Brand extension

DieHard is looking to enter the non-automotive battery market. Specifically alkaline batteries. They launched an ad campaign on April 1, which was not a joke, to try to move more aggressively into alkaline batteries with a specific goal to overtake Rayovac in the #3 position. Their initial thrust acknowledges and builds on their heritage, even using an old advertising theme.

The alkaline battery market is very large, likely over $2B in revenue. Can DieHard gain a profitable branded position in this category? And can they then leverage the brand further into other batteries? They claim they can offer retailers the same margin the retailer now gets with a private brand, but with the added benefit of the DieHard name. Maybe, but will the DieHard name “extend” and even if it does, will DieHard be able to continue to offer those margins while promoting the brand for the retailer?

Not clear to me, but given the dismal execution of the Sears “network” over the last decade, I don’t see it working out for them, assuming the business model even makes sense.

Mitch

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