Article Number : 1258 |
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| Date | 8/14/2006 8:44:17 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=1258 |
| Abstract | Chicago—The Formica Flooring brand is officially back in the marketplace. One by one, distributors around the country will be launching the line—exclusive to the specialty retailer—with the goal of having the entire country blanketed by the end of October. Now manufactured in Barnwell, S.C... |
| Article | Chicago—The Formica Flooring brand is officially back in the marketplace. One by one, distributors around the country will be launching the line—exclusive to the specialty retailer—with the goal of having the entire country blanketed by the end of October. Now manufactured in Barnwell, S.C., by Kronotex USA via an exclusive licensing agreement with Formica Corp. (FCNews, April 17/24), displays are now being placed in the Mid-west by All-Tile, one of the region’s leading distributors, after a two-week kickoff that began July 10. Bob Weiss, president of All-Tile, challenged his Chica-go area reps to place 200 displays within the first two weeks. Ken Peden, executive vice president of Kronotex, told the All-Tile salesforce they are in a rare position. “As a salesperson you have a unique opportunity to take a product into the marketplace for the first time. You probably will never have that opportunity again.” He told FCNews Kronotex is committed to making Formica the number one laminate brand in North America within three years. And if history is any indication, the man should be taken at his word. Peden spearheaded the impressive ascent of the Quick-Step brand in the last five years from the ground floor to sales eclipsing $300 million by some accounts. Peden also heralded Kronotex’ commitment to be a completely vertical operation. “We will do everything except make the printed paper,” he told the All-Tile team. “If you are not vertical in America you can’t compete and won’t survive long term.” The Barnwell facility offers a competitive advantage, he said. “The current capacity is 200 million square feet with capability to double. We own 350 acres of land, so there is plenty of room for us to be able to expand.” The new Formica Flooring benefits from the resources of what is the world’s largest laminate flooring manufacturer. The Krono Group, parent company of Kronotex, owns a 45% global market share with sales eclipsing $1 billion and product sold in more than 80 countries, according to Peden. Kronotex represents 24% of that business. “Even though Krono Group dominates this business worldwide, the financial strength of this organization is untapped; The manufacturing capability is untapped.” But, for the company to be successful in America it needed to do something bold, and that was to acquire the Formica brand, which not only has 92% awareness in this country, said Keith Wiethe, marketing manager, but is also one of the top 10 consumer brands, joining the likes of Coke and Kleenex. “You can either license a brand or develop your own, which can take several years. Obviously, licensing the Formica name made more sense.” He noted while the brand is best known for countertops, research shows people associate the Formica name with durability, affordability and ease of installation. “We are taking those qualities and incorporating them into our laminate flooring business.” Licensing the Formica name brings with it some added value, such as design expertise. Kronotex’ team is working side-by-side with the same designers who develop the other Formica products. “They are up on the latest design trends,” Wiethe said. “This facilitates our commitment to be the styling leader in the laminate flooring industry.” Another advantage is, according to Wiethe, the Formica product is lawsuit resistant. “We pay royalties to both Berry and Unilin, the two largest locking-system patent holders in the world. We are dancing with both sisters.” He added Krono Group is the only company in the world to acquire licenses from both companies. The Strategy Peden outlined a four-part game plan he believes will lead to Formica becoming the laminate leader in North America: 1. Obtain and secure the best distribution in each market. The retail channel represents 60% of all laminate flooring sold in this country, he said; 2. Place a minimum of 6,000 displays in the first 12 months; 3. Initiate consumer advertising to drive consumers into retail stores asking for Formica flooring, and 4. Continue to increase Formica brand awareness and capture more of the specialty store laminate business. Tim Tipton, Kronotex’ national sales director, told the All-Tile team that entering a crowded marketplace meant the Formica line would have to be different. As well, there was no sense in competing at the low end of the market, where margins are slim. So, it was determined the Formica name would not appear on anything less than an 8mm product. “This ensures Formica will be perceived as a higher-end brand.” In addition, all products are at least 54-in. in length and carry warranties starting at 20 years. The Products The line launches with 38 SKUs comprising the most popular looks in the market today—and then some. “We were not going to introduce 90 SKUs that don’t move,” Tipton said. “What we did was include the best shades of oak and some premium colors.” There are five collections making up the initial launch: • Arianna: This opening price point is a 2-strip, 8mm product rich in texture. Ten SKUs are available with a 20-year warranty; • Delanna: A four-sided beveled edge in a single strip is the highlight here. Most of the beveled-edge products in the industry are 9mm or 10mm, Tipton said. The 8mm construction allows for a high-end product at a value price point. Six SKUs are available with a 25-year warranty; • Marcella: A 10mm, 5-1/6-in.-wide, registered embossed, beveled-edge product in three different lengths. A matte oil finish parallels the trend of low gloss. Eight SKUs are available with a 30-year warranty; • Sienna: The one tile collection borrows from Formica’s best countertop designs and colors, and includes slate and limestone looks. Registered embossed, the thin grout lines are designed to simulate real tile to an even greater degree. Four 13-in. tiles reside on one 51-in. board for installation ease. Eight SKUs offer a 25-year warranty, and • Quintessa: The top of the line collection. This 12mm —1/2-in.—product offers a 6-ft.-long board, micro beveled on all four sides and a special locking system Kronotex claims is different than any other product in the market. No tapping is needed. Six SKUs come with a lifetime warranty. A merchandising unit called the SpaceSaver houses all 38 SKUs. The display, which measures 75X29X90-in., is designed to be a furniture-type piece and draw in the customer. Quintessa, the highest-margin product, takes center stage and is afforded wing-panel dominance. In addition to the five-branded Formica collections, the offering includes Kingston, a 7mm product with an allover texture. Tipton noted because this is not an 8mm product, it will not be branded as Formica but provides retailers with a line to compete against the other entry-level offerings on the market. It will be displayed on sample boards. He noted the line offers better colors than the other 7mm products on the market. As well, competitors’ 7mm goods are 48-in. in length, while this product is 54-in. All Formica products are complemented by Finale accessories, sundries and moldings. There is a special foam underlayment for noise reduction along with a care and maintenance kit which includes such items as a floor cleaner, stain remover, scratch mast spray and glue remover. For more information on Kronotex and the Formica line, call 803/541-3463. |