Rayovac 2004 Annual Report Download - page 33

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The consumer battery industry has two major segments: general and specialty. General batteries consist of
non-rechargeable alkaline or zinc carbon batteries in cell sizes of AA, AAA, C, D and 9-volt. Specialty batteries
include rechargeable batteries, hearing aid batteries, photo batteries and watch/calculator batteries. Most
consumer batteries are marketed under one of the following brands: Rayovac/VARTA, Duracell, Energizer or
Panasonic. In addition, batteries are marketed under retailers’ private label brands, particularly in Europe.
In North America and Europe, the majority of consumers purchase alkaline batteries. The Latin America
market consists primarily of zinc carbon batteries, but is slowly converting to higher-priced alkaline batteries as
personal income grows.
Within North America and Europe, the rechargeable battery business has experienced dramatic changes
over the past three years. Our development of a one-hour charger and an innovative 15-minute rechargeable
battery technology help us maintain a leading market position within the rechargeable category in the United
States, as estimated by management. Ongoing industry innovation in battery design and performance technology
is also expected to help expand the size of the market.
Within the hearing aid battery category, we continue to maintain a leading global market position according
to management estimates. We believe that our close relationship with hearing aid manufacturers and other
customers, as well as our product performance improvements and packaging innovations, position us for
continued success in this category.
We also operate in the electric personal care industry, which consists of electric shavers and accessories,
electric grooming products and hair care appliances. Electric shavers include men’s and women’s shavers (both
rotary and foil design) and electric shaver accessories consisting of shaver replacement parts (primarily foils and
cutters), preshave products and cleaning agents. Electric grooming products include beard and mustache
trimmers, nose and ear trimmers and haircut kits and related accessories. Hair care appliances include hair dryers,
hairsetters, curling irons, hair crimpers and straighteners and hot air brushes. Electric shavers are marketed
primarily under one of the following brands: Remington, Braun and Philips/Norelco. Europe and North America
account for the majority of the worldwide industry sales, with other major markets including Japan and Asia/
Pacific.
Our ability to succeed in these highly competitive product categories is influenced by the following factors:
•Strong Diversified Global Brand Portfolio. We have a global portfolio of well-recognized consumer
product brands. Our Rayovac and VARTA brand names have been used to market batteries for over 80
years. We use the Rayovac brand name primarily in North America, Latin America and the United
Kingdom and the VARTA brand name primarily in Europe and selected countries in Latin America. Our
Remington brand name dates back to 1816, making it one of the oldest consumer brands, and is
primarily used in North America, the United Kingdom, Australia and select European countries for our
electric personal care products.
•Market Leading Positions. We are the third largest global consumer battery manufacturer and marketer
and a leading designer and marketer of electric personal care products. We believe that our leading
market positions enable us to obtain favorable shelf space and additional product listings with major
retailers, as well as maintain strong brand awareness and image among consumers. In addition, we
believe our market positions facilitate acceptance of our new product introductions by both retailers and
consumers.
•Expansive Distribution Network. We distribute our products in over 120 countries globally through a
variety of retailers, wholesalers and distributors, including hearing aid professionals, industrial
distributors and OEMs.
•Strong Global Retail Relationships. We have well-established business relationships with many of the
top global retailers, distributors and wholesalers in the countries in which our products are sold. These
relationships have enabled us to expand our overall market penetration and promote sales.
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