Frank Tataseo Group Vice President, Functional Operations “Marketing Mature Brands: Creating the...
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Transcript of Frank Tataseo Group Vice President, Functional Operations “Marketing Mature Brands: Creating the...
Frank TataseoGroup Vice President,
Functional Operations
“Marketing Mature Brands: Creating the Platform for Growth"
Total FY04 Sales of $4.3 BillionHome Care (19%)
Auto Care (6%)
Charcoal (13%)
Dressings & Sauces (8%)
Cat Litter (6%)
Brita / Canada (7%)
Glad (15%)
Laundry Care (13%)
International (13%)
Clorox begins and ends with the Consumer We’re all about big share brands in mid-sized
categories
Assumes dividends reinvested
448%
206%
233%
Jun95 Jun96 Jun97 Jun98 Jun99 Jun00 Jun01 Jun02 Jun03 Jun04
0
500%
300%
100%
400%
200%
CLOROXS&P 500
PEERS
CLOROXS&P 500
PEERS
Jun94
Total Shareholder Return
12 Final Case Studies
SELECTION CRITERIA
289 Categories
58 Categories
18 BrandsContacted
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
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%
1.1%2.3%1.3%1.9%
5.1% 4.6%5.5%6.3%
7.1%7.2%
Yogurt CrackersLaundry
DetergentMen’sRazors
Toothpaste
Median FDM
Category 1
3.0%
Soup
CookiesTea
BagsLoose
Contraceptives
Median FDM
Category 1
3.0%
Charcoal Shampoo
DilutableCleaner
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
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
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
Senior management was the thought leader and set strategy
Brand group responsible for operationalizing
#2 - Management Led
Significant consumer-perceived product superiority vs. consumer frame of reference as the foundation of the brand
Examples
– Celestial Seasoning Target 2:1 preference; 50% of line achieved
– Yoplait Company, targets 60/40; Yoplait 70/30%
#3 - Product Superiority
Common elements:
– “Brand truth” it is the best
– High hurdles articulated, demanded, and measured
#3 - Product Superiority
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
Clear, consistent positioning
Suave: value position (“why pay more?”)
#5 - Consistent Consumer Positioning
Brand core is platform for broadening
Suave
– Suave: From why pay more to “don’t you look smart”
#6 - Disciplined Broadening
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
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 18th birthday
Growing media fragmentation may challenge this principle
#8 – Mass Marketed
Compelling story to retailers on how they’ll make more money
Typically a category dollar growth story
#9 – Retailer Win
Growth Idea
Brand Promise
Customer Promise
Product Holy Grail
Value Proposition
Summary of Key Strategic Choice Areas
Kingsford Charcoal
Drive Charcoal relevance through superior taste
Tastes Better Than Gas
Premium Product, Premium Price
Drive category dollars through increasedTraffic and market basket
Easy to Light and Longer Burn
GrowthIdea
Brand Promise
Customer Promise
ProductHolyGrail
ValueProposition
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5,000
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45,000
72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
Vo
lum
e (M
sc)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Sp
end
ing
($M)
C2 and CLB Ad C2 and CLB RR CLB/C2 Ships - Msc
Spending not available 1972-1984
Splashless bottle
CLB scents
LC2 launch
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
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
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
GrowthIdea
Brand Promise
Customer Promise
ProductHolyGrail
ValueProposition
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
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
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