History
Zippo (www.zippo.com) was founded in Bradford, Pennsylvania, in 1932 when George G. Blaisdell decided to create a lighter that would look good and be easy to use. Blaisdell obtained the rights for an Austrian windproof lighter with a removable top, and redesigned it to his own requirements. He made the case rectangular, attached the lid to the bottom with a welded hinge and surrounded the wick with a windhood. Fascinated by the sound of the name of another recent invention, the zipper, Blaisdell called his new lighter ‘Zippo’, and backed it with a lifetime guarantee. The 80-year-old brand’s fame took off during World War II, when Zippo’s entire production was distributed through commercial outlets run by the US military.

Zippo’s current business model By June 2012, Zippo had produced over 500 million windproof lighters since its founding in 1932. Except for improvements in the flint wheel and modifications in case finishes, Blaisdell’s original design remains virtually unchanged.

Although the windproof lighter is the most popular Zippo product, Zippo has been hurt by anti-smoking campaigns. Its business is fundamentally tied to smokers and it has suffered from US tobacco regulations. Cigarette makers order thousands of Zippos to promote their brands, distributing them to smokers in exchange for coupons.

Due to significant decrease in sales from 18 million lighters a year in the mid-1990s to about 12 million lighters in 2011, combined with increasing pressure on people not to smoke, Zippo decided to try offering a wider variety of products using Zippo brands, such as watches, leisure clothing and eau de cologne.

At the same time, Zippo has expanded its sales operations nationally and internationally through a wide network of sales representatives. In more than 120 countries throughout the world, Zippo is synonymous with US-made quality and craftsmanship. Zippo windproof lighters enjoy a widespread and enviable reputation as valuable collectibles.
The company produces the Zippo Lighter Collectors’ Guide, containing illustrations of the lighters and descriptions of the series, as well as an explanation of the date code found on the bottom of every Zippo

lighter. Clubs for lighter collectors have been organized in the UK, Italy, Switzerland, Germany, Japan and the US. Zippo also sponsors it own collectors’
club, Zippo Click.
Questions
1. What are the pros and cons of the product diversification strategy that Zippo has been following recently?

2. In a US marketing campaign in the late 1990s, Zippo was repositioned as an essential tool for avid outdoorsmen. Individual tin and sleeve packaging was developed that reflected the ‘tool’ position of the lighter. For continuity, similar packaging and graphics were developed for the cans of Zippo lighter fluid, and the lighters and fluid were delivered to retailers in handy self-shipping counter-top displays. To support the national rollout, the advertising company (Swanson Russell) developed a communications programme that included direct mail to major outdoor product distributors, as well as advertising at both the trade and consumer levels (pictured above). However, the outdoor market was entirely new to the Zippo sales force, who were accustomed to calling on tobacconists and convenience stores. How would you use the product life cycle (PLC) concept for this case study?

3. What obstacles would Zippo Manufacturing Company face if it repeated the outdoor campaign in other countries?

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20421 PACIFIC OCEAN Zippo