Hooked on Rapid Growth
• What changes have taken place at HOP as a result of the 2005 acquisition by Educate?
Paucek: The most significant change has been our swift and aggressive move to retail. As you may remember, prior to 2005, “Hooked on Phonics” was sold almost exclusively through infomercials. In less than 24 months, the “Hooked on Phonics” brand went from zero retail penetration to distribution in nearly every mass-market retailer in the United States, including Wal-Mart, Target, Costco, Sam’s Club, Borders, Barnes & Noble, among others.
• What have been the challenges of adapting to new ownership?
Paucek: Whenever a company goes through a major change, such as what we’ve experienced, there are always challenges. In our case, because the company’s DNA was entirely direct response, we needed to build a team with both sales and packaged-goods experience.
Take the product packaging for example; our “Learn to Read” program was sold in a large, brown cardboard box. This was something we obviously needed to address before we could launch our product [in retail outlets].
• What was your vision for HOP when you took over as CEO at the end of 2005?
Paucek: Our vision was two-fold: [First, to] make “Hooked on Phonics” available to consumers on a wider scale through mass-market retail distribution; and [second, to] extend and diversify the “Hooked on” product line through the addition of new programs for infants and toddlers, language products, and [electronic learning aids] with partners such as [Bannockburn Ill.-based toy developer] Zizzle.
[In May 2006, HOP announced a partnership agreement with Zizzle to create a new line of electronic learning aids to be sold at major retailers worldwide.]
• Hooked on Phonics is a household name, but some consumers may still remember it strictly as an infomercial product. What strategies have you been taking to increase consumer awareness about HOP’s growth beyond that niche?