Cottle-Taylor is an oral care company operating in India looking to increase toothbrush sales by 30%. Brinda Patel proposes a 20% growth strategy focusing on new users and increased brushing frequency with a 9% ad budget. Michael Lang wants a 12% ad budget and premium product focus, projecting 30% growth. While Lang projects higher revenues, Patel's strategy has higher gross profits by focusing on customer base growth. A blended strategy is suggested, using Patel's approach initially before transitioning to Lang's premium focus.
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This is a case study of cottle taylor discussed in a management class. In this case study , all efforts are being made to solve the case study and all the questions are answered. Hope this would be useful to management students.
These are the ppt slides of Cottle Tayor: expanding the oral care group in INDIA. We presented this case in the case competition in GIFT university Gujranwala and stood third.
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This is a case study of cottle taylor discussed in a management class. In this case study , all efforts are being made to solve the case study and all the questions are answered. Hope this would be useful to management students.
These are the ppt slides of Cottle Tayor: expanding the oral care group in INDIA. We presented this case in the case competition in GIFT university Gujranwala and stood third.
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Cottle-Taylor: Expanding the Oral Care Group in India
1. COTTLE-TAYLOR:
EXPANDING THE ORAL CARE
GROUP IN INDIA
BY-JASHON
YAMNAM
KANU PRIYA SINGH
KRITIKA JINDAL
KUNAL SURVE
MANAN SETH
MANAS RANJAN TRIPATHY
2. COTTLE-TAYLOR: AN INTRODUCTION
1815 to
2009
Hand Soap
Home Care
Products
Personal Care
Products
Oral Care
Products
Operations in 200 Countries over 4 Geographical
DReivviesniounes: $11.5 billion ($5.7 billion from
Emerging Markets)
Operating out of
Philadelphia
• Company had an international workforce
• Invested heavily in foreign Communities
• Manufacturing Units in 75 Countries
• HQ relies on Local Managers for Strategic Advice and
Research
• Secure early Market Share in Emerging Markets
3. COTTLE-TAYLOR IN INDIA
• CALLED COTTLE INDIA
• FOCUS ONLY ON ORAL CARE
• WIDE DISTRIBUTION NETWORK WITH 4,50,000 RETAIL OUTLETS
• OUTLETS INCLUDED SMALL SHOPS, ROAD SIDE VENDORS, MEDIUM & LARGE
STORES AND EVEN SUPERMARKETS
• MARKET SHARE (2009)- 38%
• 46% MARKET SHARE OF TOOTHBRUSH SOLD IN INDIA
• HINDA-DALTAN AND SARINDIA – MAIN COMPETITORS
% Market Share
21
11
22
46
Hinda-Daltan SarIndia
4. INDIAN CONDITIONS
• MORE THAN 75% OF INDIANS LIVE ON $2 A DAY
• INDIAN MARKET INCLUDED URBAN, SEMI-URBAN AND RURAL AREAS
• LARGE PORTION OF POPULATION STILL RELIES ON TRADITIONAL
PRODUCTS LIKE NEEM TWIGS, BLACK SALT, TOBACCO, CHARCOAL
AND ASH
• 50% OF INDIANS NOT CONCERNED WITH PREVENTING OR CURING
DENTAL PROBLEMS(2007 STUDY)
• RURAL POPULATION 5 TIMES MORE LIKELY TO REFRAIN FROM USING
DENTAL CARE PRODUCTS OVER URBAN COUNTERPARTS
• ONE DENTISTRY PERSONNEL FOR EVERY 10000 PEOPLE
• MAJORITY OF POPULATION DO NOT VISIT DENTIST
• NO DENTAL INSURANCE IN INDIA
5. BRUSHING FREQUENCY AND REPLACEMENT
Brushing Incidence
7
9
22
39
23
In India
1 Time/Week 2 Times/Week 3 Times/Week
1 Time/Day 2 Times/Day
Replacement Incidence
8.6
91.4
Replaced in 3 Months
6. STRATEGY IN INDIA
• PARTNERS INDIAN DENTAL ASSOCIATION FOR PROMOTION OF ORAL
HYGIENE
• LOWERED PRICE FOR BASIC TOOTHPASTE AND TOOTHPOWDER (MARGIN
REDUCED FROM 31% TO 25%)
• AS MARGIN ON TOOTHPASTE AND TOOTH POWDER WENT DOWN, FOCUS
SHIFTED TO LOW AND MID RANGE TOOTHBRUSHES (INCREASE PRICES BY
20% DUE TO INFLATION )
• PLANS TO SLOWLY INTRODUCE HIGH END TOOTHBRUSHES AND ANCILLARY
PRODUCTS LIKE MOUTHWASH AND DENTAL FLOSS
• USE OF DENTISTS TO PUSH SALES
7. MARKETING TILL 2009
• 9% OF TOOTHBRUSH SALES SPENT ON TOOTHBRUSH ADVERTISING
• 3% ON PROMOTION AND MERCHANDISING
• 10% ON OFF INVOICE ALLOWANCES FOR TRADE DEALS
• ADS TARGET MEN AND WOMEN AGED 20-35
• HQ RELIED ON COUNTRY MANAGERS TO ADD LOCAL FLAVOR TO
GLOBAL ADS Ad Expenses
TV Newspapers
Billboards Radio
8. CURRENT SCENARIO
• DECLINING US REVENUES
• SENIOR MANAGEMENT LOOKED TO EMERGING MARKETS TO OFFSET
DOMESTIC LOSES
• MICHAEL LANG, VP OF MARKETING FOR GREATER ASIA AND AFRICA, IS
UNDER PRESSURE TO DELIVER RESULTS
• HE NEEDS HIGHER UNIT SALES AND REVENUE CONTRIBUTION FROM
INDIA
• BRINDA PATEL, DIRECTOR OF ORAL CARE MARKETING FOR INDIA,
PRESENTS SALES FORECAST SUPPORTING 20% INCREASE IN
TOOTHBRUSH SALES
• LANG FINDS FORECAST CONSERVATIVE
• LANG WAS PREVIOUSLY ABLE TO ACCELERATE GROWTH IN THAILAND
AND EXPECTS SAME PLAN TO WORK IN INDIA
• PATEL GIVEN 2 DAYS TO PRODUCE REVISED MARKETING PLAN TO
ACHIEVE GOAL OF 30% SALES GROWTH
9. PROBLEMS TO BE SOLVED
• DETERMINE WHOSE PLAN (PATEL OR LANG) WOULD CREATE A HIGHER
REVENUE
• INCREASE UNIT SALES BY 30%
• DEVELOP A MARKETING PLAN BY WEIGHING 3 KEY FACTORS:
PERSUADING CONSUMERS TO BRUSH FOR FIRST TIME
INCREASE INCIDENCE OF BRUSHING
PERSUADE CONSUMERS TO UPGRADE TO MID RANGE OR PREMIUM
PRODUCTS
10. PATELS STRATEGY
• PATEL WANTED TO RETAIN EXPENDITURE AT 9% OF SALES
• THOUGHT THAT COMPANY WOULD NOT LIKE TO SPEND TOO MUCH MONEY AT
THE TIME OF RECESSION
• WANTS TO CREATE NEW CONSUMERS
• WANTS TO INCREASE BRUSH USAGE
• PATEL WANTED TO FOCUS MAINLY ON :
PERSUADING CONSUMERS TO BRUSH FOR FIRST TIME
INCREASE INCIDENCE OF BRUSHING
11. EFFECTS OF PATELS STRATEGY
• INCREASE IN NO OF RURAL BRUSHERS
• CREATE A LARGER CUSTOMER BASE FOR FUTURE
• DRIVE SALES OF LOW END BRUSHES
• KEEP EXPENSE MINIMUM FOR COMPANY
• SALE OF MID- RANGE AND PREMIUM TOOTHBRUSH UNAFFECTED
• 20% INCREASE IN SALES RESPITE INCREASE IN TOOTHBRUSH PRICES
12. LANGS STRATEGY
• LANG PROPOSED INCREASE IN AD EXPENSE TO 12%
• BASED ON STRATEGY USED IN THAILAND
• STRATEGY MORE FOCUSED ON :
PERSUADING CONSUMERS TO UPGRADE TO MID RANGE OR PREMIUM
PRODUCTS
13. EFFECT OF LANGS STRATEGY
• INCREASE IN EXPENSES FOR COMPANY (AD 12%)
• NEW CUSTOMERS CREATED IS COMPARATIVELY LOWER
• HIGH INCREASE IN SWITCHING FROM LOW END TO MID RANGE AND
PREMIUM PRODUCTS
• MORE SALE OF MID RANGE AND PREMIUM PRODUCTS
14. SALES PROJECTION
Toothbrush Products 2009
In
millions
2010 E
Patel
In millions
2010 E
Lang
In millions
$
Price/Uni
t (After
20%
Increase)
Revenue
In millions ($)
Patel Lang
Low End
Manual
Complete 230.6 276.7 267.5
+
16
%
0.18 49.81 48.15
Sensitooth 29.9 35.9 34.7 0.216 7.75 7.5
Fresh Gum 15 18 17.4 0.216 3.89 3.76
Surround 9 9.7 10.4 0.228 2.21 2.37
Kidsie 15 16.2 17.4 0.144 2.33 2.51
Total 299.5 356.5 347.4 - 65.99 64.29
Mid Range
Manual
Zagger 34.4 43 75.7 +
120
%
0.348 14.96 26.34
Directionflex 8.6 10.8 18.9 0.636 6.87 12.02
Total 43 53.8 94.6 - 21.83 38.36
Battery
Operated
Brushes and
Refills
Swirl Brush 1.5 1.7 1.88 +
25
%
7.68 13.06 14.44
Refills 0.2 0.2 0.3 0.672 0.13 0.2
Total 1.7 1.9 2.18 - 13.19 14.64
Total 344.2 412.2 444.18 - 101.01 117.29
15. INCOME STATEMENT
Weightage
%
Patel Lang
Toothbrush Gross Revenues 100% 101.01 117.29
Less(-): Trade Discounts 10% 10.10 11.73
= Net Revenue 90% 90.9 105.56
Less(-): Variable Manufacturing, Selling
and Distribution Costs
46% 46.46 53.95
= Gross Margin 44% 44.44 51.61
Less(-): Advertising 9%(P)/12%(L
)
9.09 14.07
Less(-): Consumer Promotions and
Merchandising
3% 3.03 3.52
Less(-): Selling, General and
Administrative Costs
14% 14.14 16.42
= Profits from Operations - 18.18 17.6
16. 120
100
80
60
40
20
0
COMPARISON BETWEEN THE TWO
101.01
117.29
APPROACHES
18.18 17.6
Patel Lang
Revenue
17. SUGGESTIONS
5
%
40%
55%
Urban Areas
Semi Urban Areas
15%
55%
30%
Message 1 Message 2
70%
25%
Rural Area
5%
18. STRATEGY IMPLEMENTATION
Urban Areas (Metros and
Large Cities)
Semi-Urban (Small Cities,
City Outskirts)
Rural Areas (Villages)
• Organise Dental Camps
in Schools for Kids
• Give Discount Coupons
to School Kids
• Use Celebrities for
Premium Products
• Kiosk Marketing of Mid
Range and Premium
Products outside Malls
• Organise Dental Camps
in Schools for Kids and
Parents
• Give away free
merchandise to kids
• Kiosk Marketing for Low
End and Mid Range
Products
• Use Local Celebrities for
Marketing
• Use “On the Go”
Marketing in Rrural Areas
• Organise Dental Camps
• Give away free
Merchandise
• Distribute pamphlet for
advertise (pictographic)
19. CONCLUSIONS
• LANGS STRATEGY PROJECTS A REVENUE OF $117.29 MILLION COMPARED TO
$101.01 MILLION FOR PATELS STRATEGY
• BUT GROSS PROFIT FOR PATELS STRATEGY ($18.18 MILLION) IS MORE THAN
LANGS STRATEGY ($17.6 MILLION)
• PATELS STRATEGY GENERATES MORE USERS HENCE CREATING A LARGER
CUSTOMER BASE FOR FUTURE
• PATELS STRATEGY SHOULD BE FOLLOWED FOR 2010 AND LANGS STRATEGY MAY
BE IMPLEMENTED ONCE FIRST TIME USERS ARE INCREASED
• THERE SHOULD BE DIFFERENT WEIGHTAGE GIVEN TO THE 3 KEY MESSAGES FOR
RURAL, URBAN AND SEMI-URBAN AREAS