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Category AnalysisM
The US auto air freshener market was $450 million in 2013 and grew 8% from 2012. Vent clips and sticks grew the fastest at 18% year-over-year, while paper fresheners still have the overall lead. There is confusion over the market leader as several companies claim to dominate different segments. The market has potential for growth as new entrants like P&G and Bath & Body Works expand offerings. Recommendations include emphasizing American manufacturing, pursuing additional store placements, and tying freshener replacement to other car tasks.
Category AnalysisM
- 1. Category Analysis Auto AirFresheners Martin Jackson
- 2. Current Market • CarAir Freshener total US market was $450M in 2013 – Grew ~8% from 2012 – Fastest Growing type is vent clips and sticks +18% YOY – Paper fresheners still hold the overall lead +8% $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Auto Air Freshener Revenue $M 2012 2013
- 3. Current Market Share •Confusion over market leader – Car-Freshner claims “Global Leader in automotive air fresheners” – Handstands claims “the #1 NPD market share producer in the USA” – Kline Group lists P&G as the leading marketer in the category – Auto Expressions claims “dominates the Air Freshener Market across US and Canada with approx 43% market share” • Very diverse channels but ~75% is focused on a few retailers
- 4. Potential Market • Alot of potential for growth • Market facing new entrants seeking to pick up share – P&G bringing the $1B brand febreeze into the category – Bath and Body Works and Yankee Candle offerings for auto scents in their mall stores as well as expanding them into other large retailers $450 M Category Revenue ÷ 244 M Vehicles registered in US $1.84 Spent per Vehicle 244 M Vehicles registered in US X 12 months X $1 Average cost for air freshener $2.9 B Maximum Total Market
- 5. What is right? •Targeting 3 distinct target markets with 3 brands • 28 patents for air care products protects design • Wide distribution • Product designs project lifestyle and image for consumer • Kline Group claims they are the fastest growing What is wrong • Profitability issues based on cash infusion May 2013 • Product lines outside the category results in less focus • Foreign manufacture increases risk for supply chain
- 6. What is right? •$1B Brand name established in home care section • Heavy marketing funding available through P&G • Enhanced access to areas of store • Television and print advertising reaching customers in new ways and may increase the market What is wrong • P&G requires fast growth or will kill product line • Current advertising targets same market as home lines, ignores much of the rest of the market • Focused on vent clips in car category and extending spray from home line • Home brand advantage not as strong in auto stores and other channels
- 7. What is right? •Multiple product categories in automotive give more leverage with channel • Participation in all segments of car air freshening category • Assorted with home air care at mass retailers/grocery as well as in automotive • Multiple brands allow larger ownership of shelf space • Unique in category Odor elimination product Ozium What is wrong? • Licensed Glade brand increases cost • Foreign manufacturing increases supply chain risk • Ownership by diverse equity firm confuses strategy • Likely limited focus on innovation • Multiple brands do not have separate target markets or value propositions.
- 8. What is right? •Primarily serves the car freshener market allowing focus and flexibility • Has almost 60 scents available • Iconic design in the little trees line with strong trademark history • Manufactures and distributes own line providing flexibility • Made locally in US and in Europe What is Wrong? • Power of brand mostly in Paper category which is losing share of market • Younger consumers tie to parents • Single category limits leverage with channel partners
- 9. Recommendations • Emphasize madein America on the packaging – Move from back of package to the front • Pursue additional facings in other areas of the store – Clipstrip/side counter/kicker display in home fragrance – Seasonal displays with Christmas and garden departments • Prompt consumers to replace regularly by tying to other car care tasks like oil change – Check your tree when you refill your gas • Continue expanding into new delivery vehicles, scents and finishes to tie to consumer lifestyle