Market Analysis on Kelsey-White and Blue

Background and Problem

Blue, the primary brand from Kelsey-White (K-W) from American consumer-packaged goods industry, which had several formulations—liquid, powder, and single-use pods. However, brand was meeting the challenge compared with other main brands as Turbo, Fresh and Store as below from the marketing data in 2018.  

1. From the market share data in 2018, Turbo was leading huge market share as 41%, and Blue shared only 11% as least one;
2. From profitability data in 2018, Turbo was taking the leading position as almost $232 Million, Blue was not the worst case but just sized less than 1/6 of Turbo;
3. From the revenue, Turbo was again leading the peak position over $1.3 Billion, which is basically four times of Blue in the market.

In summary, Blue was the smallest player from market share and revenue side, but it could be improved to next level since the both revenue and profitability were gradually grown in the past years in relatively slow step but not declining, which opens chance for Marketing team to explore where to further grow business with more focus target customer and product, cumulative operation profit is expected to grow to $200 Million in 2022 while market share, revenue and profitability should be grown in the same time inventory should be controlled in proper level, one market data analysis and action plan is managed as below few steps:

Initial Marketing Data Analysis  

1. Selecting target region for Blue

Target region should be selected since U.S customer has various consumer habits from region to region, Western and Southeast region are selected since Blue was most welcomed in 2018.

1. Selecting formulation

Powder as the oldest formulation invented in 1907, which was widely used globally as the oldest, cheapest and dependable detergent solution. Powder has limitation that is mostly only targeted to low income and older generation which is not main stream for detergents product. 1

Liquid as the form developed some years to replace powder which has advantage used commonly and easily as standard solution in U.S families, it is most popular product among low and average income families with middle age buyers, which is main stream to buy detergents for whole families in the market;

Single pod as the newest form developed some years as tiny package without any measurement to size or weight compared with liquid, which is extremely convenient and popular for those high-income families and young generation who are busy with work and life, however it has limitation to focus only part of population as wealthier and younger group who is not main force among population to buy detergents.

From cost perspective, Single pod is most expensive selection since adding 15% of cost while liquid is added as 7%.

In summary, Liquid is chosen since widest population scope, less risky and cost impact while branding effect from middle age families to younger or older generation.

Deep Market Data Analysis and Decision

Based on product as liquid form is selected, one deeper marketing analysis is started with below criteria,

1. Annual income is more than $20,000 but less than $60,000, which is defined as middle income group;
2. Age is between 35 to 55, which is defined as middle age group; 2
3. Middle age families with middle level income, which normally has two and more households in general understanding for population mapping;
4. There is no targeted ethnic group in this case, since there are very diverse group from White, Asian, Hispanic to Black considering there are wide geographic location from Alaska to California. 3

With these groups of the target customer, price, trade and media channel are analyzed with below figures and decision was made based on data,

1. Trade channel matters since the product should be accessible to major shopping location to target, club is taking demand as 3.5 Million units and mass is taking demand as 3.2 Million units while other two gathered as 5.1 Million units, therefore club and mass are invested as 60% of spending;
2. Media channel is decided based media consumed volume, TV and Digital Ads are major one with new technology takes 54% while radio and print take rest of the market, therefore TV and digital Ads are invested as 65% of budget since current data but also new technology trend as digital Ads is used more and more in daily life;4
3. Price is one critical point to win the customer and market since 5 dollars or less is one major point to differentiate the unit demand from less 6 Million Units to more than 13.5 Million Units demand, which is bringing huge difference if Blue is going to beat others from the bottom position to top position if there is no innovation investment as driving force;
4. Production volume is maintained basically as zero in the past, sales is expected 4 Million Units growth which would be like last year with consideration there may have labor or machine constrain in the manufacturing process;
5. Product Features and positioning is defined as odor elimination since this feature is listed in various way as “Lemon” or “Fresh Scent” but all in best detergents list in 2018, while there is nothing related with cold water;5
6. During the plan, more consideration on price and volume then lead the data change through years, with new pricing strategy implemented from 7$ to 5$, then the demand is strongly increased in 2019 since lower price, then price is kept same in 2020 and 2021, but the demand is decreased since price competition from Store to be $4.5, therefore in 2022, the price was decreased to $4.8 to compete price with Store considering the price war will be started if price goes as same as $4.5;

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