This document provides a case study on Colgate Palmolive's launch of their Colgate Max Fresh product globally. It discusses the company and toothpaste market background. It then examines the product development and launch initiatives taken in the US, China, and Mexico markets. In the US, Colgate Max Fresh was positioned as a premium brand and advertised heavily on TV and online. In China, it was renamed Icy Fresh and promoted using a celebrity. In Mexico, consumer testing showed average success potential and volume was expected to come mostly from existing Colgate brands.
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Colgate max fresh ppt
1. COLGATE MAX FRESH:
GLOBAL BRAND ROLL-OUT
CASE STUDY
GROUP 6
MEGHA SINHA
PRATEEK JAIN
PRIYANKA KANWAR
RADHIKA SETHI
NISHANT NEGI
2. COLGATE PALMOLIVE
Company Background
• 10.6$ billion revenue (2005)
• Operating in 200 countries
• 70% of sales outside USA
• Two core product segments: Oral personal & home care; pet nutrition
segments
Organization structure
• Regional presidents with P&L responsibility
• Global business development groups organized by category
Year 2004
• Reported +6.5% unit volume growth
• +7% sales dollar growth
• +0.1% point growth in gross profit margin to 55.1%
4. Colgate launched world’s first
commercial toothpaste in 1873.
In 1955, P&G launched first fluoride
toothpaste – Crest
By 1990, virtually all toothpaste in
U.S. offered fluoride protection and
consumers evolved to additional oral
care concerns.
In 1997, CP launched Colgate Total
promising 12 hours protection against
full range of oral health problems.
6. COLGATE MAX FRESH
PRODUCT DEVELOPMENT
Global research and development works with
CIC’s to develop new products
CMF utilized patented technology of
dissolvable mini breath strips as a point of
differentiation
Product consisted of small pieces of “Tape”,
packaged in a convenient carrying case which
dissolves on the tongue releasing a flavor
designed for fresh breath
9. TOOTHPASTE
MARKET
Value Shares of Leading U.S.
Toothpaste Manufacturers
Manufacturer Brands
2004 value share of
toothpaste Market
Colgate-Palmolive Colgate 34.80%
Procter&Gamble Crest 31.60%
GlaxoSmithKline Aqua fresh, Sensodyne 14.50%
Church&Dwight
Close-up, Mentadent, Aim,
Pepsodent 10.20%
All Other 8.90%
10. MARKET
SEGMENTS
• Cavity/fluoride protection was the key benefit sought
,followed by reduction in plaque build-up , breath
freshening and tartar control.
• In 2004, U.S. toothpaste market was evenly split between
toothpastes that emphasized therapeutic(cavity/fluoride
protection/ sensitivity relief)benefits and those that
stressed cosmetic benefits(freshening/whitening).
11. COLGATE MAX FRESH
• Positioning
1. As a premium brand along with CWE
2. Promises freshness with a whitening reassurance
3. Uses mini breath strips
• Advertising
1. Media advertising to generate awareness accounted for 73% of the year 1
marketing budget.
2. Targeted at adults 18-34 age group, with female skew.
• Marketing Support
1. Launch was supported by a website which incorporated creative promotions
and leveraged package visuals and program sponsorships on MTV,AOL music, AOL
first look and yahoo launch.
2. For offline customers, plans included in-store
sampling, merchandising, display offering money back rebates and various
special packs such as “buy one get one free” and two pack trial pack
13. Value Shares in The China
Toothpaste Market
2000 2001 2002 2003 2004
Colgate Equity 19.20% 24.70% 24.20% 23.90% 23.60%
Total Colgate-Palmolive 25.20% 31.60% 32.70% 32.60% 32.10%
Crest 11.80% 12.90% 14.80% 18.00% 21.20%
14. TOOTHPASTE
MARKET
• In 2004, toothpaste market was an $868 million retail
business.
• 38% growth since 2000.
• Market skewed towards therapeutic segment and
low priced local brands.
15. COLGATE MAX FRESH:
QUALIFYING THE PRODUCT FOR MARKET
• Communication Challenge
• Colgate Max Fresh did not test as well as others name
in China which led to the name being changed to “Icy
Fresh”.
• “cooling Crystals” was identified as the most relevant
and meaningful phrase to describe breath strips to
Chinese consumers.
• Celebrity advertising was developed
using Jay Chou, leading rock star in
china, who embodied ”extreme living”.
16. • Colgate dominated in Mexico
with an 82% value share of the
$348 million retail toothpaste
market in 2004.
• Market heavily skewed
towards the therapeutic
segment(87% of value share)
but growth was slow.
• Majority of consumers
focused on basic oral
care(cavity prevention)
• Price sensitivity and sales
promotion activity were both
high In Mexico.
MEXICO
17. COLGATE MAX FRESH
LAUNCH
• Concept and product results
1. Net acceptance was slightly below par in terms of benchmarks for
comparable new personal care products tested in Mexico.
2. Consumer Viability Index(CVI) of 62% suggested that the
initiative had an “average” chance of in-market success, defined
as maintaining stable distribution for at least two years after
launch .
• Sources of Volume
1. CMF volume sourced from Colgate would be slightly below fair share whereas
crest would lose more than fair share.
2. CMF volume was expected to come from CP brands notably Colgate Big Red and
21% from Crest.
3. “Shelf Is Not Elastic”. Understanding which Colgate SKU’s might be at risk of
delisting was important.
18. • Pricing
1. Pricing objective was to achieve parity with Crest’s cool explosions.
2. Price/Value perception was above average for CMF.
3. Tested at a retail price of 15.99 Pesos
4. Estimated that CMF could increase volume by +25% if the price was
decreased from 15.99 to 14.99 Pesos.
• Advertising
1. Proposed advertising idea , “a joy for your mouth". Depicted in an
advertisement entitled “Snow surfer”.
2. Incremental Production and talent costs combined were $500,000.