Marketing Strategies of Colgate Palmolive Ltd

Project Report A STUDY ON MARKETING STRATEGIES OF COLGATE PALMOLIVE LTD. Submitted to Dr. D. K. Agarwal Submitted by DINESH CHAUHAN62014 VIVEK DHAR 62066 FORE SCHOOL OF MANAGEMENT NEW DELHI table of contents ? Introduction1 ? Objective2 ? Methodology3 ? Company Profile4 ? Company Strategy6 ? Marketing prance15 ? SWOT Analysis26 ? Survey Findings28 ? retailers Survey34 ? Conclusion37 ? Suggestions39 ? Consumer Questionnaire ? Retailer Questionnaire ? Bibliography trigger As early as 3000 B. C. Egyptians subroutined tooth scrubes fashioned from twigs.In the twentieth century a major design advance occurred in 1938 with the establish of Dr. Wests Miracle Tuft toothbrush, the first nylon bristle brush. Until the later(a) 1970s toothbrushes were widely viewed by consumer as a commodity and were primarily secures on determine. The appointment remained depleted and the companies also treated their toothbrushes as an extension, to get their consumers to use their toothpastes. Typic e rattling(prenominal)y in the Indian marketplace the percentage of toothbrush users has tardily inched upwards.As it has always been associated by the non-users as a non-essential item much(prenominal) so because of their fierce loyalty to the margosa twigg(Datun) and the index finger. The market of late has been the en take on of several foreign players and the marketing game has assumed a totally impudent dimension. Companies ar trying to shift to PULL scheme of long term returns and the inclination of consumers to shell out a a couple of(prenominal) rupees extra to ensure a more in allsome care of their teething and gum. This has resulted in rapid growth in value terms.Added to this is the initiative of the companies to concentrate on 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 recent players with their innovative reports and experience in similar developing marke ts, the assiduity is be standardized to see a lot of action in the immediate future. object glass The supra of the project was manifold. ? First of all a general idea of the toothbrush manufacturing its competitiveness, leger 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 starting time involvement category harvest-tide. ? This was to be followed up with the study of Colgate convinced(p) toothbrush, as a typical merchandise of the party, Colgate Palmolive and its standing in the market twin other players, especially naked fledglings. ? To amalgamate all above to discontinue as to what was to be the future/probable course of the toothbrush industry and Colgate Plus tooth brush in bad-tempered. METHODOLOGY 1.To get an idea of the industry, I went through all the relevant literature we could lay my hands upon. This include A & Ms, Business Todays. 2. For consumer attitudes, I pre pared a questionnaire that was circulated among 70 odd people, fountainhead spread out across the whole of Delhi. The same was weare 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 instigator image and congenator studying of various brand could also be elicited. 4.The findings were synthesized, and keeping in mind the new(a) 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 twenty-third September 1937 as a private limited confederacy in Bombay, as a wholly owned subsidiary of Colgate Palmolive Co. Of USA initially it started with trading activity and later set up manufacturing ope balancens in 1949 at Sewry (Bombay). The company became a earthly concern limited company on 5th October 1978.In 1990-91 the company commiss ioned facilities for fatty acid and basin soap at Waluj (Aurangabad). The plants at Sewri and Waluj manufacture oral care products like dental consonant creams, tooth powder tooth brushes and in-person care products like toilet soaps, shampoo, which are marketed under various brand names such as Colgate, Palmolive, Halo, Protex and Charmis. The companys distribution network covers 1700 stockists and 4,50,000 retailers with ware house facilities in Mumbai, Calcutta, Delhi, Hyderabad, Luck nowadays and Madras ( and a new addition at Faridabad).The company has its own Research and growth facilities and had also been getting the R&D benefits of the parent company. It has a intimately established quality Control Department at Sewri & Waluj. For 40 divisions, since opening 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. carbon each, when it was increases to Rs. 1. 96 crore, by a bonus issue in th e ratio of 1301. To comply with the FERA regulations, Colgate Palmolive, USA diluted its share holding to 40% in the Indian company, through an cristal of sale to the Indian public in October 1978.Following FERA relaxation, the foreign shareholding was increased from 40% to 51% in September 1993. Colgate Palmolive (CP) is a global leader in household and personal care products. In 1991, it had gross revenue of $ 6. 06 billion and a gross win of $ 2. 76 billion, its world wide R&D exp give the sackitures were $ 114 meg and media advertizing exp polish offiture totalled $ 428 million. Colgate Palmolives five year plan for 1991 to 1995 emphasized new product launches and entry into new Geographic markets, along with improved efficiencies in manufacturing and distribution and a continuing focus on core consumer products.In 1921 $ 243 million was spend to upgrade 25 of Colgate Palmolives 91 manufacturing plants, 275 new products were introduced world-wide several strategic acquisitio ns (e. g. of the Mennen mens toiletries company) were completed and manufacturing began in chinaware 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 Palmolives strong unit, accounted for 64% of sales and 6% of profits in 1991. COMPANY STRATEGY vocal CARE AND TOOTH brush INDUSTRY IN PARTICULAR Volume is the reveal says Richard Usuquen, VP Marketing Colgate Palmolive (India) Ltd. To expand the market in all ranges, CP has an ongoing country- carriage VAN PROGRAMME and SCHOOL PROGRAMME covering 14 million villages and 80 million consumers, teaching people brush or all the same clean their teeth with the fingers. CPs action centring around finely fit the urban market (59. 5%) and rude 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 de ntal cream at low footings.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 al countersink garnered 8% market share. Usuquen says The penetration of brushes in India is very low, so more than market share, it is weighty to grow the market. To that end CP has actively introduced line extensions across all three segments economy, middle and premium since decease year.At the entry take aim it has adopted the sleeve packaging, with no individual cases. The focus is on madcap 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 co nsumers, at prices low enough to generate trial. For the urban market, the focus is on preserveing 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. CPs perception of the Indian market is of one where people meet change but clamour for high end products at stingily prices. The coiffure to this conundrum as per the companys strategy is to .. optimize cost and formulation and the proceses and come up with efficient manufacturing to answer this . CPs strategy is to pour in a lot of authorisement in the Indian market in terms of capital expenditure and organisational support and each out to the deepest interiors.SEGMENTATION The toothbrush industry rouse 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 nonunionized naturally available cleaning mediums viz. Index Finger, N eem twigs and so on But Colgate Plus need non to bothered about last mentioned as it operates in a different category. The tooth brush industry idler be segmented in the basis of social class & income conference (Demographic Segmentation ), price (Product segmentation), benefit (behavioural segmentation), the last being the most important.demographic SEGMENTATION ACCORDING TO worth Segment Category patsys Characteristic wiped out(p) income rural class Economy Promise, Cibaca Looking for low price midway income group semi urban Standard Colgate stainless Pepsodent popular encourage for money consumer Upper middle income urban Premium Colgate Plus, Classic, Ajay, Royal highschool quality cleaning efficiency consumers Upper class urban demoralise Super Premium Oral B, turquoisefresh, Jordan, Close UpUnique, attribute, dentists recommendation The last two categories merge, since Colgate Plus is intelligently positioned in between the two to maintain a high quality in age as well as encourage switches from standard category to up grade PSYCHOGRAPHICS Variations in Product Jazzy looks, Transparent pass overSimpleton looks, Modest Mix of the two transparent Flashy colours Superior Packingpackaging, significant colours handle but not very flash packaging. urban sophisticate Chooses with care, sports it asAbhors Abhors a status symbol while interacting in group travels Semi urban Non Chalant User Aspires for it, but finds it Very a good deal goes for this as it Some times this difficult to afford tries it serves is purpose without much seldom expenditure Rural User Does not have attack/cant Is the only option Datun Generally cant afford this think of either Tooth brushes brands Oral B, Jordan, Aqua fresh etc. Promise, Forhans etc. Cibaca, Ajanta, Ajay etc. The overall response reflects a gradual snuff it in the direction of the premium to super premium segment as it is once in three months/four months buy , thus being prosperous in luring all customers (except the rural user who are a elegant minority of the Market) to try out the ones that are places at a high price on account of their trendy looks and overall appeal of style and splendor. BENEFIT SEGMENTATION User Characteristic Invalid oral health consumer Involved oral health Consumer Uninvolved Oral Health Consumer healing(p) Brushers Cosmetic Brushers Non-chalant Brushers Product Differentiater Search functionally superior Search for product that Views products as same Lack of product with many attributes. effectively delivers decorative interest benefits Advertising appeal Put off by hardsell Prefers Influenced by promotion, Relatively unaware of ads can dentist recommendation or punt on a USP at most be influenced by price informed opinion offs, package deals Buying behaviour Buys for himself, will go to a Buys and uses for himself. Buys for family. , will pick up specialised store will not go beyond a large any brand available. shop, supermarket Regularity of usage Brushes by and by every meal Brushes mostly once, sometimes At most once a day twice Brand loyalty High Low Nil Price (Willing to pay) 20 15-20 Rs. 20 3. 0 25. 0 7. 5 ASCRIBED TO No specific reason 59. 4 33. 3 50. 0 word of mouth 15. 6 16. 7 19. 1 strike with advt. 9. 3 20. 11. 9 shopkeeper insisted 15. 6 20. 8 14. 3 dentists advice 6. 3 8. 3 4. 8 REPLACEMENT FREQUENCY 0-1 MONTHS 23. 5 12. 5 17. 4 1-2 MONTHS 26. 5 29. 28. 3 2-3 MONTHS 23. 5 29. 2 30. 4 3-4 MONTHS 23. 5 16. 7 19. 6 4 MONTHS 2. 9 16. 7 4. 3 FREQ. OF BRUSHING at a time (per day) 50. 0 28. 46. 7 Twice 44. 2 68. 0 46. 8 after every meal 2. 9 4. 0 2. 2 Not very particular 2. 9 0. 0 2. 2 pressed with Advertisement YES 11. 1 22. 2 12. NO 88. 9 78. 0 87. 1 RELATIVE immensity OF ATTRIBUTES MALES FEMALES TOTAL RANK PRICE 62. 7 57. 3 61. 2 5 PACKAGING 40. 2 49. 3 44. 6 8 DURABILITY 74. 5 74. 7 75. 2 LONG HANDL E 51. 9 60. 0 57. 0 6 FLEXIBLE spot 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 baseball diamond brainiac 36. 3 41. 3 38. 9 10 GRIP 58. 8 68. 0 63. 4 4 INDICATOR 28. 4 41. 3 34. 3 11 COLGATE PLUS USERS RESPONSE Males Females Total v.Good COLGATE PLUS 30. 96 CIBACA 14. 28 ORAL-B 16. 66 CLOSE-UP 9. 52 PEPSODENT POPULAR 7. 14 JORDAN 9. 2 OTHERS 11. 90 BRAND RECALL BRANDS PERCENTAGE COLGATE PLUS 20. 47 PEPSODENT POPULAR 11. 02 CIBACA 10. 4 ORAL-B 9. 54 AQUA-FRESH 7. 59 AJANTA 7. 09 OTHERS 28. 35 Only about 5% of the respondents could not remember which toothbrush they were presently using which were excluded from the above computing. RETAILERS SURVEY FEATURES No. f Respondents 20 Areas covered Defence Colony, southern Avenue, Khan Market, North Campus, Sarojini Nagar Nature of stick to Structured Questionnaire Objective a) To profit the respond to new entrants v is-a-vis Colgate Plus as perceived by retailers. B) Retailers favorite brand(s) Margins offered Limitations Given the areas covered, the response was bound to be asked in privilege of the upper class users. FINDINGS A.Availability slack Classic, Aqua-Fresh, Oral-B, Pepsodent, Colgate Plus Not Easy Royal, Forhans, Cibaca, Jordan, Prudent. B. Sales High Colgate Plus, Cibaca, Classic, Pepsodent, Oral-B Satisfactory Close-up, Ajanta, Ajay, Jordan, Aqua-Fresh C.Profit Margins Highest Classic, Royal High Jordan strong point 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 final level of margin and yet commands the highest market share. The low margin was nonetheless 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 sanded up by any judgment system whatsoever. Supply is kept regular on weekly basis. D. Retailers Perception Of Preferences BY BRAND NAME 36. % CHEAP BRUSH 9. 3% SPECIFY PRICE RANGE 15. 9% EXPENSIVE 21. 5% TRY NEW ONESE 16. 8 E. Retails insisted on Pushing Classic as it was moderately priced and yet offered a very good margin. * The D above was also substantiated by our consumer survey. CONCLUSIONThe 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 great latent demand. Out of their stable of marketing s trategies, advertising till now had been low priority for the players (this was confirmed in our survey as 88. % of respondents dont disclaim 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 flock margins still hold the key to increasing off take of toothbrushes. No one has made a serious attempt in the virtuous territory of 65% non-users (CPs Rural Van Programme is a recent drive). The thought of doing a Nirma to the toothbrush market has escaped everyone. scorn 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 prone straight tongue cleaner cased in the toothbrush handle. Cartoons section 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. recognize with adjustable handle. film a certificate by the Indian alveolar 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 stripling 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 secure of a brush which will help in blocking and prepointing the get of the buyer. As the target segment is the premium segment therefore, premium se t 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 reverting small changes of Rs. 31 or Rs. 31- and Rs. 1 so they sometimes cancel 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 enthronisation is needed for such heavy sales promotion and also an attempt should be made to convert this low involvement product into a high involvement as it is concerned with personal card and hygiene and a product of daily use. CONSUMER QUESTIONNAIRE 1. AGE ( 15-30 Years ( 30-40 Years ( 40-50 years (Above 50 years 2. SEX ( Male ( Female 3. OCCUPATION ( Govt. Service( freelance ( Corporate Executive ( Student ( Others (specify __________________) 4. MARITAL STATUS Single ( espouse with children ( Married without children 5. AVERAGE MONTHLY INCOME/ALLOWANCE ( Rs. 20000 6. Which toothbrush do you principally use? 7. Name any other five toothbrushes that you can recall 12345 8. Who purchases your toothbrush? ( Myself( A family member( A Subordinate 9. Do you ask for a toothbrush by name? ( Yes ( No 10.How much are you ready to spend on a toothbrush? ( Rs. 5-10( Rs. 10-15( Rs. 15-20( Rs. 20 11. What prompted you to purchase your menstruation toothbrush? ( Dentists advice ( Impressed with the advertisement ( Shopkeeper gave it to me ( A well-wisher recommended it to me ( Just bought it no specific reason. 12. How often do you change your toothbrush? (0-1 month( 1-2 months( 2-3 months( 3-4 months ( 4 months 13. How often do you brush your teeth a day? ( Once ( Twice ( After every meal( Not particular 14. What according to you are the relative importances of the following? V. Imp Imp. Not so Imp. Doesnt matter PRICE PACKAGING DURABILITY FLEXIBLE NECK COMFORTABLE ANGLE SOFTNESS OF BRISTLES LOOKS (TRANSPARENT HANDLE ETC. ) DIAMOND HEAD GRIP INDICATOR 15. Has any toothbrush ad (seen on TV/in a magazine) made an impact on you? YES NO IF YES, and so WHY ORAL-B AQUA FRESH ROYAL COLGATE PLUS 16. Kindly answer the following in case you have used Colgate Plus/Aqua Fresh toothbrushes AQUA FRESH COLGATE PLUS QUALITY *V. keen * GOOD * V.GOOD * GOOD * MODERATE * MOD ERATE * NO GOOD * NO GOOD AVAILABILITY * EASY * not SO EASY * hard-fought * EASY * NOT SO EASY * DIFFICULT IF IT WORTH THE PRICE * YES *NO * YES * NO * CANT SAY *CANT SAY IF THE BRAND IS NOT AVAILABLE, THEN I * WILL hold off * WILL WAIT * WILL NOT WAIT * WILL NOT WAIT THANK YOU FOR SPARING YOUR VALUABLE TIME RETAILER QUESTIONNAIRE 1. situation of the store 2. Selling toothbrushes since 3. Brands stocked ( Colgate Plus( Cibaca Supreme( Aqua Fresh ( Jordan( Oral-B( Royal ( Pepsodent( Promise( Ajay ( Ajanta( Classic 4. Which are the top three toothbrushes in terms of exist sales? 1. 2. 3. 4. 5. In case not covered above. What is the status of 1. Aquafresh( Good( Picking up Moderate( Poor 2. Colgate Plus( Good( Picking up Moderate( Poor 6.How do consumers ask for a tooth brush? (Rank them) (a) Ask by brand name(b) Ask for a tatty 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) G et a regular feedback Aquafresh( Yes( No Colgate Plus( Yes( No (b) Maintain regular show Aquafresh( Yes( No Colgate Plus( Yes( No 8. Rank your profit margin for the following brands 1. Cibaca Supreme2. Colgate Plus 3. Oral-B4. Aqua Fresh 5. Classic 6. Ajanta 7. Pepsodent 8. Jordan 9. What is your a) Highest Margin b) Lowest Margin 10. If the consumer does not ask for a specific toothbrush then which one would you offer him? Why? BIBLIOGRAPHY 1.Business Today library 2. A&M Issues of June 05, June 05, April 2006 3. CII Library 4. FORE Library 5. Kotler Philip (Principles of Marketing) 6. Kotler, Philip (Marketing Management). ACKNOWLEDGEMENT I would like to express my unprejudiced thanks to Prof. N. S. Uppal for entrusting me with a challenging project and along with it, his help and hike 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. p ic pic pic pic pic pic pic pic pic pic pic pic pic