From: Rishit Shah To: Professor Johansson Subject: Colgate Max Fresh Case writeup Colgate Max Fresh

CMF) is indeed a viable brand in China. Exhibits 10A and 10B prove that the concept outperformed the norm for new toothpaste products in China on key quantitative measures such as purchase intent, uniqueness, value for money and believability. Scoring much higher in the uniqueness measure will certainly help the brand to capture a significant value share in Chinas high end segment. A rating of 97 for purchase intention shows that CMF would not face too many problems in gaining its initial customers as long as it creates awareness using consistent advertising. CMF is also a viable brand in Mexico. The Consumer Viability Index (CVI) of 62% for CMF suggests that this initiative would have an average chance of in-market success. Coupled with the market testing results that showed that CMF would capture 21% of its volume from Crest, CP would totally kill competition by introducing CMF in Mexico. However, whitening and freshness are still very new concept in Mexico. As shown in Exhibit 14, the total cosmetic value share declined by 2.6% from 2000 to 2004. A combination of relatively flat demand and a toothpaste market heavily skewed towards the therapeutic segment, CMF acceptance is likely to be lower in a saturated Mexican market. Still CP should introduce CMF to gain or maintain its dominant position in Mexico. US promotional campaign is significantly different than the proposed Chinese and Mexican commercials. US advertising is very rational and aimed to convince consumers that CMF would provide them with freshness and whitening using the mini breath strips. The campaign has a celebrity and is targeted towards consumers who are fresh breath experientialists. The proposed Chinese and Mexican commercials do not contain any rational arguments. The product name and the differentiating factor (breath strips) was also renamed to emotionally connect with the local consumer. This was a classic case of different advertising campaigns due to differences in the high versus low context cultures. US is low context while China, Mexico are high context. The Chinese campaign has a celebrity while the Mexico campaign does not. If CP plans to introduce CMF in various developing countries going forward, Chinese and Mexican advertising seem best as a platform for a global campaign. CMF offers the same features across different countries and the usage is also same. Chinese and Mexican advertising targets extreme living individuals with a unified positioning and is ideal for pattern standardization with slightly different execution in each developing market. The costs of adapting the product and promotion in China are $3.2M. Assuming that the pro-forma P&L statement is accurate, CP is expecting sales of $20M in the first year. Product adaption costs of $3.2M are completely worth it given the expected sales. The costs of adapting the product in the Mexican market are $500K. Again, for potential sales of $10M in the first year, 500K of adaptation is worth it. The projection of success for the first two years differs widely due to the difference in marketing expenses. CP enjoys a dominant position in the Mexican market with 82% share. There is already wide brand awareness and as a result, it does not need to spend a huge amount of dollar for advertising in Mexico. Additionally, Mexico is a mature market. CP does not need to spend more to increase the size of the market. On the contrary, China is a developing market for toothpaste. It has a growing high end segment and there is a significant opportunity to gain market share by introducing the right product and marketing it. As a result, a huge marketing spend in China by CP is justified to gain a bigger market share and positive profits in the coming years.