DeLonghi America, known in the U.S. primarily as an oil-filled electric heater company, is aggressively expanding into other product categories, most notably kitchen electrics.
Positioning itself as a vendor of high-end kitchen electrics and other items, DeLonghi--a division of DeLonghi SpA, an Italian manufacturer--has already penetrated several major U.S. department stores with its first kitchen appliance, the Alfredo Bake n' Broil, a toaster oven.
DeLonghi's long-term marketing strategy is "to offer high-end unique products for department stores, and ultimately have line extensions suitable for mass merchants,' said Jim McCusker, president of DeLonghi America. "We intend to offer DeLonghi products for every room in the house like our competitors do.
"Our future plans call for us to enter new categories that we feel market penetration can be made in.'
DeLonghi's omnibus product release schedule--featuring recent or soon-to-come items-- includes deep fryers, automatic drip coffeemakers, cool-touch toasters, cord/cordless irons, dehumidifiers, pressure cookers, and fans.
Distribution is a major element of McCusker's ambitious plans.
"Exclusive distribution to department stores and select specialty shops is the key selling factor with all of our products,' said McCusker. "When we go into a department store to present our units, buyers get a first hand look at a product that is visually different from our competitors'.'
It was the Alfredo Bake n' Broil toaster oven that provided DeLonghi entree to the kitchen appliance distribution channels. It debuted in the U.S. in November 1984.
"In the beginning, toaster ovens were a tough sell for us,' recalled McCusker, "because people knew DeLonghi as a heater company.' Furthermore, although DeLonghi would be selling Alfredo to many of the same retailers that carried the heaters, the actual buyer would be different. "Many of them had never heard of DeLonghi,' noted McCusker.
"We overcame these obstacles by positioning the Alfredo so it could be sold at the same price as the compact microwave ovens which were just becoming popular,' said McCusker. "This enabled retailers to get a good margin on the unit in a category that had historically yielded a very low margins.'
The firm gradually overcame its initial difficulty in capitalizing on DeLonghi's brand name, and with the success of the Alfredo Bake n's Broil ovens, "we felt we could branch out into other categories in the kitchen electrics market,' said McCusker.
In keeping with that goal, DeLonghi has entered the deep fryer market. The company's good reputation helped paved the way with retailers for its new products.
Its newest offering is a deep fryer. "Deep fryers are very popular in Europe and we think ours will take off here,' said McCusker.
Known as the Fiorella, DeLonghi's unit has a basket inside the fryer that rotates on an axis, dipping the food in and out of the hot oil for uniform frying. "Because the unit rotates on an axis, 50 percent less oil is used than in other units,' said McCusker.
Because DeLonghi's deep fryer is "highly styled,' McCusker said he would not be competing with Presto, the market leader, but with Tefal. DeLonghi's unit retails for $119 and will be available in department stores this month.
DeLonghi coffeemakers will be available in December, and, at the January housewares show, the company will show its new expresso machine to key buyers, said McCusker. The coffeemaker business, he noted, is currently approximately a 10.5 million unit market. Other suppliers place the figure at almost one million units higher than that.
Two 12-cup automatic drip coffeemakers will be available for exclusive distribution to department stores in time for holiday gift-giving, according to McCusker. Both Eurostyle units use a number-four cone filter and have cord storage. One model has a 24-hour programmable timer. Suggested retails are $69 for the basic unit and $79 for the programmable version.
Also slated for a January introduction are two cool-wall, wide-mouth toasters, one with electronic settings. "The toaster market is currently about eight million units with nearly 300,000 units going to the cool-wall wide mouthed toasters,' said McCusker.
The competitors in this segment of the toaster business are Maxim, Proctor- Silex, Rowenta, Oster, Russell Hobbs, Tefal and Philips,' said McCusker.
Product features on DeLonghi's cool-touch toasters include a crumb tray and cord storage. The non-electronic unit will carry a suggested retail of $39, the electronic unit, $49.
A cord/cordless iron may also be introduced at the Housewares Show according to McCusker. One buyer from a major Midwest department store said he has already seen the iron and is interested in putting it in his assortment "because we've always been successful with DeLonghi products in the past.'
"We also see dehumidification as a category we can make good headway in,' said McCusker. "As far as I know, we'll be the first to sell dehumidifiers in department stores, and the first to put them in four-color packaging rather than the traditional corrugated boxes.'
Two models, including a 25-and a 40-pint system will be available in stores at the end of November. Suggested retails will be $189 and $229, respectively. DeLonghi's dehumidifiers compete against units from Sears, Martin, Admiral and various Korean manufacturers, noted McCusker.
DeLonghi is designed to be a full-line supplier, "and dehumidifiers are part of this overall strategy,' McCusker said.
"We also have eased into the pressure cooker market to see if we can find a niche for ourselves,' said McCusker. "We saw an open slot between Presto and Cuisinarts and positioned our pressurecookers there.' Four-, 6- and 8-quart belly-shaped stainless steel units are available in the marketplace now.
Fans are another category in which DeLonghi has met with good retailer response.
A buyer for a major West Coast department store noted that the "unique grid on DeLonghi's fans appeal to our customers looking for a stylish fan, and has been an important factor in our sales in the category.
"We had a great season with the DeLonghi 12-and 16-inch oscillating fan and 12-inch pedastal fans, even though they are seasonal goods,' he said. He also carrys Patton fans.
DeLonghi sells a three-inch personal fan, a 12-inch box fan, 12-and 16-inch pedastal fans and seven-, 12- and 16-inch oscillating fans.
The new DeLonghi products now entering stores were originally lead by the success of the company's heater line.
DeLonghi first "raised industry eyebrows in 1980 when it jumped into the U.S. heater market,' said McCusker, "and immediately became a strong competitor in the heater business.' By 1983, DeLonghi's heater sales had risen dramatically to $25 million, he noted.
"When we entered the heater business in this country, the market was ripe for a heater such as ours,' said McCusker. "Heating costs were high and consumers were becoming aware of the dangers of kerosene. And, while quartz heaters were available, they were not that good.'
Heaters currently represent 70 percent of DeLonghi's U.S. business and are still the backbone of the company. McCusker expects that percentage to decrease, however, as the company becomes more involved in other product categories.
The DeLonghi heater line includes electric oil-filled, fan, convection, and gas models.
Murray Klein, vice president of Zabar's in New York City, has been carrying DeLonghi's heaters for five years. "The units have sold really well for us, and we've had no customer returns on it. We have a good thing going with DeLonghi, and we intend to continue look at their products in the future.'
"We've done consistently well with DeLonghi heaters,' said an assistant sales manager for a major East Coast department store. "The weather hasn't even gotten very cold yet, and we already sold 83 oil-filled heaters during a three-day promotion at $39.99 each.' The chain carries two oil-filled heater models and one convection heater with a fan, also known as a turbo heater.
DeLonghi oil-filled heaters compete against models from Holmes, Lakewood and Welbilt, said McCusker; in the convection heater category Robeson is a competitor, he noted.
The pioneer pattern established by the heaters was repeated in kitchen appliances by the Alfredo. Originally available in either white or red, a black model was introduced this past April. The unit is packaged in a four-color carton.
At Macy's New York, the Alfredo competes against B&D, Toastmaster, Proctor-Silex and Hamilton Beach.' "We are continually selling out of them,' said a spokesperson for the store. "We carry all three colors and seem to sell Alfredo mainly to customers who are looking for a contemporary, highly-styled attractive unit.' The Alfredo retails for $89.99 here.
Good news seem to travel fast for the Alfredo Bake n' Broil. "Because our sister stores in Federated picked it up and were pleased with the results,' said a buyer at Foley's in Houston, "we have decided to carry it this year too. It has a very exciting look.'
"I brought in DeLonghi's unit two years ago because it was, and still is, a sharp looking, quality product,' said the small electrics buyer for a Midwest department store. "The packaging adds a nice look to our floor and lures the customer over to take a closer look.' His store also carries models from Black & Decker and Proctor-Silex.
"In my store, we frequently find ourselves in a sold-out position on DeLonghi's Alfredo,' said a small electrics buyer for a major West Coast department store, "so now we have really stocked up. Customers are attracted to the unit by its features including the large interior cooking space and the fashionable colors. What's more, the $89 price tag is well-received.' She also carries a Black & Decker toaster oven at a higher price and a Toastmaster unit at a lower one.
In April, DeLonghi introduced an Alfredo with a top burner and interior light. Further expansion is scheduled for July of 1988 when McCusker plans to introduce "Alfredo-type units for the mass market.'
"The DeLonghi toaster oven with top burner is one of the better toaster ovens we carry,' said an assistant sales manager for a major East coast department store. "DeLonghi and Black & Decker are comparable in price--both are about $89.99 --but the DeLonghi unit sells better. Single people and older couples who cook small amounts of food see it as a fashionable and functional unit.' Her store also carries units from Proctor-Silex and Toastmaster.