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Adina Crossley
                     Alejandra Jimenez 

                              Lily Yang
                        Na...
    Method Overview
    Recommended Strategy
    STEEP Analysis
    Target Markets and Customers
    Competitors
   ...
    Introduction
     ◦  Produces broad range of home cleaning and
        personal care products
     ◦  Founded in 2000...
◦  In seven years Method becomes a 100-person
   international enterprise (source: Marin Magazine)

◦  Inc. magazine recen...
OPPORTUNITY: Eco-friendly market is hot! Competitors still fragmented
RISKS: Rapid expansion of advertising and promotion ...
    SOCIAL MOVEMENTS:
     Green Consumer
              Purchase behavior closely aligned with personal values
         ...
    TECHNICAL:
        Cleaners can now be made using oxygenated processes, natural
        bacteria and enzymes
    EVI...
    ECONOMIC:
         Natural biobased products now produced on large scale to
          support green movement – reduc...
    POLITICAL:
         Emphasis is on decreasing use of petroleum both as energy
          and in products

         P...
    Customers with green preference
     lifestyle
                                                  Considers himself/h...
Customer Type                       Motivation and Needs
 Trial                             Willing to try, but tend to s...
Ranked in Order of Threat Level
1. Clorox Green Works

2.  Seventh Generation
     Experienced 40% growth annually since M...
STRENGTHS                          WEAKNESSES
      Brand known for high quality,     Ordinary package design and
     e...
    Design:
        Innovative recyclable packaging with attractive curvy colored
         package
    Technology:
    ...
STRENGTHS                                      WEAKNESSES
Fast growth                                    Not all products ...
Method Products
                                 attractive to
                                 Trial, Occasional
        ...
•  Green cleaners
consumers are rising
exponentially during last 3
years

•  Consumers are price
sensitive and normally th...
    Key Strength for Effective Growth Strategy
     ◦  Early deal with Target
     ◦  Have not focused on traditional Gre...
    External:
        Green Products Market lacks uniform or trusted
         certification or endorsement
        Lack...
 Aggressively expand distribution of core successful
      cleaning product line to East Coast and Mid-West
       •  Cre...
Method Co. Strategic Marketing Planning
Method Co. Strategic Marketing Planning
Method Co. Strategic Marketing Planning
Method Co. Strategic Marketing Planning
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Method Co. Strategic Marketing Planning

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A strategic marketing planning for Method Company "an environmentally- friendly cleaning manufacturer" by The stuudents of UC Berkeley Extension 2008

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Method Co. Strategic Marketing Planning

  1. 1. Adina Crossley Alejandra Jimenez 
 Lily Yang Navid Farzinnia Stephen Yeung Marketing Planning K. Gerlach August 2008
  2. 2.   Method Overview   Recommended Strategy   STEEP Analysis   Target Markets and Customers   Competitors   Core Competencies and SWOT   Current Objectives   Market Growth Analysis   Risks   Recommended Actions
  3. 3.   Introduction ◦  Produces broad range of home cleaning and personal care products ◦  Founded in 2000 by two partners: Eric Ryan a designer and Adam Lowry a chemical engineer ◦  Key positioning: non-toxic, biodegradable, inexpensive, not tested on animals, with attractive packaging made from recycled plastic ◦  Tagline: People Against Dirty ◦  SMP Focus: largest part of business: home cleaning products
  4. 4. ◦  In seven years Method becomes a 100-person international enterprise (source: Marin Magazine) ◦  Inc. magazine recently named Method "the seventh- fastest growing private company in America.“ ◦  The Method's 2006 revenue reached $55 million, up about 80 % over the previous year. In industry 4 % considered good growth.  (source: Information Resources Inc.) ◦  The Method's annual turnover is $100m  (source: Adam Lowry, co-founder of Method) ◦  In 2007 Method launched in the UK.
  5. 5. OPPORTUNITY: Eco-friendly market is hot! Competitors still fragmented RISKS: Rapid expansion of advertising and promotion may increase costs, drive out profits, Some new products may not be winners! EXISTING PRODUCT NEW PRODUCTS EXISTING MARKETS Launch Innovative Expand product line to (CUSTOMERS) retail: pop-up stores, include more personal website sales, online care products postings NEW MARKETS Expand distribution of Limit revolutionary (CUSTOMERS) all products products to one to two nationwide to mass a year market
  6. 6.   SOCIAL MOVEMENTS: Green Consumer   Purchase behavior closely aligned with personal values regarding outside environment. Eco-Friendly   Increasing interest in non-toxic home products that do not harm the environment – term is eco-friendly Mass Luxury   Offers better quality at prices that are still low Customer Education   consumers looking for more information in return for brand loyalty Youth demographic   emerging huge youth demographic entering 20s in next five years
  7. 7.   TECHNICAL: Cleaners can now be made using oxygenated processes, natural bacteria and enzymes   EVIRONMENTAL Outdoor environment:   Cleaning product additives in soil and water   USGS found metabolites in 69% of streams and disinfectants in 66% of streams Indoor environment:   EPA study: concentration of pollutants inside 2 to 5 times higher than outside   Mt. Sinai studies indicate high levels of dioxin and chemicals in all human bodies in US.
  8. 8.   ECONOMIC:   Natural biobased products now produced on large scale to support green movement – reduces cost of ingredients and are renewable   Rising cost of raw materials - especially petrochemical products
  9. 9.   POLITICAL:   Emphasis is on decreasing use of petroleum both as energy and in products   Public demand for 3rd party certification of Green products: Green Seal, Scientific Certification System (SCS), USGBC (LEED for buildings)   Increasing likelihood of tax benefits for use or production of green products   European Union restrictions on common cleaning chemicals: parabens.   Hazardous Products Act: requires labeling of hazard or toxic products w/ first aid information
  10. 10.   Customers with green preference lifestyle   Considers himself/herself to be a green   Is concerned primarily with indoor consumer pollution and personal/family health   Concern for the outdoor environment:   Very concerned with the environment in recycled packaging and organics general ingredients are relevant but not more important than price   Responds to design in packaging and home environment   Prefers natural aroma to that of chemical smell in the home   Is not looking for the absolute lowest price   Is likely female   Is likely between ages of 25 and 50 Customer Segment One Customer Segment Two
  11. 11. Customer Type Motivation and Needs  Trial Willing to try, but tend to stick to natural foods. Open to the idea of doing more but it’s not a priority  Occasional Have integrated a few Green products into their lives, usually consumables  Regular Take action to make Green a part of their lives, yet remain primarily in the food/beverage categories  Committed Dedicated to a Green lifestyle, for the good of themselves as well as the world around them. Using Green products from all categories, including household cleaners and laundry.  Customer Segment One = Trial, Occasional, Regular Target segment for Method! Customer Segment Two = Committed
  12. 12. Ranked in Order of Threat Level 1. Clorox Green Works 2.  Seventh Generation Experienced 40% growth annually since Method launch. Now at $100 million (source: Mintel Research 06) 3. Simple Green 4. Earth-Friendly 5. Consumer trend to make non-toxic cleaners in the home
  13. 13. STRENGTHS WEAKNESSES  Brand known for high quality,  Ordinary package design and effective product odor  Breadth of product line  Packaging not made of all  Lower price recycled material  Large Advertising/promo budget  Low innovation in formula  Large distribution channel of  Low trust as a green brand 24,000 stores*  Education OPPORTUNITIES THREATS  20% increase in Eco-friendly/  Multiple competitors entering green market  Low barrier to entry  Home consumer product industry  Established green brands moving focused on green products into cleaning product category  Brand already known by large  Downturn in economy Emerging Millennium generation  Difficult to promote Green brand without damaging existing *source: Mintel Research “chemical” brand image
  14. 14.   Design:   Innovative recyclable packaging with attractive curvy colored package   Technology:   Produce fruity smell products with regular natural materials   Mass Market Distribution Channel:   Achievement of economies of scale distribution while keeping advantages of small-scale manufacturing operation   New Product Must Adhere to Core Competencies  Be visible in the home = value: design  Be used frequently = value: non-toxic  Be low to mid priced = value: available to mass market
  15. 15. STRENGTHS WEAKNESSES Fast growth Not all products viewed as equally effective Very popular herbal aroma Some products contain petroleum-based Innovative package design ingredients Recycled plastic packaging Lack of bulk sizes for product refills Non-toxic for use on and around people and Still not widely recognized in mass consumer pets market Highly effective natural surfactants Low level of advertisement and promotion Broad product line Inexperienced mgmt team Strong distribution channel in areas w/large target market segments Low price for value Strong brand loyalty OPPORTUNITIES THREATS High demand for products in current Growing number of competing products: low distribution channels barrier to entry Only 2-5% of cleaning products available are Global detergent co. moving into market green Clorox GreenWorks popularity and large Cleaning product market huge: 17.5 billion distribution channel Products are popular and recognized by Price pressure by competitors large emerging youth market Retailers closing due to soft economy
  16. 16. Method Products attractive to Trial, Occasional And Regular consumers These groups together make Up 77% of the consumer population As interest in natural products increases so will Method’s target market Source: Mintel, Natural Products Marketplace Review
  17. 17. •  Green cleaners consumers are rising exponentially during last 3 years •  Consumers are price sensitive and normally they showed to shift to non green products when there was more than 20% price difference. •  Sales of natural cleaning products rose by 23% between ‘06 and ’07. Source: SPINS Market Research
  18. 18.   Key Strength for Effective Growth Strategy ◦  Early deal with Target ◦  Have not focused on traditional Green product channels: Specialty stores, Whole Foods, Catalogs ◦  Focus has been on where trial, regular, and occasional consumers shop. ◦  Now expanded to Costco, Safeway and other “mainstream” retailers   Consumers are eco-friendly, looking for value but still have relatively high income ◦  Still primarily on the West Coast
  19. 19.   External:   Green Products Market lacks uniform or trusted certification or endorsement   Lack of label uniformity drive consumers to decide on price   Still lack of access to green and/or eco-friendly products for most consumers (especially in the mid- west)   Consumer excitement over eco-friendly may dissolves in the face of high prices (note 20% price increase study SPINS research)   Internal   To date company has no experience with product failure – could bet too much on a flop.
  20. 20.  Aggressively expand distribution of core successful cleaning product line to East Coast and Mid-West •  Create tailored bundle (not bulk) packaging for Warehouse stores like Costco  Evaluate and drop any laggard products  Expand line of complementary personal care products  Limit introduction of revolutionary product introductions to one a year  Step-up Creative Promotion   Colleges, mid-luxury green focus hotels, airlines   Pop-up store events   Website community: blogs, education and FAQ  Obtain 3rd party green certification  Don’t stop core competencies: product aesthetics, design, distribution and value  

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