Cheryl Tiegs has never been to the Noxell Corp.'s headquarters here in suburban Baltimore, but she plays an integral role in selling its products to consumers.
The makers of Cover Girl cosmetics, as well as of Noxzema skin cream and Lestoil cleaning solutions, devote large amounts of their promotional dollars to prime-time television, and Cheryl Tiegs represents the quintessential image for selling their beauty products.
"A lot of women can identify with Cheryl; she has that clean, wholesome kind of beauty rather than a theatrical look," said George L. Bunting Jr., Noxell president and chief exective officer.
Tiegs has represented Cover Girl on television for a decade. And even though younger, up-and-coming beauties like Christie Brinkley and Kelly Emberg also grace Noxell's ads, there is no intention of replacing Tiegs, who is 35.
"What we intend to do, and I believe have done quite well," Bunting said, "is to saturate prime-time television and certain print media, such as the so-called women's magazines, with our products. So, when a woman walks into a discount store, drug store or supermarket, she is already familiar with our products and doesn't have to be informed by a sales person."
Noxell's approach has worked well. In 1981 its net income was $16.86 million ($3.45 per share) on sales of $233.11 million, compared with 1980 net income of $14.70 million ($3.01) on sales of $204.16 million.
Last year, the cosmetics division accounted for 47 percent of the company's consolidated net sales. And, since its introduction in 1961, Cover Girl has represented a large share of Noxell's sales.
In addition to saturating the airwaves with advetisements, Noxell makes sure that its displays appear prominently in shops where their products are sold. "Noxell was a pioneer in this mass marketing, saturation advertising approach," said Steven A. Rockwell, an analyst for Baltimore's Alex. Brown & Sons.
"Historically, cosmetics were sold by sales personnel who gave each woman advice on what cosmetics she should use. But Noxell changed all that. Sure, you don't get the personalized service at a drug store when buying Cover Girl, but you save a lot of money," Rockwell added.
For example, one-fluid ounce of Cover Girl liquid makeup sells for approximately $2.59, which is competitive with other mass-marketed liquid makeup products. The same quantity of Noxell's Moisture Wear line, which was introduced for older women, with, according to Bunting, "an up-style image," sold for only a dime more. By comparison, the same amount of Elizabeth Arden liquid makeup sells for $10, and Este'e Lauder Age-Controlling Creme sells for approximately $32.50 an ounce.
Why is there such a discrepanacy in price? "There is a difference in ingredients in some of the products," said Diana Temple, vice president and cosmetics industry analyst at New York's Salomon Brothers. "Some women are allergic to certain products. But you must keep in mind, some people don't mind paying the extra money since you get good service and expert advice with it. And, don't forget that there is the issue of snob appeal."
According to Temple, Noxell spends two and a half times more on advertising than its chief competitors, such as Revlon, spend. "Remember that a mid-priced product of Revlon's must be marketed in a department store," and that means Revlon must allot a certain percentage of its promotional dollar to in-store activities. Consequently, a little less, percentage-wise, is spent on TV.
Bunting admits that his company spends more money, proportionally, on television advertising than his closest competitors do. For the most part, he sees these competitors as Maybelline, Oil of Olay and specific lines of Max Factor and Revlon. He would not comment on his company's market share, claiming that certain conditions are not comparable. For example, since Noxell competes with only a limited portion of Revlon's products, total sales for the two firms would not be an accurate barometer.
Salomon Brothers' Temple agrees that comparing market shares is risky. "You have the question of which products are sold where. Selling in supermarkets, drug stores and discount stores is a lot different from emphasizing high-priced specialty stores." However, Noxell commands a sizable, if imprecise, chunk of cosmetics sold at discount, drug and grocery stores, she said.
When Bunting's grandfather, George A. Bunting, invented Noxzema and introduced it as a sun-tan lotion in 1914, a friend discovered that not only did it protect one against the sun's rays, it also helped combat his eczema. As he put it, "It knocks my eczema." Thus, a product name was adopted and grew to become a household word.
In 1917, following a three-year trial, Bunting decided to open the Noxell Chemical Co. With himself, a salesman and secretary composing the company's staff, he boosted Noxzema's sales to $5,214. In 1925, sales jumped to $100,000 and they have increased each successive year. Noxzema shaving cream alone accounted for 10 to 12 percent of the national market share.
With its purchase of Lestoil from Standard Household International in 1969, Noxell departed completely from the personal-grooming field. "In one sense it wasn't a departure. Like Noxzema, Lestoil was a single product with a good reputation for quality," Bunting said. Utilizing massive direct advertising, Noxell transformed Lestoil's slim sales into a perpetual leader in its field.
Although Noxell sales are increasing in the United States, Canada, Europe and Australia, the firm's operations are concentrated at its plant in suburban Baltimore. Its top executive officers are there, as well as 750 of its 1,300 worldwide employes. "Since all the top people are right here, our major decisions can be made informally. We can act and react immediately, without even being on the phone," said Vice President and Secretary Robert W. Lindsay.
Sales and profit figures confirm that a company, utilizing skillful mass-marketing techniques, can be successful in selling disparate types of products to the American consumer.
And, perhaps, Noxell Corp. soon will branch out even further. Noxell has an option to purchase the company that makes Wick Fowler 2-Alarm Chili powder. At its annual meeting on March 10, Bunting could not tell his stockholders whether the option would be exercised.