Colgate Max Fresh: Global Brand Roll-Out Essay
Nigel Burton, the president of global oral care at Colgate-Palmolive Company (CP), is reviewing market launch plans for a new toothpaste, Colgate Max Fresh (CMF) by CP’s Chinese and Mexican subsidiaries. Both launch plans involved departures from the CMF marketing program for the USA launch six months earlier. Burton must decide whether the costs of marketing program adaptation in China and Mexico can be justified. “Was CMF launched in the U. S. with a global marketing program? If not, what aspects were not transferable? ” The reality is that the U. S. Marketing team took little or no account of the global transferability of their program. They simply sought to develop the best possible marketing program for the U. S. This becomes apparent once the Mexico launch is introduced. The U. S. advertising was, most obviously, country-specific because the celebrity, Emily Proctor, was not known outside the U. S. CP dominates Crest in Mexico so any new CP product can probably obtain distribution. CMF is not essential to the Mexican portfolio but is being launched to block new products from Procter & Gamble CP’s market position in China is more similar to the U. S. than Mexico.
CP and Procter & Gamble are in a battle for market share leadership. The marketing adaption costs for the CMF launch in China are much larger than in Mexico. “What are the various costs and benefits that a multinational company must live with when new product launches are delayed around the network? ” To the opportunity costs of lost sales on the product in question should be added the knock-on launch delays that the next new product and the one after that may also suffer. Assess the CMF launch in the US. CP’s launch of Total in 1998 enabled it to regain share leadership in the U. S. from Procter & Gamble’s Crest.
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Total was, like Crest, targeted at consumers who were more concerned with deriving therapeutic value than cosmetic benefits from their toothpaste. CP risks losing control of the high ground, dangerous for a category share leader. CP was therefore under pressure to launch a new product with cosmetic benefits. Exhibit 2A shows that 63% of consumers (equal second in frequency) rate “freshens breath” as a “must have”. The concept of CMF (Exhibit 3) focusing on providing consumers with “a whole new dimension of freshness” seems highly relevant. The prime target market is young singles and this is reflected in the selection of Emily Procter.
There is no indication in the case that U. S. CP mangers considered the possibility of a worldwide roll-out when they developed the U. S. marketing program – Emily Procter is unknown outside US + breath strips were very much a U. S. phenomenon so it was not obvious that a new product based on mini breath strips, as the reason to believe, would travel across borders anyway. Were China’s changes to the CMF marketing launch program justifiable? In China, CP and Procter & Gamble were locked in close combat for share leadership in one of the world’s fastest developing and largest toothpaste markets. Unlike in the U. S. Crest Whitening Expressions and Crest + Scope had not yet launched in China. CP China therefore had time to “get it right”. They had to adjust the U. S. marketing program in China. Emily Proctor, the U. S. actress, was unknown. The Chinese had no experience of breath strips. They also had distinct flavor preferences. CP managers in China felt that they “needed to connect with youth at an emotional level” since freshness was a relatively new concept in toothpaste and breath strips were unknown. They therefore changed the name to Icy Fresh in the concept statement, described breath strips as “cooling crystals” (limited appeal in the winter.
The management challenges were the delays to the market launch date caused by the various adaptations. In some cases, such as the packaging, the delays were unanticipated and perhaps the incremental benefits achieved did not justify the opportunity costs of the delays. In the end, the china launch occurred twelve months after the U. S. roll-out in August 2005 Did CP Mexico manage its launch better than CP China? CP dominates the toothpaste category in Mexico and, therefore, can probably secure distribution for any new product in its portfolio.
This is reflected in the comparative income statements which show CMF losing money in China in the first two years after launch while making money from year one in Mexico. Though not under pressure from Crest in the Mexican market, it was prudent for CP Mexico to preempt Procter & Gamble by launching CMF ahead of Crest Cool Explosions and possibly Crest + Scope. CP Mexico accepted the CMF brand positioning concept as developed for the U. S. Adaptation efforts centered on the necessity of developing new television advertising. Instead of using a local celebrity, their Snowsurfer ad (Exhibit 18) focused on the brand.
How would Burton prioritize additional countries in the global CMF roll-out? Ideally, he would probably favor countries with: A large overall market size A well-developed interest in the toothpaste category A tight race between CP and Crest A growing cosmetic segment A familiarity with breath strips A committed country manager and marketing team Who are not interested in overtesting further adaptations and /or reinventing the wheel. What are the costs and benefits of adaptation? • The out-of-pocket costs associated with new advertising, new packaging, additional market research etc. The opportunity costs of delayed launches while marketing program adaptations are being finalized. • Opportunity costs associated with launch delay for subsequent new products if adaptation causes a delay in the roll-out of the first one. • The administrative complexity costs associated with developing and overseeing adapted programs in each country. • Trademark registration inefficiencies and extra costs if multiple sub-brands have to be registered. • inventory and working capital requirements of the global supply chain are greater.
Adaptation may also bring the following qualitative benefits: Recruitment, motivation and retention of higher quality marketing personnel if they have responsibility for designing the local program Multiple country adaptations early on that lead to the identification of a “hit” strategy that may then be adopted by other country subsidiaries as part of their launch programs. It is also relevant to note that the toothpaste consumer in one county is unlikely to care whether the same product is being bought by consumers in another country under a different brand name or with a different product formula.