23-08-2012, 01:28 PM
A STUDY ON MARKETING STRATEGIES OF COLGATE PALMOLIVE LTD.
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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.
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.
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.
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.
BRANDING
Colgate is a brand having a cult following. It world wide reach and association
with dental health has made it a brand associated with a caring attitude,
providing quality oral care to masses at an affordable price.
Colgate is No. 1 brand in Indian Market the three consecutive surveys by A &
M magazine. So, while launching the new toothbrush, it was imperative to
keep “Colgate” as a part of the name and incorporate something that could
justify the increment in price. As modifications in the form of an entirely new
category “diamond head” was introduced, it was ideally decided upon a name
that promised to deliver something extra, additive, etc. “Plus” was thus added
on.
PRICING
Generally the most important of all the P’S in a developing country like India
where semi-urban and rural population constitutes, a massive portion of the
total market, has to be decided upon after contemplating on all the aspects
related to the market and the product itself.
For a product like toothbrush, the major cost is that of packaging (about 40%
of total), the rest being spread over the bristles, the nickel silver wire holding
the tufts in place and on the body of the brush.
The prices of toothbrushes have taken a quantum leap. The costliest
toothbrush in 1986 was Rs. 4/- which is today in the range of Rs. 25/-. Thus
we have seem a major jump in value sales vis-à-vis volume sales.
Colgate Plus when it was launched in 1987, was introduced as a champion
product to become the ‘hero’ of the toothbrush market meant to ‘keep your
smile forever’. It promised to deliver more than the rest and was priced
accordingly and soon became a major player in the market. At that time it was
playing against ‘Jordan’ and ‘Royal’, both of which were being imported.
Gradually as the market expanded, with the several new players coming in,
Colgate Plus continued to be the top most brand of the players till Oral - B,
Aquafresh, Forhans Galaxy came in .