Analysis of Marketing Strategies of Colgate Palmolive: Course Instructor Strategic Marketing Management
Analysis of Marketing Strategies of Colgate Palmolive: Course Instructor Strategic Marketing Management
Analysis of Marketing Strategies of Colgate Palmolive: Course Instructor Strategic Marketing Management
Submitted to:
Submitted By
We would especially like to express our acknowledgement to Mr. Maqsood Ahmed (Brand
Manager- Colgate Palmolive) for providing us company fact and helped us in the development of
this report. This report has greatly helped us to evaluate the professional aspects of the
different strategies like promotion strategies, pricing strategies etc which are discussed in detail
in this report.
Table of Contents
Company Overview 5
Over View of Toothpaste Industry 7
Distribution Trend 7
Marketing Objective & Stratagies………………………………………………………………8
Target Market……………………………………………………………………………………9
Colgate Target Market…………………………………………………………………………10
Positioning of Brands .…………………………………………………………………………..12
Pricing Strategy………………………………………………………………………………….16
Distribution Strategy……………………………………………………………………………17
Challenges in the Way of Promotion…………………………………………………………..18
Collgate Moves to Face Challenges…………………………………………………………….21
Promotional Stratagies of Colgate ……………………………………………………………..25
Product wise Promotion……………………………………………………………………….27
Advertisment…………………………………………………………………………………….28
Sales promotion………………………………………………………………………………….30
Advertising budget…………………………………………………………………………….31
Competitive Analysis……………………………………………………………………………32
Average Market Share………………………………………………………………………….33
Recommendations……………………………………………………………………………….34
COLGATE PALMOLIVE (PAKISTAN) LIMITED
Company Overview:
Colgate Palmolive (Pakistan) Limited is part of the Lakson Group of Companies which
deal in consumer package goods, such as dental, personal, surface and fabric care
products. Colgate Palmolive (CP) is a franchise of Colgate Palmolive Co. Incorporated
(USA). During the first half of FY11 the company witnessed a 17.01% increase in gross
turnover from Rs 7,140 million in HY10 to Rs 8,355 million in HY11, owing to the higher
products distribution base.
Colgate-Palmolive is one of the three major players in the Fast Moving Consumer Goods
(FMCG) business in Pakistan. The nature of the products offered by the company, both
locally and globally, fall into four categories: Oral Care, Personal Care, Surface Care and
Fabric Care. The company’s principal strength in Pakistan, however, lies in Oral Care,
Fabric Care and Surface Care. Major successes at Colgate-Palmolive are attributed to the
identification and satisfaction of consumer needs in various income groups. The
company aims to serve different consumer segments with equal importance by
maintaining consistent levels of quality and price. It does so by adopting a customer-
oriented approach that requires tremendous effort in identifying consumer needs and
coming up with effective and profitable solutions.
The company continues to invest in serving the lower end of the rural market. Low cost
but quality products and methods of distribution are being designed to reach such
consumers. For example, investment has been made in a number of rural promotion
vans to create awareness and get lower end penetration. In this way, the company is
not only providing consumers with value-added products but is also reaching out to
those residing in the remote areas of Pakistan.
CATEGORIES:
Personal Care:
Deodorants, Bar soap (Palmolive), Body wash, Hair care, Liquid hand soap, Toiletries for
Men and Shaving Cream etc.
Surface Care:
Dishwashing Liquid (Ajax, Max), Bleach and Household Cleaners.
Fabric Care:
Laundry detergents and Fabric Softener
CP does not categorizes its different types of dental creams (gel, cream etc) and treat
them under one brand name “Colgate”. Therefore we studied “Colgate” as a whole.
OVERVIEW OF TOOTHPASTE INDUSTRY
DISTRIBUTION TREND
Entities involved in the Distribution Process
Sales Manager
Basically Sales Managers at CP are responsible for the overall management and control
of the distribution & redistribution process. Sales Managers are responsible for selecting
and maintaining relationships with the Distribution agencies. They are also responsible
for handling their own Sales Task Force that caters to the direct accounts & other
institutions.
Distribution Flow:
Kotri
Warehouses
Personal Sales Force
Distributors
Institutions
Wholesalers
Retailers
End users
MARKETING OBJECTIVES AND STRATEGIES
Marketing Objectives:
The Marketing Objective for the Year 2011 are to:
Increase the Market Share to 15%
Maintain the Profit Margin of 6%
Marketing Strategies:
The Marketing Strategies for achieving the above goals are:
However, for communication purposes the target market is defined differently. This is
done in order to ensure that the advertisement is direct, specific and tailor made to suit
the viewers and achieve their purpose. The target market definition used for
advertisement purpose thus is an educated housewife who is concerned about her
family and wants to give her family the best within her means and knowledge. She is
responsible for their well being and is playing the role where her actions may result in
being harm-full or helpful. Hence the current target market for the Colgate toothpaste
as a percentage of the total industry as can be seen in the above grid is Rs. 825 million.
It is constitutes all individuals earning an income of Rs.5000/- and above, which are 38
million people. That is 30% of the 140 million urban population of Pakistan and 12% of
the rural population.
The zones and their sub-divisions vary in potential. The following table depicts the
distribution of the target market sales in the major zones, based on the
population size.
POSITIONING OF BRANDS
Positioning of Major Brands (Including Tooth Powder)
Brands Positioning
Close-up Fresh Breath, Social Acceptance; Teenagers
Colgate Cavity Prevention, Strong Teeth; Family
Macleans Cavity Prevention, Strong Teeth
Sparkle Cavity Prevention, Strong Teeth
Medicam Medication, Alchemy
Pepsodent Cavity Prevention, Low Price, Jermy check formula
English Low Price
Forhans Gum Care
Dentonic Leading Tooth Powder, Best Quality Formula
A
products position is the place that it occupies relative to competitors in a
given market as perceived by the relevant group of consumers that is by the
target market segment.
Objective:
All brand extensions of Colgate have been positioned as cavity prevention toothpaste
for the whole family that strengthens the teeth and keeps them healthy. Colgate is
aiming to use positioning in order to create an image of a premium product of high
quality. The objective is to use positioning in order to achieve this image in the mind of
the consumer on the basis of the benefits provided by the product.
Strategy:
Further, the positioning is emphasizing on the main benefit of the product i.e. cavity
prevention. Therefore, the basis of positioning is strong teeth and cavity prevention
through which we will be achieving an image of high quality. The positioning strategy is
to create an association of Colgate Toothpaste with cavity prevention and emphasizing
cavity prevention and strong teeth in the promotional campaigns will do this.
Slogan
“Mera Colgate”
BCG Matrix
HIGH LOW
HIGH ? ? ?
Colgate herbal -Colgate Total
Colgate whitening Fresh Stripe
-Colgate Fresh
Energy Gel
Market Growth Rate
LOW
COLGATE CDC
High
Low
Colgate toothpaste features as a Star for CPL since it has a high growth rate and a high
Relative Market Share
market share. It has market growth rate of 25% and a relative market share of 0.74
(Colgate 11.5/ Sparkle 15.5). This shows that the brand has tremendous potential in
Colgate
Toothpaste
Sales
Introduction Growth Maturity Decline
Time
PRICING STRATEGY
Objective
The pricing policy aims to generate trial of the product. Increasing the number of users
of the product will do this. Additionally the pricing objective is to meet competition to
make sure that in the premium product segment Colgate’s prices are at par with those
of its competitors so that relatively high prices do not reduce market share. The aim is
to give good value for money through good, competitive prices which result in
consumer satisfaction.
Strategies
Primarily two pricing strategies are used in order to achieve the overall marketing
objectives and the pricing objectives:
Pricing Method
The basic method for pricing the product is cost-plus method or strategy where a fixed
percentage is added to the cost in order to determine the price at which the product will
leave the company i.e. the x-factory price.
Another major target is to derive maximum benefit from key account holders like hyper
markets through making better relation and use them as “implicit distributors” from
where retailers can come and buy Colgate products & company saves its distribution
cost. But this strategy is workable in the places where we have such hyper-marts in
small cities & rural areas Colgate has set the target of widening its customer base.
Distribution Strategy
The Distribution Strategy for Colgate is:
Account Maintenance (of all Accounts - Super Key, Key and Small Accounts)
Account Development (of Small Accounts)
The focus is to increase the number of small retail accounts that give CP 25% of their
total business in volume. The reason for this is that these retail outlets have the
most potential for growth and will help Colgate-Palmolive in its aim of low-end
penetration. On the other hand, Super Key and Key Accounts are already
generating optimum business for the company.
Resources Available
Sales and Distribution Budget for the year 2011 - 2.5% of Sales
An Effective Marketing Team
A Network of 320 Distributors all over Pakistan
300 Vehicles of Lakson Group
17 Warehouses of the Lakson Group
In order to establish their brands Colgate is moving on each front variant to variant and
communicating its brand promise with quality. Colgate has adopted a multi-dimensional
promotional style to make its variant “”stand out in the crowd” and counter the
competitors moves.
Realistically speaking if we talk about ATL completion Colgate has strongest presence
over there as compare to its competitors although Close up and occasional airing of
Medicam, Macleans etc happen but mainly close up is the follower in this regard.
As far as BTL activities are concern almost all the competitors are there, in fact Medicam
has renovated many “roundabouts in Karachi” by the name of “Medicam chorangis”,
promotional materials are also used by them like posters on shops
etc.Recently,medicam roundabouts have been inaugurated in more areas too like
Gulshan-a-iqbal, Bahadarabad and SITE etc.
Medicam round-about
Also close-up with the power of unilever kind of brand name has locked horns with
Colgate in promotional war, they just signed youth icon Aisam-ul-haq as their brand
ambassador and ran a campaign with big bang to create hype among teen agers. Their
campaign was about different prizes like “dinner with Aisam” and “a chance to go watch
Wimbledon with Aisam ” as bumper prize.
This campaign has put a lot of pressure on Colgate fresh energy gel team to counter
close up move and win a war of “fresh breath symbol” in youth who wants to attract
others by their fresh breaths.
Close Up “Dinner with Aisam and chance to go and watch
Wimbledon”
Despite of all the hurdles Colgate has established a strong brand image by it versatile
and multi dimensional activities in order to cater different segments of markets. Colgate
has been educating its consumers unlike others who only “believe in fun” and has been
reflecting caring attitude towards society by spreading awareness regarding dental
health, supporting children’s creativity, artistic abilities, education and athletic skills.
By doing all this Colgate has gained strong image in its consumer as caring brand.
Colgate has become the icon of “dental health awareness” among masses and children
love to use it as they feel it as their friend.
This all is the result of huge, effective, multi-dimensional promotional & marketing
activities spreading from TVCs till on-the-ground activities in schools, presence on
digital/social networking spots & interactive promotional tools.
Here are glimpses and brief of few of their activities which reflect their efforts to
strengthen their brand image in consumer’s minds & hearts.
From January-February 2004, another innovative and skill building event that was
organized by CPPL was the Colgate Picture Pakistan Model Building Contest for schools.
This contest was first of its kind in Pakistan. To participate, school children between 6-13
years of age were asked to build 3D models from Colgate packs that would represent
the culture of Pakistan. It was a team based challenge and the contest received an over
whelming response from hundreds of schools in 23 cities of Pakistan. Children from
across the country submitted brilliant models by capturing the beauty of Pakistan's
culture.
Colgate Scholarship Programme:
Colgate has marvellous scholarship program where school children have to answer few
questions about dental health tips and they can win up to 20000 rupees scholarships.
Making dental health education fun to learn for children—
Dr. Rabbit!
Dr. Rabbit is the cartoon character which entertains and educates children regarding
their dental health. Dr. Rabbit has been portrayed as children friend and it is famous
among them. It also offers day chart and lot of online games to them. It is great strategy
on their part to make Colgate children first choice.
Colgate also helping society in cooperation with Hassanali Karabhai Foundation &
Medical Trust and constructed 32-bed hospital in Swabi & Lakson medical centre in
Mardan.
Colgate has developed a powerful Branding Strategy which has significantly helped the
Brand in acquiring substantial amount of share in the oral care market of Pakistan. In
order to strengthen its' Brand Identity, Colgate is still restructuring its Branding Strategy.
Its strategy was strong enough to position the company as a major brand in the oral care
market of Pakistan.
Unilever Pakistan
P & G Pakistan
Reckit and Benkiser
Zulfiqar Industries Limited
GSK
Medicam Group of Industries
ADVERTISEMENT
Colgate primarily used advertisements as its main promotion strategies. Its different
products which are designed for different segments are targeted to the audience by
highlighting its features. Its common tagline for all products is;
SALES PROMOTION
PUBLIC RELATIONS
PR campaigns were undertaken extensively during the launch of the brand in leading
newspapers and magazines, though they were focused more directly on enhancing the
image of the parent company in the eyes of stakeholders like shareholders potential
investors, etc. that in consumers.
SALES FORCE
Sales force consists of the company’s distributors (who are instrumental) ensuring that
the products are stocked by the retailers, which is made easier by the range of product
offerings supplied by the same distributor of Colgate Palmolive.
CHANNEL
The products are sold in retail outlets like Karana stores, supermarkets, medical shops,
co-operative stores etc. It is distributed through the supply chain of company distributor
to Wholesaler to retailer to final consumers.
After learning fie Oral Care Tips and answering the questions one can get an
opportunity to earn a scholarship of Rs. 10,000/-
If one buys 200g + 100g tubes of Colgate Dental Cream in a Value Pack for Rs.
86/- one can get a Colgate Extra Clean Toothbrush worth Rs 25 free.
COLGATE MAXFRESH
COLATE TOTAL
Tagline: The most advanced toothpaste for your superior oral teeth´.
It targets the common man conscious of his teeth and therefore requires 12 hours of
protection. It even indirectly highlights the need to brush twice. It shows that the
toothpaste fights 12 problems for 12 hours.
Objective
Advertising is a major marketing tool and means of promoting the brand. The main
objective of advertising is:
Strategy
Currently Colgate has 24% share of voice in the total advertising of toothpaste. It carries
out heavy advertisement to be able to meet competition and thus increase market
share to 15%. The advertising strategy is to ensure that the advertising efforts do not fall
below those of competitors, which could be harmful for the brands market share.
Psychographics: Housewives who care for their family and want the best for them. Oral
hygiene plays a very important role as part of the total hygiene of these health
conscious women.
MEDIA
Television
In order to build the credibility of Colgate’s cavity protection feature a quarterly TV
program will be launched on major entertainment channels. This program will be
entitled “Danton Ki Nigahdasht Colgate Kay Saath”. In every episode a renowned dentist
will be invited and the consumers will get the opportunity to clarify their oral hygiene
problems by writing to our “P O Box number”. The consumers will also be encouraged to
participate in the “Colgate Smile of the Week” contest by mailing to us their smiling
photographs. The dentist will choose the best smile at the end of every episode and the
winner will receive a gift hamper from Colgate Palmolive.
In order to make this program interesting the dentist will request two of his favorite
Pakistani pop songs. The duration of this program will be half an hour starting from 7.30
p.m. to 8 p.m. every Monday. Awareness of this program will be created through a print
ad. This would be around one – eighth of a page of the “Images” section of Dawn. This
ad will be shown on the last Sunday before the first episode.
Radio
Soon after the twelve episodes of “Danton Ki Nigahdasht Colgate Kay Saath” are over
we would start a program by the name of “Colgate Hour” and it would be for the same
purpose. It will be aired on FM 105 every Friday from 3:30 p.m. till 4:30 p.m., for one
month. Renowned dentists would be invited to inform the consumers about the various
aspects of oral hygiene. Every episode would discuss a single aspect, for example-
Cavities formation and prevention, gum diseases, proper ways of brushing, etc. At the
end of the program, the dentist would request his favorite song. This will be a part of
Colgate’s social responsibility effort and would emphasize the importance of oral
hygiene as an important part of the total health of a person.
SALES PROMOTION
Objective
To generate trial and repurchase by education consumers. Since there is a large
portion of the population, which is still not using toothpaste as a means of oral
hygiene, Colgate’s brand manager wishes to induce trial through consumer
promotions, which will also help in increasing market share. It is also very important
to encourage repurchase through promotions in order to meet competition.
To build market share. Through promotions activities the aim is to create a market
presence relative to other brands of toothpaste. Through promotional Colgate will
be able to supplement other marketing efforts in order to increase market share
from 21% to 30%
Strategy
Sales promotion strategy includes the following
Point of Purchase displays. This is the use of different kinds of attractive displays at
large retail outlets to attract consumers and to stimulate furthers sales of the
product.
We recommend that the advertising budget should be based on the following actual
sales and assumptions about the projected increase in the same. The advertising budget
for the year was set according to the following:
Total Colgate- Palmolive sales revenue in the past year (2009-10) – Rs. 14,584 million
Projected increase in sales – 10%
Advertising budget – 10% of sales
Share of Colgate in total company sales – 21%
The product forms competing in the market include Toothpaste (both foreign and local),
Toothpowder, Gel and other Traditional forms like charcoal and salt mixtures.
Direct Competitors
Direct Competitors are firms likely to gain or lose a substantial share of customers from
each other over time because they serve the same customers and offer similar benefits.
Close-up
Macleans
Sparkle
Pepsodent
Signal
Aqua Fresh
Medicam
Forhans
Sensodyne
Touchme Natural
Dentonic
Indirect Competitors
Manjan
Meswak
Dandasa
Charcoal and Salt Mixture
Medicam is the market leader with a market share of 25% due to its usage in masses.
Colgate commands the second largest share in the market that is 21%. English & Sparkle
respectively dominate as third & fourth positions. Other brands occupy an insignificant
market share presently but may grow to threaten the market leaders and followers. We
should also consider that English toothpaste kind brands are used by lower class.
RECOMMENDATIONS
We have made the following recommendations based on the analyses of the four
elements of the marketing mix. We suggest the following marketing strategies that can
be implemented.
Marketing Strategies
Colgate should a low-priced product in its portfolio to expand market share and
cater price-sensitive market as consumers of that segment would surely love to buy
such brands product if found in their range.