Greenworks by Clorox

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  • Objective to be achieved Review and response to current Clorox’s strategies Introduce new strategies In hope to clear and improve Clorox’s brand image. Consumers can see Clorox as a safe, green and trustful product that they can rely on. Thus, continuously strengthen Clorox’s position in the market.
  • The Clorox Company -Should specify that this is the mother company and completely different from the brand Clorox
  • Brief Background information of Clorox
  • Issue of Clorox Clorox has in the past been misunderstood by consumers in false accusations of being chemically harmful and dangerous. However, the chemical ingredient is actually sodium hydrochloride (NaOCl) Due to this misunderstanding, this even affect Clorox’s mother company- The Clorox Company since they have the same name.
  • Belief is a descriptive though about Clorox, may be based on real knowledge, opinion or faith. Attitude describes a feelings toward an object but they are very difficult to change.
  • Situational Analysis Macro: Consumers have growing concerns about different environmental problems (pollutions and global warming). They want to contribute and start to select products that is environmentally friendly and sustainable. Current economic situation and uncertainty about future will make consumers to have a much more careful consumption decisions Micro: Consumers misunderstanding towards products Traditional Business Practice- may be hard for consumers to notice the change of company
  • Situational Analysis Macro: Consumers have growing concerns about different environmental problems (pollutions and global warming). They want to contribute and start to select products that is environmentally friendly and sustainable. Micro: Consumers misunderstanding towards products Traditional Business Practice- may be hard for consumers to notice the change of company Strong competitors like Method. (Every company tend to go to the road of “environmentally friendly or organic.)
  • As a necessity evil, Clorox has a mass target market across different demographic and physiological factors. Focused on health-conscious consumers, its target market ranges widely from suburban soccer moms to laundry-savvy single men in urban environments with various income levels, though not exceeding $80,000. The Clorox target customer is looking for accessible, cost efficient cleaning products that are effective to easily incorporate into their busy, on-the-go lifestyles.
  • Marketing Strategy (Brief Intro)
  • Products marketed as "nontoxic," "natural" or "green" now crowd store shelves, promising to be safer to the people who use them as well as the environment. Clorox's entry into this blossoming segment has created somewhat conflicting reactions. Rivals think the giant will make the category, not take it. "It's good news for us. Clorox can help educate the market," says Monica Nassif, founder of the Mrs. Meyer's Clean Day brand. She also thinks the company will help expand the availability of eco-friendly ingredients, like plant-based surfactants, from suppliers. ((Coeli Carr. "Clean Goes Green. " Time 24 Mar. 2008: GB.10. ABI/INFORM Global. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)) Colgate-Palmolive bought Tom's of Maine, the natural toothpaste maker in 2006 (lana DeBare. "Clorox expects greenbacks from green cleaners :[1]. " San Francisco Chronicle [San Francisco, Calif.] 14 Jan. 2008,A.1. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) Clorox rivals such as Procter & Gamble and S.C. Johnson are also said to be developing new green product lines to add on the shelf. (Clorox Enters Booming Market for 'Green' Cleaners :[1]. " All Things Considered 6 February 2008 1. Research Library. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)
  • Cleaning is a $3.4 billion category, and the natural market is still a little niche, but the bigger companies perceive a high-growth area (Coeli Carr. "Clean Goes Green. " Time 24 Mar. 2008: GB.10. ABI/INFORM Global. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) The green cleaning category right now is less than 1 percent of sales. But the sales of "natural" household cleaners and supplies - including bathroom and kitchen cleaners - have grown 26 percent from January 2007 to January 2008, according to SPINS, a market research and consulting firm for the natural-products industry.So lots of consumers want green cleaning options but they're not really adopting them because they are not satisfied with the options that are available to them. So there was this market of underserved consumers. -("Clorox Enters Booming Market for 'Green' Cleaners :[1]. " All Things Considered 6 February 2008 1. Research Library. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) -(McCLATCHY-TRIBUNE. "New cleaning products claim to be better for you and the environment. " Capital 29 March 2008 E.3. ProQuest Newsstand. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) One of the reasons green home cleaning products haven't achieved much market penetration is if they came from an environmental brand, consumers have the sense that they won't work -- green won't work. And if it came from someone with a cleaning reputation the reaction was: They can't be green. (Felicity Barringer. "Clorox Courts Sierra Club, And a Product Is Endorsed :[TheBusinessOfGreen]. " New York Times [New York, N.Y.] 26 Mar. 2008, Late Edition (East Coast): SPG.2. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)
  • And Last year the company's earnings increased 12%, to $496 million on sales of $4.8 billion, but its stock price has lagged the S&P 500. (Coeli Carr. "Clean Goes Green. " Time 24 Mar. 2008: GB.10. ABI/INFORM Global. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) The market for eco-friendly cleaning supplies is a tiny but fast-growing business, in fact, the overall $3 billion market for household cleaning products isn't growing - but the green niche is. ("Clorox Enters Booming Market for 'Green' Cleaners :[1]. " All Things Considered 6 February 2008 1. Research Library. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) Clorox's commitment to Green Works Is significant- the company's first new brand in 20 years, Clorox spent about $20 million to develop the products--all-purpose, dilutable, bathroom, toilet-bowl and glass-and-surface cleaners. Americans spent over $432 million on all-purpose cleaners in 2007 - but only 1 percent of that went to Method and 0.3 percent went to Seventh Generation; by comparison, Clorox makes three brands of conventional all-purpose cleaners - Pine-Sol, Clorox Clean-Up and Formula 409 - that together raked in 41 percent of consumer sales. (Ilana DeBare. "Clorox expects greenbacks from green cleaners :[1]. " San Francisco Chronicle [San Francisco, Calif.] 14 Jan. 2008,A.1. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) Green Works "may be one of the biggest new product launches in Clorox's history," says Connie Maneaty, an analyst with BMO Capital Markets. The company's $925 million acquisition of Burt's Bees similarly points to a new direction for Clorox. The line of beeswax personal-care products-birthed out of a home-based honey business in the '80s-generated $170 million in revenues in 2007. The expensive acquisition is expected to clip earnings by 10 to 15 cents in fiscal 2008. But Burt's will benefit from Clorox's extensive distribution capacity and is expected to be a strong bonus in fiscal 2009. Analysts advise investors to keep their eyes on the company's volume growth, which will be a key indicator of whether consumers are switching to generic brands, when the company releases earnings February 4.
  • What can be done? (come up with new plan) The following will focus on a product for brand extension: Green Works Dish washer and the national advertising campaign.
  • Line Extension A natural dish detergent Surfactant-free Hypo-allergenic Biodegradable Non-toxic It will strengthen its image as green, giving the consumer wider choice to be eco-friendly, as well as enriching their dishwashing experience Form a written, proven standard to clearly define the meaning of “natural” to Clorox Continue working on the formula to make the products 100% natural product, not 99%…market it as such
  • Method is a San Francisco-based corporation which produces non-toxic, biodegradable cleaning supplies with a focus on minimalist product design. In 2006, Inc. magazine named Method the 7th fastest-growing private company in the United States
  • Seventh Generation, Inc. is a company which makes and sells non-toxic and environmentally safe household cleaning supplies and other household products. The company is based in Vermont. It embraces the ideal of providing renewable, phosphate-free, and biodegradable cleaning products. The company was founded in 1988.
  • Clorox’s core customer base in mind, Clorox simply offers a solution to satisfy their underserved desire to be natural and environmentally friendly without paying the premium price; rather than trying to convert loyalists of other natural brands.
  • To familiarize consumers with the dish soap, coupons will be distributed to give an instant $1 off to the purchase of the dish soap within the 90 days from its first introduction to market. They will be available in magazines, such as ‘Goodhousekeeping’, ‘RealSimple’ and at retail outlets, Walmart, Target, and Kmart. With the discount, the price gap between the new dish soap and conventional products is narrowed; this price-incentive strongly encourages consumers to try out the new eco-friendly products, for a price of a regular product.
  • The only way to combine these elements is to combine a very well known cleaning brand with a very green brand. And Sierra Club as the green brand and Clorox stands for powerful bleach. And Clorox picked the name Green Works precisely to fight the perception among consumers that natural products don't work. the Green Works products are about to be paired with a name -- the Sierra Club -- normally associated with fighting toxic waste. At the same time, the Sierra Club will be taking a step in a new direction by using its brand to help Clorox get a piece of a $150 million market dominated by names like Seventh Generation and Method. It is the first product endorsement by the Sierra Club in its 116-year history, and it will receive an undisclosed portion of the proceeds. The Sierra Club is said to ensure that the products' ingredients met the Club's requirements for being called "natural," a term that has no federally approved definition when it comes to cleaning products. Most of the chemicals in the new Clorox products come from plant sources, the company said, with virtually no petroleum-derived ingredients in the first place. (Felicity Barringer. "Clorox Courts Sierra Club, And a Product Is Endorsed :[TheBusinessOfGreen]. " New York Times [New York, N.Y.] 26 Mar. 2008, Late Edition (East Coast): SPG.2. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)
  • A few small firms such Seventh Generation and Method have been selling natural biodegradable household cleaners for years. But their products are expensive and their loyal customers aren't typical consumers - they eat organic and shop at farmers markets or health food stores. ("Clorox Enters Booming Market for 'Green' Cleaners :[1]. " All Things Considered 6 February 2008 1. Research Library. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) Green Works products are priced at a 15% to 20% premium compared with conventional ones (suggested retail price for 32 oz. [1 L] of the all-purpose cleaner is $3.39). "The prices are much lower than for products typically found in Whole Foods," Peiros says. "Consumers will be getting a great product at a cheaper price, so if I were one of those companies, I'd probably feel a little concerned.” Clorox's pursuing its core customer base--rather than trying to convert loyalists of other natural brands--is the smarter strategy. "Consumers come in different shades of green,; some are dark green, as in almost obsessive. But it's more typical for consumers to be light green, when the price they pay does not involve too much inconvenience or too much money. And that's exactly the way Clorox is shading it. (Coeli Carr. "Clean Goes Green. " Time 24 Mar. 2008: GB.10. ABI/INFORM Global. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)
  • Clorox chose to keep its own logo on the Green Works label to prominently communicate that this is a trusted source. Clorox introduced bleach to American households a century ago and has the potential to move green cleaning products beyond the niche of Whole Foods-type stores and into the wider world of Wal-Marts and suburban supermarkets. I suspect that most of the people who will be attracted to GreenWorks are not people who are buying Seventh Generation, but more mainstream Wal-Mart shoppers with an interest in buying green, thus, If handled right, this has huge sales potential. Americans spent over $432 million on all-purpose cleaners in 2007 - but only 1 percent of that went to Method and 0.3 percent went to Seventh Generation, according to Information Resources Inc. By comparison, Clorox makes three brands of conventional all-purpose cleaners - Pine-Sol, Clorox Clean-Up and Formula 409 - that together raked in 41 percent of consumer sales. (Ilana DeBare. "Clorox expects greenbacks from green cleaners :[1]. " San Francisco Chronicle [San Francisco, Calif.] 14 Jan. 2008,A.1. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)
  • These are a few drafts of the advertising campaign
  • Patterns of scheduling advertising: Continuous Consumer will constantly expose to the message and create a better image of Clorox in their minds. Thus their belief will change and have stronger affinity towards Clorox The campaign will last for a year
  • Communication Effects Consumer will receive a clear message of “Clorox: Being Safe Going Green” Through constant exposure towards different ‘facts’, consumers’ attitude towards Clorox will change Sales Effects Sales should be increase through this campaign in long run
  • Expected Outcome The above measures can change consumers’ belief and improve the brand image of Clorox. Thus, expand market and increase consumers’ loyalty. The image of Clorox as dangerous and toxic is replaced by safe and socially responsible, as well as green The revenue is to increase by 20% to 25% by the second year into the new plans Its market position of the household cleaning sector of Fortune 500 is to rise to the top 3 within five years
  • Conclusion Clorox has realized that consumer’s misunderstanding of the company affected its performance in the market Since then, it has tried various tactics to revamp its image and improve consumer’s cleaning product experience The company has high potential to significantly raise its market position with plans we explored
  • References
  • Greenworks by Clorox

    1. 1. Clorox: Green and Safe ‘Greenworks’ by Clorox Marketing May 2, 2008 Jin Sun Park Vanessa Kincaid Christy Choi
    2. 2. Objective <ul><li>Review and Response to current Clorox’s marketing strategies in changing consumer’s perceptions </li></ul><ul><li>Introduce new strategies that can help to improve Clorox’s brand image </li></ul>
    3. 3. The Clorox Company <ul><li>The Clorox Company is a leading manufacturer and marketer of consumer products with fiscal year 2007 revenues of $4.8 billion. With 7,600 employees worldwide, the company manufactures products in 25 countries and markets them in more than 100 countries. </li></ul>
    4. 4. Clorox: The Brand 30+ products: bleach, stain remover, wipes, kitchen cleaner, mopping system, toilet bowl cleaner, and etc.
    5. 5. Issue of Clorox <ul><li>Misunderstood of being chemically harmful and dangerous </li></ul><ul><li>In fact, Clorox is very safe as its chemical ingredient is sodium hydrochloride NaOCl </li></ul>
    6. 6. Why do consumers have such belief? <ul><li>Psychological factors will affect buyers’ choice. </li></ul>Belief Attitude <ul><li>Consumers’ misunderstanding towards Clorox will change their buying behavior and choose other brands that claim to be safe. </li></ul><ul><li>The ever growing trend of sustainability and environmentally friendly products has urged consumers to become more conscious and aware of their purchases and consumption </li></ul>
    7. 7. Situational Analysis <ul><li>Macro-environment </li></ul>Growing Concerns about Environment Problem Consumers select environmentally friendly and sustainable product Economic Situation and Uncertainty about future Consumers are more careful in making their consumption decisions Weak US currency Cost of raw material increase
    8. 8. <ul><li>Micro-environment </li></ul>Consumers’ Misunderstanding towards Clorox Large group of strong competitors Consumers are overwhelmed by the large number of products they can choose from Procter and Gamble being the largest competitor Many up-and-coming new brands entering the market High exposure to Wal-mart Limited growth outside North America market
    9. 9. Clorox’s Target Market <ul><li>Mass target market across different demographic and physiological factors. </li></ul><ul><li>Focused on health-conscious consumers </li></ul><ul><li>Various income levels, though not exceeding $80,000. </li></ul><ul><li>Looking for accessible, cost efficient cleaning products </li></ul>
    10. 10. Actions by Clorox
    11. 11. TV Advertisement Various Campaigns+ Programs:
    12. 12. The “Green” Trend in Household Products
    13. 13. Perception of Green Cleaning Products <ul><li>Natural products don't work </li></ul><ul><li>They are very expensive </li></ul><ul><li>People often have to go to special stores to get them </li></ul><ul><li>There's not a brand that consumers know and trust </li></ul>
    14. 14. The Economic Connection between “GreenWorks” and Clorox <ul><li>the overall $3 billion market for household cleaning products isn't growing - but the green niche is </li></ul><ul><li>Americans spent over $432 million on all-purpose cleaners in 2007 - but only 1 % of that went to Method and 0.3 % went to Seventh Generation </li></ul><ul><li>But Clorox makes three brands of conventional all-purpose cleaners - Pine-Sol, Clorox Clean-Up and Formula 409 - that together raked in 41 percent of consumer sales. </li></ul>
    15. 15. Green Works <ul><li>Made from natural products such as coconut and lemon </li></ul><ul><li>Biodegradable </li></ul><ul><li>Hypo-allergenic </li></ul><ul><li>Not tested on animals </li></ul><ul><li>Non-allergenic </li></ul><ul><li>Recyclable packaging </li></ul><ul><li>The creation of this line helps the image of Clorox become more socially responsible. </li></ul><ul><li>Major Competition -- Seventh Generation and Method </li></ul>
    16. 16. Now that we have researched and seen what Clorox has done… Here is our educated and reputable ideas and opinions to the solution of the Clorox brand image problem…
    17. 17. Our new ideas and suggestions <ul><li>Plan 1: Line extension </li></ul><ul><li>Plan 2: National advertising campaign </li></ul>
    18. 18. Line Extension <ul><li>A natural dish detergent </li></ul><ul><ul><li>Surfactant-free </li></ul></ul><ul><ul><li>Hypo-allergenic </li></ul></ul><ul><ul><li>Biodegradable </li></ul></ul><ul><ul><li>Non-toxic </li></ul></ul><ul><li>Strengthen its image as green </li></ul><ul><li>Enrich their dishwashing experience </li></ul><ul><li>Define the meaning of “natural” to Clorox </li></ul><ul><li>Work on the formula to make the products 100% natural </li></ul>
    19. 19. Competitor 1: Method
    20. 20. Competitor 2: Seventh Generation
    21. 21. Redefined Target Market <ul><li>Satisfy underserved desire to be natural and environmentally friendly without paying the premium price </li></ul><ul><li>rather than trying to convert loyalists of other natural brands, focus on Clorox’s core customer base </li></ul>
    22. 22. Promotion 1: Coupon <ul><li>To familiarize consumers with the [new] products </li></ul><ul><li>Available in magazines and at retail outlets </li></ul><ul><li>The price-incentive strongly encourages consumers to try out the product. </li></ul>
    23. 23. Coupons and Advertisements to be positioned in:
    24. 24. Media Promotion for Greenworks Dish Soap <ul><li>Increases visibility and awareness of </li></ul><ul><li>product </li></ul><ul><li>Relates product with personality and the </li></ul><ul><li>customers and values she stands for </li></ul><ul><li>Gives nationally televised promotion </li></ul>“… and everyone in today’s Audience gets a free gift basket of Greenworks!!!!” {Applause}
    25. 25. Clorox’s Advantage 1 <ul><li>Sierra Club Endorsement </li></ul><ul><ul><li>The first product endorsement by the Sierra Club in its 116-year history </li></ul></ul><ul><li>Pricing Strategy </li></ul><ul><li>Its Brand Recognition </li></ul>
    26. 26. Clorox’s Advantage 2 <ul><li>Sierra Club Endorsement </li></ul><ul><li>Pricing Strategy </li></ul><ul><ul><li>Much lower than for products typically found in Whole Foods </li></ul></ul><ul><ul><li>priced at a 15% to 20% premium compared with conventional ones </li></ul></ul><ul><li>Its Brand Recognition </li></ul>
    27. 27. Clorox Advantage <ul><li>Sierra Club Endorsement </li></ul><ul><li>Pricing Strategy </li></ul><ul><li>Its Brand Recognition </li></ul><ul><ul><ul><li>Clorox introduced bleach to American households a century ago </li></ul></ul></ul><ul><ul><ul><li>Trusted brand + transparency = Success </li></ul></ul></ul>
    28. 28. National Advertising Campaign Clorox: Being Safe Going Green
    29. 30. Advertising Timing <ul><li>Patterns of scheduling advertising: Continuous </li></ul><ul><li>The campaign will last for a year </li></ul>
    30. 31. Advertisement Evaluation <ul><li>Communication Effects </li></ul><ul><ul><li>Clear message of “Clorox: Being Safe Going Green” </li></ul></ul><ul><ul><li>Consumers’ attitude towards Clorox will change </li></ul></ul><ul><li>Sales Effects </li></ul><ul><ul><li>Sales should be increase through this campaign in long run </li></ul></ul>
    31. 32. Consumer’s Expected Reaction Belief Attitude Message from Clorox Buy Clorox Clorox as a safe and clean brand Strong affinity Clorox’s sales increase
    32. 33. Expected Outcome <ul><li>Clorox as safe and socially responsible, as well as green </li></ul><ul><li>The revenue is to increase by 20% to 25% by the second year into the new plans </li></ul><ul><li>Its market position of the household cleaning sector of Fortune 500 is to rise to the top 3 within five years </li></ul>
    33. 34. Conclusion <ul><li>Clorox has realized that consumer’s misunderstanding affected its performance in the market </li></ul><ul><li>Clorox has tried various tactics to revamp its image and improve consumer’s cleaning product experience </li></ul><ul><li>The company has high potential to significantly raise its market position with plans we explored </li></ul>
    34. 35. References <ul><li>www. clorox .com </li></ul><ul><li>www.the clorox company.com </li></ul><ul><li>Clorox Enters Booming Market for 'Green' Cleaners :[1]. &quot; All Things Considered 6 February 2008 1. Research Library. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) </li></ul><ul><li>Barringer, Felicity. &quot;Clorox Courts Sierra Club, And a Product Is Endorsed :[TheBusinessOfGreen]. &quot; New York Times [New York, N.Y.] 26 Mar. 2008, Late Edition (East Coast): SPG.2. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) </li></ul><ul><li>Carr, Coeli. &quot;Clean Goes Green. &quot; Time 24 Mar. 2008: GB.10. ABI/INFORM Global. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>)) </li></ul><ul><li>DeBare, lana. &quot;Clorox expects greenbacks from green cleaners :[1]. &quot; San Francisco Chronicle [San Francisco, Calif.] 14 Jan. 2008,A.1. ProQuest National Newspapers Premier. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) </li></ul><ul><li>McCLATCHY-TRIBUNE. &quot;New cleaning products claim to be better for you and the environment. &quot; Capital 29 March 2008 E.3. ProQuest Newsstand. ProQuest. New School Digital Library. 18 Apr. 2008 <http://www.proquest.com/>) </li></ul><ul><li>Ozanian, Mike. “Clorox clean up.” Forbes.com. February 17 2005. http://www.forbes.com/2005/02/17/cz_mo_0217soapbox_inl.html </li></ul><ul><li>Story, Louise. “Can Burt’s Bees Turn Clorox Green.” New York Times , January 6, 2008. http://www.nytimes.com/2008/01/06/business/06bees.html?_r=1&oref=slogin </li></ul>

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