1. The Clorox Company Case
Harvard Business School Case
April 16, 2015
Define the Problem:
How will Clorox create sustainable corporate social responsibility while expanding its market share
through its brands?
1. Expand further into Brita products while addressing corporate social responsibility
2. Wait to expand Brita until corporate responsibility is addressed
3. Allocate majority of our resources towards the more established and mature brands such as
Clorox Bleach, Pine-Sol, and Formula 409 to create funds to spend on corporate social
1. Will brand image diminish for each product as we try to promote corporate social responsibility
for the entire company?
2. If growth was important, is sustainability an enduring mainstream trend that deserved solid
3. Should Clorox lean into its existing sustainable brands or look for other opportunities that are
4. Should Clorox look to emerging markets or its core businesses for growth?
The newest megatrends in the market are health and wellness, and environmental sustainability.
These trends, however, are not always about saving the world for the consumers. Instead their views of
health and wellness and environmental sustainability are often about her and her world, rather than the
world. The consumer is concerned about making her would better, and in doing so she was doing a good
thing for the world.
Clorox joined in on the trend of sustainability early on. The products they acquired (Burt’s Bees
and Brita) were some of the first in their product areas that supported the concept of health and wellness
and environmental sustainability. Clorox then invested heavily and launched their first new product in 20
years their new natural line of cleaning products – Green Works. These new sustainable products
accounted for much of the company’s sales growth over the past severalyears. However,the growth rates
of Burt’s Bees and Green Works, especially, have slowed considerably. According to the Cambridge
Group’s research more and more consumers are changing their habits and buying different products
around sustainability. 15% of the population in 2007 showed very strong demand for these products and
another 33% had strong demand. From 2006 to 2007 consumers who claimed to regularly buy green
products jumped over 20%.
Consumers are also now becoming concerned not with just how natural the products are that they
are using, but also the parent company’s social responsibility to the environment. In early 2008, Clorox
decided to make corporate social responsibility a major priority. Through efforts from the Eco office as
well as the individual business units, Clorox achieved Leed Platinum Certification in Energy and
Environmental Design-Existing Building/Operating and Maintenance, being one of only 38 buildings in
the U.S. to achieve this recognition. Clorox overall had made good progress on its eco goals by 2011.
Being a corporation with the name Clorox, not all consumers realized how environmentally friendly the
company was. Going forward, Clorox must overcome this information gap and decide how to show
2. Bolf, Borgerson, O’Brien, Sather, Whetter 1
consumers how overall as a company they are economically responsible. Also they must decide how
much more to invest in their sustainable products versus their larger brands.
Years coming up to 2011 were promising, with net earnings reaching over $600 million in 2010.
The projected sales for 2011 were flat and not as progressive as years past. Clorox hosts Burts Bees,
Green Works, and Brita under their umbrella of sales, which only generated 10% of Clorox’s sales. Burts
Bees and Green Works were beginning to make less sales, which could have been due to loss of interest
in the trend or less disposable income. Although the sales are decreasing, Burt’s Bee’s skyrocketed sales
to $126 million over 10 years, proving a strong customer base and interest in the brand. Brita’s growth
was consistent, even through the recession, in 2010, Brita had $250 million in revenues. Clorox still holds
a remarkable amount of assets- reaching $4,555 million- meaning the amount Clorox could pump into
marketing and expanding is feasible and necessary to stay afloat in the health-conscious market.. In order
to sustain corporate social responsibility, strong PR and marketing will be the most influential instruments
for consumers to reconsider Clorox as a necessary brand.
Burt’s Bees Products
Burt’s Bees,an acquisition of Clorox, was founded from their creation of a lip balm made from
beeswax and almond oil. Later the brand introduced a line of toothpaste, shampoo, and a product line for
babies called “Baby Bee.” The product was sold at a number of food and health stores including Target,
CVS, and Walgreens. Clorox saw great potential in the Burt’s Bees brand, not only in the U.S.,but also
on an international level. Burt’s Bees was built on the ideology of “The Greater Good,” and believed that
success followed companies that were socially responsible. The brand was positioned around
sustainability and health and wellness. To determine their target market, Burt’s Bees divided consumers
into five different segments based on 1) their involvement and focus on the environment and 2) their
health and wellness concerns. Their two primary targets consisted of “committed naturalists” and “health
and beauty sleuths.” The committed naturalists were more concerned with environmental impacts
whereas the health and beauty sleuths were more focused on wellness. Although the committed naturalists
and the health and beauty sleuths did not need a lot of convincing to purchase Burt’s Bees,together the
groups comprised of only 8-10% of American women. In order to maximize capitalization, Burt’s Bees
would have to reach two more consumer groups, the “beauty enthusiasts” and “demanding
conventionalists.” These groups are open to natural products, but will not go out of their way to conduct
product research,therefore more convincing might be required.
Brita currently makes up about 4% of Clorox’s sales. The water filtration systems industry has
seen huge booms targeteting fast growing market segments that prefer clean water that cuts down on
waste and adds to sustainability. Brita jumped on this train and positioned themselves as a household
filtration system that cuts costs and waste of water bottles while still giving the consumer clean, good
tasting water. Brita is successfulbecause it has a multidimensional value proposition. It is good for the
consumer’s health, it saves the consumer money, and it cuts waste so it is good for the planet. This has
proved to be very successfulfor Brita, even as a Clorox entity. Brita is the market leader in “pour
through” filtration systems which is only 12% of an industry that is still booming. This is a strength for
Brita and Clorox. To be most successful,Clorox will have to decide if Brita and the water filtration
industry is worth investing heavily in or if it is just a current trend.
There is also a lot of opportunity with a brand such as Brita. Since the brand is well established in
water filtration systems, Brita has a leg up from the competition as new markets for filtration systems
flourish. Brita also has the financial power being tied to Clorox. If Clorox decides to invest heavier into
Brita, it will need to establish what means of spending are best for turning scarce resources into the best
ROI. Many investments in the brand look favorable, but with that comes opportunity costs. Clorox needs
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to analyze the trends and decide if they should allocate their resources in R&D towards product
aesthetics,point-of-entry marketing, faster filtration systems, or “on the go” filtration systems.
Green Works Products
Green Works is the second brand to add to the natural trendy line in Clorox, and the first to
include the Clorox name. Trend research projected that consumers wanted an affordable cleaning product
not chalked with chemicals. Since Clorox had the research and development for cleaning products already
perfected,it was a feasible investment to create such a trendy product. This gave Green Works a strong
position in the “green cleaning” market because almost half of consumers desire a more natural cleaning
product and were willing to pay a 25% premium for them. Within the first year,Green Works held 42%
of the natural cleaning category, which grew 100% during the launch of Green Works.
Although the sales for Green Works were $100 million in the first year, the Clorox brand spent a
hefty amount of advertising and marketing; after they began pulling money out of GW budget, the sales
began dipping. Clorox decided there needed to be a change. GW brand was repositioned as a more
“explicitly green” product, pinpointing the mothers that wanted a safer cleaner. Clorox also redistributed
the product to less Wal-Mart stores and where sales may have been a one-and-done trial purchase. Green
Works is back to growing, as a $50 million brand, and becoming a certified plant-based ingredient
Clorox brand currently markets their sustainability products through print, digital, and some TV
advertisements. They use taglines and facts that support why their products are sustainable and are
helping the environment, and how natural they are. For example, on the Brita product advertisements they
focused on showing consumers just how many water bottles they can save from the environment with just
one filter product. For Burt’s Bees product line they show how natural the ingredients are, same with
Green Works. Recently, Clorox has cut their marketing budgets on their sustainable products
significantly, since they only make up about 10% of the total revenue. At first Clorox used a lot of trade
discounts with their retailers, but realized after the recession this was only hurting their total revenue.
With Green Works, Clorox used a high-low pricing strategy for a while to try and lure in new customers,
pricing them at $2.99 then placing it on sale for $1.99. This strategy ended up raising more profits for
both the retailer and Clorox. After cutting back on the marketing budgets for these brands, Clorox started
defensively spending, putting more money into Clorox’s larger revenue brands marketing. Going forward
Clorox will need to decide which brands they would like to allocate this money to.
Burt’s Bees products were built around the idea of being socially responsible and the “Greater
Good” which is why the products were originally only found in organic and health stores. Burt’s Bees
decided to expand past health stores and go into major retailers such as Walgreens and Target. Later,
Burt’s Bees also gained distribution at Wal-Mart. Only a few short years later in 2007, Burt’s Bees was in
15,000 retail stores. To bring attention to the products, they are often set up in displays which Burt’s Bees
called “hives”. A “hive” is a small area that features all of the products that Burt’s Bees offers in one
convenient location. Burt’s Bees started with a revenue of $23 million in 2000 and 7 years later in 2007
had a revenue of $164 million due to the vast expansion and popularity of the products.
Burt’s Bees began expanding overseas in 2009 entering new markets in Japan, Korea,Thailand
then France,Italy, Germany, and Scandinavia and lastly Chile, Colombia, Panama and Puerto Rico in
2010. Burt’s Bees also has very loyal Facebook followers. The company uses Facebook as a great way to
engage users with new products and distribute samples prior to a product launch.
Mass merchandisers such as Target and Walmart are still Green Works largest customers.
Typically, Target shoppers have the mindset that they can afford products they think are good for their
sensitive skin and allergies. Some Wal-Mart stores that have a full Green Works line but shoppers can’t
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afford to switch to natural products. Clorox agreed that it would be okay to let some of the Green Works
products be removed from the shelf and replaced with only the popular selling products. Clorox
considered potentially expanding into adjacent product lines to fill category pipelines.
Brita offers a variety of different systems including a whole house filtration, “on the go” water
filtration, and faucet mount filtration. For Brita, the company has been bouncing around the idea of
expanding the products. The products are one of a kind and Brita is rate the top “pour-through” filtration
system. With expansion, they must consider manufacturing capabilities as well as distribution channels.
The Clorox name has been mainly associated with one thing, cleanliness. When you think of
Clorox, you can’t help but think of the fresh smell of a bleached room. This used to be a great thing for
Clorox’s brand, but in the past few years,Clorox has decided to revamp its brand image to stay with the
trends of sustainability. Highly health conscious consumers are passionate, stubborn, and smart. They are
breaking down products by each ingredient on the back label. Consumers are now wanting more natural
ingredients and less harsh chemicals that could damage the environment. For Clorox, who are trying to
revamp their brand image, this is showing to be difficult and possibly ineffective. Clorox’s income is
made up of about 90% non-green products. Consumers perceive Clorox as a non-green company that has
extensive R&D in chemical cleaning and home products.
This is where the revamping kicks in. Taking notice to consumer trends, Clorox has adopted three
brands that help transition their brand image into a greener, healthier, and more sustainable company.
With the acquisition and influence of Brita, Burt’s Bees,and Green Works, Clorox has just started
transitioning towards these trends. The problem now is deciding whether the trend of sustainability is here
to stay, or just a fad. Should Clorox invest this much money into revamping a brand that has been
successfulunder its old brand image for 100 years?
Clorox should expand further into the Brita brand and its products while addressing corporate
social responsibility. Clorox should expand into Brita to follow the trend of “sustainability”. Brita is a
brand that focuses on products that help the world “go green” by reducing waste and focusing on cleaner
water for its consumers. The ideal target market for Britta products are consumers that are around the ages
of 20-65 for both men and women. Younger target markets can be reached by promoting easy to-go
systems and pour-through systems that are eco-friendly. Brita will be positioned as a socially responsible
company that is focused on preserving the world and “going green”. Since some of the benefits of Brita
are better tasting water,cost savings, and positive environmental impacts, it will be priced at a premium.
Brita should continue to use positive and informative messages to inform its consumers about the
environment. Brita’s PR partnership with Nalgene has proved successfuland should be continued to
promote Clorox’s commitment to improving the environment. The main focus for Brita should be
expanding its pour-through filter line and then continue its to-go products. The to-go products and pour-
through systems should be sold in stores such as Target, Walmart and department stores while the
commercial systems should be sold through Brita and home improvement stores.
Clorox has a large target market that it must reach through the brands it has acquired. Clorox
jumping on the “sustainability” bandwagon acquired Brita, a brand focused on providing cost effective
and responsible clean water. This brand is used by many households in a pour through filtration pitcher.
Brita’s target market is very broad, as more consumers are concerned with “going green.” Ages 20-65
men and women are Brita’s target market, however, as this trend grows, younger consumers will be
targeted through new products, such as filtered water bottles. Because college students are cost conscious,
the best way to reach this market would be through emphasizing the cost savings of filtered water bottles
versus disposable water bottles.
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Clorox, as brand known for selling bleach, is targeting the house mom’s who need to complete
heavy-duty cleaning tasks. Mothers are not the only market that can benefit from bleach. Expanding the
target market into places that express need for extreme cleanliness, such as, restaurants,car shops, and
cleaning companies would increase market share. Educating the market on how using bleach can create a
sustainable environment will only make Clorox’s brand image more positive. By having a positive image,
Clorox’s target market will expand greatly with such moves towards sustainability.
Clorox will take an offensive positioning strategy when it comes to the megatrend known as
sustainability. With our Brita products specifically, we will continue to position them as the sustainable
alternative to bottled water. As society becomes more and more concerned with the environment, we will
continue to advertise how many bottles just one of our products can prevent from being thrown in a land
mine. With increased advertising along with more public relations we hope society will see Clorox’s
efforts to be one of the best regarding corporate social responsibility. While working on corporate social
responsibility, we will continue research and development into new product categories to grow the Brita
filtration business and remain ahead of the curve when it comes to sustainability.
Because of the benefits that Brita,which includes: better tasting water,cost savings, and positive
environmental impacts, we believe that this product should sell at a premium. If Clorox can effectively
communicate the benefits of Brita to consumers, they will see the value in this technology. While the
costs of purchasing a Brita filtration system are initially more than purchasing a case of bottled water,the
long-term cost savings will make up for the initial cost. Consumers will also receive higher quality water
as well. Using this product will cost only $0.19 daily per user versus $1,748 annually of purchasing
bottled water daily. Even after charging a premium for this product, it will essentially pay for itself in cost
Brita’s filtration system promotions have been very successful. We would like to continue
educating consumers on how much one of our products can save the environment, save energy costs, and
the great taste without the waste. We would like to continue our PR partnership with Nalgene and their
reusable beverage containers, as well as other relevant manufacturers once our product category grows.
Overall we would like to allocate 60% of Clorox’s total promotion budget towards it’s sustainable
products and PR relating to corporate social responsibility, leaving the other 40% for their more mature
brands. Through allocating more of our resources towards our Brita products and other sustainable
products, we should see an increase in sales following this advertising budget increase.
Brita has the opportunity to expand but with expansion comes new distribution channels and
manufacturing processes. We would like to see the pour-through and on the go water filtration systems be
sold in stores such as Walmart, Target, and a variety of department stores. We would like to include
Brita’s on the go and pour through systems in department stores because they carry a variety of home
goods products. Currently, Clorox already has ties with a few large mass merchandising stores, so
bringing in this product would just need another delivery system from the Brita manufacturing plant to
the stores. Another option would be to bring the pour-through and to-go systems into health conscious
and eco-conscious stores such as Trader Joes or Whole Foods. The pour-through filtration systems have
the potential to increase sales for Brita due to the sustainability of clean water. For the commercial
filtration systems, most will be sold directly through the Brita company. The company will work with
other businesses such as schools, government departments and workplaces to have the systems installed
by Brita professionals. We would also like to see some smaller commercial systems sold in home
improvement stores such as Lowes, Home Depot or Menards. Including the systems and repair parts in
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these stores will allow for small business and homeowners to install a Brita filtration system without
working directly with the company.
From a manufacturing standpoint, the Brita factory would need to expand its staff as well as its
space and production lines if they are going to be making more products. The manufacturing plant for
Brita already exists so there is no need to build anything new or build a second plant, just expand on what
they have in order to keep up with the new production needs.
We want to keep Brita’s main interests in pour-through water filtration systems. The traditional
Brita products should see visiting in product variety, offering more appealing alternatives for the point-of-
entry market. This means smaller pitchers that are more suitable for college students’ fridges. These
products also need to be more cost effective since the college demographic is less likely to pay a premium
if there are cheaper substitute products. A product that can effectively appeal to the self-replenishing
college psychographics will show continuous, or at least sustainable, growth for the brand.
Another product segment worth investing is “on the go” products. With the health craze and
sustainability trends taking over, consumers are carrying around more reusable water bottles than ever.
Already having a foot in the door by teaming up with Nalgene, Brita is set up conveniently to take
advantage of this opportunity. We do not predict “on the go” products ever being Brita’s main income
stream,however we do believe a compact and fast filtering product shows a worthwhile ROI. On the go
Brita products can also play as a transition for consumers to start using Brita’s home line of pour through
The last product segment Brita should focus on is commercial systems. As schools, government
departments and businesses strive to be more sustainable, there is a blue ocean for products that can
deliver sustainability. This opportunity is worth the attention. Brita should up its ante and establish itself
in commercial systems with a water fountain and tap water extension that filters water and promotes the
use of tap water over bottled water. A big part of the success in this product segment will be in the
promotion because it will be key to educate consumers,including businesses, on the advantages of using
Brita ad-ons on water fountains and faucets.
Evaluate the Decision Process
We thought this case was hard because it had a lot of information to take in. There were so many
Clorox products included on the case we didn’t know where to start. The case touched on so many
products that we debated on what we wanted to focus on. We agreed that it would be impossible to take
on all the products Clorox offers. At first we decided to expand in all three of Clorox’s sustainable
product categories including: Green Works, Burt’s Bees,and Brita. After further discussion we decided to
go into Brita because its opportunity for growth and that its products follow the sustainability trend.
Overall, this case was difficult and we are nervous to see how the class discussion turns out because we
think every groups options will be different.