RELIGIOUS PRODUCTS CONSUMER SALES 5D.doc · Web viewWord Family Record & Tape Club Christian ......

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: 270Mail Order $Sales ($Million): 590Average Sales Per Business ($Million): 2.2

5 Leading Businesses

SalesName of Business Sub-Segment ($Million)

Christian Book Distributors Christian: Devotional 63.6Augsburg Fortress Publishers Christian: Devotional 52.8Concordia Publishing House Christian: Devotional 35.0Word Family Record & Tape Club Christian: Devotional 25.0Nelson Word Church Services Christian: Devotional 20.0

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SEGMENT: ReligiousProducts

SUB-SEGMENT: Christian

1998 SALES ($MILLION): 250 NO. OFBUSINESSES: 180

AVERAGE SALES PER BUSINESS ($MILLION): 2.9

MAIL ORDERRATIONALE:

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 productsGifts/Cultural Products: Cultural, ethnic and gift products with a religious association or source

CHARACTERISTICS 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 Christian Gift Center

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SEGMENT: Religious Products SUB-SEGMENT: Judaic/Other




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 productsGifts/Cultural Products: Cultural, ethnic and gift products with a religious association or source

CHARACTERISTICS

• Bar Mitzvah gifts • Decorative accessories• Books • Meditation supplies• Cultural gifts


None

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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 BaseMarketing

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

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Opportunities Dual consumer/institutional markets Limited retail store competition Dual ethnic/denominational markets Seasonal, religious life event gift occasions Dispersed religious, ethnic communities

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.

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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 sub-segments, 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: 700Mail Order $Sales ($Million): *2,990Average Sales Per Business ($Million): 4.3



Bass Pro Shops Fishing/Aquatic Equipment 280.0Golfsmith Athletic Equipment 126.0Sportsman’s Guide Hunting Equipment 125.5Eastbay Running Store Apparel Oriented 142.5Orvis Co. Fishing/Aquatic Equipment 95.9

*Note: ReclassificationNon fashion oriented portion of Apparel: Great Outdoors ($380 million sales)

reclassified as Sporting Goods: Apparel Oriented.

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SEGMENT: Sporting Goods SUB-SEGMENT: Athletic Equipment




Unavailable at Retail:• Price • Specialty • Specialty depth

PRODUCT DOMAIN: Individual athletic equipment specialties

CHARACTERISTICS

Athletic equipment specialization Upscale demographics Consumer high tech performance appeal


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

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SEGMENT: Sporting Goods SUB-SEGMENT: Hunting Equipment1998 SALES ($MILLION): 580 NO. OF

BUSINESSES: 110AVERAGE 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

CHARACTERISTICS

Equipment specialization Consumer high tech performance appeal Limited specialty retail store competition


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

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SEGMENT: Sporting Goods SUB-SEGMENT: Fishing/Aquatic Equipment1998 SALES ($MILLION): 575 NO. OF




PRODUCT DOMAIN: Fishing and aquatic sports equipment and supplies

CHARACTERISTICS

Low order size Importance of proprietary products Increasing retail discount store competition Consumer high tech performance appeal


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

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SEGMENT: Sporting Goods SUB-SEGMENT: Apparel Oriented1998 SALES ($MILLION): 380 NO. OF



Unavailable at Retail:• Specialties • Specialty range and depth

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


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

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SEGMENT: Sporting Goods SUB-SEGMENT: Marine Equipment




Unavailable at Retail:• Price • Specialties • Line range and depth• Trade name brands

PRODUCT DOMAIN: Specialty boats and outfitting equipment across all marine specialties

CHARACTERISTICS

High order size Depth of inventory of specialties Marine gift products Upscale demographics Mail order/retail store business synergies


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 We-No-Nah Canoe

Marine Surplus Depot Northwest River Supply

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SEGMENT: Sporting Goods SUB-SEGMENT: Hiking, Mountaineering/Ski Equipment1998 SALES ($MILLION): 125 NO. OF




PRODUCT DOMAIN: Hiking, mountaineering and skiing specialties and accessories

CHARACTERISTICS

Equipment specialization Limited specialty retail store competition Upscale market Consumer high tech performance appeal


Recreational Equipment Inc.

Sessions Snowboard Shop Performance Snowboarding

Burton Snowboards

SEGMENT: Sporting Goods SUB-SEGMENT: Equestrian Supplies

1998 SALES($MILLION): 105

NO. OFBUSINESSES: 35




PRODUCT DOMAIN: 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


State Line Tack Libertyville Saddle Shop . Miller Harness Co

Chick’s Harness & Supply

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SEGMENT: Sporting Goods SUB-SEGMENT: Camping Supplies1998 SALES ($MILLION): 95 NO. OF



Unavailable at Retail:• Price • Specialties • Specialty range and depth

PRODUCT DOMAIN: Camping full line and specialty products

CHARACTERISTICS

General camping line or specialties Mid scale, down scale market


Campmor Huntmaster Survival Gear Igloo Products

Hard Hat

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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


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

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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


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

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Trends (cont.) 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)

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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: 110Mail Order $Sales ($Million): 690Average Sales Per Business ($Million): 6.3



Checks In The Mail Specialized Stationery 85.7Current Checks Specialized Stationery 84.3Current General Stationery 84.2Concepts Direct General Stationery 79.2Designer Checks Specialized Stationery 54.9

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SEGMENT: Stationery SUB-SEGMENT: Specialized Stationery1998 SALES ($MILLION): 405 NO. OF



Unavailable at Retail:• Specialties • Specialty depth

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 labelsLEADING 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

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SEGMENT: Stationery SUB-SEGMENT: General Stationery1998 SALES ($MILLION): 235 NO. OF



Unavailable at Retail:• Price • Line range and depth

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


Current Artistic Greetings Bruce Bolind

Concepts Direct American Stationery Co./Rytex Co.

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SEGMENT: Stationery SUB-SEGMENT: Greeting Cards1998 SALES ($MILLION): 50 NO. OF



Unavailable at Retail:• Price • Specialty messaging • Line range and depth

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


Trumble Greetings Henderson Bailey

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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%


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


Catalog publishing and direct mail solos

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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.

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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: 570Mail Order $Sales ($Million): 2,030Average Sales Per Business ($Million): 3.5Internet $Sales ($Million): 50



Pleasant Co. Specialty Toys/Novelties/Emblems 247.4Disney Catalog Children’s/Mothers’ Products 200.0Delia*s Children’s/Mothers’ Products 93.4Georgetown Collection Specialty Toys/Novelties/Emblems 55.0Opportunities Unlimited Specialty Toys/Novelties/Emblems 37.4

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SEGMENT: Toys/Games/ Children's Products

SUB-SEGMENT: Specialty Toys/Novelties/Emblems




Unavailable at Retail:• Price • Specialties • Specialties depth• Personalization

PRODUCT DOMAIN: Fun, entertainment, identification, model building, doll house and special interest novelty products

CHARACTERISTICS

Novelties-low order size Limited specialty retail store conpetition Specialty lines:

• Wooden Toys• Rocketry• Novelties• Doll Houses• Magic supplies


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

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SUB-SEGMENT: Children's/Mothers' Products





PRODUCT DOMAIN: Children's apparel and home furnishing products and maternity apparel

CHARACTERISTICS

Price competition High product return rate Maternity/children's market Specialty retail store competition Apparel, children's room furniture, traditional toys


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

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SUB-SEGMENT: Educational Products




Unavailable at Retail:• Specialties • Line range and depth • Trade brand names

PRODUCT DOMAIN: Child development programs, specialties and materials

CHARACTERISTICS

Upscale market Premium priced Child growth developmental lines Mail order company brand name loyalty


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 Holt Education Outlet

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SUB-SEGMENT: General Toys





PRODUCT DOMAIN: General toy lines and toy specialties

CHARACTERISTICS

Specialty retail store competition Upscale markets High end traditional lines Hobby lines Toy novelty lines


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

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SUB-SEGMENT: Games/Play Equipment/Gambling




Unavailable at Retail:• Specialties • Line range and depth

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 gamesLEADING 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.

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Generic Industry 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


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


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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 Children's educational household products and toys High end traditional toys Hobby and gaming Identification and recognition specialties

Customer Sourcing Space advertising and cold catalog list sourcing


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

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FACTORS CHARACTERISTICSProblems 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 Upscale potential of Educational Toy market Dual institutional/consumer marketing Electronification as basis for new product development Edutainment product marketing

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

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Trends (Cont.) 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)

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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: 136+Mail Order $Sales ($Million): 27,310Average Sales Per Business ($Million): 200.8-



United Services Automobile Association Closed Markets 6,631.0GEICO Open Markets 4,285.0AARP/Prudential Closed Markets 3,975.6J.C. Penney Life Insurance Co. Catalog Retailers 944.321st Century Insurance Open Markets 907.9

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SEGMENT: Insurance SUB-SEGMENT: Closed Markets1998 SALES ($MILLION): 14,830 NO. OF

BUSINESSES: 50+AVERAGE SALES PER BUSINESS ($MILLION): 296.6


Unavailable through Brokers or Agents:• Price • Program type • Application convenience

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

Association Washington Physicians Group Jewelers Mutual Insurance

Co. AARP (American Association Of

Retired Persons) National Chiropractic Mutual

Insurance Co. Keystone Insurance Co.

American Bankers Insurance Co. Of Florida

Chicago Motor Club Insurance Co.

Florists’ Mutual Insurance

Teachers Insurance & Annuity Association

Agricultural Workers Mutual Auto Insurance

Attorneys Liability Insurance Co.

National General Insurance Co. .AAA Life Insurance Co. IDS Property Insurance Co.

Amex Assurance Group American Family Life Insurance Co.

Union Labor Life Insurance Co.

CUMIS Insurance Society Uniformed Services Benefit Association

Preferred Physicians Medical Risk Retention Group

MIC General Insurance Co. New York Schools Insurance Reiprocal

Lawyers Mutual Liability Insurance Co. Of North Carolina

Veterans Life Insurance Co. Savers Property & Casualty Insurance Co.

Automobile Club Of Missouri Group

BCS Life Insurance Co. Academy Life Insurance Co. Minnesota Lawyers Mutual Insurance Co.

Armed Forces Insurance Exchange Podiatry Insurance Co. Of America

Southern States Insurance Exchange

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SEGMENT: Insurance SUB-SEGMENT: Open Markets1998 SALES ($MILLION): 11,290 NO. OF

BUSINESSES: 80+AVERAGE SALES PER BUSINESS ($MILLION): 141.1-


Unavailable through Broker or Agents• Price • Program type • Application convenience

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)

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GEICO Insurance Life Insurance Co. Of North America

Wausau Underwriters Insurance Co.

21st Century Insurance Co. Allianz Life Insurance Co. Of North America

Foremost Corporate Group

Amica Mutual Insurance Co. Guarantee Trust Life Insurance Co.

Pension Life Insurance Co.

Colonial Penn Insurance Co. Savings Bank Life Insurance Co. Of Massachusetts

First Providian Life And Health Insurance Co.

Union Fidelity Life Insurance Fidelity Security Life Insurance

National Benefit Life Insurance Co.

Nationwide Group Western Diversified Services Midland Mutual Life Insurance Co.

Physicians Mutual Insurance Co. Depositors Insurance Federated American Insurance

California Casualty Co. Fidelity Security Life Insurance

Nacolah Life Insurance Co.

Gerber Life Insurance Co. Western Diversified Services Funeral Directors Life Insurance Co.

Globe Life & Accident Insurance Co.

IntraAmerica Life Insurance Co.

Pacific Guardian Life Insurance Co.

CIGNA Direct Marketing Central States Health & Life Co. Of Omaha

Companion Life Insurance Co.

Allstate Direct Marketing Liberty Life Insurance Co. Life Of Boston Insurance Co.

Central States Indemnity Co. Of Omaha

Guarantee Reserve Life Insurance Co.

North American Co. For Life & Health

Minnesota Mutual Life Insurance Co.

Old American Insurance Co. National Merit Insurance Co.

Providian Direct Marketing Property/Casualty Insurance

Provident Mutual Life Insurance Co.

North American Co. For Life & Health

Colonial Penn Life Merastar Insurance Co. Royal Insurance Co. Of Puerto Rico

American International Group U.S. Healthcare United World Life Insurance Providian Life & Health

Insurance Co. Garden State Life Insurance

Co. Medico Life Insurance Co.

Physicians Life Insurance Co. Zurich Life Insurance Co. Of America

Interboro Mutual Indemnity Insurance Co.

Wawanesa Mutual Insurance Co. Balboa Life Insurance Co. Atlantic Southeastern Insurance Co.

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SEGMENT: Insurance SUB-SEGMENT: Catalog Retailers1998 SALES ($MILLION): 1,190 NO. OF



Unavailable through Brokers or Agents:•Price • Program Type

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


J.C. Penney Life Insurance Co.

. Montgomery Ward Insurance Co

J.C. Penney Casualty Insurance Co.

Montgomery Ward Life Insurance Co.

.Forum Insurance Co. Signature Life Insurance Co. of America

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Generic Industry 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



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

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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-217


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.

Market Segmentation 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


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

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INSURANCE CONSUMER SALESFACTORS CHARACTERISTICS

Problems 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 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

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

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FACTORS CHARACTERISTICSTrends (Cont.) 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-220

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: 4Mail Order $Sales ($Million): 4,913.0Average Sales Per Business ($Million): 1,228.3

Catalog RetailersSales

Name of Business Sub-Segment ($Million)

J.C. Penney Retail Based 3,600.0Spiegel Mail Order Based 663.0Sears, Roebuck & Co. Retail Based 550.0Montgomery Ward Retail Based 100.0

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SEGMENT: General Merchandisers- Catalog Retailers

SUB-SEGMENT: Retail Based

1998SALES ($MILLION): 4,250 NO. OFBUSINESSES: 3

AVERAGE SALES PER BUSINESS ($MILLION): 1,416.7


Unavailable at Own Retail:• Ordering convenience • Special offers

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


J.C. Penney Sears, Roebuck & Co. Montgomery Ward

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SEGMENT: General Merchandisers- Catalog Retailers

SUB-SEGMENT: Mail Order Based

1998 SALES ($MILLION): 663.0 NO. OFBUSINESSES: 1



Unavailable at Retail:• Trade brand names • Price • Ordering convenience

PRODUCT DOMAIN: Apparel, home furnishings

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


Spiegel

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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%


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


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

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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 drop-out)

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

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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: N/A (Most department stores) Mail Order $Sales ($Million): 12,800.0



Federated/Macy's Trading Area Mail Order 1,160.0May Department Stores Trading Area Mail Order 800.0Dillard Trading Area Mail Order 500.0Nordstrom Trading Area Mail Order 350.0Dayton Hudson Trading Area Mail Order 270.0

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SEGMENT: Department/ Specialty Stores

SUB-SEGMENT: Trading Area Mail Order

1998 SALES ($MILLION): 12,800 NO. OFBUSINESSES: NA

AVERAGE SALES PER BUSINESS ($MILLION): --


Unavailable at Own Retail:• Ordering convenience • Special offers

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


Federated Department Stores/Macy’s

Nordstrom Belk Department Stores

May Department Stores Dayton-Hudson Neiman-Marcus

Dillard

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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.



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 Fashion apparel Decorative accessories Cosmetics/toiletries, personal accessories High soft goods percentage Middle, high end prices

Customer Sourcing Trading Area Mail Order: Retail store credit card basis


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

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Trends 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-229

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 8Mail Order $Sales ($Million): 280Average Sales Per Business ($Million): 35.0

5 Leading BusinessesSales

Name of Business Sub-Segment ($Million)

Shell Mail Order Oil Company Syndication 55.0Mobil Merchandise Center Oil Company Syndication 48.0Amoco Oil Company Syndication 45.0Texaco Oil Company Syndication 40.0Exxon Merchandise Center Oil Company Syndication 35.0

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Generic Industry Consumer image problem of oil companiesMerger consolidation among oil companies



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


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

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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 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

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

(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.)

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http://www.nmoa.org/catalog/mailorderdir.htm

http://www.nmoa.org/catalog/catalogage150.htm

http://www.nmoa.org/catalog/dma/dma_response.htm

http://www.nmoa.org/catalog/dma/dma_stats.htm

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