Frank TataseoGroup Vice President,

Functional Operations

“Marketing Mature Brands: Creating the Platform for Growth"

Total FY04 Sales of $4.3 BillionHome Care (19%)

Auto Care (6%)

Charcoal (13%)

Dressings & Sauces (8%)

Cat Litter (6%)

Brita / Canada (7%)

Glad (15%)

Laundry Care (13%)

International (13%)

Clorox begins and ends with the Consumer We’re all about big share brands in mid-sized

categories

Assumes dividends reinvested

448%

206%

233%

Jun95 Jun96 Jun97 Jun98 Jun99 Jun00 Jun01 Jun02 Jun03 Jun04

0

500%

300%

100%

400%

200%

CLOROXS&P 500

PEERS

CLOROXS&P 500

PEERS

Jun94

Total Shareholder Return

How do you GROW a large, mature base business in an essentially flat category?

A Simple Question

12 Final Case Studies

SELECTION CRITERIA

289 Categories

58 Categories

18 BrandsContacted

38 Potential Vendor/Brand Stories

25 High-Level Brand Case Studies

Mature categories

Highflyer brands

Balanced story mix

Final case studies (12)

Case Driven Approach

Highflyer brands have grown 10%per year on average

1. Represents the median category growth CAGR based on 1997–2001 IRI FDKT data for 289 categories

6.8%

2.7%3.7%

1.9%3.0%

1.9% 2.9%

19.6%

9.8%10.1%11.0%10.9%

16.8%17.3%

1.1%2.3%1.3%1.9%

5.1% 4.6%5.5%6.3%

7.1%7.2%

Yogurt CrackersLaundry

DetergentMen’sRazors

Toothpaste

Median FDM

Category 1

3.0%

Soup

CookiesTea

BagsLoose

Contraceptives

Median FDM

Category 1

3.0%

Charcoal Shampoo

DilutableCleaner

Nine drivers

Some new learning; however, most won’t appear unexpected

The mindset is different, not specific functional skills

– Emphasis placed on growth drivers

– Standard they hold themselves to

– Constancy of purpose

Key Takeaways

An ambitious business strategy that clearly identified:

– Where the next level of growth was going to come from

– What would drive it

#1 - Single-Minded Growth Idea

Examples:

– Trojan - Fear to fun

– Progresso - Compare against condensed soup

Common elements:

Strategies are bold at the time, but simple and obvious in retrospect

Proactive not reactive

Could be articulated in one-line

Everyone understands what it means to them

Explicit about both what to do and what not to do

– Momentum achieved by sticking with a strategy more important than having the perfect strategy

#1 - Single-Minded Growth Idea

Senior management was the thought leader and set strategy

Brand group responsible for operationalizing

#2 - Management Led

Significant consumer-perceived product superiority vs. consumer frame of reference as the foundation of the brand

Examples

– Celestial Seasoning Target 2:1 preference; 50% of line achieved

– Yoplait Company, targets 60/40; Yoplait 70/30%

#3 - Product Superiority

Common elements:

– “Brand truth” it is the best

– High hurdles articulated, demanded, and measured

#3 - Product Superiority

Exceptionally strong value proposition based on the combination of

– Quality

– Price

Typically “premium/premium”

Sometime “parity/half price”

Never “parity/parity”

#4 - Strong Value Proposition

Clear, consistent positioning

Suave: value position (“why pay more?”)

#5 - Consistent Consumer Positioning

Brand core is platform for broadening

Suave

– Suave: From why pay more to “don’t you look smart”

#6 - Disciplined Broadening

Typically 3-5 year R&D horizons, regardless of category

Guided by a “holy grail”

Rarely distracted given belief in their strategy

#7 - Long-Term Innovation Strategy

Majority of effort and dollars focused against mass vehicles

Supplemented by alternative media that was clear strategic fit between target market behavior and category benefit

– Condom sampling at rock concerts

– New razor at 18th birthday

Growing media fragmentation may challenge this principle

#8 – Mass Marketed

Compelling story to retailers on how they’ll make more money

Typically a category dollar growth story

#9 – Retailer Win

Growth Idea

Brand Promise

Customer Promise

Product Holy Grail

Value Proposition

Summary of Key Strategic Choice Areas

Kingsford Charcoal

Drive Charcoal relevance through superior taste

Tastes Better Than Gas

Premium Product, Premium Price

Drive category dollars through increasedTraffic and market basket

Easy to Light and Longer Burn

GrowthIdea

Brand Promise

Customer Promise

ProductHolyGrail

ValueProposition

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($M)

C2 and CLB Ad C2 and CLB RR CLB/C2 Ships - Msc

Spending not available 1972-1984

Splashless bottle

CLB scents

LC2 launch

From 1980 to 1990, Clorox bleach (CLB and C2) grew +5% CAGR

Since 1990 the business has grown <1% annually

21

Clorox Bleach once had Highflyer Performance

How did we lose the Magic?

Was “High Need, Low Fear”

Large need vs. detergent alone

Mindset: growth engine

Regular innovation and education to new moms

Thought expansively about the benefit

A miracle – laundry, cleaning, personal use

Broad frame of reference – vs. detergent alone

Expanded wash load penetration

Became “Low Need, High Fear

Concern that improved detergent reduced need

Mindset: resource generator, don’t mess it up

Reduced innovation and education

Narrowed the benefit

Focus on laundry only Narrowed frame of reference to

private label bleach Share stealing

Make Clorox Bleach essential by increasing relevance and decreasing fear

The purest clean

Drive category sales and profit

Bleach performance without the barriers

Preferred vs. detergent along, premium price

Clorox Bleach

GrowthIdea

Brand Promise

Customer Promise

ProductHolyGrail

ValueProposition

New strategy is basis for all activity:

– New advertising including education

– New customer plans

– New R&D stream

– New energy, enthusiasm and purpose

Turnaround beginning:

– Consumption from –2% trend to +3%

– Share up 1 point to 63%

Results

Clorox Liquid Bleach

Clorox Bleach Pen

Delivers “holy grail”of bleach performance by providing controlled whitening

Outstanding results

– Captured a 10 share of the soil and stain remover category

– Generated 4% category growth

– Significant popular press coverage

Innovation – Clorox Bleach Pen

Summary

Mindset is the critical factor

– Growth is management led

– Drive to creating clear, ambitious growth idea

– Communicate and strive for highest standards

– Maintain constancy of purpose, both in the strategy and the execution

So my simple question for you…

What’s YOUR Growth Idea?