brand management agenda introductions - my background clorox company overview consumer driven...

Brand Management

Agenda

Introductions - My Background

Clorox Company Overview

Consumer Driven General ManagementBrita Case

Q&A

The Clorox Company

Performance

Portfolio of Strong Brands

Business Results

International Growth

Portfolio

L au n d ryH om e C lean in g

C loroxE q u ity

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H ou seh o ldP rod u c ts

D ress in g& S au ces

P ro fess ion a lP rod u c ts

F oodP rod u c ts

C h arcoa l C atL itte r

In sec tic id es A rm or A ll

K in g s fo rdP rod u c ts

In te rn a tion a l B rita

C lo roxC orp ora te

Just acquired First Brands:- STP, Glad Bags, Johnny Cat- Complete restructure in progress

Clorox Brands are Market Leaders

#1 or #2 in Nearly Every Category!

Home Cleaning Laundry Additives Salad Dressing/Barbecue Sauce Insecticides Home Water Filtration System Automotive Care Products Charcoal/Grill Products

Revenue Growth(Sales: $Millions)

1,547 1,6341,837

1,9852,224

2,5332,741

0

500

1,000

1,500

2,000

2,500

3,000

1992 1993 1994 1995 1996 1997 1998

Profit Growth1992-1998 Net Earnings ($MM)

99

167180

200222

249

298

0

50

100

150

200

250

300

1992 1993 1994 1995 1996 1997 1998

Revenue Growth

10.5%

6.8%

5.2%

7.0%

3.1%

0%

2%

4%

6%

8%

10%

12%

Clorox Gillette Procter &Gamble

Colgate GeneralMills

Clorox is Growing Faster than Its Peers

% Average Annual Growth Rate1992-1998

5-Year Total Shareholder Return

1993 1994 1995 1996 1997 1998

CloroxS & P 500Peer Group

$243

5-Year Total Shareholder Return

1993 1994 1995 1996 1997 1998

CloroxS & P 500Peer Group

$243

$281

5-Year Total Shareholder Return

1993 1994 1995 1996 1997 1998

CloroxS & P 500Peer Group

$417

$281

$243

Clorox Introduced a Record 41 New Products Worldwide in 1998

8

15

28

38 3639 41

05

1015

202530354045

1992 1993 1994 1995 1996 1997 1998

New Products

Clorox is Aggressively Pursuing

Acquisitions to Fuel Growth

Pine-Sol & Combat 1991

S.O.S 1993

Black Flag 1995

Armor All 1997

Lestoil 1996

8 Int’l Acquisitions 1994/95 2 Int’l Acquisitions 1997

7 Int’l Acquisitions 1998

First Brands 1999

Brand Year

International Growth

Clorox International business has increased four times since 1992

1992 1998

5% 18%

Consumer Driven General Management

Brita Case Study

Why was Clorox interested in Brita?

Brita presented a growth opportunity and a solution to consumer need:

High growth in bottled water category Expensive, inconvenient solution

Consumer concern about air/water quality

Medical studies on negative effects of lead

Brita Vision

Change the way Americans drink tap water

Original Objectives: 70% awareness 8% household penetration Comparable profit margins

Early Consumer Insights

Purchase of Brita linked to dissatisfaction with taste of tap water

Brita Early AdoptersWater involved (5+ glasses/day)Believe that drinking water is a way to feel healthyUrban, high income & educated

Filtration not broadly recognized as alternative to tap waterDirect marketers of in-line systemsBottled water

Early Brita Copy Focused on educating consumer

Benefits: Brita makes tap water taste great

Support: Removes impurities like lead and chlorine

“Works/Taste”

The Beginning1988-1992

Business Issues: Cost Structure

Organization Structure

Financial

Distribution Channels

Fish or Cut Bait 1993

Brita had achieved profitability Awareness: 22% HH penetration: 2% Distribution in 11,000 stores

Long term commitment to Brita Distribution expansion plan Increased marketing

investment

New pitcher models Expanded consumer

understanding

0 0 0 1 2 205

1015

2025

1988 1989 1990 1991 1992 1993

HH penetration

1988 1989 1990 1991 1992 1993

Profits

0

8% Target

Increasing Consumer Understanding

Brita Users are drawn to the brand because it gives them clear, clean, refreshing water and makes them feel that they have done something good for themselves.

Values Emotional Benefit Functional Benefit Brita Features

- I care aboutdoing good thingsfor myself

- Healthy- Look/feel good- Refreshing- Not worried

- Clear, cleanrefreshing water

- Removesimpurities- Makes tap watertaste great

Consumer Beliefs Water is life essential Water must be pure to help me be my best Water has impurities; often can’t see or taste them People & their activities cause impurities Best water is pure from nature (waterfall)

Brita Copy

Focused on water in nature & leverage emotions & benefits

Benefits: Brita makes your tap water clean, clear and refreshing

Support: Removes impurities like lead and chlorine

“There was a Time”

Open the Floodgates!1993-1996

Aggressive Growth

Awareness: 40%

HH penetration doubled each year to 9% in 1996

Expanded Distribution from 11,000 to over 30,000 stores

2 26

9

05

1015

2025

1993 1994 1995 1996

HH penetration

1993 1994 1995 1996

Profits

0

8% Target

Open the Floodgates!1993-1996

Business Issues

Geographic Expansion

Filter Manufacturing

Infrastructure

2 26

9

05

1015

2025

1993 1994 1995 1996

HH penetration

1993 1994 1995 1996

Profits

0

8% Target

Ride the WaveToday

Exceeded Brita Vision objectives Awareness: 70% HH penetration: 14% Market Share: 71% Brita user loyalty: 85% Distribution in 40,000+ stores

Over 70 failed competitors

One of our top 4 revenue brands Continues to grow at double

digit rate

1 2 26

913

16 18

0

5

10

15

20

25

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

HH penetration

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Profits

0

8% Target

Future Challenges

Category maturity Drive filter sales Encourage current users to replace their pitchers

Competition Technological leadership

Protect filter annuity from “universal filters”

Brita Equity Invest in new products or current line?

Where should we take the Brita equity

Consumer Driven General Management

Recognized Marketing Expertise

In-Depth Understanding of Our Consumer

General Management Responsibility

Brand Management

Skill Sets

Leadership

Interpersonal Skills

Results Focus

Strategic Thinking

Analytical Problem Solving

Innovativeness