At least two water-heater manufacturers are betting that consumers are changing their buying habits to purchase more appliances with well-known "power brand" names. As a result, State Industries is producing a line of water heaters under the Maytag name, and Rheem is manufacturing a line of water heaters for General Electric (see related story).
"A new day is coming to the water-heater business," said John R. Lindahl Jr., State's senior vice president/sales and marketing. "The big names in consumer appliances will soon be battling - and beating - the more familiar traditional water-heater brands for consumer attention and demand."
An important difference between Rheem and State is that the G.E. brand of water heaters will be available only through The Home Depot while the Maytag appliances will take a multichannel approach to distribution. The State-produced Maytag water heaters eventually will be sold at about 450 Lowe's home centers nationwide and a number of Ace and TruServ hardware stores, as well as through Maytag appliance dealers and plumbing and HVAC wholesalers.
"We want to take a selective approach to whom we partner with,'' Lindahl said. "The strategy is to position the product with people who will make that product work and not tarnish the Maytag name. The wholesaler/contractor outlet is one of the biggest."
The multichannel strategy was agreed upon from the start of the relationship between State and Maytag. State has sold its water heaters at both wholesale and retail for years.
"Maytag was looking for a partner who could give them an innovative product design and who understood more than just one distribution channel," Lindahl said. "They wanted that expertise. Manufacturing capacity was another factor in Maytag's decision. They didn't want a tremendous amount of market share but they did want to offer a superior product."
"It's a whole new way of selling water heaters," noted Terry Bihun, State's vice president/sales. "As the major appliance brands become widely available in retail stores, consumers will look at the label on the water heater and its particular value, not just the number on the price tag."