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SIDDHARDHA KARANAM SID: 306857 as the part of course work for module M04MKT Principles of Marketing under the guidance of Mr. Mark Goodman and Mr. Balwant Samra
Table of Contents
Table of Contents........................................................................................................ 2 Table of Figures.......................................................................................................... 3 Executive summary.....................................................................................................4 Introduction................................................................................................................ 5 Colgates orientation...................................................................................................6 Conclusion............................................................................................................... 9 SWOT analysis............................................................................................................ 9 Conclusion............................................................................................................. 14 Competitive advantage.............................................................................................14 Conclusion............................................................................................................. 15 Marketing Mix analysis..............................................................................................15 4-Ps ....................................................................................................................... 16 Product Price Place Promotion Customer solution..............................................................16 Customer cost.......................................................................20 Convenience........................................................................21 Communication..............................................................22
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Table of Figures
1. Figure 1: Net sales of Colgate .. 4 2. Figure 2: Marketing orientation . 7 3. Figure 3: Product-marketing expansion grid .. 8 4. Figure 4: WTI prices per annum ..... ....11 5. Figure 5: 4-Ps of Marketing Mix . .14 6. Figure 6: Various Colgate toothpaste ..17 ..18 ..18
7. Figure 7: Price, earnings and Dividends of Colgate 8. Figure 8: Price list of Colgate Active Salt in India
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Executive summary
Colgate-Palmolive Company is a $15.3 billion consumer products worldwide company that serves people of above two hundred countries and territories. These consumer products make peoples lives healthier, easier and enjoyable. Around 75% of sales are from the global operations. Colgate-Palmolives core businesses are in Oral Care, Personal Care, Home Care and Pet Nutrition (Colgate 2008). The company is leading the business of toothpaste under its brand name Colgate, an oral hygiene product. The company manufactures a wide range of toothpastes. In 1873, ColgatePalmolive Company introduced its first toothpaste Colgate Ribbon Dental Cream in glass jars. Later in 1896, this toothpaste began to sell in a collapsible tube (Colgate 2007a). Colgate has successfully ruled about half of the toothpaste market all over the world. This report will be focusing on Colgate toothpaste of the Colgate-Palmolive Company. The main aim of this report is to investigate and analyse the marketing activities of Colgate toothpaste. What is the Colgates orientation? What are the strengths, weaknesses, opportunities, and threats (SWOT) of Colgate? What are the competitive advantages of Colgate? What is the impact of Colgates marketing mix? This report will try to address all these questions and more.
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FIGURE 1: NET
SALES OF
COLGATE
(Colgate 2008: 4) Orientation Colgate tries to sense the customer needs and demands. This proves that the company is marketing oriented. Let us now analyze the Colgates orientation towards the marketplace. Companies have their respective beliefs concerning their marketing efforts which are usually
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Conclusion
Colgate is a Marketing orientation company. This can be clearly shown below Potential market opportuniti es FIGURE Marketin g products and services 2: MARKETING ORIENTATION (Jobber 2007: 6)
Custome r needs
Custome rs
SWOT analysis
SWOT analysis is a structured approach for evaluating the strategic position of a business by indentifying its Strengths, Weaknesses, Opportunities and Threats (Jobber 2007: 63). To get a clear idea of Colgate toothpastes outlook, it is useful to analyze the companys as well as the products (toothpaste) Strengths, Weaknesses, Opportunities and Threats (SWOT). Additionally, a SWOT analysis summarizes the outcome of marketing audit of the company (Jobber 2007: 61).
Strengths
First to introduce in market: In 1873, Colgate-Palmolive Company introduced its first toothpaste in glass jars. Later in 1896, Colgate was the first toothpaste which began to sell in a collapsible tube (Colgate 2007a). Brand Image: Strong customer perceptions. Colgate is most reliable and renowned brand around the globe today. This image would aid in attracting new customers. In 2005, around 14 European countries were participants to name their most reliable brands in various categories. Colgate was chosen for the most trusted brand in the toothpaste category with 53% of votes (Jobber 2007: 331).
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New markets
GRID
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Weaknesses
Excessive debt: In 2007, Colgate had a debt of about $3,222 million i.e. equity ratio of 1.47 compared to its competitor P&G whose was 0.53. In 2007, companys interest increased to $157 million. Earlier the interest was $136 million in 2005 and $120 million in 2004. This resulted in an unfavourable consequence on companys liquidity position and may perhaps hinder its reliability in the market (Datamonitor 2008b: 7). 11 | P a g e Coventry University
Opportunities
New products: Colgate is keen on constant innovation and introduction of new products which attracts the customers attention and also grows in the range of products with the increase in market share (Ivythesis Typepad 2008). Growing demand of oral products: There is a huge growing demand of the Colgate oral care products all over the world. Colgate is popular for its oral care products and this is considered to be the main source for the growth in companys revenues (Ivythesis Typepad 2008). Widespread marketing: Global customer awareness can be done mostly by marketing. Colgate is successfully marketing their products regularly. Colgate can grow their revenues by global marketing which would most probably attract more and more customers (Ivythesis Typepad 2008). Hispanics in U.S: Colgate performs promotional campaign and exclusive marketing to attract the Hispanic market by television, on-line media and print. The growing population of Hispanics in U.S. can be the cause of development in Colgates revenues (Datamonitor 2008b: 7).
Threats
Accusation: Recently, Colgate was accused for the involvement in illegal price-fixing cartels. Moreover, Colgate and other few companies illegally swapped the data with retailers regarding ongoing price talks (Datamonitor 2008b: 8). In 2006, German competition regulator noticed that Colgate planned to increase by 5% price of all the Colgate toothpaste brands. As Colgate carried out the report of the cooperative role, Federal Cartel office did not charge any fine on them (Datamonitor 2008b: 8).
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WTI price $72 per barrel $122 per barrel $126 per barrel
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toothpaste. These competitors are also working hard in introducing new products and in increasing their market share. The nearest competitor of Colgate toothpaste is Crest of P&G and other being Unilever (Ivythesis Typepad 2008). Forex risks: Since, Colgate is spread worldwide in around 200 countries and territories;
there are huge threats in the business operations. This is also one of the vital reason for which the company would be extensive affected (Ivythesis Typepad 2008). Counterfeit Colgate toothpaste: In 2007, U.S. Food and Drug Administration
announced that the ColgatePalmolive Company were alerting about the counterfeit Colgate toothpaste. It is been noticed that the toothpastes are deceptively packaged as Colgate which was found in various dollar-type discount provisions in New York, New Jersey, Pennsylvania, and Maryland. The company clearly mentioned that the counterfeit toothpastes are not distributed or manufactured by the Colgate-Palmolive Company (U.S. Food and Drug Administration 2007; MSNBC 2007). Recently, from 28 November to 5 December, two major retailers Sainsburys and Boots were swindled in selling the counterfeit Colgate toothpaste (Telegraph 2008). This is a serious threat for the company as counterfeit toothpastes may contain harmful ingredients and mar the brand image. Additionally, this reflects the financial status of the company.
Conclusion
Colgate has to maintain all their strengths and grab all the opportunities. On the other hand, Colgate should sooner overcome all its weaknesses and work harder on the threats.
Competitive advantage
Competitive advantage is the achievement of superior performance through differentiation to provide superior customer value or by managing to achieve lowest delivered cost (Jobber 14 | P a g e Coventry University
Conclusion
All the strengths and opportunities of Colgate are the competitive advantages.
4-Ps
Marketing mix is essential for the company to develop the demand for its products. This can be collectively done by the four vital categories which are well-known as 4-Ps of marketing mix. The 4-Ps are namely Product, Price, Place and Promotion (Armstrong and Kotler 2009: 83). PRODUCT Variety Quality Design Features Brand name Packaging Services
FIGURE 5: 4-PS OF MARKETING MIX (Armstrong and Kotler 2009: 83) Product Customer solution
Product is a good or service offered or performed by an organization or individual, which is capable of satisfying customer needs (Jobber 2007: 28). Colgate toothpaste is the product that appends importance to the customers lives (Pauszek n. d.). Brand name and Quality Quality comes first when the company is product oriented. Colgate toothpastes quality factors are meticulously tested to guarantee consumer satisfaction. Colgate has proved for the best 16 | P a g e Coventry University
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Design and Packaging Colgates focus on innovation also concentrates on the product designs and their packaging. As shown below are the few of many varieties of Colgate toothpastes with outstanding innovative designs and packaging. We can see the uniqueness of each and every product with different style, colours and names. This proves how Colgate is keenly working on attracting the customers and understanding the new generation.
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TOOTHPASTES
For example: Colgate Herbal White toothpastes green-colored packaging boosts the herbal ingredients, the pneumonic of mint leaves, lemon and eucalyptus complements the ingredients in the toothpaste. The two bright colours red and blue (word new) are examined to attract customers eye in the stores (Foolonahill n. d.). Quantities of the toothpaste available in the market are mostly in three sizes - 50g, 100g and 200g (Foolonahill n. d.).
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Price is the amount of money customers must pay to obtain the product. (Armstrong and Kotler 2009: 83). The price of any product partially highlights its quality. Although the Colgate toothpastes quality leads in the toothpaste category globally, the price of the toothpaste is fixed only after clearly examining the prices of other leading toothpastes which are already in the market or will be launched soon in the market. This strategy of pricing, aids in positioning the toothpaste as a conventional product than a niche product (Laird et al n. d.). Below shown are the price, earnings and dividends chart of the Colgate-Palmolive Company from the year 2003 to 2008.
FIGURE 7: PRICE, EARNINGS AND DIVIDENDS (Corporate Information n. d.) List price
OF
COLGATE
Let us consider one of the Colgate toothpaste for the discussion of list price. Colgate Active salt - The list price of this toothpaste in India is shown below for different quantities.
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IN
INDIA
Place includes company activities that make the product available to target consumers. (Armstrong and Kotler 2009). The vital role of marketing is the process of how the product is being sent from seller to buyer. Through the dentists, stores, pharmacies etc, distribution strategy is been offered to the Colgate (Pauszek n. d.). Channels The Colgate toothpastes are sold in retail outlets like supermarkets, malls, pharmacy, cooperative stores etc. The products are distributed by the Colgates supply chain as shown below (Foolonahill n. d.). Distribut ors Wholesal ers Retailers Consume rs
FIGURE 9: SUPPLY CHAIN IN COLGATE (Foolonahill n. d.) Coverage Colgate toothpastes are available in almost all countries around the globe. Colgate serves people of above two hundred countries and territories. Now, their market also includes the semiurban and rural areas where the company is primarily focusing on (Foolonahill n. d.). Locations 21 | P a g e Coventry University
Promotion means activities that communicate the merits of the product and persuade target customers to buy it. (Armstrong and Kotler 2009). Widespread promotion of Colgate products has made it a synonym to toothpaste (Wa In U.S., Colgate employed extremely embattled incorporated marketing campaign which involves TV, print advertising, assortment of promotional events and on-line contents (Colgate 2007). Advertising Advertising involves internet, print, outdoor, broadcast etc (Armstrong and Kotler 2009: 383). In 2004, Colgate invested large budget examining new on-line advertising campaign to realize the competence of appending on-line advertising to media mix. On this, E-business director of Colgate Palmolive, Gabi Stade said: "The objective is to test whether including online within the media mix works more efficiently than TV and traditional media alone. At Colgate-Palmolive we are always keen to push the boundaries of the marketing mix while being sure to track any innovations to assess their effectiveness." (Whitehead 2004). 22 | P a g e Coventry University
FIGURE 10: ADVERTISING (Colgate 2007b: 3) Few of the advertising slogans of Colgate toothpaste:
Advertising slogan: It cleans your breath while it cleans your teeth (Wininspiration n. d.).
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Additional 3-Ps
The additional 3-Ps (People, Physical Evidence and Process) affects the distinctive characteristics of service product. People The people mean the customers and/or employees of the Company. Valuing Colgate People" is a training program for employees introduced in Colgate to motivate people of all race and religion. This aids to achieve goals, corporate objectives of Colgate, to be aware of their values and how to respect others for their contributions (Colgate 2009). Physical Evidence There is no much physical evidence of Colgate toothpaste. Process Colgates customer services department are doing well and are in-force for tracking the customers by getting feedbacks from them. Colgate mentions their contact details on the 25 | P a g e Coventry University
Recommendations
We recommend that Colgate promote more of their products commercially, with magazine ads, in the radio, ads in dental clinics/ hospitals, dental colleges/universities, in billboards, and on sides of public transportation (coaches/buses). We also recommend Colgate to offer more of special coupons, discounts and rebates to their customers. Colgate could be beneficial when there are in-store displays (Pauszek n. d.). Colgate should work on the physical evidence as it is equally important for public awareness of the products.
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References
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