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Transcript
Contents
Introduction 1
Objective 2
Methodology 3
Company Profile 4
Company Strategy 6
Marketing Mix 15
SWOT Analysis 26
Survey Findings 28
Retailers Survey 34
Conclusion 37
Suggestions 39
Consumer Questionnaire
Retailer Questionnaire
Bibliography
INTRODUCTION
As early as 3000 B.C. Egyptians used toothbrushes fashioned from twigs. In the 20th
century a major design advance occurred in 1938 with the launch of Dr. West’s
Miracle Tuft toothbrush, the first nylon bristle brush. Until the late 1970’s
toothbrushes were widely viewed by consumer as a commodity and were primarily
purchases on price. The involvement remained low and the companies also treated
their toothbrushes as an extension, to get their consumers to use their toothpastes.
Typically in the Indian market the percentage of toothbrush users has slowly inched
upwards. As it has always been associated by the non-users as a non-essential item
more so because of their fierce loyalty to the margosa twigg(Datun) and the index
finger. The market of late has been the entry of several foreign players and the
marketing game has assumed a totally new dimension. Companies are trying to shift
to “PULL” strategy of long term returns and the inclination of consumers to shell out
a few rupees extra to ensure a more wholesome care of their teeth and gum. This has
resulted in rapid growth in value terms. Added to this is the initiative of the
companies to focus on expanding the market by bringing the over 65% non-users in
their consumer fold. With such vast potential to be exploited, the entry of several new
players with their innovative ideas and experience in similar developing markets, the
industry is likely to see a lot of action in the immediate future.
OBJECTIVE
The above of the project was manifold.
First of all a general idea of the toothbrush industry - its competitiveness, volume
and potential was to be adjudged.
Next was to go on to analysis of the attitudes of a typical consumer and his/her
idea/perception of this low involvement category product.
This was to be followed up with the study of Colgate Plus toothbrush, as a typical
product of the company, Colgate Palmolive and its standing in the market vis-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.
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 in group
travels
Abhors Abhors
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
At most once a day
twice
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