Written Analysis and Communication

Individual Assignment No. 2

Case Analysis Report
On
Cottle-Taylor: Expanding the Oral Care Group in India
Submitted by
Name : Varun Verma
Roll No : 131158
e!tion : "#A $%&' ( A
Institute o) "anagement* Nirma +niversity
,ate o) u-mission: 2.(August(2/13
%or O))i!e +se:
0rade
Executie Summary
&1e report -rings out -usiness story* and t1e !1allenges )a!ed -y 21iladelp1ia(-ased Cottle(&aylor
In!.3s Indian su-sidiary* Cottle(India. &1e oral !are division 4ants to in!rease t1e unit(sales o)
toot1-rus1es so as to in!rease its mar5et s1are and a!1ieve 1ig1er pro)it margins. Cottle(India3s
!urrent mar5et situation and strategy 1as -een dis!ussed. &1e mar5eting(1ead 1as to !ome up 4it1 a
revised plan 41i!1 aims at* !lose to 3/6 gro4t1 in toot1-rus1 unit(sales. A promotional strategy )or
targeting t1e di))erent segments o) oral !are mar5et is to -e de!ided* putting appropriate emp1asis to
t1e t1ree 5ey messages o) advertisements* as re7uired.
2age ! o) "!
Situation Analysis
Cottle(&aylor is a ma8or international %"C0 -rand 4it1 its presen!e in more t1an 2// !ountries*
and operates in 9 geograp1i!al(divisions a!ross 3 main produ!t !ategories
1
. #y 2//:* 5/6 revenue
4as !ontri-uted -y emerging mar5ets. Noti!ing a steady gro4t1 in sales and anti!ipating )uture
opportunities* Cottle ;India )o!ussed primarily on oral !are segment.
Cottle 1as 386 s1are o) Indian oral(!are mar5et
2
. <ey strengt1s o) Cottle in t1is regard:
Consumer edu!ation
3
in asso!iation 4it1 Indian ,ental Asso!iation
9
1elped !reate a -rand
image amongst !onsumers.
Competitive edge in spite o) lo4 margins
5
$in toot1pastes and toot1po4der' due to its 5/
plus years o) e=perien!e* in!reased produ!tion !apa!ity and 1ig1er e))i!ien!y
>
over t1e
years* and t1ere-y doing a4ay 4it1 !ostly imports.
?ig1er margins
.
and -etter gro4t1 rates
8
attra!ted -ot1 "i!1ael @ang $mar5eting 1ead )or Cottle*
0reater(Asia and A)ri!a' and #rinda 2atel $dire!tor* oral !are mar5eting )or Cottle(India' to s1i)t
)o!us on toot1-rus1 sales.
&arget segment
:
)or promoting toot1-rus1 sales is t1e population aged -et4een 2/(35 years.
Advertisement e=penses are to -e spread a!ross a mi= o) &V* radio* ne4spapers* -ill-oards et!. &1e
target !ustomers )or t1is advertising !an -e -roadly divided into 3 !ategories
1/
:
1. &1ose 41o do not -rus1( en!ourage t1em to start -rus1ing
11
.
2. &1ose 41o -rus1 less )re7uently( in!rease t1eir )re7uen!y o) toot1-rus1 usage.
3. Regular users( persuade t1is !ategory to s1i)t to mid and 1ig1(range produ!ts.
@ang -elieves t1at results o) Cottle(&1ailand !an -e reprodu!ed in India due to similarities in t1e
t4o mar5ets. #rinda* -eing e=posed to t1e realities o) Indian mar5et* t1in5s t1e ot1er 4ay round. I)
4e 1ave a !loser loo5* -ot1 !ountries di))er at )e4 points
12
. #ut @ang is sure a-out 2 t1ings* 1'
advertisement e=penses to -e in!reased a-ove 126 o) produ!t(sales* 2' even distri-ution a!ross t1e
3 5ey messages
13
to -e eliminated. @ang re8e!ts #rinda3s plan o) 2/6 gro4t1 target )or 2/1/ $8ust
26 point in!rease )rom previous year' and no4 s1e 1as t1e tas5 to !ome up 4it1 a revised
promotional plan 4it1 1ig1er gro4t1 rate pro8e!tions* $!lose to 3/6' 4it1 !larity on:
&arget audien!e.
,istri-ution o) advertisement e=penses.
1ort term and long term -ene)its o) t1e messages.
#roblem Statement
&1e pro-lem )a!ed -y #rinda 2atel is t1at* 1o4 t1e relative importan!e s1ould -e given to t1e t1ree
5ey messages in t1e 2/1/ promotion and advertisement programme
19
* so t1at t1e promotional mi=
1elps to a!1ieve @ang3s 3/6 gro4t1 rate o) toot1-rus1 unit(sales in di))erent target mar5ets.
&1is in turn* is re7uired to in!rease t1e pro)its generated -y Cottle(India3s oral !are division.
2age $ o) "!
Ob%ecties
1ort term o-8e!tives:
In!rease a4areness o) oral !are in Indian mar5et and en!ourage -rus1ing 1a-it.
2romote t1e t1ree toot1-rus1es !ategories namely* lo4(end* mid(range and -attery operated
1ig1(range' and in!rease unit sales gro4t1* !lose to 3/6.
2ersuade !onsumers to upgrade to mid and 1ig1 range produ!ts.
@ong term o-8e!tives:
In!rease sales o) 1ig1(margin produ!ts and introdu!e ot1er produ!ts li5e mout14as1* dental
)loss et!.
In!rease oral !are mar5et s1are and -oost pro)its o) Cottle(India.
Options and Alternaties
1. #rinda 2atel3s Instin!t: +neven distri-ution )or t1e advertisement mi= $!onsisting o) t1e
t1ree 5ey messages
15
' 4it1 a 1ig1er emp1asis to message one and t4o.
2. @ang3s -elie): 0oing a1ead 4it1 an uneven mi= so as to give more importan!e to t1e t1ird
5ey message.
3. Continue 4it1 t1e earlier model o) giving e7ual importan!e to all t1e t1ree 5ey messages
and no in!rease in produ!t(promotions.
Ealuation o& Alternaties
1. %o!ussing more on t1ose 41o do not -rus1 andAor are less )re7uent users: in!e it is !lear
t1at most o) t1e rural population still does not indulges in -rus1ing* t1ey must -e t1e prime
)o!us o) promotion strategy as t1is 4ould 1elp in in!reasing mar5et s1are* esta-lis1ing t1e
-rand 4it1 )irst(mover advantage
1>
and 1elp in a!1ieving long term -ene)its.
2. Bmp1asising more on in!reasing sales o) 1ig1(end toot1-rus1es: &1is is de)initely an
important aspe!t. #oosts to t1e C-ottom lineD rely 1eavily on selling 1ig1(margin produ!ts.
#ut -y giving more importan!e to t1is segment* 41i!1 is a very small !1un5* Cottle 4ill -e
missing out on in!reasing mar5et s1are 41ere t1e ma8ority o) t1e population is !on!entrated.
It mig1t result in giving spa!e to !ompetitors to strengt1en -ase and possi-ly a))e!t mar5et
s1are in su-se7uent years.
3. Bven distri-ution o) promotional e=penses: &1is option CseemsD to -e t1e sa)est -et.
Continuing 4it1 t1e same strategy mig1t result in a!1ieving s1ort term -ene)its. #ut t1en t1e
7uestion !omes* 41y 4e even re7uire mar5eting
1.
. Cottle !annot 8ust ta5e a -a!5 seat and
allo4 ot1ers to ta5e advantages o) t1e mar5et. As a mar5et leader* it 1as to !ontinuously ta5e
steps to in!rease its dominan!e
18
and )o!us on a!1ieving long term goals. Also* t1ere is
pressure )rom Cottle 1ead7uarters to ta5e ne!essary steps and -oost sales and t1at is 41y
@ang is pus1ing #rinda to !ome(up 4it1 revised plan.
2age ' o) "!
(ecision
Bvaluation o) t1e alternatives suggests t1at #rinda must go a1ead 4it1 in!reased e=penditure on
promotional plan. Allo!ation o) )unds to t1e t1ree 5ey messages must -e di))erent )or di))erent
target segments i.e. more emp1asis on message 1* 2 in rural mar5etE and semi(ur-an and ur-an
!onsumers must -e targeted 4it1 more emp1asis on t1e t1ird 5ey message.
Action #lan
&arget rural !onsumers 41o do not use modern oral !are 4it1 e))e!tive means o)
!ommuni!ation t1at rea!1es out to t1em most e))i!iently. "ore advertisements on radio* -ill
-oards and 4alls o) 1omes s1ould serve t1is 4ell.
Arrange )or more oral 1ealt1 !ampaigns and i) possi-le provide 4it1 )ree samples o) lo4
!ost -rus1es and toot1pastes to indu!e usage
1:
.
pread a4areness amongst less )re7uent users a-out regular usage 4it1 1eavy &V and
ne4spaper advertisements so t1at t1e message does not go unnoti!ed.
&arget ur-an !onsumers 4it1 1ig1 disposa-le in!ome to upgrade to -etter range o) produ!ts
-y s1o4!asing t1e -ene)its and li)estyle advantages. &1is 1as to -e done -ot1 at t1e
advertisement level and at t1e dentist3s level. Arrange innovative programs in malls and
areas 41ere target audien!e is visi-le.
Bnsure dentists re!ommend Cottle produ!ts to t1e patients 4it1 more emp1asis on mid and
1ig1(range toot1-rus1es.
Contingency #lan
I) su-stantial gro4t1 in rural segment is not noti!ed and more s!ope o) gro4t1 in t1e ur-an 1ig1(
in!ome group !onsumers is )elt* t1en )o!us s1ould -e s1i)ted to t1e appropriate segment and more
e=penditure must -e allo!ated to ta5e ne!essary steps. &1is 4ill -e done to ensure Cottle(India
a!1ieves -etter margin and unit(sales in mid and 1ig1(range produ!ts.
2age ) o) "!
Exhibits and *e&erences
Exhibit ": Case &acts about Cottle-Taylor+ and Cottle India,
Case )a!t 1 Cottle(&aylor3s 9 main operational geograp1i!al divisions: Nort1 Ameri!a*
Burope* @atin Ameri!a* 0reater(Asia and A)ri!a
&1ree produ!t !ategories:
i. ?ome !are: laundry* dis14as1ing produ!ts et!.
ii. 2ersonal !are: soaps* lotions* deodorants et!.
iii. Oral !are: toot1pastes* toot1-rus1es* dental )loss* mout14as1 et!.
Case )a!t 2 Cottle &oot1-rus1 produ!t range:
i. @o4(end $manual': Complete, Sensitooth, FreshGum, Surround, Kidsie.
ii. "id(range $manual': Zagger, Directionflex.
iii. ?ig1(end $-attery(operated': Swirl, which also had replaceable Swirl-
efills.
Case )a!t 3 &1e t1ree messages re7uired in t1e promotional program mi=:
i. 2ersuading !onsumers to upgrade to mid(range or premium produ!ts.
ii. In!rease t1e in!iden!e o) -rus1ing.
iii. 2ersuading !onsumers to upgrade to mid(range or premium produ!ts.
Exhibit !: Indian oral care mar-et pro&ile in terms o& demographic and economic &actors,
1. Forld3s largest demo!ra!y 4it1 a population o) 1.1> -illion $2//: estimate'.
2. 0ross ,omesti! 2rodu!t $0,2' in 2//: 4as 19> times greater t1an in 1::/. #ut e!onomi!
gro4t1 is in!onsistent a!ross t1e states* mostly !on!entrated among "a1aras1tra* +ttar
2rades1* and And1ra 2rades1.
3. ,espite o) e!onomi! gro4t1* appro=. 3.6 lives -elo4 poverty line and 8/6 live on less t1an
2G a day. ?ig1 population migration is e=pe!ted to result in 86 o) people living in slums and
d4ellings.
9. As o) 2//:* rural population !onstituted .86* i.e. people living in to4ns and villages.
5. "ost o) t1ese areas 4ere la!5ing o) one or more -asi! servi!es su!1 as !lean 4ater* ele!tri!ity*
4aste treatment systems* -asi! 1ealt1 !are* edu!ation et!.
>. >96 o) t1e total Indian e=penditures !ame )rom t1ose lo4est earning segments* !onsisting o)
dailyA4ee5ly 4age la-ours* 41i!1 1ad )rugal or no savings.
.. "ost rural people relied on traditional 4ays )or oral !are su!1 as use o) Neem t4igs* -la!5 salt*
!1ar!oal* as1 et!. "ost o) t1em asso!iated oral pro-lems 4it1 eating 1a-its and 1ereditary
pro-lems* rat1er t1an improper oral !are. A survey s1o4ed* 5/6 Indians 4ere not !on!erned
a-out prevention o) dental pro-lems and rural population 4as 5 times less li5ely to use modern
oral !are produ!ts* 41en !ompared to t1eir ur-an !ounterparts.
8. Oral !are a4areness programs and resear!1 studies* promoted -y I,A $Indian ,ental
Asso!iation'* in asso!iation 4it1 ot1er mem-ers li5e Cottle* aimed at edu!ating people a-out
dental 1ealt1 -ene)its. &1is* along 4it1 rise in in!ome levels and in)luen!e o) 4estern 1a-its*
resulted in oral !are segment 4itnessing a 1/6 gro4t1 in 2//:. An independent study also
s1o4ed t1at t1e rural residents e=posed to !ampaigns 4ere t4i!e as li5ely to adopt toot1
-rus1ing as t1ose 41o 4ere not.
2age . o) "!
:. 2enetration o) dentists in India 1o4ever* 4as very dismal. "a8ority never !onsidered visiting a
dentist and only 26 visited regularly. &1is also resulted in migration o) 7uali)ied dentists to
)oreign !ountries and signi)i!ant la!5 o) dentists and 7uali)ied persons in rural areas o) t1e
!ountry.
1/. #rus1ing in!iden!e in India* as o) 2//. is s1o4n in t1e )ollo4ing !1art.
11. &oot1-rus1 repla!ement )re7uen!y -y user 4as a -ig !on!ern )or Cottle. Only 8.>6 people
)ollo4ed t1e re!ommendation o) repla!ing toot1-rus1 every 3 mont1s. "ost people used t1e
-rus1 to t1e e=tent t1at it 4ould -rea5 or -e!omes unusa-le.
2age / o) "!
Exhibit $: Comparison o& Indian and Thailand oral mar-ets 01sing &acts in *eport Exhibit !2,
#oint o& comparison: India Thailand
Cultural "ore !onservative "ore open to ne4 e=perien!es
#opulation Intensely 1ig1 population Comparatively lesser populated
Income gro3th No steady in!ome gro4t1 teady rising in!ome
#urchasing po3er "a8ority 1ave no savings and
)rugal disposa-le in!ome
Comparatively 1ig1er pur!1ase
po4er
A3areness Very less a4areness a-out oral
!are and asso!iated -ene)its
?ig1er level o) a4areness
Exhibit ': 4ar-et position o& Cottle-India in oral care segment,
2age 5 o) "!
Exhibit ): *eleant academic concepts applicable in the report,
S,
6o,
Case Scenario Sub%ect in
re&erence
(escription *e&erence 4aterial
1. Cottle(India3s
mar5et s1are.
"anagerial
B!onomi!s
Oligopoly mar5et stru!ture:
most 4idely o-served*
espe!ially in %"C0 se!tor.
"i!roe!onomi!s: -y Ro-ert
. 2indy!5. C1apter 11*
&opi! 11.2* 2age 3..
2. Consumer
edu!ation in
rural mar5ets.
"ar5eting
"anagement
Consumer needs to -e
edu!ated and !leared a-out
t1e produ!t* its -ene)its and
1o4 it serves t1e needs o)
t1e !onsumer.
"ar5eting "anagement: -y
21ilip <otler. C1apter 5*
2age 132
3. Operating on
lo4 margins
"anagerial
B!onomi!s A
"ar5eting
"anagement
In toug1 !ompetition and
loo5ing )or )uture prospe!ts*
)irms sometimes 1ave to
operate 4it1 lo4 margins
"i!roe!onomi!s: -y Ro-ert
. 2indy!5. C1apter .* 2age
221
9. ?ig1 produ!tion
!apa!ity and
1ig1 e))i!ien!y
in toot1-rus1
manu)a!turing.
"anagerial
B!onomi!s A
Operations
management
"anu)a!turing )irms need to
1ave 1ig1er !apa!ity to
serve mar5et demand and
-etter produ!tion
e))i!ien!ies to lo4er !osts.
"i!roe!onomi!s: -y Ro-ert
. 2indy!5. C1apter 5*
2age 19.
5. %irst(mover
advantage in
rural mar5ets.
"ar5eting
"anagement
%irst mover advantage 1as a
lot o) -ene)its in t1e s1ort
and long run. "ostly it is
a-out produ!t image*
positioning and !1oosing
t1e rig1t produ!t(mar5et
mi=.
"ar5eting "anagement: -y
21ilip <otler. C1apter 8*
2age 22.
>. Need o)
mar5eting.
"ar5eting
"anagement
In toug1 !ompetitive
mar5et* t1e rig1t mi= o)
mar5eting 4it1 rig1t timing
is essential to sustain and
gro4 -usiness.
"ar5eting "anagement: -y
21ilip <otler. C1apter 1*
2age 5
.. B=ploring ne4
mar5ets.
"ar5eting
"anagement
As a mar5et leader* a )irm
s1ould not only de)end
!ompetitors* -ut also
e=plore ne4er mar5ets to
esta-lis1 )oot(1old -ut also
to in!rease presen!e in
ne4er areas and )ind ne4
possi-ilities.
"ar5eting "anagement: -y
21ilip <otler. C1apter 8*
2age 212
8. Indu!ing usage
o) toot1-rus1 in
rural mar5ets.
"ar5eting
"anagement
Consumer does not )eel t1e
need o) t1e produ!t all t1e
time and as a mar5eter*
)ree-ies and promotional
o))ers must -e used to
indu!e usage and !reate t1e
need )or t1e produ!t.
"ar5eting "anagement: -y
21ilip <otler. C1apter 5*
2age 132
2age 7 o) "!
1nderta-ing
&o F1om It "ay Con!ern:
I* Varun Verma 1ere-y de!lare t1at t1is assignment is my original 4or5 and is not !opied )rom
anyoneAany41ere. I) )ound similar 4it1 sour!es* I s1all ta5e !omplete responsi-ility o) a!tion ta5en
t1ereo) -y FAC &eam.
ignature
6ame: 8arun 8erma
*oll 6o,: "$"")5
Section: A
2age "9 o) "!
End 6otes :ollo3:
2age "" o) "!
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Re)er to Report B=1i-it 1: !ase )a!t 1.
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&argeting and segmentation
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