Businessmodel of Clorox

Customer Segments

Clorox produces and markets a broad range of household, lifestyle, and cleaning products designed for use by the general consumer population. The Company, however, does not serve the general consumer market directly, providing products to end-users through various intermediary customers. These customers include:

• Wholesale Distributors, including consumer product distributors and wholesalers, as well as medical supply distributors for certain products;
• Retailers, including supermarket chains, discount stores, pharmacies, dime stores, and members-only retail warehouse clubs; and
• Ecommerce Businesses, including various ecommerce merchandisers, online marketplaces, and digital retail channels. Clorox serves a range of leading retail chains, including Sears Holdings, Target, Neiman Marcus, JC Penney, and Macy’s. The Company’s largest single customer is Walmart and its affiliates, which accounted for 27% of the Company’s consolidated net sales for 2016.

Clorox’s native US continues to be its largest market, with domestic customers accounting for the majority of the Company’s sales. The Company, however, also services customers across Latin America, Canada, Europe, and Asia Pacific.

Value Propositions

Clorox provides value to its customers in the following ways:

• Its brand recognition and reputation, with the Company controlling a range of popular, market-leading brands that are household names, notably its flagship Clorox-branded bleach, as well as having a track record for supplying high-quality, safe, and reliable products over many years;
• The breadth of its product portfolio, with the Company producing and marketing a broad and diverse range of household, lifestyle, and cleaning products, including bleaches, waste bags, healthcare products, and charcoal;
• Its international sales and marketing reach, with the Company serving a large domestic customer bases, as well as providing products to customers across Canada, Latin America, Europe and Asia Pacific;
• Its commitment to research and development, with the Company committing a substantial portion of its resources to the development of new and innovative products, with a view to providing a constantly improving portfolio of products to its customers worldwide. ### Channels

Clorox operates a corporate website at www.thecloroxcompany.com, through which it provides information on its various brands, leadership, and business activities. It also operates a separate consumer-facing website at www.clorox.com, through which it publishes more information its various products and provides a range of coupons and discount offers to consumers. While Clorox does not operate its own online sales channel, the Company’s website does provide information on nearby locations and online channels through which consumers are able to purchase products via its Find a Store service.

In the US, the majority of Clorox’s products marketed and sold to mass retail outlets, warehouse clubs, and dollar, military and other types of retail stores primarily through the Company’s in-house direct sales force, and to grocery stores and grocery wholesalers primarily through a combination of direct sales teams and a network of brokers. The Company’s sales teams are organised by business segment and geographic region. Clorox also sells institutional, janitorial, and food-service versions of many of its products through a network of wholesalers and distributors using a network of brokers, and sells many of its healthcare products specialist medical supply distributors.

Outside the US, Clorox also employs the services of various distributors and licensees to make sales, and also operates through joint-venture arrangements with local partners.

Customer Relationships

Clorox does not sell products to customers on a self-service basis. It does, however, provide a service on its website that helps consumers to identify places, both online and offline, where they can purchase Clorox products.

Clorox makes its sales primarily through a direct sales force that consults directly with customers in order to establish the details of multi-year sales and distribution contracts. These contracts are tailored to the needs and circumstances of each customer. The Company’s larger customers are each afforded their own account management team, with Clorox seeking to establish longstanding relationships with its customers, and secure recurring business.

Clorox provides ongoing support to its customers, who are able to contact the Company’s support staff and account management teams by phone or via email. The Company also provides online resources for consumers through its website, including various user guides, tips, and FAQs. Additionally, Clorox operates several social media accounts – including with Facebook, Twitter, Pinterest, and YouTube – through which it is able to interact directly with customers.

Key Activities

Clorox is a manufacturer and marketer of consumer and professional products, selling products primarily through mass retail outlets, e-commerce channels, wholesale distributors and medical supply distributors.

Clorox organizes its operations into four reportable business segments: Cleaning, comprising laundry, home care and professional products marketed and sold in the US; Household, comprising charcoal, cat litter and plastic bags, wraps and container products marketed and sold in the US; Lifestyle, comprising food products, water-filtration systems and filters, and natural personal care products marketed and sold in the United States; and International, comprising all products sold outside the United States.

The Company markets its products under a number of brand names, including its flagship Clorox-branded bleach and cleaning products, Pine-Sol cleaners, Liquid-Plumr clog removers, and Kingsford charcoal.

Key Partners

Clorox works closely with a range of companies and organisations in order to provide products to its customers efficiently and reliably. These partners include:

• Supplier and Vendor Partners, comprising suppliers of materials, manufacturing resources, tools, and services that are utilised across the Company’s production, marketing, sale, and distribution processes;
• Distribution and Channel Partners, comprising various distributors, sales agents, brokers, and licensees that assist in extending the Company’s in-house sales and marketing reach, particularly in international markets where the Company has a more limited presence;
• Joint Venture Partners, comprising a range of consumer goods companies and retailers, with which the Company co-markets products and engages in various joint branding projects;
• Manufacturing Partners, comprising various manufacturing and packaging companies that assist in the production and packaging of the Company’s products; and
• Corporate Responsibility Partners, comprising various non-profits and charitable organisations, with which the Company collaborates on various social and community projects. Clorox recently engaged in a partnership with The Huffington Post to develop content for the publication, comprising 70 pieces of editorial content, where Clorox branding appears. The Company has also entered into an agreement with Soccer United Marketing, the commercial arm of Major League Soccer, making it an official partner of the US Soccer Federation and the Federacion Mexicana de Futbol.

Key Resources

Clorox’s key resources are its brands and intellectual properties, its portfolio of products, its supply chain and manufacturing facilities, its sales and distribution channels, its partnerships, and its personnel.

Clorox owns and or leases a number of properties across the US and internationally. This includes 23 manufacturing facilities in North America, 13 manufacturing facilities outside North America, six regional distribution centres in North America and several other warehouse facilities in the US and international markets, as well as a research and development facilities and a network of sales and administrative offices.

Most of Clorox’s brand name consumer products are protected by registered trademarks, which the Company considers to be key to the success of its operations. The Company’s patent rights are also material to its business. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in Clorox’s name, including applications entitled ‘Intercalated bleach compositions, related methods of manufacture and use’, ‘Precursor polyelectrolyte complexes compositions comprising oxidants’ and ‘Preloaded dual purpose cleaning and sanitizing wipe’.

Cost Structure

Clorox incurs costs in relation to the development and manufacture of its products, the procurement of supplies and materials, the operation of its sales and distribution infrastructure, the implementation of marketing and advertising campaigns, the management of its partnerships, and the retention of its personnel.

For the year ended 30th June 2016, Clorox accrued selling and administrative costs totalling $806 million, advertising costs amounting to $587 million, and research and development costs totalling $141 million.

Revenue Streams

Clorox generates revenue through the manufacture and sale of various cleaning, household, and lifestyle products. In 2016 the Company recorded total net sales of $5.76 billion. The Company’s largest revenue generator was its Cleaning segment, which recorded sales of $1.91 billion, followed by its Household segment, which recorded 1.86 billion. The Company’s Lifestyle and International segments recorded total net sales for the year of $$990 million and $997 million respectively.