CASE STUDY

ON

BRITA PRODUCTS CO.

Submitted To:Ms. Kanika Jhamb Submitted By: Vinmre Kaushal RA1703B2A21 B.Tech (Hons.)MBA-CSE

Situation Analysis:Product History: In 1987, Charlie Couric, a marketing executive with the Clorox Company,
discovered Britas home water pitcher-and-filter system in health food store. Optimistic of its capability to be profitable, Clorox acquired the right to market the home water filtration system in the United States from Brita GmbH. Clorox, citing the overriding long-term benefits of continuous filter sales, initially engaged in deficit spending. Such measures paid off and Clorox not only created a $350 million dollar market, but also captured 70% of the market revenue.

Company Strategy: During the 1990s, Brita has built its marketing position using the
strategy Established in class, first in mass, and alone in grocery. Britas competitors were unable to effectively rival Brita in pitcher sales. To retain its market lead, Brita had to continue to first attract, lock-in and maintain customer loyalty in each segment. With 80% of customers remaining with the Brita system after five years and purchasing an average of 4 filters each, suggests that the value of the customer, once captured and retained, is enormous.

Problem:
The small company, PUR, had emerged with the impending launch of its faucet-filter system that mounts directly to consumer kitchen faucet. The new product offers health and convenience benefits that the Brita pitcher cannot. In order to compete against this new threat, Brita has three alternatives: 1. 2. 3. Continue to promote water pitchers Shift promotion to boost filter sales Launch and promote new faucet-filter system

While Brita still maintains an overall dominate place in the market, the company must continue to evolve its brand and offerings to ensure that lead. Therefore, Brita should offer a faucet mounted filtration system to the public and capture the emerging segment of consumers focused on health and purification.

SWOT Analysis Strengths:

Market leader in pitcher/filter category; strong brand image Large retail distribution system; presence in multiple channels (Class to mass) Loyal customer base; repeat customers with replacement filters Strong advertising and brand imagery; waterfall equals good, clean taste

Weaknesses:

Slowing growth in pitcher market Lack of product diversity Change in customer preferences; deficient attention paid to health concerns/benefits Existing channel relationships may not work for faucet launch

Opportunities:

Untapped markets to be explored; possible new segment with faucet filter Migrate current customers to new faucet; pitcher becomes a stepping stone product New product appeal to health safety concerns

Threats:

Entrance of new competitors to the market; pitcher prices may drop New competitor, PUR, about to merge with P&G; could become market leader in faucet purification

New faucet sales may cannibalize Brita pitcher sales

STP ANALYSIS Segmentation:

The new marketing plan designate a large portion of the funding toward enlightening consumers as to the new health benefits associated with the new filters, while continuing to build upon our excellent reputation for great taste as well. With both bases covered, Brita can expect to dominate as the industry leader, avoiding the three-year period of losses associated with introducing this new product like was experienced by other competitors. Rather It will enter the market just as it is about to enter the growth stage, with a comparable product, an exquisite reputation, and a huge marketing effort to enlighten consumers as to new health benefits and create the awareness as company needs to dominate this segment too.

Target:
Brita has unmatched brand reputation and recognition in the home water purification industry, commanding a dominant 70% of the pitcher/filter market consistently for a decade. Using the Brita name will allow the company to more easily penetrate the market with the introduction of any new products and increases the likelihood of success.

Positioning:
With the technology available by competition, it should be fairly easy to develop a filter for both the pitcher and faucet systems that can filter out these harmful bacteria and microorganisms. This new option in filters will meet customer demands for a healthier option that still produces the great taste that we have always been associated with, while allowing price conscious consumers who are already satisfied with the existing filter the option to purchase their same filters at a lower cost.

Possible Options Available:

Continue

to promote water pitchers

Positives:
Brita is the dominant player in the home water filtration industry, with 83% of pitchers and 75% sales in filters sold in retail outlets across the United States. As market research indicates, 14% of U.S. households have purchased the Brita water filters. This signals growth opportunity for Britas products. Since pitchers are kept in refrigerators, water is cold versus lukewarm faucet water. Also, rival company Teledyne has produced a faucet mounted filter system since the 1960s with little growth, indicating that the faucet market might have continued slow growth.

Negatives:
Staying with the pitcher sales alone will not allow the company to proactively enter new market segments and ward off emerging competitors. Brita faces the loss of customers over time if the company cannot match the benefits of its competition. In addition, by not producing faucet-filter systems, the company blatantly ignores the growing category of health conscious consumers. Taste is no longer the only compelling stimulus driving home water filter purchases.

Shift

promotion to boost filter sales

Positives:
As Brita users continue to enjoy the benefits of their pitchers, they must consistently purchase replacement filters over time. Since pitchers have a lengthy product life cycle, Brita can utilize advertising and promotions to increase current sales of the filter from its established customer base.

Negatives:
Filter sales occur naturally and typically do not need additional promotion. A more effective strategy would be to develop an LED system indicator that would signal replacement. Furthermore, since the PUR systems have already a similar LED indicator, Brita should competitively follow suit.

Launch and

promote new faucet-filter system

Positives:
A Brita produced faucet mounted filter system would enable the company to compete with rival company PUR. In order to succeed against the competition, Brita must be proactive and produce products that fit the changing lifestyles and needs of the consumers. Additionally, the faucetfiltered water may appeal to consumers, as the cost per glass is less than that of the pitcher, while delivering great health benefits and possibly improving taste.

Negatives:
The possibility of pitcher cannibalization is very likely. The brands emphasis on taste will have to be adjusted to include the real and perceived health benefits of the new faucet mounted system. In order to compete with PURs new faucet product, Brita must also invest a large amount of money in consumer advertising and promotion.

Marketing Strategy:
Brita should launch and promote new faucet-filter system, thereby appealing to a broader customer base the health conscious segment of consumers. Britas launch should not alienate its pitcher market, and the company must continue to sell pitchers with a focus on the mass-market channel. The market is becoming more saturated in the pitcher category, so pricing more aggressively would be appropriate. However, Brita should not lower the price on its filters.

By deepening the consumers relationship with the Brita brand, the companies can more effectively transition users from buying the pitcher as a starter product to purchasing the new and sophisticated faucet mounted system. As the case illustrates in Exhibit 4, consumers preferences are changing and leaning toward a more healthy and mindful standpoint.

Overall, Britas marketing goals are to leverage the companys brand name and image to become the leader in the faucet mounted filter market. By doing so they must transition the brands definition from taste alone to a combination of taste and health aware. Brita must also increase awareness of filter changes and the ease in which to purchase them.

Conclusion:
Britas marketing goal becoming the number 1 position in the home water filtration market signals the introduction of a faucet mounted filter as the best choice. While the products introduction bears high initial costs, the future benefits obtained through higher filter sales and the prevention of lost sales to competitors outweighs the cost. The new faucet filter should also be sold under the Brita name.

As Brita enters the faucet mounted filter market, it must not engage or encourage intense price competition. It is also essential that Brita is successful in transitioning to a health aware brand. If initial advertising is not successful in appealing converting the brand image, Brita should pursue an even more aggressive marketing approach since it essential that Brita stakes a position in this upcoming market segment.