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MGT-520
Team: McDream
Eunkyu Yang, Seung Jae Kwak, Kijin Ryan Lee, Ah Reum Kwon, Go Eun Lyu

The Brita Products Company

1. To what do you attribute Brita’s success?

The success of Brita in the United States was due to the innovative product model as well as the great marketing support from a well-established manufacturer and marketer, The Clorox Company. Although the company struggled the first few years with low sales volume, however, they believed that a Brita consumer would have a remarkable lifetime value, resulting in the retention rate of 80%. Not only their retention rate was high, Brita’s market share had been steady in the range of 65% and 75%, which made them a dominant market player in the system and filter market. The reason for being so dominant in the market was because Brita’s products were exactly what the consumers were looking for. Attributes of the core product, the pitcher, itself had the following benefits: It improved the taste of water better by reducing chlorine and odors and it was extracting heavy metals from the water so there were no depositing salts or sediment when the water was boiled.

In terms of market environment, there was actually no major concern to the consumers about filtering the tap water until it became an issue. During the decade of 90’s, the sensitivity people showed about some health-related accidents helped Brita to easily increase their brand awareness to the public and create a significant market. As the market grew and the product became popular, a lot of people perceived Brita pitcher as a present for their friends and close ones.

[Exhibit 6] Retail Market Shares (United States, all retail outlets)

System
| 1995| 1996| 1997| 1998|
Pitchers (thousands of units)| 2,636| 4,381| 5,689| 6,307| Brita| 77%| 77%| 80%| 83%|
PUR| -%| -%| 4%| 8%|
Rubbermaid| -%| -%| 7%| 4%|
All others| 23%| 23%| 11%| 5%|
Faucet Mounts (thousands of units)| 659| 898| 1,249| 1,291| PUR| 9%| 30%| 67%| 74%|
Teledyne| 43%| 43%| 27%| 23%|

Filters
| 1995| 1996| 1997| 1998|
Filter Sales ($millions, retail)| 63.3| 82.3| 116.3| 154.7| Brita| 65%| 75%| 75%| 75%|
Teledyne| 10%| 9%| 7%| 4%|
PUR| 1%| 2%| 8%| 17%|
Omni| 8%| 5%| 3%| 2%|
Sears| 2%| 2%| 1%| 1%|
Pollonex| 1%| 1%| 0%| 1%|

2. What marketing assets has Clorox acquired in these years of vigorous growth, and what is the best use to which the assets can be deployed?

Clorox has shown substantial growth and gained significant market share in the filtered-pitcher market over the years. Clorox has huge brand recognition and that makes it easier for them to use their large market share to attract consumers to new products. Consumers already know what products they make and will not be hesitant to purchase them. Brand recognition will be a significantly important in the sale of faucet filtration systems.

Since Brita is known to have the best water taste in the market and consumers are interested in the better taste than better removing contaminants. Therefore, even if the Brita products are a little more costly, consumers are willing to pay extra dollars for better tasting water. Plus, since Clorox is a hugely successful company, they have a large marketing and R&D budget, which will give them a huge advantage over the competitors in the market. They can advertise the brand and the products in an aggressive manner, and more people will see the products, which leads to a higher chance of sales increase.

3. What are the prospects for filter sales? What are the prospects for the faucet-mounted system? Which would you favor?

Brita Company already has a majority share of 75% in the filter market. They are not giving too much weight to marketing at the moment to increase the filter demand and working primarily on in-store promotions only. Thus, if Brita changes their investment direction to the way that...
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