Cottle Taylor Expanding the Oral Care group in India

By: Group 6

Agenda
Case Introduction
Major Problems Solutions

Case Introduction
Cottle Taylor is a consumer-product company based in Philadelphia. The company has presence in 75 countries across the globe. But, the revenues from existing markets are declining which forced them to look for markets in emerging economies. In India, the companys focus is on Oral Care products. Their marketing strategy is to enter with basic products with competitive prices and then introduce premium products. Cottle is a market leader in terms of sale of Toothpaste and Toothpowder. But, high illiteracy, unawareness about Oral hygiene and low income have proven to be roadblocks in their expansion strategy.

Major Problems
Gross margin on Toothpaste and Toothpowder was dropping. Thus, they thought of leveraging their competitive advantage and higher margins in toothbrushes to counter the decline. But, toothbrush market itself had an array of issues like:
a) 40% population didnt brush teeth regularly. b) Unaware of consequences of bad Oral care. c) 50% rural population didnt use toothbrush to brush teeth. d) Below 10% users changed toothbrush regularly.

Major Problems
Cottle Taylor didnt value its relationship with seed distributors though they constituted around 300000 retail outlets across the country. As a result:
a) Distributors didnt know key selling points of the Cottles products. b) There was issue with communication and retail deliveries.

Major Problems
The senior management emphasized on shifting the product mix towards mid-range and premium products. This strategy worked in emerging markets like Thailand. But, it had some inherent issues: a) 37% population was still below poverty line. b) Majority of the population didnt visit dentist regularly. Thus, the idea of partnering dentist for product promotion was not going to work. c) Advertising budget constraints due to recession.

Major Problems
Cottle only spent 5% of the advertising budget on Radio advertisement which is the only source of entertainment of the rural population and around 78% (905 Million) people lived in rural areas. Thus, the advertising in rural India by the company was not adequate.

Solutions
The solution will be to first understand the dynamics of economic and social conditions of the population of India. Thus the strategy to increase revenues in this competitive market should be to: The population should be divided into segments and for each segment a different line of product should be advertised which can cater to their needs and should be affordable. For E.g. Low end toothbrush line to be marketed for the economically weak people and mid-range or premium products for people with income above 5000$/year (80 Million households). Cottle should partner with IDA more and more to create awareness among the people in rural areas about Oral Hygiene and also use this opportunity to advertise their products. Also, at the same time partner with the dentists to get help in the advertisement of mid-range or premium products for the urban .

Solutions
As the markets for Toothpaste, toothpowder and toothbrushes already have several competitors, the focus should be on ancillary products like mouthwash and Dental floss where market is fresh and the growth rate is highest (62% growth in period 2004-09). More budgets should be allocated for advertisement in rural areas which could be in the form of radio broadcasts and billboards. Relationship with seed distributors should be established and local population should be used to more and more to counter the language problem. Also, the distributor should be trained for key selling points of the Cottles products which will help the distributor to push the product to the customer. Also, a reward program should be initiated for the distributors who achieve the sales target decided by the company.

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