NEW PRODUCTS PUMP CLOROX GROWTH: SALES RISE 14.6% AS SPENDING JUMPS TO SUPPORT 31 LAUNCHES SINCE MID-'96

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As some of its biggest household-product rivals struggle to keep their single-digit growth rates ahead of inflation, Clorox Co. has been chalking up double-digit gains.

Behind this performance are a string of successful new products and continued strong spending for ad support.

With sales up 14.6% so far in the fiscal year ending June 30, Clorox also has been budgeting double-digit ad budget increases, which may be part of the reason for its growth.

The marketer has increased ad spending by 23% from year-ago levels in the nine months ended in March, largely to support 31 product launches since last July. Clorox's worldwide ad and promotional spending for the period was $254.3 million. That was even before an anticipated increase in ad spending for the Armor All brand Clorox acquired late last year.

SPENDING RISES

Clorox has increased ad spending as a percentage of sales by a full point in the past year to 13%, said Carol Warner, analyst with Montgomery Securities.

While that still isn't up to the level of industry leader Procter & Gamble Co., Clorox has been boosting ad support as a percentage of sales while P&G has announced plans to do the opposite.

Aside from P&G, Clorox already outspends other household-products rivals as a percentage of sales.

Part of Clorox's recent ad spending surge has been in support of its Brita water filtration systems, a small but fast-growing business. While making up only 7% of Clorox's $2.5 billion in annual sales, Brita has been growing at a torrid 50% annual rate for the past two or three years, Ms. Warner said.

Clorox has committed $30 million in ad support from Y&R Advertising, San Francisco, for Brita this year.

"We're increasing the ad budget because of the growth of the category and the entry of new competitors," said Charles Couric, VP, Brita & Professional Products unit.

BATTLING RIVALS

Clorox's commitment to ad support for the brand already has held off lightly marketed challenges from such major companies as Mr. Coffee, Honeywell and Teledyne Water Pik.

Culligan International Co. began running ads last year for its on-faucet water purifier (AA, July 1). Rubbermaid plans to back its new water-filtration product as part of a previously announced corporate ad campaign from Meldrum & Fewsmith, Cleveland, but has not specified spending figures.

Clorox's more mature household-cleaning business, led by such brands as Clorox Clean-Up, Formula 409 and Pine-Sol, also has been a key to the company's success. Clorox's brands have boosted sales 8% in the past year in a shrinking category, Ms. Warner said.

"They really have a new-product focus compared to five years ago, when they hardly had any" new products, she said, and that's been a key.

Clorox is launching new campaigns from DDB Needham Worldwide, San Francisco, for Formula 409 disinfecting cleaner and has set an estimated $10 million to support Formula 409 carpet cleaner (AA, March 10).

Glenn Savage, director of marketing for household products, pointed to the turnaround of the S.O.S brand, which Clorox acquired in 1994, as an example of the company's commitment to marketing.

"We've restructured a lot of trade [promotion] activity," Mr. Savage said. "That

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