2. Class: pgdm 2016-18 batch
Roll no : 33
Historyofcolgate:
In 1806 devout Baptist English immigrant soap and candle maker William
Colgate established a starch, soap, and candle factory on Dutch Street in New York
City under the name "William Colgate & Company". In 1857 Colgate died and the
company was reorganized as "Colgate & Company" under the management of his
devout Baptist son Samuel Colgate, who did not want to continue the business but
thought it would be the right thing to do. In Milwaukee, Wisconsin, the B.J. Johnson
Company was making a soap entirely of palm oil and olive oil, the formula of which
was developed by B.J. Johnson in 1898. The soap was popular enough to rename
their company after it - "Palmolive".
Development:
Founded in 1806, Colgate Palmolive is the global FMCG giant with 200 years of
spectacular performance behind it. Its revenue in 2005 was around $1.5 billion dollars,
with multiple brands indifferent sub-segments of FMCG Business need: Colgate
Palmolive wanted to increase the brand recall of Colgate toothpaste amongst
the telephonic shoppers. From a survey, it found out that 68% of the kirana stores
in India offered home delivery as an option and 21% of the business of these kirana
stores was generated through home delivery.
3. Growth:
Colgate-PalmoliveCompanyTappingMassiveGrowthinAsianMarkets:
Colgate Palmolive Company expressed enthusiasm about its opportunities in Asia,
and management said that the company is planning to re-enter Indonesia, the world's
fourth most populous country with a population of approximately 255 million. According
to the 2015 annual report, net sales in Asia of approximately $2.5 billion represented
just over 15% of the company's top line. As of 2014, Colgate-Palmolive held an
approximate 86% market share in the oral care (toothpaste) business in Asia.
Colgate-Palmolive (India) today has one of the widest distribution networks in India - a
logistical marvel that makes Colgateavailable inalmost 5.0+ million retail outlets across the
country. The Company has grownto aRs. 4132crore plus organization withanoutstanding
record of enhancing value for its strong shareholder base. The company leads the 6735
crore Indian toothpaste market byholding 54.7% of the value market share.
The mainGOALS ofColgate areto better understand consumers behavior, launching new
products through innovation, increasing effectiveness and efficiency as well as
strengthening the leadership worldwide.
Colgate have came up with many products in ORAL CARE, PERSONAL CARE,
HOUSEHOLD CAREand FROM THE DENTIST range.
THE products from this range are as follows:
http://www.colgate.co.in/app/Colgate/IN/Corp/Products.cvsp
The brand have came up with list of products under this category depending upon
consumer’s requirement.
INTRODUCTIONININDIA:
In 1992, Colgate established its first factory inIndia to produce toothpaste for the domestic market,
and by1999becamethe highest selling brand inthe world. Colgateproducts aremarketed inChina
which ispronounced gaolujie, similar toColgate,and has apositivemeaning of high-quality cleaning
4. gel.. Asof 2002, Colgate occupied 20% of the market share for toothpastes in China. Present day,
this toothpaste is"oneof the thickest known on the market.
MARKETINGPLAN:
The Marketing plan of Colgate aims to address all the important areas that carefully
identifies and elaborates as how the company has evolved as a brand and
differentiates its product line all across the globe.
The Colgate Palmolive Company, which is headquartered in New York, is known to
be the biggest seller of toothpaste and a global leader in oral care Products. The
company serves its product offering in over 200 countries worldwide.
CustomerAnalysis
Despite of facing a tough competitive market, the company always aims to deliver
maximum customer value to the market through its multi-product segment strategy.
Colgate has catered all it segments that starts from baby boomer generation. They
have retained its customers by constantly launching new innovative products to
remain competitive in the market.
Competitive Analysis
P&G as Competitors: Both Colgate and Procter and Gamble were established in
1800s as a small family run business. And now both not just have sustained them
but transformed as the 21st century personal care products multi-nationals with
several household name brands.
However, Colgate –Palmolive is less diversified as compared to its competitors like
P&G and Unilever. The company’s biggest source of sales is in oral care business.
The current market cap of Colgate-Palmolive is $58,835mil while P&G has $225,032
million.
SWOT Analysis
Strengths
• Geographically diversified industry.
• Strong brand image.
• Strong market share.
5. • Appealing advertisements.
• Huge sales growth.
• Skilled workforce.
• Strong promotional strategies.
Weaknesses
• Product expansion is restricted.
• Saturated market.
• Market share is lower than its competitors.
Opportunities
• International Market Expansion.
• Emerging markets may attract business
• Differentiation strategy is required.
Threats
• Increase in commodity prices.
• Fierce competition.
• New entrants in the market can be a threat to Colgate
Market Segmentation
The Company has divided its market into two product segments: Oral, Personal,
Household Surface and Fabric Care. Colgate is considered to be the global leader in
the Oral care Products such as toothpaste, Toothbrushes and many other
pharmaceutical products. Colgate also possesses a strong market in the Personal
Care segment that includes products like bar, liquid hand soaps, shower gels,
shampoos etc.
Marketing Strategies
• Geographic Segmentation Strategy: The Colgate Company has implemented this
strategy by expanding its business in over 200 countries. The company does not
market the same product in every country. For instance, in United States they are
selling sixteen different types of toothpastes while in UK; they are selling twenty two
different types of varieties.
• Demographic Segmentation Strategy:The Company caters the market segment
based on different demographics such as age, gender, social class etc. For kids aged
8-10, they have products like transitional toothpastes. They have a separate section
for infants, children, teenagers and adults.
• Psychographic Segmentation Strategy: Here the company sells the products
considering the lifestyle and needs of the consumers. For people who are sensitive
about their teeth, they have introduced Sensitive pro-relief toothpaste and brushes
which are made to decrease tooth sensitivity issues.
6. Marketing Mix 4’Ps
• Product: In Pakistan, Colgate’s Herbal White toothpaste is widely used. The product
has a unique blend of herbs and ensures a good oral health to the consumers.
• Price: Market penetration pricing strategy is adopted by Colgate in order to gain
market dominance. Most of the personal consumer products and oral care products
are priced at a cheaper rate so that a massive amount of consumers could be
persuaded towards the brand.
• Place: The products are made available via direct distribution channel where the
majority of the consumers can easily get an access to the Colgate’s products.
• Promotions: Colgate promotes all its products through personal selling, advertising,
publicity and public relations.
CONTROVERSIES:
The brand has faced bursts of competition from time to time and has fought back
effectively to regain market share. In the 1960s and 1970s, Forhans was the
challenger brand but it is completely forgotten today. Binaca, which later became
Cibaca and finally got taken over by Colgate, was another challenger.
However, maybe because of the dominance of Colgate in India, this category has
a fewer number of brands than, say, soaps. Given that neither soaps nor
toothpaste have any technological barriers to entry and most entry barriers are
created by marketing muscle, one would have expected to see many more brands
in the fray.
Despite the strong brand and Colgate’s focus on oral care, in the late 1980s Close-
Up changed the way toothpaste looked and felt in the mouth. High on freshness
ingredients, the transparent look and the youth-centric approach gave Colgate
some sleepless nights at the time. Close-Up gained a significant share of the
market, forcing Colgate to launch a similar product and alter its strategies for some
time. Colgate has regained its share since then, but Close-Up continues to hold a
majority share in the gel category, with Colgate Gel remaining a distant second.
Unilever also attacked Colgate on the ‘healthy teeth’ platform with Pepsodent,
thereby attacking on two fronts. Currently, despite Colgate accounting for about 55
per cent share of the toothpaste market, Pepsodent and Close-up are still sniping
at its heels with intermittent attacks.
7. The Pepsodent-Colgate ad war which started on August 11 with the release of
Pepsodent’s latest TVC that blatantly used Colgate’s name in their ad claiming 130
per cent better protection, led Colgate to file a case in Delhi High Court on August 13,
2013. The court stated that the commercial does not “denigrate” the product of the
competitor Colgate. The controversial TVC that dragged the two FMCG majors to court
portrayed Pepsodent Germicheck Plus Superior Power as a breakthrough innovation
which is scientifically proven to have 130% germ attack power benchmarked against
Colgate Strong Teeth. Earlier after the release of the TVC, when HUL was asked the
reason behind using Colgate’s name in the advertisement Atul Sinha, Category Head
– Oral Care, Hindustan Unilever Limited said, “It makes the consumers aware in a
manner that is most relevant to them and enables them to make a more informed
choice of the toothpaste they buy for their families. We have done this as a truthful
representation of our scientific tests in a very responsible manner.
Future:
Colgate's Entryin Super Premiumtoothpaste Segment - Colgate
Sensitive Pro-Relief:
A few years back Sensodyne entered into this market and decided to occupy a place
into a smaller niche segment and took the competition to an all new level and since
Colgate did not want to leave the opportunity presented to it by GSK's launch of
Sensodyne, thus it itself made an entry into super premium segment to give GSK's
Sensodyme a tough competition and even go beyond it, but also try and gain a share
of the market segment which is ready to pay even higher premium prices for the
toothpaste based on the benefits being provided to the customers of this segment just
by the mere use of this toothpaste
GSK launched Sensodyne which was launched with a positioning statement
that it helps to fight the problem of sensitive teeth within a week and the within
this week the problem of sensitive teeth will be solved with the use of
Sensodyne by using Dentist's in their ads who were shown recommending
use of Sensodyne to fight the problem of sensitive teeth…
To counter this threat Colgate came forward with an improved version of the
toothpaste to take Sensodyne head on and leave it behind and take the
toothpaste market into the super premium segment. In this segment as per
Colgate, customer's will be willing to pay a price for an instant relief from
8. sensitivity of teeth within a few moments of usage of Colgate Sensitive Pro
relief. And this instant relief came at a price which is even higher than the
earlier premium segment.
The company reported to achieve revenues of $4.32 billion for the quarter.
Additionally, the company’s gross profit margin narrowed to 58.3% in the
quarter due to high raw material and packaging costs and the net income
reached to $388 million for the period.
The Colgate-Palmolive is a consumer oriented company which is currently
operating in more than 100 countries. They provide many employee oriented
programs and managing their international business quite well. The way they
have established in the business and international market, they still have a
higher chance to remain competitive in the years ahead.
