GROUP 8: Abhishek Das (P16014), Prasanna (P16016), Akshay Lal (P16037),

Pradeep (P16041), Durgesh (P16057)

Case Analysis: Brita Products Company

Consumers- By the end of the decade of 1990s, a poll found that 47% of the respondents preferred
not to drink water directly from the tap. National Consumer water quality report (in 1999) revealed
that 72% of all respondents and 89% of young adults, uttered anxiety about the quality of
households water supply. Majority of households used either bottled water or some water
purification system. Percentage of people taking no precautions reduced from 47% in 1995 to 35%
in 1999.
Company- Brita GmbH is a family owned corporation headquartered in Tanustein, Germany. It
made many industrial and consumer water filtration products. In 1988, Brita GmbH agreed to let
Clorox form a subsidiary, Brita USA, to be the sole distributor of Brita products. By 1999, around
13-15% of 103 million households in US were using Brita pitcher. Brita USA held 70% revenue
share in USA market.
Competitor- Britas competitors were Culligan, Electrolux, Sunbeam, Kenwood, Corning,
Melitta, PUR, Rubbermaid, Teledyne, Omni and Mr. Coffee. In 1999, PUR was the only
competitor with double digit market share. In 1998, PUR held 74% of market share in Faucet
mount systems.
Context- Household pitcher penetration was slowing but six out of seven household didnt have
one. Consumer preference getting shifted from Taste to Health. Competitors were entering the
market with technological advancement and innovative features.
Decision Problem- How to take Brita Brand forward with available alternatives.
a) Household pitcher penetration was slowing. Products like PUR entered the market with
technological advancement and innovative features. Consumers were no more attached with only
taste. Screening of microorganisms also became important for consumers. So, Brita was facing
product life cycle issue with pitchers. Brita can design a strategy to convert nonusers. Brit can also
reposition pitcher. Brita can go with Harvesting strategy with gradually reducing a product or
businesss cost and trying to maintain sales. Brita can also use divesting strategy with strong
distribution.
b) Faucet mounted device sales is picking up recently due to its advantages in space occupied and
variable costs. Though the overall device cost is higher than pitcher, the life of filters used in faucet
mounted devices was far better that it required lesser filter replacements in an year compared to
pitcher water filter. Leading brands in faucet mounted devices were focussing on the purity of
water and the protection it offered against microorganisms. In the light of increasing concerns
about microbes like bacteria in drinking water, faucet mounted devices compared with pitcher had
a definite edge both in current penetrated market and potential market unexplored. The study
conducted by ACNielsen forecasts a rapid explosive growth of 30-110% in current water filter
market if Brita enters the segment.
Filter sales for Brita was increasing at an exponential rate till 1997. The growth of sales of filters
in 1998, though it is increasing, is not in the same trend as the preceding 2-3 years. This shows the
penetration of faucet mounted devices into the market. Filter sales are bound to drop as pitcher
sales go down and also due to the fact that filters for faucet mounted are replaced in less frequency
as they are long lasting.

GROUP 8: Abhishek Das (P16014), Prasanna (P16016), Akshay Lal (P16037),

Pradeep (P16041), Durgesh (P16057)
c) Based on the data available in the case, following should be Britas strategy:
1. In case of Pitchers, it is clear that the growth in sales has seen a decline and the increase in sales
of Faucet mounted systems will affect the growth further. However, the sales of Pitcher systems
are still increasing and is yet to hit its peak in addition to the fact that only 1 in 7 households use
Pitchers. The company must invest minimum amount on marketing the product for non-users
(most of the investment should be on Faucet mounted filters) by focusing the campaign on cost
benefits. Additionally, they should work towards introducing better filters that can remove more
number of harmful particles and bacteria (cryptosporidium, guardia, Lindane etc).
Limitations: The uptick in Faucet mounted segment may eat up the sales in Pitcher segment.
The investment in innovative filters may end up causing a loss to the company especially if the
sale of Pitchers goes down.
2. In case of Faucet mounted filters, the company must introduce their version to the market as
quickly as possible. For the brand name they must negotiate a royalty or one-time payment for
using the name Brita in order to better leverage the in built brand recognition. Additionally, based
on the scenarios given in the case, the company should keep the pricing close to $39.99(kept high
based on survey). Consider the scenario number 9 from the given 10 scenarios.
Based on the above mentioned scenario and data provided to us, the forecast would be:
Total Households: $ 75.86 million
List price (30% of sales): $ 39.99
Feature price (70% of sales): $ 34.99
Trade Promotion: $ 3.2 million
Consumer Promotion: $ 2 million
Competitive Pricing: Current
Total Sales(units): 1,350,000
Total Sales(value): $ 49.26 million.
Cost of goods sold: $ 24.3 million.
Gross Margin: $ 24.96 million.
Limitation: The sales of this type will eat away the sales of Pitchers. Thus the company would
lose the market share advantage. Moving ahead it might be difficult for the Pitcher division to
stay afloat if they dont make necessary changes as mentioned in the previous point.