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SUBMITTED BY:
P r i y a n k a B a j a j ( A 1 1 )
V e r n i k a ( A 1 2 )
M o h i t S a c h d e v a ( A 1 3 )
A k s h a y M a l i k ( A 1 4 )
N i k h i l M a d a n ( A 1 5 )
The Brita Product Company
SUBMITTED TO:
Prof. Hitesh Jhanji
Clorox Company
 Chairman and CEO: G. Craig Sullivan
 Major Manufacturer and Marketer of Laundry Additives, Home-
Water Purifiers, Household Cleaners & Auto-Care products etc.
 85% Brands, first and second in their categories.
 In Jan’99, Clorox brought “First-Brands”, a $1.2billion
Manufacturer of Auto care Products and Home Fireplace
Products.
 Combined Revenue: $3.9billion in 1998.
 Merger resulted in Sales beyond U.S reached 20% from 18%.
 Charlie Couric: Marketing executive at Clorox.
The Brita Products Company
 Founded by Heinz Hankammer in 1966.
 A Family owned corporation.
 Headquarter: Tanusstein (near Wiesbaden), Germany
 Producer of a variety of Industrial and Consumer Water Filtration
Product.
 Struggled in U.S before the merger with Clorox.
 In Sept. 1988, Clorox merged with Brita and formed a subsidiary
Brita USA after strong negotiations.
 “Filters from Brita and produce own Pitchers”
 3% Royalty to Brita Gmba.
 Couric appointed as the president and G.M.
Clorox’s Brita-USA
 Brita USA struggled due to small base of Sales for 4 years.
 Survey: Brita customer would have a remarkable lifetime value.
“Each pitcher sale would start a flow of filters sales.”
 1990: Product on hold.
 1999: 13% to 15% of the 103million households in the US were
using Brita pitchers.
 Brita had created a home water purification industry worth
$350million at retail.
 Held a 70% revenue share, a strong base installed.
The Product
Components:
-A two-compartment
Pitcher.
-Replaceable Filters.
Consumer Attitude: A Concern…
 Decade of 1990s: Unsafe tap water concerns U.S households.
 Wells supplying contaminated water.
 U.S. Environmental protection agency declared 10% of the U.S.
surface water ”sufficiently contaminated” with toxic pollutants.
 1993: In Milwaukee, 403,000 people got sick , 111 died.
Reason: Parasite Cryptosporidium entered the Municipal
Water supply.
Resultant: 47% of Respondents preferred not to drink water
straight from the tap.
 Sales of Bottled water increased rapidly.
Market Performance
 Brita‘s Terminology: “Systems” for pitchers and Faucet-Mounted
units, “Filters” for the Replacement Filters.
 First four years of Brita USA: Slow and Dull system sales.
Rapid growth in filter sales.
 Similar Profiles of Brita in Canada and U.K.
 Survey: 25% of buyers had given a Brita pitchers as a gift.
80% of buyers were still using it a year later and buying
2 or 3 filters a year.
 July 1998: Company offered “BOGO” (buy one, get one free),
System sales Doubled and Share increased by 10 points.
 After advertisement and trade promotions, Brita USA earned a
24% net return on sales, Highest of all the Clorox units.
Brita’s offers
Brita unit sales(In’000)
0
5000
10000
15000
20000
25000
30000
1991 1992 1993 1994 1995 1996 1997 1998 1999
Filters
Systems
(In ‘000)
(In ‘000)
Brita
Distribution
“Class to Mass”
Upscale pitchers
Standard pitchers
Bonus pack
systems.
1992 1998
Department
stores
27% 13%
Mass
merchandisers
31% 34%
Grocery stores 11% 14%
Club stores 31% 21%
Drug stores - 12%
Positioning and Advertising: Couric Explained
 People had no idea about Pitchers.
 Advertising Split:
o How it works; How it tastes?
 Focus on Taste because:“Talk Taste implies Talk Health”.
 Bottled water industry does not refers Health.
 To be on the top of the mountain.
 Pure and simple advertising:
o Showed Mountain Streams, waterfalls and outdoors.
o Promised clear, crisp, refreshing water.
Brita’s value position
Remove
contaminants
Taste better than
tap
Water clarity
Competitors
 Competitors: PUR, Sunbeam, Rubbermaid, Teledyne, Melitta, Omni, Corning,
Electrolux, Culligan, Kenwood, Mr. Coffee.
 Brita’s Market Share: 65% to 75% across the decade.
 1997:
 Rubbermaid:
o Launched a low price product, with Technology similar to Brita’s.
o Claimed 800 glasses versus Brita’s 560.
o No advertising, Fail
 1998: At Chicago Show, Dozens of Manufacturers unveiled new filters, to
attack the Leaders.
 Sunbeam:
o Launched “Fresh Source” that removes Microbiological cysts, Chlorine and
Lead.
o $10 million on Advertising.
“Closest” Competitors…
 Teledyne:
o Position: 3rd .
o 1998: Unveiled Faucet Mount Product at the show.
 PUR:
 Position: 2nd
o Publicly held U.S. corporation.
o Company made water system for outdoor enthusiasts and
Desalinators for marine and military use, in addition to water
filters.
o Spent $40million in advertising and promotion to support its
line of faucet-mount and pitcher filters.
o 1999: PUR “only competitor with 2 digit Market Share”.
Top Competitor
PUR’s promotional program
A)30-second add on spot
network TV.
B)To point out the differences
between PUR and current
pitchers.
PUR’s Faucet-mount
Pitchers Faucet Mount
 Stored in Refrigerators, cold
water.
 Only Pitcher removes Hardness
of Water.
 Water is passed at low pressure.
 Tasted more crisper, with low
ph.
 Filter lasts shorter, a glass costs
higher.
 Not stored in Refrigerators.
 Faucet Mount would not.
 Water passed through at Higher
pressure.
 Comparatively less crisper.
 Filter lasts longer, A glass of
water costs lesser, half.
Pitchers and Faucet Mount…
Brita’s interest towards Faucet mount
 Before 1995: Brita expressed interest in Faucet-mounted water
filtration systems.
 Out of the 50 countries in which Brita did business, only Japan had a
significant faucet business.
 1994-95: Faucet segment started forming.
 PUR launched a faucet-mounted products through Recovery
Engineering inc.; Success.
 1995: Brita hired an outside design company to design a Faucet mount.
 Brita filtration technology played no part in Faucet Mount design.
 Conversation held on whether to use Brita’s name; Royalty Issues.
 Faucets Mounts: Direct Cost: $15
Filter: $3
SIMULATION STUDY:
 567 Respondents, 3 different rooms, displayed 10 products available in
the market.
o Faucet Filter increased the likelihood of buying a product from Brita
Line.
o Combined Pitcher and Faucet Filter market cannot expand.
o Even with the high price, Brita Faucet Filter generated same level of
purchase intentions as Brita Pitcher does.
o Half the Brita pitcher owners will continue to pitcher along with Faucet
Filters.
o Both Brita’s and PUR’s Faucet Filters were perceived to be superior to
Brita Pitchers.
o Brita’s Faucet was perceived to improve water taste.
o Unit sales at both $34.99 and $39.99 were strong.
 Study implies Sales of Faucet Filters for the first year would lie
between 350000 and 1395000 units .
Couric’s Conclusion…
 Three point of views taken:
o Keep the focus on building the installed base for Pitchers.
o Shift the budget to encourage the installed base to buy more
Filters.
o Put the weight of resources behind building a whole new installed
base in Faucet Mounts.
 House-Hold Pitcher penetration slowing, 6 out of 7 did not have
one.
 Targeting the segments of singles and to the parents of young
children.
 Investing in Direct Mail or other highly targeted marketing tools.
Couric’s Conclusion…
 Recovery engineers had a technological edge over Brita.
 PUR had been first to market with number of new features.
 PUR has outplayed Brita in terms of health aspect of cleaning the
microorganisms
 Brita is yet to cover 2,3 and 4 bullet levels of clearing the
microorganism that PUR has already done.
 Procter and Gamble, Clorox’s most respected competitor now
controlling PUR, implying strengthening of oppositions.
 Brita needs more time to launch proper and health-friendly Faucet
Filters.
o The company has been in a dangerous risk now as a number of
competitors has combined with a better product line.
Thank You!!!

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The brita product company

  • 1. SUBMITTED BY: P r i y a n k a B a j a j ( A 1 1 ) V e r n i k a ( A 1 2 ) M o h i t S a c h d e v a ( A 1 3 ) A k s h a y M a l i k ( A 1 4 ) N i k h i l M a d a n ( A 1 5 ) The Brita Product Company SUBMITTED TO: Prof. Hitesh Jhanji
  • 2. Clorox Company  Chairman and CEO: G. Craig Sullivan  Major Manufacturer and Marketer of Laundry Additives, Home- Water Purifiers, Household Cleaners & Auto-Care products etc.  85% Brands, first and second in their categories.  In Jan’99, Clorox brought “First-Brands”, a $1.2billion Manufacturer of Auto care Products and Home Fireplace Products.  Combined Revenue: $3.9billion in 1998.  Merger resulted in Sales beyond U.S reached 20% from 18%.  Charlie Couric: Marketing executive at Clorox.
  • 3. The Brita Products Company  Founded by Heinz Hankammer in 1966.  A Family owned corporation.  Headquarter: Tanusstein (near Wiesbaden), Germany  Producer of a variety of Industrial and Consumer Water Filtration Product.  Struggled in U.S before the merger with Clorox.  In Sept. 1988, Clorox merged with Brita and formed a subsidiary Brita USA after strong negotiations.  “Filters from Brita and produce own Pitchers”  3% Royalty to Brita Gmba.  Couric appointed as the president and G.M.
  • 4. Clorox’s Brita-USA  Brita USA struggled due to small base of Sales for 4 years.  Survey: Brita customer would have a remarkable lifetime value. “Each pitcher sale would start a flow of filters sales.”  1990: Product on hold.  1999: 13% to 15% of the 103million households in the US were using Brita pitchers.  Brita had created a home water purification industry worth $350million at retail.  Held a 70% revenue share, a strong base installed.
  • 6. Consumer Attitude: A Concern…  Decade of 1990s: Unsafe tap water concerns U.S households.  Wells supplying contaminated water.  U.S. Environmental protection agency declared 10% of the U.S. surface water ”sufficiently contaminated” with toxic pollutants.  1993: In Milwaukee, 403,000 people got sick , 111 died. Reason: Parasite Cryptosporidium entered the Municipal Water supply. Resultant: 47% of Respondents preferred not to drink water straight from the tap.  Sales of Bottled water increased rapidly.
  • 7. Market Performance  Brita‘s Terminology: “Systems” for pitchers and Faucet-Mounted units, “Filters” for the Replacement Filters.  First four years of Brita USA: Slow and Dull system sales. Rapid growth in filter sales.  Similar Profiles of Brita in Canada and U.K.  Survey: 25% of buyers had given a Brita pitchers as a gift. 80% of buyers were still using it a year later and buying 2 or 3 filters a year.  July 1998: Company offered “BOGO” (buy one, get one free), System sales Doubled and Share increased by 10 points.  After advertisement and trade promotions, Brita USA earned a 24% net return on sales, Highest of all the Clorox units.
  • 9. Brita unit sales(In’000) 0 5000 10000 15000 20000 25000 30000 1991 1992 1993 1994 1995 1996 1997 1998 1999 Filters Systems (In ‘000) (In ‘000)
  • 10. Brita Distribution “Class to Mass” Upscale pitchers Standard pitchers Bonus pack systems. 1992 1998 Department stores 27% 13% Mass merchandisers 31% 34% Grocery stores 11% 14% Club stores 31% 21% Drug stores - 12%
  • 11. Positioning and Advertising: Couric Explained  People had no idea about Pitchers.  Advertising Split: o How it works; How it tastes?  Focus on Taste because:“Talk Taste implies Talk Health”.  Bottled water industry does not refers Health.  To be on the top of the mountain.  Pure and simple advertising: o Showed Mountain Streams, waterfalls and outdoors. o Promised clear, crisp, refreshing water.
  • 12. Brita’s value position Remove contaminants Taste better than tap Water clarity
  • 13. Competitors  Competitors: PUR, Sunbeam, Rubbermaid, Teledyne, Melitta, Omni, Corning, Electrolux, Culligan, Kenwood, Mr. Coffee.  Brita’s Market Share: 65% to 75% across the decade.  1997:  Rubbermaid: o Launched a low price product, with Technology similar to Brita’s. o Claimed 800 glasses versus Brita’s 560. o No advertising, Fail  1998: At Chicago Show, Dozens of Manufacturers unveiled new filters, to attack the Leaders.  Sunbeam: o Launched “Fresh Source” that removes Microbiological cysts, Chlorine and Lead. o $10 million on Advertising.
  • 14. “Closest” Competitors…  Teledyne: o Position: 3rd . o 1998: Unveiled Faucet Mount Product at the show.  PUR:  Position: 2nd o Publicly held U.S. corporation. o Company made water system for outdoor enthusiasts and Desalinators for marine and military use, in addition to water filters. o Spent $40million in advertising and promotion to support its line of faucet-mount and pitcher filters. o 1999: PUR “only competitor with 2 digit Market Share”.
  • 15. Top Competitor PUR’s promotional program A)30-second add on spot network TV. B)To point out the differences between PUR and current pitchers.
  • 17. Pitchers Faucet Mount  Stored in Refrigerators, cold water.  Only Pitcher removes Hardness of Water.  Water is passed at low pressure.  Tasted more crisper, with low ph.  Filter lasts shorter, a glass costs higher.  Not stored in Refrigerators.  Faucet Mount would not.  Water passed through at Higher pressure.  Comparatively less crisper.  Filter lasts longer, A glass of water costs lesser, half. Pitchers and Faucet Mount…
  • 18. Brita’s interest towards Faucet mount  Before 1995: Brita expressed interest in Faucet-mounted water filtration systems.  Out of the 50 countries in which Brita did business, only Japan had a significant faucet business.  1994-95: Faucet segment started forming.  PUR launched a faucet-mounted products through Recovery Engineering inc.; Success.  1995: Brita hired an outside design company to design a Faucet mount.  Brita filtration technology played no part in Faucet Mount design.  Conversation held on whether to use Brita’s name; Royalty Issues.  Faucets Mounts: Direct Cost: $15 Filter: $3
  • 19. SIMULATION STUDY:  567 Respondents, 3 different rooms, displayed 10 products available in the market. o Faucet Filter increased the likelihood of buying a product from Brita Line. o Combined Pitcher and Faucet Filter market cannot expand. o Even with the high price, Brita Faucet Filter generated same level of purchase intentions as Brita Pitcher does. o Half the Brita pitcher owners will continue to pitcher along with Faucet Filters. o Both Brita’s and PUR’s Faucet Filters were perceived to be superior to Brita Pitchers. o Brita’s Faucet was perceived to improve water taste. o Unit sales at both $34.99 and $39.99 were strong.  Study implies Sales of Faucet Filters for the first year would lie between 350000 and 1395000 units .
  • 20. Couric’s Conclusion…  Three point of views taken: o Keep the focus on building the installed base for Pitchers. o Shift the budget to encourage the installed base to buy more Filters. o Put the weight of resources behind building a whole new installed base in Faucet Mounts.  House-Hold Pitcher penetration slowing, 6 out of 7 did not have one.  Targeting the segments of singles and to the parents of young children.  Investing in Direct Mail or other highly targeted marketing tools.
  • 21. Couric’s Conclusion…  Recovery engineers had a technological edge over Brita.  PUR had been first to market with number of new features.  PUR has outplayed Brita in terms of health aspect of cleaning the microorganisms  Brita is yet to cover 2,3 and 4 bullet levels of clearing the microorganism that PUR has already done.  Procter and Gamble, Clorox’s most respected competitor now controlling PUR, implying strengthening of oppositions.  Brita needs more time to launch proper and health-friendly Faucet Filters. o The company has been in a dangerous risk now as a number of competitors has combined with a better product line.

Editor's Notes

  1. Upscale for department stores. Standard for mass merchants, grocery and drug stores. Bonus pack for clubs.
  2. Faucet mount will eat up pitcher filter sales Pitcher filters were just a starter product, Faucet mount is a level up