Case: BRITA- In search of a winning strategy
Some of the challenges that Brita faces are as follows:
Decline in sales since 1998. As company’s flagship brand, Brita was expected to contribute double digit top line growth. But in reality, there was approximately a 5% decline in sales every year since 1998 and this decline continued until 2006. •
Faced the problem of losing customer faith in the Brita brand. Brita had slowed established a string brand position among consumers over the ten year period since 1988. It grew to be a $200m grossing company from a small filter system provider. Brand awareness stood at 70% and 18% of 103m households in US used Brita pitchers. This reputation was at stake due to the decline in sales and consequently losing its strong share position in the market. •
Heightened pressure from competitors. There were many competitors who entered the market but failed to succeed against Brita. Many competitors came up with the similar kind of filters but unable to succeed due to strong branding of Brita achieved due to its first mover advantage. But suddenly in 1998, competitors like PUR came up with the FM product an alternative product to PT filter provided by Brita. This was a success in the market. There was an increase in competition now and most competitors pitched around health and safety, an issue sensitive to consumers. •
Consumers shifting to different brands. Previously consumers did not have much choice over tap water. The introduction of Brita PT systems was seen as an innovative product which provided clean and tasty water. With more competitors entering the market and providing alternate options, the consumers had more choice to choose from the lot. With increased choice of products, they had other options over Brita based on their needs. •
Complaints from current Brita users. In an environment where consumers had many choices to select a filter product, Brita did not adapt its product to the changes in technology. Many of the Brita consumers had complaints about the design of the product. Example: some were not sure when to change the filter? There was no indication on the product when the filter needed to be changed. Brita’s PT systems were also perceived as inconvenient by some consumers. •
Increasing popularity of bottled water. Bottled water was a new innovation. This sector was fast growing and capturing the market share. There was a tremendous growth of bottled water consumption in 1990s. Many consumers were switching to use bottled water because it was convenient, portable and clean. •
Inability to recognise shift in consumer trends.
Inability to turn the fortunes around until 2006. There were various strategies which Brita came up with in response to competition and to prevent decline in sales. But none of the strategies which Brita came up with to resolve the losing market share problem was successful and they did not seem to work. Following are some of the reason why these strategies did not work: •
No consumer focus. Brita was just blindly responding to competitive pressure. They were clearly responding to sales decline, loss of market share and competition. None of the strategies involved doing comprehensive market research on how the consumer perceptions/behaviours have changed? •
Looks like they were moving away from their initial brand positioning of great tasting water and clean water. No market focus seen on strategies attempted. They are trying to compete with soft drink beverages. This is far from their safety and health focused positioning. •
Most of the strategies were short term. No time given to see their effects. Need for immediate response from market. •
Urgent and flawed technological solutions have been proposed to come up with a fix to the solving the existing flaws in the product designs. This doesn’t seem to have worked well to solve consumers’ issues. •
Attempt to make the product cheaper than bottled water-> downgrades the health and safety...
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