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Frank Tataseo Group Vice President, Functional Operations “Marketing Mature Brands: Creating the Platform for Growth"

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Presentation on theme: "Frank Tataseo Group Vice President, Functional Operations “Marketing Mature Brands: Creating the Platform for Growth""— Presentation transcript:

1 Frank Tataseo Group Vice President, Functional Operations “Marketing Mature Brands: Creating the Platform for Growth"

2 Total FY04 Sales of $4.3 Billion Home Care (19%) Auto Care (6%) Charcoal (13%) Dressings & Sauces (8%) Cat Litter (6%) Brita / Canada (7%) Glad (15%) Laundry Care (13%) International (13%)

3 Clorox begins and ends with the Consumer  We’re all about big share brands in mid-sized categories Assumes dividends reinvested 448% 206% 233% Jun95Jun96Jun97Jun98Jun99Jun00Jun01Jun02Jun03Jun % 300% 100% 400% 200% CLOROX S&P 500 PEERS CLOROX S&P 500 PEERS Jun94 Total Shareholder Return

4 How do you GROW a large, mature base business in an essentially flat category? A Simple Question

5 12 Final Case Studies SELECTION CRITERIA 289 Categories 58 Categories 18 Brands Contacted 38 Potential Vendor/Brand Stories 25 High-Level Brand Case Studies Mature categories Highflyer brands Balanced story mix Final case studies (12) Case Driven Approach

6 Highflyer brands have grown 10% per year on average 1. Represents the median category growth CAGR based on 1997–2001 IRI FDKT data for 289 categories 6.8% 2.7% 3.7% 1.9% 3.0% 1.9% 2.9% 19.6% 9.8% 10.1% 11.0% 10.9% 16.8% 17.3% YogurtCrackers Laundry Detergent Men’s Razors Toothpaste Median FDM Category 1 3.0% Soup Cookies Tea Bags Loose Contraceptives Median FDM Category 1 3.0% Charcoal Shampoo Dilutable Cleaner

7  Nine drivers  Some new learning; however, most won’t appear unexpected  The mindset is different, not specific functional skills –Emphasis placed on growth drivers –Standard they hold themselves to –Constancy of purpose Key Takeaways

8  An ambitious business strategy that clearly identified: –Where the next level of growth was going to come from –What would drive it #1 - Single-Minded Growth Idea  Examples: –Trojan - Fear to fun –Progresso - Compare against condensed soup

9  Common elements:  Strategies are bold at the time, but simple and obvious in retrospect  Proactive not reactive  Could be articulated in one-line  Everyone understands what it means to them  Explicit about both what to do and what not to do –Momentum achieved by sticking with a strategy more important than having the perfect strategy #1 - Single-Minded Growth Idea

10  Senior management was the thought leader and set strategy  Brand group responsible for operationalizing #2 - Management Led

11  Significant consumer-perceived product superiority vs. consumer frame of reference as the foundation of the brand  Examples –Celestial SeasoningTarget 2:1 preference; 50% of line achieved –YoplaitCompany, targets 60/40; Yoplait 70/30% #3 - Product Superiority

12  Common elements: –“Brand truth” it is the best –High hurdles articulated, demanded, and measured #3 - Product Superiority

13  Exceptionally strong value proposition based on the combination of –Quality –Price  Typically “premium/premium”  Sometime “parity/half price”  Never “parity/parity” #4 - Strong Value Proposition

14  Clear, consistent positioning  Suave: value position (“why pay more?”) #5 - Consistent Consumer Positioning

15  Brand core is platform for broadening  Suave –Suave: From why pay more to “don’t you look smart” #6 - Disciplined Broadening

16  Typically 3-5 year R&D horizons, regardless of category  Guided by a “holy grail”  Rarely distracted given belief in their strategy #7 - Long-Term Innovation Strategy

17  Majority of effort and dollars focused against mass vehicles  Supplemented by alternative media that was clear strategic fit between target market behavior and category benefit –Condom sampling at rock concerts –New razor at 18 th birthday  Growing media fragmentation may challenge this principle #8 – Mass Marketed

18  Compelling story to retailers on how they’ll make more money  Typically a category dollar growth story #9 – Retailer Win

19 Growth Idea Brand Promise Customer Promise Product Holy Grail Value Proposition Summary of Key Strategic Choice Areas

20 Kingsford Charcoal Drive Charcoal relevance through superior taste Tastes Better Than Gas Premium Product, Premium Price Drive category dollars through increased Traffic and market basket Easy to Light and Longer Burn Growth Idea Brand Promise Customer Promise Product Holy Grail Value Proposition

21  From 1980 to 1990, Clorox bleach (CLB and C2) grew +5% CAGR  Since 1990 the business has grown <1% annually 21 Clorox Bleach once had Highflyer Performance

22 How did we lose the Magic? Was “High Need, Low Fear” Large need vs. detergent alone Mindset: growth engine Regular innovation and education to new moms Thought expansively about the benefit  A miracle – laundry, cleaning, personal use  Broad frame of reference – vs. detergent alone  Expanded wash load penetration Became “Low Need, High Fear Concern that improved detergent reduced need Mindset: resource generator, don’t mess it up Reduced innovation and education Narrowed the benefit  Focus on laundry only  Narrowed frame of reference to private label bleach  Share stealing

23 Make Clorox Bleach essential by increasing relevance and decreasing fear The purest clean Drive category sales and profit Bleach performance without the barriers Preferred vs. detergent along, premium price Clorox Bleach Growth Idea Brand Promise Customer Promise Product Holy Grail Value Proposition

24  New strategy is basis for all activity: –New advertising including education –New customer plans –New R&D stream –New energy, enthusiasm and purpose  Turnaround beginning: –Consumption from –2% trend to +3% –Share up 1 point to 63% Results

25 Clorox Liquid Bleach

26 Clorox Bleach Pen

27  Delivers “holy grail”of bleach performance by providing controlled whitening  Outstanding results –Captured a 10 share of the soil and stain remover category –Generated 4% category growth –Significant popular press coverage Innovation – Clorox Bleach Pen

28 Summary  Mindset is the critical factor –Growth is management led –Drive to creating clear, ambitious growth idea –Communicate and strive for highest standards –Maintain constancy of purpose, both in the strategy and the execution

29 So my simple question for you… What’s YOUR Growth Idea?


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