Leveraging Green for Growth
As part of The Centennial Strategy, proposed by the company CEO Don Knauss, Clorox has continuously strived to become a leader in creating sustainability product. Through both internal development and acquisition, it had established environmentally friendly products that can be use around the user environment. Despite their early stage success, most of these products have struggled to maintain the growth rate and attracting new consumers. The root causes are the deteriorating economic and the lack of information on their products. The combination of the high price and the lack information discourage base and new consumers to try their new sustainable products. As a result, consumers are less willing to sacrifice efficacy, price and availability of their traditional products for those sustainable ones. Despite the drawbacks from high pricing, economic recession, low trial rates and uncertainty of their new environmentally friendly products efficacy and safety, Clorox should continue to invest and build brand image for sustainability products. Recent research from Cambridge research and Clorox indicates positive correlation between environmental concern and its impact to users purchasing decision. People are becoming more aware and are more influenced by the subject. Consumers, in good economy, are concern about price, quality and also the benefits that their environment receives from the products they are buying. Thus it is important for Clorox to maintain its leadership and at the same time invest more to explore on the opportunity of introducing innovative adjacent products to capture other segments of the market. As a recommendation, Clorox will need to clearly separate the brand and the market segment and narrow down its focus. For Brita, it should focus on the core competencies and develop innovative products to minimize the gap for new entry. Along the same line, Burt’s Bee should expand into different segment by launching new products, with lower price with lesser natural ingredient, to the untapped 39% of the market (beauty enthusiasts and demanding conventionalists). They should also continue with the foreign market expansion, especially in the emerging market such as Asia and Latin America and avoid European sophisticated and high competition market. Lastly, for Green Works to stay competitive and maintain its leadership, it should become a standalone brand to clear the uncertainty of the tied brand image that it has with Clorox. After the separation, Green works should try to lower its cost and invest more on educating the users the benefits and the effectiveness of its products to the non-natural ones. This will not cannibalize Clorox sales because the price differentiation will separate the early adopters of the sustainability trend from the laggards. The early adopters are less price sensitive and will be more willing to pay a little extra for the product while the laggards will keep buying the traditional cleansers of Clorox. Brita “In me”
Brand segmentation is very important especially when products do not relate or associate to each other. Through market segmentation, Brita can focus on its target consumers without suffering from effects might occur if it was branded under Clorox. As a result it was able to segment the target and present the brand as an environmentally friendly product. This has led a great success in growth in revenue and market share of the high margin category of pitcher filtration systems. Brita had succeeded in introducing the trend of sustainability in water consumption. This had become a great benefit to Clorox as it strengthens the business brand as a sustainability company. Its financial data indicates that there is room for further market expansion as revenue substantially increases from $170 million in 2007 to $250 million in 2010. Much of the success is credited to the launch of the...
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