Gross universe merchandise up 2. 5 % in 2005. following two old ages of & lt ; 1 % growing. Overall emerging market economic systems detonating ; + 10 % GDP growing in China and + 6 % growing in Latin America. Political values in emerging markets may do it hard for foreign competition to come in market without domestic spouse and / or ; foreign investing & A ; market variegation less attractive( import / export duties ) . Situational Analysis Situational Analysis Industry Purpose of the Oral Personal Care industry is to forestall dentitions and gum diseases and present decorative benefits. Scope of the industry includes toothpaste. floss. oral cavity rinses and toothbrushes. Industry Definition Competition
Colgate has dominant market value portion in China ( 32 % ) and Mexico ( 82 % ) . China market fragmented with Colgate & A ; P & A ; G stand foring 53 % of portion. Situational Analysis Industry Product Development growing scheme with launches of premium grade trade name extensions Crest Whitening Expressions ( US ) Crest With Scope ( US ) . Colgate Icy Fresh ( China ) . Crest Cool Expressions ( MX ) .
Brand Position: Competition Strategy ( P & A ; G )C+S = toothpaste + gargle + whiteningCWE / CCE = spirit + toothpaste + whitening
Entering Emerging Markets under its Crest trade name without JV spouses. Leveraging x-brand graduated table with Crest + Scope.Built its trade name around curative benefits. while decorative benefits market turning fastest in Emerging Markets. Introducing in decorative section ; a historic Colgate fastness. Heavily invests in advertisement behind new merchandise launches. Situational Analysis Growth Market Strategies Porter Five Forces Analysis Global Oral Personal Care Colgate Palmolive Oral Care SWOT Analysis Situational Analysis Marketing Strategy Pricing: Positioned as a super-premium trade name. monetary value para to Crest Cool Expressions ( 14. 99 – 15. 99 pesos ) . Marketing Budget: $ 2MM selling budget aimed to drive test through in-store selling. sampling. and public dealingss. Corporate Marketing Strategy Aims
Colgate Max Fresh ( CMF ) Mexico Marketing PlanStrategicGrowth driven by high border nucleus concern.Ad focused on high border merchandises and high potency markets. Innovation driven: 40 % of gross revenues from merchandises launched in past 5 old ages. TacticalGrowth Strategy: Merchandise Development ; Super Premium sectionGrowth Targets: China 2 % YR1. 2. 8 % YR2 ; MX 5 % YR1. 6 % YR2 value portion. Will require trading up consumers. Value Proposition: CMF would drive new dimension of freshness Target Market: Geared towards 18-34 yr. old grownups ( female oriented ) ; augment Colgate’s strong competitory place in Value & A ; Mid-Tier. Situational Analysis Marketing Strategy
Will US developed media programs translate?Can Colgate efficaciously trade-up consumers?What impact will cannibalization hold on profitableness?Is market big plenty in Mexico for premium sections?Will benefits of CMF convey to Mexico consumers?
BASES testing and Consumer Viability Index showed fringy promise. . CMF Marketing Concerns for MexicoSymptoms of Colgate Palmolive’s Primary Problem Emerging Market consumers are monetary value sensitive Crest assailing decorative sectionConsumers experiment through test vs. big initial purchase Despite Growth in cardinal countries Colgate-Palmolive runing net incomes and net income are down. +6. 5 % unit volume growing+7 % gross revenues dollar growing+0. 1 % growing in gross net income border-2 % Operational Net income-7 % Net IncomeTo drive growing Colgate-Palmolive is looking to concentrate on higher border nucleus concerns. Core Elementss of the Strategic Problem In the US toothpaste market CP is seeing a 3. 1 % addition in volume of gross revenues attributable to the Super Premium Toothpaste Category.
Global Strategic Opportunity exists in the Premium Toothpaste market. Represents $ 75 M gross revenues dollar addition and entire market cap of $ 409. 5 M dollars Merely the Premium Toothpaste Category is turning at a significant rate.
In 2004 CP captured ~60 % of that Gross saless Dollar Increase in the US mostly dues to the debut of Colgate Max Fresh.
In order to go on to turn CP must happen a manner to develop their Premium Toothpaste merchandise CMF in emerging states. Colgate Palmolive’s Primary ProblemWould the costs of following CMF in each new state provide sufficient incremental gross revenues and net incomes to warrant the added complexness of localised selling and rollout programs associated with those new markets. Colgate-Palmolive must go on to globalise its Premium Toothpaste Strategy. Any solution must equilibrate they cost of localisation with the expected gross revenues and net income addition for each new market. Besides it is in Colgate-Palmolive’s best involvement to develop reclaimable guidelines as it approaches other new markets similar to China and Mexico. Colgate Palmolive’s Secondary Problems
Type 1: Establish a tactical selling program for the CMF rollout in an emerging market where Colgate-Palmolive has little antecedently established presence ( China )
Type 2: Establish a tactical selling program for the CMF rollout in an constituted market that has high rival activity ( Mexico ) . In order to set up an effectual planetary scheme two types of secondary jobs must be solved in the Colgate Max Fresh Case Study: Any solution must equilibrate they cost of localisation with the expected gross revenues and net income addition for each new market. Secondary Problem Detail Need to present a merchandise to force Colgate-Palmolive profitableness Colgate has worldwide portion. the lone manner to spread out is to drive high border concern. China ( new markets ) have strongly entrenched local trade names.
Colgate Max fresh will necessitate to vie with its ain joint venture trade name Darlie ( High End ) . Due to new merchandise debut at the Super Premium Toothpaste Market rival Crest has 3 % growing twelvemonth to twelvemonth. Colgate Equity Brands have been dead for 3 old ages. CP is non merely fring out on possible net incomes but besides easy fring market portion to its # 1 rival. Market is unfamiliar with CMF “breath strips”
US Marketing Video will be uneffective due to the US Star involved. Is it deserving making new famous person backed selling content? Will the Go Big or Go Home scheme work in China and other similar markets? How can Colgate-Palmolive best enter the Chinese Market with CMF. China
Secondary Problem Detail Colgate-Palmolive knows P & A ; G will be presenting Crest Cool Expressions ( CWE ) in Mexico in the close hereafter. CO must develop the best selling program to stunt P & A ; G Crest Cool Expressions while protecting their overpowering market portion. 82 % Value portion for Colgate-Palmolive
CP needs to make a selling program to present CMF with limited budget and maximise regional public-service corporation. Due to CP’s big built-in market portion. the end of the Mexican run will be to maximise the merchandise funnel. There is a big chance nowadays to upsell clients from the Big Red Brand toothpaste to the new CMF toothpaste. Mexico See Exhibit 17 –
Will waiting to present CMF until after the CWE merchandise debut change the company estimates of profitableness? Can the Mexico Snowsurfer commercial be better standardized for planetary selling programs? Traveling frontward how will CP use this selling program for future markets? Colgate-Palmolive Company Alternatives Locally make the clear bottle Works for China. non Mexico China
Allows for easiness of enlargement of the Colgate Max Fresh trade name in clear bottle to other regional venues Besides. provides future capablenesss for usage in other new merchandises Problems:This does add 20 % variable cost to CogInitiates a 6 month hold on production$ 1. 5 M sunk cost before productionOptions Colgate-Palmolive Company AlternativesRegional Market OptionsMexicoChinaColgate-Palmolive Company Alternatives Provide more test handiness with the smaller bundles to rock more to give CMF a attempt CMF has the breathstrips or “cooling crystals” within the toothpaste. hence bundle the breath strips bundle with CMF to construct consciousness. Stop using famous persons to advance CMF
Provide regional spiritsKeeps merchandise as a premium merchandiseCost of $ 200. 000 per spiritHas shown assuring results in other partsIn China. Crest utilized a tea spirit and Colgate a salt spirit In Russia. after let go ofing a local spirit. the toothpaste market portion rose from 11. 8 % in 2002 to 24. 9 % in 2005. Colgate-Palmolive Company Alternatives Allows for greater distinction between the CWE toothpaste In Mexico. drop the monetary value from 15. 99 pesos to 14. 99 pesos to protect a greater portion of CP market portion. In Mexico and other markets CP is extremely entrenched in. utilize clear bottle In Mexico. Keep the monetary value at 15. 99 pesos
Implementation Strategic Vs. Tactical Plans The strategic program traveling frontward for emerging markets will be to utilize an easy customizable commercial and adapt it to multiple states Colgate is the dominant toothpaste trade name universe broad. so our primary end will be to forestall Crest from deriving market portion and besides to upsell our bing clients to the ace premium section We agree with the determination to utilize a famous person commercial in China due to the size of the market portion the Crest is cultivating Each part and civilization has a different set of values and penchants Each part will hold a alone tactical program to maximise effectiveness Jay Chou Colgate Max Fresh Commercial Implementation in China Distributing the toothpaste in clear bottles to construct trade name consciousness Colgate-Palmolive has invested a big sum of capitol in the Max Fresh selling run Maximize the return on investing by:
Passage to less expensive packaging once consumers are familiar with merchandise Include breath strip samples with Max Fresh tooth paste in selected markets Snowsurfer Commercial ( English Dub ) Implementation in Mexico Our schemes in Mexico will be really similar to our program in other emerging markets Focus will be on continuing our market portion alternatively of new growingUse clear bottle and breath strip samples in choice markets to increase trade name awareness Colgate histories for 82 % of entire market portion compared to 10. 2 % of Crest’s entire market portion Crest + Scope merely accounts for 3 % of entire market portion
Set monetary value at 14. 99 pesos per 100 milliliterWe will re-evaluate our Colgate Total ( 19. 36 pesos per 100 milliliter ) selling run to concentrate on the flush 40+ age group to minimise cannibalization Implementation in Brazil Characteristics of the Brazilian Market 71 % of Brazilians agree that “music is an of import portion of my life” 33 % have participated in trips to the beach in the last 30 yearss 76 % agree that “it is of import to be attractive to the opposite sex” 65 % agree that “it is of import to maintain immature looking”
32 % express the desire for plastic surgery in order to better their visual aspect
Statisticss from Geoff Wicken. KMR GroupTactical Strategy Brazil Vollyball is the 2nd most popular athletics in Brazil To go a patron on the FIVB circuit. we must use by July 31. 2006 Update packaging to include “Made in Brazil”The busy season in Rio De Janeiro December to March. so we recommend kicking off a median selling run in October 2006 This will give Colgate-Palmolive a opportunity to measure the success of the BreathStrip samples in China and Mexico If we do non see the return on investing we will non include the promotional packaging in Brazil Brazilians place a high accent on being attractive to the opposite sex. which means there could a enormous chance to market Colgate Max Fresh as a merchandise that will whiten dentitions and do you more “kissable” Adapt the SnowSurfer commercial to the Brazilian market
Sponsor a national beach vollyball tourneyConclusion Colgate-Palmolive is actively seeking ways to increase their operating net income and net income Introducing new high border merchandises to emerging markets will be critical to their success Selling Colgate MaxFresh as expeditiously and efficaciously as possible will be necessary in assisting us accomplish our fiscal ends