Colgate Marketing

Colgate-Palmolive alliance(NYSECL) is anAmeri buttocks modifymultinational corporationfocused on the production, distribution and provision of household, health care and personal products, such assoaps,detergents, and viva hygieneproducts. In 1806,William Colgate, himself a soap and examine maker, opened up a starch, soap, and candle factory on Dutch Street inNew York metropolisunder the name of William Colgate & Company. In the 1840s, the firm began merc baseball mittising individual bars in uniform weights. In 1857, William Colgate died and the political party was shake up as Colgate & Company under the management ofSamuel Colgate, his son.In 1872, Colgate introducedCashmere Bouquet, a mellisonant soap. In 1873, the firm introduced its first tooth ranch, an aromatic tooth gonee sold in jars. His connection sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in 1896. By 1908 they initiated mass selling of toothpaste in tubes. Colgate-Palmolive has long bee n in rambunctious competition withProcter & Gamble, the worlds largestsoapanddetergentmaker. PampG introduced itsTidelaundry detergentshortly afterWorld war II, and thousands of consumers turned from Colgates soaps to the new product.Colgate lost its number one place in thetoothpaste trade when P&G started puttingfluoridein its toothpaste. In the beginning oftelevision, Colgate-Palmolive wished to compete withProcter & Gambleas a shop ofsoap operas. Although the confederacy sponsored many shows in part, they were virtually famous for be the full sponsor of the serialThe Doctors. Year Wise Details * 1873 resonant toothpaste was first introduced. * 1896 First dental cream was introduced in collapsible tube. * 1928 Colgate unified with Palmolive Peet Company. * 1937 Colgate Palmolive India limited was come in existence. 1949 Colgate toothpaste launched in Indian market by CPIL. Company details * Fabian Garcio is the Chairmen and Roger D. Calmayer is the M. D Compa ny.* It acquired 75% equity in advance viva voce care product * Registered office is located at Mumbai. * Its summation turn all over is Rs. 1363 cr. * Its main business is manufacturing and marketing of oral care products toilet soaps, shaving products etc. * Its has captured highest divvy up in the toothpaste strike off in India. * Its manufacturing plant is situated at Baddi plant of Himachal Pradesh Colgate toothpaste * Launched in 1949 , Colgate is largest tooth paste in India . Colgate has been ranked as India virtually trusted flaw crossways all Categories for four consecutive geezerhood from 2003 to 2007 by brand equities most trusted brand survey. Colgate was to a fault rated as the no. 1 brand. * Colgate toothpaste has variety of products which includes * Colgate dental cream * Colgate active salt * Colgate pocket fresh * Colgate union 12 * Colgate extra clean gum care * Colgate sensitive soup-strainer * Colgate 360 soup-strainer Total market share of Colgate in different years The leader in the oral-care category is positioned to capitalize on underpenetrated market segments with with(predicate) strong brands.A 51% subsidiary of Colgate US, Colgate Palmolive (India) (CPIL) is a market leader in the Indian oralcare industry since decades. The club has products across variants and price points in toothpaste, toothpowder, and toothbrushes, and has leaders in each of these. CPILs two brands of toothpastes Colgate and Cibaca are targeted at the urban and countrified markets, respectively. CPILs toothpaste sales volume increased 11% and toothbrush 41% in the September 2008 quarter, expanding its overall market share to 37. 7% in the January-August 2008 period. The order boosted the toothpowder market share to 48. % in the January-August 2008 period. These increases were determined by tight focus on getting closer to consumers e genuinelywhere, fortify partnerships with the dental profession and customers in the trade and fostering innovation in all realms of business. The launch of innovative products such as Colgate Active Salt, Colgate Maxfresh and Colgate 360 toothbrush also contributed to the growth of the market share. Penetration of modern oral-care products below 55% is low in India as many deal in inelegant India still clean their teeth with traditional products like twigs of neem tree, salt, ash, and new(prenominal) herbal items.Per capita inlet of toothpaste in India is among the lowest globally. While Indias per capita consumption of toothpaste is 92 grams, even countries like China and Malaysia consume much at 219 grams and 285 grams, respectively. Also, just 7% of the population here brushes twice a sidereal day as likend with 61% in China. Increasing awareness on the benefits of oral care and brushing twice daily would work in spare of CPIL. In the current scenario of economic slowdown, in that respect may be a reduction in demand for premium products and higher demand for value-for- funds products.CPIL forget be at a significant competitive advantage as it has one of the strongest brands in the lower priced toothpaste segment. The company has improved its presence in the value-for-money segment through an increase in market share of Cibaca from 5% in the year ended March 2005 (FY 2005) to 7. 3% in FY 2008. The markets for progress oral products like mouth wash, dental floss and teeth discolour products are at a nascent stage in India. These products come on limited usage with consumer concentration in urban areas. CPIL caters to these products and has an upper hand in the development of this market as they evolve in future.The company has also made attempts to widen its product basket through penetration into shower gelatines and dead body washes and has been steadily expanding its offerings in the Palmolive Naturals as well as Palmolive Thermal resort range. To make efficient use of capital, address overcapitalisation and reward shareholders, CPIL cut its share capital from Rs 136 crore to Rs 13. 6 crore in the pecuniary ended March 2008 (FY 2008). Though the number of shares outstanding and the shareholding structure deplete remained unchanged, this reduction has substantially improved the return ratios like return on capital employed (RoCE) and return on equity (RoE).RoCE spurted to 129. 95% in FY 2008 from 90. 01% in FY 2007. RoNW improved to 104. 67% from 71. 23%. CPIL aims at coast gains through efficient supply-chain management and bringing down cost of operations. It has expanded its Baddi (tax-efficient zone), Himachal Pradesh, skill to 66,000 tonnes in FY 2009 from 40,000 tonnes in FY 2007. This plant enjoys excise and income-tax exemption. These benefits willing boost margin. With most commodity prices falling, CPILs raw material, packing and transport costs will also come down, helping it to increase margin as also expand ad budgets to boost volume growth.Net sales increased 16% to Rs 863. 06 crore in the half ye ar ended September 2008. Operating boodle margin declined 96 basis points to 18. 9% and operating profit grew 10% to Rs 162. 95 crore. Total tax outgo fell 11% to Rs 28 crore, which lifted net profit 17% to Rs 135. 40 crore. Company previse CPIL to register EPS of Rs 19. 7 in FY 2009. The share price trades at Rs 405. P/E is 20. 6. Cost of advertising incurred by colgate toothpaste in different years. blotto rural off take for FMCG products and Colgates expanding market shares in oral care suggest that the company could sustain strong topline growth over the next 2-3 years.Colgates profit growth may outpace sales growth, as it widens its product mix and lowers tax incidence by alter more of its production to tax- bountiful zones. At the current market price, the wrinkle trades at about(predicate) 19 times its expected earnings for 2008-09 and about 16 times expected earnings for 2009-10, at par with FMCG peers. The companys strong cash coffers, rising dividends and high divid end yield also make the stock a good defensive pick in a volatile market. Colgate Palmolive India, which holds a 49. 2 per cent market share in toothpastes and a 35. 2 per cent share in toothbrushes, is the captain player in the Indian oral care market.Oral care products birth seen strong volume growth over the past year, set by consumer upgrading (from toothpowder to paste) and strong rural offtake. As the only other FMCG company apart from Hindustan Unilever to have an extensive rural distribution network, Colgate appears well fixed to capitalise on strong rural demand for FMCGs, which is being driven by buoyancy in rural incomes and spending power. In the past year, Colgate has been able to expand its oral care market share on the back of new product launches and a strong presence in the economy segment where rival Hindustan Unilever does not have a major presence.Given its dominant market share, Colgate enjoys considerable pricing power to pass on input cost increases to c onsumers. The company has also made attempts to widen its comparatively narrow product basket through an entry into shower gels and body washes and has been steadily expanding its offerings under the Palmolive Naturals as well as Palmolive Thermal Spa range. Shower gel is a high growth segment which offers superior profit margins. Colgates strategy of shifting from outsourcing to own manufacture of products and kettle of fish new facilities in tax- complete zones, has also led to steadily meliorate profitability.Its operating profit margins have moved up from 17-18 per cent to 22 per cent over the past 3 years. The company closed the social club months ended December 2007 with a 14-per cent growth in sales and a 30-per cent growth in net profit (excluding one-off items), patronage significantly higher advertising spends. COMAPANYS SALES IN proceed 3 YEARS Amounts spend by all toothpaste brands on advertisement (InRs. Crs. ) From the above data we can say that Colgate gives prefe rence to TV media and very small share of advertisement budget is spent on fool media Toothpaste penetrationTalking about penetration Colgate concentrates more on urban India, so there is scope to expand business and market share in rural India . Cost of advertisement incurred by different toothpaste brands Even when we will compare Colgate with its competitors in terms of amount spent on marketing we can see that we can clearly see that colgate is the one who spends highest amount on advertising i. e. 40 % of entire market spending on advertisement. contention who stood second in spending is PEPSODENT . PEPSODENT spends 22% on advertisement capturing 22. 8 %of the total market share. Followed by CLOSEUP whos is third inProduct mix Strong odontiasis Decay defense Colgate Strong Complete 12 Hr Protection Colgate Total Cooling Crystal Freshness Colgate Max Fresh fresh Breath Colgate Energy Gel Plaque &Removal Colgate herb tea Total Oral Care Colgate Cibacea Stains Preventing & Shiny Colgate Advanced colour Germ Fighters Colgate Salt Fruity Bubble Gam Flavour Colgate Kids bell mixed bag The Regular segment Volume(64,922 tons) The Low price point segment Volume(21,641 tons) Price Range Price Range 50 gms Rs 12. 5-24 50 gms Rs. 8-10 nose candy gms Rs. 25-30 100 gms Rs. 4-20 150 gms Rs. 35-45 150 gms Rs. 25 Prominent brands Prominent brands Colgate Pepsodent Close-up Meswak Dabur Red Colgate Cibaca Babool linchpin Ajanta Place mix * Colgate palmolive spread all over country. It has 3. 5 gazillion retail outlets and 4235 direct distribution channel. * It has cover 75 % of urban market and 39 % of rural market of its total market share. * Colgate toothpaste are unattached at all most every retail shops in pune. * The Company is tying up with initiatives like E- Chupal and Disha to further strengthen its distribution network. Shubham Enterprises * Add. 16 no. , New kalebari, Meera complex ground floor p une (411033) Dealer margin 10 Rs (per carton) Retailer margin Per lash 6 7 Rs. (Per box ) box 50 gm. 24 piece box 100 gm. 12 piece box 200 gm 6 piece publicity mix * Colgate has use various promotion strategy like discount , offers such as 20% extra on colgate strong , free tooth brush with cibaca toothpaste . * It has adopted various medium of advertisement like TV ads, oral care campaign * It has tied up with IDA * It has given free check up by introducing oral health month.Steps taken sectionalization * CPIL has segmented market on the basis of product features * 1 geographical segmentation * Rural area Colgate herbal &Cibaca toothpaste. * Urban area Colgate Gel ,Colgate max fresh, Colgate strong etc. Demographic segmentation * A) season 2 year & above * B) Gender M/F * C) Income Rs. 5000 & above * D) Family life cycle Young single, married, with pip-squeakren , old people * E) Education Both educated on non educated people Psychographic Segmentations * A) keep style * Sustainer Colgate Strong Colgate dental Achiever Colgate energy gel * Experimental Colgate citrus blast * Health Conscious Colgate herbal behavioural Segmentation * A) Value segmentation Good quality , benefits, value for money* B) User status Regular user, first time * C) Loyalty culture medium , strongly * D) Uses rate light & Medium Targeting * Company has mainly targeted children& youth all over the country . Since a child involves its whole family so their parents also use it. * For youths they have launched Colgate max fresh & Colgate energy Gel for modern & adventures generation. locating As the dental expert Colgate has identified different oral needfully and Offers the customer a toothpaste that full fill their desired needs. * It has established its brand image in customer mind so customer has total faith on it. Conclusion & Recommendations * CIPL is doing extremely well in all the areas of its operations and this is the reason for its being the market leader. * It is no. 1 brand of toothpaste in India it has capture more than 39% market share. * The company should focuse on more promotional strategies and Distribution system through effective SCM to beat its competitor .