Inside Rheem's Rebranding Efforts

Rheem Manufacturing Company demonstrated the future of integrated air and water technology in both the HVAC and water heating industries at the AHR Expo 2011, held recently in Las Vegas. Rheem also unveiled its new brand identity and numerous redesigned products.

“Rheem has spent more than 85 years developing products that provide the highest quality, reliability and durability,” said Rheem CEO J.R. Jones. “Given that water heating and HVAC systems account for more than 60% of a home’s energy consumption (source: U.S. Department of Energy), Rheem has a unique opportunity to build off our rich history of high-quality water heating and HVAC products with a full suite of innovative and energy efficient products.”

Attendees of the AHR Expo were treated to a highly professional overview of exciting new Rheem products and systems, all of which feature a high-quality, modern appearance. Also on hand were Rheem products that are not yet released, such as the second-generation hybrid electric water heater, featuring a color touch-screen. Rheem took extra steps to ensure that its exhibit design and layout align with the company’s outlook on innovation through the incorporation of new technologies. For instance, Rheem brand ambassadors working in the exhibit leveraged iPads® to provide background on Rheem products. They also gave a sneak peek of an upcoming iPhone® /iPod Touch® Rheem racing game app that was developed to tie into their racing sponsorships. As a bonus, champion NASCAR driver Kevin Harvick of the No. 33 Rheem Chevrolet was also in the Rheem exhibit, demonstrating the game for AHR attendees and challenging his fans.

“Over the past three years, Rheem has invested more in our products, people and operations than at any other time in our history — even in the midst of very challenging economic times,” said Rheem senior vice president and COO Chris Peel. “We are very proud to share with the AHR Expo attendees the early fruits of our efforts, including our new products and brand identity.”

Rheem also unveiled a totally new and enhanced website in February that projects the company’s new branding and direction.

Recently, The Wholesaler conducted the following exclusive Q&A with Rheem’s J.R. Jones and Chris Peel as they talked candidly about the rebranding efforts.

TW: Please explain the rebranding initiatives at Rheem. What was the impetus?

Jones: The Rheem rebranding initiative reflects our desire to build on what is already a very strong brand in the water heating and HVAC markets. Our objective is that the Rheem brand will be synonymous with quality, reliability and innovation, truly showcasing the power of integrated air and water technologies. We have a long, rich tradition of high quality, dependable products, and we will continue that. But, beyond that, we are on a mission to be the innovative leader in efficient integrated comfort solutions for homes and businesses.

There are many elements associated with the Rheem rebranding initiative, but the most obvious elements include the introduction of an entirely new visual appearance for our products, a new website and a new tagline. We’re redesigning our products with attractive new colors and with sculpted, smooth lines that meet today’s demand for stylish and superior performance that complements other appliances and décor elements. Rheem will begin rolling out the newly styled products, starting with the mid-2011 launch of the super efficient hybrid electric water heater, followed by a full suite of new designs in the coming years and months.

At the AHR Expo 2011 in February, we unveiled the new Rheem tagline, “The New Degree of Comfort,” which will impact how we interact with customers at every level. “The New Degree of Comfort” signifies the Rheem commitment to bringing innovative, energy efficient technologies, including integrated air and water solutions, to homeowners.

Another element of our rebranding initiative is a newly resigned Rheem website, which went live in mid-February. The website is highly visual in nature and provides several intuitive and interactive features under a new Homeowners tab. This section includes a revamped Local Contractor feature, which enables consumers to search nearby contractors by products installed and services provided, such as financing, rebates, online HVAC system selection program and water heating authorized service providers. The section also features a Rebate Center, which automatically populates with appropriate local rebate opportunities. Rheem is the first water heating and HVAC manufacturer to feature localized rebate opportunities on its website; other manufacturers link to an external site for consumers to search.

TW: How long has this been in the works?

Peel: Rheem has been planning and actively working on our rebranding initiative for nearly five years, with an accelerated effort over the past 18 months. This important undertaking represents the largest period of capital investment in Rheem history and was done to create significant advantages for plumbing and HVAC contractors and homeowners for years to come.

TW: Was the economy any cause for concern? Did the economy alter business objectives?

Jones: During the past few years, the U.S. and global economies changed dramatically, and, as a result, the water heating and HVAC industries underwent significant changes. In these industries, the successful businesses overhauled the way they operate in order to make it through the most significant economic correction period since the Great Depression. These businesses took measures such as aggressive cost management, productivity improvement and reorganizing operations for greater efficiency and reduced waste. At Rheem, we took those exact steps, but, at the same time, we recognized the opportunity to go beyond these fundamental tactics and invested heavily in innovation. We took a close look at the basics of our business — research and product development, manufacturing operations, product design, sales, distribution and marketing — and made substantial enhancements to every area. This ultimately positioned Rheem to be a stronger, more united, technologically advanced company poised for growth.

TW: Our audience is plumbing and the “wet” side of heating. With the introduction of the electronic-based systems, and the integration of air/heat pump technology, how does it affect plumbers, if at all (ease of use, training, etc.)?

Peel: Over the past few years, Rheem has placed a considerable emphasis on new product development. A big change for Rheem, and for the industry, is bringing electronic controls into what has traditionally been a mechanical industry.

Typically, air conditioning systems have included electronic control systems, but water heating systems have not. Because Rheem is unique in that we have decades of water heating and air conditioning technological expertise, we have a unique opportunity to help plumbers recognize the benefits of integrated electronic controls and integrated air and water systems. Rheem is developing integrated electrical controls that will bridge across our vast and diverse water heating, heating and cooling, pool and spa heating product lines.

It is our belief that the introduction of electronics to our plumbing customers will:

• provide unprecedented benefits to their customers, leading to improved profitability;
• provide differentiation from their competition;
• improve the ease of installation, reducing call backs; and
• make our products easier to use and realize maximum performance benefits.

TW: How important is educating the contractor/wholesaler who, in turn, educates the consumer? How is your relationship with the contractor/wholesaler, and does it change moving forward?

Peel: An increasing number of consumers are preparing for major purchases by combing the Internet for information and doing comparison shopping before contacting local sales and service providers. Armed with information, consumers select contractors whom they judge to be informed and up to date to help them make their water heating and heating and cooling purchase decisions.

Moving forward, consumers are likely to quickly dismiss those whom they deem to be out of touch or uninformed in favor of contractors who demonstrate that they have the expertise that brings value and trust to the transaction. So, it’s important that Rheem assists contractors and wholesalers in staying on top of their game by making information available 24/7 and by offering focused and convenient training courses. It is important that our contractor/wholesaler customers adapt their business models to this reality and to the evolution of products that cross traditional boundaries (e.g., hybrid systems).
In terms of training, Rheem employs full-time training coordinators in our Montgomery, Ala., manufacturing facility that specifically offer ongoing tankless water heating training. Although tankless water heaters have been used worldwide for more than 50 years, consumers in the United States are just starting to learn more about the attractive benefits of tankless technology. One of the most important things that Rheem offers in the education process is explaining how tankless water heaters function, particularly emphasizing what makes them efficient options for consumers.

Our relationship with contractors and wholesalers has always been collaborative, and we’re in a great position to be an even more integral resource for them in the future. As Rheem pioneers new products that combine both air and water technologies, we can be a resource for plumbers and HVAC contractors who need greater education on whichever product line is not their current specialty. For instance, in 2009, Rheem launched a hybrid electric water heater that uses heat pump technology — originally used in HVAC systems — to heat water.

Heat pump technology enables water heaters to be nearly twice as efficient as standard electric water heaters. When we launched the product, we helped plumbers learn more about how heat pump technology functions in a water heating application. In mid-2011, Rheem will launch the second generation version of our hybrid water heater, which will feature a color touch-screen LCD display. We expect to continue educating plumbers on the use of heat pump technology when we unveil the enhanced hybrid model.

TW: What has been the reaction from your reps and wholesaling channels?

Peel: Reactions to the new Rheem brand identity from our distributors and wholesale channels has been overwhelmingly positive, particularly from those who saw the new look and feel of our products first-hand at the AHR Expo 2011 and the annual Air Conditioning Contractors of America conference. Our reps were as excited as we are about the new product designs, technologies and overall direction of Rheem. Their enthusiasm for the new product designs was especially evident, because no one else is able to provide so many advantages, services and good-looking water heating and HVAC products designed and built by one manufacturer.

TW: It had been mentioned [at AHR] that most of Rheem Water Heating’s product offerings were three years old or less in terms of being on the market. Were you cognizant of this and is this (having new, innovative products that are continuously evolving) something to strive for moving forward?

Peel: We will continue to invest at an accelerated rate in technology, efficiency and product development to keep our product offerings relevant and aligned with contractor and consumer demands.

TW: What are some of the new products?

Jones & Peel: The Rheem Prestige Series condensing tankless water heater is the most efficient Rheem tankless water heater to date. Boasting an industry-best minimum flow rate of .26 gpm and a minimum activation flow rate of .40 gpm, homeowners using low-flow fixtures receive hot water without having to increase the flow. That’s an important benefit in today’s eco-conscious world that translates to savings on water usage and energy costs. Units can vent with PVC piping, making installation faster, easier and cost-effective for contractors.

The Rheem Integrated Heating & Water Heating System powered by tankless technology offers home heating and hot water from a single source. Because this energy-efficient system is designed, built and warranted by a single manufacturer, Rheem, contractors receive the benefit of seamless product integration, leading to a smoother installation process. When contractors work with Rheem to offer the integrated system, they also benefit from strong customer service and product training. For contractors that specialize in either HVAC or water heating, this system is a great way to expand knowledge and experience, helping to bridge the gap into new product offerings and increased business.

In mid-2011, Rheem will unveil the second-generation version of its hybrid electric water heater. This product will feature the hybrid industry’s first color touch-screen LCD display. It also includes three user-friendly modes of operation: energy saver, high demand (normal) and electric heat only. The energy saver mode works by extracting warmth through the surrounding air, concentrating the heat and delivering it through the water. The high demand mode uses a combination of heat pump/electric elements to meet the needs of peak hot water demand. The electric only mode is available to ensure hot-water availability without using the heat pump. With the next-generation release, Rheem will lead the industry with five hybrid electric water heater models, providing the widest range of application flexibility in the industry.

TW: The industry is moving quickly toward energy efficient systems. Can you describe how Rheem is leading the way in this area?

Jones: Because Rheem has deep manufacturing expertise in both the air and water categories, we’re able to leverage efficiencies from both business units into our new product development to ultimately create more energy efficient systems. For instance, at the AHR Expo 2011, we unveiled a concept hybrid air & water package unit, which is the only product in the commercial industry leveraging heat recovery water heating technology. The unit works by switching over from a refrigerant to air system to a refrigerant to water system when there is a demand for air conditioning and hot water. This is an energy efficient option, because the heat of the refrigerant is transferred to the water instead of to the outside environment as in a normal air conditioning cycle. The benefits of this include improved efficiency in both water heating and air conditioning. This is a perfect example of why we are unique in our ability to find intelligent technology combinations that bring creative solutions to addressing the need to reduce home energy consumption.

TW: Can you explain how Rheem melds quality with innovation?

Jones: Rheem has an 85-year history focused on delivering quality, durable and reliable products to the market. However, today’s consumers demand more than quality products; HVAC and water heating systems have to be innovative and efficient too. Given that water heating and HVAC systems account for more than 60 percent of a home’s energy consumption, Rheem has a unique opportunity to align our “Quality First” tradition with our focused efforts to integrate more functionality and electronic controls into HVAC and water heating systems.

TW: Please describe your visual brand message?

Peel: The Rheem “visual brand” message speaks to a level of comfort, style and performance that is a part of enjoying life. When the temperature is just right and you feel comfortable, when you feel good about your home and what’s in it, you just can’t help but smile. That’s the inspiration behind the new look and feel of Rheem. Our innovative new products, sleek new designs, the integrity of Rheem products and the trust the Rheem brand has earned over the years are all expressed in the new Rheem look and feel.

More specifically, all future Rheem products will feature a soft, grey paint scheme, rounded edges accented with polished metallic elements. All Rheem products will display the vivid bright red Rheem logo, as well as a distinct, vertical indented line down the middle of the product. This element — the Rheem logo matched with the indented vertical line — creates a visual “thermometer,” associating the Rheem brand with the soothing and reliable comfort result all consumers are looking for. A curved line at the bottom of each product portrays a smile, which symbolizes the Rheem commitment to people, making them comfortable and helping them enjoy life. It also signifies how Rheem views itself as a company; one of integrity that is easy to do business with. Combined, these new design elements create a more contemporary, appliance-looking product, with attractive style features that are pleasing to today’s homeowner.

TW: Do you consider social networking an important aspect of Rheem’s business?

Peel: Absolutely. With the rise of Internet usage and social media, more consumers are going online to find information about products. This is a great thing; consumers are proactively making themselves better informed about water heating, HVAC and pool heating product options. So it’s becoming increasingly important to focus our efforts on engaging consumers in social media platforms.
As Rheem evolves its new brand identity, social media will be more prevalent in our marketing efforts. For instance, as part of our racing sponsorship programs, we will launch an iPhone®/iPod Touch®/ iPad® racing game app in the second quarter of this year. We debuted a sneak peek of the app at the AHR Expo 2011; top NASCAR driver Kevin Harvick demoed the game along with three lucky AHR attendees.

For more information on Rheem, visit www.rheem.com.