brita case march 2006
DESCRIPTION
Brita Case March 2006. Brita – Overview. Past. Pioneer in water filter technology Over 10 years of successful sales and market domination. Present. “Leaky bucket” and decreasing market share. Future. Brita Blue Filters. Brita’s success – the “blue-water” decade. 1993. 1988. - PowerPoint PPT PresentationTRANSCRIPT
Brita CaseMarch 2006
Brita – Overview
• Pioneer in water filter technology• Over 10 years of successful sales and
market domination
• “Leaky bucket” and decreasing market share
• Brita Blue Filters
Past
Present
Future
Brita’s success – the “blue-water” decade
Brita created the market for filtered water, aided by shifting consumer values towards safety, health, and great taste
1988
1999
1993- First in the market with value proposition ofgreat tasting water
- Educational ad campaign onhow to use Brita
“Tap water transformed”
- National distribution (40,000 stores)- Brand awareness 70%- 18% of 103mil households use Brita
- 80% of customers still using it one year on- Industry worth $350MM (owned 71%)- 70 competitors failed- Consumer choice limited to tap water or PT
Brita’s problems 1999 - 2006
Strategy 1 Strategy 2 Strategy 3 Strategy 4 Strategy 5
Where does water belong?
Bottled Water as the bad guy
Leaky Bucket Tap water Turn-offs
Bottled Water as the bad guy
Re-visited• Quit the
water business
• Beverage vs. filter
• Difficult to change people’s behaviour
• Bottled water taste without the bottle
• 46% of PT lapsed in a year
• Gauge & Windows
• innovation did not succeed
• Revisit filtration when BW is so prevalent
• Transform the taste of tap
• More convenient
• Cheaper
Brita did not identify their target market and failed to come up with an effective value proposition
• Brita’s share of the filtered water market was threatened by PUR (exacerbated when they were purchased by P&G) and the emergence of bottled water (1997)
Target market selection criteria Criteria Tap
Traditionalists
Weary Tap Satisfied
Principled Filtered Fans
Affluent Fridge Followers
Assertive Self improvers
Bottled Water Indulgers
Segment is well defined/identifiable
All of the segment are well defined.
Accessible 1 2 6 4 5 3
Competitor Intensity
Highest tap satisfaction index (220) limited room for market entrant
High competitive intensity(lots of substitutes) focus convenience & budget
FM, other pitchers, refrigerator filter system
No room for non-refrigerator mark entrant
Competition from other filtered water options: Refrigerator, FM, PT, and bottled water
High-20% of producers control 80% of sales
Stability of preferences
Want: Tap WaterLikely to switch: NoSusceptible to innovation: NoTSI: 220
Want: Cheap & ConvenientLikely to switch: No Susceptible to innovation: NoTSI: 171
Want: Filtered WaterLikely to switch: NoSusceptible to innovation: YesTSI: 43
Want: Convenient filtered water Likely to switch: NoSusceptible to innovation: YesTSI: 81
Want: Volume, healthy, value-seekers Likely to switch: YesSusceptible to innovation: YesTSI: 121
Want: Simplicity and accessibility Likely to switch: NoSusceptible to innovation: Maybe TSI: 34
Profit potential Low Low High Medium High Low
Target market selection rationale
Primary Source of Water
Water Consumption
Aver
age
Tap T
radit
ionali
st
Weary
Tap S
atisifi
ed
Princ
ipled
Filter F
ans
Afflue
nt Frid
ge Foll
ower
s
Asse
rtive
Self Im
prov
ers
Bottled
Wate
r Ind
ulger
s02468
10121416
2.815 2.99 1.64 2.7 2.88 4.01 2.67
5.25 5.64
2.384.56 4.45
10.33
4.14
Away from Home At Home
# o
f 8o
z G
lass
es P
er D
ay
0
20
40
60
80
100
Target Markets
Principled Filter Fans
Assertive Self-Improvers
• Current core consumer base• High accessibility and profitability• Primary source of water : Filtered water• Sound bite: Filtered water is healthier than tap
• Potential new segment• Good accessibility• High growth potential: Lack of penetration &
high water consumption• Primary source of water : Filtered water & Tap
water• Sound bite: I drink a lot of water – it keeps me
healthy
Consumer perspective on competitive products
0
2
4
6
8
10 Bottled Water Pitcher (PT)
Consumer Perception (BW vs. PT)
Consumer Perception (PT vs. FM)
0
2
4
6
8
10 PT Faucet
Brita Blue – Smart Filter
The Website
The Filter
How it Benefits Brita
• Helps solve leaky bucket• Increases filter purchases
• Differentiates us from competition
How it Benefits the Customer
• Convenience – Know when to change filter
• Safer – Change filter to avoid contaminants
How it Benefits Brita
• Increases customer interaction
• Customer data – demographics
• Additional revenue stream
How it Benefits the Customer
• Drinks water for health – meet daily quota of consumption
• Ease of purchase
Brita’s Value Proposition Points of Parity
Remove Contamina
nts
Tastes Better
Than Tap
Water Clarity
Convenience – Color Indicator
Website
Points of Differentiation
Brita Blue is the most technologically advanced and cutting-edge filter on the market because its colour-change indicator
lets you know when a new filter is needed so that you can avoid contaminants and continue enjoying clear, great-tasting
water.
Pricing Considerations
Product Pitcher Faucet Mounted “Traditional” Filter
Brita Blue (New Filter)
New Price Unchanged Unchanged Unchanged High price high margin
Rationale
New Filter
Assumptions:1. Optimal filter changes occur 6x per year (1/2months)2. Customer leakage on traditional filter wrt PT= 20%
Pitcher
Brita B
lue F
ilter
Fauce
t Mou
nted
Brita B
lue F
iler
$0
$20
$40
$60
$30
$5 $8
$48
$45
$5 $8 $48
$24 $30 Traditional Filter
Traditional Filter
Methods of Distribution
Communication Strategy- Focusing on the 6 M’s
- Increase awareness, consideration and purchase of our Brita Blue Smart filter
Mission
- Our existing customers- The Assertive Self-Improvers
Market- Brita Blue alerts you to change your filter- Website allows you to track your water consumption
Message
- TV & print ads- Website
Media
- To be determinedMoney
- Sales of Brita Blue- # subscribed users on the website
Measurement
Decision Making Process
Awareness Consideration Attitude Trial Repeat/
Loyalty
Provide to Yoga
Studios/GymsBrand-Building
AdsAffective AdsProduct Promoting Ads
Apply push & pull tactics to influence the customer decision making process
Product-Promoting Ad
Decision Making Process
Awareness Consideration Attitude Trial Repeat/
Loyalty
Provide to Yoga
Studios/GymsBrand-Building
AdsAffective AdsProduct Promoting Ads
Apply push & pull tactics to influence the customer decision making process
Attitudinal & Behavioral Objectives
Attitudinal Objectives
Think
Feel
Believe
Do Chang
e FiltersDo
Use Websit
eDon’t Switch Brand
s
The Brita Blue filter is trustworthy and convenient Brita cares about overall well-being and caters to my lifestyleBrita is improving my overall quality of life
Increase filter change frequency and confidenceCreate Brita Blue account & improve consumption awarenessDecrease likelihood of brand-switching
Behavioral Objectives
Risk & Concerns with Marketing StrategySingle Message to
Consumers
Competitor Innovation
Consumer Price Sensitivity
• The current marketing plan is focused on sending a single message to consumers regardless of their product choice
Website Adoption
• Demand elasticity with respect to price is unknown for our target segments (ie. will the more expensive filter fail on the basis of price)
• The Assertive self-improvers, despite being diligent, do not indicate a heavy use of the internet. If the segment does not use the website there is room for competitors to displace us• An omnipresent threat in the competitive and fragmented filtered water market, will P&G come up with a more innovative product?
Questions?
Appendix A: The Website
Filter Capacity Days used Cups per
Litre
Cups per Day
100 L 50 Days 4.23 8.46
Example
Appendix B