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
- Educational ad campaign on
how to use Brita
1988
- First in the market with
value proposition of
great tasting water
“Tap water transformed”
1999
- 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 created the market for filtered water, aided by shifting consumer values towards safety,
health, and great taste
Brita’s problems 1999 - 2006
• 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)
•
•
Strategy 1
Strategy 2
Strategy 3
Strategy 4
Strategy 5
Where does water
belong?
Bottled Water as
the bad guy
Leaky Bucket
Tap water Turnoffs
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
Target market selection criteria
Criteria
Tap
Traditionalists
Weary Tap
Satisfied
Segment is well
defined/identifiable
Principled
Filtered Fans
Affluent Fridge
Followers
Assertive Self
improvers
Bottled Water
Indulgers
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 nonrefrigerator 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 Water
Likely to switch: No
Susceptible to
innovation: No
TSI: 220
Want: Cheap &
Convenient
Likely to switch: No
Susceptible to
innovation: No
TSI: 171
Want: Filtered
Water
Likely to switch: No
Susceptible to
innovation: Yes
TSI: 43
Want: Convenient
filtered water Likely
to switch: No
Susceptible to
innovation: Yes
TSI: 81
Want: Volume,
healthy, valueseekers
Likely to switch:
Yes
Susceptible to
innovation: Yes
TSI: 121
Want: Simplicity
and accessibility
Likely to switch: No
Susceptible to
innovation: Maybe
TSI: 34
Profit potential
Low
Low
High
Medium
High
Low
Target market selection rationale
# of 8oz Glasses Per Day
Water Consumption
16
14
12
10
8
6
4
2
0
Away from Home
At Home
10.33
5.25
5.64
2.815
2.99
Average
4.56
4.45
2.7
2.88
4.01
2.67
Principled Filter
Fans
Affluent Fridge
Followers
Assertive Self
Improvers
Bottled Water
Indulgers
2.38
1.64
Tap Traditionalist Weary Tap Satisified
4.14
Primary Source of Water
100
90
80
70
60
50
40
30
20
10
0
Total
Filtered Water
Bottled Water
Tap Water
33.3
21.7
35.4
Tap Traditionalists Weary Tap Satisified
4.3
4.4
67.3
12.1
6.8
75
Principled Filter
Fans
90.6
0.8
3.1
Affluent Fridge
Followers
75.7
1.9
6.6
Assertive Self
Improvers
32.3
26.3
30.7
Bottled Water
Indulgers
0.4
84.9
8.1
Target Markets
Principled Filter Fans
•
•
•
•
Current core consumer base
High accessibility and profitability
Primary source of water : Filtered water
Sound bite: Filtered water is healthier than tap
Assertive Self-Improvers
• 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
Consumer Perception (PT vs. FM)
PT
9
8
7
6
5
4
3
2
1
0
Water Quality
Entry Cost
Ongoing Cost Transportation
Faucet
Installation
Space
Usage Volume
Maintenance
Simplicity
Portability
Maintenance
Simplicity
Portability
Consumer Perception (BW vs. PT)
10
Bottled Water
Pitcher (PT)
8
6
4
2
0
Water Quality
Entry Cost
Ongoing Cost Transportation
Installation
Space
Usage Volume
Brita Blue – Smart Filter
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
The Website
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
Contaminants
Water Clarity
Points of Differentiation
Tastes Better
Than Tap
Convenience –
Color Indicator
Website
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, greattasting water.
Pricing Considerations
New
Filter
Product
Pitcher
Faucet Mounted
“Traditional” Filter
Brita Blue (New
Filter)
New Price
Unchanged
Unchanged
Unchanged
High price high margin
Rationale
Pitcher
Incremental
Traditional Brita Blue annual filter Faucet
Filter
Filter
sales
Mounted
Incremental
Traditional Brita Blue annual filter
Filter
Filer
sales
$60
$48
$50
$40
$5
$30
$20
$10
$30
$5
$8
$48
$8
Traditional
Filter
$0
Assumptions:
1. Optimal filter changes occur 6x per year (1/2months)
2. Customer leakage on traditional filter wrt PT= 20%
$45
$24
Traditional
Filter
$30
Methods of Distribution
Communication Strategy- Focusing on the 6 M’s
Mission
- Increase awareness, consideration and purchase of our Brita
Blue Smart filter
Market
- Our existing customers
- The Assertive Self-Improvers
Message
- Brita Blue alerts you to change your filter
- Website allows you to track your water consumption
Media
- TV & print ads
- Website
Money
- To be determined
Measurement
- Sales of Brita Blue
- # subscribed users on the website
Decision Making Process
Product Promoting Ads
Awareness
Consideration
Affective Ads
Provide to Yoga
Studios/Gyms
Brand-Building Ads
Attitude
Trial
Repeat/
Loyalty
Apply push & pull tactics to influence the customer decision making process
Product-Promoting Ad
Decision Making Process
Product Promoting Ads
Awareness
Consideration
Affective Ads
Provide to Yoga
Studios/Gyms
Brand-Building Ads
Attitude
Trial
Repeat/
Loyalty
Apply push & pull tactics to influence the customer decision making process
Attitudinal & Behavioral Objectives
Behavioral Objectives
Attitudinal Objectives
Think
Feel
Believe
The Brita Blue filter is
trustworthy and convenient
Do
Change
Filters
Increase filter change
frequency and confidence
Brita cares about overall
well-being and caters to
my lifestyle
Do Use
Website
Create Brita Blue account
& improve consumption
awareness
Brita is improving my
overall quality of life
Don’t
Switch
Brands
Decrease likelihood of
brand-switching
Risk & Concerns with Marketing Strategy
Single Message to
Consumers
Consumer Price
Sensitivity
Website Adoption
Competitor Innovation
• The current marketing plan is focused on sending a single
message to consumers regardless of their product choice
• 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
100 L
50 Days
4.23
Cups
per
Day
8.46
Appendix B