A Report On The Brita Products Company
Evaluation of Alternatives8
Brita is made by a small German company called Brita GmbH. In 1988 Clorox acquired the right to market Brita in the USA. By 1999, 13% to 15% of the United States Household was using Brita Pitcher. Brita has a 70% revenue share in the $350 million worth of water purification industry. With the growth of household market lot of competitors have entered into the market Culligan, Electrolux, Sunbeam, Kenwood, Corning, PUR, Rubbermaid to name a few. PUR has launched a new product faucet mounted filter which has the potential of eating into the Brita Pitcher market. Clorox is in process of launching its own version of faucet-mounted filter but is currently contemplating various scenarios. Charlie Couric was the marketing executive who was responsible for bringing Brita to Clorox. With the growing presence of competitor and merger of PUR the most respected competitor of Clorox with Proctor and Gamble will only add more concerns for Charlie. He now has to decide what course of action will be beneficial for Clorox in the long run. Whether to focus on increasing the customer base of the existing Brita’s Pitcher, to launch Faucet mounted filters, to work towards developing filters which will remove more contaminants from water. The following report will provide a detail analysis on the problem faced by him and possible solutions. This report will also provide you with the analysis which is undertaken to reach those solutions.
The problem faced by Charlie Couric is to decide what steps he should take to move Brita Brand forward. He has a list of recommendation which can be pursued but each has its pros and cons. The primary problems which are faced by Clorox can be broadly classified as follows. * Increase in Competition
Brita Brand was generating a close to $200 million of revenue every year. This success of Brita attracted lot of competitors. Culligan, Electrolux, Sunbeam, Corning, Melitta, PUR, Rubbermaid, Teledyne, Omni and Mr. Coffee. Although the only competitor with double digit market share was PUR. But they pose a great deal of risk to Brita brand. All these competitors have started spending heavily on promotion and advertising of their products.
* Launch of Faucet Mounted Product
Prior to 1995 the demand for faucet mounted filtration system was not widespread. The only significant faucet business was in Japan due to the space constraints in Japanese kitchens. But post 1995 the demand for faucet based filter have started to increase.
* Mergers between competitors
Proctor and Gamble one the world’s largest consumer product company is closing a deal to control PUR brand from Recovery Engineering. PUR is the biggest and most respected competitor of Clorox. This merger will provide PUR with the wide distribution networks and economies of scale.
* Penetration of Brita Pitcher is Slowing
The household pitcher penetration of Brita was slowing and yet six out of seven household did not have a Brita pitcher. Situational Analysis
Since the launch of Brita Pitcher in the United States in 1988, they have been market leaders in home water filtration industry. By year 1999 Clorox has sold 17 million units pitcher. The Brita brand generated close to $200 million in revenues every year. Approximately 13% to 15% of households in United States are using Brita pitcher. Brita has 70% revenue share in the $350 million of home water purification industry. Apart from catering to the masses Clorox also created a line of upscale pitchers called Ultra for department stores. The standard pitcher which was inherited from Germany and was manufactured locally was sold in mass merchants like target and Wal-Mart. The...