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Case Study: Clorox: Leveraging Green for Growth
Problem Statement
The main brand problem facing the Clorox Company is whether to continue investing in green products.
Sources of Brand Equity
Clorox is recognized as a company dealing with chemicals and specifically cleaning solutions including bleach. Clorox products are popular with consumer and in retail outlets, where a significant portion of their products are sold, and given priority. According to Cammarata, et al. (2010), retailers such as Costco and Wal-Mart carry only top selling products due to limited space. Clorox held the number one or two market share position in its product categories for 88% of its brands and typically received prominent placement in stores (Cammarata, et al. 2010). Such placement indicates the brand recognition, brand recall and purchase intent associated with the Clorox brand. The brand awareness and image were built through advertisements and promotions of the products as superior and efficient. The company spends 9% of its total sales every year on ads. It spent 523 million, $503 million and $498 million on advertisement in 2015, 2014 and 2013 fiscal years respectively. Advertising helps the company to highlight the superiority of the products when compared with products from competitors. It also helps in brand recall and recognition.
The CBBE Model explains that the power of branding is in the mind of the consumer and therefore, building a brand requires tapping into their minds. Salience, performance, imagery, judgments, feelings and resonance form the basis of the model. The Clorox brand is associated with affordable cleaning solutions that cater to the needs of an efficient cleaning agent (Ofek & Lauren 2011). Although some consumers associate it with products that are harsh to the environment, most customers view it as a necessity as for adequate cleaning. The association of Clorox with bleach was a problem in marketing Green Works. However, since the Clorox brand was not and trusted as efficient, the product was successful after its launch. The company has been producing cleaning solutions since 1913 and was the first commercial organization dealing with liquid bleach.
Brand Positioning
Clorox products other than Green Works, Brita, and Burt Bees target the mass market and not a particular segment. However, with the three products, the company targeted a niche group of consumer who were environmentally conscious. These customers care about products “in me, on me and around me” (Ofek & Lauren 2011). The marketing of Green Works was aggressive towards establishing the product as natural. Clorox focuses on the mass market across different demographic factors, health conscious customers. The customers targeted are in various income levels but not exceeding $80000. Their target group wants an affordable product that is effective. The target group for Green Works is the group dubbed as “Chemical Avoiding Naturalists” (Cammarata, et al. 2010). These consumers wanted greener cleaners but felt the existing products didn’t work well, came from brands they didn’t know or trust, were too expensive, or were not available where they shopped.
The company’s main competitors are Proctor and Gamble and Unilever while in the green product segment, Method and Seventh Generation is the main competitors (Cammarata, et al. 2010). Method and seventh generation are companies that have traditionally dealt with green products while Procter and Gamble is a corporation dealing with home care products and the biggest competitor for Clorox (Ilana, 2008). Clorox products include laundry additives and bleaches, home and institutional cleaning products, water filtration systems, plastic wraps and bags, food products, auto care products, charcoal briquettes, and personal care products (Cammarata, et al. 2010). The cleaning and personal care products are similar to those in the markets as they all serve a similar purpose. However, the company differentiated the products by making them environmentally friendly. This move was as a result of the emerging trend of environmentally conscious consumers.
Current Marketing Strategy
Clorox being known for its chemicals which were toxic and acted as biocides had to convince users that they could produce a green product. In their marketing strategy for Green Works, the company had to make a decision whether to maintain the Clorox name or discard it (Ofek & Lauren 2011). However, it was decided to the brand equity that Clorox had, would convince the target consumers that the products were effective. During the promotion of the new product, the company underwent an aggressive campaign in television and print. However, there were still concerns about the product by the consumers, and the company sought an endorsement from the Sierra Club (Cammarata, et al. 2010). The Sierra Club would give it the credibility it needed as an environmentally friendly company with similar products. Additionally, this strategy was aimed at attracting new environmental friendly consumers that might have a negative image of Clorox.
Clorox also priced Green Works at 10-20% above the traditional household cleaners. However, this was significantly lower than the price of similar products from Method and Seventh Generation, who were the main competitors. The lowered price gave Clorox a competitive advantage among reluctant green consumers and enabled market penetration into the niche group. By reducing the price, Clorox ensured that their products although green were still affordable to the target market. Green Works was approved by the Environmental Protection Agency (EPA), and its products ranked the best in their category using the Design for the Environment (DFE) standards (Cammarata, et al. 2010).
As a century-old company, Clorox had a well-established distribution channels. It distributed its products through well-known and prominent retailers such as Wal-Mart and Costco. These retailers ensure that the target market was reached. It also provided a solution to the notion that green products could not be easily accessed.
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