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

1. Adina Crossley
Alejandra Jimenez
Lily Yang
Navid Farzinnia
Stephen Yeung
Marketing Planning
K. Gerlach
August 2008

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.  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

5. ◦ 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.

6. 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

8.  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

9.  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.

10.  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

11.  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

12.  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

13. 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

14. 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

16. 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

17.  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

18. 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

20. 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

21. • 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

22.  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

23.  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.

24.  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
