a pink lighter that I carry in my pocket all the time. It’s one of our pink powder-coated lighters that has a beautiful picture of my daughter on it, who I tragically lost in a car accident five years ago.
- The original Zippo windproof lighters cost $1.95. A similar lighter today retails for $15 to $16. The design has remained virtually unchanged.
- The Bradford factory produces 50,000 lighters a day.
- In 2012, Zippo produced its 500 millionth lighter.
- The original 1947 Zippo Car, customized for $25,000, traveled to all 48 states in the 1950s. When Zippo looked to restore the car prior to its 50th anniversary, however, it had disappeared without a trace. Despite a PR campaign asking “Have you seen this car?” Zippo had to buy a second Chrysler, customizing it to look exactly like the original.
- During World War II, Zippo dedicated all manufacturing to the U.S. military; this was a significant catalyst to establishing Zippo as an American icon.
- There are approximately 4 million Zippo collectors in the U.S. and 11 collectors clubs worldwide. The highest amount paid for a Zippo lighter was $37,000 for an original 1933 model.
- There are more than 288,000 Zippo-related videos on YouTube, and 600,000 fans on Facebook. More than 22 million people have downloaded the Zippo smartphone app.
- The Zippo lighter has been featured in more than 1,500 movies, stage plays and television shows.