Industry performance in 2009 reflected the extended recession. Value-conscious consumers and strong competition lead household cleaning products marketers to undertake extensive promotional activity to offset sluggish sales. As Bob Markovich mentioned in his article for the Home & Garden blog, “Don’t be surprised if you’re inundated with ads for small products from big brands like Procter & Gamble, Colgate-Palmolive, Kimberly-Clark, and Clorox. All four are among the basic-goods conglomerates that are ramping up their advertising as the beleaguered economy starts coming to life.”
As yes, while sales were slow to declining in many product categories, media spending for the US household cleaning products market reached new heights in 2009. Traceable media expenditures have more than doubled during the year. Church & Dwight was the leading advertiser in 2009 in the bleaches and laundry boosters category, heavily promoting its Oxi Clean line. Similarly, Clorox increased its ad support by almost 21% and Procter & Gamble spent over $30 million to promote the launch of its new product Tide Stain Release.
Marketers spent heavily in order to support both new launches and established brands in mature categories. However, high media support yielded modest gains in the highly competitive and mature industry.
In the recessionary economy, customers turn to value brands and seek products with improved performance. As a result, marketing efforts focus on the promotion of value-added benefits. This extends beyond promotion of new launches that have been specifically manufactured to provide combined functionality. For instance, mature products such as Clorox bleach try to maintain sales and market share by raising awareness about extended use of bleach beyond laundry care. The advertisements show that when diluted in water, bleach can be used to disinfect surfaces such as kitchen countertops, floors or baby bottles.
The search for value erodes customer brand loyalty. This shift in spending behavior has, however, created opportunities for some companies to draw in new customers. Private labels in particular have seen considerable growth. For example, in the dish care segment, private labels collectively accounted for the third largest share among automatic dishwasher detergents and rinse aids. These lower priced alternatives to national brands are improving their product ranges and quality and are increasingly meeting consumers’ expectations, even being perceived as comparable with or better than the products of some national brands.
Customer behavior indicates that many purchasing decisions are now made directly at the store shelf. The better margins that private labels provide retailers result in their growing shelf space allocation. In turn, this growing presence reduces the visibility of their higher-priced alternatives. Marketing efforts have, therefore, increasingly focused on promotion at trade level. A slow economic recovery will further challenge the sales of higher-priced branded products, especially if customers stick to the frugal habits they have adopted during the recession.
Data in this article has been taken from Kline’s recently published study Household Cleaning Products USA 2009. This comprehensive annual survey of the U.S. household cleaning products industry covers market size and share data, retail sales, channel breakdowns, trends, and forecasts for 23 major product categories. Also included are detailed profiles of 14 leading marketers and timely bulletins covering new products and corporate developments. The accompanying online database contains:
• Rolling six years of data 2004-2009
• Sales data for hundreds of brands, companies, categories, and segments
• Growth/decline percentage and market share percentage for all brands, segments, and categories
• Retail sales, unit sales, and sales forecasts through 2014 for all 23 categories and five product classes
• Fully searchable by category, segment, brand, trade class, and company names