Running Head: THE WHIRLPOOL EVERYDROP STRAW
The Whirlpool EveryDrop Straw
Abel Rodriguez, Adriana Pacheco, Chyvonne Polinas, Andy Hurtado, Sergio Silva
March 14, 2016
Bus-306
Professor Davis
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Table of Contents
Executive Summary................................................................................................................................... 4
Situational Analysis ................................................................................................................................... 5
Market Summary ...................................................................................................................................... 5
Market Analysis......................................................................................................................................... 6
Demographics ....................................................................................................................................... 6
Geographics .......................................................................................................................................... 7
Psychographics...................................................................................................................................... 8
Behavioral ............................................................................................................................................. 8
Market Needs........................................................................................................................................ 9
Market Trends........................................................................................................................................... 9
Market Growth ....................................................................................................................................... 10
SWOT Analysis......................................................................................................................................... 10
Strengths: ............................................................................................................................................ 10
Weaknesses: ....................................................................................................................................... 11
Opportunities: ..................................................................................................................................... 11
Threats: ............................................................................................................................................... 11
Competition ............................................................................................................................................ 12
Product Offering ..................................................................................................................................... 13
Keys to Success ....................................................................................................................................... 14
Critical Issues........................................................................................................................................... 15
MARKETING STRATEGY ........................................................................................................................... 15
Target Market ..................................................................................................................................... 15
Value Proposition .................................................................................................................................... 15
Mission Statement .................................................................................................................................. 16
Marketing Objectives .............................................................................................................................. 16
Financial Objectives ................................................................................................................................ 16
Target Markets ........................................................................................................................................ 16
Positioning .............................................................................................................................................. 17
Strategies ................................................................................................................................................ 18
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Marketing Mix ......................................................................................................................................... 19
Pricing.................................................................................................................................................. 19
Distribution ......................................................................................................................................... 19
Marketing Communications.................................................................................................................... 20
Marketing Research ................................................................................................................................ 20
Financials................................................................................................................................................. 21
Breakeven Analysis ............................................................................................................................. 21
Sales Forecast.......................................................................................................................................... 23
Expense Forecast .................................................................................................................................... 25
Controls ................................................................................................................................................... 25
Implementation ...................................................................................................................................... 26
Marketing Organization .......................................................................................................................... 26
Contingency Planning ............................................................................................................................. 27
References .............................................................................................................................................. 29
THE WHIRLPOOL EVERYDROP STRAW
Executive Summary
People today are very health and hydration conscious but there are hardly any products on the
market that make filtered drinking water easily portable. Water filters and water bottles are
heavy and not compactable and iodine tablets are limited. To close this gap, Whirlpool is
introducing its EveryDrop straw, a reusable plastic straw with a built-in filter. The straw’s small
size makes it lightweight and easily concealable, perfect for people on the go. The straw comes
with a carrying case and three cleaning swabs, so consumers can feel free to carry and use it
anywhere and anytime they want. The EveryDrop straw will reduce the usage of plastic water
bottles and make clean drinking water accessible to people when they need it.
Whirlpool’s EveryDrop straw will have an advantage over other filtration devices and water
bottles because of its name brand, its low price, and the positive effect it will have on the
environment. This report will be analyzing the market, trends, competitors and the strengths,
weakness, opportunities and threats to argue that the EveryDrop straw will be a formidable
product against water bottles and other filtration devices
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Situational Analysis
Having clean, filtered water to drink has largely become an American expectancy. However,
there are few products in the marketplace today that provide water both odorless and tasteless,
and easily obtainable for the individual on-the-go. The travel water industry is filled with
bottles, plastic and reusable; hydration packs, lightweight filter canteens, and all of these either
bulky or heavy when full. The market niche currently focuses on personal filtration systems.
A few personal filtration devices are available to the general public, but these too are bulky and
costly. Lighter options are limited to iodine water tablets, which serve for only a fixed amount of
water. Other methods of filtration exist aside from those mentioned above, but these, too, take up
enormous spaces and are mostly for large-scale application, rather than small. Yet, there is one
possible entry in the highly portable, water filtration market: the EveryDrop.
Whirlpool’s EveryDrop straw is a reusable straw with a built-in filter. The straw is both
affordable and compact. The straw can filter up to 300 gallons of water, allowing consumers to
filter their drinking water anywhere, at any time.
Market Summary
In 2012, bottled water sales in the U.S. were reported at $11.8 billion. However, the volume of
bottled water consumed does not compare to the reported 1 billion gallons of tap water supplied
by U.S. water utility companies (Bottled Water Market, 2014). Both are booming industries, yet
each carries unique health concerns. Whereas one might argue bottled water is a healthier
solution to contaminated water supplies, the chemicals in plastic bottles leech into the water,
adding tasteless, harmful compounds. The bottles themselves are not always recycled properly,
leading to garbage formations like that of the Great Pacific Garbage Patch (Great Pacific
Garbage Patch, 2014). Bottled water production has been proven to be unsustainable and
ultimately harmful to the environment. Between 60-70 percent of bottles of water are not
recycled and an estimated 17 million barrels of oil are used each year to produce bottles of water
(Gleick, 2013). In addition to this, there are incidents of groundwater depletion in areas around
bottled water production sites (Gleick, 2013). Tap water consumption, however, carries its own
complications.
Sources of tap water are continually contaminated with chemicals such as arsenic and nitrate
from industrial activities; copper and lead from pipe erosion in homes, or even additives such as
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chlorine and hotly debated fluoride allegedly beneficial to the public (Drinking Water
Contaminants, 2013). These additives and contaminants can produce illnesses such as kidney
disease, circulatory complications, and in higher, extended doses, can result in death. Recently,
fracking by oil companies has been a common topic in the groundwater contamination debate.
Along the coast, saltwater intrusion is a real dilemma when considering viable drinking water for
communities.
Increased use of filtration systems in the home can curb further increases in the sales and
production of bottled water as well as assist in removing harmful chemicals and additives from
tap water. Large home filtration systems, faucet attachments and specialized pitchers are useful if
an individual is home and wishes to lower the use of water bottles. Yet, these systems are not
portable and do not aid in healthy water consumption when an individual is active. Not only does
this problem exist for those who desire to have drinkable water while performing routine
activities, but this problem is a larger concern for emergency situations or for those who
participate in hiking, camping or hunting. These individuals are more concerned with space and
portability. The necessary amount of bottled water a camper needs uses more space than may be
available, taking up storage for other important objects or gear. Larger systems add weight to a
hiker’s or biker’s pack. The answer to these types of problems lies in Whirlpool’s EveryDrop
straw, a portable, individual straw easily stored and very portable.
Market Analysis
Demographics
To determine target demographics, a survey was created and administered to 60 people, asking
regarding age, gender, marital status, household size, and whether the survey participant enjoyed
outdoor activities. Based on data collected from the survey, the demographics targeted for the
EveryDrop straw are between the ages of 18 and 45. Further survey results show that dividing
the demographics based on marital status is not beneficial for this product. However, survey
results revealed that those who are married and have children are highly likely to purchase the
EveryDrop straw. This segment is appealing and beneficial to Whirlpool. Survey findings show
that it is in Whirlpool’s best interest to segment this market by geographic, psychographic and
behavioral variables, targeting those segments in order to receive the best results from the
market.
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Geographics
When surveyed, results showed that the EveryDrop straw would be used most often during
outdoor recreations. Because of this, the geographical regions that are most important are the
Pacific and Mountain regions of North America, as well as those areas with national parks often
frequented for activities by the local population. As described on the website
CampingTourists.com, eight of the 15 “must-see” camping destinations described are in the
Pacific or in Mountainous regions (Camping Tourist, 2014). Marketing strategies would
emphasize these particular areas as the most favorable for EveryDrop. Camping enthusiasts do
not live in the rural regions, rather they live in the nearby urban areas and metropolises. This
conclusion is based on location data, especially for so-called big box retailers such as the outdoor
retailer Recreational Equipment Incorporated (REI). This retailer first opened in Seattle,
Washington and is now located in urban areas of cities across the Pacific coast. Although this
geographical factor should be a major focus for Whirlpool, it should not be the only factor that
influences where the product is sold. Stores like this also cater to a similar group whose
survivalist preparations are more closely linked to disasters.
Thanks to current economic stresses, international relations, and even a television program
featured on National Geographic, America is currently experiencing a growth of a population
that identifies themselves as ‘preppers,’ those who prepare themselves for emergency situations
(Raasch, 2012). Although this is a behavioral factor, Whirlpool would do well to offer the
EveryDrop straw in geographical locations with higher sales of either emergency kits or
individual products used in higher risk disaster areas, such as areas prone to earthquakes,
tornadoes or hurricanes. Those include states such as: Missouri, Arkansas, Kentucky, Alabama,
Louisiana, Florida, New York, Oklahoma, California, and Texas. As of 2013, these locations are
the top ten states in the country that experience a large amount of natural disasters (Whiteman,
2013).
A behavioral factor that also correlates to geographic locations is the act of traveling. According
to survey results, individuals claimed that the EveryDrop straw would be useful in domestic or
international travel--especially travel to locations with questionable or often contaminated water
supplies. In answer to this need, it would benefit Whirlpool to segment based on cities with hightraffic airports, most especially any airports offering international flights.
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Psychographics
Market segments targeted and grouped by social classes consisting of upper lowers, working
class, middle class, and upper middle class would be a viable option. Whirlpool would benefit
from targeting each of the above social classes, but will find the middle and upper middle classes
most lucrative. According to the Nielsen Company, segments within these two social classes are
highly likely to participate in recreational sports and outdoor activities (My Best Segments,
2013).
Figure 1
An important segment that Whirlpool would profit in choosing are people who identify
themselves with keywords such as ‘adventurous’ or ‘outgoing’. This segment of individuals is
likely to enjoy activities such as camping, hiking, or hunting. Survey data indicates that the
market is most likely to use a product such as the EveryDrop straw outdoors, as shown in figure
one. This is also true for a closely related group: the environmentally conscious. They would
prefer an alternate means to get filtered water other than in bottles.
Behavioral
As stated earlier, traveling is a particular behavioral factor that correlates with geographical
factors. Yet, regardless of additional financial resources, travel does not occur often, so it is
expected that those who purchase the EveryDrop straw for traveling will also be considered a
light to medium user. The light-to-medium users also encompass the aforementioned ‘prepper’
group who would purchase EveryDrop straws to include in emergency and disaster relief kits.
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Market Needs
Plastic water bottles and water packs can become inconvenient to outdoor people who tend to
pack light and only include essentials. A plastic water bottle or water pack becomes useless once
the water is consumed because they offer no way of filtering another source of water. They also
become added weight the person has to carry back to camp or to a trashcan to avoid littering. A
way to refill these used containers is a relatively untapped market.
The EveryDrop can address this need. In a survey, 62 percent of the people surveyed said they
would buy a straw that filters their water.
Are you interested in purchasing a reusable straw that will automatically
filter water as you sip?
Yes
34
62%
No
21
38%
Figure 2: Survey
Market Trends
The growing awareness and concern for the environment sets the stage for Whirlpool to
introduce the EveryDrop straw. Although bottled waters have shown a steady increase, just this
year it has seen a small decrease. This is especially true since cities such as San Francisco are
beginning to ban the sales of plastic water bottles (Sabatini, 2014). Since Whirlpool has an
established name in household products and has entered into the water filtration market, the
EveryDrop straw can become a must-have product to consumers within this market. The
company can utilize their brand equity in order to cement their product line in households.
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The straw is not limited in appeal to only the public sector. Government entities may also
take an interest in the straw to supply troops with an instrument other than chemical tablets to
access potable water.
Market Growth
The bottled water market has seen a steady decline in the U.S. markets. This year alone, the
market only grew 6.7 percent, its smallest increase in the last ten years (Bottle Water Demand
May Be Declining, 2014). Though the U.S. is the largest consumer of bottled water, the market
is starting to change. Every year about 38 billion water bottles end up in landfills across the
world (Bottled Water Consumption, 2014). Corporate Accountability International estimates that
it costs around $70 million a year to safely dispose of water bottles (Corporate Accountability
International, 2014). Large cities, such as San Francisco and Salt Lake City, have started banning
water bottles as stated above, with more cities to come. The consumer market is starting to take
notice of these cities banning water bottles and its hurting water companies in their bottom-line.
There is a huge opportunity for growth because the consumer market is becoming more
environmentally conscientious. Just like how the Prius changed the culture of the auto market,
EveryDrop will change the culture of drinking water. It will be only a matter of time before most
cities adopt a ban of plastic water bottles. There are products similar to the EveryDrop straw in
the market but they are not marketed in a way to appeal to those who need a water bottle
replacement in a large city. Companies who use this political trend to introduce products that
compensate for the lack of water bottles will be at an advantage compared to competitors.
SWOT Analysis
Strengths:
EveryDrop straw’s biggest strength is the EveryDrop name and, thereby, its association with
Whirlpool Water. EveryDrop has made itself known with its innovative portable water filter and
the catchphrase “Water at the speed of life” (Whirlpool Water, 2014). It also helps knowing that
according to Whirlpool’s own data, 80% of American homes possess a Whirlpool product
(Whirlpool Water, 2014). The EveryDrop straw is more easily carried and affordable than
indirect competitors, such as water bottles. In comparison to direct competitors, the EveryDrop
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straw can filter more water and removes more contaminants than virtually any other product of
its kind.
Weaknesses:
A weakness of the EveryDrop straw is that its usefulness is relative to consumer surroundings.
Since water cannot be stored inside of it as in a water bottle or pack, an EveryDrop requires a
contained or easily accessed water source. Another weakness is the filter inside the straw, like
any other filter, can only cleanse so much water before replacement is necessary. Even though
300 gallons is a lot of water, the fact that a replacement filter is necessary may deter some
potential customers from purchasing the straw. Also, because of the straw’s compact size, the
inside of the straw is difficult to clean.
Opportunities:
The EveryDrop straw has few direct competitors, none of whom have made a huge splash in the
marketplace yet, so Whirlpool’s target market is still largely untapped. Two particular trends
help target opportunities for EveryDrop: bettering the environment and ease of use.
Two trends that are becoming increasingly popular every day are people’s consciousness of the
environment and their health. The EveryDrop straw addresses both of these. First, it keeps plastic
bottles out of the environment, and second, it gives people the ability to filter almost any water at
any time. Since the start of the Great Recession, Americans have grown keen on saving money.
With the EveryDrop straw, consumers can feel more comfortable drinking from faucets and
water fountains as opposed to buying water bottles. As shown by the constant downsizing of
laptop computers and other electronics, consumers also appreciate more lightweight products.
Needless to say, the EveryDrop straw is much smaller and lighter than any water bottle.
Threats:
EveryDrop straw is not the first product of its kind made available. There are similar
products which have been in existence for a year or two already, which will make it harder to
enter the marketplace. Water bottles are strongly embedded in today’s culture, so if not marketed
properly, people may not take to the straw filter. Since most people are not accustomed to
carrying straws around with them, integrating the EveryDrop straw into everyday life may prove
to be challenging. Another current trend is being sanitarily conscious. Therefore consumers may
worry about the straw getting dirty or be turned off by how the inside can be hard to clean. They
also might question how often it needs to be replaced.
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Competition
The EveryDrop straw will compete directly within the portable water filtration market. Its
existing, direct competitors are the Aquamira Frontier straw, the Seychelle Pure Water straw, and
the NDuR Survival straw. Its largest direct competitor is the award winning LifeStraw (Reinders,
2012). These straws all promote filtration of bacteria and parasites. The NDuR straw promotes
that it filters bacteria, parasites, and viruses as well as metals found in contaminated water
(Weiss, 2013). Whirlpool’s EveryDrop straw combines the company image of the LifeStraw
with the capabilities of the NDuR. The EveryDrop straw will have the ability to gain market
share with its product offerings as well as utilizing the resources that Whirlpool has cultivated
through brand recognition and development. The straw will be able to gain market share through
competitive pricing, since the price is set to undercut the competition by at least $10. The
EveryDrop straw will also be available for purchase in sporting goods retailers, placed near
camping equipment. In addition to these retailers, the straw will be offered in stores such as
Target. This will give an advantage to Whirlpool, since their competition cannot be found at
these retailers.
Other competitors within the portable filtration market are the bobble, a plastic bottle that filters
as water is poured into it. Also, any home filtration system, such as an attachable faucet filter,
pitchers with filters similar to those from Brita, or filters attached to refrigerators are considered
competitors to the EveryDrop. Each of these systems in the home can be used to refill any type
of cup with suitable drinking water. This does not assist those who participate in outdoor
activities such as camping and hiking. Buyers who exhibit this behavior have need of space in
packs or lighter weight while traveling on foot. With the straw, a hiker or camper will have the
ability to filter water from any source eliminating the need to carry empty reusable cups. Also,
consumers who wish to build a complete emergency kit will benefit from including the
EveryDrop straw in their kit opposed to the competition. In the case of emergency, the straw is
capable of filtering a minimum of 300 gallons of water as well as potential contaminants.
Whirlpool’s straw is at an advantage compared to the competition because of the product’s size.
In addition to the water filtration market, the EveryDrop straw will have indirect competition
with companies like Nestle and Alhambra who supply bottled water (IBWA Member Bottled
Water…, 2014). Competing in this market may be a challenge for Whirlpool’s straw. If
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Whirlpool is able to promote their product as a lighter, smaller alternative to water bottles, they
can not only reaffirm the usefulness to outdoors-people, but also capture those who often travel
domestically or abroad. Some difficulty will occur in this area because of the convenience of
purchasing and throwing out a water bottle compared to the cleaning required for the EveryDrop
straw.
Product Offering
The EveryDrop straw is a product that will encourage consumers to be more
environmentally conscious by cutting back on their purchases of bottled water. In order to do
this, Whirlpool will design and create this straw to filter 99.99% of viruses, bacteria, and
parasites from any source of water. Whirlpool currently offers the EveryDrop water filter, which
is promoted for its versatility, ease of use, and great alternative to bottled water. The EveryDrop
straw will comfortably fit within this existing product line and will utilize the micro-contaminant
filter already developed and used by Whirlpool for its water filter (Whirlpool Water, 2014). The
straw will measure wider than an average straw and will twist open in order to exchange a used
filter for a new one.
In addition to the filtration capabilities, the EveryDrop straw will make use of modern
logo design and eco-friendly promotions that are used for the EveryDrop water filter to appeal to
the target market. Other options for the straw include:

Four color choices--pink, blue, white, and olive

Bisphenol A (BPA) free

Filters at minimum 300 gallons of water

A one year warranty

Three swabs to clean after outdoor use

Small case for storage
The EveryDrop straw will be available to purchase in locations such as Target, Sears, or
similar stores. The olive and white colored straws will be strategically placed near the camping
gear and outdoor equipment as these are gender neutral colors and complement trendy,
camouflage camping gear. The blue and pink straws will be located near the EveryDrop water
filter among competition in the store. The straw will also be available in the camping and
survival areas of sporting goods stores such as REI, Sports Authority, Big 5, and others.
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Replacement filters as well as additional swabs will be sold separate and located next to the
straws in each of the various stores.
Keys to Success
The keys to success for the EveryDrop straw are to effectively market to our target group, and to
improve product awareness. Even though straw filtration devices have been around since 2005,
the biggest straw filtration device LifeStraw, only has 14,000 followers on Facebook .
EveryDrop, if marketed correctly, can overtake the LifeStraw by having a stronger social media
presence with a more effective message.
Social media can have a huge impact on the EveryDrop straw. In the 18-29 age group, a
staggering 90 percent of the demographic uses Facebook, while in the 30-49 category, it is a still
78 percent. These numbers show a dramatic increase from a humble beginning of nine percent
for 18-29 year olds, and seven percent for 30-49 year olds (Social Networking Fact Sheet, 2013).
The other key to success is making the product known. EveryDrop straw needs to be heavily
marketed to our key demographic of 18-49. Television commercials played on outdoor
programming, such as the Outdoor Channel, and also sports networks such as ESPN will be able
to touch our ideal target market. This can be taken even further by showcasing the product on
shows similar to Dooms Day Preppers, Man vs Wild or Survivorman. Shows like these highlight
the importance of emergency and disaster preparedness.
EveryDrop has strengths that will help it become a leader in the market. Whirlpool, the parent
company of EveryDrop, states in its data that 80% of American homes own a Whirlpool product.
The brand recognition of Whirlpool, the savings EveryDrop can provide compared to water
bottles and the positive effect EveryDrop has in the environment are all keys to success,
especially with the new concerns of the effects of global warming. The American people are
becoming more environmentally conscience and the new trends are to become more green.
EveryDrop provides a green alternative to water bottles because of the huge amount of oil that is
needed to make enough water bottles to quench Americas thirst. The strengths of Whirlpool, the
opportunity to become a market leader because of lack filtration competition and the growing
trend of environmentally friendly products, gives EveryDrop a huge advantage to become
successful product.
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Critical Issues
One critical issue the EveryDrop straw will face is competition from bottled water companies—
which include mega corporations like Coca Cola. Bottled water can be bought at almost any
convenience store, gas station, supermarket, etc. EveryDrop straws would most likely be sold at
locations that sell outdoor equipment (Target, Walmart, etc.), sporting goods stores, camping
stores, and online retailers. Since it is not as convenient as buying a bottle of water from the local
convenience store, EveryDrop needs to be marketed to the point where a customer would feel
unsafe if they stepped outside without it.
Another critical issue is introducing the EveryDrop straw to the market. The EveryDrop straw
will effectively change how we think of water. Customers will now have to carry a straw with
them instead of buying a bottle of water. Going green and conserving the environment needs to
be marketed to the customer in a way where we effectively change the consumer culture. While
it is possible to accomplish this, it will be difficult. Bottled water sales have been declining, and
continue declining because of the social aspect of water bottles. There is a huge opportunity for
Whirlpool’s EveryDrop straw to effectively become the “anti-water bottle”; a product that will
not only save the customer money, but also will help save the environment.
MARKETING STRATEGY
Target Market
The EveryDrop Straw will present a different type of convenient, reliable and cost saving
method to our target markets: those adventurous, outdoorsy and traveling individuals who will
vastly benefit from this product. Our cost saving product will also be very accessible for those
looking to build emergency kits when they go camping, traveling, or kits for home use.
Value Proposition
The EveryDrop Straw is a straw that filters water for customers that live in or around areas
where there is little or no viable fresh water sources. The EveryDrop straw can be easily stored in
a handbag, pocket or big socks. The EveryDrop straw will save lives from diseases caused by
drinking unsafe water, and offers the following additional features:

Filters a minimum of 300 gallons of water

A one year warranty

Three swabs for cleaning after outdoor use
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Mission Statement
The ultra-portable EveryDrop straw by Whirlpool quickly cleans and filters every drop you drink
at the speed of life.
Marketing Objectives
Our marketing objectives for EveryDrop are to increase sales, improve product awareness,
establish ourselves in the industry, and create brand awareness.
To accomplish our marketing objectives, the EveryDrop straw will need to distinguish itself as,
not only as a more affordable option than bottled water, but also as a planet-saving product. All
of the marketing for EveryDrop Whirlpool is planning to do, whether it is print advertising,
online marketing, social marketing, or television commercials, each must communicate the same
message: the EveryDrop straw is cheaper than bottled water and it will help save the planet for
future generations to come.
By offering clear message to consumers, they will know that not only are they saving money, but
they are helping the environment. Ideally, consumers must look at purchasing water bottles as
hurting the environment and contributing to global warming and pollution.
Financial Objectives
Whirlpool aims to sell at least 80,498 units in the first year to break even. This would take
20,125 units per quarter, or 6,708 units per month. Each unit would be priced at $14.95,
amounting to $1,605,933.00, which is the estimated total cost of all production and marketing.
Target Markets
After segmenting our water filtration market, people who travel, participate in outdoor activities,
and are preparing for an emergency situation represent key target markets due to the nature of the
water filtration market and the survey responses we received.
One primary segment that Whirlpool should target is individuals who participate in outdoor
activities. Since fresh, clean water is scarce in the outdoors, it will be important to tell people
who camp, hike, kayak, snowboard, etc. that there is a safe and reliable way to properly hydrate.
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Our product will prevent horrible diseases from entering the body of our customers. Travelers
are another group concerned with excellent potable water.
Travelers will also be an important target for Whirlpool’s straw filtration product. Travelers are
important because not all water and sanitation outside the United States is as safe and regulated.
The unsafe factor for questionable drinking water abroad creates an opportunity. Customers will
be excited to know that they can drink most water wherever they decide to travel without risk of
foreign disease and bacteria. This is one particular feature that could carry potential for wide
dispersal in emergency kits.
When preparing for emergencies, bottled water may be a large part of an emergency kit, due to
risks of water contamination or shortage. Large bottles and containers may take up a lot of space.
The EveryDrop straw will be perfect for a kit that can replace such storage issues. With many
natural or manmade disasters, the potential for a shortage of potable water is of greater in
specific areas deemed high-risk. That is why it will be important to target those high-risk disaster
areas.
Positioning
Whirlpool has successfully positioned their company so customer perception associates the
brand with quality, compared to competitors. Whirlpool adopted the vision statement, “Every
Home… Everywhere… with Pride, Passion and Performance,” to further drive their position
with customers (Overview, 2014). In addition to this statement, Whirlpool promotes its
EveryDrop water filter with the slogan, “Water at the Speed of Life” to position their filter as a
quick-working device for on-the-go consumers. Because of implemented strategies that build
branding in the minds of consumers, Whirlpool products are in nearly 80% of American homes
(Our Story, 2014). According to the American Customer Satisfaction Index, in 2013, Whirlpool
is the leading household appliance brand and continues to hold a majority of the market share
(Press Release, 2013).
Whirlpool has positioned their preexisting EveryDrop water filter with product attributes:
filtering one gallon of water in two minutes, a filter that lasts two months, and the capacity to
filter 60 total gallons in that time. That is 50% more than the competition’s capabilities
(Whirlpool Water, 2014). Technical product attributes aside, Whirlpool has driven ease of use
associated with using their water filter. A positioning aspect with greater impact on consumers is
the beliefs and values that Whirlpool represents. Whirlpool positions their filter to create a
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“world where freshly filtered water flows faster and in more places than ever thought possible”
(Whirlpool Water, 2014). This paints an image of delicious water accessible to anyone,
anywhere. The phrase, “love your world” is also used for positioning strategies, driving
consumers to associate this filter with having a greater benefit to the environment than the
product’s competitors.
With the EveryDrop branding in place, Whirlpool can utilize its strengths to position the
EveryDrop straw. Brand positioning for the straw will be very similar to the EveryDrop water
filter. The straw will be capable of filtering more water than its competitors’— a minimum of
300 gallons compared to the estimated 264 promised by competition such as Lifestraw. Benefits
will also include ease and speed of use. Beliefs and values will be treated in the same manner,
delivering a message that sets the EveryDrop straw above the competitions’ in, not only the
modern design, but messages such as “love your world” to portray values that are
environmentally conscientious. Utilizing established brand positioning will enable the
EveryDrop straw to occupy a perceived position of more-for-less. This is due to the fact that
Whirlpool’s straw will be priced at $14.95, a price that is $10-$15 less than competitors’ and will
also be bundled with the aforementioned product offerings.
Strategies
To create customer value and build relationships, the EveryDrop straw needs to create a
marketing strategy responding to threats, opportunities, and critical issues. The threats,
opportunities and critical issues EveryDrop currently faces are competition from water bottles,
competition from other filtration devices, finite water sources, and a finite lifespan of the
EveryDrop straw.
An effective marketing strategy needs to show key differences adding value to the product and
customer. Where EveryDrop adds value is in the savings compared to water bottles and its
benefit to the environment. The EveryDrop straw can filter 300 gallons of water, which is 38,400
ounces a year, or approximately 2,272 water bottles containing 16.9 ounces each. The average
cost of a water bottle is $1.45, when multiplied by 2,272 (water bottles) the cost equals
approximately $3,294 a year. By purchasing an EveryDrop filter, a customer can save $3,280.
THE WHIRLPOOL EVERYDROP STRAW
19
Environmental effects are another difference. There are many environmental advantages in
replacing the plastic bottle. Water bottles are made with petroleum, and it takes an
aforementioned 17 million barrels of oil to fulfill the demand of bottled water. The oil used to
meet the demand of water bottles is enough to provide for 1.3 million cars a year. Another
important fact is, although water bottles are recyclable, only 23 percent of water bottles are
actually recycled. Thirty eight billion water bottles a year end up in a landfill which equates to
more than $1 billion worth of plastic being wasted.
The marketing strategy will show these keys differences in our advertisements. An EveryDrop
straw delivers value to its customer base because it will save them thousands of dollars and,
more importantly, purchasing the EveryDrop straw benefits the environment. Customers must
know that they are not just buying a filtration device. They are buying change.
Marketing Mix
Pricing
The EveryDrop straw is set to debut in stores and online at $14.95. For this price, the customer
receives a small carrying case, three swabs for cleaning, and four color options to choose from.
Since we are introducing a new product, we want to penetrate the market as best as possible. We
achieve this by following the market-penetration pricing. By setting the EveryDrop straw $10-15
cheaper than our direct competitors we can attract new buyers and market share.
Distribution
In order for buyers to purchase the EveryDrop straw, Whirlpool will use a three level distribution
system and be indirectly distributed. This allows the buyers to purchase the EveryDrop straw at a
retailer such as Walmart, Target, and REI. This is further explained in the following figure.
THE WHIRLPOOL EVERYDROP STRAW
Producers
20
Retailers
Final
Buyers
Figure 3
The EveryDrop straw is shipped from the producers to a retailers and finally to the final buyer
via this consumer marketing channel.
Distribution will also be done directly through Whirlpool’s webpage. Consumers will be able to
purchase the EveryDrop straw through Whirlpool’s online store. This process is known as
“business-to-consumer” marketing, moving from the producers straight to the final consumer, as
the process has no intermediary levels. EveryDrop will make use of this in order to sell the
straws directly to customers.
Marketing Communications
With the sales revenue the EveryDrop filter has, a percentage will be put aside in order to
promote the product. We will want to direct market the EveryDrop straw and will be advertised
via television commercials, direct mail, catalog, and the Internet in order to reach our target
market.
Informative advertising will inform our target market of this new product and make them aware
of its existence. This type of advertising can be put to use in print media such as brochures,
catalogs, magazines and television commercials.
Marketing Research
THE WHIRLPOOL EVERYDROP STRAW
21
Primary research was conducted via an original online survey to determine the best target market
for the EveryDrop straw. The survey inquired about each participant’s demographics, interest in
the product, and opinions regarding price, location, and uses.
Secondary research was conducted online to explore competition, such as similar products
already on the market, market potential and Whirlpool, and costs of marketing and production.
Future research could potentially broaden the target market to consumers of different
demographics or previously unthought of applications. Ongoing research should track the most
effective ways to market the EveryDrop straw.
Financials
Breakeven Analysis
Below is an analysis on fixed and variable costs associated with production only for the
EveryDrop straw and its break-even point.
Price Per Unit: $14.95
Per Month:
Per Year:
$5,700
$68,400
1,500
18,000
Maintenance
200
2,400
Machinery
100
1,200
Fixed Costs:
Rent
Utilities
Total:
$7,500
Total:
$90,000
Per Unit:
Total Cost Per Unit (7860)
$1.00
$7,860.00
Wages
1.25
9,825.00
Raw Materials
1.00
7,860.00
Assembly
0.25
1,965.00
Variable Costs Per Month:
Manufacturing
Total:
Total Cost for
Breakeven Units
Table 4
$3.50
Total:
$27,510
$117,510
THE WHIRLPOOL EVERYDROP STRAW
22
With the above information, the break-even point without consideration for marketing results in
7,860 units which is $117, 510 in sales.
Table 6 is a forecast of units necessary.
Figure 5
Below is an evaluation of fixed and variable costs pertaining to production and marketing efforts
in order to ascertain Whirlpool’s break-even point for the EveryDrop straw.
Price Per Unit: $14.95
Per Month:
Per Year:
$5,700
$68,400
1,500
18,000
Maintenance
200
2,400
Machinery
100
1,200
Fixed Costs:
Rent
Utilities
Total:
$7,500
Total:
$90,000
Total:
$1,234,190
Sales Costs:
Fixed Marketing
Costs
THE WHIRLPOOL EVERYDROP STRAW
Variable Costs Per Month:
23
Total Cost Per Unit (80,498
Per Unit:
units) for Break Even:
$1.00
$80,498.00
Wages
1.25
100622.50
Raw Materials
1.00
80,498.00
Assembly
0.25
20,124.50
Manufacturing
Total:
$3.50
Total:
Total Cost for
$281,743
$1,605,933
Breakeven Units
Table 6
Below is a sales forecast depicting per unit sales.
Table 7
According to figure 4 and 5 figure, with the EveryDrop straw priced at $14.95, Whirlpool will
need to sell 80,498 units as their break-even point. This results in unit sales of 20,125 per quarter
and 6708 per month. The 80,498 units of sale translate into a dollar amount of $1,605,933.00
necessary to break even. A profit will be seen when 100,000 units are sold.
Sales Forecast
THE WHIRLPOOL EVERYDROP STRAW
24
As Whirlpool intends to sell 80,498 units in the first year, aggressive quarterly sales goals have
been set, as shown in Figure (Sales Forecast). The first quarter sales goal is lower than those of
quarters two and three because, as a large portion of the target market is outdoor adventurers,
demand for the EveryDrop straw will most likely drop during the winter season. However, sales
for the first quarter are estimated to be slightly higher than sales in the fourth quarter because it is
expected that consumers will be spending more on holiday shopping, and less on personal
accessories. Sales in the summer and fall seasons are estimated to be the highest because
consumers are more hydration-conscious in warmer weather, and adventuring outdoors a lot
more often.
Sales for the second year are predicted to be higher than the first by an increase of 20,000 units.
A simple, and likely breakdown of the second year would be an additional 10,000 units sold in
the second quarter, and an additional 10,000 units in the third quarter. Selling 100,000 units
would both guarantee a profit, and be a milestone achievement.
The goal for the third year is to sell 125,000, another respectable increase from the previous year.
This can be attributed to an expansion in the EveryDrop straw’s target market and reach, which
is expected to have occurred by this time.
Sales
Forecast
Year 1
Year 2
Q1
Q2
Q3
Q4
17,000
25,498
25,000
13,000
Year 3
Total
Sales
(Units)
80,498
100,000
125,000
$254,150. $381,195.1 $373,750.0 $194,350.0 $1,203,445.1 $1,495,000.0 $1,868,750.0
Revenue
00
Unit Price
$14.95
Figure 8: Sales Forecast
0
0
0
0
0
0
THE WHIRLPOOL EVERYDROP STRAW
25
Expense Forecast
Expense Forecast Based on Marketing Costs Per Year
Advertising
$1,167,190
Production
9,000
Distribution
8,000
Salary
50,000
Total
$1,234,190
Figure 9
Above is a list of fixed marketing expenses, and is included in the break-even analysis.
With an average cost of a television commercial at $112,100.00 (TV Cost, 2014), Whirlpool will
purchase ten 30-second television ads at this rate to air on primetime television, costing $14.26
per break-even unit. Whirlpool will purchase ad space with magazines, such as Backpacker, to
advertise the EveryDrop straw. Ad space in outdoor-based magazines can cost about $46,190 for
nine full-page, color advertisements, or $5.88 per unit (2013 Media Kit, 2013). Since the
EveryDrop brand exists, some advertising costs will be absorbed into market budgeting allocated
for the filter. Whirlpool should hire an additional person at $50,000 a year to oversee advertising
specifically for the straw. Costs related to marketing efforts are high compared to production
because Whirlpool puts efforts in investing heavily in these types of expenses (Whirlpool
Corporation, 2014).
Controls
To market the EveryDrop straw successfully, Whirlpool must maintain strong
relationships with retailers and promoters. A small team will be responsible for getting the
EveryDrop straw into as many retail places as possible across the country. Retail databases will
be synced with Whirlpool’s so the number of units sold at each location will be updated
consistently. Sales can be accurately tracked and inventory will never be lacking. A separate
THE WHIRLPOOL EVERYDROP STRAW
26
team will work with promoters in advertising, public relations, and other marketing areas to raise
awareness and demand of the EveryDrop straw.
Implementation
The first step in implementing the EveryDrop straw will be to contact a manufacturer of
the essential materials needed to make the straw filter. After contact with the manufacturer, the
manufacturing at our factory will commence. We would need to test every single straw before
we send out the product to our retailers. These tests will be important to ensure that customer
needs are met, and our branding not tarnished. As the product grows in popularity, we would still
test every straw to ensure quality. After testing the EveryDrop straw, we would need to distribute
the product to the retailers in which we have been allowed to sell in.
Then after the producing, testing, and distributing, we would need to wait for the consumer to
begin buying our product. With the extraordinary product that Whirlpool will help to sell, the
EveryDrop straw would be in every home and in every consumer's mind when traveling,
preparing or in arranging activities.
Marketing Organization
Both business-to-business and business-to-consumer will be used by Whirlpool for the
EveryDrop straw. For business-to-business dealings, Whirlpool will add the product to a catalog
for ordering. The sales force that is in place for the EveryDrop water filter will absorb the task of
selling the straw. There are three marketing methods we will use in informing the public of the
straw: television commercials, print ads in magazines, and word-of-mouth through the use of
online bloggers. This means that for business-to-consumer relations, the employees that are in
place for the filter will also be tasked with creating commercials and print ads in magazines. In
order to create a presence on the Internet with bloggers, samples will be sent to bloggers who
talk about outdoor activities, those who are parents, and any other person who blogs about
activities in our targeted market. This will create the need for an additional employee to manage
public relations pertaining to the straw and those bloggers. Whirlpool enabled the EveryDrop
filter’s website to have a checkout option. The straw will also be an option for purchase directly
from the website. It will be necessary to have online customer support. All other functions can be
absorbed by staff already employed by the Whirlpool Corporation.
Below is a diagram of the marketing department necessary for the straw.
THE WHIRLPOOL EVERYDROP STRAW
27
Public Relations
Online
Customer
Support
Marketing
Department
Media
Advertising
Online
Customer
Support
Figure 10
Contingency Planning
EveryDrop, like any other company, will have a contingency plan in place. A contingency plan is
needed in case there is a change in the economy or a drop in sales. A severe change in market
conditions, such as The Great Recession, can hurt a company. A company must be ready to
adapt and change to the market as needed.
Currently the economy is improving, but if the economy faced another recession, EveryDrop
would have a contingency plan to overcome it. In the housing recession, spending went down
across the board. Unemployment also climbed from 5%, to a dismal 10%. Customers had to
change their spending habits. If another recession were to happen, EveryDrop will increase
marketing to show the benefits over buying water bottles. One EveryDrop filter can save a
customer thousands of dollars.
THE WHIRLPOOL EVERYDROP STRAW
28
A drop in sales can be many things. It can be a drop of price from a competitor, a change in how
a product is perceived, a new product entering the market, or a range of different factors. For
EveryDrop to be successful, it will have to have a pulse on what their competitors are doing, and
also have “what if” scenarios for the different factors that can lead to a drop in sales. If a
competitor were to drop its price, EveryDrop could drop its price as well. But before that, it
should consider all options such as: does the competition donate to any charities, is the
competing a product of lesser quality, or any other difference that can differentiate itself from its
competitors. The last thing any company would want to do is get in a price war.
THE WHIRLPOOL EVERYDROP STRAW
29
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