46095125 a study on marketing strategies of colgate palmolive ltd
TRANSCRIPT
INSTITUTE OF MANAGEMENT STUIES NOIDA
Project Report
A STUDY ON MARKETING STRATEGIES OF COLGATE
PALMOLIVE LTD.
“POST GRADUATE DIPLOMA IN MANAGEMENT” SESSION: 2011-13
SUBMITTED TO SUBMITTED BY DR. VANDANA MATHUR
Contents
Executive summary 1
Introduction 2
Objective 3
Methodology 4
Literature Review 5
Company Profile 6
Company Strategy 6
Marketing Mix 15
SWOT Analysis 26
Survey Findings 28
Retailers Survey 34
Conclusion 37
Suggestions 39
Consumer Questionnaire
Retailer Questionnaire
Bibliography
EXECUTIVE SUMMARY
The project was started on 1st December, 2012 after knowing all the relevant information about the Colgate market and distribution, under the guidance of ……………. The first part of my project involves the study of distributors allocated to me Identification of their problem areas and helping them in order to increase sale. For this I used the method of personal interviews and questionnaires. At the same time, they were being made aware of the increasing network and consumption of toothbrush customers. For this I visited around 20 distributors in New Delhi region. I was also visited 20 retailers s out of New Delhi.
This study deals with the marketing activities for the LPG, study the customer satisfaction level.The customer satisfaction level is being measured through a questionnaire and covers the important measuring coordinates of the satisfaction level. The results from the survey are analyzed and several interesting revelations are made in the end with suggestions to improve the image and sales of the product.
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-à-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.
Literature review
1.Fiorito & Laforge (1984) on the other hand have conducted a research on smaller retailers and
what kind of marketing strategies they have employed to stay competitive in the retail industry.
2 The two types of marketing strategies which are highlighted in the research as being commonly
used by small retailers pertain to integrated marketing strategy and differential marketing.
3 “The mission now is ruthless efficiency, eliminating the losers and refocusing budgets on
genuinely profitable activities” (Parsons, 1992).
4 A study conducted by McMaster (1987), highlighted the importance of market strategies
pertaining to branding which aid the retail business to initiate growth and positioning for itself in
the market.
5 “The study concludes that sales growth has been the marketing strategy demonstrating highest
affinity to profit performance. Apart from this, increase in market share, capital-to-labor ratios,
and the average inventory level are keys to evaluating and selecting retail marketing strategies
which promise high profitability.” (Cronin, 1985)
6 The limited service offering and marketing strategy for catering to niche markets is analyzed
by Campo & Gijsbrechts (2004),
7 The paramount goal of marketing is to understand the consumer and to influence buying
behaviour. One of the main perspectives of the consumer behaviour research analyses buying
behaviour from the so-called “information processing perspective" (Holbrook and Hirschman
1982).
8 the information processing perspective, marketing analyses consumer behaviour by employing
a psychologically grounded concept of attitudes (Balderjahn 1988; Ronis, Yates et al. 1989;
Luzar and Cosse 1998).
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
consumer
Standard Colgate Classic
Pepsodent popular
Value for money
Upper middle
income urban
consumers
Premium Colgate Plus,
Classic, Ajay, Royal
High quality cleaning
efficiency
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 Flashy
colours Superior
Packing
Simpleton looks,
Modest
packaging, Solid
colours
Mix of the two :
transparent
handle but not
very flash
packaging.
Urban
sophisticate
Chooses with
care, sports it as
a status symbol
while interacting
Abhors Abhors
in group travels
Semi urban Non
Chalant User
Aspires for it, but
finds it difficult to
afford; tries it
seldom
Very often goes
for this as it
serves is purpose
without much
expenditure
Some times this
Rural User Does not have
access/can’t think
of
Is the only option
Datun
Generally can’t
afford this 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
Therapeutic
Brushers
Involved oral
health Consumer
Cosmetic
Brushers
Uninvolved Oral
Health Consumer
Non-chalant
Brushers
Product
Differentiater
Search
functionally
superior product
with many
attributes.
Search for
product that
effectively
delivers cosmetic
benefits
Views products
as same Lack of
interest
Advertising
appeal
Put off by
hardsell Prefers
dentist
recommendation
or informed
opinion
Influenced by
promotion,
hammering on a
USP
Relatively
unaware of ads
can at most be
influenced by
price offs,
package deals
Buying behaviour Buys for himself,
will go to a
specialised store
Buys and uses
for himself. Will
not go beyond a
large shop,
supermarket
Buys for family.,
will pick up any
brand available.
Regularity of
usage
Brushes after
every meal
Brushes mostly
once, sometimes
twice
At most once a
day
Brand loyalty High Low Nil
Price (Willing to
pay)
>20 15-20 <12/0q
Major Brands Jordan, Oral - b
Indicator
Colgate Plus,
Pepsodent
Perfect
Colgate, Classic,
Cibaca, promise
TARGETING
Colgate plus has been intelligently targeted at the upper middle class, towards the lower
end of Premium / super Premium category to not only take advantage of growing
consumer affordability but also to provide a pull factor to family user in standard/popular
category to upgrade to higher quality Colgate Plus.
An implicit assumption about the large segment is that it is decently educated, hygienic
conscious and keenly discerning about the cleaning efficiency of the toothbrush used.
They primarily live in metros, urban areas, big towns, and have a good standard of
living.
At the time of its launch in 1987, Colgate Plus was the first indigenously manufactured
toothbrush in premium segment. Company claims, it built this segment single handily
and obviously has the first mover advantage exemplified by its No.1 position despite the
onslaught of variety of premium brands from abroad.
Colgate believed that with rising income & increasing westernisation, it could upgrade
the toothbrush market and consumer could be willing to pay a few rupees more for a
quality product.
DIFFERENTIATION & POSITIONING
In the toothbrush market which is heavily cluttered both in terms of brand varieties and
corresponding messages and constant hammering of almost similar USP’s it is very
difficult to differentiate and position a product as mundane as a tooth brush in the
consumers mind to persuade him to become a loyal user.
Positioning in tooth brush market done at various levels
PRODUCT : Design differentiation like angular neck, dolled rubber grip, rigged edges
and design of bristles, convenient head shaper etc.
These work only in upper segment, which is willing to pay a premium for added
attributes. Colgate Plus has a unique diamond shaped head & soft outer bristles.
PACKAGING :Cardboard cartons, transparent blisters, hanger shaped hooks, coffin
packing (storing when not in use). In a blister pack, packaging makes up to 40% of
cost. Colgate Plus comes in transparent blister pack with a hanger shape hook.
PRICE : By super premium pricing one can give a perception or aura of technical
superiority/high quality to a brush Jordan, Oral - B, Close Up Contact have followed this
route.
Or one could take value for money route to target large families and heavy user
economy pricing for market penetration especially in rural markets.
Colgate plus has positioned itself in lower end of super premium category.
RECOMMENDATION / RELIABILITY : Oral - B has its USP as the tooth brush most
dentists world wide use & recommend - One could go for celebrity endorsement in
cosmetic segment but its not at all an effective strategy in a low involvement product like
toothbrush.
Colgate world - wide has a image of brand for committed to public oral care and hence
its association with a dentists and the ‘ring’ of protection & confidence.
Positioning Colgate Plus as a higher quality product in the “Professional” segment was
an intelligent move as it prevented cannibalization of its other brands like Colgate
Classic.
BRANDINGColgate is a brand having a cult following. It world wide reach and association with
dental health has made it a brand associated with a caring attitude, providing quality
oral care to masses at an affordable price.
Colgate is No. 1 brand in Indian Market the three consecutive surveys by A & M
magazine. So, while launching the new toothbrush, it was imperative to keep “Colgate”
as a part of the name and incorporate something that could justify the increment in
price. As modifications in the form of an entirely new category “diamond head” was
introduced, it was ideally decided upon a name that promised to deliver something
extra, additive, etc. “Plus” was thus added on.
MARKETING MIX
PRODUCT
Product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a need or want.
The product can be looked at five levels:
The Core product is the essential service that the buyer is buying. In this case it is Oral
care.
The Generic product is toothbrush.
The Expected product is a set of attributes that the buyer expects to get./ in this case
being, efficiency of cleaning, thoroughness in cleaning and care of gums.
Augmented Product is that what is provided by the seller beyond the expected product
attributes i.e. those attributes that seek to distinguish the product from others in its
category. Colgate Plus is put across as a complete dental care product. It uses its
diamond shaped head, soft outer bristles, hard inner bristles and accreditation by the
Indian Dental Association as its USP’s.
Potential Product refers to set of possible new features that might eventually be added
to the product being offered. Toothbrush as a product does not offer much scope
beyond changes in design and material/ shape of bristles. Design changes are usually
made on grounds of aesthetics, handling and efficiency in cleaning. Colgate Plus has
recently introduced Colgate Plus Zig Zag on the grounds of efficiency in cleaning.
Some product differentiates in the industry are ;
Pepsodent Popular - the Squiggle between the head and the handle is
flexible and stand along structure.
Jordan Magic - the colour changes to indicate when you have brushed
enough.
Close-Up Confident -a thick handle with a shall head giving better access.
Oral - B -blue tuft as indicator which loses colour as bristles
harden with use.
PACKAGING:
Packaging provides one with means and scope of differentiating in relatively
homogenous product market. Packs have graduated from cardboard cartons to blister
packs to let the consumer pick the colour of his choice. Some like Pepsodent Perfect
and Colgate Plus, come in hanger shaped hooks on the blister packs because most
small sized retail outlets lack the shelf space required to dangle peg-racks.
The pricing depends a lot on the packaging and advertising. In a blister pack,. The
product makes up 60% of the cost, packaging the rest. A coffin pack, where the brush
can be kept back after use, inflates the packaging cost. While these ‘hygiene packs’ do
prevent the toothbrush from accumulating dust, they end up with a double layer of
packing, the outer one indicating mandatory product details.
Major Operators in the Premium Toothbrush “Segment
Product/
Manufacturer
Feature Benefit Reason Tagline
Oral B
Indicator
(Gillette)
Indicator
Bristles
Tells you
when to
change the
toothbrush
Blue band
fades half
way
The brand
most dentists
use
Reach
(Johnson &
Johnson’s)
Angled neck,
raised rubber
ridges on
handle
Cleans even
hardest to
reach places
Slimmed
down tapered
head
Feel the
difference
Colgate Plus
(Colgate
Palmolive)
Diamond
Head, Soft
outer and
hard inner
bristles
Reaches
inner crevices
of the mouth,
gentle to
gums,
comfort and
efficacy
Unique
diamond
shaped head
(narrow in
front)
Because your
smile was
meant to last
a lifetime
Aquafresh Pressure Prevents gum Flexes as you For gentle
Flex
(SmithKline
Beecham)
sensitive
squiggle
neck, dotted
rubber grip
irrigation brush to
absorb extra
pressure
dental care
PLACE
A marketing channel performs the work of moving goods from producers to consumers.
It overcomes the time, place and possession gaps that separate goods from those who
want them.
The decisions regarding distribution channels are a very crucial part of the marketing of
Fast Moving Consumer Goods (FMCGs) more so because of tooth brush being a low
price product with negligible brand loyalty, no Consumer would be willing to walk more
than 2 km to procure a tooth brush and would accept, without much hesitation, any
toothbrush thrust upon him by the shopkeeper. So the markets has to make extra
efforts to ensure easy availability of this low involvement product, which is no easy task
in a country of the size & diversity as that of India.
Channel decisions have important implications for other elements in marketing mix.
Colgate Palmolive had to design a distribution strategy which would best attain following
channel objectives.
Achievement of greatest possible coverage of the target market
Ensuring that the consumer can easily procure the toothbrush (Under no conditions
stock out can be allowed.)
Maintaining mutually beneficial relationship with the retailers since tooth brush is
basically push marketed.
PROMOTION
The discussion of marketing mix elements cannot be complete without analyzing the
promotional strategy of the company. In a low investment category, where there is
hardly any individual who can call himself “brand loyal’ and most of them happy with
whatever toothbrush they can lay their hands on, without caring too much about price, a
marketing effort to ensure an optimum push and pull combination and an impact
presence in the consumers mental frame is a must. However, because of the callous
attitude with which consumers purchase a tooth brush, too much marketing effort in one
direction or some particular defined directions without immediate appraisal does not
make sense, more so because of the low turnover to promotional expenses. It simply
does not make sense to spend 20% extra on promotion to gain 0.2% extra market
share. In view of the above. Colgate Plus has been very selective about its campaign
and has moved between mediums very slowly.
Advertising Campaign
Colgate Plus launched in the U.S. in 1985, was introduced in India in 1987 and was
among the very few players in the premium segment. “Colgate” brand name was
capitalized upon with the diamond shaped head being shown as the ‘hero’ in oral care
and all set to take on the toothbrush market. As competition intensified it shifted its
focus on softness and comfortable feeling with efficiency in cleaning plaque. The
advertisements were screened on Doordarshan and in leading magazines. They were
targeted to the family as a whole, very much like the strategy for other Colgate
products. The focus gradually shifted to soft outer bristles and hard inner bristled to
ensure a caring approach to gums and meticulous cleaning. The tagline used was “ . . .
Because your smile was meant to last a lifetime”.
There was parallel thrust on Dentist Accreditation which successfully translated into
Colgate Plus beginning to appear on dentist prescriptions. However in the face of
intense competition, no large scale endorsement by event or personality was sought for
and Colgate Palmolive continued to target the family as it kept on doing with its
toothpaste.
Throughout its advertising strategy planning Colgate Palmolive relied nonprofessionals
agencies. The account is currently handled by :”Redifussion”.
Sales Promotion
1. POP : The company provided danglers, small posters and hooked/dispenser
packing to its retailers. These were particularly splashed across retail outlets during
the discount periods with “Red & Yellow” colour combinations to ensure high rate of
impulse purchases. However, besides the discount offers, no other POP display
means made much of an impact in terms of increase in sales.
2. Health Mela : Colgate Palmolive organizes a ‘Young India Dental Health melas in
select cities where free check ups and free sample distributions of toothpaste and
toothbrushes are done. This aims at achieving a three pronged strategy of
Increasing dental care consciousness
to create a good brand recall of Colgate oral care products
to increase the company’s image as a socially responsible entity.
3. Keeps India smiling - Ad campaign : In a break from its earlier attitude of only
ascribing to its oral care image. Colgate joined the list of companies basing their
campaigns on the 50 years of independence. They launched a “Vande Mataram”
series of campaigns with people from all walk of life coming and sharing their
experiences on how the times have changed for the better following it up with
“Vande Mataram”. The small snippet was followed up with Colgate being flashed in
the form of a smiling face, emphasizing both its attachment with the growth and
development of the Nation and its contribution in keeping India smiling for the last 50
years thus striking both an intellectual and emotional chord. The snippets were
strategically screened in key media slots.
4. Sponsorships : Though Colgate oral care products have not been witnessed to
promote any large scale events, Colgate has often associated itself with TV serials
based on social and family themes e.g., Humlog and Buniyaad - thus re-
emphasizing their positioning as a family products.
Though not all of the above specifically emphasized the promotion of Colgate Plus
toothbrushes, they are conclusive image building exercises for the company as a whole
and aimed at highlighting its supremacy and commitment to the ‘oral care sector’. As
such it automatically translated into an image building exercise for the toothbrush
category as well.
Colgate Plus was distributed free with the September : issue of the filmfare magazines.
PRICING
Generally the most important of all the P’S in a developing country like India where
semi-urban and rural population constitutes, a massive portion of the total market, has
to be decided upon after contemplating on all the aspects related to the market and the
product itself.
For a product like toothbrush, the major cost is that of packaging (about 40% of total),
the rest being spread over the bristles, the nickel silver wire holding the tufts in place
and on the body of the brush.
The prices of toothbrushes have taken a quantum leap. The costliest toothbrush in 1986
was Rs. 4/- which is today in the range of Rs. 25/-. Thus we have seem a major jump
in value sales vis-à-vis volume sales.
Colgate Plus when it was launched in 1987, was introduced as a champion product to
become the ‘hero’ of the toothbrush market meant to ‘keep your smile forever’. It
promised to deliver more than the rest and was priced accordingly and soon became a
major player in the market. At that time it was playing against ‘Jordan’ and ‘Royal’, both
of which were being imported. Gradually as the market expanded, with the several new
players coming in, Colgate Plus continued to be the top most brand of the players till
Oral - B, Aquafresh, Forhans Galaxy came in . So right now Colgate Plus priced at Rs.
18/- is behind Close Up Confident (Rs. 19.75/-), oral- B (Rs. 20/-) Forhans Galaxy (Rs.
22/-) and Aquafresh (Rs. 25/-). As such it is at the bottom level of the Super Premium
segment along with Johnson’s Reach (Rs. 18/-) Jordan (Rs. 19/-), Forhans Zest (Rs.
18/-) trying to deliver more value for money.
While the present strategy keeps Colgate Plus (all three-sensitive, adult and zig-zag) at
a penetrative pricing as regards to Oral-B, Aquafresh Flex and Forhans Galaxy, it gets
and advantage of superior oral care image vis-à-vis the other brands in the same price
brand.
The strategy can be said to be working well as Colgate Plus, as of today is the market
leader both in terms of volume and value share.
SWOT ANALYSIS
STRENGTHS
1. Colgate continues to be the number one brand in consumer perception as per A& M
survey of the last four years.
2. Colgate products are perceived as a champion of the oral-card industry.
3. Advantage of better penetration, and better presence in the consumers mental
faculties.
4. Massive retailer network and strong supply base.
5. Image of a ‘company committed to complete dental care of the whole family’.
6. Market growth of more than 25% in value terms.
WEAKNESSES
1. Lacks the universal appeal and accreditation of world wide players like ORAL-B,
AQUA-FRESH etc.
2. Has not been able to penetrate the rural segment in volume terms.
3. No regular system of feedback or appraisal of the sale status of is toothbrush.
4. Market growth of 10% in volume terms.
OPPORTUNITIES
1. Any ‘PUSH’ can be easily and quickly affected n account of its widespread
presence.
2. Doing a ‘NIRMA’ to the toothbrush market is something Colgate is quite capable of ,
given the base and vision that the company commands.
3. Investment into R&D and the sales campaign so as to effect a strong long term pull
can transform the nature of the market completely as not one has acted in this
direction so far.
4. With the average semi-urban/urban consumer ready to shell out this extra bucks it
pays to go n for technological innovations and addition of utilities to this low
involvement product which has to so far been centered only around cleaning of
teeth.
THREATS
1. Foreign brands like AQUA-FRESH, ORAL-B, JORDAN, etc are trying to take the
course of the market to different dimensions.
2. The low margins being offered might go against the prospects of Colgate plus in
case some player in the lower segment starts offering high margins.
3. Low Involvement category and poor brand loyalty - susceptible to sudden large scale
switching in a very short span of time.
SURVEY FINDINGS
CONSUMER SURVEY
FEATURES
1. No. of respondents : 67
2. Areas covered : Defence Colon, Khan Market, South Avenue,
North Campus, Sarojini Nagar
3. Nature of Survey : Structure Questionnaire
4. Objective : 1. To analyze brushing habits and associated
attributes of the general populace.
2. Get a feedback from the Colgate Plus
users.
5. Limitations : As only well to do families/people were
accessed, the findings are expected to be
asked to the premium and the super premium
segment.
FINDINGS
RESPONSE MALES (%) FEMALES (%) TOTAL (%)
Ask by brand
name
57.6 70.8 62.8
bought it in
person
73.3 75.0 70.4
eagerness to
spend
Rs. 5-10 29.0 0.0 22.5
Rs. 10-15 41.9 29.2 40.0
Rs. 15-20 25.8 45.8 30.0
> 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 20.8 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 29.2 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 28.0 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 12.9
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 75.4 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
God Can’t say
v. Good
God Can’t say
v. Good
God Can’t say
Quality 17 73 10 40 60 - 21.5 65.5 13
Access 90 10 - 97.5 - 2.5 95.5 - 4.5
Value/price
42 50 8 60 23 7 51 32 17
Loyalty Yes-3
No-97
Yes-3
No-97
- Yes -3
No -97 -
FURTHER FINDINGS
BRANDS PERCENTAGE
COLGATE PLUS 30.96
CIBACA 14.28
ORAL-B 16.66
CLOSE-UP 9.52
PEPSODENT POPULAR 7.14
JORDAN 9.52
OTHERS 11.90
BRAND RECALL
BRANDS PERCENTAGE
COLGATE PLUS 20.47
PEPSODENT POPULAR 11.02
CIBACA 10.24
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
1. No. of Respondents : 20
2. Areas covered : Defence Colony, South Avenue, Khan
Market, North Campus, Sarojini Nagar
3. Nature of survey : Structured Questionnaire
4. Objective : a) To gather the respond to new
entrants vis-à-vis Colgate Plus as
perceived by retailers.
B) Retailers favorite brand(s)
Margins offered
5. Limitations : Given the areas covered, the response
was bound to be asked in favour of the
upper class users.
FINDINGS
1 Availability
Easy : Classic, Aqua-Fresh, Oral-B,
Pepsodent, Colgate Plus
Not Easy : Royal, Forhans, Cibaca, Jordan,
Prudent.
2 Sales
High : Colgate Plus, Cibaca, Classic,
Pepsodent, Oral-B
Satisfactory : Close-up, Ajanta, Ajay, Jordan, Aqua-
Fresh
3. 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.
4. Retailer’s Perception Of Preferences &
BY BRAND NAME 36.5%
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.
5. Which are the top three toothbrushes in terms of exist sales.
1 oral-B
2 Pepsodent
3 Colgate Plus
6 In case not covered above. What is the status of stock.
7 How do consumers ask for a tooth brush? (Rank them)
8 Which of these two companies make it a point to:
(a) Get a regular feedback
Colgate Plus yes
Aquafresh
(b) Maintain regular supply
Colgate Plus ¹ Yes
Aquafresh
9 Rank your profit margin for the following brands:
10 If the consumer does not ask for a specific toothbrush then which one
would you offer him? Why?
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 88.9% 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. 11 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 : ¹ 15-30 Years ¹ 30-40 Years ¹ 40-50 years
¹ Above 50 years
2. SEX : ¹ Male ¹ Female
3. OCCUPATION :
¹ Govt. Service ¹ Self-employed ¹ Corporate Executive
¹ Student ¹ Others (specify __________________)
4. MARITAL STATUS : ¹ Single ¹ Married with children
¹ Married without children
5. AVERAGE MONTHLY INCOME/ALLOWANCE
¹ <Rs. 3000 ¹ Rs. 3000-6000 ¹ Rs. 6000-10000
¹ Rs. 10000 - 20000 ¹ > Rs. 20000
6. Which toothbrush do you generally use?
7. Name any other five toothbrushes that you can recall
1 2 3 4 5
8. Who purchases your toothbrush?
¹ Myself ¹ A family member ¹ A Subordinate
9. Do you ask for a toothbrush by name? ¹ Yes ¹ No
10.How much are you ready to spend on a toothbrush?
¹ Rs. 5-10¹ Rs. 10-15 ¹ Rs. 15-20 ¹ > Rs. 20
11.What prompted you to purchase your current toothbrush?
¹ Dentist’s advice
¹ Impressed with the advertisement
¹ Shopkeeper gave it to me
¹ A well-wisher recommended it to me
¹ Just bought it no specific reason.
12.How often do you replace your toothbrush?
¹0-1 month ¹ 1-2 months ¹ 2-3 months ¹ 3-4 months
¹ > 4 months
13.How often do you brush your teeth a day?
¹ Once ¹ Twice ¹ After every meal ¹ 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
15.Kindly answer the following in case you have used Colgate Plus/Aqua Fresh
toothbrushes:
16.
AQUA FRESH COLGATE PLUS
QUALITY *V. GOOD * GOOD
* MODERATE
* NO GOOD
* V. GOOD * GOOD
* MODERATE
* NO GOOD
AVAILABILITY * EASY * NOT SO EASY
* DIFFICULT
* EASY * NOT SO
EASY * DIFFICULT
IF IT WORTH THE
PRICE
* YES *NO
* CAN’T SAY
* YES * NO
*CAN’T SAY
IF THE BRAND IS NOT
AVAILABLE, THEN I
* WILL WAIT
* WILL NOT WAIT
* WILL 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
¹ Colgate Plus ¹ Cibaca Supreme ¹ Aqua Fresh
¹ Jordan ¹ Oral-B ¹ Royal
¹ Pepsodent ¹ Promise ¹ Ajay
¹ Ajanta ¹ 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 ¹ Good ¹ Picking up Moderate ¹ Poor
2. Colgate Plus ¹ Good ¹ Picking up Moderate ¹ 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 ¹ Yes ¹ No
Colgate Plus ¹ Yes ¹ No
(b) Maintain regular supply
Aquafresh ¹ Yes ¹ No
Colgate Plus ¹ Yes ¹ No
8. Rank your profit margin for the following brands:
1. Cibaca Supreme 2. Colgate Plus
3. Oral-B 4. 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. ASHISH JHA
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.