Zippo: An iconic product's success story
By emphasizing 'quality, quality, quality' for its product, and taking advantage of clever marketing in movies, the Zippo lighter has had 80 years of businees.
Mon, Jun 25, 2012 at 10:35 AM
On June 5, 2012, Zippo produced its 500 millionth lighter in its Bradford, Pa., factory.
Although Zippo has reached a level of success that most companies can only dream about, that success was far from assured when, in 1932, George Blaisdell opened in the midst of the Great Depression. However, Zippo was able to overcome that challenge and become an iconic American brand by following a simple formula.
"I think that the fact that we make a very high quality product in the United States is very meaningful and it means a lot to our success," said Greg Booth, current president and CEO of Zippo . "The fact that we make a quality product that is efficient and we can service our customers quickly is important. The other thing that in my opinion that is critically important is that we manufacture and market a product that is relevant to our target audience. Marketing is key."
Those marketing efforts have included a mixture of savvy business tactics, licensing and a bit of good fortune along the way. While those licensing deals have grown to include other iconic brands such as Harley Davidson and Playboy, it all started with the company's famous windproof lighter.
"Blaisdell through a chance meeting at a country club saw a lighter that he thought was intriguing and interesting, but he thought he could improve it," Booth said.
Blaisdell did this by adding a hinge to the lighter and re-engineering the traditional lighter so it would work in any condition. Despite the redesign, the company initially struggled as they attempted to grow during the Depression. Blaisdell, however, soon had an opportunity that would change the company's future.
"When World War II came around, Blaisdell made a commitment to sell lighters to the military," Booth said. "That is when the business began to blossom and grow. It got a lift from the GIs in a very challenging environment. Their Zippos were reliable, rugged and durable and soldiers started to talk to their friends about them and look for them once they came home." [13 Iconic Products Still Made in America]
After more than a decade promoting the product, Zippo lighters were becoming a popular item. That popularity continued to grow after the lighters began to be featured in many movies, starting in the 1940s.
"When people ask why it has been in so many movies, I tell them it is something that works on the first take," Booth said. "Whenever a producer or director is looking for a great actor, they want someone who can do it on the first take."
To date, Zippos have been featured in more than 1,500 movies. While movies and the war were both large catalysts to their growth, the company owes its continued success to the fact that the company did not rest on their laurels. Instead, the company has bolstered its bottom line by focusing on selling the American-made product in other countries.
"Our business has grown to the point that we now do business in about 160 countries around the world," Booth said. "They want to buy this iconic brand not only because it is iconic, but because it is fashionable and it resonated with customers."
The appeal of the American-made lighters has grown to the point that sales in the United States and overseas are split nearly evenly. Despite the success of the product in other markets, Zippo has no interest in moving their company and the nearly 800 Zippo employees outside of the United States.
"George Duke, the owner of the company and grandson of the founder, just like his mother, aunt and grandfather has said they are making lighters in Bradford," Booth said. "He has said these Zippo lighters are going to be made here and we are not going to move offshore; they have made a commitment to stay here."
Staying in the United States has not come without challenges for the company that produces 60,000 lighters a day and sells 12 million lighters a year. Notably, Zippo faces competition from cheaper lighters that are produced overseas. Zippo competes with the competition using a simple formula.
"It is quality, quality, quality," Booth said. "People pick up a Zippo and people pick up brand X and you see the difference in quality and consumers are willing to pay more for it because of the brand. I'm sure our cost per unit is more than those in China, but we can charge more because of our quality. It is a combination of efficiency and effectiveness, marketing and a strong brand. Not everyone has all those things, but if you do and you execute correctly, you are going to be successful."
Part of that quality includes the fact that Zippo owners pay nothing for repairs to their lighters. Since 1932 the company has repaired more than 8 million lighters. Even with superior quality, Zippo has still faced other challenges, including pressure from the anti-smoking movement.
"Pressure on tobacco-related products has been challenging," Booth said. "We are obviously tied to the tobacco industry because we sell lighters so we have had to work with that. We can't do anything to change the legislation or pressure, so we just have to continue to market as effectively as we can and go where the opportunities are. The fact that we do business in 160 countries gives us those opportunities."
Taking advantage of those opportunities though would not be possible if not for the company's ability to position themselves in the right position to be able to. That, in the opinion of Booth, is the greatest lesson other businesses can take away from the story of Zippo.
"I think that proactive innovation is what makes a company kick," Booth said. "If you are not innovating and you are simply reacting, you are probably not going to survive. We are constantly looking to innovate."
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