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Colgate-Palmolive

Prof: Dr. K.Sontake Strategic Cost Management Prasseedha Raghavan

Introduction

My case is about how

Colgate Palmolive India Ltd
used the fundamental
4P marketing concept
to turn the trend and be a
proactive competitor
in the FMCG market.
Snap Shot
• Colgate-Palmolive was incorporated in India in the year
1937.
• Launched Colgate Dental Cream.... and became a
company dedicated to the oral health of the Nation.
• Launched various oral care and personal care products
like Colgate Toothpowder, Toothbrushes, Palmolive
Shave Cream, Halo Shampoo, Charmis Cream.
• 1960s – 1970s... Consolidated Indian presence and
became a blue chip company on the Indian bourses.
• 1980s -1990s... Manufacturing went state-of-the-art.
Colgate-Palmolive entered a new category – household
surface care, with the launch of Axion dish washing paste.
The Indian consumer was offered top-of-the-line products
Bugaboo
• Year 1999 showed a fall of 43% in their net profit.
• The brand lacked freshness and aggressiveness in its
marketing efforts.
• The company remained sluggish in the marketing warfare
• A follower rather than a leader
• Reactive rather than proactive in introducing smart strategy.
Riposte
• The new management team gave a new look to the
company.
• Colgate Palmolive India Ltd. , distinguished the
two strong equities in India.

Colgate for Oral care -----Palmolive for Personal care

AND

Submitted them to proven marketing principles &

guidelines

* Cost of custom research service depends on project scope

4Ps PRODUCT PRICE PLACE PROMOTION
Product Strategy:
• Colgate reorganised its portfolio
• Introduced a wide range of products but with very
clear positioning.
• In oral care, Colgate identified four categories –
premium, freshness, popular and economy.
• Focused on only those products within this category
which could give results.
• Introduced new products in whichever segment the
need gap was felt.
• Wherever sluggishness was felt, a relaunch took
place to reposition the product over the product life
cycle.
To adhere
• Colgate pulled out 4 variants
• Colgate double protection
• Calcigaurd
• Fresh mint
• Fresh strips
• And Launched
• Colgate Herbal – Targeted at semi-urban, rural areas – priced
cheaper than colgate dental cream
• In other segments
• Battery operated Colgate Act brush
• Pamolive Naturals Transparent Soap in the premium toilet soap
segment
• Palmolive range of shaving products was expanded
• Charmin Skin Cream with vitamins was repositioned
• Colgate Cibaca Top
• And Revitalised – Colgate Dental Cream
 Scope
• Penetration of oral care products - 50 %
• Almost 30% of rural households use traditional materials such as neem,
banyan tree sticks and ash for cleaning teeth.
• Only about 15% of Indian toothpaste users brush twice a day.
• As a whole, per capita consumption of toothpaste in India is only 107gm
compared to 300gm in Europe.
• In this sense, Indian market is an unsaturated one and there is great
potential to be exploited. For instance, the toothpaste market is expected to
grow at 6% per annum.
• Growth in the rural areas will be driven by conversion of non-users
• While in the urban areas – by intensity of use.
• Also, in urban areas, value growth will be higher than volume growth, as
more consumers switch to value added products.
• The increase in rural incomes due to abundant rainfall this year will also
benefit Colgate due to its high exposure to rural markets.
Place : Reaching out to customers
• And the company is further strengthening
its distribution network.
• It plans a foray into 1,40,000 villages
within the next five years.
• It plans to have 1million retail outlets by
the end of the year.
• Colgate Palmolive makes its best to
enhance their availability in different kinds
of retail outlets and in as many
geographical areas as possible.
 Promotion Strategy: Boarding the
land.
• undertook a series of communication initiatives
• Colgate Shoppe – where select retail outlets in key cities depict a clear dominance of
Colgate-Palmolive
• Hero no. 1 - wherein stockists salesmen are motivated with recognition and reward
for outstanding achievements
• Dil Se – which reward wholesalers for their loyalty and consistency in marketing the
company’s products.
• nurturing mutually beneficial relationships with its various trade
partners
• For Consumers
• ‘Colgate Ke Andar Kya Hai’ for rewarding consumer loyalty.
• Rural Promotion
• the school Dental Health education program – The Young India Bright Smiles,
Bright Futures Program in collaboration with the Indian Dental Association.
• Introduction of a Toll Free Consumer Helpline for easy access to the company.
Outcome
• Obviously this led to a 10% increase in its
advertising expenditure but it resulted in
21% increase in net profit and a 8%
increase in sales in spite of tough
competition from big players like –
Meswak, Babool, Anchor.
 Price Strategy
• Introduced a flanking pricing strategy by launch of brands in
all price segments.
• Backward integrated.
It has manufacturing facilities for flavour and other ingredients, which yields
significant cost savings. It has set up a world class facility for manufacture of Di-
Calcium Phosphate, a key ingredient in toothpaste. It has a World Class
Technology and Research Centre. The company has implemented SAP to
enhance operational and supply management effectiveness. The company has set
up a wholly owned subsidiary in Nepal for manufacture of toothpaste and
toothpowder. Besides, Colgate Palmolive has adopted a Global Raw
Materials/Packaging Materials Suppliers System.
• At the same time, while inventory and debtor days were maintained at levels 28
days and 14 days respectively, creditor days registered a sharp increase from 82
days to 110 days. Operations therefore generated cash of Rs.2 bn.
• Overhead expenses reduction exercise.
Conclusion : - On the Move.
• The interactions between the different elements
of the marketing mix have put into action a
virtuous circle.
The company has adopted efficient Supply
Chain Management and undergone cost
reduction exercise. The money thus saved
was invested in advertising and distribution
and to launch new products at the same time
increasing operational profit.
2000 – 2007

The ultimate vote of Consumer Confidence &

Corporate Success
• Voted Brand No.1 in A&M’s annual survey of India’s
Top Brands conducted by Taylor Nelson Sofres-MODE
• Ranked India’s no. 1 ‘Most Trusted Brand’, in a survey
by Brand Equity – A C Nielsen ORG-MARG. For 4
consecutive years.
• Ranked as ‘Best Employers in India’ in a survey
conducted by BT-Hewitt and Best Employers in India

 
THANK YOU
What the company has shown us is
fundamental marketing concepts can always
help companies in their market strategy.

Sometimes
you can be unique
by following basic rules

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