Hooked On Retail
By Pauline Tingas
Popular supplemental education brand explores its potential with an aggressive, but balanced, retail strategy.
There’s a lot of room for improvement when your packaging is simply a brown corrugated box. That’s not to say that such a box didn’t serve Hooked on Phonics well—protecting its educational products through shipping during the 17 years the brand was sold through direct-response radio and TV.
But, in 2005, fresh from an acquisition by Educate Inc., the company was charged with making a rapid transition from “infomercial” sales to a retail distribution strategy.
The brown corrugated box would have to go. “The brand had never existed at retail. It literally didn’t have packaging,” says Mark Mashaw, vice president of marketing for Educate Products, which oversees the Hooked on Phonics brand.
New packaging would have the task of launching the brand as a recognizable consumer good on the shelf. It would also have to stand on its own, because, with the direct-response model scrapped, packaging would be the primary force to drive sales.
One challenge the packaging didn’t have was establishing name recognition. Unlike most brands and their first forays into retail, Hooked on Phonics had incredible awareness built through years of infomercials. It had become so familiar that, in one instance, it was spoofed by the mischievous, animated series South Park in an episode dubbed “Hooked on Monkey Phonics.”
Mashaw says the brand also enjoyed great customer loyalty, the result of awards bestowed by teaching and parenting associations. “We were extremely well known and trusted by parents,” he says.
‘Strong opportunity in the retail space’
Of course, that allegiance had plenty of time to develop. Hooked on Phonics first came on the market in 1987, the creation of a father whose son was struggling to read. The product went on to reach more than two million families and thousands of schools in the ensuing 17 years.
But Educate Inc., which acquired the brand for $13 million in January 2005, believed it could reach more customers with distribution at retail outlets like Costco, Target and www.Amazon.com
“We felt there was a strong opportunity in the retail space that [Hooked on Phonics] hadn’t taken advantage of,” says Mashaw.
Many experts cautioned that the brand was set to enter a nearly saturated retail market for educational products; some analysts were reporting that retailers were looking to cut shelf space devoted to the educational software category.
Educate Inc., however, had quite a different experience. According to the company, the Hooked on Phonics name was a huge asset in the new distribution strategy.
“We had a strong response from retailers,” says Mashaw. “For them it’s a good opportunity—we’re an established trusted name that’s totally new to retail.”
Mashaw also says retailers were supportive because there wasn’t a direct challenger brand in the space. In some instances, he explains, the brand competes with products dominated by licensed characters; other times, it competes with products from traditional academic publishers that don’t have the fun appeal. Neither, he says, poses an insurmountable challenge.
“Publishers don’t have brands. And moms don’t trust Dora [the Explorer, an animated TV character] to help their kids read,” Mashaw says. “That’s the interesting thing about what we’re doing. We’re offering complete branded systems at retail.”
Forging that position, the company entered the club channel early in 2005 with a line of new products tailored to specific grade levels and topics. The brand’s Master Reader product, for instance, focused on advanced phonic skills in kids ages seven and up; though, in launching that specific product in late 2005, the brand had little time to indulge in exploratory package designs.
“[The project] was completed inside of a month,” recalls Bill Goodwin, president of Goodwin Design Group, the firm charged with the package design. He says Educate wanted the package for an important sales meeting
“We shared early concepts with key retailers for feedback,” explains Mashaw. “They know their space, aisle and category. They know what sells.”
‘Strike a balance’
A challenge in developing the new packaging was creating something with a dual appeal to moms and kids—especially crucial for a product like Master Reader, which retails for $249.99.
“Parents will invest the money,” says Mashaw, “but they want a sense of energy so it doesn’t have an academic look, so it will appeal to their kids.” At the same time, he says, if it looks too frivolous, parents might hesitate to make the purchase.
Striking that balance between “educational” and “fun” was the charge of Goodwin Design. It was also important that the firm keep the packaging in line with the product itself. “You can’t misinterpret the product for consumers and give them a bad out-of-box experience,” cautions Goodwin.
In that vein, he says, the color palette—orange and blue—had really been established by the Master Reader components inside the box.
“It made more sense for our group to maintain an existing color palette that had equity and work to segment the product by age,” he explains.
Since Master Reader skewed a little older than the products already introduced, Goodwin Design avoided a flat color field (which apparently appeals younger) and added complexity to the color scheme to ensure the packaging would be appropriate for the targeted age.
“We took the color scheme and rendered it out for depth and texture and added beveling to make it a more sophisticated package,” says Brian Barto, art director at Goodwin Design.
Other decisions the firm weighed carefully were whether to put a child on the package. “It’s a great way to ID the age segment for the product,” says Goodwin.
Hooked on Phonics celebrates the bond between the parent and child, but it was important to achieve a degree of balance in this instance as well. The brand had gone to market with other product packaging that featured front panel photos of children using the product while in their mother’s embrace. But that wouldn’t work for the Master Reader demographic.
“An eight-year-old relates differently to parents than a four-year-old does. An eight-year-old needs to do work more independently,” says Mashaw.
So the selected photo was of a boy, without a parent, who, Goodwin describes as likely to be perceived as “safe” by adults but, more importantly, as “cool” by kids.
Our job was kid appeal, adds Barto. He says layering graphics underneath the blues and oranges gave the design a techie background. A metal icon element on the bottom right of the package served the same goal. Those treatments also worked to subtly preview the box contents, which included four CDs of interactive computer programs.
“We were walking a fine line,” says Goodwin. “We wanted the flair of a computer game with the practical aspect of the brand.”
That practicality was developed to appeal to parents. Since mom was the primary purchaser of the product, it was important for the packaging to drive home key brand communication about the educational value of the product.
“We took one-third of the primary display panel and added the Hooked on Phonics logo and their claims of ‘success guaranteed’,” says Barto.
Another tactic, a fifth panel on the large suitcase-style box, served to communicate the idea of “value” for the $249 product.
“There is so much this product has to offer on so many different levels, that we thought it needed a visual of what you’re getting in the box,” says Barto.
In fact, the list of what’s in the box is quite extensive: four books, four easels, 64 story cards, four CDs, a progress poster, a set of stickers and a parents’ guide. “It also helps justify the price point,” Barto says.
Though, Mashaw says, there are many more accessible price points within the Hooked on Phonics library. He says the company has many versions of the product and dozens of line extensions that retail for as low as $4.79. And the company is hooked on more than just phonics. There are math, study skills and handwriting products; and new in 2006 is Hooked on Spanish—also designed by Goodwin—which Mashaw says he expects to be the “hero product” of the year.
The brand is also getting more marketing support, just launching a print campaign in national parenting magazines to let consumers know Hooked on Phonics is now at retail.
“We’re growing our distribution, and it’s wide enough to warrant advertising support,” says Mashaw. Growing indeed. The Baltimore Sun, hometown paper of Educate, put Hooked on Phonics sales at $20 million in 2005, reporting that an increase of 50 percent is expected in 2006.
Mashaw is reluctant to comment on sales figures, but he does say, “We’re doing 70 SKUs compared to seven last year. That’s a sign of acceptance, sell in and sell through. We are definitely growing.” BP
The author, Pauline Tingas, is the Senior Editor of BRANDPACKAGING magazine.
Where to go for more information...