Brand Management Agenda  Introductions - My Background  Clorox Company Overview  Consumer Driven General Management  Brita Case  Q&A

The Clorox Company Performance  Portfolio of Strong Brands  Business Results  International Growth

Portfolio Just acquired First Brands: - STP, Glad Bags, Johnny Cat - Complete restructure in progress

Clorox Brands are Market Leaders #1 or #2 in Nearly Every Category!  Home Cleaning  Laundry Additives  Salad Dressing/Barbecue Sauce  Insecticides  Home Water Filtration System  Automotive Care Products  Charcoal/Grill Products

Revenue Growth (Sales: $Millions)

Profit Growth Net Earnings ($MM)

Revenue Growth % Average Annual Growth Rate

5-Year Total Shareholder Return $243

5-Year Total Shareholder Return $243 $281

5-Year Total Shareholder Return $417 $281 $243

Clorox Introduced a Record 41 New Products Worldwide in 1998

Clorox is Aggressively Pursuing Acquisitions to Fuel Growth Pine-Sol & Combat1991 S.O.S1993 Black Flag1995 Armor All1997 Lestoil Int’l Acquisitions1994/95 2 Int’l Acquisitions Int’l Acquisitions1998 First Brands1999 Brand Year

International Growth Clorox International business has increased four times since % 18%

Consumer Driven General Management

Brita Case Study

Background  Brita water filtration pitcher invented by a German entrepreneur in 1970  Brita filter uses a carbon & ion exchange resin to remove impurities like lead and chlorine from water  Brita is sold in over 40 countries worldwide  Clorox purchased U.S. distribution rights in 1988  Initial efforts by Brita Germany to develop U.S. market had failed

Why was Clorox interested in Brita? Brita presented a growth opportunity and a solution to consumer need:  High growth in bottled water category  Expensive, inconvenient solution  Consumer concern about air/water quality  Medical studies on negative effects of lead

Brita Vision  Change the way Americans drink tap water  Original Objectives:  70% awareness  8% household penetration  Comparable profit margins

Early Consumer Insights  Purchase of Brita linked to dissatisfaction with taste of tap water  Brita Early Adopters  Water involved (5+ glasses/day)  Believe that drinking water is a way to feel healthy  Urban, high income & educated  Filtration not broadly recognized as alternative to tap water  Direct marketers of in-line systems  Bottled water

Early Brita Copy  Focused on educating consumer  Benefits:  Brita makes tap water taste great  Support:  Removes impurities like lead and chlorine “Works/Taste”

The Beginning Business Issues:  Cost Structure  Organization Structure  Financial  Distribution Channels

Fish or Cut Bait 1993  Brita had achieved profitability  Awareness: 22%  HH penetration: 2%  Distribution in 11,000 stores  Long term commitment to Brita  Distribution expansion plan  Increased marketing investment  New pitcher models  Expanded consumer understanding 0 8% Target

Increasing Consumer Understanding Brita Users are drawn to the brand because it gives them clear, clean, refreshing water and makes them feel that they have done something good for themselves.

Brita Copy “Great Distances”  Remain focused on taste & educating consumer  Increase water imagery

Brita Copy  Focused on water in nature & leverage emotions & benefits  Benefits:  Brita makes your tap water clean, clear and refreshing  Support:  Removes impurities like lead and chlorine “There was a Time”

Open the Floodgates!  Aggressive Growth  Awareness: 40%  HH penetration doubled each year to 9% in 1996  Expanded Distribution from 11,000 to over 30,000 stores 0 8% Target

Open the Floodgates! Business Issues  Geographic Expansion  Filter Manufacturing  Infrastructure 0 8% Target

Ride the Wave Today  Exceeded Brita Vision objectives  Awareness: 70%  HH penetration: 14%  Market Share: 71%  Brita user loyalty: 85%  Distribution in 40,000+ stores  Over 70 failed competitors  One of our top 4 revenue brands  Continues to grow at double digit rate 0 8% Target

Brita Copy “New Again”

Future Challenges  Category maturity  Drive filter sales  Encourage current users to replace their pitchers  Competition  Technological leadership  Protect filter annuity from “universal filters”  Brita Equity  Invest in new products or current line?  Where should we take the Brita equity

Consumer Driven General Management  Recognized Marketing Expertise  In-Depth Understanding of Our Consumer  General Management Responsibility

Brand Management Skill Sets  Leadership  Interpersonal Skills  Results Focus  Strategic Thinking  Analytical Problem Solving  Innovativeness