colgate palmolive case study

COLGATE PALMOLIVE

THINGS TO ANALYZE MARKETING MIX

ADVERTISING BUDGET

COMPANY BACKGROUND

COMPANY BACKGROUNDREUBEN MARK – CP’S CEO

COMPETITORS – P&G, UNILEVER, J&J

SALES-$6.06B GROSS PROFIT-$2.76B

INTERNATIONAL SALES – 64% PROFIT 67%

R&D EXPENDITURE–$114M MEDIA EXPENDITURE–$428M

CURRENT U.S. MARKET SITUATION

CURRENT U.S. MARKET SITUATION

TOOTHBRUSH ACCOUNT FOR 15.5% OF TOTAL ORAL CARE MARKET GROWTH RATE 9.3% / ANNUM

1991-1992

BUT IN 1992 GROWTH RATE – 21% IN VALUE AND 18% IN VOLUME DUE TO INTRODUCTION OF NEW BRANDS

INCREASING PRODUCT SEGMENTS


VALUE PROFESSIONAL SUPER-PREMIUM$1.29 $2.29-$2.89$1.59-$2.09


BRISTLE TYPE HEAD SIZE(FIRM, MED, SOFT, EXTRA SOFT) (FULL, COMPACT, CHILD)

INCREASING PRODUCT SEGMENTSTHE SUPER-PREMIUM SEGMENT

VARYING CONSUMER BEHAVIOUR

VARYING CONSUMER BEHAVIOURMORE CONCERNED ABOUT GUM HEALTH.

PURCHASERS WERE UNPLANNED AND UNFAMILIAR WITH PRICES

48% - EVERY 3 MONTHS , 70% TOOTHBRUSH-BRISTLES , 11% AFTER SEEING DENTIST , 3% PURCHASE ON IMPULSE

VARYING CONSUMER BEHAVIOUR

FACTORS AFFECTING BRAND DECISION

VARYING CONSUMER BEHAVIOURINTENSITY OF CONSUMER INVOLVMENT IN THEIR ORAL HYGIENE

FIERCE COMPETITION

FIERCE COMPETITION

ORAL-B JOHNSON AND JOHNSON

PROCTER AND GAMBLE SMITHKLINE BEECHAM

ORAL-B

LAUNCHED INDICATOR BRUSH IN 1992

RELIED ON PROFESSIONAL ENDORSEMENTS – “THE

DENTISTS TOOTHBRUSH”

ORAL-B

MEDIA EXPENDITURE - $11.2 MILLION

$1.00-OFF COUPONS, “BUY ONE GET ONE FREE” OFFERS AND @2.00

MAIL IN REFUNDS.

JOHNSON AND JOHNSONENTERED WITH REACH BRAND

BRUSHING IN EVERY HARDEST TO REACH

PLACE, THEREBY INCREASING

EFFICIENCY OF BRUSHING

GLOW REACH AND ADVANCED DESIGN

REACH

JOHNSON AND JOHNSONENTERED WITH REACH BRAND

60¢ coupons, $1.00 refunds by mail, and “buy-two-get-one-

free” offers

MEDIA EXPENDITURE – $17.1 MILLION

PROCTER AND GAMBLE

ENTERED WITH THE CREST COMPLETE

the ability to reach between the teeth up to 37% farther than leading flat brushes.

PROCTER AND GAMBLE

ENTERED WITH THE CREST COMPLETE

55 cent coupons and $1.99 refunds on toothbrushes purchased from floor stands MEDIA EXPENDITURE -

$6.4 MILLION

SMITHKLINE BEECHAMENTERED WITH AQUAFRESH FLEX

PROMOTED FOR ITS “FLEXIBILITY AND GENTLENESS”

SMITHKLINE BEECHAMENTERED WITH AQUAFRESH FLEX

included $1.99 mail refunds, “buy-two-get-one-

free” offers, toothbrush on-pack with toothpaste,

and a self-liquidating premium offer of towels.

MEDIA EXPENDITURE - $10 MILLION

USE OF ADVERTISEMENT AND PROMOTION


WHY ADVERTISEMENT?


It was hard to increase primary demand, so new products tended to steal sales from existing products. In the case of toothbrushes, increased advertising and promotion enhanced the category’s visibility which fuelled consumer demand


MEDIA ADVERTISING EXPENDITURE OF VARIOUS BRANDS


MESSAGE AND TAGLINE OF VARIOUS BRANDS


COLGATE ADVERTISING STRATEGY AND TAGLINE


ADVERTISING AND PROMOTION BUDGET OF COLGATE

DISTRIBUTION CHANNELS

DISTRIBUTION CHANNELSMAJOR DISTRIBUTION CHANNEL

MASS MERCHANDIZERS

INCREASING NUMBER OF SKUINCREASED IN-STORE PROMOTIONAL SUPPORT

AVERAGE MARGIN ON TOOTHBRUSH 25%-35%

DISTRIBUTION CHANNELSRETAIL TOOTHBRUSH SALES

DISTRIBUTION CHANNELSMARKET SHARE OF VARIOUS BRANDS

NOW LETS GET TO THE THINGS WE HAVE TO ANALYZE!!

THE PROPOSED MARKETING MIX

•PRODUCT DESIGN ANALYSIS•POSITIONING•BRANDING•COMMUNICATION STRATEGIES

DECISIONS TO BE MADE ON

PRODUCT DESIGN ANALYSIS


TRIPLE ACTION BRUSHING EFFECT

SUPERIOR, TECHNICALLY INNOVATIVE, PLAGUE-REMOVING DEVICE

AVERAGE 35% MORE PLAGUE REMOVAL

POSITIONING

POSITIONING

NICHE POSITIONING STRATEGY

MAINSTREAM POSITIONING STRATEGY

CUSTOMERS CONCERNED WITH GUM DISEASE

CAPTURING BIG SHARE OF THE MARKET

NICHE POSITIONING STRATEGY

MAINSTREAM POSITIONING STRATEGY

RESULT

• SINCE MAINSTREAM POSITIONING STRATEGY IS GIVING MORE RETURNS AND ALSO HELPING COLGATE IN GAINING A HUGE MARKET SHARE IT WILL BE FOLLOWED

BRANDING

BRANDING

PRECISION SYSTEM III ADVANTAGE

CONTOUR SENSATION PROBE

ACCEPTED BY 49% CONCEPT ACCEPTORS

STRESSING “COLGATE” OR “PRECISION”

BRANDING

INCREASE COLGATE PLUS CANNIBALIZATION BY 20%

NO CHANGE IN CANNIBALIZATION

COMMUNICATION AND PROMOTION


PRINT- AD


SURVEY RESULTS


CUSTOMER RESPONSE

VERY DIFFERENT FROM OTHERS

MUCH EFFECTIVE THAN OTHER TOOTHBRUSHES

“You can really feel it working.”

55% 77%

SAMPLING IS NEEDED


PROMOTION PLANS

• A FREE 5 OZ. TUBE OF COLGATE TOOTHPASTE (RETAIL VALUE OF $1.89) WITH THE PURCHASE OF A PRECISION BRUSH IN STRONG COMPETITIVE MARKETS; AND A 50%-OFF OFFER ON ANY SIZE OF COLGATE TOOTHPASTE (UP TO A VALUE OF $1.00) IN CONJUNCTION WITH A 50¢ COUPON ON THE PRECISION BRUSH.• ENDORSING AND PROMOTION BY DENTISTS

ADVERTISING AND PROMOTION BUDGET

ADVERTISING AND PROMOTION BUDGET

ADVERTISING CONSUMER & TRADE PROMOTION

$ 9.6 MILLION $ 14.4 MILLION

CREDITS-• Istockphotos.com• flickr.com• Google.com

DISCLAIMERCREATED BY, AYUSH GARG, BITS GOA, DURING A MARKETING INTERNSHIP WITH PROF. SAMEER MATHUR, IIM LUCKNOW

colgate palmolive case study

Marketing