One wish left for John Gray?
Can a guy used to cleaning up in the garage find just as much market share in the kitchen and the bathroom? John Gray will soon find out.
Like the Genie that used to be part of the corporate name until it was changed to Philips Home Products this last spring, John Gray has made every wish come true for his parent firm, North American Philips Corp.
It was John Gray who rescued Genie garage-door openers after their market share plunged to 17% in 1982. Two years later, it was 34%. In mid-1983 he bought Shelton Jet-Vac and turned a 6% market share into 17%.
But now John Gray must successfully introduce a high-priced line of small kitchen appliances and resurrect the once-high-flying Schick electric-shaver line while competing directly against his parent’s Norelco brand. That’s an assignment that might make even the most skilled marketeer shudder, particularly in the men’s electric-shaver market where Norelco’s market share is nearly 50%.
Yet if you see John Gray at the International Housewares Exposition in Chicago this week, don’t expect to see him retreating into Aladdin’s lamp. After three decades of marketing small appliances, the 50-year-old Philips president and CEO doesn’t frighten easily.
Although the moves into electric shavers and kitchen appliances are Philips’ first excursions outside the garage and come during a year in which sales have been flat, Mr. Gray oozes confidence in both the strategy and the specific task at hand. “Garage-door openers have a 30% penetration and are on a shallow curve to 40%,’ he explains. “We’re inclined to grow faster than that. Besides, we need product expansion to provide profitable new growth–without which I don’t think a company can survive.’
Since his arrival just over four years ago, shop vacuums, garage trash compactors, and keyless entry systems have joined the Genie line. And garagedoor openers are now only 70% of sales, down from 95%.
Gesturing at Schick shavers, he speaks disdainfully of the packaging he inherited from his parent firm–which in 1982 bought the brand two years after it had been discontinued. “It’s just awful,’ he says. “We are repackaging and repositioning the product line’ to the high end of the market. The intent: Upgrade the image of the Schick foil shaver by likening it to the wedgeshaped chisel used by the skilled sculptor.
“We can’t sell at the low end and generate the sales dollars we need to advertise on TV,’ he says. (Schick holds less than 10%–maybe as low as 6%–of the 7-million-unit-a-year men’s electric-shaver market.)
With appliances, Mr. Gray aims to build a high-quality, high-feature image. “There is an opportunity for a protected line,’ he says, now that rival Gillette’s Braun Inc. is moving toward the mass market and problems are plaguing Black & Decker in shifting from the GE name.
Look for John Gray to stick to his knitting and find niches as he diversifies.
Shortly after joining Genie in 1982, he squashed a plan to build kitchen trash compactors because the product didn’t meet Genie’s distribution network. But two years later he approved a portable garage compactor. He moved into shop vacuums because hardware stores had no viable product to compete with Sears, Roebuck. And to spur garage-door-opener sales, this fall he unveiled and Genie Genius, a model that offers extra home-security features.