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How Zippo Keeps The Flame Lit


Special Report: ENTERPRISE: Marketing: AMERICAN ICONS

HOW ZIPPO KEEPS THE FLAME LIT

On a cool day last July, Betty Linton stood under a big tent in Bradford, Pa., surrounded by thousands of cigarette lighters. They were piled high on tables: old lighters promoting Heinz and Harley-Davidson and Phillips 66, banged-up lighters that crossed the Channel on D- day, and kitschy ones from the 1970s, decorated with the fat Elvis.

Linton, an auto worker from Milwaukee, is a smoker, but she wouldn't dream of using anything but a match to light up. Like most of the collectors who gathered for a giant Zippo lighter swap meet on the western Pennsylvania grounds of Zippo Manufacturing Co., she has a reverence for lighters that extends far beyond their firepower. "I rarely use a lighter because I don't want to ruin or lose one," she says.

Music to James Baldo's ears. Baldo, the Zippo sales-and-marketing vice-president who put together the swap meet, is counting on collectors such as Linton to keep driving up sales of Zippo lighters even as smokers kick the habit and the government threatens to regulate cigarettes. To mobilize collectors, Baldo, 47, organized National Zippo Day. And from the fervor of the Japanese and Germans, the Texans and Kentuckians under the big tent, you'd think the vendors were selling cut-rate options on Microsoft shares. "I could spend $20,000 here," says Clayton Vecellio, a retired trucker from nearby Lewis Run, Pa. Collectors, predicts a smiling Baldo, "will keep the flame burning."

Baldo, who came to Zippo from bicycle maker Huffy Corp. seven years ago, faced two daunting challenges when he took on his current job at the 64-year-old privately held company in 1990. Zippo had great brand recognition, stemming from its role as standard GI issue during World War II, but the generation that carried Zippo lighters into battle was flickering. Baldo needed to spark interest in younger buyers. That's when he ran up against his second problem: With a vigorous antismoking backlash in full force, having your product identified mainly as a cigarette accessory was not a marketing plus.

FISH BELLIES. Clearly, collectors were the key to growth. After all, smokers might buy only one or two of the lighters--each of which carries a lifetime guarantee. Plenty of 1940s-vintage Zippos still show up for repairs at the Zippo shop, which has fixed lighters retrieved from the bellies of fish and lighters punctured by bullets. Collectors, on the other hand, "buy six and give them away, and entice their friends to become collectors," says Baldo. And as the Zippo pilgrims at Bradford readily attest, collectors just don't stop buying. "I have a couple thousand of them," says Jack Stroble, a retiree from Hilton Head, S.C.

Baldo, a cigar smoker, says he didn't appreciate at first the power of the venerable windproof lighters as collectibles. But when he noticed nonsmokers buying Zippos, he commissioned a study from Pittsburgh's Allegheny Marketing. The stunning results: More than 90% of Americans recognize the Zippo brand, and fully 30% of Zippo's customers are collectors. While a basic brushed-chrome Zippo runs $10.95, collectors will pay much more. Stuart P. Katz, a New Jersey dealer, has a 1932 hinged Zippo with the initials of Zippo founder George Blaisdell that he says is worth $3,000.

Adding to Baldo's marketing prospects, he quickly saw that Zippomania didn't end at American shores. Indeed, Zippos conquered foreign markets from the pockets and knapsacks of American soldiers. Supplying the armed forces during World War II kept Zippo so busy it couldn't keep up with demand at home. And after the war, the lighters, with their distinctive click, became a treasured piece of Americana from Germany to Japan. "It's a mythical American brand, like Harley-Davidsons or Levi's," says Henia Powczer, Zippo's advertising agent in Paris.

ROCK ICON. To exploit the collector market, Baldo helped to organize Zippo collector clubs in Europe and Japan as well as the United States. But the collecting rage seemed to spread even faster than he could supply it. In 1991, Baldo's first full year on the job, Zippo sales doubled, to more than $100 million, with only a 5% price increase. "We didn't see it coming," Baldo says. To keep up with demand, Zippo added $25 million of new manufacturing space to its Bradford factory. Meanwhile, Baldo stoked demand with yearly collectible lighters. Zippo has already sold 600,000 of this year's four rain forest theme lighters. Each carries part of a rain forest scene and can be bought separately or in a set for $129.95. Even disposable-lighter companies, confronting a sluggish market for smokers, are appealing to collectors. BIC Corp. is selling a limited-edition line of psychedelic lighters.

Baldo gets a big boost from Zippo's icon status, which generates the kind of publicity money can't buy. Rolling Stone Keith Richards, who smokes on stage, keeps a Zippo as close as his guitar. Movie heroes from Bruce Willis to Harrison Ford have used Zippos to ignite fuses, burn documents--even to light cigarettes. Overall, sales continue to grow at nearly a 10% yearly clip and will top $150 million this year, says Baldo.

Zippo, founded by an oil engineer who saw a market for a good-looking lighter that would work even in the wind, employs 1,085 in a town of 12,000, making it far and away Bradford's biggest company. Although George Blaisdell died in 1978, there's still a lively family presence. His two daughters own the company, and while they aren't active in management, their children are. The family has also lent its name to a school and two swimming pools. And last year, Zippo opened a lighter museum to keep the company history alive. One display features the Zippo that journalist Ernie Pyle held as he set sail across the Pacific in 1945. When sailors asked him where they were going--a tightly held secret--Pyle scratched one word on his Zippo: Tokyo. Then, he passed it around.

But no matter how rich its history, Zippo can't afford to live only off the past. Its business is fundamentally tied to smokers, and it could suffer from the Clinton Administration's proposed tobacco regulations. Cigarette makers order thousands of Zippos to promote their brands, distributing them to smokers in exchange for coupons. "They're substantial customers," says Zippo CEO Michael A. Schuler. Under the proposed regulations, such promotions would be forbidden.

BRIGHT IDEA. Considering the White House's campaign against teen smoking, Baldo faces a delicate task: selling to the youth market, the 18-to-34-year-olds who have no nostalgia for Zippos. To help get its brand in the hands of younger buyers without provoking the ire of antismoking forces, Zippo has come up with a new version of its product for folks who don't smoke: the ZipLight, which houses a battery-powered flashlight in a traditional lighter casing. Zippo is spending $500,000 to advertise the ZipLight on TV and is testing its first commercials on youth-oriented shows such as Seinfeld, Friends, and Saturday Night Live. Print ads will run in Spin magazine. Zippo is branching out in other ways, too, with Zippo pens, belt buckles, and money clips, all with a lifetime guarantee. Two years ago it bought W.R. Case & Sons Cutlery, a knife maker big in the collectors' market.

Rolf Loeser, Zippo's managing director in Germany, says the company has to soft-pedal its pitch to the young. So instead of mass-media advertising, Loeser has used concert promotions and other events to position Zippo as a hip accessory for the under-30 crowd. The strategy helped him pull off an improbable feat: Last year, Germans bought 50,000 D-day commemorative Zippos. Now that's marketing.

ZIPPO FACTS

FOUNDED: 1932 by George Blaisdell

NAMED FOR: the then-recently invented zipper because Blaisdell liked the name

NOW OWNED BY: Blaisdell's daughters, Sarah Dorn and Harriet Wick

MOST UNUSUAL PROMOTIONAL VEHICLE: The pre-World War II Zippo car

NUMBER OF EMPLOYEES: 1,085

ESTIMATED 1995 SALES: $150 million-plus

BIGGEST RETAILERS: Wal-Mart and Things Remembered (division of Cole National)

NUMBER OF CURRENT LIGHTER MODELS: 550

TOP FOREIGN MARKET: JapanBy Stephen Baker in Bradford, Pa.


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