This document discusses Colgate-Palmolive's Soft and Shiny shampoo line in Malaysia. It provides background on Colgate-Palmolive and describes the shampoo industry and Colgate's sales operations. It then analyzes Colgate's strengths, weaknesses, opportunities, and threats through a SWOT analysis. The problem stated is that Colgate's shampoo brand has difficulty sustaining market share due to competition and needs to be relaunched every two years, and the product manager wonders how to help the brand stay alive in this business long-term.
This document discusses Colgate-Palmolive's Soft and Shiny shampoo line in Malaysia. It provides background on Colgate-Palmolive and describes the shampoo industry and Colgate's sales operations. It then analyzes Colgate's strengths, weaknesses, opportunities, and threats through a SWOT analysis. The problem stated is that Colgate's shampoo brand has difficulty sustaining market share due to competition and needs to be relaunched every two years, and the product manager wonders how to help the brand stay alive in this business long-term.
This document discusses Colgate-Palmolive's Soft and Shiny shampoo line in Malaysia. It provides background on Colgate-Palmolive and describes the shampoo industry and Colgate's sales operations. It then analyzes Colgate's strengths, weaknesses, opportunities, and threats through a SWOT analysis. The problem stated is that Colgate's shampoo brand has difficulty sustaining market share due to competition and needs to be relaunched every two years, and the product manager wonders how to help the brand stay alive in this business long-term.
This document discusses Colgate-Palmolive's Soft and Shiny shampoo line in Malaysia. It provides background on Colgate-Palmolive and describes the shampoo industry and Colgate's sales operations. It then analyzes Colgate's strengths, weaknesses, opportunities, and threats through a SWOT analysis. The problem stated is that Colgate's shampoo brand has difficulty sustaining market share due to competition and needs to be relaunched every two years, and the product manager wonders how to help the brand stay alive in this business long-term.
Prepared By : Mohamed Ahmed Yusuf G1327311 Prepared For : Mr. Ayub Bin HJ. Khalid Due date : June 12, 2014
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3 | P a g e Table of Content 1 Background of the Company ....................................................................................... 4 2 The Industry ............................................................................................................... 5 3 Sales Operation .......................................................................................................... 5 4 SWOT Analysis ........................................................................................................... 6 5 Related Issue .............................................................................................................. 7 6 Problem Statement .................................................................................................... 7 7 Several Options .......................................................................................................... 8 8 Conclusion ................................................................................................................. 8
4 | P a g e 1 BACKGROUND OF THE COMPANY Colgate-Palmolive (Malaysia) Sdn Bhd is a subsidiary company of Colgate Palmolive Company USA, started off in Malaysia in 1960 as a manufacturing company of toothpaste. The parent company based in New York USA was originally a manufacturer of soap and detergent products. These products were well accepted and the company soon expanded into other parts of the world and also began to manufacturing other products. Besides, the parent company is also responsible for research and development, producing new formulae for new products and improving the existing formulae. Colgate-Palmolive (M) was responsible for the manufacturing of the following product lines: a) Oral Category Colgate Dental Cream, Colgate tooth brush b) Household products Trojan, Fab, Fab Laundry, etc. c) Toiletries Palmolive, Darling d) Personal Care Products Soft and Shiny Shampoo, Code 10 Colgate-Palmolive (M) was a market leader in all its products lines e except for its beauty soap and shampoo. However, with the help of Palmolives soap, the company managed to maintain number 2 position in the beauty soap market. In toothpaste market, Colgate has captured 55% of the market to become the market leader. Colgates toothpaste was sufficiently established in Malaysia to lead the brand name Colgate, became a generic name for toothpaste among customers. The company had market leader for most competitive product category such as detergents i.e. Fab and Trojan which held 34% in the market share whereas Fab Laundry bar captured 65% of the market. The company was also active in research and development in manufacturing new products. As a result, new products introduced such as Glo Dishwashing liquid in 1975 and Softlan fabric softener in 1980, which have also become a market leader. The company has expended their products to overseas namely Singapore, Hong Kong, Brunei, Fuji and Papua New Guinea.
5 | P a g e 2 THE INDUSTRY In year 1980 in Malaysia, there were four shampoo manufacturers in Malaysia namely Colgate Palmolive, Beecham, Bristol Myers and Kao Trading. All the companies produced a range of hair care products of different variants and brand names. Shampoo market could be divided into two segments which is the cosmetic and the medicated or anti dandruff segments. A cosmetic shampoo would feature its ability to clean hair effectively and result in beautiful manageable hair, while for medicated shampoo would solve hair problems common to users including dandruff. The local cosmetics and toiletries industry generally involves mixing and formulation processes, using imported ingredients. Many of these companies are contract manufacturers for products, such as shampoo and conditioners, hair care products, perfumes and cosmetics. From January 2001, all cosmetic products must be registered with the Health Ministry before they are put on sale. A two-year grace period has been given to allow the manufacturers, importers and distributions of these products to adhere to the ruling. Currently, there are no import restrictions, import licensing impediments or import quotas governing these products except for the 20% to 30% import duty on talcum powders, face powders and hair preparations. The cosmetics and toiletries market in Malaysia has registered an average growth of 10.0% over the 1996 - 2000 periods. Sales value of the industry totaled RM2.4 billion in 2000.
3 SALES OPERATION In year 1976, Colgate Palmolive has introduced Colgate Family Shampoo with the idea of producing good quality and low priced product. The target market was rural Malays and young users with low income. The way the shampoo is packaged in a 60ml-150ml and 300ml containers. The products are well accepted because of low pricing and promised benefits. Since Colgate is able to capture 13% of the total market share a year after launching, they have become a leader in the market with 20% market share in 1978. The control of the market was not able to stay long and the sales began to drop. The market dropped 16% in 1981 and the company has taken few steps to analyze the situation. Four major competitors namely Kao Trading, Bristol-Mayers, Zaitun Industry Sdn. Bhd. and UNZA was the reason of the drop in sales. It becomes a threat for Colgate in the cosmetic segment of the industry.
6 | P a g e Beside, shampoo was generally considered a simple product as its formulation will not requires high technology knowledge made the business became an easy entrance. It was quite command to see a brand on the retail shelves produces by unknown producer. Additionally, with the attitude of customer towards brand switching especially in the cosmetic segment made it even more attractive for new producers to enter the market. Colgate believes that they need to improve its shampoo in order to stay dominant in the market. Thus, in January 1982, Colgate Family shampoo was revitalized. Few changes in terms of packaging, brand name and variants are done. This improvement would uplift the image of the shampoo and suit the customer demand.
4 SWOT ANALYSIS Strength Weakness Good quality with low price product Halal in Malaysia Strong market share i.e. toothpaste captured 55% market share, Soflan fabric softener captured 65% market share. Become a generate brand for toothpaste. Different variants for different product positioning. Difficult for Colgate to penetrate the shampoo market due to the Colgate generally which known more as toothpaste. Hard to control and maintain its products in the market
Opportunities Threat Fully utilize on Research and Development center to produce more demand products in order stay alive in the market. Opportunity to grow their business Easy entrance business created more competitors exist in the market i.e. local & international brands. A lot of substitute products in market. Customer attitude toward brand
7 | P a g e globally. switching made fast changing and advanced development of products.
5 RELATED ISSUE Colgate Palmolive, the company started off in Malaysia as a manufacturing company of toothpaste which brings it as its core product. When Colgate Palmolive introduced its Colgate Family Shampoo in 1976 with the idea of producing a good quality and low price product, the product was well accepted by the consumers. The company was able to captured 13% of the total market share a year after launching and subsequent, in 1978, the company becomes a leader in the market with 20% total share. However their control of the market was not for very long. The sale began to drop in subsequent year and continuously. Their shampoo brand was having difficulty to sustain in the market share due to too many of competitors in the market. Besides, the shampoo needs to be revitalization in every two years in order to maintain in the market. Additionally, Colgate as the branch name preferred for toothpaste is making it more difficult to penetrate the market of shampoo because the customer is associating Colgate with only toothpaste.
6 PROBLEM STATEMENT Cik Rose the Product Manager of Colgate-Palmolive Sdn. Bhd. informed that in order to improve the performance of the shampoo line, the shampoo needs to be re-launched in every two or three years in order to survive in the market. Hence, in January 1982, Colgate Palmolive Shampoo was revitalized i.e. size packing, branding and various products offered. In July 1987, Soft and Shiny Shampoo was launched, covered both cosmetic and medicated segment. Nevertheless, the nature of shampoos line business is that the competition is very tight that a brand seldom stays unchallenged. The brand is having a tough time to compete in the market even there is re-launched in every two or three years. Therefore, Cik Rose wondering on how to make Colgate-Palmolive Sdn Bhd stay alive in this business.
8 | P a g e 7 SEVERAL OPTIONS There are few options need to be considered in order to rectify this problem. Firstly, the company should be able to allocate some budget for engaging a Product Ambassador such as famous artist, sportsman/sportswoman etc. By using such big names, ultimately the customers may be inclined towards to the promotion materials and advertisement. At the same time, they would be excited to use the shampoo produce by the company. Therefore, the market share might be rectified and eventually conquer the market share. Secondly, the company should also allocate some budget in giving away a free sample to the customers at the crowded place such as LRT, bus station, shopping mall etc. for them to try before they could buy. By giving such a free sample, the customers may evaluate the effectiveness of the shampoo. For winning the customer trust, the most important thing is the good quality. If the company able to produce a quality products, customer definitely will buy and maintain the product as their single used. Finally, the re-branding of shampoo is crucial as the competitor will be doing the same thing in order to compete. Hence, the company should be able to produce creative and innovative advertising campaign and therefore this would be absolutely catches the attention of the customer.
8 CONCLUSION Nowadays, the marketing play a crucial role in the company especially for easy entrance business. In order to sustain its market share, Colgate-Palmolive Sdn. Bhd. is required to have strong marketing strategy for every new product that they produce. Or else, if the products would not able to be sustained, the effort on producing these new products is a wasted. Based on the new era, whereby customers are easily being influence by their favorite artist. Hence, it is recommended for Colgate-Palmolive Sdn. Bhd. to engage Product Ambassador. Nevertheless, it is a crucial for the company to make a proper research on who is the artist or sportsman that the most admire by the customers. Product Ambassador with a very clean track record and good personality definitely is the best traits for a product. The advertisers have begun attempting to quantify and qualify the use of artist in their marketing campaigns by evaluating their awareness, appeal, and
9 | P a g e relevance to a brand's image and the celebrity's influence on consumer buying behavior. Sometimes the influence of the Product Ambassador is not always positive. If there is a time where the Product Ambassador is no longer relevant to the product, it is time to change to a new Product Ambassador. The free sample given to the customer must be provided with high quality. The negative comment will definitely spread by words of mouth and may jeopardize the business, After spending a large amount of money, the objective if the free sample will not be materialize if the negative comment received by the customer. Re-branding has become a real trend in the last decades. Some companies have re- branding in several times. Same goes to Colgate-Palmolive, whereby after the second generation of Soft N Shiny Shampoo launched, the performance is still below than the target. Obviously, the risks of changing the established brand identity are high and benefits are not guaranteed. Hence, Colgate-Palmolive should look into a proper products market strategy to determine the best marketing for every rebranding product.