Mr. Clean Car Wash: Procter & Gamble's Foray into Services

Mr. Clean Car Wash: Procter & Gamble's Foray into Services
Case Code: BSTR375
Case Length: 21 Pages
Period: 2007-2010
Pub Date: 2010
Teaching Note: Not Available
Price: Rs.500
Organization: Procter & Gamble Company
Industry: Consumer Packaged Goods
Countries: US
Themes: Entry Strategy, Franchising
Mr. Clean Car Wash: Procter & Gamble's Foray into Services
Abstract Case Intro 1 Case Intro 2 Excerpts

"Mr. Clean Car Wash takes a brand name with over 50 years of consumer trust and delivers a delightful car cleaning experience. It's really a new day in car washing - and a whole new franchising opportunity. Our vision is to become the first national chain of branded car washes - which presents a unique opportunity for entrepreneurs to get in early in the growth curve."

-Bruce Arnett Sr., CEO of Mr. Clean Car Wash, in 2010.

"Mr. Clean brand is in a pickle, because NPDES and storm water rules are tightening, their home-use product puts consumers in jeopardy of breaking the law with water pollution rules. So, their only option is to do something different, but I do not think they have thought this through correctly. It will be interesting to watch, that's for certain."

- Lance Wislow, a business consultant, in 2009.

"It seems like a huge leap for a consumer goods company to move into services like this, but P&G has been considering entering the services arena since the 1960's, and has been testing and refining these ideas over the last several years. The company's caution is warranted. Moving from goods to services is not simply another brand extension; operating Mr. Clean car washes presents significantly different challenges than launching a Mr. Clean Magic Eraser."

- Ellen Peebles, Senior Editor, Harvard Business Review, in 2009.

Moving From Goods to Services

On February 26, 2010, US-based consumer packaged goods giant Procter & Gamble Company (P&G) announced that it would launch Mr. Clean Performance Car Wash (Mr Clean Car Wash) in Texas and open about 25 Mr Clean franchised car wash locations in Houston and Dallas.

Leveraging on the brand value of Mr. Clean, a line of cleaning products, P&G entered the arena of car wash services when it opened its first car washing facility in Cincinnati in 2007. Later in February 2009, P&G expanded the footprint of Mr Clean Car Wash through the acquisition of a car wash franchise chain in Atlanta, Carnett's Car Washes (Carnett's).

P&G's car washing business was operated by Agile Pursuits Franchising Inc. (Agile Pursuits), a wholly-owned subsidiary of P&G. As of early 2010, Mr. Clean Car Wash was the largest full-service car wash franchise in the US, with 15 operations in Ohio and Atlanta and another six facilities under development.

Introduced in 1958 by P&G, Mr. Clean was one of America's top-selling brands in household cleaning. The Mr. Clean line included Mr. Clean Wipes, Multi-Surface Cleaners, Magic Eraser, and other cleaning tools. It was also one of the most successful brand extensions with licensed products exceeding over US$ 70 million in annual retail sales as of 2008. The brand's parent company P&G focused on providing branded consumer packaged goods...

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