1. What was the environment when Clorox first decided to pursue green products in
the mid 2000’s?
2. Why did Clorox choose to develop a new brand instead of acquiring an existing
brand, or extending existing Clorox household cleaner product lines?
3. How is Clorox’s pricing strategy different from their competitors, both traditional and
green?
4. What are the pros and cons of a partnership with the Sierra Club?
5. What new opportunities to leverage the success of GreenWorks should Clorox
consider? Provide a few new product ideas for Clorox.
1.The green products space in the mid-2000’s was dominated by smaller companies. Seventh
Generation was one of the first to introduce green cleaners in 1987. Clorox or their competitors
didn’t touch the green products market and completely avoided entering the market until the
mid-2000’s. In the 2000’s there was a small but growing market segment that demanded more
transparency, values, and positive social impact with consumer products. The market segment
consisted of consumers that were willing to pay more for products that fulfilled their lifestyle
demands. For example, sales of natural household products between 2003 and 2005 had
increased by about 65%, from $38 million to $63 million(Mintel Household Cleaning Products:
The Consumer-U.S. June 2006.) According to IRI Infoscan 2007 report, the home and personal
cleaning “green” brands had surpassed non green brands in dollar growth.
2. In the mid-2000’s, Clorox saw an opportunity in sustainable products. New CEO Donald
Knauss saw a window of opportunity in the sustainable products market. Knauss oversought the
acquisition of the natural personal care products company Burt’s Bees in a $925 million. The
idea of a biogradable plant and mineral based cleaning product had been under development
since 1995 with the idea of creating a product that had reduced the percentage of harmful
chemicals used in solvent-based cleaners. In 2004 through a market-segmentation exercise,
Clorox identified a niche consumer market and called it “Chemical Avoiding Naturalists.” This
niche but growing market derised greener products but were wary that existing products in the
market didn’t work well or came from unrecognizable brands that they didn’t trust, were too
expensive, or had limited distribution in retail stores they shopped. After discovering this new
consumer market and their preferences and efforts to battle changing regulations Clorox
launched Greenworks in January 2008. There were concerns within the company that using the
Clorox name to sell the new green products could create consumer backlash or affect sales.
Brand managers remained adamant of those concerns because Greenworks target consumer
desired products that were effective, something that the Clorox brand could guarantee.
3.Clorox’s pricing strategy for the GreenwWorks brand was aggressive. To rapidly steal and
capture market share from other natural brands on the market, Clorox priced Greenworks
products at 10%- 20% above traditional cleaners. Despite being priced slightly higher than
traditional household cleaners, GreenWorks products were still significantly cheaper than
popular products on the market like Seventh Generation and Method. For example, at Walmart
a GreenWorks household cleaner was being sold at a price of $2.82 for a 32 oz bottle whereas
a Method Counter Top cleaner was being sold at $3.99 for a 17 oz bottle and Ecover Ecological
Bathroom Cleaner was being sold for $5.50 for a 16.9 oz at natural food stores. When
compared by cents per oz the Clorox GreenWorks cleaner was far cheaper at 8.8 cents/oz
versus the 24.9 cents/oz for the Method cleaner and 32.5 cents/oz for the Ecover cleaner. The
Clorox GreenWorks cleaner was just slightly more expensive or cheaper when compared to
conventional cleaners from competitors sold at Walmart. The 409 Multi-Surface Cleaner was
being sold at 6.7 cents/oz, the SC Johnson Windex Cleaner was being sold at 9.6 cents/oz, and
the P&G Mr. Clean Multi-Surfaces Antibacterial Cleaner was priced at 10.7 cents/oz.
4. Clorox entered a partnership with the Sierra Club to build and change public perceptions of
the Clorox brand and promote the newly launched GreenWorks brand. The partnership between
a a company that endorses environmentally safe practices and Clorox had some skepticism.
However, the partnership was seen as a powerful statement about Clorox’s new found
“greenness” image. They sought that the partnership would attract new environmentally
conscious consumers who have a poor image of Clorox. The Sierra Club sought to create “good
outcomes through win-win situations.”(Orin Corel, spokesperson for the Sierra Club) The new
partnership created backlash among environmentalists. A vast majority of Sierra Club
memebers viewed Clorox as a major contributor to a bad environment. The Sierra Club’s
credibility and reputation was hurt as a result of the partnership. The partnership hurt Sierra
Club’s membership recruitment as the organization had trouble recruiting younger members and
contribution levels decreased. Clorox on the other hand evaded controversy.
5. Clorox could leverage the success of the GreenWorks brand by taking new initiatives to
contribute to a greener more sustainable future. Clorox should invest in research and
development to find new household cleaning product formulas that are more environmentally
sound and also pose reduced risk to consumers. Clorox should take an initiative to create a
products that provide more benefits just then “greenness” they say to provide. For example,
they could donate money from sales of their GreenWorks products to sustainable causes such
as planting new trees, or carbon capture causes. They should also develop products that are
made from compostable materials. One product, i propose is the creation of a bamboo based
toilet paper, since bamboo grows at a faster rate than trees. They should provide evidence to
consumers that their products are sustainably sound by allowing a third-party investigation
company test their products.