1.

TOOTHPASTE INDUSTRY OVERVIEW

The concept of toothpaste in India is relatively new. In ancient and medieval India oral hygiene was taken care of by home made and ayurvedic products. Practically all of rural India prefers cleaning their teeth with traditional products such as neem twigs, salt, ash, tobacco or other herbal ingredients, contributing to a low per-capita consumption of branded oral care products. According to WHO, Indias overall awareness of oral hygiene is still very poor. The dentist-to-population ratio is 1:35,000 in comparison to 1:7,500 as recommended by the WHO. But with burgeoning middle class and multi-pronged advertising campaigns, there is now a latent demand for the formal oral care products and this is set to rise exponentially in the coming years. Growth is also likely to emanate from consumers upgrading to matured, value-added and innovative products in this category. Of late, growth of modern trade has also propelled brand sales, especially in the urban markets. Overall, the oral care sector is mainly represented by toothpaste. Other products include mouthwashes, sprays, teeth whiteners and oral rinses. In India, there is also significant usage of toothpowders, especially in semi-urban and rural areas.

In India, toothpowder was primarily targeted at people who used traditional products like salt, neem twigs and other herbal products. Brands like Colgate, Dabur, Babool, Vicco are the prominent players in the toothpowder market in India.

Over the past decade it has become evident that growth opportunities really lie in the rising demand for toothpaste as the toothpowder is beginning to show a phase of decline, as more and more consumers are switching from powders to pastes. According to Amit Burman, vice chairman, Dabur India Ltd, the toothpowder market is growing slowly and has been largely stagnant, whereas the market for toothpastes has been witnessing strong double-digit growth, largely driven by a consumer shift in rural markets from toothpowders to toothpastes. However in the last few decades the toothpaste industry in India has shown impressive growth.
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Toothpaste market comprises of three pillars, namely:

Essential Care: these are paste based products catering the need of health benefit and

Oral hygiene. These give solution to your basic dental problems like tooth decay, cavity problem and more. For example toothpaste like Colgate, pepsodent.
Advanced Care: These products are also a paste based product catering to the sensitive

needs of individuals with sensitivity in their teeth. For example Sensodyne and Colgate Sensitive
Freshness Segment: these are Gel based products specially designed for catering the

problems of bad breath and non-whiteness of the teeth. For example Close-up and Colgate maxfresh. The oral market in India is estimated to be closer to Rs 2,700 crores of which the largest contributor is the toothpaste segment accounting for approximately 75% of the total market in India. It is expected to reach Rs. 3,226 crores by 2012. The fastest growing segment of the toothpaste market is the Rs. 900 crore gel segment, where HULs Close Up has widened its lead with a 60% share. The growth in the urban market has been largely by the Gel segment. Presently, a large chunk of the market is still held by Colgate. The major players in the toothpaste industry being Colgate Palmolive and HUL, as well as several minor players like Balsara Hygiene, Dabur, etc. In India toothpaste usage as compared to other countries is very low which signifies about the potential of the market. In Urban India the usage of toothpaste per person per year is just 190gms. Where as it is 200gms of toothpaste per person per year in developing countries as Indonesia and Thailand. In developed countries as USA and other European countries the toothpaste usage is 375 gms per person year. In India the toothpastes companies are going in for advertising on a heavy note, on an average the companies managing this FMCG category are spending 6.15% of their sales on development.

Unlike in western countries, the market for new-age oral care products such as mouth freshening washes, dental flosses and teeth whitening products are at a nascent stage in India. The limited use of these products is also for now restricted to urban areas only.

2. EVOLUTION OF CLOSE UP
Initially most of the toothpaste catered to the essential Care of the customers i.e. providing them with Oral health benefit, however there was a research and development conducted by Lever Brothers and based on the findings, an Anti-essential care product was invented. The product was invented with an innovative concept to cater to the need of freshness and whiteness with some additional enhanced benefits. One of which included the Gel based feature. Close-up was the first of its kind in the World to enter the toothpaste industry with a Gel based paste in the year 1967. However it entered Indian market in the late 1975. Close up toothpaste is a famous product from the house of Uniliver. Thousands of people across the world swear to start the day, by brushing their teeth with Close up toothpaste. For generations, toothpaste was associated with an opaque pepper mint flavor substance. Uniliver came out with this unique concept of brushing teeth with the help of a red gel. Unlike the usual pepper mint flavor of other toothpastes, Close Up came up with a spicy cinnamon flavor that was enough to kick start the day Slowly they understood what the consumers were looking for and started providing them innovative solutions like crystal form lemon close up Green Core, Jares, Snowman Green, Red Hot Menthol Chill and Close up white now toothpaste. This made Close up toothpaste, the best whitening toothpaste. Each paste took the concept of gel toothpaste to the next level. As a consumer there was much on offer from the house of the Close up toothpaste. There was no need for the product in the market earlier, however, close up created a need for the product in the market.

3. RISE AND FALL OF CLOSE UP

By 1980, Close Up had 3% of the 16,000 tonnes toothpaste market. The production capacity was doubled through a deal with the third party manufacturer and the brand was taken National. Over the next year and a half, the premium slashed by 30%. In 1983, Colgate started fearing after witnessing a downfall in market share and started airing its campaign by inviting customers into its Dental ring of confidence by stressing more on breath and posing as a complete toothpaste. Close Up countered this move by sharpening product benefits, while urging the customers to do the HA test by blowing air on their palm. The message was that Close Up feels a lot cooler which reiterated the basic benefit of a fresh breath. In 1987, Close Up was much below expectations with only 4.5% of the 32,000 tones toothpaste market. Two basic problems were identified: (1) Appearance of Toothpastes detracts prospects from its serious buyers. (2) Commercials displayed too much of proximity between couples which was too much for a mother, who actually purchased the Toiletries.

1998, the 3 Ps in Close Ups Marketing mix was reworked in Tamil Nadu, where people have a strong sense of Oral Hygiene and the area has a cost effective media Reach. The three reworked Ps are as follows: (1) Product: Blue mint flavor introduced. Tangerines of Read reduced. (for serious buyers.) Soft Squeeze lamitubes for toothpastes introduced for the first time in the country.

(2) Communication Advertisement focus moved from spotlight to Gregarious couples. This group orientation was more acceptable to the Mother. (3) Distribution Took Brand to Sub Urban and Rural areas. Posters and Mobile Vans arrived in areas where Urban lifestyle was a matter of aspiration. This was a purposeful move as the company did not want the Brand to be saddled with a restrictive.

4.

MARKET SEGMENTATION & POSITIONING

4.1 Market Segmentation Market segmentation is broadly classified into two categories: Specific need based segment a. Enhancement needs : this cater the need for having fresh breath and whiteness of teeth b. Hygienic needs : This caters to the overall Oral care needs

Demographic segmentation The segmentation was specially to target youth between 18-25 years, however it did not alienate the people who were above the age of 30 years (especially the ones who feel young at heart). This product was also targeted to those groups of audiences who liked experimenting with different products. Close up is targeted at young people; the target market being Multi Brand Households where the young does not use what their parents use. This particular targeting was significant when Close Up was launched because Colgate positioning was a sort of oral care and hygiene benefits. Also, Colgate was going for a broad market constituting of all the age groups.

4.2 Positioning A large part of Close Up's success is because of its brand positioning. "

Close up falls under the third pillar of toothpaste Freshness Segment particularly dealing the need for white teeth and freshness. Also Close Up has positioned itself for Emotional benefit of closeness and rational benefit of freshness. The name Close Up was propounded with a motive of building social confidence to get closer to others. Close Up was positioned as a youth oral care brand from the very beginning. In 2004, the brand was re-launched with a publicity blitz that communicated virtues of a Vitamin Fluoride system present in the product -- a powerful mix of vitamins, fluoride, mouthwash and micro-whiteners, for fresher breath and stronger, whiter teeth.

5. MARKETING MIX

5.1.

PRODUCT

Close Up falls under the umbrella brand HUL Hindustan Unilever Limited. The level of product may be discussed as below: Core benefit : Hygiene
Basic product Toothpaste

Expected product Freshness Augmented product - Various Flavor

Future Product Target sensitivity segment.

Product line of Close Up is: Red Hot Menthol Chill Peppermint Splash Lemon Mint Fire Freeze
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The colour of the toothpaste depends upon the flavor. The colour also is decided with a motive to evoke the mood and desire to affect the purchase decision of the potential customer. Various colors of the same flavor are tested in the market and the best color for that flavor is selected.

The strength of the product is its USP of catering the customers who desire a fresh breath along with white teeth.

There were extensive market test conducted by the producer before manufacturing and offering the product in the market. The tests that were conducted were on the basis of the concept, product testing, communication route, and the final advertisement. Innovation : The first-move advantage in the gel market has helped Close Up secure an edge over the other brands. A large part of its success can be attributed to two factors - youth-centric product positioning and an innovative product pipeline. The most recent addition to its arsenal has been the Fire Freeze variant. Packaging The Packaging of Close Up is designed to exhibit liveliness and freshness. The pack of the product has a metallic effect to make it more lively and attractive. It also has a couple being featured on its pack to help the target audience identify with the concept of the product. Close Up was the first brand who featured a couple on its cover.

The packaging was designed in par with the competitors in the market. The color of the pack of Close Up was decided as per the color of the toothpaste. The package of the product also comprised with the details as per the norms laid down for consumer product. The packs offered in rural area are relative of smaller, with a motive to enable the daily wage worker to purchase the product.

5.2 PRICE The price of the product is the same for the rural and the urban market, however the products are offered in a smaller pack in rural area to enable them to purchase the same. Decision to fix the price is taken into consideration after evaluating the competitors pricing strategy. However the price for Close Up was on premium basis at par with the premium variance of the competitors. In India, there is a high consideration given to the basic need of the consumer and based on which price of the product is decided, which is mostly in parity with the basic needs.
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With respect to the pricing aspects of the distribution channel, there are some trade discounts given to the intermediaries, also there is a facility of 2-3 days credit purchase for the wholesalers and distributers Brand name Close Up Red Hot Size 40g 80g 150g 150g *2 (combo saver pack) Close Up Menthol chill 150g 80g Close Up Peppermint Splash Close Up Lemon Mint Close Up Fire Freeze 150g 80g 150g 60 35 65 150g Amount (Rs.) 15 33 59 94 58 32 55

5.3 PLACE Close Up has its presence in both, Urban as well as Rural market. However the sale is comparatively more in Urban 60% and less in Rural area 40%. In International market the presence of Close Up is felt in Brazil (as No.2 in Toothpaste market). In Thailand, Philippines Close Up is the No.1 in the toothpaste market and in Nigeria it holds a share of 82%. The market share of Close Up in India is 18% of the toothpaste market and it ranks third in the toothpaste segment (after Colgate and Oral - B) and no.1 in the Gel segment. Close Up toothpaste is made by Lever Brothers Limited (Unilever) and used all over Africa Limbe, Malawi to Lusaka, Zambia.from Tema in Ghana, Nairobi in Kenya, Uganda, Ethopia, Tanzania, Thailand, Phillipines.
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HUL has concentrated on building their rural distribution networks by rolling out smaller units of toothpastes at affordable prices. The companies have also been using channels such as echoupals and Disha to further reach the rural population.

CLOSE UP
Distribution Channel of Close Up

Carrying & Forwarding Agents

Redistribution Stockists Wholesalers

Rural Retailers Urban Retailers

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Consumers

5.4 Promotion: Promotion for Close Up is done through various modes of media. There is advertisement telecasted on television, especially on the youth oriented channels like MTV and so on. The Close Up tune PAAS AAO..PAAS AAOPAAS AAO NA... is very popular among the youth. There are also promotional activities on radio, and outdoor media like banners and hoardings. Also there are promotional activities done in mall. In Philippines promotion was carried out by asking people to get their breath tested and then they were asked to brush their teeth in mall, after which again there was a test conducted to know the difference in the freshness of their breath after using Close Up. The findings of this experiment were that the subjects were convinced that Close Up was effective in providing freshness. There was also a promotional activity conducted in Nigeria by contacting the Schools and helping the young students to understand the effect of using Close Up. Close Up also conducts promotional activities in colleges all over the world to increase their sale. They have recent tied up with online gaming company Zapak. The brand plans to use the gaming platform to promote 'Fire Freeze'. Gaming apart, the brand is also betting on Facebook. Close Up has sponsored a reality show called Nachenge Gayenge Joomenge on Doordarshan.

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The brand recently roped in South Indian brand ambassador Suriya to protect its turf in the South (Andhra Pradesh and Tamil Nadu), where the brand has historically been strong. Based on the promotional activities, there was a finding that Peppermint Splash was currently doing well in the market, however the newly introduced product Fire Freeze is yet to pick up on sales in metro cities for which there are more promotional strategies introduced. Advertisements : Kya aap Close Up karte Hai?? Paas Aao Na..The Closer the Better Dooriyo Ko Mitaao . Paas Aao

6. MARKET SHARE
In terms of volume, Close Up increased its share from 11.7% in 2005-06 to 12.1% in 2006-07 and 12.7% in 2007-08 and 18% in 2010

Colgate is the clear leader in toothpastes, in both volume and value, with 53.1 percent share each in 2011 followed by HULs Close Up which holds 18 per cent volume share (value 17 percent).
The remaining 30% is occupied by brands such as Pepsodent, Dabur, Babool and recently launched Sensodyne.

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7. COMPETITION
Main competitor for Close Up is Colgate - Colgate Max Fresh and Colgate Fresh Energy Gel in gel form. To break into Close Up's stronghold, Colgate's Max Fresh gel has also been trying to don a young image. A few months ago it roped in numerous celebrities like Shahid Kapoor, Genelia D'Souza, Virender Sehwag, Gautam Gambhir and Zaheer Khan to promote the power of freshness. It is also building an engaging Facebook page and organised a Max Fresh Alarm contest during the IPL season 4, where winners got the opportunity to meet cricketer Virender Sehwag. However, breaking into the youth space will not be an easy feat for Colgate's Max Fresh as Colgate gel's biggest handicap is its mother brand equity of a serious health brand and this fact itself makes it less appealing to younger consumers. Colgate has been actively advertising its gel toothpaste in the south and hence, in order to counter this, Close Up roped in Suriya as its Brand Ambassador in the south. Close Up's success has not been enjoyed by Hindustan Unilever's sister brand Pepsodent (white toothpaste) which has seen a steady decline in sales in the last few years.This has largely been due to getting the price points and rural strategy wrong Apart from the market competition, Close-up also faces completion from:

Toothpowder. Traditionally used Neem twigs. Shelf space of the vendor. To have Close Up as a brand recall name in the minds of the consumer.

For facing and surviving the competition in the market, Close Up always comes up with some innovation in the product.

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COMPANY Colgate-Palmolive India Limited

BRAND NAME Colgate Dental Cream, Colgate Active Salt and Colgate Total 12; Colgate Max Fresh and Colgate Fresh Energy Gel in gel form; Colgate herbal; Colgate Cibaca; and Colgate Advanced Whitening, Colgate Max Citrus Blast, Colgate Max Peppermint Blue, Colgate Max Spicy Red and Colgate Sensitive

Hindustan Unilever Ltd

Vicco Group of Companies

Pepsodent
Vicco Vajradanti Paste, Vicco Vajradanti Sugar Free paste, Vicco Vajradanti powder

Henkel India Limited Johnson & Johnson Ltd.

Neem active Listerine and Coolmint Listerine.

Dabur Co.

Dabur Red, Dabur Red Gel, Babool, Babool Neem and Meswak.

7.1. Competitors Pricing

Brand Name Colgate Maxfresh 150g 150g *2 (combo pack) Colgate Maxfresh Colgate Maxwhite 40g 150g Size Amount (Rs.) 60 100 15 65

Babool Mint Fresh gel

145g 16

30

Anchor Red gel

150g

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8. MARKET SURVEY ANALYSIS

Research Objective: To study the toothpaste market and strategies Close Up can adopt to gain a larger market share. Research Methodology: Data has been collected from a sample of 60 people, both males and females. We have targeted three age groups namely, 18-25 years, 26-35 years and 36 and above. Since the target group for Close Up is 18-25, we have collected and tabulated our findings so as to see how receptive this age group is to the toothpaste. Close Up doesnt target, but extends its market maximum up to the people of the age 36. Majority of the people above 36 are actual customers of the brand and hence data has been collected from these two age group as well.

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ANALYSIS 1. Preferred Toothpaste Brand

It is observed that 45% of the age group 18-25, 70% of the age group 26-35 and 65% of the age group 36 and above prefer Colgate as a Brand for toothpaste whereas 25% of the 1st age group, 15% of 2nd age group and 20% of 3rd age group prefer Close Up and the remaining prefer Pepsodent and other brands. The market share of Close up is significantly lower than Colgate.
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Looking at this we can see overall 61% market is occupied by Colgate, 20% by Close Up and 12% use Pepsodent and 7% people use other brands. This shows that Close Up has good, decent and consistent market share of close to 20% in all age groups.

2. Preferred Qualities in a Toothpaste

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It is observed that people of the age group 18-25 and 26-35 want Freshness as the main quality in their toothpaste. This is followed by Cavity Prevention, whereas in the age group 36 and above is the other way. The third quality people want is whitening followed by Sensitivity and then Flavor for all the age groups. Overall people wanted freshness as a factor in their toothpaste but they did not want to compromise on cavity prevention. For older people sensitivity was also an issue. We saw a very minor population wanting flavors in the toothpaste this shows that toothpaste having freshness will do for consumers but flavors are not what a customer desires in toothpaste.

3. Factors Affecting Purchase Decision

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PurchaseDecision

Other 3% Price 21% Brand 49%

Advertisement 5%

Packaging 1%

Availability 21%

The biggest factor that affects a purchase decision for toothpaste in all the age groups is Brand (49%). People are brand conscious. The Availability of the product and its Price, both factors accounts for 21% each that affects the purchase decision. While Advertising and Packaging affects the purchase decision marginally Here we can see that Colgate is so much into the minds of consumers that when they talk about brand and choosing toothpaste the first one which comes to consumers mind is Colgate. To break the rhythm Close Up should focus more on brand building in minds of younger generations.

4. Preference

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Majority people across all the age groups prefer Paste Variety toothpaste. Here, more than 50% of people have opted for paste variety and close to 20% people opted for gel variety. Close Up operates basically in gel market and it is difficult to change the mindset of people using paste variety .thus Close Up should cater to the masses and get into large scale production of paste variety. Also medium sized tubes are preferred by the consumers.

5. Advertisements:

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It is observed that the advertisements are viewed by majority of the audience. As far as the ads go the message is very well conveyed to the audience. We can say that Close Up comes up with innovative ads that have permanently set into the into the minds of consumers.

6. Customer Satisfaction

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The Experience of the consumers when they used Close Up the last time was recorded. Around 40% of the consumers are satisfied with the product. However its also observed that 25% could not comment on this as they have never used Close Up.

Hence we have listed some recommendations to help Close Up increase its market share and popularity amongst the masses.

9. RECOMMENDATIONS & CONCLUSION

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Based on the observations of the survey and the primary data collected at HUL, we have concluded the need for below:

Currently Close Ups main target market is the youth between the ages 18 25 years.

However, we feel that Close Up should extend its target audience beyond this age group say to a maximum of 35 years as people feel young at heart and associate them with the brand.

In India, the decisions (in middle class house) regarding purchase of the toothpaste are taken by the mothers. Hence such advertisement should be telecasted which would appeal to all kind of consumers and at the same time focus on their target segment-the youth. Ad Concept: Mother goes shopping. She observes a group of youngsters on the way exuding confidence and enthusiasm. She sees Close Up in their shopping bag and decides to buy it for the son and daughter.

As per our survey analysis, the most commonly used toothpaste amongst all age groups is Colgate. Also, the survey revealed that the consumers are brand loyal and hence getting them to change their preferences would be a tough job for Close Up. They must focus on brand building and crossing the popularity of Colgate to gain a higher market share. Close Up should tie up with various Doctors, Clinics and Hospitals around the country as through our survey, it was noticed many consumers would change their brand on the basis of their Doctors recommendations.

The positioning of Close Up was clear in the minds of a consumer as a product promoting Freshness. When asked what comes to your mind when you hear Close Up people gave us a variety of answers like: Freshness
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 Red gel paste Two lovers Paas Jitna Behtar Utna The boy with the Afro Jya Aap Close Up Karte Hai? Smile and White Teeth

What we could see is that the Gel paste and Freshness was something that many people remembered so the positioning of Close Up was clear in minds of consumers as a youth brand. They recalled Close Up as a tooth paste for freshness and gel variety. Hence we recommend, if Close Up continues with this image and builds on it, it can gain a higher market share.

Close Up should be extensive promotional strategies in Urban areas (like mobile dental check up) conducted to attract new customers. As per our survey, we have observed that many people have not tried Close Up. Close Up should try spreading awareness by give out free samples of their product outside colleges. Also, they should give out free samples with HUL brands like Axe Deodrant and Lakme in order to gain popularity. Also, they should start giving free toothbrushes along with their packs.

Close-up should also get itself involved in the paste based segment to increase its market share, as most of the Indians (especially the mothers and the higher age group) prefer paste based toothpaste for use.

Todays consumer look for more than freshness and whitening in a toothpaste. Cavity prevention is now an essential feature which has to be present in every toothpaste. Along
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with the Freshness Factor Close Up should also focus on Cavity prevention as the youth is more aware of the benefits of Oral care and hygiene.

The appearance of Close up (in terms of the packaging) did not have any major changes

from the time of its introduction, hence it was noticed that it had a negative effect on the purchase decision of the potential customer. Close up should propagate some constructive changes that would not only have a positive impact on the target audience but would also appeal new customers.

More preference should be given to manufacturing and packaging of Close up in a middle

sized tube as most of the audience prefer purchasing a normal (or mid-sized) toothpaste.

Close Up should choose known celebrities as their brand ambassadors for their product

(rather than new models) which can be one of the major factors to boost up the sales turnover of the product.

Close Up should go in for Product Diversification and come out with a new product that caters to Cavity Prevention and Sensitivity. The target audience for this product should be 36 and above.

Based on our survey we also found out that they may use Close Up in the future and hence, in order to convert these prospective customers into potential customers, Close Up should cater to their needs through our findings.

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ANNEXURES
SURVEY QUESTIONNAIRE

Name: ___________________ 36 and above Sex: Male Female

Age Group: 18-25

26-35

1. Which toothpaste brand do you prefer? Colgate Others ____ Pepsodent Close Up

2. What qualities do you look for in toothpaste? Freshness Sensitivity Flavor Whitening Cavity Prevention

3. Which factors affect your purchase decision? Price Brand Advertisements Availability Packaging

Please specify in case of any other __________________ 4. Do you prefer? Gel Variety Paste Variety Either would do

5. Size Features you like in toothpaste Small Size tube Makes no difference Medium Size tube Large Size tube

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6. What kind of offers would most likely make you purchase another brand of toothpaste? Buy One Get One free Price Reduction Coupons No Brand change

7. Have you seen the Close up ads? Yes No

8. Do they appeal to you? Yes No

9. How satisfied were you in terms of product effectiveness the last time you used Close-Up toothpaste? Very dissatisfied Dissatisfied satisfied Not applicable Not sure Satisfied Very

10. What comes to your mind when you hear Close up? _______________________________________________ 11. Do you plan to purchase Close-Up toothpaste in the future? Yes No May be

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