Category: Colgate

Colgate Palmolive.
This paper is an in-depth financial analysis of Colgate-Palmolive. This company is incorporated in US and quoted on the NYSE. It is a global manufacturer of personal products. This financial analysis will not only determine the financial performance of the company over a period of time but also bring to light the key factors involved in it. Colgate-Palmolive is now over 200 years old since it first came into inception. The financial statement analysis carried out below shows that Colgate has performed considerably well in almost all areas.
However continuing with this remarkable performance in future and particularly this year is going to be a tough ask keeping the global economic meltdown in perspective. COMPANY OVERVIEW: Colgate-Palmolive is one of the largest manufacturers of personal products worldwide with an international workforce of more than 36,000 employees and a revenue of above 11 billion US$ in 2007 with a net income of over a billion US$. Its headquarters are situated at 300 Park Avenue, New York. It came into inception in 1806, when a soap and candle maker named William Colgate opened a factory in New York and named it “William Colgate and Company”.
In early 19th century Palmolive was a famous soap brand manufactured by a company named “B. J. Johnson Company”. However B. J. Johnson Company which had earlier merged with another soap manufacturer “Peet Brothers” acquired Colgate Company and renamed the new company to “Colgate-Palmolive” (Colgate-Palmolive, n. d. ). Although it was under George Henry Lesch who remained as the CEO, President and also Chairman of the Board in the 1960s when Colgate-Palmolive truly became a modern company. He was a visionary individual who took the company to greater heights. Colgate-Palmolive’s current CEO is Ian M. Cook.

Some of the strongest competitors of Colgate-Palmolive have been Procter & Gamble, Johnson & Johnson. However their rivalry with Procter & Gamble goes back to World-War 2 Although Colgate has an international presence which ps to almost 200 countries, it is publicly listed only in US and India. Major product areas of Colgate-Palmolive include the following: Household products Personal care products including health care products as well Industrial and veterinary supplies Sports and leisure time equipment (Colgate-Palmolive, n. d. ). Some of the famous products are Colgate (toothpaste), Palmolive (soap), Suavitel, and Ajax etc.
Colgate-Palmolive made a key acquisition in 2006 when they purchased 84% shares of Tom’s of Maine in 2006. Tom’s of Maine was also a manufacturer of personal care products and was quite famous in US. This acquisition not only lowered the competition but Colgate reached new markets and achieved further diversity in its products. Among various achievements a key achievement which lifted the reputation of Colgate-Palmolive as a prospective employer was its naming in “100 Best companies for Working Mothers” in 2004. This list was issued by the Working Mothers magazine. (Colgate-Palmolive, n. d. )
Strengths: Since the company has a global presence it has access to larger market than a company which produces only locally. The company has a well diversified product portfolio which is instrumental in mitigating risks for instance; market saturation in a few products won’t hurt the company that badly. Weaknesses: Being a global company, Colgate has to face a lot of exchange rate fluctuations. Since it is publicly listed in only 2 countries as mentioned before, Colgate misses out on the benefits of stock exchange listing elsewhere for example, London Stock Exchange, Tokyo Stock Exchange etc.
Opportunities: Even when the whole world got into the grip of economic recession in mid 2008, Colgate continued to perform well even in 2008. It could use its increased profitability to invest in Research and Development and it could spend on exploring new markets. Since the company is lowly geared as compared to the industry average, they can use this to their advantage by obtaining finance at competitive interest rates to further diverse their product portfolio or break into new industries. They can also achieve growth through mergers, acquisitions or joint ventures.
Threats: Colgate-Palmolive largely caters to North America or Latin America besides an international presence. This could prove lethal for them, since North America is said to be in heavy depression under the current global economic recession with the worse still to come. Colgate-Palmolive’s lack of strong presence in potential markets for instance, Africa, Central Asia wouldn’t auger well in the current global economic recession when companies are looking to mitigate their risk through diversity. (Stapleton. J, 1997)

Colgate Palmolive

Marketing Strategies of Colgate Palmolive Ltd.
Project Report A STUDY ON MARKETING STRATEGIES OF COLGATE PALMOLIVE LTD. Submitted to: Dr. D. K. Agarwal Submitted by: DINESH CHAUHAN[62014] VIVEK DHAR [62066] FORE SCHOOL OF MANAGEMENT NEW DELHI Contents ? Introduction1 ? Objective2 ? Methodology3 ? Company Profile4 ? Company Strategy6 ? Marketing Mix15 ? SWOT Analysis26 ? Survey Findings28 ? Retailers Survey34 ? Conclusion37 ? Suggestions39 ? Consumer Questionnaire ? Retailer Questionnaire ? Bibliography INTRODUCTION As early as 3000 B. C. Egyptians used toothbrushes fashioned from twigs.
In the 20th century a major design advance occurred in 1938 with the launch of Dr. West’s Miracle Tuft toothbrush, the first nylon bristle brush. Until the late 1970’s toothbrushes were widely viewed by consumer as a commodity and were primarily purchases on price. The involvement remained low and the companies also treated their toothbrushes as an extension, to get their consumers to use their toothpastes. Typically in the Indian market the percentage of toothbrush users has slowly inched upwards.
As it has always been associated by the non-users as a non-essential item more so because of their fierce loyalty to the margosa twigg(Datun) and the index finger. The market of late has been the entry of several foreign players and the marketing game has assumed a totally new dimension. Companies are trying to shift to “PULL” strategy of long term returns and the inclination of consumers to shell out a few rupees extra to ensure a more wholesome care of their teeth and gum. This has resulted in rapid growth in value terms.

Added to this is the initiative of the companies to focus on expanding the market by bringing the over 65% non-users in their consumer fold. With such vast potential to be exploited, the entry of several new players with their innovative ideas and experience in similar developing markets, the industry is likely to see a lot of action in the immediate future. OBJECTIVE The above of the project was manifold. ? First of all a general idea of the toothbrush industry – its competitiveness, volume and potential was to be adjudged. Next was to go on to analysis of the attitudes of a typical consumer and his/her idea/perception of this low involvement category product. ? This was to be followed up with the study of Colgate Plus toothbrush, as a typical product of the company, Colgate Palmolive and its standing in the market vis-a-vis other players, especially new entrants. ? To amalgamate all above to conclude as to what was to be the future/probable course of the toothbrush industry and Colgate Plus tooth brush in particular. METHODOLOGY 1.
To get an idea of the industry, I went through all the relevant literature we could lay my hands upon. This included A & M’s, Business Today’s. 2. For consumer attitudes, I prepared a questionnaire that was circulated among 70 odd people, well spread out across the whole of Delhi. The same was done with the retailers to try and see the conformity in findings in some specific attributes. 3. The questionnaire was to structured that an idea of brand image and relative studying of various brand could also be elicited. 4.
The findings were synthesized, and keeping in mind the new entrants, their potential and the potential of the market, projections were made and conclusions were drawn. COMPANY PROFILE A household name for paste and tooth powder, Colgate Palmolive (India) was established on 23rd September 1937 as a private limited company in Bombay, as a wholly owned subsidiary of Colgate Palmolive Co. Of USA Initially it started with trading activity and later set up manufacturing operations in 1949 at Sewry (Bombay). The company became a public limited company on 5th October 1978.
In 1990-91 the company commissioned facilities for fatty acid and toilet soap at Waluj (Aurangabad). The plants at Sewri and Waluj manufacture oral care products like dental creams, tooth powder tooth brushes and personal care products like toilet soaps, shampoo, which are marketed under various brand names such as Colgate, Palmolive, Halo, Protex and Charmis. The company’s distribution network covers 1700 stockists and 4,50,000 retailers with ware house facilities in Mumbai, Calcutta, Delhi, Hyderabad, Lucknow and Madras ( and a new addition at Faridabad).
The company has its own Research and development facilities and had also been getting the R&D benefits of the parent company. It has a well established quality Control Department at Sewri & Waluj. For 40 years, since inception till 1978, Colgate was carrying on its business in India with a paid up capital of Rs. 1. 5 lakh made up of 1500 equity shares of Rs. 100 each, when it was increases to Rs. 1. 96 crore, by a bonus issue in the ratio of 130:1. To comply with the FERA regulations, Colgate Palmolive, USA diluted its share holding to 40% in the Indian company, through an offer of sale to the Indian public in October 1978.
Following FERA relaxation, the foreign shareholding was increased from 40% to 51% in September 1993. Colgate Palmolive (CP) is a global leader in household and personal care products. In 1991, it had sales of $ 6. 06 billion and a gross profit of $ 2. 76 billion, its world wide R&D expenditures were $ 114 million and media advertising expenditure totalled $ 428 million. Colgate Palmolive’s five year plan for 1991 to 1995 emphasized new product launches and entry into new Geographic markets, along with improved efficiencies in manufacturing and distribution and a continuing focus on core consumer products.
In 1921 $ 243 million was spend to upgrade 25 of Colgate Palmolive’s 91 manufacturing plants, 275 new products were introduced world-wide; several strategic acquisitions (e. g. of the Mennen men’s toiletries company) were completed and manufacturing began in China and Eastern Europe. Since 1985, gross margins had climbed from 39% to 45% while annual volume growth since 1986 had averaged 5% International sales Colgate Palmolive’s strong unit, accounted for 64% of sales and 6% of profits in 1991. COMPANY STRATEGY – ORAL CARE AND TOOTHBRUSH INDUSTRY IN PARTICULAR Volume is the key” says Richard Usuquen, VP Marketing Colgate Palmolive (India) Ltd. To expand the market in all ranges, CP has an ongoing RURAL VAN PROGRAMME and SCHOOL PROGRAMME covering 14 million villages and 80 million consumers, teaching people brush or even clean their teeth with the fingers. CP’s action centring around finely balancing the urban market – (59. 5%) and rural markets (68% share) . So while the company has introduced such premium packaging as stand up toothpaste tubes with flip-up caps in the urban market, it is also selling sachets of Colgate dental cream at low prices.
This focus on volumes is also evident in the toothbrush market, estimated at 400 million units per annum. C-P is the toothbrush leader in India with an approximately 60% market share, but since ‘95 it is facing challenges from HLL which has already garnered 8% market share. Usuquen says “The penetration of brushes in India is very low, so more than market share, it is important to grow the market”. To that end CP has actively introduced line extensions across all three segments – economy, middle and premium since last year.
At the entry level it has adopted the sleeve packaging, with no individual cases. The focus is on driving volumes through the price-sensitive segment. The mid-price market has been the introduction of the HIGH KLEEN range, while the upper end has seen the zig – zag and Double – Action launches. For the economy segment, a price focus has been adopted. On offer are five toothbrushes each from the CP and Cibacca stables to rural consumers, at prices low enough to generate trial. For the urban market, the focus is on maintaining novelty value by introducing new variants and added features. Whatever is new, people buy. So the idea is to accelerate choice through a variety of product features”. CP’s perception of the Indian market is of one where people welcome change but clamour for high end products at cheaply prices. The answer to this conundrum as per the company’s strategy is to “….. Optimise cost and formulation and the proceses and come up with efficient manufacturing to answer this “. CP’s strategy is to pour in a lot of investment in the Indian market in terms of capital expenditure and organizational support and each out to the deepest interiors.
SEGMENTATION The toothbrush industry can be regarded as a component of the Oral Care industry which broadly comprises tooth paste, mouth wash and floss, besides tooth brushes and a large unorganized naturally available cleaning mediums viz. Index Finger, Neem twigs etc. But Colgate Plus need not to bothered about latter as it operates in a different category. The tooth brush industry can be segmented in the basis of social class & income group (Demographic Segmentation ), price (Product segmentation), benefit (behavioural segmentation), the last being the most important.
DEMOGRAPHIC SEGMENTATION ACCORDING TO PRICE |Segment |Category |Brands |Characteristic | |Low income rural class |Economy |Promise, Cibaca |Looking for low price | |Middle income group semi urban |Standard |Colgate Classic Pepsodent popular | Value for money | |consumer | | | |Upper middle income urban |Premium |Colgate Plus, Classic, Ajay, Royal |High quality cleaning efficiency | |consumers | | | | |Upper class urban sophisticate |Super Premium |Oral B, Aquafresh, Jordan, Close Up|Unique, attribute, dentists | | | | |recommendation |
The last two categories merge, since Colgate Plus is intelligently positioned in between the two to maintain a high quality in age as well as encourage switches from standard category to up grade PSYCHOGRAPHICS |Variations in Product |Jazzy looks, Transparent handle|Simpleton looks, Modest |Mix of the two : transparent | | |Flashy colours Superior Packing|packaging, Solid colours |handle but not very flash | | | | |packaging. |Urban sophisticate |Chooses with care, sports it as|Abhors |Abhors | | |a status symbol while | | | | |interacting in group travels | | | |Semi urban Non Chalant User |Aspires for it, but finds it |Very often goes for this as it |Some times this | | |difficult to afford; tries it |serves is purpose without much | | | |seldom |expenditure | | |Rural User |Does not have access/can’t | Is the only option Datun |Generally can’t afford this | | |think of | |either | |Tooth brushes brands |Oral B, Jordan, Aqua fresh etc. |Promise, Forhans etc. |Cibaca, Ajanta, Ajay etc. |
The overall response reflects a gradual move in the direction of the premium to super premium segment as it is once in three months/four months purchase, thus being successful in luring all customers (except the rural user who are a small minority of the Market) to try out the ones that are places at a higher price on account of their trendy looks and overall appeal of style and splendor. BENEFIT SEGMENTATION |User Characteristic |Invalid oral health consumer |Involved oral health Consumer |Uninvolved Oral Health Consumer| | |Therapeutic Brushers |Cosmetic Brushers |Non-chalant Brushers | |Product Differentiater |Search functionally superior |Search for product that |Views products as same Lack of | | |product with many attributes. effectively delivers cosmetic |interest | | | |benefits | | |Advertising appeal |Put off by hardsell Prefers |Influenced by promotion, |Relatively unaware of ads can | | |dentist recommendation or |hammering on a USP |at most be influenced by price | | |informed opinion | |offs, package deals | |Buying behaviour |Buys for himself, will go to a |Buys and uses for himself. |Buys for family. , will pick up| | |specialised store |Will not go beyond a large |any brand available. | | | |shop, supermarket | | |Regularity of usage |Brushes after every meal |Brushes mostly once, sometimes |At most once a day | | | |twice | | |Brand loyalty High |Low |Nil | |Price (Willing to pay) |>20 |15-20 | Rs. 20 |3. 0 |25. 0 |7. 5 | |ASCRIBED TO | | | | |No specific reason |59. 4 |33. 3 |50. 0 | |word of mouth |15. 6 |16. 7 |19. 1 | |impressed with advt. |9. 3 |20. |11. 9 | |shopkeeper insisted |15. 6 |20. 8 |14. 3 | |dentists advice |6. 3 |8. 3 |4. 8 | |REPLACEMENT FREQUENCY | | | | |0-1 MONTHS |23. 5 |12. 5 |17. 4 | |1-2 MONTHS |26. 5 |29. |28. 3 | |2-3 MONTHS |23. 5 |29. 2 |30. 4 | |3-4 MONTHS |23. 5 |16. 7 |19. 6 | |> 4 MONTHS |2. 9 |16. 7 |4. 3 | |FREQ. OF BRUSHING | | | | |Once (per day) |50. 0 |28. |46. 7 | |Twice |44. 2 |68. 0 |46. 8 | |after every meal |2. 9 |4. 0 |2. 2 | |Not very particular |2. 9 |0. 0 |2. 2 | |pressed with Advertisement | | | | |YES |11. 1 |22. 2 |12. | |NO |88. 9 |78. 0 |87. 1 | RELATIVE IMPORTANCE OF ATTRIBUTES | |MALES |FEMALES |TOTAL |RANK | |PRICE |62. 7 |57. 3 |61. 2 |5 | |PACKAGING |40. 2 |49. 3 |44. 6 |8 | |DURABILITY |74. 5 |74. 7 |75. |2 | |LONG HANDLE |51. 9 |60. 0 |57. 0 |6 | |FLEXIBLE NECK |52. 9 |60. 0 |57. 1 |6 | |COMFY. ANGLE |68. 6 |78. 7 |73. 7 |3 | |SOFT BRISTLES |78. 4 |86. 7 |82. 9 |1 | |LOOKS |46. 1 |40. 0 |44. 9 | |DIAMOND HEAD |36. 3 |41. 3 |38. 9 |10 | |GRIP |58. 8 |68. 0 |63. 4 |4 | |INDICATOR |28. 4 |41. 3 |34. 3 |11 | COLGATE PLUS USERS RESPONSE | |Males |Females |Total | | |v.
Good | |COLGATE PLUS |30. 96 | |CIBACA |14. 28 | |ORAL-B |16. 66 | |CLOSE-UP |9. 52 | |PEPSODENT POPULAR |7. 14 | |JORDAN |9. 2 | |OTHERS |11. 90 | BRAND RECALL |BRANDS |PERCENTAGE | |COLGATE PLUS |20. 47 | |PEPSODENT POPULAR |11. 02 | |CIBACA |10. 4 | |ORAL-B |9. 54 | |AQUA-FRESH |7. 59 | |AJANTA |7. 09 | |OTHERS |28. 35 | Only about 5% of the respondents could not remember which toothbrush they were presently using which were excluded from the above computing. RETAILER’S SURVEY FEATURES |No. f Respondents |: |20 | |Areas covered |: |Defence Colony, South Avenue, Khan Market, North Campus, Sarojini| | | |Nagar | |Nature of survey |: |Structured Questionnaire | |Objective |: |a) To gather the respond to new entrants vis-a-vis Colgate Plus | | | |as perceived by retailers. | | | |B) Retailers favorite brand(s) | | | |Margins offered | |Limitations |: |Given the areas covered, the response was bound to be asked in | | | |favour of the upper class users. | FINDINGS |A.
Availability | | | |Easy |: |Classic, Aqua-Fresh, Oral-B, Pepsodent, Colgate Plus | |Not Easy |: |Royal, Forhans, Cibaca, Jordan, Prudent. | |B. Sales | | | |High |: |Colgate Plus, Cibaca, Classic, Pepsodent, Oral-B | |Satisfactory |: |Close-up, Ajanta, Ajay, Jordan, Aqua-Fresh | |C.
Profit Margins | | | |Highest |: |Classic, Royal | |High |: |Jordan | |Medium |: |Oral-B, Aqua-Fresh, Reach, Cibaca | |Low |: |Colgate Plus, Pepsodent, Close-up | * Highest Margin : 35-40%Lowest Margin – 10-15% N. B. Colgate Plus features in the lowest level of margin and yet commands the highest market share. The low margin was however denied by the Sales Office of Colgate-Palmolive at Delhi, who claimed to offer equal to that of the industry standards. Colgate Plus was not backed up by any appraisal system whatsoever. Supply is kept regular on weekly basis. D. Retailer’s Perception Of Preferences |BY BRAND NAME |36. % | |CHEAP BRUSH |9. 3% | |SPECIFY PRICE RANGE |15. 9% | |EXPENSIVE |21. 5% | |TRY NEW ONESE |16. 8 | E. Retails insisted on “Pushing” Classic as it was moderately priced and yet offered a very good margin. * The “D” above was also substantiated by our consumer survey. CONCLUSION
The present day brushing habits of the Indian society as a whole leaves a lot to be desired – 41 toothbrushes are sold for every 100 persons per year! Total units sold add u to a little over 400 million, growing at the rate of 10% p. a in volume terms and 25% in value terms (difference explained by the shift to upper end of the market). This implies not much inroad has been made into the rural and semi-urban market. Non-users constitute about 65% of total population. While the global brands try to create new markets and add new dimensions, there is much greater latent demand. Out of their stable of marketing strategies, advertising till now had been low priority for the players (this was confirmed in our survey as 88. % of respondents don’t recall the ads). This indicates companies find it formidable to change the low involvement level psyche of consumers and the route of aggressive sales promotion by way of price offs, POP displays, tied sales and generous trade margins still hold the key to increasing off take of toothbrushes. No one has made a serious attempt in the virgin territory of 65% non-users (CP’s Rural Van Programme is a recent drive). The thought of doing a Nirma to the toothbrush market has escaped everyone. Despite packaging constituting a substantial (upto 40%) of the cost of a toothbrush it has found to have influenced the purchasing decisions of the buyers.
In our survey consumers corroborated to this effect (refer to the survey findings). Companies could rethink their strategy of increasing differentiability by packaging and instead invest in product development for the same. SUGGESTIONS Some possible product improvisations Attached straight tongue cleaner cased in the toothbrush handle. Cartoons character printed on the handle to attract kids. Padding on the handle end to massage the gums. Casing the toothbrush (for kids) in a toy form. Neck with adjustable handle. Get a certificate by the Indian Dental Association (IDA) for the toothbrush, like the Colgate Calciguard Toothpaste. Segregate the toothbrush types for different age groups, e. g. ,
Children – Thicker handle for better grip, bright colours and cartoons printed on the handle. Young People of Teenager – more trendy colours and designs, like stripes or polka dotted, more vibrant colours. Adults – Simple designs and sober and decent colours. For the new entrant Introduce the product with the offer of one free toothbrush with the purchase of a brush which will help in blocking and prepointing the purchase of the buyer. As the target segment is the premium segment therefore, premium pricing of the product is necessary. Price the product at Rs. 251 -* or at Rs. 301- and not at Rs. 361 or Rs. 221- because the shopkeepers face a problem in returning small changes of Rs. 31 or Rs. 31- and Rs. 1 so they sometimes avoid the product as confessed by the shopkeeper. Add value to the product by giving tips on taking good oral care, in the back side of the package or a free pamphlet with the purchase of a brush, like brushing twice a day, flossing, polishing, regular dental check-up by your dentist, this shows a caring and concerned attitude by the company. With the purchase of a toothbrush, give a free coupons which is to be filled in by the consumer and can be used by him or her for getting a free dental check-up as when and where specified in the advertisement in the newspaper. This kind of scheme can be implemented by the company once in two three months.
However, these suggestions can be used by the big players in the market or the new entrant, who has to be a big player because a large investment is needed for such heavy sales promotion and also an attempt should be made to convert this low involvement product into a high involvement as it is concerned with personal card and hygiene and a product of daily use. CONSUMER QUESTIONNAIRE 1. AGE : ( 15-30 Years ( 30-40 Years ( 40-50 years (Above 50 years 2. SEX : ( Male ( Female 3. OCCUPATION : ( Govt. Service( Self-employed ( Corporate Executive ( Student ( Others (specify __________________) 4. MARITAL STATUS 🙁 Single ( Married with children ( Married without children 5. AVERAGE MONTHLY INCOME/ALLOWANCE ( Rs. 20000 6. Which toothbrush do you generally use? 7. Name any other five toothbrushes that you can recall 12345 8. Who purchases your toothbrush? ( Myself( A family member( A Subordinate 9. Do you ask for a toothbrush by name? ( Yes ( No 10.
How much are you ready to spend on a toothbrush? ( Rs. 5-10( Rs. 10-15( Rs. 15-20( > Rs. 20 11. What prompted you to purchase your current toothbrush? ( Dentist’s advice ( Impressed with the advertisement ( Shopkeeper gave it to me ( A well-wisher recommended it to me ( Just bought it no specific reason. 12. How often do you replace your toothbrush? (0-1 month( 1-2 months( 2-3 months( 3-4 months ( > 4 months 13. How often do you brush your teeth a day? ( Once ( Twice ( After every meal( Not particular 14. What according to you are the relative importances of the following? | |V. Imp |Imp. |Not so Imp. Doesn’t matter | |PRICE | | | | | |PACKAGING | | | | | |DURABILITY | | | | | |FLEXIBLE NECK | | | | | |COMFORTABLE ANGLE | | | | | |SOFTNESS OF BRISTLES | | | | | |LOOKS (TRANSPARENT HANDLE ETC. ) | | | | | |DIAMOND HEAD | | | | | |GRIP | | | | | |INDICATOR | | | | | 15. Has any toothbrush ad (seen on TV/in a magazine) made an impact on you? |YES |NO |IF YES, THEN WHY | |ORAL-B | | | | |AQUA FRESH | | | | |ROYAL | | | | |COLGATE PLUS | | | | 16. Kindly answer the following in case you have used Colgate Plus/Aqua Fresh toothbrushes: | |AQUA FRESH |COLGATE PLUS | |QUALITY |*V. GOOD * GOOD |* V.
GOOD * GOOD | | |* MODERATE |* MODERATE | | |* NO GOOD |* NO GOOD | |AVAILABILITY |* EASY * NOT SO EASY * DIFFICULT |* EASY * NOT SO EASY * DIFFICULT | |IF IT WORTH THE PRICE |* YES *NO |* YES * NO | | |* CAN’T SAY |*CAN’T SAY | |IF THE BRAND IS NOT AVAILABLE, THEN I |* WILL WAIT |* WILL WAIT | | |* WILL NOT WAIT |* WILL NOT WAIT | THANK YOU FOR SPARING YOUR VALUABLE TIME!! RETAILER QUESTIONNAIRE 1. Location of the store : 2. Selling toothbrushes since 3. Brands stocked ( Colgate Plus( Cibaca Supreme( Aqua Fresh ( Jordan( Oral-B( Royal ( Pepsodent( Promise( Ajay ( Ajanta( Classic 4. Which are the top three toothbrushes in terms of exist sales? 1. 2. 3. 4. 5. In case not covered above. What is the status of: 1. Aquafresh( Good( Picking up Moderate( Poor 2. Colgate Plus( Good( Picking up Moderate( Poor 6.
How do consumers ask for a tooth brush? (Rank them) (a) Ask by brand name(b) Ask for a cheap brush (c) Specify a price range(d) Go for an expensive brush (e) Keep trying newer ones 7. Which of these two companies make it a point to: (a) Get a regular feedback Aquafresh( Yes( No Colgate Plus( Yes( No (b) Maintain regular supply Aquafresh( Yes( No Colgate Plus( Yes( No 8. Rank your profit margin for the following brands: 1. Cibaca Supreme2. Colgate Plus 3. Oral-B4. Aqua Fresh 5. Classic 6. Ajanta 7. Pepsodent 8. Jordan 9. What is your a) Highest Margin b) Lowest Margin 10. If the consumer does not ask for a specific toothbrush then which one would you offer him? Why? BIBLIOGRAPHY 1.
Business Today Library 2. A&M Issues of June ‘05, June ‘05, April ‘2006 3. CII Library 4. FORE Library 5. Kotler Philip (Principles of Marketing) 6. Kotler, Philip (Marketing Management). ACKNOWLEDGEMENT I would like to express my sincere thanks to Prof. N. S. Uppal for entrusting me with a challenging project and along with it, his help and encouragement has been exemplary. I wish to place my sincere gratitude to the officials of concerned organization and libraries who in spite of their busy schedule always spared their time whenever needed. ———————– [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic]

Marketing Strategies of Colgate Palmolive Ltd

Assignment colgate vs crest.
Apple’s biggest pportunity comes from its own, loyal fan base. 5. IPhone 4 owners are surely pinning for new hardware and the Iphone 5 has a tempting target. 6. The truly fanatical fans which number In the millions will buy the Iphone 5 no matter Its faults. Needs 1 . Apple, the creator of ‘phone came to know that consumers needs Include Mobility, Flexibility and Reliability. Wants 1 . An Iphone Increases your self-confidence, status and Reassurance, one can never feel left out and that’s the biggest want of a Consumer, Demands 1 .

Apples lower priced IPhone 5C was more expensive than many analysts had anticipated but demand is still coming from lower income consumers. Due to Its more updated and enhanced features IPhone can hardly lose its market. Challenges 1 . only 3-4 competltlve players. 2. Heavily demanded by its consumers. 3. Huge number of fan following that remains anticipated for the newer and newer models. 4. Iphone 5C offers colorful backs on its newer model that attracts huge number of Female Market. 5. Its updated graphical view and smooth user friendly

Assignment colgate vs crest

Colgate Marketing.
Colgate-Palmolive Company (NYSE: CL) is an American diversified multinational corporation focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products . In 1806, William Colgate, himself a soap and candle maker, opened up a starch, soap, and candle factory on Dutch Street in New York City under the name of “William Colgate & Company”. In the 1840s, the firm began selling individual bars in uniform weights. In 1857, William Colgate died and the company was reorganized as “Colgate & Company” under the management of Samuel Colgate, his son.
In 1872, Colgate introduced Cashmere Bouquet, a perfumed soap. In 1873, the firm introduced its first toothpaste, an aromatic toothpaste sold in jars. His company sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in 1896. By 1908 they initiated mass selling of toothpaste in tubes. Colgate-Palmolive has long been in fierce competition with Procter & Gamble, the world’s largest soap and detergent maker. P;amp;G introduced its Tide laundry detergent shortly after World War II, and thousands of consumers turned from Colgate’s soaps to the new product.
Colgate lost its number one place in the toothpaste market when P&G started putting fluoride in its toothpaste. In the beginning of television, “Colgate-Palmolive” wished to compete with Procter & Gamble as a sponsor of soap operas. Although the company sponsored many shows in part, they were most famous for being the full sponsor of the serial The Doctors. Year Wise Details * 1873 – Aromatic toothpaste was first introduced. * 1896 – First dental cream was introduced in collapsible tube. * 1928 – Colgate merged with Palmolive Peet Company. * 1937 – Colgate Palmolive India limited was come in existence. 1949 – Colgate toothpaste launched in Indian market by CPIL. Company details * Fabian Garcio is the Chairmen and Roger D. Calmayer is the M. D Company.

* It acquired 75% equity in advance oral care product * Registered office is located at Mumbai. * Its total turn over is Rs. 1363 cr. * Its main business is manufacturing and marketing of oral care products toilet soaps, shaving products etc. * Its has captured highest share in the toothpaste brand in India. * Its manufacturing plant is situated at Baddi plant of Himachal Pradesh Colgate toothpaste * Launched in 1949 , Colgate is largest tooth paste in India . Colgate has been ranked as India most trusted brand across all Categories for four consecutive years from 2003 to 2007 by brand equities most trusted brand survey. Colgate was also rated as the no. 1 brand. * Colgate toothpaste has variety of products which includes : * Colgate dental cream * Colgate active salt * Colgate max fresh * Colgate total 12 * Colgate extra clean gum care * Colgate sensitive toothbrush * Colgate 360 toothbrush Total market share of Colgate in different years The leader in the oral-care category is positioned to capitalize on underpenetrated market segments through strong brands.
A 51% subsidiary of Colgate US, Colgate Palmolive (India) (CPIL) is a market leader in the Indian oralcare industry since decades. The company has products across variants and price points in toothpaste, toothpowder, and toothbrushes, and has leadership in each of these. CPIL’s two brands of toothpastes — Colgate and Cibaca — are targeted at the urban and rural markets, respectively. CPIL’s toothpaste sales volume increased 11% and toothbrush 41% in the September 2008 quarter, expanding its overall market share to 37. 7% in the January-August 2008 period. The company boosted the toothpowder market share to 48. % in the January-August 2008 period. These increases were driven by tight focus on getting closer to consumers everywhere, strengthening partnerships with the dental profession and customers in the trade and fostering innovation in all areas of business. The launch of innovative products such as Colgate Active Salt, Colgate Maxfresh and Colgate 360° toothbrush also contributed to the growth of the market share. Penetration of modern oral-care products below 55% is low in India as many people in rural India still clean their teeth with traditional products like twigs of neem tree, salt, ash, and other herbal items.
Per capita consumption of toothpaste in India is among the lowest globally. While India’s per capita consumption of toothpaste is 92 grams, even countries like China and Malaysia consume much at 219 grams and 285 grams, respectively. Also, just 7% of the population here brushes twice a day as compared with 61% in China. Increasing awareness on the benefits of oral care and brushing twice daily would work in favour of CPIL. In the current scenario of economic slowdown, there may be a reduction in demand for premium products and higher demand for value-for-money products.
CPIL will be at a significant competitive advantage as it has one of the strongest brands in the lower priced toothpaste segment. The company has improved its presence in the value-for-money segment through an increase in market share of Cibaca from 5% in the year ended March 2005 (FY 2005) to 7. 3% in FY 2008. The markets for advanced oral products like mouth wash, dental floss and teeth whitening products are at a nascent stage in India. These products find limited usage with consumer concentration in urban areas. CPIL caters to these products and has an upper hand in the development of this market as they evolve in future.
The company has also made attempts to widen its product basket through entry into shower gels and body washes and has been steadily expanding its offerings in the Palmolive Naturals as well as Palmolive Thermal Spa range. To make effective use of capital, address overcapitalisation and reward shareholders, CPIL cut its share capital from Rs 136 crore to Rs 13. 6 crore in the fiscal ended March 2008 (FY 2008). Though the number of shares outstanding and the shareholding structure have remained unchanged, this reduction has substantially improved the return ratios like return on capital employed (RoCE) and return on equity (RoE).
RoCE spurted to 129. 95% in FY 2008 from 90. 01% in FY 2007. RoNW improved to 104. 67% from 71. 23%. CPIL aims at margin gains through efficient supply-chain management and bringing down cost of operations. It has expanded its Baddi (tax-efficient zone), Himachal Pradesh, capacity to 66,000 tonnes in FY 2009 from 40,000 tonnes in FY 2007. This plant enjoys excise and income-tax exemption. These benefits will boost margin. With most commodity prices falling, CPIL’s raw material, packing and transport costs will also come down, helping it to increase margin as also expand ad budgets to boost volume growth.
Net sales increased 16% to Rs 863. 06 crore in the half year ended September 2008. Operating profit margin declined 96 basis points to 18. 9% and operating profit grew 10% to Rs 162. 95 crore. Total tax outgo fell 11% to Rs 28 crore, which lifted net profit 17% to Rs 135. 40 crore. Company expect CPIL to register EPS of Rs 19. 7 in FY 2009. The share price trades at Rs 405. P/E is 20. 6. Cost of advertisement incurred by colgate toothpaste in different years. Strong rural off take for FMCG products and Colgate’s expanding market shares in oral care suggest that the company could sustain strong topline growth over the next 2-3 years.
Colgate’s profit growth may outpace sales growth, as it widens its product mix and lowers tax incidence by shifting more of its production to tax-free zones. At the current market price, the stock trades at about 19 times its expected earnings for 2008-09 and about 16 times expected earnings for 2009-10, at par with FMCG peers. The company’s strong cash coffers, rising dividends and high dividend yield also make the stock a good defensive pick in a volatile market. Colgate Palmolive India, which holds a 49. 2 per cent market share in toothpastes and a 35. 2 per cent share in toothbrushes, is the dominant player in the Indian oral care market.
Oral care products have seen strong volume growth over the past year, driven by consumer upgrading (from toothpowder to paste) and strong rural offtake. As the only other FMCG company apart from Hindustan Unilever to have an extensive rural distribution network, Colgate appears well placed to capitalise on strong rural demand for FMCGs, which is being driven by buoyancy in rural incomes and spending power. In the past year, Colgate has been able to expand its oral care market share on the back of new product launches and a strong presence in the economy segment where rival Hindustan Unilever does not have a major presence.
Given its dominant market share, Colgate enjoys considerable pricing power to pass on input cost increases to consumers. The company has also made attempts to widen its relatively narrow product basket through an entry into shower gels and body washes and has been steadily expanding its offerings under the “Palmolive Naturals” as well as “Palmolive Thermal Spa” range. Shower gel is a high growth segment which offers superior profit margins. Colgate’s strategy of shifting from outsourcing to own manufacture of products and locating new facilities in tax-free zones, has also led to steadily improving profitability.
Its operating profit margins have moved up from 17-18 per cent to 22 per cent over the past 3 years. The company closed the nine months ended December 2007 with a 14-per cent growth in sales and a 30-per cent growth in net profit (excluding one-off items), despite significantly higher advertising spends. COMAPANY’S SALES IN LAST 3 YEARS Amounts spend by all toothpaste brands on advertisement (InRs. Crs. ) From the above data we can say that Colgate gives preference to TV media and very small share of advertisement budget is spent on print media Toothpaste penetration
Talking about penetration Colgate concentrates more on urban India, so there is scope to expand business and market share in rural India . Cost of advertisement incurred by different toothpaste brands Even when we will compare Colgate with its competitors in terms of amount spent on marketing we can see that we can clearly see that colgate is the one who spends highest amount on advertising i. e. 40 % of entire market spending on advertisement. Competitor who stood second in spending is PEPSODENT . PEPSODENT spends 22% on advertisement capturing 22. 8 %of the total market share. Followed by CLOSEUP whos is third in
Product mix Strong Teeth Decay Protection | Colgate Strong | Complete 12 Hr Protection | Colgate Total | Cooling Crystal Freshness | Colgate Max Fresh | Fresher Breath | Colgate Energy Gel | Plaque &Removal | Colgate Herbal | Total Oral Care | Colgate Cibacea | Stains Preventing & Shiny | Colgate Advanced Whitening | Germ Fighters | Colgate Salt | Fruity Bubble Gam Flavour | Colgate Kids | Price Mix The Regular segment: Volume(64,922 tons) | The Low price point segment Volume(21,641 tons) | Price Range | | Price Range | | 50 gms | Rs 12. 5-24 | 50 gms | Rs. 8-10 | 100 gms | Rs. 25-30 | 100 gms | Rs. 4-20 | 150 gms | Rs. 35-45 | 150 gms | Rs. 25 | Prominent brands: | Prominent brands: |
• Colgate • Pepsodent • Close-up • Meswak • Dabur Red | • Colgate Cibaca • Babool • Anchor • Ajanta | Place mix * Colgate palmolive spread all over country. It has 3. 5 million retail outlets and 4235 direct distribution channel. * It has cover 75 % of urban market and 39 % of rural market of its total market share. * Colgate toothpaste are available at all most every retail shops in pune. * The Company is tying up with initiatives like E- Chupal and Disha to further strengthen its distribution network. Shubham Enterprises * Add. 16 no. , New kalebari, Meera complex ground floor pune (411033) Dealer margin : 10 Rs (per carton) Retailer margin Per box 6 – 7 Rs. (Per box ) box 50 gm. – 24 piece box 100 gm. – 12 piece box 200 gm – 6 piece promotion mix * Colgate has use various promotion strategy like discount , offers such as 20% extra on colgate strong , free tooth brush with cibaca toothpaste . * It has adopted various medium of advertisement like TV ads, oral care campaign * It has tied up with IDA * It has given free check up by introducing oral health month.
Steps taken: Segmentation * CPIL has segmented market on the basis of product features * 1 Geographic segmentation – * Rural area – Colgate herbal &Cibaca toothpaste. * Urban area – Colgate Gel ,Colgate max fresh, Colgate strong etc. Demographic segmentation * A) Age – 2 year & above * B) Gender – M/F * C) Income – Rs. 5000 & above * D) Family life cycle – Young single, married, with children , old people * E) Education – Both educated on non educated people Psychographic Segmentations * A) Life style – * Sustainer – Colgate Strong Colgate dental Achiever – Colgate energy gel * Experimental – Colgate citrus blast * Health Conscious – Colgate herbal Behavioral Segmentation * A) Value segmentation – Good quality , benefits, value for money
* B) User status – Regular user, first time * C) Loyalty – Medium , strongly * D) Uses rate – light & Medium Targeting * Company has mainly targeted children& youth all over the country . Since a child involves it’s whole family so their parents also use it. * For youths they have launched Colgate max fresh & Colgate energy Gel for modern & adventures generation. Positioning As the “dental expert” Colgate has identified different oral needs and Offers the customer a toothpaste that full fill their desired needs. * It has established its brand image in customer mind so customer has total faith on it. Conclusion & Recommendations * CIPL is doing extremely well in all the areas of its operations and this is the reason for its being the market leader. * It is no. 1 brand of toothpaste in India it has capture more than 39% market share. * The company should focuse on more promotional strategies and Distribution system through effective SCM to beat its competitor .

Colgate Marketing

Colgate-Palmolive essay.

Executive Summary
This paper discuss Information Technology and its application in Colgate-Palmolive Company, a multinational corporations currently active in providing their consumers with consumer products like soaps, detergents, and oral hygiene products. Today, the company is in the beginning of is last stages of IT development. During the last decade, the company has been operating with the support of high-tech IT operations throughout their global markets.
In this stage, there are little or no more IT inventions and initiatives that would generate large changes in the company in the future. The IT strategy of the company is build on the basis of Colgate-Palmolive’s fundamental operation philosophy, integration. Under the SAP system installed in 1994, the company is able to manage their relationship with internal departments and external parties under a single and standardized software design. The IT strategy also allows the company greater efficiency in facing environmental changes and competitive challenges.

Colgate-Palmolive
I.                   Introduction
I.1.      Information Technology
            The term information technology is no stranger to business managers today. It has become a growing necessity for many businesses due to the increasingly rapid growth of economy and market expansion. It is a tool of business survival and a tool of enhancing corporate competitive advantages.
            According to Jim Kelton (2005), companies living in today’s economy generally have three major phases of growth, they are: the Initial Expansion phase, the Growth phase and the Contraction phase. Information technology grows and evolves along with these three phases of growth. In the first phase, Initial Expansion, after a few months of successful business, demands accelerate and production and staffing both increase. In this phase, IT projects are generally put on hold until cash flow improves. Employees take advantage of only the existing computers and other information management equipment until financial opportunity comes.
In the second phase, the Growth phase, volume and prices have reach the condition that allows better financial conditions. As production activities increase, employees perform more meetings and do more work involving existing information technology equipments. IT projects are seen as a necessity to capture growth and there is much more attention and investment in developing them (Kelton, 2005).
In the last phase, the Contraction phase, the IT projects started in the Growth phase are generally completed. However, the business reaches its maturity stages. Business slowdown decreases staffing and production activities. New projects are put on hold or cancelled and there are no new investments on IT (Kelton, 2005).
I.2.      Corporate Background
            Within this paper, we are discussing about IT implementation in the Colgate-Palmolive company. Colgate Palmolive is an $ 11.4 billion worth of multinational company, having customers in more than 200 countries and territories. The company produces consumer products and mostly healthcare products, like toothpaste, bar and liquid soaps, deodorants, antiperspirants, dishwashing detergents, household cleaners, fabric conditioners and specialty pet food. Corporate activities are divided into three core business oral Care, Personal Care and Home Care & Pet Nutrition (‘Colgate Palmolive 2005 Annual Report’, 2006).
            Colgate’s Gross profit margins have increased consistently, from 39% in ’84 to 54% in 2000. Forecasts even indicate that the margin will reach 60 by 2008. In this paper, we will examine further of what IT development phase is Colgate-Palmolive company in today and how it assist the company with its operations (‘Colgate Palmolive 2005 Annual Report’, 2006).
II.                General Management Principles on IT Operations
II.1.     Roles of IT
After shortly assessing the core principle of Colgate-Palmolive’s IT department design, in this chapter we will define how IT operations helped the company in their short and long-term operations. As mentioned previously, the company delivered a stable growth of profit margin and sales as a whole. Corporate CIO stated that the role of IT operations within that success is no less than crucial. However, he also stated that unlike others in the global business, Colgate’s IT strategy doest not stand on its own, it is a part of an overall integration strategy (Barlas, 2002).
II.2.     IT Integration Strategy
According to their CIO, Ed Toben, the company only has one e-business strategy, integration. The strategy has been around since mid 1990’s, maintained its course during the 1999 and 2000 when it was ‘unfashionable’, and remained apparent until today. Despite the massive size of the IT operations throughout company’s global operations, the strategy of ‘integration’ maintain its dominance in most of the design (Barlas, 2002).
The company installed an SAP R/3 implementation since 1994. It has AS 400s systems, mainframes, various applications and approximately 75 data centers which are all designed within the principles of integration. The IT department was designed to eliminate scattered processes arising from data dispersal and avoid the panacea-form of e-business software management. The CIO stated that this integrated style of software management was derived from the corporate philosophy of integrated business software.
Thus, the IT department has some extent of responsibility in overseeing the entire operation as one integrated process. This philosophy has been around since before Colgate installed the SAP system. For instance, the company consolidated its customer service and transportation divisions into one organization, thus, they have clear visibility into the entire consumer-related processes (Barlas, 2002).
II.3.     Colgate-Palmolive IT Implementation
As mentioned previously, the company does not install its SAP software until 1994. Thus, the strategy of integration requires some stages of adaptation before it can fully be implemented throughout the entire organizational system. The company must migrate from dozens of disparate legacy systems and applications to a single data model (Barlas, 2002).
Ed Toben, the CIO indicated that Colgate go through this process very carefully. The company began rolling out R/3 in North America in effort of creating an operational template from business, IT and data management perspectives. The established template then became the model for extending the R/3 to other geographic regions in the world. As a result, today, the company operates using only a single data center and one backup (Barlas, 2002).
III.             IT Relationship with other Departments and External Parties
III.2.   Relationship with Vendors and Corporate Customers
For internal and external operation purposes, the integration strategy has apparent benefits. Some of the mist obvious benefits are the decommissioning of legacy assets and redundant IT positions. Furthermore, the IT relationship has contribute considerably to drive business efficiency. The company collaborates with IT partners like IBM and SAP to keep costs down as infrastructure grows. The company standardized of most of its IT processes right to their desktops (Barlas, 2002).
This standardized system allows the company to react quickly when facing conditional changes or even more fundamental changes in business environment. For example, Ed Toben stated that they did not have any difficulty in facing the currency change to euro in their Europe markets because the SAP system allow them to change their currency to Euro with a single and easy operation (Barlas, 2002).
Relationship with external parties like vendors and customers also guided with the integration philosophy.  Partners are encouraged to actively exchange information and cooperate to solve problems within the supply chain. Colgate managed this by promoting the well establish platform of communication. The company also has a collaborative planning, forecasting and replenishment (CPFR) and promotional planning with a number of partners. Relationship with vendors also becomes easier because the company implemented the Vendor Managed Inventory (VMI) system with various retailer’s distribution centers.
III.2.   Relationship with the General Consumers
Within their financial report, the company stated that they goes far beyond the traditional consumer research I order to understand consumer preferences. For instance, in Europe, interactive touch screen units are placed in consumer centers to gain insights from consumers. Information gained from consumer insights is then routed to the various categories of consumer segments. Furthermore, the company also has invitation-only interactive online communities of 300-400 people providing the company with deep insights that enhance the speed and quality of new product development and marketing programs. The company uses advanced technology to gain insight from consumers and storing within the IT system so all departments might take ‘hints’ from them (‘Colgate-Palmolive Company’, 2006) .
IV.      Conclusion
            Considering the phases of IT development as elaborated above, Colgate-Palmolive is within the second and the last phase. Some fundamental IT projects has been completed and displaying tremendous signs of success while other smaller initiatives are currently under development and integration process with the core IT system.
            Managers of the company believed that IT has a crucial role in supporting the success of Colgate Palmolive. The company has a single IT strategy, integration. Most of the IT designs throughout company’s worldwide operations are using this strategy. The company maintains partnership with several IT partners in order to provide managers with integrated, standardized IT operation right to their desktops. The company uses this strategy in their relationship with internal as well as external parties. Among other benefits, this IT strategy allows the company to react quickly to any environmental changes and gain insights of consumer preferences in their industry.
Bibliography
Barlas, Demir. 2002. ‘Colgate Palmolive’. Line 56. Retrieved November 1, 2006 from http://www.line56.com/articles/default.asp?ArticleID=3896&pg=2&topicID=3
‘Colgate-Palmolive Company’. 2006. Computer Business Review. Retrieved November 1, 2006 from http://www.cbronline.com/companyprofile.asp?guid=8F29C49C-AF39-411A-AF1B-930E67BFA795&CType=View
‘Colgate-Palmolive Financial Report’. 2005. Colgate Palmolive. Retrieved November 1, 2006 from http://investor.colgatepalmolive.com/Annual/annual.cfm
Kelton, Jim. 2005. ‘The Role of Information Technology (IT) – Are You Investing In Your Future?’. Retrieved November 1, 2006 from http://www.altiusit.com/files/articles/articlewpinvest.htm
 

Colgate-Palmolive essay

Colgate Palmolive-Precision Toothbrush Case.
COLGATE – PALMOLIVE COMPANY: THE PRECISION TOOTHBRUSH I-SYNOPSIS In 1992, Colgate-Palmolive (CP) was the global leader in household and personal care products like toothbrushes and toothpastes. In 1991, its sales topped at $6 billion and profits at $2. 76 billion and it cornered 43% of the world’s toothpaste market and 16% of the world’s toothbrush market. It was also the leader in retail toothbrush sales in the United States. Prior to the 1990s, consumers were satisfied with toothbrushes that were aesthetically pleasing. But the 1990s saw that baby boomers were becoming increasingly concerned with their oral health, specifically their gums.
This led to a rise in the sales of therapeutic toothbrushes. The toothbrush industry experienced a massive influx of worthy competitors and this led to the formation of a niche, super-premium market. In order to gain an edge each competitor worked on developing new toothbrush technology, forming alliances with dental professionals, expanding advertising budgets and offering promotions that would grab consumer attention. In August 1992, Colgate – Palmolive was poised to launch a new toothbrush in the United States, tentatively named Colgate Precision in the super-premium market.
Precision, was proven to be very effective in removing plaque – 35% more effective than existing brands – and in preventing gum disease. This advantage has been attributed to the innovative design, high-tech research using CAD and infrared scanning, consumer research and extensive product testing. CP’s Oral Care had been developing this technologically superior toothbrush for over three years. But the market was highly competitive with new products already in the fray. CP had to market Colgate Precision as per existing market strategies that include proposed strategies involving product, price, place, and promotion.

The issues and Challenges, Analysis and Recommendations of the case are enumerated in the succeeding paragraphs. II-SSUES AND CHALLENGES In 1991, CPs sales topped at $6 billion and profits at $2. 76 billion and it cornered 43% of the world’s toothpaste market and 16% of the world’s toothbrush market. In the United States, the world’s largest market, Colgate-Palmolive held the number one spot in toothbrush sales with a market share of 23%. Its international sales accounted for 64% of total sales and profits account for 67% of the total profits from international operations.
The impending release of Colgate-Palmolive’s new toothbrush, Precision, may affect sales of its existing toothbrush lines. This may lead to a “cannibalization” of the Colgate Plus and Colgate Classic’s market of up by 35% to 60%. of the expected Colgate Precision sales. Since the existing toothbrush lines are the “cash cows” of the company’s oral care division, a dismal performance by the new Colgate-Palmolive Precision might drain the “cash cows” of its their resources market share altogether. Colgate-Palmolive’s media expenditure layout is very small compared to its rivals.
It spent only $7 million dollars on marketing Colgate-Palmolive Plus. Since media exposure fuels consumer demand for a new product, this is one area where Colgate-Palmolive needs to have its expenditures equivalent to that of its rivals. Colgate-Palmolive’s media expenditure layout is very small compared to its rivals. CP could be positioned as a niche product to be targeted at consumers concerned about gum disease as such; it could command the 15% premium over Oral-B and would be expected to capture 3% of the US tooth brush market by the end of first year following its launch.
Alternatively Precision could be positioned as a mainstream brush with the broader appeal of being the most effective brush available on the market. It was estimated that as a mainstream product, Precision could capture 10% of the market by the end of the first year. CP already had another toothbrush in the mainstream toothbrush, but didn’t have any in the super premium niche position. Other decisions that will follow the positioning decision would be price, distribution channels, advertising and promotion planning.
If it is positioned as mainstream right away then not only will it cannibalize Colgate Plus, which is one tier below the super-premium category, but will have leave CP without a product in the super premium category which is the largest customer segment and Oral-B is virtually unrivalled in that space. Challenges Because of the recent market saturation, the various producers of oral health care products have rushed to offer promotional incentives including two-for-one, buy-one-get-one-free and mail-in refund coupon deals.
With the increase of in-store advertising, toothbrushes and toothpastes have been found to sell 170% better when located in close proximity. The most worrisome threats to CP are from the company itself. If CP were to release the Precision brush into the mainstream market as the “Colgate Precision,” not only would it knock the children’s Plus brush off of the shelves, it would also cannibalize its flagship Plus model. III-ANALYSIS In the year 1993, budget was increased to cater for overall toothbrush ads and promotion budget by $19. 2m (80%over estimated $24m). $32. 5m was devoted to precision, $10. m to Colgate plus. The advertisements focused on prevention of gum disease, toothbrush effectiveness so as to develop superiority claim for Precision. Customers picked their brushes based on features, comfort, personal recommendation and health and hygiene. As a consequence they were willing to pay premium for products addressing these concerns.. 82% of toothbrush purchases were unplanned. 46% of adults were therapeutic brushers. 85% brushed daily. 85% used professional brush and 54% flossed regularly. Their major brands were Oral B Angle, Oral B Regular and Colgate Plus.
In 1992 CP had a principal toothbrush brand Market share of 26% and was followed by Oral B and Johnson & Johnson with market shares of 23% and 22% respectively. CP had the highest market share of 26% in Food stores and 39% in Mass merchandisers but had a dismal 17% market share in drug stores where Oral B had a highest market share of 31%. Thus CP needed to increase its focus in the drugstore channel. Colgate precision was priced at $2. 02 in the niche category and $1. 76 as a mainstream product. The manufacture cost per unit of Colgate precision was $0. 66 in the niche category and $0. 4 as a mainstream product. Industry Analysis Not only can the industry be broken down by price models (super-premium, professional, and value), it can broken down a second time into niche and mainstream offerings. Consumers of this industry can be sorted into three categories: therapeutic, cosmetic, and uninvolved. Competitive Analysis One promising conclusion that can be drawn from the competitive analysis is that every company has been caught off guard by the change in consumer behavior, emergence of new technology, and introduction of new players entering the playing field.
For example, in 1988, Johnson & Johnson introduced “new brush technology” only to phase it out by 1992. In order to get an edge, competitors, Johnson & Johnson, Oral-B, Procter & Gamble, and Smithkline Beecham (latter two are new competitors), are offering promotions in the form of coupons, mail-in refunds, and bundles. Environmental Analysis With 43% of the global toothpaste market and 16% of the global toothbrush market, CP has defined itself a leader of household and personal care products worldwide, and positioned itself as the number one retailer of toothbrush products in the United States.
Because of its good standing relationship with retail stores, it is able to position its products on the middle shelf, right between its competitors, Reach and Oral-B. Although industry players are manufacturing products to improve oral health, it has been difficult to educated consumers of the importance of preventing gum disease (which is a common motivator to improve dental care habits). One major advantage that the competitor, Oral-B is, it is recommended by dental professionals.
IV-RECOMMENDATIONS Opportunities In consumer tests, majority of consumers are willing to experiment with new brands/models, CP could make being new, different, and effective the major tenants of its marketing messaging; along with including messaging concerning their incredible ability to fight gum disease, it should have a rock solid campaign. Price Precision should be positioned as niche category in the price category $2. 29

Colgate Palmolive-Precision Toothbrush Case

Colgate Pricing Strategy.
In a highly competitive oral care market, Colgate holds its’ own, and maintains a category leadership position. The company’s strategies to category growth are accomplished by long-term, joint planning with retailers; understanding consumers and how they shop; and employing integrated marketing to demonstrate the benefits of new products. The company has long been on the voyage to establish the best brush possible, and in doing so, has developed a number of impeccable products along the way.
The introduction of the Wisp portable mini-brush, which was voted 2010 Product of the Year and marketed through online video and social media, increased Colgate’s market share of the U. S. manual toothbrushes to a record 32. 2% last year. In the toothpaste segment, Colgate took the leadership position with 36. 2%. Earlier this year, Colgate introduced Wisp Plus Whitening with over 15 million impressions in the second quarter. Articles in Fitness and InStyle magazines and mentions on “The View” television program and numerous blogs further promoted awareness of the product, as did sampling at colleges and conducting a Facebook fan drive.
In keeping up with consumer trends, Colgate began to focus on features, comfort and professional recommendations. Consumers first purchased toothbrushes without much knowledge or information concerning the product’s benefits. As new product development increased, and consumers became better informed about the benefits of toothbrushes, they began to focus their interest not only on cavity prevention, but also on the health of their gums, their oral hygiene, and their cosmetic appearance.

Because consumer interest and toothbrush purchases began to increase, advertising and promotion also began to increase, which lead to the development and addition of the super-premium product class (McCarthy, 2002). Consumers began to purchase toothbrushes based on the specific benefits each toothbrush and company had to offer. One study identified 46% of adults as being therapeutic brushers – that is, brushers acting primarily to avoid cavaties and other problems with oral care (Pauszek, 2009). In reaction, Colgate developed the new Prescision toothbrush.
CP tracked consumers brushing movements and how they affected plaque removal, thereby developing a brush with a varation of bristle lengths to thoroughly clean hard to reach areas (Younger, 2002). Production began in 1989 when the company put together a research team whose purpose was aimed at testing the design of the toothbrush, how the company would market the product, and how the company would gain a competitive advantage over others. Colgate-Palmolive’s mission was to “develop a superior, technical, plaque-removing device” (Laidler, 2003).
The research team tested and experimented with the toothbrush for eighteen months by the usage of “dental professional focus groups and product usage tests. ” This led to the introduction stage of the product life cycle, with the “launching” of the Precision toothbrush to the oral health care market in 1993 (Laidler, 2003). Colgate-Palmolive considered many different names, which included, “Colgate System III, Colgate Advantage, Colgate 1. 2. 3, Colgate Contour, Colgate Sensation, and Colgate Probe” (Laidler, 2003).
Colgate-Palmolive decided upon the name Precision, because they did not want a name that could lead customers to associate the new toothbrush with their already existing toothbrush, Colgate Plus. The price budget for promotion was set at 14. 4 million dollars. The company’s promotion plan was to “induce trial” (Laidler, 2003). Colgate Palmolive planned to promote the Precision toothbrush by offering a free five-ounce tube of toothpaste or a fifty percent off coupon that could be put towards any other size of toothpaste to every consumer who purchased a Precision toothbrush, and by offering $. 0 off coupons (Younger, 2002).
The position of the Precision toothbrush could be niche or mainstream (Colgate Palmolive, 2009). The focus of niche positioning would be placed on consumers who are concerned about the prevention of gum diseases. There would be many positive benefits to the company if Colgate-Palmolive were to position the Precision toothbrush as a niche product. These benefits would include one, by targeting the segment of consumers who are worried about gum disease; Colgate-Palmolive would be able to charge premium prices (Colgate Palmolive, 2009).
Two, Colgate-Palmolive would be able to differentiate the Precision toothbrush from other toothbrushes, because of Precision’s technological superiority over the other toothbrushes already on the market. In contrast, mainstream positioning would place emphasis on the Precision toothbrush as being the most appealing and effective toothbrush available on the market. The advantages of using mainstream positioning for the Precision toothbrush would be that most retail stores are under a mainstream position rather than a niche position.
In addition, in the super-premium category, the Precision toothbrush would be the most superior product (Younger, 2002). By positioning the toothbrush as a mainstream product, it would in return increase name recognition for Colgate. Negative advantages of using mainstream positioning for the Precision toothbrush are that although the toothbrush would be superior to the other super-premium toothbrushes, the prices for the Precision and other brushes would be equal. Equal prices would then lead to increased competition, which in return could cause prices to go up.
A second disadvantage could also lead to the cannibalization of Colgate-Palmolive’s other super-premium toothbrush, the Colgate Plus. By producing a superior toothbrush, that offers more qualities than the other toothbrushes available on the market, at or around the same price as the competition, consumers will hopefully want to purchase the Precision toothbrush over the others. There will be more qualities offered at no extra charge. The price of the toothbrush if positioned as a mainstream product will have to be equal to the prices of the other toothbrushes already available on the market.
If the Precision toothbrush is profitable and there is a high percentage of consumer demand, then Colgate-Palmolive might want to consider increasing the price of the toothbrush by a small margin. The price of a product says something about the quality. Even though the quality of the Precision toothbrush will be significantly higher than other leading toothbrushes, the price of the toothbrush will be determined by the prices of the other toothbrushes already in the market (McCarthy, 2002). This pricing strategy is a result of positioning the toothbrush as a mainstream product rather than a niche product.

Colgate Pricing Strategy