Clorox Bleach by Clorox Company - Term Paper Example

Summary and Recommendations Clorox regular bleach and shout are similar products used for household cleaning but they are from different companies. Clorox bleach is produced by Clorox Company having the same name as the brand name thus enjoy the good reputation that comes with the brand. Shout is a product of the SC Johnson company being one of the varieties of products that they produce. Clorox has for a long time dominated the market and gained customer loyalty which has given it competitive advantage over the years. However due to introduction of similar products by other companies, it is experiencing competition which is affecting its sales with one of its main competitor being SC Johnson. Thus it is necessary for the company to identify its strengths and weaknesses in order to develop strategies to improve its market share and sales and thus gain competitive advantage over its competitors. Its strengths are that is enjoys customer loyalty and give back to the community thus good reputation. The weakness of Clorox is that it is a small company concentrated only in a small region of the global market. SC Johnson on the other hand enjoys the strength of having its products all over the global market. However they have a disadvantage that they do no give back to the community and have limited customer loyalty. The recommendations that Clorox Company can implement in order to achieve competitive advantage of the product category market include strategic marketing, innovations and expansions of its operations and products into new markets so as to gain global market value and dominate it as well. Market Analysis of Product Category The bleach market globally is expected to have a value of $2.6 billion which is an increase from 2008 by 0.7%. Americans alone accounts for almost 50% of the global market value of the bleach while the Clorox contribute 28.5% share of bleach’s global market value. Supermarkets are the main distributing channels for the product. The market of bleach consists of both powder bleaches as well as liquid bleaches and the value of the market can be determined by the selling price. Clorox bleach seems to be the most popular and most trusted brand in the American market as compared to shout from SC Johnson. Hence its existence for more than six generations has helped in gaining customer loyalty and confidence which gives them advantage over their competitors like Sc Johnson. The product category have been recording increased sales over the years however currently due to economic crisis consumers tend to go for the products that are cheaper and economical. Due to presence of some chemicals in the product category, Clorox Company decided to introduce green products as a market strategy to improve sales and lure the consumers since nowadays everyone wants to go green and protect the environment. This was done in 2008 and for the first few years the sales increased enormously (Thomas, 58). However when the global recession crept in the sales started declining because people prefer to buy the normal Clorox which is lower in price as compared to the green option. At the end of the day consumers want to promote environmental protection but not at a higher cost. Clorox Company is relatively small as compared to SC Johnson and it commands mostly domestic market unlike SC Johnson which commands global market. This has give SC Johnson an advantage over Clorox since they cover almost all countries in the world. This has given challenge to Clorox and currently they are putting together strategies that can help them expand and they are especially eyeing the Canadian market. The household market is growing quite rapidly and thus other companies are gaining market value globally at the expense of Clorox Company. Market analysis of the product category shows that there a variety of cleaning products in the market. Many companies have invaded the household cleaning products market thus quite a number of cleaning products for the consumer to chose from. As a result competition is very stiff and their main competitor is SC Johnson. The behavior of consumers shows that they tend to go for products which are relatively cheaper due to economical reasons. However some consumers are still loyal to the Clorox brand and this is an advantage the company can use to gain competitive advantage. Strength of Clorox is that despite the competition, they still dominate the market with a market share of 65% in the United States. Clorox also faces competition from small private companies who are very flexible as they can purchase at current market value while Clorox must stick to contracts. Table 1: showing prices of different brands of bleach in the market Company Product Price/Lb* Clean Environment Company Color Safe Powdered Bleach $3.00 Sodasan Bleach Additive $3.90  Bi-O-Kleen Oxygen Bleach Plus $3.13 Clorox Clorox bleach $5.18 Sc Johnson Shout $4.98 Bio Pac Non-Chloride Bleach Powder **  The main environmental factor that is affecting the market is the safety of the goods which brings in political factors as well. For instance there is controversy that green line produced by Clorox is not safe after all and the normal regular bleach is even safer than the new product. Political issues as well as economical factors such as the recession greatly affect the performance of both companies in terms of reduction in sales and reduction in capital for operation. The market of bleach is quite challenging technologically since the cleaning products change each and every time thus there is need to keep up with the changing market and come up with new innovations or improves the existing one. Foreign exchange fluctuations also have impact on the companies for example a decrease in dollar would harm the company due to increase in price of exports thus high cost of foreign inputs, this high cost is then passed on to the product retail price and thus the consumers get to bear all the burden. Thus profit margins derived from exchange rates are likely to be very unstable as they tend to fluctuate all the time. Brand Analysis of Competitor and Focal Brand Brand Analysis of Clorox Company Clorox Company deals with the manufacture of household cleaning products such as bleaches, food products as well as water filters. However Clorox bleach named after the company is the most popular product of the company. It is estimated that out of ten households in America, eight of them use Clorox brand bleach and the other Clorox laundry products. Clorox products furthermore are sold in over 100 countries including in Africa, South America, North America, Europe and Asia. Clorox bleach is the cornerstone of the Clorox Company as it makes the company gain its popularity as well as the leader in the market of cleaning products. However Clorox Company stretches way beyond the bleach product. This is because apart from cleaning (Formula 409, Pine-Sol, Green Works) and laundry products, the company also deals with other products such dressing/sauces (Hidden Valley, KC Masterpiece), cat litters (Fresh Step, Scoop Away), plastic wrap and containers (Glad). Other products from the company include charcoal briquettes (Kingsford, Match Light), filtration systems (Brita, North America) and natural personal care products such as Burt’s Bees. In addition, in 2010 it also sold care brands such as Armor All and STP. The company trades under the name CLX on the New York Stock Exchange. Clorox mission statement is “To understand and delight consumers with brands that enhance their lives, as well as to make a positive impact in the communities where we do business”. This they fulfill by giving back to the community through donations of Clorox regular bleach, disaster reliefs, teaching or funding education, culture and arts program, they have a commitment to enrich, protect and help restore the communities. “At Clorox, we work together to ensure we're running our business with a focus on integrity and quality, guided by our core value of doing the right thing every single day. We know choices we make have a significant impact on people, our planet and our communities. That's why we're continually strengthening our commitment to Corporate Responsibility, focusing on five pillars: Performance, Planet, People, Products, and Purpose” (clorox.com). At Clorox Company, the microenvironment customers are the most important and the company is focused on the best quality products offered to the customers so as to maintain their trust and loyalty that the company enjoys. The competitors as well are considered very important at Clorox Company since they contribute in a lot of cleaning products in the market and thus encourage competition on delivering the best quality products to customers. One of the competitors of Clorox is the SC Johnson brand. Since the company is dealing with multicultural market place, culture plays an important role and thus they encourage employees to freely express their views and opinions. They improve their sales through use of marketing strategies such as advertisements. The company’s strength lies in caring about the community while there weakness is lack of innovation which they need to out do the competitors. However the company enjoys brand loyalty by many people. Brand Analysis of SC Johnson SC Johnson is the competitor brand of Clorox Company. Their mission statement is “We believe we’re responsible to five key stakeholders and have to earn their trust: employees, consumers and users, the general public, our local communities and the world community. Our principles related to these stakeholder groups are part of our company philosophy called This We Believe”(Clorox.com). This We Believe describes the values of the company in relation to the five important stakeholders of the company. These are, the company’s strength and vitality lies in the employees, enduring and earning goodwill of the customers and users, responsible leader of the general public within the free economy market, assisting in well being of communities and countries and finally improving international standards. These believe help the company to act with integrity, assume moral responsibilities and strive for excellence. SC Johnson has a variety of products as well including Pledge®, Duck®, Mr. Muscle®, Windex®, Scrubbing Bubbles®, Glade®, Raid®, OFF!®, Baygon® and Ziploc®. Among these the cleaning products are Duck®, Mr. Muscle®, Windex® and Scrubbing Bubbles® which are aimed at keeping the houses clean, hygienic and fresh. The company also have 50 years experience in production of pest control products such as Raid®, OFF!®, Baygon®, Autan® and All Out®. They also produce products for preserving foods like the Ziploc® and Saran™ as well as car care products the Grand Prix®. The company has a very important microenvironment which allows it to fulfill its objectives of profit making. The company strives to excel at what they do in order to make profit. The company is operating in 70 countries and so they use demographics to determine the microenvironment. The strength of the SC Johnson company is that they have achieved international growth and thus have an opportunity of larger market share. Their weakness is that they do not care enough for the surrounding community and they also face competition threats from the many companies that are producing same products as them. Brand Remediation for Clorox Company to Improve Its Competitive Advantage From the market analysis carried above, we can conclude that Clorox Company is battling with a number of challenges and these are preventing it from achieving the maximum profit as well as fulfilling its goals and objectives. Some of these problems include competition, limited market share and technology change. Hence there is need to determine strategies that can help the company overcome these challenges and gain competitive advantage as well as dominance of the market like it once did. This can be done through marketing strategies, innovations and expansion of the existing market. The company needs good marketing strategies that will help the company gain competitive advantage over its competitor. Good marketing strategies results in high profit margins, increases market share, increases sale close ratio and ability of the company to achieve sales and competition without lowering its prices. Some of the marketing strategies that can be employed in this case include target market strategy Target market options Multiple markets Single market Entire market Table 2: Types of target market Target Market strategy Target market strategy involves identifying the market segment which is a group of people with similar needs and thus putting focus on that particular segment. Market strategy starts with market opportunity analysis which simply involves determining the sales potential of the segment of interest as well as assessing and identifying the key competitors with interest in that segment. The net step is identifying the target segment; the company may select one or two groups to focus on for sale of their products through appealing to multiple segments, concentrating on one segment or appealing to one market mix. The buyer behavior of the target market should be assessed and the psychographics and demographics fully described. It is important to identify the economic, political structures, cultural differences and technological developments that might interfere with the marketing plan (Charles et al, 105). Market mixing Another strategy that can be used is market mixing. This involves the blending of products, promotion, pricing strategies and place or distribution. These components must be controlled and blended in order to achieve satisfactory results. An excellent product cannot succeed on its own it needs promotion, strategic placement and proper pricing. This requires proper strategic planning and careful design of market mixes in order to satisfy the interest group. For example in this case the target group could be housewives from a particular geographical region like Hispanic group. By manipulating market mixing elements, the manager can be able to gain advantage of the market and beat their competitors thereby gaining competitive success. Product strategy is the heart of marketing which means the manager has to know what product is to be marketed its characteristics as well as strengths and weaknesses. Several factors that make up the product have to consider like the package, brand name, after sale service, company image and value of the product. Consumers do not just buy products because of what they can do for them but also because of the meaning they get from the products like quality, reputation and even status. The management should aim in producing products that provide value to the customer and for that Clorox Company will be able to achieve high sales and thus gain competitive advantage. Pricing strategies is the most flexible among the elements of market mixing and can be easily changed. Pricing is important and the company should set the price that will enable them to earn profit but at the same time not dig deep into consumers’ pockets. Price is also a competitive weapon which the company can use to attract consumers and thus gain competitive advantage over other companies and it will also determine the total revenue of the company. Chart showing the 4P’s of marketing Place strategies are concerned with the availability of the product in places where they are required by the customers at the right time when they are needed. This involves the activities like storage and also transport of products to where they are required. This involves proper planning to ensure that the products are transported safely and that they reach consumers while still in good conditions. On the other hand promotional strategies cover activities like sales promotions, advertising, public relations and personal selling. Promotion seeks to bring exchanges with the target group which is usually done through persuasion, education and reminding the target group of the products benefits. Promotion activities are meant to bring mutual exchanges and communication activities that will satisfy both parties. A well planned and executed promotion will result in sales increase of the product. After drawing up the marketing strategy plans, the next step is implementation of these plans where the actual actions are carried out to ensure that the goals and the objectives of the company are achieved. After implementation the marketing manager must keep on reviewing the strategies continuously to ensure that they are effective and improve where there is need to. Marketing strategy will ensure that the company achieve competitive advantage over its competitors and also improve sales. Another advantage of marketing strategy is that it sells the company as a brand which earns the company a good reputation and thus customer loyalty that will last for a long time which a lasting impact on the market. However marketing strategy requires careful and effective planning because it can easily backfire. Marketing strategy is also consumes a lot of time planning and is costly thus the cost is transferred to the consumer making the products become expensive. Expansion of the Market It is clear that Clorox enjoys the loyalty of there customers and good reputation. However this loyalty is only concentrated in one place and thus there is need to expand the market to reach as many people as possible and have the global market share. The company can take advantage of the good reputation that it enjoys because if they decide to expand the market globally, people will easily accept and adopt their products. The advantage of company expansion is improving the market share of the company, gaining global recognition and improving sales. However company expansion is disadvantageous because it requires extensive research on the market to which the company wants to introduce there products into. This will require a lot of finances to initiate and implement. The company might also experience rejection since it is new in the market thus low sales after spending a lot of money researching and establishing a new market. The company is also likely to encounter new competitors who are already in the market. Adapted from Systematic innovation by Vadim Kotelnivkov Innovation Innovation involves development of processes that will produce a new product better than the existing one or improve the existing product. A good innovation takes the form of a strategic innovation in which involves a systematic approach touching on all vital areas of the company like the product, technology, marketing, process, organizational and business innovation. For example for the Clorox Company, they could strive to innovate new products that are chlorine free, that in addition to cleaning and whitening also kills germs and products which are environmentally friendly. Innovation requires creativity, skills, intelligence, human resource and knowledge to achieve the desired results. A successful innovation requires the involvement of all stake holders like the customers, shareholders, managers, workers and the community since the change will also affect hence the need to here their opinion about the proposed new product. Innovation starts with systematic or technological innovation which involves the processes that can be able to produce high quality product. One cannot produce a quality product if the process or the machine used for production is inefficient. The manager has to set up a team to carry out research and come up with ideas for new products and the new product must be aimed at satisfying the consumer’s need since consumers satisfaction is the measure of success and achievement. Innovation is advantageous in that it makes the company rules the market by introduction of better and more improved products. However it is time consuming and use up a lot of resources of the company. It passes through a lot of processes before the new process or product is implemented. Works Cited Craig, Thomas. Marketing Strategy Competitive Advantage with Logistics. http://www.ltdmgmt.com/april98II.asp Charles W. Lamb, Joseph F. Hair, Carl McDaniel. Essentials of Marketing. Cengage Learning. Wikinvest. Clorox Company (CLX). http://www.wikinvest.com/stock/Clorox_Company_(CLX)#Foreign_Exchange_Rate_Fluctuation. 2012 Consistent Growth, Above Average Dividend Yield, Attractive Valuation http://seekingalpha.com/article/226603-clorox-company-consistent-growth-above-average-dividend-yield-attractive-valuation. September 23, 2010 Read More