The Brita Product Company

SUBMITTED TO: SU BM ITTE D BY:

Prof. Hitesh Jhanji Priyanka Bajaj (A11)
Vernika (A12)
Mohit Sachdeva (A13)
Akshay Malik (A14)
Nikhil Madan (A15)
 Clorox Company

Chairman and CEO: G. Craig Sullivan

Major Manufacturer and Marketer of Laundry Additives, Home-
Water Purifiers, Household Cleaners & Auto-Care products etc.
85% Brands, first and second in their categories.
In Jan99, Clorox brought First-Brands, a $1.2billion
Manufacturer of Auto care Products and Home Fireplace
Products.
Combined Revenue: $3.9billion in 1998.
Merger resulted in Sales beyond U.S reached 20% from 18%.
Charlie Couric: Marketing executive at Clorox.
 The Brita Products Company

Founded by Heinz Hankammer in 1966.

A Family owned corporation.
Headquarter: Tanusstein (near Wiesbaden), Germany
Producer of a variety of Industrial and Consumer Water Filtration
Product.
Struggled in U.S before the merger with Clorox.
In Sept. 1988, Clorox merged with Brita and formed a subsidiary
Brita USA after strong negotiations.
Filters from Brita and produce own Pitchers

3% Royalty to Brita Gmba.

Couric appointed as the president and G.M.
 Cloroxs Brita-USA

Brita USA struggled due to small base of Sales for 4 years.

Survey: Brita customer would have a remarkable lifetime value.
Each pitcher sale would start a flow of filters sales.
1990: Product on hold.
1999: 13% to 15% of the 103million households in the US were
using Brita pitchers.
Brita had created a home water purification industry worth
$350million at retail.
Held a 70% revenue share, a strong base installed.
The Product
Components:
A two-compartment
Pitcher.
Replaceable Filters.
 Consumer Attitude: A Concern

Decade of 1990s: Unsafe tap water concerns U.S households.

Wells supplying contaminated water.
U.S. Environmental protection agency declared 10% of the U.S.
surface water sufficiently contaminated with toxic pollutants.
1993: In Milwaukee, 403,000 people got sick , 111 died.
Reason: Parasite Cryptosporidium entered the Municipal
Water supply.
Resultant: 47% of Respondents preferred not to drink water
straight from the tap.
Sales of Bottled water increased rapidly.
 Market Performance

Britas Terminology: Systems for pitchers and Faucet-Mounted

units, Filters for the Replacement Filters.
First four years of Brita USA: Slow and Dull system sales.
Rapid growth in filter sales.
Similar Profiles of Brita in Canada and U.K.
Survey: 25% of buyers had given a Brita pitchers as a gift.
80% of buyers were still using it a year later and buying 2 or 3
filters a year.
July 1998: Company offered BOGO (buy one, get one free),
System sales Doubled and Share increased by 10 points.
After advertisement and trade promotions, Brita USA earned a
24% net return on sales, Highest of all the Clorox units.
Britas offers
 Brita unit sales(In000)

30000

25000

20000

Filters
15000 (In
000)
Systems

10000 (In
000)
5000

0
1 2 3 4 5 6 7 8 9
 1992 1998
Brita Department 27% 13%
Distribution stores
Class to Mass Mass 31% 34%
merchandisers
Upscale pitchers
Grocery stores 11% 14%
Standard pitchers
Bonus pack Club stores 31% 21%
systems.
Drug stores - 12%
 Positioning and Advertising: Couric Explained

People had no idea about Pitchers.

Advertising Split:
o How it works; How it tastes?
Focus on Taste because:Talk Taste implies Talk Health.
Bottled water industry does not refers Health.
To be on the top of the mountain.
Pure and simple advertising:
o Showed Mountain Streams, waterfalls and outdoors.
o Promised clear, crisp, refreshing water.
 Britas value position

Remove
contaminants

Taste better than

tap

Water clarity
 Competitors

Competitors: PUR, Sunbeam, Rubbermaid, Teledyne, Melitta, Omni, Corning,

Electrolux, Culligan, Kenwood, Mr. Coffee.
Britas Market Share: 65% to 75% across the decade.
1997:
Rubbermaid:
o Launched a low price product, with Technology similar to Britas.
o Claimed 800 glasses versus Britas 560.
o No advertising, Fail
1998: At Chicago Show, Dozens of Manufacturers unveiled new filters, to
attack the Leaders.
Sunbeam:
o Launched Fresh Source that removes Microbiological cysts, Chlorine and
Lead.
o $10 million on Advertising.
 Closest Competitors

Teledyne:
o Position: 3rd .
o 1998: Unveiled Faucet Mount Product at the show.
PUR:
Position: 2nd
o Publicly held U.S. corporation.
o Company made water system for outdoor enthusiasts and
Desalinators for marine and military use, in addition to water filters.
o Spent $40million in advertising and promotion to support its
line of faucet-mount and pitcher filters.
o 1999: PUR only competitor with 2 digit Market Share.
 Top Competitor

PURs promotional program

A)30-second add on spot

network TV.
B) To point out the differences
between PUR and current
pitchers.
PURs Faucet-mount
 Pitchers and Faucet Mount

Pitchers Faucet Mount

Stored in Refrigerators, cold Not stored in Refrigerators.

water.
Only Pitcher removes Hardness Faucet Mount would not.
of Water.
Water is passed at low pressure. Water passed through at Higher
pressure.
Tasted more crisper, with low Comparatively less crisper.
ph.
Filter lasts shorter, a glass costs
Filter lasts longer, A glass of
higher. water costs lesser, half.
 Britas interest towards Faucet mount

Before 1995: Brita expressed interest in Faucet-mounted water

filtration systems.
Out of the 50 countries in which Brita did business, only Japan had a
significant faucet business.
1994-95: Faucet segment started forming.
PUR launched a faucet-mounted products through Recovery
Engineering inc.; Success.
1995: Brita hired an outside design company to design a Faucet mount.
Brita filtration technology played no part in Faucet Mount design.
Conversation held on whether to use Britas name; Royalty Issues.
Faucets Mounts: Direct Cost: $15
Filter: $3
 SIMULATION STUDY:

567 Respondents, 3 different rooms, displayed 10 products available in the

market.
o Faucet Filter increased the likelihood of buying a product from Brita Line.
o Combined Pitcher and Faucet Filter market cannot expand.
o Even with the high price, Brita Faucet Filter generated same level of purchase
intentions as Brita Pitcher does.
o Half the Brita pitcher owners will continue to pitcher along with Faucet
Filters.
o Both Britas and PURs Faucet Filters were perceived to be superior to Brita
Pitchers.
o Britas Faucet was perceived to improve water taste.
o Unit sales at both $34.99 and $39.99 were strong.
Study implies Sales of Faucet Filters for the first year would lie between
350000 and 1395000 units .
 Courics Conclusion

Three point of views taken:

o Keep the focus on building the installed base for Pitchers.
o Shift the budget to encourage the installed base to buy more
Filters.
o Put the weight of resources behind building a whole new
installed base in Faucet Mounts.
House-Hold Pitcher penetration slowing, 6 out of 7 did not have
one.
Targeting the segments of singles and to the parents of young
children.
Investing in Direct Mail or other highly targeted marketing tools.
 Courics Conclusion

Recovery engineers had a technological edge over Brita.

PUR had been first to market with number of new features.
PUR has outplayed Brita in terms of health aspect of cleaning the
microorganisms
Brita is yet to cover 2,3 and 4 bullet levels of clearing the
microorganism that PUR has already done.
Procter and Gamble, Cloroxs most respected competitor now
controlling PUR, implying strengthening of oppositions.
Brita needs more time to launch proper and health-friendly Faucet
Filters.
o The company has been in a dangerous risk now as a number of
competitors has combined with a better product line.
Thank You!!!