Brita
In 1987, the Clorox Company obtained the US rights to sell a home water-pitcher and filter system made by the German company Brita GmbH. The pitcher is made of two compartments, upper and lower, and a replaceable filter. Water is placed into the upper compartment and is filtered as it flows through to the bottom compartment. Though sales were sluggish in the first few years of the product's inception, by 1998 the Brita pitcher-filter system had the highest return on sales (34%) of all of Clorox's products with revenues of 200 million dollars. However, with slowing demand for its household pitchers, Clorox now faces a threat from the entry of new type of filtration system, the faucet mounted system, made by its newly acquired competitor PUR. The faucet mounted system is a filter that screws onto kitchen faucets with the ability to filter water directly and, similar to the water pitcher system, requires replacement filters for continued use. In anticipation of the entry, Clorox developed its own faucet-mount system and is examining three strategic options: continuing to build on its install base of pitchers, shifting its budget to promote the sale of filters, or putting significant resources behind building a new installed base for faucet-mount systems. An examination of the Clorox Company, potential market and market trends, competitors, and customers shows that the company should continue to focus on and defend its install base by re-positioning itself and focusing on R&D for filter technology.
The market for Brita systems includes nearly every household in the US and is enormous at 103 million. In total, only 1/7 of the market had been captured by all pitcher systems, with Brita enjoying over 75% market share. Throughout the 1990's, consumer awareness to potential hazards in drinking water was increased with several high-profile incidents. In one area, an abnormally high rate of leukemia was linked to drinking water contaminated with industrial solvents and...
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