case study

IMPORTANT NOTE: While you may have knowledge of the company featured in this case, SC Johnson, be sure to only use the information provided in this case. The SC Johnson name on a product is a name people have trusted for 121 years to stand for quality and excellence. Beginning in 1886 as a parquet flooring company, SCJohnson soon earned a reputation for consumer-driven innovation through a product specially formulated to care for parquet floors - Johnson's Prepared Paste Wax. Over the years SC Johnson has expanded largely through acquisition. Today SC Johnson has 7 product lines including car care, floor care, household cleaning, household scent, household food storage, household pest control and shoe care. SC Johnson is a clear leader in the household mosquito repellent market with about 65% market share. Muskol, the 2" largest competitor has about 15% share. Muskol recently initiated a significant price reduction (30%) in an effort to gain market share. The annual growth rate for the Mosquito repellent market is 15%. In 2013 SC Johnson developed a new product. OFF! Clip.on"" mosquito repellent is an innovative technology with proven protection against mosquitoes. Off Clip-on mosquito repellent is a personal, odorless mosquito repellent device that you can clip onto your belt, purse or pants, providing head-to- toe protection from mosquitoes without spraying anything on your skin. It's the perfect way to enjoy personal time outside, such as hiking, gardening, reading or watching a sporting event. OFF! Clip.on " currently sells for $7.99 at retail. SC Johnson's OFF! clip.on marginal cost is $3 and they sell to retailers such as Walmart and Home Depot for $4.99. The Muskol competing brand sells for $6.99 at retail. Market analysis has identified that the OFF unique aspect of the new OFF! Clipson "M has a positive differential value of $2.00 per unit based on the significant reduction in the amount needed to protect a person each outing YOU DON'T OFF! Clip on "Mis targeted at children and adults that are active SPRAY ON and live in suburban and rural areas. There are 33.5 million Canadians, 47% of these people live in suburban and rural areas. 70% of these suburban and rural dwellers are active outdoors. Prior to the product's introduction, SC Johnson completed a survey of buyer intentions with their target market and the results were: 43%% would definitely buy, 27% would probably buy, and 20% would likely not purchase. The survey also confirmed that 35% of interested buyers intend to repeat their purchase with 6 months.When the product was launched SC Johnson spent significant promotional funds to ensure consumer awareness rate of 90%% of target market. They also ensured that their distribution system would be able to ensure an 88% availability rate. Ziploc SC Johnson's Ziploc* Sandwich Bags GET MORE OUT OF IT!" is another of the major products that the company produces. Ziploc* Sandwich Bags is part of the Household Storage product line category. Since being launched in 1972 the Ziploc* line of storage bags has become the industry leader with approximately 1/3" of the market share in North America. Ziploc continues to be command a premium position and higher price in the marketplace. The challenge for SCJohnson is that the plastic storage container product category is forecasted to only grow up 2-3%% per year for the next 5 years due to the gradual movement towards more perceived environmentally friendly storage bags. Windex Windex* Glass Cleaner is the #1 brand of glass cleaner in the world with a market share of 60%. Home Housekeeping, a leading product rating company, still rates Windex' as the best overall glass cleaner on the market. They also rate Gloss Plus as the best least expensive brand on the market. Due to the impact of alternative green cleaning products within the market place, the annual projected growth rate for glass cleaning products including Windex* is 3.8%. endQuestion 6 (4 marks) a) SC Johnson's major competitor in pest repellents, Muskol, initiated a significant price reduction of 30%. What should SC Johnson do (ignore, accommodate, attack or defend)? Briefly explain your thinking. b ) Briefly discuss one risk associated with Muskol initiating such a significant discount