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An Analysis


Nachiket Mujumdar


Colgate Max Fresh’s (CMF) introduction to the US market drove Colgate-Palmolive’s (CP) US market’s value share up to 34.8% ahead from Procter & Gamble (P&G) at 2nd place with 31.6% value share. Nigel Burton, the president of global oral care at Colgate-Palmolive Company (CP), is reviewing market launch plans for a new toothpaste, Colgate Max Fresh (CMF) by CP’s Chinese and Mexican subsidiaries. Both launch plans involved departures from the CMF marketing program for the USA launch six months earlier. Burton must decide whether the costs of marketing program adaptation in China and Mexico can be justified.

Assessing the US market conditions


Breath Strip in Toothpaste

US retail toothpaste market - $438 million with a growth rate of 8% since 2000

From Table B in the case, CP and P&G are on a head to head competition for the 2004 value share of toothpaste market with 34.8% and 31.6% value share respectively.

Exhibit 2A shows that in terms of US Market Toothpaste Benefit Importance, cosmetics benefits such as ‘breath freshening’ and ‘whitening’ are at 3rd and 5th places respectively while therapeutic benefits :

‘protection against cavities/contains fluoride’, ‘reduces plaque buildup’ and ‘controls tartar’ are at 1st, 2nd and 4th places respectively.

This shows that in the US market there is more therapeutic benefits sought from toothpastes. Exhibit 2B on the other hand qualifies that consumer benefit data. It shows that between 2000 and 2004 data. There is a dwindling importance of the therapeutic benefit : ‘anti-cavity/tartar’ at -22.7% while there is a growth in cosmetic benefits : ‘whitening’ at +16.4% and ‘freshening/cleaning’ at +2.9%. For 2004, therapeutic benefits total at 53.4% while cosmetic benefits add up to 46.6%.

CMF’s success in the US market is attributed to the fit in the needs, wants and expectations of the consumers with the products main benefits: breath freshening and teeth whitening.

Critical analysis of the US launch


Pricing: It was priced at par with CWE.

3. Product: The transparent bottles created a visual impact when placed on the retail shelf.

4. Promotion: Promotion was through


Media: To create awareness




Program sponsorships


Instore sampling, merchandising displays, sales promotions

The reality is that the U.S. Marketing team took little or no account of the global transferability of their program. They simply sought to develop the best possible marketing program for the U.S. This becomes apparent once the Mexico launch is introduced. The U.S. advertising was, most obviously, country- specific because the celebrity, Emily Proctor, was not known outside the U.S. Global marketing strategy involves understanding and addressing differences across markets, the dilemma arises when trying to balance the global brand and appeal to distinct regions. Successful global marketing campaigns leverage similarities to preserve a consistent message and limit costs while also customizing advertising to align with regional cultural preferences.


Whole New Dimension of Freshness

Assessing the Chinese market conditions

1. Market size: $868 Million with a growth of 38% since 2000

2. Skewwed towards Theurapatic segment but freshness segment is increasing

3. Major competitiors are Darlie, Crest Tea fresh

4. Market heavlily skewewed towards lower priced local brands

5. Premium market 30%

6. Significatn price difference Premium product 11 12 RMB

Local product 4 RMB Reason and changes in CP plan in the Chinese market The CP China changes to the CMF marketing launch were justifiable as per Chinese market situations. CP’s market position in China is more similar to the U.S. than Mexico. CP and Procter & Gamble are in a battle for market share leadership.






Name change Max Fresh -> Icy Fresh

The biggest challenge was creating the right communication. Max Fresh did not strike the right chord with the consumer.


Term change Breath strips -> Cooling crystals

Breath strips was unknown. A meaningful phrase was required


Advertising strategy

Communicating freshness was a challenge.


Emily Procter -> Jay Chow as a celebrity

Need to connect to the youth on an emotional level. CSI and Emily Procter were unknown in China


Complete makeover of the brand

To create differentiation and appeal


Introduction of new flavors

Chinese toothpaste market was developing quickly, new flavors were popular, competitors were introducing new flavors


Clear bottles -> Clear tubes

Cost considerations


Clear stand up tube

Maximum visual impact at point of sale

The marketing adaption costs for the CMF launch in China are much larger than in Mexico.

As the Asian market was favorable towards freshness, it would be easy to launch the product in China. The product should have been launched earlier.

The impact of the changes in the Chinese launch were as follows,

1. The media expenditure was very high. 1.5 million(Celeb ads) vs. 0.5 million (Adapting existing strategy)

2. Flavor change, Packaging change and color change added $1.77M ($200000 + $1.5M + $7000) to the capital cost and delayed launch.


New Dimension of Freshness

Assessing the Mexican market conditions

1. Toothpaste market - $348 Million with a relatively flat demand

2. Difficult to secure incremental shelf space to accommodate new product launches

3. Colgate dominates with 8% market share followed by Crest at 10%.

4. Market heavily skewed towards therapeutic segment

5. Majority of consumers focused on basic oral care

Evaluation of the launch plan in Mexico

The CMF launch was to neutralize the anticipated launch of CWE which threatened the market domination of CP.

1. The pricing of CMF was at par with Crests Cool Explosions.

2. As Crest would lose more than fair share as compared to Colgate, cannibalization was not a big issue.

3. In the concept stage, consumer appeal of CMF was strong but the consumers suspected a corresponding lack of cavity prevention and whitening benefits. The debate was between positioning the product as all inclusive vs. single minded approach.

4. The media advertising was based on the advertising that combined the explosive power to freshen with extreme living.

5. Promotion activities included in-store merchandising, sampling and PR to promote the core benefits.

CMF is not essential to the Mexican portfolio as the toothpaste market is growing at a slow rate. Colgate already owns the majority of the market and also the environment does not support new launches. The US launch strategies will also not be applicable in the Mexican market as the conditions are very different.

But with the launch of Crest Cool Explosions, PnG is threatening the value share of CP. CP can secure its market share by launching CMF in the Mexican market. CP dominates Crest in Mexico so any new CP product can probably obtain distribution. The pro-forma PnL for CMF launch predicts net operating profits in the first year itself (25% of sales) and a steady growth (11% in the second year).