Category Project
Conducted by:
Chau Nguyen
Randy Aaron Horton
INTRODUCTION
Household Cleaner(Fall 2010)
• In total GM%, household cleaners get 26.80% in Marsh Super Market, and then 35% to 39% for strong national brands in our store auditing.
• Private label receive a large GM%; from 45% to 55% with copy cat brands, or Premium-lite store brands.
• The retailers are more in control in this category because of increasing GM / profit. Retailers & many small manufacturers continued to make more new products with minimized costs, while suppliers most enhance products’ characteristics & limit cost.
IMPORTANCE OF DEPTH
GROSS MARGIN $
WalGreen-School St.
- $ GM
WalGreen-6th St. -
$ GM
Walmart-Mall Ave. -
$ GM
WalMart-6thST-$ GM
Target-Shiloh - $ GM
Harps-Crossover-
$ GM
Harps-Garland-$
GM
IGA-College-$
GM
Dollar General- Garland-
$ GM
Dollar General-SchoolSt-
$ GM
% of Total Sum 22.9% 25.9% 15.7% 18.2% 37.7% 38.0% 24.7% 25.6% 19.6% 12.8%
N 7 7 6 8 10 15 12 10 11 5
% of Total Sum 3.2% 15.0% 7.3% 2.5% 7.0% 6.0% 10.4% 13.9% 5.5%
N 1 4 3 1 3 3 4 6 2
% of Total Sum 17.2% 19.3% 8.8% 9.8% 7.4% 6.8% 3.1% 3.0% 9.1% 13.4%
N 5 5 6 5 4 3 2 2 6 5
% of Total Sum 30.5% 18.0% 28.9% 37.5% 28.8% 20.1% 31.7% 37.4% 5.5% 14.8%
N 9 5 9 11 7 8 11 11 4 6
% of Total Sum 10.0% 11.5% 5.3% 3.9% 10.9% 9.4% 5.6% 7.8% 13.3% 12.0%
N 8 8 3 3 3 7 5 6 12 10
% of Total Sum 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
N 34 32 36 40 28 46 55 39 55 41
Private Label
Total
P&G
Reckitt Benckiser
SC Johnson
Report
Manufacturer
Clorox
GROSS MARGIN %
WalGreen-School St. -
GM%
WalGreen-6th St. -GM%
Walmart-Mall Ave. -
GM%
WalMart-6thST-GM%
Target-Shiloh- GM%
Harps-Crossover
Rd-GM%
Harps-Garland-
GM%
IGA-College-
GM%
Dollar General- Garland-
GM%
Dollar General-SchoolSt-
GM%
Mean .553 .568 .332 .345 .328 .452 .410 .434 .318 .365
N 7 7 6 8 10 15 12 10 11 5
Mean .579 .434 .390 .267 .468 .479 .490 .356 .341
N 1 4 3 1 3 3 4 6 2
Mean .610 .614 .206 .360 .211 .454 .310 .362 .283 .351
N 5 5 6 5 4 3 2 2 6 5
Mean .556 .567 .348 .385 .356 .455 .505 .492 .254 .290
N 9 5 9 11 7 8 11 11 4 6
Mean .374 .374 .402 .418 .411 .446 .468 .445 .404 .379
N 8 8 3 3 3 7 5 6 12 10
Mean .517 .515 .354 .380 .333 .445 .426 .453 .355 .363
N 34 32 36 40 28 46 55 39 55 41
Private Label
Total
P&G
Reckitt Benckiser
SC Johnson
Report
Manufacturer
Clorox
Strongest Manufacturers
• Clorox
– 3 stores per item between 34 SKUs
– 26.8% stocking rate
• SC Johnson
– 3 stores per item between 31 SKUs
– 26.1% stocking rate
Demographics
• Highly purchased in $70,000+ households
• Multiple-member households•Windex most popular among 5+ member households
• Windex primarily for under 35 year olds and Lysol for middle-age
• Increasing sales for under $20,000 households since 2003
• Private labels are heavily consumed by both low & high income families
Category Role : CASH MACHINE
• In store audit, high GM % & medium Sales volume. → more development with increasing assortments & depth in a long run of brands competition.
• Based on Ad Hoc Base and Demo:
– Sales volume: down a little for low income & increasing for middle-income.
– Household size: +2 members family.
– Essential item with 91% as household penetration & 89.3% repeated buyers
BRANDS
Brands Competition
• No one brand is in control of household category
• The market is shared by PL, some strong national brands (Windex, Lysol, Clorox, 409, Fantastik and Mr. Clean) and many brands from small manufacturers.
• Retailers are playing hard with non-stop production of new products, directly competing with national brands on quality and on price
DG’s PL compete directly with Windex of SC
Johnson and with Mr. Clean of P&G on both share
of facings (3 facings) and price (only 1/2)
DG guarantees best value for customers:
quality (if customers don’t satisfy, refund)
price-sensitivity
FACINGS
WalGreen-School St. -Facings
WalGreen-6th St. - Facings
Walmart-Mall Ave. -
Facings
WalMart-6thST-Facings
Target-Shiloh- Facings
Harps-Crossover-
Facings
Harps-Garland-Facings
IGA-College-Facings
Dollar General- Garland- Facings
Dollar General- SchoolSt-Facings
% of Total Sum 20.0% 20.6% 14.1% 16.0% 29.6% 32.6% 18.0% 25.5% 17.9% 7.1%
% of Total N 20.6% 21.9% 16.7% 20.0% 35.7% 32.6% 21.8% 25.6% 20.0% 12.2%
N 7 7 6 8 10 15 12 10 11 5
% of Total Sum 2.9% 8.1% 5.0% 2.8% 6.7% 6.6% 9.1% 10.3% 3.6%
% of Total N 3.1% 11.1% 7.5% 3.6% 6.5% 5.5% 10.3% 10.9% 4.9%
N 1 4 3 1 3 3 4 6 2
% of Total Sum 14.3% 14.7% 16.2% 12.0% 18.3% 6.7% 3.3% 4.5% 9.0% 8.6%
% of Total N 14.7% 15.6% 16.7% 12.5% 14.3% 6.5% 3.6% 5.1% 10.9% 12.2%
N 5 5 6 5 4 3 2 2 6 5
% of Total Sum 28.6% 14.7% 22.2% 35.0% 29.6% 19.1% 26.2% 30.9% 6.2% 24.3%
% of Total N 26.5% 15.6% 25.0% 27.5% 25.0% 17.4% 20.0% 28.2% 7.3% 14.6%
N 9 5 9 11 7 8 11 11 4 6
% of Total Sum 22.9% 29.4% 16.2% 9.0% 9.9% 14.6% 9.0% 16.4% 23.4% 23.6%
% of Total N 23.5% 25.0% 8.3% 7.5% 10.7% 15.2% 9.1% 15.4% 21.8% 24.4%
N 8 8 3 3 3 7 5 6 12 10
% of Total Sum 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
% of Total N 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
N 34 32 36 40 28 46 55 39 55 41
SC Johnson
Private Label
Total
P&G
Reckitt Benckiser
Report
Manufacturer
Clorox
• Most PL gained best part in share of facings and share of SKUs in small stores (niche market such as DG, IGA)
• But strong national brands such as Windex and Clorox try to fight back and also has strong influence in big stores (Wal-Mart, Harps).
SKU’s & The Battle for Shelf Space
• Total SKU #s found: 194 within 10 stores
• PL plays big part in share of SKUs but strong national brand try to gain share of facings.
→ uncompromising struggle
• Retailer is in control with rather high GM%
Brand SKUs % of Category
Windex 16 8.25%
Lysol 15 7.73%
Clorox 9 4.64%
Mr. Clean 11 5.67%
Private Label 39 20.10%
Average GM% by national brand
WalGreen-School St.
-GM%
WalGreen-6th St. -GM%
Walmart-Mall Ave. -
GM%
WalMart-6thST-GM%
Target-Shiloh-GM%
Harps-Crossover
Rd-GM%
Harps-Garland-
GM%
IGA-College-
GM%
Dollar General- Garland-
GM%
Dollar General-SchoolSt-
GM%
Mean .599 .389 .389 .432 .467 .414 .452 .395 .395
N 1 2 2 3 3 3 3 1 1
Mean .543 .543 .241 .317 .244 .464 .438 .409 .336 .336
N 3 3 3 2 3 3 2 3 2 2
Mean .575 .335 .384 .476 .476 .476 .218 .218
N 2 3 2 1 1 1 3 3
Mean .610 .614 .209 .402 .211 .454 .310 .362 .288 .351
N 5 5 5 4 4 3 2 2 5 5
Mean .579 .434 .474 .267 .468 .479 .472 .356 .341
N 1 4 1 1 3 3 3 6 2
Mean .590 .590 .354 .374 .347 .503 .509 .522 .360 .360
N 3 3 5 4 4 5 6 6 1 1
Mean .517 .515 .354 .380 .333 .445 .426 .453 .355 .363
N 34 32 36 40 28 46 55 39 55 41
Total
Windex
Lysol
Mr. Clean
Fantastik
Clorox
Report
Brand
409
Stocking Rate by Suppliers
Manufactures Stocking Rate
SC Johnson 26.1%
Reckitt Benckiser 2.7%
Clorox 26.8%
P & G 19.3%
Cost Estimation
• Our cost estimation is consistent with “Cash Machine” role for Household product.
• For strong brand like Windex, the cost is high and range from 0.07 to 0.10 ¢/ounce.
• For PL, cost is ultimately low and from 0.01 to 0.07¢/ounce.
• We lower the cost when counting items with bigger size package & increase cost for smaller size.
Role of Private Labels
• Higher gross margins
• Low-price
• Difficult to differentiate
Average GM% by PL
Private Labels Presence
• Increasing presence
– Same number of facings
– New items because of high gross margins
• Private consumption is increasing across most
demographics
Private Labels vs. National Brands
ITEM $ (000) DOLLAR SHARE ITEM PENETRATION% REPEAT BUYERS
(% 2+ TIME BUYERS)
HOUSEHOLD CLEANERS
WEST SOUTH CENTRAL 300,056.0 0.7 91.0 89.3
CTL BR ND- LIQ - CLEANERS - NON- DISINFECTANT
WEST SOUTH CENTRAL
2,454.6 3.9 8.4 31.0
WINDEX ND- LIQ - CLEANERS - NON- DISINFECTANT
WEST SOUTH CENTRAL
1,615.9 2.6 3.5 15.1
LYSOL ND- LIQ - CLEANERS - NON- DISINFECTANT
WEST SOUTH CENTRAL
441.4 0.7 1.4 9.8
Suggested Strategy for Wal-Mart
• Increase strategy
• 36 total facings while the Harp’s on
Garland had 55 total facings.
• Small selection of private labels and high
number of facings
GM% by FACINGS No.
N Mean
1 3 .441
2 16 .367
3 12 .308
4 2 .295
5 1 .491
6 1 .354
9 1 .429
Total 36 .354
Walmart-Mall Ave. -GM%
Walmart-Mall Ave. -Facings