What Factors Were Responsible for Brita’s Success in the Years Since Its Launch to 1999?

Assigned Questions:

1. What factors were responsible for Brita’s success in the years since its launch to 1999?

• They were a first mover.  
• Their value proposition for customers - great tasting water
• Educated the customers
• Wide Breadth Distribution channel - Nationwide availability - supermarkets, drug stores, hardware stores, Target and Walmart, Costco
• Great brand awareness - 70%
• Large customer base - 18% of 103 million households = 18.54 million households
• Market Size = $350M Revenue, Brita has 71% Revenue = $248.5M Total Revenue
• High number of loyalty customers - 80% still using after a year
• Good world-of-mouth reputation
• Created (?) Identified a new industry - home water purification industry
• 1993 commercial clip - https://www.youtube.com/watch?v=wIuPWxT9sDc - Step-by-step function
• 1998 commercial clip - https://www.youtube.com/watch?v=tVLbFDl2I0I - Waterfall campaign
• 2002 commercial clip - https://www.youtube.com/watch?v=I-quFIY84CM - Kid talk

• From ‘unawareness’ to ‘awareness’, the following factors were responsible for its success:

• Clearly identified value proposition - great tasting water
• Branding team’s effort on educate customers: explain the product and why it is important

• 1993 commercial clip - https://www.youtube.com/watch?v=wIuPWxT9sDc - Step-by-step function
• 1998 commercial clip - https://www.youtube.com/watch?v=tVLbFDl2I0I - Waterfall campaign
• 2002 commercial clip - https://www.youtube.com/watch?v=I-quFIY84CM - Kid talk

• From product trial to product loyalty, product quality spoke for itself:

• Good world-of-mouth reputation and gift purchases

• Limited choice at the peak of Brita time: tap water or PT system

2. Problem identification: what factors are responsible for Brita’s problems and provide evidence. Why didn’t the strategies attempted between 1999 and 2006 work?

• FACTORS TO FAILURE:

• Brita’s problem - abruptly declined sales in 1999

• Losing Costco Distribution - Exhibit 1

• Higher number of competitors with differentiated products (Brita had to catch up).

• Factor - New innovation for home filter use - faucet mounted filter (FM)
• Factor - Late entry to the FM market where PUR already
• Dic - established its own business

• Growth in Bottled Water Market.  Fast growing bottled water industry - by 1997, 8% of the paid-to-drink market
• Factor - Change of the concern for customers - “removal of impurities” position

• Factor - Hesitate to roll out an FM product - PUR continued to grow and grabbed a double-digit percentage market share.
• Brita has a consistent revenue stream from replacement filter sales.  Because customers lapsed over time, Brita is losing this consistent Revenue Stream.

Internal:

• Corporation structure: no clear ownership of its brand: each function leader within Brita SBU has a dotted reporting line to the global function leader. P2

External:

• Competition with similar launch date
• Competition with similar positioning (safety and health)
• Competition meeting new needs - home filter use, faucet mounted filter (FM) with additional benefit - ‘removal of impurities’ positioning
• Competitor PUR gained more resources under P&G
• Changes in market: bottled water made up 8% of paid to drink liquid market
• Late entry to FM in 1999

• Strategy 1 FAILURE:

• The team decided not to pursue, and did not put the resources toward it.  Ultimately we believe the strategy would fail because there is easy barrier to entry in the soft beverage market and lots of competition.  Furthermore, this strategy helps people enter the water drinking market, but does not make them specifically want to drink Brita water only. due to the qualitative research nature the result wasn’t as reliable.

• Strategy 2/5 FAILURE:

• Hard to change people’s perception for the bottled waters especially if they are happy with them - Did not change people’s attitude enough for the switch.
• People who drink bottled water are specifically part of the “BW Indulgers” Segment.  Likely will not switch because Brita does not offer the same convenience as BW. (Exhibit 7)
• Per exhibit 3B - PT vs. BW - There is no incentive for BW consumers to switch to Brita, Ex. BW perception is that it is easier to maintain, equally high quality of water and Portability vs. Pt which is high cost, maintenance, not portable.
• only focus on competition, not consumer’s needs. Follow the competition to position their product which lead to the lack of uniqueness

• Strategy 3 -

• PT system as a whole was perceived as inconvenient and of less value compared to the bottled water, even a source of stress in the household; The “smart indicator” failed to show the replacement was related to the volume and customer did not view that as a reliable cue
• Customers had issues with the filter:

• Didn’t know when to change it - too ambiguous
• Didn’t see the benefit/difference of having the filter
• Pain to change the filter (source of stress in the household)
• The replacement was related to the volume and customer did not view that as a reliable cue
• Lost 3M customers within 3 months.

[pic 1]

• Strategy 4 - Management terminated the campaign

• The message is confusing - fear mongering vs. value proposition.
• Targeting specifically Segment Tap Traditionalists/Weary Tap Satisfied - both say that tap water is fine.
• Message delivered on air didn’t clearly address its brand positioning and the connection: ‘reminding consumers of the impurities tap water contains’ and ‘transform the taste of tap’.

• Strategy 5 - focus on competition not consumer. Easier and cheaper alternative did not change people’s perception around bottled water.

3. Evaluate the segments using the target market selection criteria learned in class. Which segment(s)

would you target and why?

• Segment 3 and 5 will be the target market