colgate palmolive term report

Marketing Analysis of Colgate

Palmolive Pakistan

Submitted to

Ms. Sara Khan

Submitted by

Aliya Sajjad

Hasan Faraz

Sarah Parvaiz

Shan Abdullah

MBA II

April 28, 2000

Institute of Business Administration, Karachi

Colgate Palmolive Pakistan

Table of ContentsTABLE OF CONTENTS..................................................................................................0

ACKNOWLEDGEMENTS..............................................................................................4

COLGATE PALMOLIVE................................................................................................5

COLGATE PALMOLIVE (PAKISTAN).......................................................................6

COMPANY HIERARCHY...............................................................................................7

COLGATE PALMOLIVE’S MARKETING ENVIRONMENT..................................8

THE MACRO ENVIRONMENT:...........................................................................................8

Demographic Environment:........................................................................................8

Social and Cultural Factors:.......................................................................................8

Economic Conditions:.................................................................................................9

Political and legal forces.............................................................................................9

Technology:.................................................................................................................9

THE MICRO ENVIRONMENT...........................................................................................10

The External Environment.........................................................................................10

Internal Environment.................................................................................................11

SWOT ANALYSIS.......................................................................................................12

Strengths:...................................................................................................................12

Weaknesses:...............................................................................................................12

Opportunities:............................................................................................................12

Threats:......................................................................................................................13

STRATEGIC MARKETING PLANNING...............................................................................13

HARD SURFACE CARE:...................................................................................................14

Max:...........................................................................................................................14

ORAL CARE PRODUCTS:.................................................................................................14

Colgate toothpaste:....................................................................................................14

Freshmint toothpaste:................................................................................................14

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Colgate classic toothbrush:.......................................................................................14

PERSONAL CARE PRODUCTS:.........................................................................................15

Palmolive:..................................................................................................................15

Donge:.......................................................................................................................15

Protex:.......................................................................................................................15

FABRIC CARE:................................................................................................................15

Express:.....................................................................................................................15

Brite:..........................................................................................................................15

Bonus:........................................................................................................................16

Texapol:.....................................................................................................................16

COMPETITION..............................................................................................................17

MARKET RESEARCH ANALYSIS- COLGATE PALMOLIVE.............................18

WHY COLGATE PALMOLIVE INVESTS IN RESEARCH AND DEVELOPMENT?....................18

HOW COLGATE PALMOLIVE COLLECTS DATA FOR MARKETING RESEARCH:.................20

PRODUCT ANALYSIS..................................................................................................21

PRODUCT LEVELS...........................................................................................................21

THE PRODUCT LIFE CYCLE.............................................................................................22

POSITIONING AND DIFFERENTIAL ADVANTAGE.............................................................23

Target market.............................................................................................................23

Market demand..........................................................................................................24

Brand equity...............................................................................................................24

Packaging and labeling.............................................................................................24

PACKAGING ANALYSIS OF COLGATE PALMOLIVE TOOTH PASTE...................................25

PACKAGING STRATEGY OF COLGATE PALMOLIVE TOOTHPASTE..................................26

PRODUCT LINE STRATEGY.............................................................................................26

Labeling:....................................................................................................................26

Brand Label:..............................................................................................................26

Descriptive Label:.....................................................................................................27

Stationary labeling requirement:...............................................................................27

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PRODUCT COMPETITION.........................................................................................28

PRICING STRATEGIES...............................................................................................30

DISTRIBUTION..............................................................................................................31

Intensity of distribution..............................................................................................31

Changes in the distribution environment...................................................................31

PROMOTION.........................................................................................................33

THE CAMPAIGN OBJECTIVE:...........................................................................................33

THE PROMOTIONAL BUDGET.........................................................................................34

COLGATE PALMOLIVE’S PROMOTION MIX:.....................................................35

Advertising.................................................................................................................35

SALES PROMOTION.........................................................................................................36

1. Free sampling:.......................................................................................................37

2. Distribution of souvenirs:......................................................................................37

3. Contests:................................................................................................................37

Conferences:..............................................................................................................37

PERSONAL SELLING:......................................................................................................37

PUBLIC RELATIONS AND PUBLICITY:.............................................................................37

COLGATE PALMOLIVE: A GOOD CORPORATE CITIZEN:................................................37

Conclusion:.......................................................................................................................39

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ACKNOWLEDGEMENTS

We would like to thank Mr. Shahid Iqbal, Mr. Hasan Waqar, Mr. Umar Qadri

Ms. Humaira Asrar, and Mr. Ali Belgaumi for providing us with the necessary

information, which we needed to formulate this report.

We would also like to thank our course instructor Ms. Sarah Khan for giving us the

practical insight, which enabled us to analyze this company effectively.

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COLGATE PALMOLIVE

Colgate was founded in the United States in 1806 and for the first 100 years, its business

focus was only there. However, in the very early 1900's, the Company began a very

aggressive expansion program that led to the establishment of Colgate operations

throughout the world. Today, Colgate-Palmolive is a $9 billion company, marketing its

products in over 200 countries and territories under such internationally recognized brand

names as Colgate, Palmolive, Ajax, Fab, and Mennen as well as Hill's Science Diet and

Prescription Diet.1

To meet the needs of this vast world, Colgate sets and attains the highest standards for

our products and our company. Quality is the hallmark of everything we do. So, too, is

consumer value. We continually work to understand consumers' changing needs, and then

meet those needs with innovative products that are affordable to the greatest number of

people.

We are also sensitive to our environment, and work to fulfill our business mission in

ways that will not be harmful to the delicate world in which we live.

By balancing all these elements, we try to live up to our vision of becoming the best truly

global consumer products company and a responsible and contributing member of the

global community.

1 Source: Colgate Palmolive website USA5


COLGATE PALMOLIVE (PAKISTAN)

Colgate Palmolive started its operations in Pakistan in 1977 as joint venture between

Colgate Palmolive (USA) and Lakson Group. Over the years the company has

successfully marketed some very popular consumer products. Colgate Palmolive

(Pakistan) is listed on the Karachi Stock Exchange with 60% equity with the Lakson

Group, 30% with Colgate Palmolive (USA), and 10% shareholder equity with the general

product.2 The Lakson Group is a prominent group with business enterprises in all-major

sectors. The business concerns of Lakson Group include

Lakson Group

Premier Tobacco

Century Papers

Merit Packaging

Tritex Cotton

National Detergent

Century Insurance

Clover Foods (local manufacturers of Tang)

Siza Foods (local franchise of McDonalds)

Cyber Internet Services (the largest private sector internet service provider)

Colgate Palmolive is one of the largest ventures by the group. With assets of more than

Rs. 400 million and a turnover of Rs. 1500 million, it has emerged as one of the largest

corporations in Pakistan.

The introduction of Colgate Palmolive in Pakistan was novel in the sense that unlike

other multinational ventures, the local partners were allowed to introduce and

manufacture new brands under the Colgate Palmolive flagship. However, strict checks on

quality were imposed. Colgate Palmolive Pakistan has an agreement with Colgate

Palmolive (USA), under which it pays royalty to its parent company only on brands,

which use the words “Colgate” or “Palmolive”.

Mission Statement: To provide the best quality products to consumers to fulfill their

entire household needs.

2 Source: Annual report 1997 Colgate Palmolive Pakistan6


Corporate Mission: To become the number one consumer goods company in all the

regions it is operating.3

Colgate Palmolive (Pakistan) Limited

COMPANY HIERARCHY

3 Source: Interview with Mr. Omar Qadri, Brand manager Colgate Toothpaste, Colgate

Palmolive Pakistan7


COLGATE PALMOLIVE’S MARKETING ENVIRONMENT

Like any other organization, Colgate Palmolive functions in an environment, which

influences nearly every aspect of its operations.

The Macro Environment:

The macro environment consists of elements that affect all firms in the market. The

factors affecting the operations of Colgate Palmolive has been discussed as follows.

Demographic Environment:

Changes in characteristics regarding human population, affect all companies, especially

marketing firms. Colgate Palmolive being a consumer product marketing organization

has also not remained unaffected. Rapid urbanization has greatly influenced its marketing

mix. Its products are more focused on the urban market. Similarly it has also successfully

blended the change in the occupational priorities of our social setup (from small-owned

businesses to professional jobs in its promotional campaigns, laying more emphasis on

the working class. Similarly, while promoting Colgate toothpaste, the company has

focused on dental statistics of the population. The information regarding poor dental

health of kids was efficiently used in Colgate’s advertising campaigns.

Social and Cultural Factors:

Changing gender roles have also affected the company’s marketing plans. For example

the detergents being marketed by the company include male perspectives in their

advertising campaigns, a concept considered totally unfeasible two decades ago.

Lifestyle, values, and beliefs, all affect the marketing programs of companies. For

Colgate Palmolive, the change in gender roles has had a great impact on its marketing

campaigns. The advertisements aired on behalf of the company, reflect this change, such

as a more casual, family atmosphere, and often two income households, shown in its ads.

A very important concept of our social setup is the joint family system. Te relationships

within this system are given high importance in our society, which Colgate Palmolive

keeps in mind while adopting ideas from CP (USA) for implementation in the local

market.

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Economic Conditions:

The overall economic environment has a major effect on firms, especially those that have

maximum consumer interaction, CP being a prime example. An overall economic boom

brings in increased sales for CP. Since Pakistan has an agro-based economy, the impact

of crop production is quite profound on CP’s sales level. For instance, when Pakistan had

a bumper cotton crop in 1991-92, the sales went up by leaps and bounds in nearly every

category. Managers at CP closely monitor economic forecasts and plan production level

accordingly.

Rising inflation is also another area considered by CP while marketing its products.

Introduction of Bonus as an inexpensive detergent, marketing of Brite in cheap sachet

packs and introduction of twin, Colgate toothpaste and toothbrush packs were some steps

taken by CP to provide affordable products with value to customers.

Political and legal forces

The political and legal forces operating in our environment also affect Colgate Palmolive.

Colgate Palmolive tries to maintain an active link with agencies such as, Monopoly

Control Authority, and Securities and Exchange Commission. Similarly regulations by

the tax authorities, and Customs are closely followed. New legislations, especially those

concerning import duties are closely observed.

Colgate Palmolive also supplies products to various government agencies, so that

government policy regarding expenditure has a direct impact on sales.

Technology:

Technology and innovation, at CP, are focused mainly at providing better products to its

customers. New technological procedures were incorporated in its manufacturing

operations in the recent past, which made it possible for CP to produce products at

competitive prices.

Similarly, adoption of information technology, (IT) tools has ensured efficiency, and

effectiveness of managers at CP.

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The Micro Environment

A firm is particularly impacted by its microenvironment in a variety of ways. The

microenvironment can itself be further divided into two. These include the external and

internal environments.

The External Environment

The Market:

The total market according to the definition includes people with needs to satisfy,

possessing purchasing power, and the willingness to spend. For Colgate Palmolive, the

market consists of literate middle class, and upper middle class people, with average, and

above average income.

Suppliers:

For Colgate Palmolive, the market contains two types of supply options:

1. Imports

2. Locally manufactured raw materials

Imports:

Locally manufactured raw materials. Most Colgate Palmolive’s manufacturing needs are,

however, fulfilled by local suppliers. Maximum effort is made to ensure an effective

supply chain, and to avoid shortages.

Marketing intermediaries:

Colgate Palmolive has an efficient market intermediation setup. Good relations with

whole sellers, and retailers, are ensured. Colgate Palmolive’s strong distribution network

is one of its competitive strengths. This network is maintained through both professional

and personal ties. It is due to this strong distribution, Colgate Palmolive has a very strong

presence in the market, even in small rural areas where other MNCs have failed to

penetrate.

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Internal Environment

Colgate Palmolive’s marketing program is also greatly affected by certain internal forces.

These forces make up the internal environment, which is controllable by the management

of the enterprise. These factors include:

Production facilities:

Colgate Palmolive has a big production setup. It has two manufacturing plants working at

full capacities. These factories are situated at Kotri, Sindh, and near Swat, NWFP. Clean,

hygienic, and friendly atmosphere is maintained at these factories.

Financial Resources:

In spite of being a marketing oriented organization, a lot of emphasis is laid on efficient

financial management. Colgate Palmolive’s financial department consists mainly of

qualified cost accountants. The financial division is quite active.4

Human Resources:

Colgate Palmolive doesn’t have a specific Human Resource or Personnel department.

The administration looks after basic Human Resource functions, while most of the

recruiting, and selection procedures are handled by senior, and middle level marketing

managers. The company realizes that the absence of a Human Resource department is a

major drawback, and plans to have one very soon.

Location:

Colgate Palmolive has its head office in Karachi. There are other zonal offices at Lahore,

Peshawar, Hyderabad, Multan, Quetta and Islamabad. These zonal offices take care of

their specific allotted areas. Thus, for a company with such a wide consumer base,

Colgate Palmolive is ideally located.

Research and Development: Colgate Palmolive has an active R&D department. Studies

are held at a regular basis to encourage the spirit of innovation. Similarly, training

sessions are also organized. Workshops in collaboration with Colgate Palmolive (USA)

are also held.

Company Image:

Colgate Palmolive enjoys a healthy image in the market. The fact that it is an MNC is a

big contributor to its image building exercise. However, the management of Colgate

4 Source: Mr. Shahid Iqbal, Director Finance, Colgate Palmolive11


Palmolive believes in a unique philosophy. Unlike companies, such as Nestle, and,

Johnson & Johnson, who believe in promoting the products with the company’s name,

Colgate Palmolive believes in creating strong brand names and a unique image for each

product. Colgate Palmolive has largely been successful in doing so because consumer

behavior in the market has shown that they have come to identify products of Lever Bros

and Proctor & Gamble, with the respective company names more then with the brand

names themselves, which has not been the case with Colgate Palmolive’s products.

SWOT ANALYSIS

Overall organizational swot analysis

Strengths:

Colgate Palmolive’s strength lies in its strong marketing team. Even while working

within a small budget, the team has delivered and carved a niche out for itself in the

consumer goods market. Its aggressive strategies are clearly reflected in the marketing

campaigns of Bonus VS Wheel, and Express VS Ariel. Colgate Palmolive’s marketing

efforts have been particularly strong in the promotional, and the distribution aspect of its

marketing mix.

Weaknesses:

Lack of capital, and inadequate financial resources, is a big weakness for Colgate

Palmolive. Facing the onslaught of huge MNCs like Lever Bros, and P&G, requires a

strong monetary backing. Since Colgate Palmolive, is basically sponsored by a local

group (Lakson), their financial background is comparatively weak.

Opportunities:

Growing demands for consumer goods, especially branded items, represent an ideal

opportunity for Colgate Palmolive to cash on. Similarly, positive economic signals,

economic growth, and the end of recessionary periods around the globe present bright

economic marketing prospects for Colgate Palmolive.

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Threats:

Continuous onslaught by other FMCG companies, especially Proctor & Gamble, is a big

threat for Colgate Palmolive. Proctor & Gamble has captured huge market shares from

Express, Brite, and the Palmolive soap. Its aggressive marketing strategies pose an ever-

increasing threat to Colgate Palmolive’s marketing efforts.

Strategic Marketing Planning

Colgate Palmolive Pakistan prepares its strategic marketing plans for all its products

categories division. Separate marketing plans are made for key brands like Express Brite,

max and Colgate. These plans are formulated by the brand management teams and are

carefully reviewed semi annually. Progress reports are regularly submitted to the top

managers.

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PRODUCTS

Colgate Palmolive (Pakistan) has four product categories. Included under these categories

are several brands. The product categories are as follows

Hard surface care

Oral care

Personal care

Fabric care

Hard Surface Care:

Hard Surface Care category includes some popular brands

Max:

Max is the market leader in hard surface care category. Its major competitor is Vim being

marketed by lever brothers

Javex:

Javex is a liquid hard surface care product. It is only marketed in urban area

Oral Care Products:

Oral Care Product category at Colgate Palmolive includes the three brands.

Colgate toothpaste:

Colgate toothpaste is the market leader in Pakistan

Freshmint toothpaste:

This is a relatively less popular brand by Colgate Palmolive it was basically targeted

towards people with bad breath problem. To some extent its marketing mix targeted

towards with quite similar to that of close-up toothpaste

Colgate classic toothbrush:

Colgate classic toothbrush commands a huge market share. It ranks second after Shield in

the branded category of toothbrushes.

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Personal Care Products:

Personal Care Category includes various popular soaps

Palmolive:

Palmolive is one of the most popular brands worldwide but failed to make a big impact in

the local market when it was introduced in the 1980’s. Aggressive marketing by Lever

Brothers’ brand Lux was one of the reasons for its moderate success. In spite of its failure

to gain the top slot, Palmolive still commands quite a large market.

Donge:

Donge soap is another premium brand by Colgate Palmolive. It is basically catered to the

upper income segment of the market. The ‘niche’ marketing concept has been employed

while marketing Donge. It is only available at top retailers in urban cities. Its competitors

include premium brands imported in Pakistan such as those manufactured by Cussons

(England)

Protex:

This is another personal care brand offered by CP. It is basically a semi-medicated soap

competing against brands like Safeguard and Lifeboy gold but unlike these brands this is

targeted towards the middle and the lower class.

Fabric Care:

Fabric care division is the biggest revenue earner at Colgate Palmolive. In this area the

competition amongst brands has intensified to a great extent over the past few years.

CP markets some well-known Fabric care brands, these include

Express:

Express is the best selling detergent in the country. It's Express that introduced the

concept of poly bags in Pakistan. It successfully dislodged Surf from the top position but

is facing resistance from Ariel, being marketed by Proctor and Gamble. Express was

changed to express lemon to compete Surf’s conversion to Surf Excel. Also included in

the Express series is Express bar targeted towards those who prefer soap to detergents.

Brite:

Brite is another popular brand. For years it was the market leader in Pakistan. Brite is

available in convenient sachet packs and is targeted more towards the middle class. Brite

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underwent a similar conversion process like Surf and Express. It was first changed to

double action Brite and later to Brite total.

Bonus:

Bonus is aimed at the middle and lower middle class. Its main competitor is wheel being

marketed by Lever Brothers.

Texapol:

Texapol is another detergent manufactured by Colgate Palmolive. It is basically made up

of left over scrap and is very cheap. It is marketed in only rural and semi-urban areas.

Aim:

Aim is another product targeted towards the rural area.

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COMPETITION

The competitive environment also has a big influence on Colgate Palmolive’s marketing

programs. Colgate Palmolive mainly competes with two other huge multinationals,

namely, Lever Brothers, and Proctor & Gamble. It also competes in some categories

with Zulfiqar Industries, and Transpak Corporation.

The brand war between these fast moving consumer goods (FMCGs) marketing

companies is especially tough in the detergent and toothpaste market.

A careful analysis of the competitive environment among these FMCGs reveals three

types of competition, namely: Brand competition, Substitute competition, and General

competition

Brand Competition: brand competition exists between similar products. For example,

in the case of Colgate Palmolive, Colgate toothpaste with Close Up, English toothpaste,

and Macleans. Express detergent competes with Surf Excel, and Arial in a similar

fashion.

Substitute Competition: this competition exists between products that satisfy the

same needs. Incase of Colgate Palmolive, Colgate toothpaste competes with Dentonic,

and Khas tooth powder. Similarly Express competes with detergent bars and soaps.

Donge, Colgate Palmolive’s premium personal care brand competes with imported face

washes.

General Competition: In a more general sense, Colgate Palmolive competes with

every other company for a share in the consumer’s budget.

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MARKET RESEARCH ANALYSIS- COLGATE PALMOLIVE

Colgate Palmolive believes in not only building its differential advantage over the

competitors but also in maintaining it through constant research and development. The

research efforts of Colgate Palmolive are channeled towards constant improvement of its

product, finding out new and improved ways of reducing its costs, and exploring new

opportunities for promoting its products as compared to its rival products, such as

English, Macleans, and Pepsodent toothpaste.

In view of the ever-increasing importance of the R&D function in its organization,

Colgate Palmolive has increased its research and development budgets over the last few

years.

Why Colgate Palmolive invests in research and development?

Competitive Pressure: Colgate Palmolive needs to develop and market new

products more quickly than ever before, since new products (such as Close-up’s

Ultra whitening Gel), are being launched by rivals, as well as new brands in the

existing product market are flooding the market (Pepsodent, Ora toothpaste). Thus

research is required to find out what current and potential competitors are doing.

Expanding Market: Colgate Palmolive realizes the importance of broadening its

market, previously, operating in urban areas only, it broadened its market in

Pakistan by bringing in various rural and semi-urban areas under its sales

operations

Making a mistake can be very costly: Marketing is expensive and a failed

marketing campaign can be very costly to Colgate Palmolive. So research is vital

for effective implementation of marketing operations.

Growing customer expectations: with the vast array of new products in the

market such as English, Mcleans, Close-up, Sparkle, the customers have plenty of

variety to choose from and thus, customer expectations are higher than ever

before. There is thus a need to quickly identify any problems that the customers

are facing with regard to the product, for e.g. if the toothpaste is causing allergic

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reactions to some people, then Colgate Palmolive needs to look into this problem

and quickly come up with a solution.

Colgate Palmolive has a well-established marketing research network to rely upon. Not

only does it utilize information from secondary sources such as published reports on

FMCG companies, but also has its own Marketing Information System (MKIS) within

the organization, and frequently, Marketing research projects are undertaken.

Marketing Information system has been providing up to date, information about the

competitors sales information, their marketing strategies, and also pertinent timely

information about the market demographics, the changing tastes and trends, information

about the sales and demand of substitute products, and any product that might be a threat

to the Colgate toothpaste. Soon after its launch, Pepsodent was spotted by Colgate

Palmolive to be a potential threat to the Colgate toothpaste in the subcontinent market,

and thus Colgate Palmolive intensified it marketing efforts for the toothpaste. Colgate

toothpaste had till then been primarily advertised as a toothpaste that strengthened teeth,

but later advertisements stressed that Colgate was a toothpaste that fought plague, and

freshened breath, besides making them strong.

Colgate Palmolive has a computerized marketing information system, whereby the

company maintains all sales records, and captures market data as mostly relayed by the

sales people.

Relational databases are maintained, which store data on customers, suppliers, changing

market trends, as well as sales data.

Marketing Research Projects are carried out as and when required. These projects are

mostly started at a time when a new product is ‘in-the-pipeline’. Not only does Colgate

Palmolive does research to ensure that it is going to make the right kind of product but it

also likes to make sure that the product is launched at the right time, the right way, and in

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the right market. Thus marketing research projects are carried out to ensure that the

launching goes right.

How Colgate Palmolive collects data for marketing research:

Colgate Palmolive uses both primary, as well as secondary data while conducting

research. Primary data primarily consists of forms filled out by the customers at the

retailer end, as well as retailer feedback on customer preferences. Usually both of these

are utilized whenever Colgate Palmolive conducts a formal research, such as for the

launching of a new product. When the Colgate Palmolive was launching the Colgate

Palmolive toothpaste in the new packing, both of these forms of primary data collection

were made use of.

Important information regarding competitor performance can also be obtained through

primary and secondary research. Such a practice of collecting information about

competitors in the case of secondary information is called as Competitive Intelligence.

Colgate Palmolive likes to collect fortnightly data about the sales of its own product as

well as those of competitors by geographical location, in order to keep up with customer

preferences and make any necessary changes in its marketing mix. Colgate Palmolive’s

research department if highly sensitive to any changes in the sales of rival products;

English toothpaste, Sparkle, Pepsodent, Mcleans.

Important sources for acquiring secondary data for Colgate Palmolive are the published

journals on ‘Fast Moving Consumer Goods Companies (FMCGs).

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PRODUCT ANALYSIS

Colgate toothpaste is a star product of the company. With high growth rate and an equally

high market share it is one of the most popular family product in the world.

Product levels

Core Product: The core product of Colgate Palmolive or the idea sold through Colgate

toothpaste is, ‘something that enables clean, healthy, strong teeth’. One of the

characteristics stressed the most in all Colgate toothpaste advertisements is, that it leads

to strong, healthy teeth. The presence of calcium in the toothpaste is thus stressed since

it’s widely believed that calcium strengthens teeth.

Actual Product: The actual or the physical form, in which the core product is sold, is the

white fluoride, and calcium based toothpaste, contained in a squeezable tube.

Augmented Product: Any additional features to the actual product (necessary to make

the product functional) are augmented part of the product. Social appeal and

attractiveness through brighter teeth and fresher breath are important augmented features

of Colgate Toothpaste.

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The product life cycle

Colgate Palmolive has a large market share, which is increasing at an increasing rate.

Thus it is clearly in the growth stage. The brand management team feels that its growth

stage will continue for at least another half a decade and then it will approach the

maturity stage.

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Positioning and Differential Advantage

The positioning of Colgate toothpaste is quite unique. Colgate Palmolive (Pakistan) has

been able to capture the original positioning theme from CP (USA) unlike CP (India) and

other local partners in Asia. This successful theme adoption can be attributed to the

energetic marketing team of Colgate Palmolive. (Pakistan). Colgate’s image in Pakistan

is that of a family brand with multidimensional advantages. It has an attractive taste, and

is equally good for children and adults. Unlike its competitors who focus on only one

theme like

1. Pepsodent lays emphasis on dental decay in children \

2. Macleans emphasizes on strong teeth

3. Close up focuses on shinning teeth and a fresher breath for social appeal and

4. Medicam anti toothache formula,

Colgate has been able to evolve all these images into one brand, Colgate Toothpaste.

Colgate toothpaste because of its multidimensional image is often refereed to as an all

rounder brand.

Price and quality are thus major attributes through which Colgate is positioned. High

quality for a complete dental care and premium pricing are the major positioning theme.

According to CP’s marketing tem Colgate’s differential advantage is its all rounder

capabilities. Its ability to fight tooth decay, eliminate bad breath and give strong white

teeth under one brand label is why it’s the most preferred brand in Pakistan.

Target market

Ever since its introduction in Pakistan, Colgate has had a consistent target market. Unlike

other brands Colgate has never altered its target market segment. Though there has been

some expansion in recent years.

Colgate is targeted at middle income and upper income families. Lower middle and

educated families with white-collar jobs are also included in its target market, Colgate

through its advertisements focuses on its key concept that is toothpaste of the family

theme.

A few years back Colgate was introduced in the semi urban and rural areas. Again

educated middle and upper class are targeted here.

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Market demand

The marketing team of CP believes that Colgate toothpaste has a lot of growth potential

and the saturation point is quite far off.

management.

Brand equity

Colgate toothpaste enjoys very strong brand equity both internationally as well as in the

local markets. In fact it was this brand equity that led to the introduction to the Colgate

toothbrush in the country. Regular market surveys conducted by research consultants

hired by CP (Pakistan) reveal that Colgate’s brand equity has been increasing at a rapid

pace. More and more people now have a favorable image of Colgate and more people

place as a first choice now against the previous trend when the oral care brands like

Macleans, Shield and signal enjoyed very high brand equity as compared to Colgate.

Packaging and labeling

Colgate toothpaste comes in an attractive, eye-catching red colored pack. The CP

marketing team feels that packaging of product is of vital importance and the emphasis

on this area on this area can be gauged by packaging innovation such as introductions of

polybags in case of Express, paper wrappers in case of Palmolive against card packaging

of soaps and Max in plastic bags. Similarly Colgate has also been marketed with user-

friendly packaging. A push-up lid replaced the cap, however no change was made in the

tube style. The red pack of Colgate is very attractive and eye-catching and consumers

find it easy to trace it from the retailers’ shelf.

The packaging highlights all use instruction and multiple advantages of the paste.

Similarly the claim that Colgate is recommended by more dental associates in the world

as compared to any other toothpaste is also clearly highlighted. This, the management

feels adds to the brand equity.

One element is however missing out from Colgate’s label of oral care, products have a

customer suggestion or complaint address mentioned in their packages. This is not

present in the case of Colgate.

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Packaging analysis of Colgate Palmolive tooth paste

Colgate Palmolive packages its premier quality toothpaste, keeping in mind sweat factor.

Packaging is intended to sure various purposes: -

1. Project the product on its way to the consumer: Keeping till functional especially

in mind, CP has untraced Pre "flexi" tube, which has added durability to the toothpaste

package. The flexi tube protects the tube from breaking and causing product spills, while

still on its way to the consumer. The tube is further concerned in a cardboard box to

protect the paste from concerning into direct contact with eat, deist, intense sunlight.

2. Provide protection after the toothpaste i s unpacked:

Not only does the flexible plastic packaging protect the product on its way to the

consumer, but it also ensures that the tube does not break and retains its original shape

ever after repeated usage, in fact till the using end.

3. Help gain acceptance from the new dilemma:

The primary concern of the middle mean regarding packaging is that it should be easy to

store, possess attractive packaging to attract customer and require minimal sales from

middle man, possess self explanations labels and finally the product should possess a

high turnover. Colgate Palmolive keeps these middlemen concerns in mind and has there

desired a suitable packaging.

The Colgate toothpaste is packaged is an easy to store packaging design and sizes. The

labeling itself explanations, since the toothpaste is the most popular and largest selling

toothpaste in Pakistan, the turnover rate is also very high.

4. Help persuade consumer to buy the product:

The red and color of the Colgate toothpaste together with its convenient flexi tube

packaging has proved attractive to the consumers. The brand loyal customer of CP

toothpaste is familiar with red and white packaging and can easily spots it in the

supermarket shelves.

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Packaging Strategy of Colgate Palmolive Toothpaste

When making the packaging decision, the executives must be very clear as to which

packaging strategy needs to be pursued. That weather family packaging or product line

packaging strategy will be followed. CP follows the strategy given below: -

Product Line Strategy

CP packages the CP toothpaste is its distinctive red and white colored packaging with the

familiar Colgate trademark. This packaging color combination is unique only to the

product line CP toothpaste. The different sizes of CP toothpaste are all packaged in the

same packaging. Such a strategy is being followed so that the product is district not only

from the competitors but also from any future product line in toothpaste that Colgate may

introduce.

Also, CP has never hesitated in pursuing the strategy of changing the package whenever

it has felt the red. This occurred when, the new and improved flexi tube with the flip cap

was introduced. The initial package was the traditional metal tube, then the flexi tube and

finally the flexi tube with the flip cap was introduced.

CP has also made recurrent improvements in the outer cardboard packaging, making it

more attractive and durable over time.

Labeling:

Labeling is closely related to packaging. It is the part of a product that carries information

about the product and the seller. A label may be part of a package (as in the case with CP

toothpaste) or it may be a tag. There exist a very close relationship between labeling,

packaging and branding.

Brand Label:

CP toothpaste carries a brand label which the CP toothpaste name. Along with the brand

name often a tagline is also printed, which in the case of CP toothpaste is 'For Stronger,

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healthier teeth'.

Descriptive Label:

Gives information about the product's use and performance etc. CP toothpaste carries

instruction that it should be used after every meal. It also emphasize that CP has calcium,

which makes teeth stronger, healthier.

The plague fighting ability is also highlighted in the descriptive packaging.

Statutory labeling requirements:

CP keeps in mind, the statutory labeling requirements when packaging its toothpaste. The

size the net weight of the toothpaste, along with manufacturing date, retail price, sales

tax, manufacturer’s name and origin are clearly printed on the package.

The absence of any of the above information is considered as illegal practice.

In addition to the above, CP also mentions, the ingredients in the toothpaste. Further the

packaging is environmentally friendly; whereby the tube as well as cardboard can be

recycled.

Good packaging can improve customer acceptance through improved color, design and

style, which give the product a differential advantage over the substitutes available.

Packaging has increased the brand equity of the product and the CP toothpaste is CP’s

star product.

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PRODUCT COMPETITION

The competitions in the oral care category especially in the toothpaste market very

intense. For nearly a decade, a cutthroat battle has been going on between brands

belonging to established FMCG companies.

Colgate has captured a huge chunk of the market and its share is increasing day by day.

Some of the major competitors are as follows

1. Macleans

2. Medicam

3. Close-up

4. English

5. Minto

6. Pepsodent

Among all these competitors, Medicam has the largest market share. It comes very close

to overtaking Colgate in terms of sales. The USP of both the products are however widely

different. Colgate is a more general product for overall dental health while Medicam

targets people with toothaches and those suffering from dental decay. Due to poor oral

hygiene a large number of our urban population suffers from these problems and hence

Medicam has been able to capture a large chunk of the market. A couple of years back

when Medicam’s share was increasing at a very high rate, there were plans of Colgate to

introduce a similar specialized product with Colgate brand name. However, the company

decided against it and continued to concentrate on its original USP.

The introduction of English toothpaste in the market by a competing group was another

challenge faced by Colgate brand management team. English toothpaste was targeted at

the middle class and was priced at nearly at half the price if existing brands. Its

promotional campaign focused on its cost-leadership strategy and the brand was

successful in the market leader for a brief period. Close-up being marketed by Lever

Brothers is another prominent player in the toothpaste market. Premiumly priced close-up

is targeted at the upper class. Close-Up’s marketing strategy lays a greater emphasis on

shinning teeth and fresher breath for social acceptance rather than on dental problems.

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Touchme introduced Minto in the market a year ago. Minto adopted a strategy similar to

that of English but laid emphasis on both price and quality.

Macleans some years back used to be market leaders but have lost its share mainly due to

ineffective promotional efforts. Pepsodent, Signal 2, Forhans and Ora 3 are other

competing oral care products Colgate has competition with. The shares of this toothpaste

have been declining.

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PRICING STRATEGIES

When Colgate was introduced in the market skimming pricing strategy was used. The

price was higher than most of the brands.

Colgate has persisted with its premium pricing concept ever since. Emphasizing on

quality for product differentiation it has never used price cuts to increase its sales.

Colgate’s price throughout the country has been the same.

Though it has never decreased its prices in times of stiff competition the CP management

have used discount offering like two in one pack, toothbrush packs and extra volume

packs. This tact was however employed in face of increasing competition. The main

pricing concept, however, has revealed around premium pricing. Today, Colgate is sold

at Rs 27/- (75 gms), which is way above the competition considering that one of the main

competing brand; English is sold at Rs.10.

Like other products of CP, retailers and wholesalers are given quantity discounts, price

discounts regularly.

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DISTRIBUTION

Colgate Palmolive has one of the most effective networks in the country. Its deep

penetration even in the far-flung areas is remarkable. It is because of this effective system

that Colgate toothpaste is widely available and occupies a substantial place on the

retailer’s shelves. All over the country CP unlike its competitors P&G and Levers does

not rely on external distribution agencies but has an internal distribution subsidiary by the

name of Express. This provides the company wit an administrative VMS while its

competitors have a contractual VMS. Colgate’s toothpaste distribution takes place

through various channels. In the urban areas the chain is:

Colgate Palmolive Express distributors Retailers Consumers

In certain semi-urban areas the company follows a slightly different route. For areas like

Hyderabad, Sukkur, Sialkot, Gujaranwala etc the company involves agents wholesalers

for the expertise in these areas. The chain therefore expands into:

Colgate Palmolive Express distributors Agent wholesalers Retailers

Consumers

However, in purely rural areas, Colgate in directly sold through agent wholesalers:

Colgate Palmolive Agent wholesalers Retailers consumers

No matter where Colgate is marketed, the parent company has a lot of influence on the

other members of the distribution chain and thus sufficient channel power.

Intensity of distribution

Since Colgate toothpaste is a convenience product, the management at CP wants it to be

available to every retailer I the market where consumer might reasonably look for it.

Thus, an intensive distribution policy is followed.

Changes in the distribution environment.

The Colgate Palmolive management realizes that the distribution environment will

undergo a huge change in the coming period. Colgate toothpaste is a convenience good

with huge dependency on the retailers. The retail outlet in Pakistan is going through a

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big change, new chains, and large supermarkets are replacing old neighborhood grocery

stores. Rajani’s, TesMart and select stores are important examples. CP plans to enter into

exclusive contracts with these outlets to gain effective sales management.

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PROMOTION

Promotion is the most important element of the marketing of any consumer good item

especially if it’s a convenience good.

Since competition in the all care area is extremely intense, it is promotion, which brings

out the differential advantage of a product. The management at Colgate Palmolive

realizes the importance of promotion and huge efforts are made to ensure effective

promotional planning and the success of all promotional campaign. All major product of

Colgate Palmolive is heavily promoted including Max, Palmolive, Express, Brite and

Colgate toothpaste.

Colgate’s success over other oral care brands can be attributed to its high and effective

promotional campaign. The promotional mix of Colgate consists of the following

activities:

1. Advertising

2. Sales Promotion

3. Personal selling

4. Publicity

5. Public relations

On an overall basis a push strategy is applied. This is directed towards the ultimate

consumers with the intention to motivate them to ask retailers for their product. In turn

the retailers, would request the product from the wholesaler and distributors.

The campaign objective:

Colgate toothpaste is presently in is growth stage. Keeping this in mind, the Colgate

management has outlined two major objectives of its campaign. Since the product has

been in the market for quite some time, and has crossed its introduction stage, the

management feels there is no major need for informative promotion rather the focus

should be on

1. Persuasive promotion

2. Reminder promotion.

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Persuasive promotion basically aims at convincing people that Colgate toothpaste should

be their first choice amongst all the other toothpaste. On the other hand reminder

promotion aims at constantly reminding people that the products widely available in the

market. According to Colgate’s brand management team reminder promotion is of vital

importance in case of all fast moving consumer goods and especially toothpaste’s. Many

good products have failed just because their parent companies failed to focus on reminder

promotion. Binaca and Natural toothpaste were pushed out of the market because if this

reason. The decline of Sparkle and Signal 2 both market leaders a few years back can be

attributed to the same factor.

The Promotional Budget

Promotional budgets at Colgate Palmolive are usually established at the beginning of the

year but the management I always ready to adjust them, if such a need arises. The overall

budget is set after analyzing after analyzing the long-term strategic marketing plans and

their implementation.

The basic budget is set in line with some objective or overall goal in mind. Revisions are

usually made keeping in view the competition and promotional expenditure made by the

competing firms.

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COLGATE PALMOLIVE’S PROMOTION MIX:

The promotion mix at CP. consists of the following in order of significance.

1. Advertising

2. Sales Promotion

3. Personal selling

4. Public relations and publicity

Advertising

Advertising forms a single most important promotional tool as far as Colgate toothpaste

is concerned. Its advertising campaign can be classified as

a. A consumer advertising effort and not Business-to-Business advertising.

b. Product advertising for indirect action i.e. it is designed to stimulate demand for over

a longer period of time.

c. Selective demand advertising i.e. it is directed towards stimulating demand for an

individual brand. i.e. Colgate toothpaste and not a generic category of product.

d. Competitive advertising since its advertising campaign is basically against other

competing brands and focus is on its special features and differential advantage.

Campaign Development and Implementation

An advertising campaign consists of all tasks involved in converting a basic theme

Into an advertising program for achievement of a specific organizational goal relating to a

particular product.

At CP., the brand management team initially comes up with an overall objective of the

campaign. This is discussed in detail with middle management consisting of marketing

managers. After this a budget is established from the overall promotional budget, decided

at the beginning of the year. After this budget has been approved the brand management

team gets in touch with the advertising agency, which is spectrum communications, and

the basic message of the campaign is created. Spectrum Communication is one of the

largest advertising agencies in Pakistan and has some blue-chip accounts of top MNCs

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and national companies. It also has affiliation with world-renowned advertising firms.

The campaign message is decided after active consultation between

1. Brand management team

2. Client service executives of Spectrum Communications

3. Creative department team at Spectrum. Communications

After the campaign message has been decided and approved by the CP. top management,

the brand management team decides over the media required to execute the campaign.

The media-planning department helps in making this decision. For Colgate toothpaste,

television is the most prominent media. Some advertising is also done through

newspapers, magazines and on very small scale through outdoor media like billboards.

Timings of advertising especially those that are aired on television are of great

importance. The local television scene has undergone a huge change with multiple

channels and large number of productions. This makes the placement of advertisement

more difficult. Colgate Palmolive uses the services of certain advertising agencies like

AD Track, which provides information regarding view ship and timing of advertisement.

Similarly, Aftab Associates, a leading research firm also provides relevant data necessary

to gauge the effectiveness of the advertising campaign.

Measurement of effectiveness

Once advertisements have been developed and aired, the company tries to evaluate the

effectiveness of these advertisements. Recall the company conducts tests. One drawback

as far as the total advertising campaign is concerned, is that Colgate Palmolive does not

have its own advertising department like its competitors. Due to this the company has to

rely on its agency.

Sales promotion

After advertising, sales promotion is the most effective tool used at CP. as afar as Colgate

toothpaste is concerned. Some of the common sales promotional techniques used by the

brand management team include:

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1. Free sampling:

Free small sized samples of toothpaste are given to doctors, dentists and general

consumers. The per head cost of sampling, according to the management, is high but

results are much more positive if compared to advertising.

2. Distribution of souvenirs:

Free souvenirs and momentous like pens, key chains, T-shirts etc are distributed to

consumers, especially students.

3. Contests:

Sales contests are organized amongst retailers and prizes are distributed amongst the

winners.

Conferences:

Annual conferences are held. Doctors, dentists and the Colgate’s sales team attend these

conferences. These conferences not only enhance sales but also help in image building.

Personal Selling:

Regular presentations are arranged for dentists and medical students. Workshops are also

frequently organized in medical colleges. The aim is to convince future dentists that

Colgate is the best toothpaste as far as quality is concerned.

Public Relations and Publicity:

The public relations activities are undertaken as regard as Colgate toothpaste is concerned

focus on creating a healthy image of the brand. Sponsorship of community events,

distribution of customer newsletters among the dental community are important

examples. Publicity for Colgate toothpaste usually takes place through mention in

newspapers, medical journals and other magazines.

Colgate Palmolive: A Good Corporate Citizen:

Despite of being a capitalistic concern, Colgate Palmolive as an organization is aware of

its social duties and responsibilities. Realizing this, it has launched several programs for

its community welfare. One of these programs is the “School dental care” program.

Being sponsored by the company, dental surgeons along with Colgate’s brand

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management team visit schools frequently and organize dental clinics on a regular basis

for complete checkups.

These programs, the company feels are not part of their promotional efforts since these

programs are not advertised nor are the products promoted through these events.

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CONCLUSION:

Colgate Palmolive is one of the top multinationals operating in Pakistan. Colgate

toothpaste is one of the leading brands. It is the largest selling oral care product in the

country and its market share is increasing day by day. The team managing the brand is

dynamic and in spite of limited resources, has been able to come up with new innovative

marketing strategies, giving Colgate a competitive edge over other oral care products.

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colgate palmolive term report

Documents

colgate toothpaste

colgate sets

colgate palmolivecolgate

colgate classic toothbrush

distribution environment

product analysis

internal environment

macro environment