As part of a bid to carve out a market niche for its premium-priced GE Profile refrigerator, Camco has begun testing a boutique-style merchandising concept at two Leon’s Furniture outlets.
The program, which is a first for Camco and Leon’s, involves building a 1,000-square-foot model kitchen in Leon’s outlets in Toronto and nearby Kingston, Ont. to enhance the showroom presentation of the Profile brand.
David Lehmkuhk, Camco’s sales manager on Leon’s, says the boutique concept is intended to establish a distinct brand image for Profile and set it apart from competing refrigerator lines.
Lehmkuhk says Profile retails for $2,999, several hundred dollars more than the average domestic refrigerator, so the company is looking for ways to focus consumer attention on product image and attributes.
Typically, in the appliance sector, marketers focus their efforts on price because their wares are displayed in open showrooms side by side with competing brands.
But Lehmkuhk says a price-focussed marketing strategy would never work for Profile.
‘It’s a high-end product, and to sell it, you have to promote image, not price,’ he says. ‘If you focus on price, you’re dead in the water.’
Lehmkuhk says Camco learned that lesson over the past five years as it tried, but failed, to establish another premium line in Canada – Monogram.
He says Camco’s effort to build a distinct image for Monogram was unsuccessful.
But, he says the final nail in the coffin, which led to the brand being pulled from the Canadian market, was when a number of retailers ‘began running advertising talking about price.’
Under its arrangement with Leon’s, Camco is able to separate Profile from competing brands and put the spotlight on image with an attractive display setting.
Canac Kitchens, a Thornhill, Ont.-based maker of high-end kitchen cabinetry, has teamed up with Camco to build the display kitchens used in the promotion.
Lehmkuhk refuses to reveal sales figures, but, he says the Toronto test, which has been running with no advertising since June, has been a huge success.
‘I expected to sell some appliances, but I never expected to do as well as we have,’ he says
Based on the performance of the Toronto store, Leon’s authorized a boutique in the Kingston store, which opened this month, and has given the go-ahead for three more Toronto stores.
Ed Leon, assistant merchandising manager for Toronto-based Leon’s, says he is encouraged by the test results, but cautions the program is still being considered an experiment.
Leon says the program will likely work only in high-traffic outlets, since the bulk of Leon’s shoppers are looking for affordable prices.
Leon says the boutique merchandising approach represents a sharp departure for the 43-store Leon’s chain, which he describes as a ‘large-volume retailer dedicated to serving the wants and needs of the average consumer.’
As far as advertising is concerned, Lehmkuhk says no decisions have been made yet, but Camco, Leon’s and Canac are each likely to run ads separately, and they might, as well, come together to run a joint campaign.
Lehmkuhk says Camco’s campaign might include tv image advertising in the first quarter of 1995.
So far, Leon’s is the only national chain carrying Profile, but Lehmkuhk says he would like to introduce it to additional chains, including The Bay, Sears Canada, Eaton’s and Brick Warehouse.
He says the minimum requirement for chains interested in carrying the brand is that they agree to merchandise it with stand-alone Profile displays.
