05-02-2013, 09:50 AM
Colgate-Palmolive Company
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INTRODUCTION
It's my pleasure to welcome you to the world of Colgate-Palmolive. The small soap and candle business that William Colgate began in New York City early in the 19thcentury is now, more than 200 years later, a truly global company serving hundreds of millions of consumers worldwide.
Our 200-year history reflects the strength and innovationthat Colgate people have used to constantly transform our Company and identify new opportunities. With global brands sold in over 200 countries; Colgate, Mennen, Palmolive, Ajax, Softsoap, and Hill’s Pet Nutrition are among the world's most recognizable household names, trusted and relied upon by consumers everywhere.
Colgate People, working around the world, share a commitment to our three core corporate values: Caring, Global Teamwork and Continuous Improvement.
These values are reflected not only in the quality of our products and the reputation of our Company, but also in our dedication to serving the communities where we do business.
As a leading consumer products company we are also deeply committed to advancing technology which can address changing consumer needs throughout the world. In fact, our goal is to use our technology to create products that will continue to improve the quality of life for our consumers wherever they live.
Colgate-Palmolive
Colgate-Palmolive Company is an American multinational consumer products company focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products (including toothpaste and toothbrushes). Under its "Hill's" brand, it is also a manufacturer of veterinary products. The company's corporate offices are on Park Avenue in Midtown Manhattan, New York City
HISTORY
In 1806, William Colgate, himself a soap and candle maker, opened up a starch, soap and candle factory on Dutch Street in New York City under the name of "William Colgate & Company".
William Colgate in 1833 suffered a severe heart attack stopping his business from selling. But after a couple of years of recovery he continued with his business. In the 1840s, the firm began selling individual cakes of soap in uniform weights.
In 1857, William Colgate died and the company was reorganized as "Colgate & Company" under the management of Samuel Colgate, his son, who did not want to continue the business but thought it would be the right thing to do.
In 1872, Colgate introduced Cashmere Bouquet, a perfumed soap. In 1873, the firm introduced its first toothpaste, an aromatic toothpaste sold in jars. His company sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in 1896. In 1896, Colgate hired Martin Ittner and under his direction founded one of the first applied research labs.
By 1908 they initiated mass selling of toothpaste in tubes. His other son, James Boorman Colgate, was a primary trustee of Colgate University (formerly Madison University).
Corporate governance
Current members of the board of directors of Colgate-Palmolive are: John T. Cahill, Jill Conway, Ellen Hancock, David W. Johnson, Richard Kogan, Delano Lewis, J. Pedro Reinhard, andStephen I Sadove.
Chief Executive Reuben Mark retired July 1, 2007. Ian M. Cook, President and CEO, replaced him.
Employment diversity
Colgate-Palmolive was named one of the "100 Best Companies for Working Mothers" in 2004 by Working Mothers magazine. The 2012 Human Rights Campaign "report card" on American businesses gave Colgate an A for its support of diversity in the workplace.
SWOT ANALYSIS OF COLGATE
STRENGTHS
1. Colgate continues to be the number one brand in consumer perception as per A& M survey of the last four years.
2. Colgate products are perceived as a champion of the oral-card industry.
3. Advantage of better penetration, and better presence in the consumers mental faculties.
4. Massive retailer network and strong supply base.
5. Image of a ‘company committed to complete dental care of the whole family’.
6. Market growth of more than 25% in value terms.
WEAKNESSES
1. Lacks the universal appeal and accreditation of world wide players like ORAL-B, A QUA-FRESH etc.
2. Has not been able to penetrate the rural segment in volume terms.
3. No regular system of feedback or appraisal of the sale status of is toothbrush.
4. Market growth of 10% in volume terms.
OPPORTUNITIES
1. Any ‘PUSH’ can be easily and quickly affected n account of its widespread
presence.
2. Doing a ‘NIRMA’ to the toothbrush market is something Colgate is quite
capable of , given the base and vision that the company commands.
3. Investment into R&D and the sales campaign so as to effect a strong long
term pull can transform the nature of the market completely as not one
has acted in this direction so far.
Strategies
Strategic Alternatives
The first option that CP has would be to enter the Precision into the market as a niche, super-premium product. As a niche product, compared to the other CP models, the Precision would expect earn roughly 35% volume share and 46%value share.
A positive factor of introducing the Precision as a niche product is not only would it give Colgate enough time to build up a stock of the product, CP would also be able to avoid taking the Children’s Plus model off store shelves.
With the Precision toothbrush, CP could finally introduce a super-premium product into the mix and give the therapeutic consumer segment some much needed attention. One key feature of the Precision toothbrush is that it is incredibly successful at removing significant amounts of plaque from teeth, especially when compared to competitor brushes.
Another option that CP has is to enter the Precision into the market as a mainstream, professional product. As a mainstream product, the Precision would expect to earn roughly 41% volume share and 42% value share, whencompared to other CP offerings. At a price of $0.79, and in order to boost referrals, CP would expect to earn 80% of its sales by distributing the toothbrush to dental professionals.
One negative result of channeling the Precision toothbrush through the mainstream market is that the Children’s Plus model would need to be dropped in order to make room for
Proposed Strategy
Colgate-Palmolive should focus on launching its unique product to a narrow market and introduce the Precision brush first as a niche, super-premium product for therapeutic consumers. By 1994 or 1995, when it has had time to build up its stock of the Precision toothbrushes, it should move it to the mainstream, professional market in order to add cosmetic and uninvolved consumers to its target markets.
By using this two-level approach, CP will be able to reach its maximum potential across all possible market segments. In order to move as many units as possible, CP should start the Precision at a retail price slightly higher than the Oral-B Indicator ($2.65 - $2.89). After moving it to the mainstream market at aprice no lower than $1.75, CP could focus on changing its strategy to offering a low cost product to the population as a whole (approximately 260,327 Americans). Although it does not do as much to help the company’s brand equity, CP should launch the Precision with the name, “Precision by Colgate,” in order to avoid cannibalizing its agship, Plus,model.