Marketing Strategies of Colgate Palmolive Ltd

Project Report A STUDY ON commercializeing STRATEGIES OF COLGATE PALMOLIVE LTD. Submitted to Dr. D. K. Agarwal Submitted by DINESH CHAUHAN62014 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 use soup-straineres fashioned from twigs.In the twentieth century a major design advance occurred in 1938 with the launch of Dr. Wests Miracle tussock soup-strainer, the first nylon bristle brush. Until the late 1970s toothbrushes were widely viewed by consumer as a commodity and were in general obtains on monetary value. The involvement remained outset and the companies also treated their toothbrushes as an extension, to get their consumers to use their toothpastes. Typic ea ch(prenominal)y 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 submission of some(prenominal) foreign imposters and the marketing game has assumed a originally in the buff dimension. Companies ar assay to transfigure to PULL strategy of long term returns and the inclination of consumers to shell out a few rupees extra to ensure a more wholesome shell out of their teething and gum. This has resulted in rapid exploitation in value terms.Added to this is the initiative of the companies to counsel on expanding the market by bringing the over 65% non-users in their consumer fold. With such vast potential to be exploited, the innovation of several new players with their innovative reports and accept in similar developing markets, the manufacturi ng is likely to see a hatch of action in the immediate future. OBJECTIVE The higher up 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 normal consumer and his/her idea/perception of this low involvement category carrefour. ? This was to be followed up with the study of Colgate sum toothbrush, as a typical return of the fellowship, 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 & Ms, Business Todays. 2. For consumer attitudes, I prep ard a questionnaire that was circulated among 70 odd tri be, well spread out across the whole of Delhi. The akin 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 gull 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 shout for paste and tooth powder, Colgate Palmolive (India) was established on 23rd September 1937 as a private hold guild in Bombay, as a wholly owned subsidiary of Colgate Palmolive Co. Of USA Initially it started with trading natural process 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 goo at Waluj (Aurangabad). The plants at Sewri and Waluj m anufacture oral care products like dental consonant 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 companys distribution ne 2rk 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 cxxx1. To comply with the FERA regulations, Colgate Palmolive, USA diluted its share holding to 40% in the India n company, through an protract 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 gross sales of $ 6. 06 billion and a gross profit of $ 2. 76 billion, its world wide R&D expenditures were $ 114 one thousand thousand and media advertising expenditure totalled $ 428 meg. Colgate Palmolives 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 Palmolives 91 manufacturing plants, 275 new products were introduced world-wide several strategic acquisitions (e. g. of the Mennen mens toiletries company) were completed and manufacturing began in China and Eastern Europe. Since 198 5, gross margins had climbed from 39% to 45% while annual volume growth since 1986 had averaged 5% International sales Colgate Palmolives strong unit, accounted for 64% of sales and 6% of profits in 1991. COMPANY STRATEGY ORAL CARE AND TOOTHBRUSH persistence 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 flow rate 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. CPs action centring just just about finely balancing the urban market (59. 5%) and farming(prenominal) markets (68% share) . So while the company has introduced such pension 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 p er 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, center(a) 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 finisher 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 n ew variants and added features. Whatever is new, people buy. So the idea is to accelerate filling through a variety of product features. CPs perception of the Indian market is of one where people welcome change but clamour for high end products at cheaply prices. The firmness to this enigma as per the companys strategy is to .. Optimise cost and formulation and the proceses and come up with streamlined manufacturing to answer this . CPs 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. partitioning The toothbrush industry tush be regarded as a component of the oral examination 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 etcetera But Colgate Plus need non to bothered about latter as it operates in a different category. The to oth brush industry can be metameric in the basis of social class & income group (Demographic Segmentation ), price (Product segmentation), benefit (behavioural segmentation), the last beingness 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 standardized Colgate holy Pepsodent popular Value for money consumer Upper middle income urban Premium Colgate Plus, Classic, Ajay, Royal racy quality cleaning efficiency consumers Upper class urban sophisticate Super Premium Oral B, Aquafresh, Jordan, Close UpUnique, 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 gain switches from standard category to up grade PSYCHOGRAPHICS Variations in Product Jazzy looks, Transparent compensate simpleton looks, Modest Mix of the two transparent Flashy act upon Superior Packingpackaging, Solid colours handle but not very flash packaging. Urban sophisticate Chooses with care, sports it asAbhors Abhors a locating symbol while interacting in group travels Semi urban Non Chalant User Aspires for it, but finds it Very lots goes for this as it Some times this difficult to afford tries it serves is purpose without much seldom expenditure bucolic User Does not have access/cant Is the only option Datun Generally cant 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 at one time 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 modal value and splendor. BENEFIT SEGMENTATION User Characteristic Invalid oral wellness 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 advertisement 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 certain 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(prenominal) every meal Brushes mostly once, sometimes At most once a d ay twice Brand loyalty High Low Nil equipment casualty (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 sound out 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 carnal knowledge IMPORTANCE OF ATTRIBUTES MALES FEMALES TOTAL RANK PRICE 62. 7 57. 3 61. 2 5 PACKAGING 40. 2 49. 3 44. 6 8 forcefulness 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. run 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 enchant 58. 8 68. 0 63. 4 4 INDICATOR 28. 4 41. 3 34. 3 11 COLGATE PLUS USERS solvent 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- impertinently 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. RETAILERS SURVEY FEATURES No. f Respondents 20 Areas covered Defence Colony, South Avenue, caravan inn 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) security deposits extended L imitations Given the areas covered, the response was bound to be necessitateed 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. gross revenue High Colgate Plus, Cibaca, Classic, Pepsodent, Oral-B ok 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 supply 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. Retailers Perception Of Preferences BY BRAND NAME 36. % CHEAP BRUSH 9. 3% SPECIFY PRICE scarper 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 profound margin. * The D above was also substantiated by our consumer survey. cultivationThe present day brushing habits of the Indian society as a whole leaves a lot to be desired 41 toothbrushes are sell 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 sustain in our survey as 8 8. % of respondents dont 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 increase off take of toothbrushes. No one has made a serious approach in the virgin grime of 65% non-users (CPs 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 joining (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 trip the light fantastic toe dotted, more vibrant colours. Adults Simple designs and sober and decent colours. For the new entrant Introduce the product with the offer of one throw in the towel toothbrush with the purchase of a brush which will encourage in pulley-block 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 conundrum 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 feel for and concerned attitude by the company. With the purchase of a toothbrush, give a free coupons which is to be fill up 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 promotio n 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 old age ( 30-40 Years ( 40-50 years (Above 50 years 2. SEX ( Male ( Female 3. OCCUPATION ( Govt. Service( Self-employed ( Corporate executive director ( 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? ( Dentists advice ( Impressed with the advertisement ( Shopkeeper ga ve 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. Doesnt 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 feign 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. superb * GOOD * V.GOOD * GOOD * MODERATE * MODERATE * NO GOOD * NO GOOD AVAILABILITY * EASY * non SO EASY * DI FFICULT * EASY * NOT SO EASY * DIFFICULT IF IT WORTH THE PRICE * YES *NO * YES * NO * CANT severalize *CANT SAY IF THE BRAND IS NOT AVAILABLE, THEN I * allow WAIT * WILL WAIT * WILL NOT WAIT * WILL NOT WAIT THANK YOU FOR SPARING YOUR expensive 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) stipulate 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). mention 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 cross schedule always spared their time whenever needed. pic pic pic pic pic pic pic pic pic pic pic pic pic