1. The Purpose
This writing aims to present one possible solution to the dilemma that Clorox Company faces. The Clorox Company was the market leader in water filtration in the USA with the Brita Pitcher (one of the Clorox’s most important product), but in 1999 they faced the threat of a new product ' the faucet mounted filter.
Clorox already had its own version of this new product ready to launch into the market, so the issue was to decide the best of the following strategies:
1. Continue selling only the current product;
2. Introduce their new faucet mounted filter in addition to the pitcher into the market
2. The Analysis
Market Summary
Clorox launched in 1988 the Brita Pitcher and after a decade they were the market leaders of water filtration systems with a market share of 69%.
After the Brita pitcher launch, the water quality became a growing concern to consumers. This new attitude about the quality of drinking water allowed the purified water market to grow in both bottled water and filter systems. This growing on the water market, allowed Clorox to keep growing both on pitchers and filters sales.
Fig 1 ' Sales of Brita pitchers systems and Filters
The water purifying systems are characterized by high retention rates, since the system purchase (pitchers or faucet-mounted) is then followed by filter sales for a large period, according to the average system lifetime. This means that companies could support low return rates on system sales since they were achieving higher returns on filter sales that would happen for longer periods.
Several companies were attracted to the water purifying systems market, although by 1998 none of them challenged Brita’s leading position.
In 1999, with the launch of a new filtering product ' the faucet mounted filter ' PUR became one of the most serious competitors to Clorox. In that year, PUR announced that it would invest $40M in its water filters advertising in promotion, from which...