Assignment: Economics
Samantha Fox and Jerry Brown founded a company for disinfectants and launched a popular brand of disinfectant called Clean X. Four years later it was used to combat the cholera epidemic in the state. Clean X had such an optimal composition that it remained unsurpassed for more than 20 years. It was eventually licensed in UK, France, Australia, Canada, and USA.
Samantha and Jerry sold their company to Reckitt Benckiser Corporation (RB) in 1999. RB is based in the UK, and does business in the United States and Canada.
An important brand for RB is the Clean X product line. Most Canadian consumers are familiar with Clean X disinfectant spray, but RB wants to increase sales of not only the spray product, but also the entire line of Clean X products including disinfectant wipes, tile and tub cleaner, floor cleaner and toilet bowl cleaner. It is attempting to develop a strategy in Canada in order to market more of the entire line of Clean X products.
Clean X, primarily the disinfectant spray, has a long brand heritage in Canada. The disinfectant benefit of the product is very distinctive. In the early 1990s, Clean X spray had 45 percent household penetration in Canada, but the other Clean X products -had a much lower penetration rate. RB wanted to bring these disparate products together. In doing so, RB could achieve economies of scale in terms of marketing expenses. The company thought that by combining the marketing budgets for the five separate products, it could achieve a greater impact on the market. It was believed that one way to line the products together was through the unifying benefit of disinfection.
RB wanted to achieve a greater market penetration with all four products. However, the overall household cleaning product category was not growing and in some areas was actually declining. Some industry people felt that one reason for this was that many households were cleaning less. They also felt that the recession was impacting sales in the category. Therefore, new growth for Clean X would have to come at the expense of existing competitors such as Mr. Clean, Fantastik, etc. These products also had stronger market shares.
While all competitors were using advertising and couponing, the intensity of the battle was at the shelf level. Competitive firms were literally battling it out for shelf space in order to capture market share. This meant that trade sales promotions were being used extensively, often in the form of price discounting. RB felt it shouldn't get more involved in trade discounts because of the squeeze it put on margins. It did believe, however, that limited use of consumer coupons should be part of its overall consumer-focused marketing communications activity.
RB believed that the Clean X brand probably had a rather "tired" personality. The company wanted to give it a more contemporary, interesting, and even provocative image. The problem was that to most consumers household cleaning products were really an uninteresting category. As such, building consumer awareness of the entire line would not be possible without increasing the level of consumer involvement. The question was how to create interest or involvement with the product line. A way had to be found to demonstrate the line and to have consumers pay attention.
RB knew that timing would be important. For example, interest in the category would be highest just before or during traditional spring cleaning time in Canada, which ran between late February and early May. Interest would also be high again in late fall or early winter.
RB had to determine an appropriate creative message for the consumers, select an appropriate communications medium, and consider other ways to build sales and market share for the Clean X brand.
Task
A. Identify the issue (main problem) being faced by the company.
B. Discuss a solution you can provide to resolve their problem.
C. Discuss the applicability of Market Segmentation, Target Market Selection and Positioning strategy as can be applied to your solution in this case to resolve the issue.
D. Apply marketing mix to the solution you are proposing.