Report onColgate Max Fresh: Global Brand Roll-Out

Submitted by:Karan pratap-1226114116Naseer khan-1226114117

Lalit Akhil pillala-1226114119Sai surya raghava-1226114120

Malavika issar-1226114121

1

1. Did China and Mexico each do a good job of adapting the launch to meet local consumer needs? What is the likely profit impact of each plan? Which of the proposed adaptations were "must haves" versus "nice to haves"?

Yes Mexico managed its launch of Colgate Max Fresh better than in China as they were almost in line with the US marketing strategies and no new advertisement expenses were made like in China which resulted in negative sales revenues. Since the advertisement costs were minimal owing to the fact that there was no much psychographic difference in the target audience of US and Mexico, therefore it a substantially good Operating Profit in Mexico. Moreover, Mexico also altered its Price in order to gain sales volume. Moreover, Colgate had a Value share of 82% in Mexico which is far more than that of China, and had resulted in its acceptance in the country and increased sales. Colgate dominated the Mexican market in terms of the Value Share. The toothpaste market was heavily skewed towards the therapeutic toothpastes. The Launching plan for Colgate Max Fresh had to be changed in China as people in China would not have connected to Emily Procter’s character, and it required a local celebrity for the advertisements. COLGATE MAX FRESH – GLOBAL ROLL OUT 3 Connecting to the youth on the emotional level was a justified decision taken by the marketing team and the leading of China, Jay Chow was used in the ad campaigns. . However, there were huge investments involved in changing the Ad Campaign and the Packaging. In spite of these there was a steady growth in net sales for the Colgate Max Fresh in China from 20, 303 ($000) to 23,773 ($000). Therefore, thought the marketing strategies were in line with the Chinese market however, the sales did not boost up owing to the large volume of investment made in achieving goals.

2. from a global CMF perspective, what is the short- and long-term impact of the complexity born out of these local adaptations? Is this added complexity good or bad for the global CMF business?

As part of the Global Expansion strategy, Colgate Max Fresh should look for countries in which the similar advertisement strategies could be used based on the countries in which it is launched, like China’s ad campaign could be used in South Eastern countries including Malaysia, Indonesia, Singapore, Thailand, etc. US marketing Plans could be used in Canada and Mexico’s marketing plan could be used in countries from South America including Brazil, Argentina, Chile, etc. As part of the Short Term Plan, CP should aim in targeting the

2

countries which have a mixed culture and close to the 3 countries discussed earlier. It can also look for those countries in which it already has a greater Value Share as this would ensure in easy penetration in the market. Moreover, it should also do a research before deciding on the launch plans for these countries as this would ensure product success of Colgate Mouth Fresh in these countries. As short term plans it can also look at price alterations before launching the Colgate Mouth Fresh in Price sensitive countries. The main focus basically should be in the developed and matured markets which have greater knowledge of the Product and the benefits it provides. Moreover as part of the future launches it should prioritize the countries based on the level of Value Share existing and this would ensure better adaptability of Colgate Mouth Fresh in these mew markets. Also it can look out for several promotional schemes in form of Bundled products or discounts in countries COLGATE MAX FRESH – GLOBAL ROLL OUT 5 which has greater penetration on CP and its products. This would ensure greater sales and would also provide the consumers with an option to try out the new product before its actual launch and this might also reduce burden on the Marketing research team in detailing the plans for the launch. CP should also look for International Celebrities that might fit in the advertisements for Colgate Mouth Fresh and might create a global impact and save operational expenses to a greater extent.

3.What guidelines could Burton propose going forward to optimize new product introductions for CP worldwide, for the regions, and for the country subsidiaries?

Colgate Max Fresh is one of the revolutionary products of Colgate. As part of the initial launch CP focused on the specific target group in US based on the market research. CMF was launched in the United States in August, 2004. It had recorded to contribute 34.8% to Colgate’s share. During this time US toothpaste market was split between therapeutic and cosmetic benefit Toothpastes. It was the ideal time for CMF to enter the US market. However at this time the market share of Crest’s value share was increasing the premium segment of toothpaste. Therefore, in order to counter that Colgate had to launch Colgate Max Fresh to regain the market share. Colgate Max Fresh was positioned as a high quality premium brand similar to CWE, which provided whiteness with mini breath strips. It offered the US market with 2 variants of the product namely Blue Cool Mint and Green Clear Mint, which also had a different and distinct flavour. The packaging of the COLGATE MAX FRESH – GLOBAL ROLL OUT 2 products

3

was also quite attractive owing to the clear plastic cover that showcased the containing mini breath strips. Advertising was also a major challenge as proper positioning was required to convince the target segment. It spent about 73 % of the marketing budget of Colgate. It was positioned to infuse freshness to the users and mainly targeted at fresh breath experimentalists whose primary objective was to have clean mouth at all times with fresh breath. It used Emily Proctor in its visual ads and this campaign was a huge success in the US market and it increased the sales considerably and about 40% of the target group provided positive intent to buy the product. Moreover, the sales increased as US market is highly concerned getting Fresh Breath all the time and Colgate Max Fresh provided the US market with the same with a brand new packaging style. This also increased Colgate - Palmolive’s market share in US in the Premium Toothpaste segment. Moreover, the sales boosted in US owing to the increase in the consumers who preferred Premium multi Benefit Toothpaste.

Case Analysis:-

In February 2005, Nigel Burton, in his third year as president of global oral care company in Colgate-Palmolive (CP), had every reason to be optimistic. World stock markets were strong and Colgate Max Fresh (CMF), a new toothpaste, Colgate has helped drive the share of a record in the important U.S. market, has been in the global pipeline for 2005. Burton was on his table the proposed marketing plan to launch CMF in China and Mexico. Each plan sought to maximize the business potential of the local market. Burton was to assess the plans from a global point of view. 

4

Cp organisational structure:-

5

Reasons of buying toothpaste:-

CMF Market in China•$868 million retail toothpaste market•1.1%decrease of value shares in2004 of Colgate Equity from 2001•8.4% increase of value shares in2004 Crest from 2001•“Fresh breath” top reason for buying toothpaste in China

CMF Adaptation Strategies in China

6

CMF Market in Mexico:-•$348 million retail toothpaste market•82% market value share of Colgate•10% approximated market share of Crest•Relatively flat toothpaste demand

CMF Adaptation Matrix:-

China adapted to their local market better than Mexico, according to concept and product tests. However, better test results do not necessarily mean that there will be better profits.

7

CMF Comparative Media Investments:-

CMF Launch Pro-Forma Profit-and-Loss2005 & 2006

8

Projected CMF Growth &Marketing Campaign ROI

CMF Launch Pro-Forma Profit-and-Loss2005 & 2006

Swot analysis

Strength

1) Focus on innovative and new product launches.

2) Colgate business planning initiative

9

3) Diversified business operations.

4) Strong financial performance

Weaknesses

1) Product research

2) Highly leveraged

3) Because of high rate of taxes prices are high

Opportunities

1) Emerging market growth

2)  Deploying advance technologies

3) Implementing new products majorly to attract youth.

Threats

1) Competitive landscape from other private label growth

2) Increasing commodity prices

3) Political condition is not stable

PORTER’S 5 FORCES MODEL

Incumbent Rivalry:Consumers in the consumer-products category enjoy a multitude of choices For everything from cleaning products to bath washes. While many consumers prefer certain brands, switching costs in this industry are quite low. Hence, there is a high degree of rivalry.

The Bargaining Power of Suppliers

More than likely, consumer-products companies face some amount of supplier simply because of the costs they incur when switching suppliers. Hence power for both the firms and their suppliers is probably limited.

The Bargaining Power of Buyers:Consumer-products companies face weak buyer power because customers are fragmented and have little influence on price or product. But if we consider the buyers of consumer products to be retailers rather than individuals, then these

10

firms face very strong buyer power.

The Threat of New Entrants:Given the amount of capital investment needed to enter certain segments in household consumer products, the threat of new entr ants is fairly low for the company. The main test is whether the small manufacturer can get its products on the shelves of the same retailers as its much larger rivals.

The Threat of Substitute Products:Within the consumer-products industry, brands succeed in helping to build a competitive advantage, but even the pricing power of the brand can be eroded with substitutes such as store-branded private-label offerings. Hence, there is a high threat of substitutes

BRAND PORTFOLIO

Colgate Max fresh

It is the first and only toothpaste infused with Colgate-Palmolive, the world leader in oral care, is redefining the gel segment of toothpaste in India, with the introduction of new Colgate MaxFresh Gel.

Maximum Fresh Cool Mint

cooling crystals that dissolve in the mouth completely upon brushing, releasing an intense rush of breath freshening power.

Maximum Fresh Clean Mint

11

This patented formula gives a whole new dimension of freshness to its users everyday.

Brand hierarchy

A brand hierarchy is a useful means of graphically portraying a firm’s branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements. It’s based on the realization that we can brand a product in different ways depending on how many new and existing brand elements we use and how we combine them for any one product. We can construct a hierarchy to represent how products are nested with other products because of their common brand elements.

12

COLGATE TOOTHPASTE

Colgate Dental Cream

Colgate Total

Colgate Herbal

Colgate Active Salt

colgate Max Fresh

Colgate Cibaca

BRANDING STRATEGY OF COLGATE

Every company requires a system of continuous growth and up gradation For maintaining the Brand Equity in the market. Colgate may give emphasis on Research and Development Projects in order to develop new products.

By introducing some Ayurvedic Oral Care Products The colgate aims at reaching to the rich and consuming customers of rural India

Colgate may launch some oral care products specifically targeting the urban youth and the urban rich class In order to strengthen its' Brand Image in the urban market of India.

Colgate Branding Strategy aims at introducing some special oral care products which will focus on functional benefits. The Brand can launch specific oral care products for different age groups.

The Branding Strategy of Colgate also plans to customize its packaging techniques, based on price points. This, in a way will establish a new pricing strategy.

Colgate Branding Strategy has a objective strengthening its' business promotion network. The company is undertaking advertising strategies and campaigning programs with the objective of reaching to the customers of India across income classes.

MARKETING MIX

13

14

CUSTOMER WANTS AND NEEDSPRODUCT

COST TO SATISFY

PROMOTION

PLACE

PRICE

CONVIENCE TO BUY

COMMUNICATION

1. Product :- The product, the Precision toothbrush, is a product that

should add value to a buyer’s life.

It should also add utility, and meet the wants and needs of targeted consumers.

The product should be unique and different from all similar products that are already available on the market.

The strategy is to differentiate the product’s design and packaging, which in return will cause the toothbrush to stand out.

VARIOUS TYPES OF COLGATE

2. Price:- The price of a product says something about the quality.

Even though the quality of the Precision toothbrush will be significantly higher than other leading toothbrushes, the price of the toothbrush will be determined by the prices of the other toothbrushes already in the market.

This pricing strategy is a result of positioning the toothbrush as a mainstream product rather than a niche product.

COLGAT 20g 40g 50g 75gm 80g 100g 150g 200g 300g

15

E ms ms ms s ms ms ms ms ms

Dental cream

5rs ---- 14rs ---- ---- 30rs 45rs 56rs 86rs

Max fresh --- --- 15rs --- 32rs 35rs 55rs ---- ---

Total ---- ---- --- 35rs --- --- 65rs --- ---

Sensitive --- --- 35rs --- --- 60rs --- --- ---

Kids --- 26rs --- --- --- --- --- --- ---

Advance whitening

--- --- --- 27rs --- --- 53rs --- ---

Active salt ---- --- 14rs ---- ---- 30rs ---- 54rs ----

Cibaca --- --- --- --- --- 18rs --- 28rs ---

Herbal --- --- 14rs --- --- 30rs --- 55rs ---

Fresh energy gel

--- ---- ---- ----- --- --- 55rs 60rs ---

3. Place:- Place represents the location where a product can be purchased.

The most important part of marketing is how a product will get from the seller to the buyer.

Many products go through a channel of distribution, which involves manufacturers, wholesalers, retailers, and consumers.

The distribution strategy proposed for the Precision toothbrush is through dentists, plastic surgeons, drug stores, grocery stores, large retail stores, and department stores.

The product is available in the all India market, including semi-urban & rural markets which are their primary focus.

16

4. Promotion :- Product promotion is communication spread through advertising,

Publicity and sales promotion.

Promotion represents all of the communication that marketers use in the market.

We suggest that Colgate-Palmolive advertise their products by using commercial, magazine ads, the radio, ads that are to be placed in dentist offices, billboards, and the sides of buses.

Advertising is done to promote new products, remind consumers of existing products, and also promote the image of the company at hand. We also suggested that Colgate offer special coupons and rebates through their other products, and also food products.

Also, Colgate could benefit from the usage of in-store displays.

Most of the promotional activities would be T.V. media.

T.V., FM radio for urban population.

Promotion towards rural population also.

BCG MATRIX

17

The BCG matrix or also called BCG model relates to marketing. The BCG model is a well- known portfolio management tool used in product life cycle theory.

BCG matrix is often used to prioritize which products within company product mix get more funding and attention.

The BCG matrix model is a portfolio planning model developed by Bruce Henderson of the BOSTON CONSULTING GROUP in the early 1970’s.

The BCG model is based on classification of products (and implicitly also company business units) into four categories based on combination of market growth and market share relative to the largest competitor.

STP ANALYSIS

SEGMENTATION :-

18

Colgate’s market segmentation is very broad because all their products are of need to most people so those people share a similar interest in product needs.

Colgate uses a segmentation bases by knowing that certain groups of people need Colgate toothpaste for a specific similar reason like yellow teeth, sensitive teeth or just teeth with cavities.

Colgate also uses the family life cycle because they make toothpaste that could be used for grownups and children.

Also, toothbrushes are made to attract young children with cartoon characters and different tastes and are less strong so that it wouldn’t damage their gums.

(2) TARGET GROUP:-

MAX FRESH :– Colgate targeted youth with the introduction of this toothpaste, as this helps in refreshes breath.

ACTIVE SALT :- Elder people are targeted in this segment as it makes teeth stronger and provides protection from cavities.

COLGATE TOTAL :- Colgate Total contains the anti-microbial ingredient triclosan, which reduces the number of bacteria that cause gingivitis, cavities and halitosis Basically it’s for kids but Mothers are targeted as they are very concerned about their kids. This toothpaste safeguards teeth for 12 hours.

COLGATE SENSITIVE :- People who have sensitive teeth are targeted in this segment who have problem in their gums.

KIDS TOOTHPASTE :- Often small children don’t like to brush teeth, so for them this toothpaste was launched. Colgate had focused on taste aspect to encourage kids to brush teeth.

CONCLUSION:-

19

As Burton reviewed the recommendations from China and Mexico, he noted that the U.S. marketing plan "as is" had not been tested by either management. Accordingly, it was hard to evaluate whether the time and cost of the proposed local adaptations would deliver results over and above what the base U.S. plan would have achieved. Burton wondered how he could add value to the process at this stage.

By the Detailed study on the product and market of COLGATE it was able to get a clear picture of the past and present of the products and was able to get in to the assumptions about the future of the product.

The Brand “COLGATE” has been sold successfully and has created a good demand all the time.

It is also holding a good place in the toothpaste market with a share of around 10% - 15%.

As like for all other products Colgate is also facing a tight competition in the toothpaste Market.

Since the competition is too strong the company has to keep on watching market closely for avoiding any sudden collapse for the product.

Finally, it should note that the company may have to face lot of threats in coming years like political threats, legislation threats ongoing economic crisis, changing life style of the people etc. If the company is able to overcome all the threats and can prepare themselves for facing the problems in advance it can achieve a good growth for “COLGATE”.

20