Professional Documents
Culture Documents
CASE STUDY
GROUP 6
MEGHA SINHA
PRATEEK JAIN
PRIYANKA KANWAR
RADHIKA SETHI
NISHANT NEGI
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
Organization structure
• Regional presidents with P&L responsibility
• Global business development groups organized by category
Year 2004
• Reported +6.5% unit volume growth
• +7% sales dollar growth
• +0.1% point growth in gross profit margin to 55.1%
EVOLUTION
OF
TOOTHPASTE
MARKET
Colgate launched world’s first
commercial toothpaste in 1873.
• Advertising
1. Media advertising to generate awareness accounted for 73% of the year 1
marketing budget.
2. Targeted at adults 18-34 age group, with female skew.
• Marketing Support
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 pack trial pack
CHINA
Value Shares in The China
Toothpaste Market
2000 2001 2002 2003 2004
• Communication Challenge
• Colgate Max Fresh did not test as well as others name
in China which led to the name being changed to “Icy
Fresh”.
• “cooling Crystals” was identified as the most relevant
and meaningful phrase to describe breath strips to
Chinese consumers.
• Celebrity advertising was developed
using Jay Chou, leading rock star in
china, who embodied ”extreme living”.
• Colgate dominated in Mexico
with an 82% value share of the
$348 million retail toothpaste
MEXICO market in 2004.
• Market heavily skewed
towards the therapeutic
segment(87% of value share)
but growth was slow.
• Majority of consumers
focused on basic oral
care(cavity prevention)
• Price sensitivity and sales
promotion activity were both
high In Mexico.
COLGATE MAX FRESH
LAUNCH
• Concept and product results
1. Net acceptance was slightly below par in terms of benchmarks for
comparable new personal care products tested in Mexico.
2. Consumer Viability Index(CVI) of 62% suggested that the
initiative had an “average” chance of in-market success, defined
as maintaining stable distribution for at least two years after
launch .
• Sources of Volume
1. CMF volume sourced from Colgate would be slightly below fair share whereas
crest would lose more than fair share.
2. CMF volume was expected to come from CP brands notably Colgate Big Red and
21% from Crest.
3. “Shelf Is Not Elastic”. Understanding which Colgate SKU’s might be at risk of
delisting was important.
• Pricing
1. Pricing objective was to achieve parity with Crest’s 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.