RELIGIOUS PRODUCTS CONSUMER SALES
(Remember, this information should be used as a base to build from. For current direct marketing statistics please
refer to these titles: The Direct Marketing Statistical Fact Book the Direct Marketing Response Rate Study the
Catalog Age 150 the Consumer Directory of Mail Order Catalogs and the Business to Business Directory of Mail
Order Catalogs.)
Religious Products
This small sales size segment ($590 Million) is divided by denominationality (Christian versus
Jewish/Other) and by spiritual orientation (devotional versus gifts).
The top five businesses, all five of which are Christian devotional in orientation with $188
Million in sales, account for about one-third (33%) of segment sales.
Religious Products 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
270
590
2.2
5 Leading Businesses
Name of Business
Sub-Segment
Sales
($Million)
Christian Book Distributors
Augsburg Fortress Publishers
Concordia Publishing House
Word Family Record & Tape Club
Nelson Word Church Services
Christian: Devotional
Christian: Devotional
Christian: Devotional
Christian: Devotional
Christian: Devotional
63.6
52.8
35.0
25.0
20.0
V-179
RELIGIOUS PRODUCTS CONSUMER SALES
SEGMENT: Religious
Products
1998 SALES ($MILLION): 250
SUB-SEGMENT:
Christian
NO. OF
BUSINESSES: 180
AVERAGE SALES PER
BUSINESS ($MILLION): 2.9
Unavailable at Retail:
• Devotional Products: • Specialties • Specialty range and depth
• Gifts/Cultural Products: • Price
• Specialties • Line range & depth
PRODUCT DOMAIN: Devotional Products: Clerical and individual educational, worship,
meditation and devotional products
Gifts/Cultural Products: Cultural, ethnic and gift products with a religious
association or source
CHARACTERISTICS
MAIL ORDER
RATIONALE:
 Products: Devotional
• Bibles/commentaries
• Educational videos
• Reference Materials
• Curriculum materials
• Furniture
• Ritual items
• Clergy vestments
• Home devotional products • Study Aids
• Computer software
• Parishional supplies
• Worship music
• Counseling resources
 Products: Gifts
• Audio tapes
• Greeting cards
• Religious jewelry
• Book clubs
• Handicrafts
• Stationery
• Confirmation gifts • Message checks
• Videocassettes/records
• Food specialties
LEADING BUSINESSES ($5 MILLION+ SALES)
 Christian Book Distributors
 Abbey Press
 International Bible Society
 Augsburg Fortress
Publishers
 Integrity Music
 Paulist Press
 Concordia Publishing
House
 Inspirational Network
 Great Christian Books
 Guideposts
 Alpha Omega Publications
 Leaflet Missal Co.
 Word Family Record &
Tape Club
 David C. Cook Publishing
 Gethsemani Farms
 Nelson Word Church
Services
 Eagle System’s Children’s
Books & Video
 Christian Herald
Association
 Evangelical Christian Books  C.M. Almy & Son
V-180
 Christian Gift Center
RELIGIOUS PRODUCTS CONSUMER SALES
SEGMENT: Religious Products SUB-SEGMENT: Judaic/Other
1998 SALES ($MILLION): 70
NO. OF
BUSINESSES: 90
AVERAGE SALES PER
BUSINESS ($MILLION): 0.8
Unavailable at Retail:
• Devotional Products: • Specialties • Specialty range and depth
• Gifts/Cultural Products: • Price
• Specialties • Line range & depth
Devotional
Products:
Clerical
and
individual
educational, worship,
PRODUCT DOMAIN:
meditation and devotional products
Gifts/Cultural Products: Cultural, ethnic and gift products with a
religious association or source
MAIL ORDER
RATIONALE:
CHARACTERISTICS
• Bar Mitzvah gifts
• Books
• Cultural gifts
• Decorative accessories
• Meditation supplies
LEADING BUSINESSES ($5 MILLION+ SALES)
None
V-181
RELIGIOUS PRODUCTS CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
 Religious product market serviced by specialty religious products
stores, departments and boutiques in larger stores, sales to laity by
religious institutions, product premium fund-raising channels and
mail and phone order direct response
 Christian products at $3.0B in annual sales in 1996, including
$1.3B in religious books; religious books sales growth 1992-1996
at 100% compared to 18% for overall adult books; Christian music
at 3% of overall recorded music sales, 30% sold through secular
retailers
Ownership
Private--92% Public—8% Government--0%




Conglomerate Ownership
Gaylord Entertainment: Word Family Record & Tape Club
Guideposts Associates: Guideposts
Thomas Nelson Inc.: Nelson Word Church Services
News Corp.: Zondervan
Market Segment





Laity
Clergy
Teachers
Choir directors
Administrators
Merchandising
 Economy for institutional market
 Religious and cultural specialties for laity
 Icon oriented decoration accessories and jewelry
Customer Sourcing
 Devotional: direct mail, religious magazines, newspapers
 Gifts: direct mail, catalogs, religious magazines, newspapers
Customer Base
Marketing
 Direct mail, catalogs
Seasonality
 Religious and secular seasonality
Operations
 Monastic order based (Abbey Press, Gethsmani Farms)
 Publishing house based
Problems
 Low order size
 Infrequency of ordering
 Institutional demand seasonality
V-182
RELIGIOUS PRODUCTS CONSUMER SALES
FACTORS
CHARACTERISTICS
Opportunities





Trends
 Increased adaptation of secular consumer catalog promotional and
presentation technology
 1997 Segment Events:
 BMG Direct acquires Word Family Record & Book Club from
Gaylord Entertainment Co.
Dual consumer/institutional markets
Limited retail store competition
Dual ethnic/denominational markets
Seasonal, religious life event gift occasions
Dispersed religious, ethnic communities
V-183
SPORTING GOODS CONSUMER SALES
Sporting Goods
This large sales size consumer specialty segment ($2,990 Million) is dominated by the Athletic
Equipment sub-segment ($750 Million) accounting for 25% of segment sales. The next two subsegments, Hunting Equipment and Fishing/Aquatic Equipment combined ($1,155 million)
account for 39% of segment sales.
Sporting Goods 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
700
*2,990
4.3
5 Leading Businesses
Name of Business
Bass Pro Shops
Golfsmith
Sportsman’s Guide
Eastbay Running Store
Orvis Co.
Sub-Segment
Fishing/Aquatic Equipment
Athletic Equipment
Hunting Equipment
Apparel Oriented
Fishing/Aquatic Equipment
Sales
($Million)
280.0
126.0
125.5
142.5
95.9
*Note: Reclassification
Non fashion oriented portion of Apparel: Great Outdoors ($380 million sales)
reclassified
as Sporting Goods: Apparel Oriented.
V-184
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT: Athletic Equipment
1998 SALES ($MILLION): 750
NO. OF
BUSINESSES: 195
AVERAGE SALES PER
BUSINESS ($MILLION): 3.8
Unavailable at Retail:
MAIL ORDER
• Price
• Specialty
• Specialty depth
RATIONALE:
PRODUCT DOMAIN: Individual athletic equipment specialties
CHARACTERISTICS
 Athletic equipment specialization
 Upscale demographics
 Consumer high tech performance appeal
LEADING BUSINESSES ($5 MILLION+ SALES)
 Golfsmith
 Golf Star
 Greg Norman Secret
 Edwin Watts Golf Shops
 Professional Golfers
Association of America
 Adams Golf
 Austad’s
 World of Golf
 Team Paradise
 Sevylor
 Mueller Sporting Goods
 Soccer Madness
 Sportime International
 Baseball Express
 Fairway Golf And Tennis
 Sportsline USA
 Greenspring Warehouse
 Kil-lir Enterprises
 Golf Day
 Applied Golf
 Competitive Edge
 TSI Soccer
 World Industries
 Strictly Golf
 Golfworks
 Ringside Products
 International Golf Tech
 Dynacraft Golf Products
 Mastergrip
 Links Direct
 Bost Enterprises
V-185
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT:
1998 SALES ($MILLION): 580
NO. OF
BUSINESSES: 110
Hunting Equipment
AVERAGE SALES PER
BUSINESS ($MILLION): 5.3
Unavailable at Retail:
• Price
• Specialties
• Line range and depth
• Trade brand names
PRODUCT DOMAIN: Hunting outfitting for all seasonal, type of quarry and method of hunting
categories
MAIL ORDER
RATIONALE:
CHARACTERISTICS
 Equipment specialization
 Consumer high tech performance appeal
 Limited specialty retail store competition
LEADING BUSINESSES ($5 MILLION+ SALES)
 Sportsman’s Guide
 Dillon Precision Products
 Gun Parts
 Smoky Mountain Knife
Works
 Natchez Shooter Supplies
 Pachmyr Gun Works
 Herter’s
 Brownells
 Stoeger Industries
 Edge Co.
 Dunn’s Supply
 Mid South Shooting
Supply
 Midway Arms
 American Industries
 Bowhunters Warehouse
 Bushnell Sports Optics
 Walter Craig
 A. G. Russell Knives
 Manta Survival Knife
V-186
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT: Fishing/Aquatic Equipment
1998 SALES ($MILLION): 575
NO. OF
BUSINESSES: 105
AVERAGE SALES PER
BUSINESS ($MILLION): 5.5
Unavailable at Retail:
• Price
• Specialties
• Line range and depth
• Trade brand names
PRODUCT DOMAIN: Fishing and aquatic sports equipment and supplies
MAIL ORDER
RATIONALE:
CHARACTERISTICS




Low order size
Importance of proprietary products
Increasing retail discount store competition
Consumer high tech performance appeal
LEADING BUSINESSES ($5 MILLION+ SALES)
 Bass Pro Shops
 J.D.’s Tackle
 Vortex Fishing Systems
 Orvis Co.
 Northsman
 Wenoka Sea Style
 G. Loomis
 Folsom Louisiana
 Ski Limited Enterprises
 Pacific Watersports
Accessories
V-187
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT:
1998 SALES ($MILLION): 380
NO. OF
BUSINESSES: 60
Apparel Oriented
AVERAGE SALES PER
BUSINESS ($MILLION): 6.3
Unavailable at Retail:
MAIL ORDER
• Specialties
• Specialty range and depth
RATIONALE:
PRODUCT DOMAIN: Functional Athletic, Team Sports Sporting Goods Apparel: Tennis, golf,
running sports, boating, skiing, skating
CHARACTERISTICS
 Upscale demographics
 Private label, specialty products
 Seasonally skewed
LEADING BUSINESSES ($5 MILLION+ SALES)
 Eastbay Running Store
 Simply The Best Sports
 King Of The Mountain
Sports
 Road Runner Sports
 Adolph Kiefer &
Associates
 S.I.R. Outdoor Catalog
 Eurosport
 The Finals
 Any Mountain Ltd.
 European Catalog
 Jacques Moret Bodywear
 Reliable Racing Supply
V-188
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT: Marine Equipment
1998 SALES ($MILLION): 380
NO. OF
BUSINESSES: 130
AVERAGE SALES PER
BUSINESS ($MILLION): 2.9
Unavailable at Retail:
• Price
• Specialties
• Line range and depth
• Trade name brands
PRODUCT DOMAIN: Specialty boats and outfitting equipment across all marine specialties
MAIL ORDER
RATIONALE:
CHARACTERISTICS





High order size
Depth of inventory of specialties
Marine gift products
Upscale demographics
Mail order/retail store business synergies
LEADING BUSINESSES ($5 MILLION+ SALES)
 Overton’s
 Tempo Products
 Raritan Engineering Co.
 West Marine Products
 Moore & Battle Ltd
 Gougeon Brothers
 E&B Marine Supply
 ITT Jabsco Boaters Catalog  Tidewater Workshop
 Defender Industries
 Avon Marine
 Marine Surplus Depot
 Northwest River Supply
V-189
 We-No-Nah Canoe
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT: Hiking, Mountaineering/Ski Equipment
1998 SALES ($MILLION): 125 NO. OF
BUSINESSES: 30
MAIL ORDER
RATIONALE:
PRODUCT DOMAIN:
AVERAGE SALES PER
BUSINESS ($MILLION): 4.2
Unavailable at Retail:
• Specialties
• Specialty range and depth
Hiking, mountaineering and skiing specialties and accessories
CHARACTERISTICS




Equipment specialization
Limited specialty retail store competition
Upscale market
Consumer high tech performance appeal
LEADING BUSINESSES ($5 MILLION+ SALES)
 Recreational Equipment
Inc.
 Burton Snowboards
 Sessions Snowboard Shop
SEGMENT: Sporting Goods
SUB-SEGMENT:
1998 SALES
($MILLION):
NO. OF
BUSINESSES: 35
105
MAIL ORDER
RATIONALE:
PRODUCT DOMAIN:
 Performance Snowboarding
Equestrian Supplies
AVERAGE SALES PER
BUSINESS ($MILLION): 3.0
Unavailable at Retail:
• Specialties
• Specialty range and depth
Horse-rider and horseowner riding apparel, equipment and supplies
CHARACTERISTICS




High Order Size
Upscale demographics
Limited specialty retail store competition
Mail order/retail store business synergies
LEADING BUSINESSES ($5 MILLION+ SALES)
 State Line Tack
 Libertyville Saddle Shop
 Chick’s Harness & Supply
V-190
 . Miller Harness Co
SPORTING GOODS CONSUMER SALES
SEGMENT: Sporting Goods
SUB-SEGMENT: Camping Supplies
1998 SALES ($MILLION): 95
NO. OF
BUSINESSES: 35
AVERAGE SALES PER
BUSINESS ($MILLION): 2.7
Unavailable at Retail:
MAIL ORDER
• Price
• Specialties
• Specialty range and depth
RATIONALE:
PRODUCT DOMAIN: Camping full line and specialty products
CHARACTERISTICS
 General camping line or specialties
 Mid scale, down scale market
LEADING BUSINESSES ($5 MILLION+ SALES)
 Campmor
 Huntmaster Survival Gear
 Hard Hat
V-191
 Igloo Products
SPORTING GOODS CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
 Athletic and sports equipment, footwear and clothing at $39.2B in
1995, $41.7B in 1996, at $43.0 in 1997, projected at $44.3 in 1998
 Bicycles, pleasure boats, RV's and snowmobiles at $19.3B in 1995
with 10% growth, $19.9 in 1996, at $21.2B in 1997, projected at
$22B in 1998
 Growth in sporting goods retail sales in 1995 of 5.0%, in 1996 at
6.1%, in 1997 at $3.0%, projected at 3% in 1998
 Athletic and sports footwear in 1995 at $11.4B, at $12.8B in 1996,
$13.3B in 1997, projected at $13.7B in 1998
 Sports clothing at $11.1B in 1996, $11.9B in 1997, projected at
$12.4B in 1998
 Equipment sales flat at $17.4B in 1995, at $17.7B in 1996, (4.6%
decline), 17.7B in 1997, projected at $18.2B in 1998
 Exercise equipment at $3.2B in 1996, with treadmill sales at $1B+
 Strong gains in golf equipment, 26 million golfers (5 million
women) shift to more elaborate and expensive equipment,
$15B/year spending in equipment and merchandise, $1.25B on golf
related gifts by non-golfers
 Marine accessory market at $1.2B
 Increased specialty retail store discount competition (fishing
products)
 Camping market -- rough being taken out of roughing-it;
minimalism out of fashion -- huge family tents, comfort
enhancement, foldable kitchens
 450,000 fly fishermen
 Corporate wilderness adventure market at $100 million
 54 million active skiers
Ownership
Private--81% Public—19% Government--0%
Conglomerate Ownership









Adorama: Leisure Pro
Atlanta Cutlery: Atlanta Cutlery
Boy Scouts of America: Boy Scouts Of America
Bausch & Lomb: Bushnell Sports Optics
Delia*s: TSI Soccer
Encore House: Marine Surplus Depot
Genesis Direct: Competitive Edge, Hot Off The Ice, Soccer
Madness
H I G Capital Management: Back In The Saddle
Hanover Direct: Austad's
V-192
SPORTING GOODS CONSUMER SALES
FACTORS
CHARACTERISTICS







Conglomerate Ownership (cont.)
MacAndrews & Forbes: Coleman Co.
Northern Hydraulics: Herter’s
Orvis: Orvis Co.
Petsmart: Wiese Vet Supply
Trend-Lines: Golf Day
Venator Group: Eastbay Running Store
West Marine: E & B Supply, West Marine
Market Segmentation
 Male: Fishing, Camping, Hunting, Mountaineering, Marine
 Upscale: Marine Equipment, Equestrian Equipment, Sporting
Goods Apparel
 Mid scale, down scale: Fishing, Camping, Hunting Equipment
Merchandising
 Increased emphasis on soft goods
Customer Sourcing
 Substantial class and special consumer interest magazine sourcing
with cold catalog list prospecting
Customer Base
Marketing
 Database media: Catalog, direct mail
 Heavy frequency of mailings to active customers
 Emphasis on customer service and guarantee
Seasonality
 Seasonality dictated by sporting or recreational specialty of
business
Operations
 Decreasing, involvement in own manufacturing
 Automated fulfillment for peakload apparel oriented businesses
Problems
 Increasing price competition from retail mass merchandisers for
non proprietary products
 Inventory variety coverage for specialty equipment marketers
 Seasonality of specialty product demand
Opportunities
 Consumer high tech appeal in performance and look
 Increased Soft Goods mix
Trends
 Diversification of outdoors catalog into dual season, Spring and
Fall, merchandising
 Increasing consolidation in Marine Equipment sub-segment
 Increasing turmoil in Hunting Equipment sub-segment
V-193
SPORTING GOODS CONSUMER SALES
FACTORS
Trends (cont.)
CHARACTERISTICS
 1996 Segment Events
Successories acquires British Links
 West Marine acquires E & B Marine
 Petsmart acquires State Line Tack
 Gander Mountain re-enters bankruptcy
 1997 Segment Events
 Genesis Direct acquires Competitive Edge Golf
 Woolworth acquires Eastbay
 Herter’s acquires Restle Decoy Co.
 Genesis acquires Soccer Madness
 Boaters World acquires Outer Banks Outfitters
 1998 Segment Events
H I G Capital Management acquires Back In The Saddle
Genesis Direct acquires Edge Co.
Genesis Direct closes down Training Camp
Genesis Direct in first public offer (Competive Edge Golf, Not
Off Me Ice, Soccer Madness)
V-194
STATIONERY CONSUMER SALES
Stationery
This small sales size segment ($690 Million) is skewed toward a mid-scale female market. Sales
segment stresses are low order size, infrequent ordering and retail price competition.
Stationery 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
110
690
6.3
5 Leading Businesses
Name of Business
Checks In The Mail
Current Checks
Current
Concepts Direct
Designer Checks
Sub-Segment
Specialized Stationery
Specialized Stationery
General Stationery
General Stationery
Specialized Stationery
V-195
Sales
($Million)
85.7
84.3
84.2
79.2
54.9
STATIONERY CONSUMER SALES
SEGMENT: Stationery
SUB-SEGMENT: Specialized Stationery
1998 SALES ($MILLION): 405
NO. OF
BUSINESSES: 90
AVERAGE SALES PER
BUSINESS ($MILLION): 4.5
Unavailable at Retail:
MAIL ORDER
• Specialties • Specialty depth
RATIONALE:
PRODUCT DOMAIN: Personalization, personalized checks, announcement, stationery
specialties
CHARACTERISTICS
 Difficulty of trasitory market prospecting
 Personalized stationery, appointment books, address labels, annoucements, invitation
stationery, rubber stamps, wine labels
LEADING BUSINESSES ($5 MILLION+ SALES)
 Checks In The Mail
 Check Gallery
 Wedding Thoughts
 Designer Checks
 Hero Arts
 Now and Forever Wedding
Stationery
 Artistic Greetings Checks
 Inkadinkado
 Image Checks
 Styles Super Checks
 Custom Direct Check
Printers
 Rexcraft
V-196
STATIONERY CONSUMER SALES
SEGMENT: Stationery
SUB-SEGMENT: General Stationery
1998 SALES ($MILLION): 235
NO. OF
BUSINESSES: 10
AVERAGE SALES PER
BUSINESS ($MILLION): 22.5
Unavailable at Retail:
MAIL ORDER
• Price
• Line range and depth
RATIONALE:
PRODUCT DOMAIN: General line of personal and home stationery
CHARACTERISTICS





High product margin
Combined self-use/fund-raising markets
Mid scale, down scale market
Low order size and order frequency
Holiday gift season orientation
LEADING BUSINESSES ($5 MILLION+ SALES)
 Current
 Artistic Greetings
 Concepts Direct
 American Stationery
Co./Rytex Co.
V-197
 Bruce Bolind
STATIONERY CONSUMER SALES
SEGMENT: Stationery
SUB-SEGMENT:
1998 SALES ($MILLION): 50
NO. OF
BUSINESSES: 10
Greeting Cards
AVERAGE SALES PER
BUSINESS ($MILLION): 5.0
Unavailable at Retail:
MAIL ORDER
• Price
• Specialty messaging • Line range and depth
RATIONALE:
PRODUCT DOMAIN: Alternative messaging or special purpose greeting cardline
CHARACTERISTICS
 High product margin
 Multiple seasonal potential
 Holiday season oriented paper products:
• General and specialized and personalized greeting card lines
 Gift wrapping
 Calendars
LEADING BUSINESSES ($5 MILLION+ SALES)
 Trumble Greetings
 Henderson Bailey
V-198
STATIONERY CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
 Personalized check business at $3.5B
 Overall Greeting Card industry sales at $6.3B, Hallmark Cards
share at 42%, growth at 1-2% per year; American Greetings at
35%, Gibson’s at 7%
 High gross margins and distribution costs of consumer stationery
products
 Retail distribution through consumer stationery specialty store
chains and boutiques and departments in department and mass
merchandising stores
Ownership
Private—76% Public--24% Government--0%
Conglomerate Ownership




Artistic Direct: Artistic Greetings
Deluxe Corp.: Current Checks
MDC Communications: Artistic Greetings Checks
Taylor Corp.: Current
Market Segmentation
 Female
 Mid scale, down scale: Current
 Mid scale, upscale: Small specialty marketers
Merchandising
 Product differentiation merchandising:
 Personalization of design message or art
 Regional, imported, ethnic specialties
 Functional specialties (wine labels)
 Convenience specialties (address labels, bookmarks)
 Educational specialties (calendars, scrolls)
 Personal Expression products (themed checks)
 Order enlargement merchandising
 Discounts, gifts forgiving of delivery charges for exceeding
order thresholds
 Fund-raising reselling orientation
 Current
Customer Sourcing
 Shelter and special interest magazine advertising and cold catalog
and insert and other direct mail sourcing
Customer Base
Marketing
 Catalog publishing and direct mail solos
V-199
STATIONERY CONSUMER SALES
FACTORS
CHARACTERISTICS
Seasonality
 Heavy Fall holiday and year-end emphasis
Operations




Generally do own manufacturing
Product design and differentiation
Gift marketing peakload oriented fulfillment and customer service
High product margin, low order size
Problems




Low order size and order infrequency
Peakload order fulfillment requirements
Retail competition for unpersonalized stationery
Transitory market prospecting (Bridal, Birth announcements)
Opportunities




High product margins
Combined self-use/fund-raising marketing
New product specialties (personalized checks)
Combined consumer/business-to-business markets
Trends
 Competitive holiday season overlap by Business Supplies mail
order stationery specialists (Amsterdam, Brookhollow, Baldwin
Cooke)
 Explosive growth of mail order personalized checks
 Continuing domination of segment by Current, resumption of
growth
 1997 Segment Events
 Deluxe Corp. offers Social Expressions (Current) for sale
 1998 Segment Events:
MDC communications acquires Artistic Greetings (Checking
Business)
Thomas Wykoff acquires Artistic Greetings (Non Checking
Business)
Taylor Corp. acquires Current Social Expressions from Deluxe
Corp.
V-200
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
Toys/Games/Children's Products
This large sales size segment ($2,020 Million) lacks any dominant company. Specialization is
essential to avoid retail price competition. A key market is mothers of young children with
development of educational toy and game lines as complement to apparel.
Toys/Games/Children's Products 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
570
Mail Order $Sales ($Million):
2,030
Average Sales Per Business ($Million):
3.5
Internet $Sales ($Million):
50
5 Leading Businesses
Name of Business
Pleasant Co.
Disney Catalog
Delia*s
Georgetown Collection
Opportunities Unlimited
Sub-Segment
Specialty Toys/Novelties/Emblems
Children’s/Mothers’ Products
Children’s/Mothers’ Products
Specialty Toys/Novelties/Emblems
Specialty Toys/Novelties/Emblems
V-201
Sales
($Million)
247.4
200.0
93.4
55.0
37.4
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
SEGMENT: Toys/Games/
Children's Products
1998 SALES ($MILLION): 750
SUB-SEGMENT: Specialty Toys/Novelties/Emblems
NO. OF
BUSINESSES: 285
AVERAGE SALES PER
BUSINESS ($MILLION): 2.6
Unavailable at Retail:
• Price
• Specialties
• Specialties depth
• Personalization
PRODUCT DOMAIN: Fun, entertainment, identification, model building, doll house and special
interest novelty products
MAIL ORDER
RATIONALE:
CHARACTERISTICS
 Novelties-low order size
 Limited specialty retail store conpetition
 Specialty lines:
• Wooden Toys
• Rocketry
• Novelties
• Doll Houses
• Magic supplies
LEADING BUSINESSES ($5 MILLION+ SALES)
 Pleasant Company
 Magic Attic Club
 Mary Meyer Stuffed
Toys
 Georgetown Collection
 Dover Publications
 Stardust
 Hartford Miniatures
 Neptune Fireworks
 Creative Learning
Institute
 Passport International Ltd.
 Serengeti
 House Of Miniatures
 Dee’s Delights
 Hi-Q Products
 Barbie Gourmet
 American Entertainment
 Johnson Smith
 Marvel Entertainment
Group
 Brainstorms
 Celebrity Fan Club
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
V-202
SEGMENT: Toys/Games/
Children's Products
1998 SALES ($MILLION): 555
SUB-SEGMENT: Children's/Mothers' Products
NO. OF
BUSINESSES: 80
AVERAGE SALES PER
BUSINESS ($MILLION): 6.7
Unavailable at Retail:
• Price
• Specialties
• Line range and depth
• Trade brand names
PRODUCT DOMAIN: Children's apparel and home furnishing products and maternity apparel
MAIL ORDER
RATIONALE:
CHARACTERISTICS





Price competition
High product return rate
Maternity/children's market
Specialty retail store competition
Apparel, children's room furniture, traditional toys
LEADING BUSINESSES ($5 MILLION+ SALES)
 Disney Catalog
 Baby Faces
 Airshop
 Delia*s
 Wooden Soldier
 Motherwear
 Hearthsong
 Girlfriends La
 Gifts For Grandkids
 Hanna Andersson Corp.
 Mothers Work Maternity
 Just Nikki
 Children’s Wear Digest
 Biobottoms
 Storybook Heirlooms
 My Twinn
V-203
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
SEGMENT: Toys/Games/
SUB-SEGMENT: Educational Products
Children's Products
1998 SALES ($MILLION): 350 NO. OF
AVERAGE SALES PER
BUSINESSES: 55
BUSINESS ($MILLION): 6.4
Unavailable at Retail:
MAIL ORDER
• Specialties • Line range and depth
• Trade brand names
RATIONALE:
PRODUCT DOMAIN: Child development programs, specialties and materials
CHARACTERISTICS




Upscale market
Premium priced
Child growth developmental lines
Mail order company brand name loyalty
LEADING BUSINESSES ($5 MILLION+ SALES)
 One Step Ahead
 Childcraft Education Corp
 Childswork/Childsplay
 Constructive Playthings
 Zaner-Bloser
 Right Start
 Troll Learn & Play
 Brighter Child Society
 Gifted Children’s
Catalog
 Multimedia Tutorial
Services
 Atlas Editions
 Teaching Tots
 Toys To Grow On
 Sensational Beginnings
 Child Development
Program
 Sights And Sounds For Kids  Hand In Hand
V-204
 Holt Education Outlet
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
SEGMENT: Toys/Games/
Children's Products
1998 SALES ($MILLION): 185
SUB-SEGMENT:
NO. OF
BUSINESSES: 75
General Toys
AVERAGE SALES PER
BUSINESS ($MILLION): 2.5
Unavailable at Retail:
• Price
• Specialties
• Trade brand names
PRODUCT DOMAIN: General toy lines and toy specialties
MAIL ORDER
RATIONALE:
• Line range and depth
CHARACTERISTICS





Specialty retail store competition
Upscale markets
High end traditional lines
Hobby lines
Toy novelty lines
LEADING BUSINESSES ($5 MILLION+ SALES)
 FAO Schwarz
 Hobby Store Distributing
 Child’s Dreams
 Back to Basics Toys
 .Play Visions
 Mike Feinberg Co.
 eToys, Inc.
 Hasbro, Inc
 Toys ‘R Us
 Sherman Specialty Co.
 America’s Hobby Center
V-205
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
SEGMENT: Toys/Games/
SUB-SEGMENT: Games/Play Equipment/Gambling
Children's Products
1998 SALES ($MILLION): 180 NO. OF
AVERAGE SALES PER
BUSINESSES: 75
BUSINESS ($MILLION): 2.4
Unavailable at Retail:
MAIL ORDER
• Specialties • Line range and depth
RATIONALE:
PRODUCT DOMAIN: Games, game playing, gambling and outdoor playing equipment
CHARACTERISTICS
 Games-upscale market
 Videogame market growth
 Board games, play--yard equipment, card games, games of chance, spectator sports
simulation games
LEADING BUSINESSES ($5 MILLION+ SALES)
 Opportunities Unlimited
 Video Game Junkies
 World Wide Games.
 Bits & Pieces
 U.S. Games Systems
 American Gambling
Systems
 Puzzlemania
 Spilsbury Puzzle Co
 ICD Corp.
V-206
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
FACTORS
Generic Industry
CHARACTERISTICS




















Ownership
Children's apparel market at $20B
Toy sales at $22.6B in 1997
Teen market in 1997 at $122B (Teenage Research)
Teen girls’ apparel market at $34B
Aggregate spending for children 6-12 $24B in 1997; nearly
doubled every decade in 60s, 70s, 80s, tripled in 90s; spending
shifts from almost all candy in 60s, to only 1/3 food and drink, in
90’s, 2/3 on playthings, clothes, monies, games
Pre-teen girls’ market at $4.5B, 9% growth in 1997
Doll market at $4B, collectible and specialty dolls at $400 million
Educational toys at $0.6B
Video Game market at $6.6B in 1998; computer game market at
$2.0B
Juvenile furniture market at $2.25B
Die-Cast miniature car market at $250 million
Edutainment product market to $550 million at 25% growth rate
PC entertainment software crimping growth of videogame market
Retail dominance by national specialty toy superstore chains
Hobby specialty store proliferation
Baby boomer upscaling of children's specialty market
Rapid growth of electronic and video toys
Increasing home centered family entertainment
Internet toys and hobbies market at $21 million
School uniform market at $400-500 million
Private--69% Public—31% Government--0%
Conglomerate Ownership











Hathaway: World Book Direct Marketing
Bertelsmann: Child Development Program
Harriet Carter: Funny Side Up
Clair’s Stores: Just Nikki
Delia*s: Delia*s, Storybook Heirlooms
Diplomat Corp.: Biobottoms, Playclothes
Walt Disney: Disney Catalog
Duncan Hill: Kids Club, Natural Baby, Perfectly Safe
800 Trekker:: Brainstorms, 800 Trekker Sci Fi Collectibles
Foster & Gallagher: Hearthsong, Childcraft Education Corp., Troll
Learn & Play
V-207
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
FACTORS
CHARACTERISTICS



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Conglomerate Ownership (con't)
Genesis Direct: Biobottoms, Gifts for Grandkids, Global Friends,
Hand In Hand, Lilliput Motor Co.
Hasbro, Inc. : Hasbro, Inc.
Highlights For Children: Puzzlemania, Zaner-Bloser
KBB (Netherlands): FAO Schwarz
L.L. Knickerbocker: Georgetown Collection, Magic Attic Club
Lakeshore Curriculum Materials: Toys To Grow On
MacAndrews & Forbes: Marvel Entertainment Group
Mattel Co.: Pleasant Company
S&S Worldwide: World Wide Games
Toys ‘R Us: Toys ‘R Us
Troll Associates: Troll Associates
TransAmerica Mailings: Stork Kit
U.S. Toy Co.: Constructive Playthings
ValueVision: Serengeti
Wand Partners: Bits & Pieces
Market
Segementation
 Children's Products/Mother's: Upscale
 General Toys/Special Toys: Family-oriented, mid scale
 Games/Playing Equipment, and Novelties, Emblems: Male, mid
scale
Merchandising




Customer Sourcing
 Space advertising and cold catalog list sourcing
Customer Base
Marketing
 Database media: Catalog, direct mail
 Gift oriented marketing
Seasonality
 Year round with emphasis on Fall
Operations
 General non manufacturing
 Specialty merchandise sourcing
 Gift marketing oriented customer service
Children's educational household products and toys
High end traditional toys
Hobby and gaming
Identification and recognition specialties
V-208
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
FACTORS
Problems
CHARACTERISTICS
 Price competition for low end traditional toy lines from retail mass
merchandisers
 Difficulty of marketing to teenagers compared to marketing
through parents for younger children
 Children's Apparel problems:
 Quick exit of children out of demographic profile
 Quick outgrowing of apparel
 Necessary inventory of colors and patterns
Opportunities




Trends
 Rapid growth acquisitions and public financing followed by
dispositions and acquisitions by others (Right Start)
 Recognition of the segment by conglomerates followed by partial
withdrawal (Walt Disney)
 Children's catalogs growth spurred by mini birth boom
 Development of educational toy and game market
 High failure rate of upscale children's product catalogs
 Diversification of markets from other segments into mail order
children's apparel: Lillian Vernon, Lands' End, Sharper Image,
Patagonia
 Upsurge in children's apparel oriented and infant equipment
catalogs
 Recessionary shift to playwear from better fashions
 Accelerating trend to consolidation and acquisition
 Rapid emergence of teen girls fashion magazine like catalog
market Delias, Zoe, Girlfriends
 1996 Segment Events
 Diplomat Corp. acquires Biobottoms
 Genesis Direct acquires Gifts For Grandkids
 Andrew Hamilton Co. acquires Just For Kids from Walt
Disney
 Foster & Gallagher acquires Magic Cabin Dolls
 Fulcrum Direct acquires Oshkosh Direct and Playclothes
 ValueVision International acquires Serengeti
 Foster & Gallagher acquires Troll Learn And Play
 1997 Segment Events
 Wand Partners acquires Bits & Pieces
 800-Trekker acquires Brainstorms from Cordell Enterprises
Upscale potential of Educational Toy market
Dual institutional/consumer marketing
Electronification as basis for new product development
Edutainment product marketing
V-209
V-210
TOYS/GAMES/CHILDREN’S PRODUCTS CONSUMER SALES
FACTORS
Trends (Cont.)
CHARACTERISTICS






Genesis Direct acquires Childswork/Childsplay
Genesis Direct acquires Hand In Hand
Genesis Direct acquires Lilliput Motor Co. Ltd.
Kids Stuff acquires Natural Baby
Genesis Direct acquires Niños
Fulcrum Direct acquires Storybook Heirlooms from Andrew
Hamilton Co.
 Gymboree catalog out of business
 Kids Stuff in first public offer
 1998 Segment Events:
Delia*s acquires After The Stork, Just For Kids, Playclothes,
Storybook Heirlooms and Zoe
Genesis Direct acquires Biobottoms
Mattel Inc. acquires Pleasant Co.
Fulcrum Direct bankrupt and holdings available for sale (After
The Stork, Oshkosh B’Gosh, Playclothes, Storybook
Heirlooms)
Genesis Direct closes Global Friends and Niňos
Genesis Direct in first public offer (Lilliput, Gifts For
Grandkids, Niňos, Childwork/Childsplay, Hand In Hand,
NASCAR)
V-211
INSURANCE CONSUMER SALES
Insurance
This is the largest ($27,310 Million) of all the financial consumer services sales segments and is
dominated by the 5 leading insurance businesses (61 percent).
The segment is made up of the Closed Market sub-segment (54 percent), businesses with a
market franchise like United Services Automobile Association (military) and AARP/Prudential
(Seniors), the Open Market sub-segment (42 percent), businesses without the franchise of a
captive or retail base consumer market, and Catalog Retailers (4 percent) companies with a retail
related base.
Conglomerate ownership is by diversified financial conglomerates (Citicorp, Leucadia) and
major catalog retailers with large proprietary credit card base (J.C. Penney, Montgomery Ward).
Insurance 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
136+
27,310
200.8-
5 Leading Businesses
Name of Business
Sub-Segment
United Services Automobile
Association
GEICO
AARP/Prudential
J.C. Penney Life Insurance Co.
21st Century Insurance
Closed Markets
Open Markets
Closed Markets
Catalog Retailers
Open Markets
V-212
Sales
($Million)
6,631.0
4,285.0
3,975.6
944.3
907.9
INSURANCE CONSUMER SALES
SEGMENT: Insurance
SUB-SEGMENT: Closed Markets
1998 SALES ($MILLION): 14,830
NO. OF
BUSINESSES: 50+
AVERAGE SALES PER
BUSINESS ($MILLION): 296.6
Unavailable through Brokers or Agents:
MAIL ORDER
• Price
• Program type• Application convenience
RATIONALE:
PRODUCT DOMAIN: Life, health, credit, home, auto insurance with specific institutional,
membership or demographic qualifications
CHARACTERISTICS
 Special affiliated markets: Military, retired professionals
 General consumer lines with emphasis on life and health insurance
 Company may be creation of serviced organization (original relationship of Colonial Penn and American
Association of Retired Persons)
 Opportunities for full line of financial investment, financial management and merchandising services
 Underwriting benefits of defined markets
LEADING BUSINESSES ($5 MILLION+ SALES)
 United Services Automobile
 Washington Physicians Group  Jewelers Mutual Insurance
Association
Co.
 AARP (American Association Of
 National Chiropractic Mutual
 Keystone Insurance Co.
Retired Persons)
Insurance Co.
 American Bankers Insurance Co.
 Chicago Motor Club Insurance  Florists’ Mutual Insurance
Of Florida
Co.
 Teachers Insurance & Annuity
 Agricultural Workers Mutual
 Attorneys Liability
Association
Auto Insurance
Insurance Co.
 National General Insurance Co.
 .AAA Life Insurance Co.
 IDS Property Insurance
Co.
 Amex Assurance Group
 American Family Life
 Union Labor Life
Insurance Co.
Insurance Co.
 CUMIS Insurance Society
 Uniformed Services Benefit
 Preferred Physicians
Association
Medical Risk Retention
Group
 MIC General Insurance Co.
 New York Schools Insurance
 Lawyers Mutual Liability
Reiprocal
Insurance Co. Of North
Carolina
 Veterans Life Insurance Co.
 Savers Property & Casualty
 Automobile Club Of
Insurance Co.
Missouri Group
 BCS Life Insurance Co.
 Academy Life Insurance Co.
 Minnesota Lawyers
Mutual Insurance Co.
 Armed Forces Insurance Exchange  Podiatry Insurance Co. Of
 Southern States Insurance
America
Exchange
V-213
INSURANCE CONSUMER SALES
SEGMENT: Insurance
SUB-SEGMENT: Open Markets
1998 SALES ($MILLION): 11,290
NO. OF
BUSINESSES: 80+
AVERAGE SALES PER
BUSINESS ($MILLION): 141.1-
Unavailable through Broker or Agents
MAIL ORDER
• Price
• Program type• Application convenience
RATIONALE:
PRODUCT DOMAIN: Life, health, credit, home, auto insurance open to the general public
CHARACTERISTICS
 Open market mass merchandising without the franchise of an affiliated market
 Multimedia advertising combining direct mail and broadcast
 Emphasis on casualty as well as life and health
(continued)
V-214
INSURANCE CONSUMER SALES
LEADING BUSINESSES ($5 MILLION+ SALES)
 GEICO Insurance
 Nationwide Group
 Life Insurance Co. Of North
America
 Allianz Life Insurance Co.
Of North America
 Guarantee Trust Life
Insurance Co.
 Savings Bank Life Insurance
Co. Of Massachusetts
 Fidelity Security Life
Insurance
 Western Diversified Services
 Physicians Mutual Insurance Co.
 Depositors Insurance
 California Casualty Co.
 Fidelity Security Life
Insurance
 Western Diversified Services
 21st Century Insurance Co.
 Amica Mutual Insurance Co.
 Colonial Penn Insurance Co.
 Union Fidelity Life Insurance
 Gerber Life Insurance Co.
 Globe Life & Accident Insurance
Co.
 CIGNA Direct Marketing
 Allstate Direct Marketing
 Central States Indemnity Co. Of
Omaha
 Minnesota Mutual Life Insurance
Co.
 Providian Direct Marketing
Property/Casualty Insurance
 Colonial Penn Life
 American International Group
 Providian Life & Health
Insurance Co.
 Physicians Life Insurance Co.
 Wawanesa Mutual Insurance Co.
 IntraAmerica Life Insurance
Co.
 Central States Health & Life
Co. Of Omaha
 Liberty Life Insurance Co.
 Guarantee Reserve Life
Insurance Co.
 Old American Insurance Co.
 Provident Mutual Life
Insurance Co.
 Merastar Insurance Co.
 U.S. Healthcare
 Garden State Life Insurance
Co.
 Zurich Life Insurance Co. Of
America
 Balboa Life Insurance Co.
V-215
 Wausau Underwriters
Insurance Co.
 Foremost Corporate Group
 Pension Life Insurance Co.
 First Providian Life And
Health Insurance Co.
 National Benefit Life
Insurance Co.
 Midland Mutual Life
Insurance Co.
 Federated American
Insurance
 Nacolah Life Insurance Co.
 Funeral Directors Life
Insurance Co.
 Pacific Guardian Life
Insurance Co.
 Companion Life Insurance
Co.
 Life Of Boston Insurance Co.
 North American Co. For Life
& Health
 National Merit Insurance Co.
 North American Co. For Life
& Health
 Royal Insurance Co. Of
Puerto Rico
 United World Life Insurance
 Medico Life Insurance Co.
 Interboro Mutual Indemnity
Insurance Co.
 Atlantic Southeastern
Insurance Co.
INSURANCE CONSUMER SALES
SEGMENT: Insurance
SUB-SEGMENT: Catalog Retailers
1998 SALES ($MILLION): 1,190 NO. OF
BUSINESSES: 6
AVERAGE SALES PER
BUSINESS ($MILLION): 198.3
Unavailable through Brokers or Agents:
MAIL ORDER
•Price
• Program Type
RATIONALE:
PRODUCT DOMAIN: Life, health, credit, home, auto insurance
CHARACTERISTICS




Parent's retail-related customer base as a semi-closed market
Emphasis on life and casualty coverage
Mid scale, down scale demographics
Premium payment convenience
LEADING BUSINESSES ($5 MILLION+ SALES)
 J.C. Penney Life Insurance
Co.
 Montgomery Ward Life
Insurance Co.
 . Montgomery Ward
Insurance Co
 .Forum Insurance Co.
V-216
 J.C. Penney Casualty
Insurance Co.
 Signature Life Insurance Co.
of America
INSURANCE CONSUMER SALES
FACTORS
Generic Industry
CHARACTERISTICS
















Ownership
Total insurance market at $599B
Life insurance market at $281B including annuities
Health insurance market at $73B
Property/Casualty market at $269B
Auto insurance market at $100B
Auto insurance becoming increasingly price-sensitive
Increasing share of homeowners insurance sold by banks and
mortgage lending institutions
Chronic customer acquisition and claim pressures
Increasing shifts to term insurance coverage
Recent dependence on investment income to compensate for
shrinking underwriting income
Home insurance – increasing share sold by banks and other lending
institutions
Severe catastrophic losses of Casualty insurers in 1992 and 1993;
earnings depressed with cutthroat competition and high claims
Health and Life insurers doing better than Casualty insurers with
growing markets and strong prices
Conversion of mutual insurance companies to publicly held
companies as disintegrating walls between financial services
increases demand for equity to expand operations
Internet emerging as a method of obtaining information and
transacting business, 60% of insurers to offer enhanced on-line
purchasing services in period from 1998, 2002, Internet with
potential substantially reduce insurances, marketing and selling
costs
Internet emerging as a method of obtaining information and
transacting business, 60% of insurers to offer advanced on-line
purchasing services in period from 1998-2002. Internet with
potential to substantially reduce insurers’ marketing and selling
costs
Private--41% Public—59% Government--0%
Conglomerate Ownership



Aegon N.V.: Academy Life Insurance Co., First Providian Life
And Health Insurance Co., Providian Direct Insurance, Property
And Casualty Group, Providian Life And Health Insurance Co.,
Veterans Life Insurance Company
Aetna: U.S. Healthcare
John Alden: Western Diversified Services
V-217
INSURANCE CONSUMER SALES
FACTORS
CHARACTERISTICS

























Conglomerate Ownership (continued)
Allstate Co.: Allstate Direct Marketing
American Association Of Retired Persons: AARP Life, Health,
Auto and Home
American Automobile Association: AAA Life Insurance Co.,
Chicago Motor Club Insurance Co.
American Express: American Centurion Life Assurance Co.,
Keystone Insurance Co., IDS Property Insurance Co., American
Family Life Insurance Co.
American International Group: American International Group,
American Bankers Insurance Co. Of Florida
Armed Forces Group: Armed Forces Insurance Exchange
Berkshire Hathaway: Central States Health & Life Co. Of Omaha,
Central States Indemnity Of Omaha, GEICO
Blue Cross: BCS Life Assurance Co.
CIGNA: CIGNA Direct Marketing, Life Insurance Co. of North
America
CUNA Mutual Insurance Society: CUMIS Insurance Society
CitiGroup: National Benefit Life Insurance Co.
Conseco: Colonial Penn Life
General Electric: Amex Assurance Group, Union Fidelity Life
Insurance
General Motors: MIC Life Insurance Group, National General
Insurance Co.
Kemper: Zurich Life Insurance Co. of America
Leucadia National: IntraAmerica Life Insurance Co.
Mutual Of Omaha: America Life Insurance Co. Of New York,
Companion Life Insurance Co., United World Life Insurance
Nationwide Group: Nationwide Group, Wausau Underwriters
Insurance Co.
Novartis AG: Gerber Life Insurance Co.
J.C. Penney: J.C. Penney Casualty Insurance Co., J.C. Penney Life
Insurance Co.
Physicians Mutual: Physicians Life Insurance Co., Physicians
Mutual Insurance Co.
Sammons Enterprises: Nacolah Life Insurance Co., National
Mutual Benefit, North America Co. for Life & Health
Textron: Balboa Life Insurance Co., Family Insurance Co.
USAA: United Services Automobile Association
V-218
INSURANCE CONSUMER SALES
FACTORS
CHARACTERISTICS
Conglomerate Ownership (continued)


Montgomery Ward: Forum Insurance Co., Signature Life Insurance
Co. Of America, Montgomery Ward Insurance, Montgomery Ward
Life Insurance Co.
Winterthur Swiss Group: Federated American Insurance Co.,
National Merit Insurance Co.





Groups: Professional, occupational, fraternal
Demographic: Young parents, senior citizens
Self-employed, small businessmen
Dispersed markets: Small town, rural
Merchandising








Life
Health and accident
Annuity, financial investment programs
Home and auto casualty
Income protection
Retail credit insurance
Special health programs
Legal services
Customer Sourcing




Group endorsed direct mail promotions
Merchandise buyer base of retail business
Mail order merchandise buyers
Compiled demographically selected lists
Customer Base
Marketing




Database media: Direct mail, telemarketing
Renewal marketing
Cross selling of other insurance lines
Expanding benefit limits and family member coverage
Seasonality
 Year round
Operations
 Separation of underwriting, marketing and administrative
functions, responsibility for which often assumed by different
companies
 Highly marketing and computer process oriented
Market Segmentation
V-219
FACTORS
Problems








INSURANCE CONSUMER SALES
CHARACTERISTICS
Increasing customer acquisition costs
Wear-out of productivity of promotional programs
Prospecting target segment and renewal timing identification
Stress on low price necessary for promotional success
Investment cost of direct response systems
Medical screening limitations increasing risk
Renewal timing uncertainty in replacement insurance marketing
Possible fickleness of third party clients
Opportunities






Trends
 Centralization of insurance mail order marketing at Allstate
 Increased scrutiny of potential of insurance mail order by insurers
in the face of increased costs and decreased market coverage of the
Agency system
 Decreased response of third party promotional market
 Decreased prospecting response rates
 Slump in premium sales for traditional direct response insurance
markets:
 Accidental Death And Dismemberment
 Guarantee Issue 50+ Term Life
 Hospital Cash Insurance
 Further decline of Colonial Penn with absorption into Leucadia
National
 Submergence of National Liberty into Providian
 Absorption of GEICO by Berkshire Hathaway
 Continued rapid growth of USAA and expansion into full line of
financial investment products and merchandise services
 AARP other mainstay of Closed Markets with increasing support
role of Hartford
 Enhanced ability of direct response insurance to identify creditable
prospects with improved databases and modeling
Affinity group/third party marketing
House list cross-selling
Guaranteed acceptance marketing
Insurance market for women
Diversification into investment related products
Middle and low income markets vacated by agents
Market segment specialization
 Opportunities for direct response insurers to pick up slack of
increasing number of consumers priced out of Casualty insurance
coverage
V-220
INSURANCE CONSUMER SALES
FACTORS
Trends (Cont.)
CHARACTERISTICS
 1996 Segment Events:
Aegon N.V. acquires Providian
GE capital acquires Union Fidelity from AON
 1997 Segment Events:
Conseco, Inc. acquires Colonial Penn from Leucadia
Irish Life PLC acquires Guarantee Life Insurance Co.
 1998 Segment Events:
Cendent acquires Providian Auto & Home Insurance from
Aegon N.V.
V-221
GENERAL MERCHANDISE - CATALOG RETAILERS CONSUMER SALES
Catalog Retailers
This second leading general merchandising segment ($4,913 Million) is dominated in sales by
the Retail Based mail order sub-segment (87 percent) compared to the solely Mail Order Based
sub-segment (13 percent). Profitability and growth is moderate for both segments.
Catalog retailers' share of total mail order sales had declined with the explosive emergency of
specialty mail order marketing, a counterpart in-mail order to the loss of share of market in retail
of department stores to specialty stores.
Catalog retailers, for many years, losing share of market to specialty mail order marketers at the
high end and to discount mass merchandisers at the low end, have made efforts to spawn
specialty catalogs out of their general catalogs and to upgrade their market and increase their
fashion orientation (Spiegel). Sears, Roebuck after severe losses closed down its Catalog
Division in 1993, but later revived its big Holiday book and licensed and then suspended
specialty catalogs with Hanover Direct
Similar joint catalog venture by Montgomery Ward with Fingerhut has been suspended with sale
of Montgomery Ward Direct to ValueVision International.
Outside of Spiegel and J.C. Penney mail order merchandising by the erstwhile Catalog Retailers
is now confined to direct mail syndication.
Catalog Retailers 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
4
4,913.0
1,228.3
Catalog Retailers
Name of Business
Sub-Segment
J.C. Penney
Spiegel
Sears, Roebuck & Co.
Montgomery Ward
Retail Based
Mail Order Based
Retail Based
Retail Based
V-222
Sales
($Million)
3,600.0
663.0
550.0
100.0
GENERAL MERCHANDISE - CATALOG RETAILERS CONSUMER SALES
SEGMENT: General Merchandisers- SUB-SEGMENT:
Catalog Retailers
1998SALES ($MILLION): 4,250
NO. OF
BUSINESSES: 3
Retail Based
AVERAGE SALES PER
BUSINESS ($MILLION): 1,416.7
Unavailable at Own Retail:
MAIL ORDER
• Ordering convenience
• Special offers
RATIONALE:
PRODUCT DOMAIN: Own products, third-party syndicated products
CHARACTERISTICS
 Sears, Roebuck and Montgomery Ward:
• Promotional activity now largely confined to direct mail product syndication
 J.C. Penney
• Specialty catalogs and seasonal big books
• Emphasis on soft goods merchandising and telephone ordering
LEADING BUSINESSES ($5 MILLION+ SALES)
 J.C. Penney
 Sears, Roebuck & Co.
V-223
 Montgomery Ward
GENERAL MERCHANDISE - CATALOG RETAILERS CONSUMER SALES
SEGMENT: General MerchandisersCatalog Retailers
1998 SALES ($MILLION): 663.0
SUB-SEGMENT: Mail Order Based
NO. OF
BUSINESSES: 1
Unavailable at Retail:
MAIL ORDER
• Trade brand names
RATIONALE:
PRODUCT DOMAIN: Apparel, home furnishings
AVERAGE SALES PER
BUSINESS ($MILLION): 663.0
• Price
• Ordering convenience
CHARACTERISTICS
 Increasing proportions of more profitable soft goods in lines
 Conflict between prospecting on basis of price appeals and merchandising of an upgraded line
 Return of sales growth and profitability problems in 1997
LEADING BUSINESSES ($5 MILLION+ SALES)
 Spiegel
V-224
GENERAL MERCHANDISE - CATALOG RETAILERS CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
 Vulnerability to business cycle downturns
 Subject to acute profit pressures in consumer credit financing in
periods of rising interest rates
 Positioning and competitive problems against discount retailers
and specialty retailers
Ownership
Private--2% Public--98% Government--0%
Conglomerate Ownership




J.C. Penney: J.C. Penney
Otto Versand: Spiegel
Sears, Roebuck & Co.: Sears, Roebuck & Co.
Montgomery Ward: Montgomery Ward
Market Segmentation
 Retail Store based:
 Family oriented
 Mid scale, down scale
 Suburban, smaller metro market
 Mail Order based:
 Career women oriented
 Upscale
 Urban, suburban, major markets
Merchandising
 General merchandise line with increasing emphasis on soft goods
and specialty products
 Private labels and national brands
 Middle price range with emphasis on customer service
Customer Sourcing
 Retail Based: Retail store credit card base
 Mail Order Based: Shelter magazines and mini catalog cold list
prospecting
Customer Base
Marketing
 Continued circulation dependent on customer ordering activity
above threshold
 General distribution of limited number of full catalogs and selected
distribution of larger number of merchandise specialized catalogs
Seasonality
 Follows general retail seasonal patterns with emphasis on Fall and
Spring
V-225
GENERAL MERCHANDISE - CATALOG RETAILERS CONSUMER SALES
FACTORS
CHARACTERISTICS
Operations
 Promotional operations dependent on retail credit card base
 Consumer credit key marketing, financial and administrative
function
 Highly automated telephone ordering and product fulfillment
system
Problems
 Rising printing and postage costs for full catalogs
 Repositioning failure of Aldens, success of Spiegel
 Inadequate positioning of specialty catalogs against specialty
competition
 Customer franchise limitations on upgrading lines and prices
Trends
 Collapse and suspension of Sears own catalog operations
 Shift to home delivery to store pick-up
 Closedown of Catalog Division
 Suspension of Montgomery Ward catalog marketing with
Fingerhut, Sears with Hanover Direct
 Decline of Big 5 catalogs to Big 4 (Aldens drop-out), in 1985 to
Big 3 (Montgomery Ward drop-out), in 1994 to Big 2 (Sears dropout)
 Newly developed catalog circulation balance between two or three
general catalogs and a portfolio of specialty catalogs
 Shift from point-of-sale and mail order to phone order
 Diversification of Spiegel into apparel and sporting goods via
acquisition
 Attempted shift from full promotional responsibility to low risk
shared relationships (Montgomery Ward, Sears)
 Disguised rental of credit card lists through syndication
relationships with third parties
 Increased investment and emphasis on telemarketing
V-226
DEPARTMENT/SPECIALTY STORES CONSUMER SALES
Department/Specialty Stores
Department store organizations with exhausted trading area potentials and deterred by rising
physical costs of territorial expansion are exploring the strategic potential of mail order as a
means of gaining a national franchise
Department/Specialty Stores 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses:
Mail Order $Sales ($Million):
N/A (Most department stores)
12,800.0
5 Leading Businesses
Name of Business
Federated/Macy's
May Department Stores
Dillard
Nordstrom
Dayton Hudson
Sub-Segment
Trading Area Mail Order
Trading Area Mail Order
Trading Area Mail Order
Trading Area Mail Order
Trading Area Mail Order
V-227
Sales
($Million)
1,160.0
800.0
500.0
350.0
270.0
DEPARTMENT/SPECIALTY STORES CONSUMER SALES
SEGMENT: Department/
SUB-SEGMENT: Trading Area Mail Order
Specialty Stores
1998 SALES ($MILLION): 12,800 NO. OF
AVERAGE SALES PER
BUSINESSES: NA
BUSINESS ($MILLION): -Unavailable at Own Retail:
MAIL ORDER
• Ordering convenience
• Special offers
RATIONALE:
PRODUCT DOMAIN: Emphasis on Apparel, Cosmetics, Home Furnishings
CHARACTERISTICS
 Generally subordinated to retail store merchandising strategies, formulas, and requirements
 Important function is to sustain customer store shopping awareness and generate traffic
LEADING BUSINESSES ($5 MILLION+ SALES)
 Federated Department
Stores/Macy’s
 Nordstrom
 Belk Department Stores
 May Department Stores
 Dayton-Hudson
 Neiman-Marcus
 Dillard
V-228
DEPARTMENT/SPECIALTY STORES CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
 Escalating staffing and operating costs
 Increasing competition for department stores from specialty stores
at the high end and discount stores at the low end.
Ownership
Private--2% Public--98% Government--0%
Conglomerate Ownership








Belk Department Stores: Belk Department Stores
Dayton Hudson: Dayton Hudson
Dillard: Dillard Department Stores
Federated Stores: Federated Department Stores/Macy's
Harcourt General: Neiman-Marcus
May Department Stores: May Department Stores
Mercantile Stores: Mercantile Stores Co.
Nordstrom: Nordstrom
Market Segmentation
 Female
 Mid scale, upscale
 Large metro area, suburban
Merchandising





Customer Sourcing
 Trading Area Mail Order: Retail store credit card basis
Customer Base
Marketing
 Catalog publishing and statement inserts
 Emphasis on gift and telephone marketing
 Merchandising and traffic generation functions
Seasonality
 Follows general retail store pattern
Operations
 Retail credit card basis
 Schedule offshoot of retail operations
Problems
 Subordination of mail order merchandising to traffic generation
function
Fashion apparel
Decorative accessories
Cosmetics/toiletries, personal accessories
High soft goods percentage
Middle, high end prices
V-229
DEPARTMENT/SPECIALTY STORES CONSUMER SALES
FACTORS
Trends
CHARACTERISTICS
 Increased recognition of mail order compared to store traffic
generation function of catalog in the face of saturated store
expansion opportunity and store sales slowdowns in business cycle
downturns
 Increasing separation of mail order from store operations and
emphasis on telemarketing in mail order operations
 Radical organization ownership disruption with acquisitions by
May, Harcourt General and Federated
V-230
OIL COMPANIES CONSUMER SALES
Oil Companies
Oil Company syndication to proprietary credit card bases is a stagnant general merchandise sales
segment ($300 Million).
Growth of oil company syndication sales is limited by the size and inflow to the credit card
bases, their mid scale demographics and the financial turbulence of the syndicator's responsible
for merchandising sourcing and fulfillment.
General Merchandise: Oil Companies 1998 Consumer Sales
Segment Size:
No. Of Mail Order Businesses
Mail Order $Sales ($Million):
Average Sales Per Business ($Million):
8
280
35.0
5 Leading Businesses
Name of Business
Shell Mail Order
Mobil Merchandise Center
Amoco
Texaco
Exxon Merchandise Center
Sub-Segment
Oil Company Syndication
Oil Company Syndication
Oil Company Syndication
Oil Company Syndication
Oil Company Syndication
V-231
Sales
($Million)
55.0
48.0
45.0
40.0
35.0
OIL COMPANIES CONSUMER SALES
FACTORS
CHARACTERISTICS
Generic Industry
Ownership
Consumer image problem of oil companies
Merger consolidation among oil companies
Private--0% Public--100% Government--0%
Conglomerate Ownership







First Data Corp.: Shell Mail Order, Unocal
Ford Motor Co.: Amoco
General Electric: Exxon Merchandise Center
Ito-Yokado: Citgo
Mobil: Mobil Merchandise Center
Standard Oil of California: Chevron
Texaco: Texaco
Market Segmentation




Gasoline credit card base
Male
Mid scale, down scale
Same regional distribution as gasoline marketing
Merchandising
 Sourced through merchandise distributors
 Male:
 Audio-Video
 Consumer electronics
 Watches, personal accessories
 Luggage, leather goods
 Female:
 Cookware, dinnerware
 Household appliances
 Jewelry
Customer Sourcing
 Source through inflow to retail credit card base
 Regular program to activate and reactivate credit card base
Customer Base
Marketing
 Statement inserts, solo package, insert package and catalog
 Frequency of promotion determined by prior order behavior
 Installment credit payment convenience
Seasonality
 Regular year round program supplementing monthly statement
inserts with periodic special mailings
V-232
OIL COMPANIES CONSUMER SALES
FACTORS
CHARACTERISTICS
Operations
 Oil company assumes payment collection responsibility
 Syndicator responsible for promotional, advertising, product
fulfillment responsibilities
 Fulfillment either by manufacture drop shipment or from
syndicator inventory
Problems





Trends
 Increased uncertainty about continuity of mail order customer base
syndication as a result of oil industry company mergers (demise of
Gulf syndication followed by recent revival)
 Shake-out among syndicator suppliers squeezed by increasing
promotional costs and tight sales margins
 Stagnant oil company merchandising sales
 Disposition by oil companies of financial responsibility of
businesses to outside financial specialty firms
 1996 Segment Events
 First Data Corp. takeover of financial responsibility for Shell
Mail Order and Unocal
 General Electric (GE Capital) takeover of financial
responsibility for Exxon Merchandise Center
 Ford Motor Co. (The Associates) takeover of financial
responsibility for Amoco
Merchandising sourcing to avoid wear-out of consumer interest
Limited spending potential of retail card base
Financial instability of syndicators
Diminishing customer response
Credit card base demarketing
(Remember, this information should be used as a base to build from. For current direct marketing statistics please
refer to these titles: The Direct Marketing Statistical Fact Book the Direct Marketing Response Rate Study the
Catalog Age 150 the Consumer Directory of Mail Order Catalogs and the Business to Business Directory of Mail
Order Catalogs.)
V-233