Colgate-MaxFresh-Global-Brand-Roll-Out-

Marketing-Management-Strategy-for-
China-and-Mexico
Presented by:
Presented to: Group-1 | IMM | NMP-29
Dr. Kirti Sharma
Professor, Marketing Area Soumik Nag
Management Development 29NMP81
Institute, Gurgaon Ravi Prakash
29NMP66
Rajeev Goswami
29NMP64
Abhishek Sharma
 COLGATE PALMOLIVE

Company Background
10.6$ billion revenue (2005)
Operating in 200 countries
70% of sales outside USA
Two core product segments: Oral personal & home care;
pet nutrition segments

Global Financials - 2004

7% Revenue growth (sales $)
0.2% Growth in Gross profit
-2% Operating Profit
-7% Net Income
2000 2001 2002 2003 2004
Colgate 39.7% 40.6% 39.8% 38.8% 39.7%
Palmolive
P&G 12.2% 12.5% 13.8% 13.9% 14.7%
Global Toothpaste Market Value Share
 EVOLUTION OF TOOTHPASTE MARKET

Colgate launched worlds first commercial

toothpaste in 1873

In 1955, P&G launched first fluoride

toothpaste Crest

By 1990, virtually all toothpaste in U.S.

offered fluoride protection and consumers
evolved to additional oral care concerns.

In 1997, CP launched Colgate Total promising

12 hours protection against full range of oral
health problems.
COLGATE MAX FRESH PRODUCT DEVELOPMENT

Global research and development works

with CICs to develop new products

CMF utilized patented technology of

dissolvable mini breath strips as a point of
differentiation

Product consisted of small pieces of Tape,

packaged in a convenient carrying case
which dissolves on the tongue releasing a
flavor designed for fresh breath

Four factors involving franchise growth:

1. Consumer substitution
2. Market Spending
3. Distribution Penetration
4. Transaction Size
 COLGATE MAX FRESH US LAUNCH
August 2004
Freshness + Whitening
Breath strips --- uniqueness
Principal consumer benefit: cosmetic
Value share for cosmetic benefit
toothpastes up by 19%
(2000-2004)
Main competitor: Crest Whitening
Expressions
Value Shares(CWE)
of Leading U.S. Toothpaste Manufacturers
Big success
Manufactur Brands 2004 value share of
er toothpaste Market
Colgate- Colgate 34.80%
Palmolive
Procter Crest 31.60%
Gamble
GlaxoSmithK Aqua fresh, 14.50%
line Sensodyne
Church Close-up, 10.20%
Dwight Mentadent, Aim,
 COLGATE MAX FRESH
Market segments
Cavity/fluoride protection was the key benefit sought ,followed by
reduction in plaque build-up , breath freshening and tartar control.

In 2004, U.S. toothpaste market was evenly split between toothpastes

that emphasized therapeutic(cavity/fluoride protection/ sensitivity
relief)benefits and those that stressed cosmetic
benefits(freshening/whitening).
Positioning Advertising
1. As a premium brand along with CWE 1.Media advertising to generate
2. Promises freshness with a whitening awareness .
reassurance accounted for 73% of the year 1
3. Uses mini breath strips marketing budget.
2. Targeted at adults 18-34 age
Marketing Support group, with female skew.
1. Launch was supported by a website which incorporated
creative promotions and leveraged package visuals and
program sponsorships on MTV,AOL music, AOL first look and
yahoo launch
2. For offline customers, plans included in-store sampling,
merchandising, display offering money back rebates and
various special packs such as buy one get one free and two
 CP ORGANIZATIONAL STRUCTURE

lobal Business Development GroupGeographic Division Asia/Latin America

Oral Care(Category Lines) -EXECUTION
STRATEGY $
Responsible for all products in the region
valuated on Global Market Share Supervised regional CIC
Resource Allocation P&L responsibility
Report to COO Report to COO

$
Consumer Innovation Center (CIC)
Asia/Latin America
Work on strategy with GBD Groups
Marketers and product developers $
Involved in new product development
(Global R&D)
Go to Division Marketing VP
Report to Regional
Marke
t
Team Country Subsidiary
China/Mexico
Launch Develop and execute local
plan marketing campaigns
and Report to Geographic
2004 TOOTHPASTE MARKET AT A GLANCE
REASON FOR BUYING TOOTHPASTE
 CMF MARKET IN CHINA

$868 million retail tooth paste market

1.1% decrease of value shares in 2004 of Colgate Equity
from 2001
8.4% increase of value shares in2004 Crest from 2001
Fresh breath top reason for buying toothpaste in China

the Product for Market

Max Fresh did not test as well as others name in China which led to the na
to Icy Fresh.
Crystals was identified as the most relevant and meaningful phrase to d
rips to Chinese consumers.
advertising was developed using Jay Chou, leading rock star in china,
odied extreme living
 CMF ADAPTATION STRATEGIES IN CHINA

Adaptation Costs Time Frame

New Commercial/TV $500,000 -
Ad
Renaming of Breath - -
Strips
Celebrity Endorser Up to -
$1,000,000
New Flavors* $200,000 32 weeks
Filling Machines $1,500,000 -
Packaging Research I $7,000 12 weeks
Packaging Research II - 24 weeks
Color Testing* $7,000 4 weeks
New packaging is 20% variable cost
*Does not fall in either
Therapeutic or Cosmetic premium/package.
Value Share.
Packaging for existing tube in carton
format is 40% of COGS
 CMF MARKET IN MEXICO

$348 million retail toothpaste

market
82% market value share of
Colgate
10% approximated market share
of Crest
d product results
Relatively flat toothpaste demand
nce was slightly below par in terms of benchmarks for comparable
nal care products tested in Mexico.
Viability Index(CVI) of 62% suggested that the initiative had an average
ccess, defined as maintaining stable distribution for at least two years a

Volume
e sourced from Colgate would be slightly below fair share whereas crest w
han fair share.
e was expected to come from CP brands notably Colgate Big Red and 21

ot Elastic. Understanding which Colgate SKUs might be at risk of delistin

ant.
 CMF MARKET IN MEXICO contd..

Pricing
1. Pricing objective was to achieve parity with Crests cool
explosions.
2. Price/Value perception was above average for CMF.
3. Tested at a retail price of 15.99 Pesos
4. Estimated that CMF could increase volume by +25% if the
price was decreased
from 15.99 to 14.99 Pesos.

Advertising
1. Proposed advertising idea , a joy for your mouth". Depicted
in an advertisement entitled Snow surfer.
2. Incremental Production and talent costs combined were
$500,000.
CMF ADAPTATION STRATEGIES IN MEXICO

Adaptation Costs Time Frame

New Commercial/TV $500,000 -
Ad
Renaming of Breath - -
Strips
New Freshness - -
Message*
Pricing Strategy - -
Sources of Volume - -

*An additional Therapeutic Benefit message

would have possibly increased sales.
 CMF ADAPTATION MATRIX

Adaptation CHINA MEXICO

New TV ad MUST MUST
Celebrity endorser OK OK
New Flavors OK OK
New Packaging OK OK
Pricing MUST MUST
Sizes MUST MUST
Renaming Breath MUST MUST
Strips

China adapted to their local market better than Mexico,

according to concept and product tests. However, better test
results do not necessarily mean that there will be better
profits.
PROJECTED CMF GROWTH & MARKETING CAMPAIGN ROI

Market Sales Net Sales ROI ROI

(tons) Growth YOY 2005 2006
Growth YOY 2005-2006
2005-2006
China 12.5% 17% - -5.8%
33.48%
Mexico 15% 30% 33.29% 55.16%
Computed from Exhibits 13 & 20

More marketing dollars spent does not necessarily lead to

more sales & profits.
 SWOT ANALYSIS

Strengths Weaknesses

1) Focus on innovative and 1) Product research

new product launches. 2) Highly leveraged
2) Colgate business 3) Because of high rate of
planning initiative taxes prices are high
3) Diversified business
operations.
4) Strong financial
performance
Opportunities Threats

1) Emerging market growth 1) Competitive landscape

2) Deploying advance from other private label
technologies growth
3) Implementing new 2) Increasing commodity
products majorly to attract prices
youth 3) Political condition is not
stable
 RECOMMENDATION 1

Organizational Restructuring
Geographic Divisions, Global Business
Development Units and the Consumer
Innovation Center groups should have
communication and reporting protocols in
place.

Everyone should have ROI accountability

Control and allocation of marketing budget

 RECOMMENDATION 1 contd..
lobal Business Development GroupGeographic Division Asia/Latin America
Oral Care(Category Lines) -EXECUTION
STRATEGY $
Responsible for all products in the region
valuated on Global Market Share Supervised regional CIC
Resource Allocation P&L responsibility
Report to COO Report to COO

$
Consumer Innovation Center (CIC)
Product
Asia/Latin America
Launches
Work on strategy with GBD Groups
Evaluated
By ROI
Marketers and product developers $
Involved in new product development
(Global R&D)
Go to Division Marketing VP
Report to Regional
Marke
t
Team Country Subsidiary
China/Mexico
Launch Develop and execute local
plan marketing campaigns
and Report to Geographic
executi
 RECOMMENDATION 2

Streamline Product Development

Develop product features and packaging
with strict regulations in mind to avoid waste
of R&D resources.

Local market adaptations and added

complexities should only be executed if it can
contribute to the bottom line.
 RECOMMENDATION 2

Optimize Marketing Operations

Marketing dollars need to be spent with ROI
in mind

Marketing campaigns should be executed by

country subsidiaries because they have better
knowledge of the market
Thank You...