The Brita Products Company

Propose strategic and tactical market definitions for Brita filtered water products. Why is it important for Brita to understand this distinction in their market arena? How does your definition impact the size of the potential market and likely competitive strategy Brita should adopt? Be explicit about how the competitors change across your definitions and how this impacts Brita strategy.

Brita should approach their market definitions in a way that supports continued growth throughout the beverage industry. At present, they have some tactical decisions to make regarding target markets and the possibility of a new product all together. The household penetration of the Brita pitcher is slowing so a new action plan must be made to handle the changing circumstances. I propose two tactical market definitions that will lead Brita Products Company into future.

The first will be a newly focused campaign using the current Brita pitcher targeted towards young individuals who care about their water and the taste of it. This will be a youthful target market that is too price-sensitive for bottled water and other store bought beverage choices. The age group will range between 18 and 34.

The second tactical market definition will introduce Brita Faucet Filters. This product will fulfill the need of the health conscious consumer. These consumers are willing to pay more for the safety of what they’re ingesting and what they’re giving to the people they care about. The target market will be 25 and 44 and will include families. We build upon the respected Brita name to gain preliminary exposure and credibility.

The strategic market Brita should focus on consists of the entire population. Everyone must drink water. Their current goal is to ‘put a pitcher on every kitchen counter top’ and that still applies. Every household is potential buyer of a Brita product and as of 1999 only one in seven actually was. See Exhibit 1 for a break down of the market definitions.

The distinction in this market arena is the understanding what your company is doing now, where it is headed in the future, and who will be there to compete with. When you set a tactical marketing definition you are outlining a smaller portion of your strategic marketing position allowing for a focused approach that will not overwhelm your marketing scheme. By slowly setting tactical marketing definitions you are setting up a comprehensive plan of attack for your entire market arena.

If Brita were to decide to focus on the entire water drinking population all at once then their company would collapse under the enormous budget. They would have to compete not only against their substitutes-in-kind competitors such as PUR, Rubbermaid and Teledyne, but also their substitutes-in-use competitors such as bottled water and even plain tap water. Also, by attempting to attract everyone at once then you lose market share to companies who focus on one particular group. The old adage of ‘a jack of all trades is a master of nothing’ applies in this scenario.

Exhibit 1

Tactical Definition Potential Tactical Definition

for Brita Pitchers for Brita Faucet Filters

Aesthetics Concerned Quality Concerned

Consumers Consumers

A taste of Nature

The better way to filter

Brita PUR Brita PUR

Rubbermaid Teledyne

Sunbeam

Strategic Definition

for Brita filtered

water products

All households

(103 million in 1999)

Clean water for everyone

Brita Bottled Water

Tap water

Soft-Drinks

Assume Brita asked you to guide them in the conduct of a competitive analysis. Write a brief outline for them that a) discusses why it is worthwhile to invest in developing a competitive information system, b) recommends and justifies the type of customer, competitor, and company data that should be collected, and c) describes how this data would likely be used in developing competitive strategy.

There are five steps that are quintessential for a competitive analysis:

Knowing your competitors

Identifying their strategies

Assessing their strengths and weaknesses

Estimating their reactions to your efforts

Choosing which competitors to challenge and avoid

In a competitive analysis one must compile a good variety of information not only about your competitors but also about your consumers. A company needs to know which needs they are pursuing to meet for their consumers and which other company is attempting to meet those same needs. A company needs to be aware of the potential competitors coming into the market. This would allow for a lead time to counteract any unique offerings or benefits of your competitor’s product. In addition, a close eye on competitors can help in the development of new products or accessories for your current product. This is another way for Brita to gain advantage in the technology race for water filtering products.

Investing in a competitive information system will not only provide the above, but also put your company in an action state rather than constantly on the defense of new competing products.

The type of customer that Brita should focus on in their competitive analysis is the customer that is not currently using a Brita product. More specifically is the customer that is using their current competitor’s product. By gauging their perceptions of the competitors product versus your product then you can begin to understand their needs and better ways to meet them.

The competitors included in the analysis should not only include your immediate obvious competitors, but anyone who may be happening into your industry or market. Brita should be aware of the bottled water companies as well as Brita GmbH who has the technology to take American products abroad with the Brita name.

The company data collected should include any patents granted and/or trade shows where the competition is doing an exhibition. Any information regarding new product launches and expenditures on research and development would be of interest. All of this would allow you to see the dynamics of the market and gain insight into competitor’s strategy.

If Brita gathers all of this information and uses it accordingly they will be able to have an action strategy rather that a reaction strategy. They will be able to build strategies around the anticipated moves of their competitors. They can gain the first movers advantage in the marketplace. This will be key to retaining market share and avoiding having to lower costs because of unanticipated competition undercutting the Brita position.

Develop a behavioral model or description for how consumers interact with Brita Water Filter Pitchers. Be explicit about key consumer behaviors, motivations, and likely problems consumers’ experience. You analysis should begin with behaviors that occur once a product is brought home and continue through disposal.

Based on your analysis of these behaviors, develop and justify several new product ideas and marketing tactics that would help Brita increase sales. Your ideas can be based on your reasoning and do not need to be supported with actual consumer research or data.

After the initial purchase of the Brita Water Filter Pitcher the consumer will begin to consume the product or in Brita’s case, use the pitcher. The first behavior is the opening of the box and examining this new product. After the examining process it will probably go straight into the dishwasher of sink to be washed before the first use. After the washing the pitcher will finally get a chance to prove its worth. Finally a first trial run of filling the pitcher will take place leading to continued use because the first few times of use will be with excitement about the new product and the better tasting water. The customer will then begin to communicate about the product to friends and family passing on the information they have gathered from their experiences about the pitcher. As 80% of users report using their Brita Water Filter Pitcher a year after purchase, I conclude that the disposal of the product will be after the plastic pitcher begins to show wear. The consumer will then toss it out to purchase a shining new pitcher.

The overall behaviors lead to a positive word of mouth marketing impact for the Brita Water Filter Pitcher. The motivation to use the product comes from excitement about the prospect of this relatively easy product to use that produces recognizable benefits – better tasting water. There could be some negative feedback that Brita needs to be aware of.

Once the Brita Water Filter Pitcher is brought home there are several problems customers could face. The first that comes to mind is refrigerator space. A typical family of four, in my experience, usually takes up the entire space with food, milk and juice boxes. This could lead to people leaving it out on the counter where the water would quickly become room temperature and loose the crisp, fresh taste. Another problem is the timing for a refill. It takes approximately five minutes for the water to move through the filtering process. If you have company over or you are having a meal with your family then you will probably go through more than a pitcher of water thus creating the an awkward moment when someone can’t be refilled when there is a need or be filled in the first place.

I think a new product variant for no shelf space in the refrigerator could be an insulated pitcher that kept the freshly filtered water at a colder temperature. This would have a double benefit of appealing to potential customers who are on the go and fear that they are not home enough to benefit from a Brita Water Filter Pitcher. They could market this as the busy family’s alternative to expensive bottles of water or the plain tap water.

Another product could be the faster pitcher refill design. They are handling this issue in essence with the faucet filter they are thinking of launching. Alas, any form of a faster form for the filtered water would be greatly benefit the customers who just don’t have the time nor the patience to wait for the five minutes before another pitcher of water is ready to be consumed.

How would you use the Brita name in branding the new faucet filter system? Why? Your answer should carefully consider the viability of the different brand architecture naming options discussed in class. For your chosen name, justify why this option is preferred. Be sure to consider big picture issues such as Brita’s current brand architecture and equity, competitors, and the customers you believe should be targeted.

I recommend naming the faucet filer system the Brita Water Faucet Filter. It is in line with the name of the Brita Water Filter Pitcher and would not confuse consumers as to what they were buying. The retail industry reported in the case that there was a distinct preference for using a well known name like Brita. Consumers will be able to relate the Brita name with another water filtering device and have confidence in their purchase decision.

The brand name of Brita is an arbitrary name that has no significance to a consumer if they did not know about the products. The specific names given to the Brita products are descriptive of what they are for. This allows customers to fully understand what they are buying and lessen the risk of the brand name taking over the entire industry such as the problem that the Band Aid brand faced.

The brand Brita uses a branded house architecture that builds upon the Brita name. By continuing to use the Brita brand you are leveraging their equity in your favor. They currently have an 80% market share that will lend itself to the credibility of the new product. Pointing out the key differences in the two products will help ease cannibalization. The faucet system is ideal for people who can not wait five minutes every time they use a pitcher’s worth of water. It removes more contaminates so it is the ideal choice of for the health concerned customers.

Competitors will be quick to join in on the faucet mount endeavor, but Brita should be ready as they have already gone through that with the pitcher product. By staying up with technology and not waging in the technology war with the other companies Brita has maintained its best taste position and that’s what the brand means to people. Competitors can’t take that away.

The Vantis study suggested that the relevant price range for the faucet mounted filter was between $39.99 and $34.99 and that both prices provided strong value.

Should this be the “relevant range” for Brita’s pricing decisions? Why?

How could Brita become more market-based in their pricing? Be very specific about how you would approach the price decision for the faucet mounted filter if you were managing this product.

An important factor to consider when determining a pricing strategy is product positioning. Are you positioning your product as a discount product, a luxury product, or somewhere in the middle?

Another factor is profitability. In most cases, the lower a product is priced, the greater the quantity of it will sell. However, if profit margins are reduced to increase quantity demanded, the additional quantity demanded by the lower price must make up for the lower profit margins.

The most important factor to consider is to ensure that the price charged covers at the very least the direct cost of producing the product. Then it is important to look at ensuring that the expected quantity sold at that price will also cover the other associated (fixed) costs in producing the product.

While it is easy to get caught up in looking at short term profitability, it is important to also consider the long term impact of a price. It can be difficult to raise the price of a product once consumers expect a certain price; it can be equally damaging to the product’s reputation if price needs to be dropped too quickly as consumers can perceive a defect in the product.

Another important consideration is that of Prospect Theory. As per Gerald E Smith and Thomas T Nagle in the California Management Review ” The Prospect theory argues that people evaluate purchases in terms of gains or losses, relative to a reference point. Managers can therefore, influence purchase decisions by how they present or frame, price and benefits relative to a reference point”. This emphasizes the point that perhaps a wise pricing approach is to charge on the higher end of the price range, and offer a discount leading consumers to feel like they have “won” rather than they have lost.

However, with all that being said, we are not able to determine that the $34.99-39.99 is the relevant price range, as we are not sure how these numbers were determined. This range could either be too narrow, too low, or too high. We are not sure, as in the study consumers were not ask to pin point a price, at which they would purchase the product, or a price at which they would switch to the lower cost alternative, or purchase from the competitor. Should Brita conduct another similar study, they should not give consumers a range as it may skew the results, but rather as respondents to provide a price range.

We can assume, however, that Brita did do their research and are giving us only the relevant information in the case and that the ranges given are in fact in the relevant price range.