PROJECT REPORT
COLGATE MARKETING STRATEGY
Submitted to:
Prof. Anirban Som
On
September 22, 2021
In
Partial fulfillment of the Marketing Management course
Post Graduate Programme in Management 2021
Submitted By:
Section: HR
Group: 04
Gaury K- 2104008
Jibin C Varghese- 2104010
Siddharth Mohapatra- 2104019
Marru Vinod Kumar- 2104030
R Logithkumar- 2104034
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TABLE OF CONTENTS
INTRODUCTION 3
1 SITUATIONAL ANALYSIS 3
1.1 Porter's Five Forces Analysis 3
1.2 BCG matrix 4
1.3 Growth Strategy 4
2 SEGMENTATION AND TARGETING 4
2.1 Segmentation 4
2.2 Geographic Segmentation 5
2.3 Demographic Segmentation 5
2.4 Psychographic Segmentation 5
2.5 Targeting 5
3 POSITIONING 6
3.1 Positioning Statement 6
3.2 Value Proposition 6
3.3 Perceptual Map 6
3.4 Current Perceptual Map 6
3.5 Future Perceptual Map 7
4 PRODUCT 7
4.1 Core Product 7
4.2 Augmented Product 7
4.3 Branding 7
4.4 Packaging 7
5 PRICE 7
5.1 Value based 7
5.2 Skimming Pricing 8
5.3 Price-elasticity consideration 8
6 PLACE 8
6.1 Marketing Channel 8
6.2 Direct Channel 8
6.3 Indirect channel 8
6.4 Distribution Intensity 9
7 PROMOTION 9
7.1 Consumer Behavior 9
7.2 Message 9
7.3 Integrated Marketing Communications 9
7.4 Push Strategy 9
8 REFERENCES 10
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INTRODUCTION
Colgate has been in the national oral care market for 70 years, and their 4,444 oral care brands have
substantial brand value in the market. The company has traditionally been a leader in the national oral
care market, continuously relying on innovations to stay ahead of the competition.
Currently, it occupies a dominant position in the toothpaste segment, with a market share of 48% in the
domestic market. Its relative market share is 1.5 times that of the second-largest player.
1. SITUATIONAL ANALYSIS
1.1 Porter's five force analysis
1. Industry Rivalry- There is extreme competition in India's Toothpaste market with HUL, GSK,
Dabur, Patanjali, and others are vying for market share with Colgate Palmolive. Colgate still
has a market leader position.
2. Buyer's bargaining power – Toothpaste is an everyday use item, with customers having a lot of
choice and competition among the brands leading to negligible switching costs and a very
price-sensitive market. But even then, Colgate had some market power due to its market leader
position and image of credibility by being recommended by dentists. Also, due to Colgate's
innovative nature, almost all of its competitors have to contend with one product line, therefore
reducing their advantages.
3. Supplier's bargaining power- There is a dominant position maintained by the suppliers of raw
materials in the consumer goods sector, such as the toothpaste market. Here the suppliers place
a high price on the raw materials, thereby reducing the profit margin and the overall
profitability of Colgate Palmolive in the toothpaste market.
4. The threat of new entrants- There is a high barrier of entry in the Toothpaste industry in India
due to stringent regulations of the Bureau of Indian Standards (BIS). New entrants might find it
challenging to enter the market without a high initial sunk cost on all the regulatory tests.
5. The threat of substitutes- There are two factors to consider-
Internal- The internal threat consists of the company's products acting as a substitute to the
other. Colgate toothpaste has various products, including Herbal, Salt, Maxfresh, Sensitive, and
regular Strong teeth toothpaste. But since each product has a unique value proposition, it is
never a threat to one another.
External-The external threat includes all the socio-cultural, demographic, economic threats.
Essentially the "cost" of an effect causes a consumer to switch from one product to another.
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When the cost of a product is increased, consumers start preferring products of a lesser charge
and might stop purchasing the product from the company, increasing the "Churn rate. "When
there is an increase in price due to many socioeconomic factors, it poses a threat. Customers of
Colgate find switching costs to be higher for other substitutes.
1.2 BCG Matrix
The BCG matrix shows that the maximum potential for growth lies in Colgate Vedshakti and
toothpaste for diabetics. Also, we can see that in the toothpaste segment, Colgate has the most amount
of brands in the cash cow's segment. Colgate visible white and Colgate regular (strong teeth) are the
star brands currently for Colgate.
1.3 Growth Strategy: Understanding Porter's Five forces analysis and the BCG matrix of Colgate as a
whole, we found that more attention is required for Toothpaste for Diabetics and Colgate Vedshakti.
So, we are planning a marketing strategy with a particular focus on these two products. This will
strengthen Colgate's position as the market leader and leading innovator in the Toothpaste industry
while also giving a much-needed boost in the natural toothpaste segment where Colgate is lagging.
2 SEGMENTATION AND TARGETING
2.1 Segmentation: - Colgate toothpaste focuses on the entire market as a whole, rather than dividing
the markets. But Colgate also has created some products for specific segments of the market. From the
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journey of Colgate, we can see that each specialized product was designed to counter a competitor in
the market and thus maintain the market leader position. For example, the Max Fresh brand was
intended to counter Close-up's intrusion to the market or Colgate Pro-Relief to counter Sensodyne's
intrusion. In the present scenario, consumers are shifting towards natural toothpaste as the first option.
The natural toothpaste segment occupied 30% of the total sales in India in 2108. In growth terms, the
natural segment has grown five times the rate of the non-natural segment in the oral care category.
Another segmentation initiative from Colgate is the recently released toothpaste for Diabetics. India is
ranked second worldwide in the number of diabetic patients, which comes around to be 77million. This
is a vast market that is not yet focused on by any of the giants in the industry. Thus, Colgate gets the
first-mover advantage even if there are other minor players in the pond.
2.2 Geographic Segmentation: Colgate will focus on the entire market as a whole. At the same time,
we will maintain some sub-brands like Sensitive, Visible White, and Vedshakti for the Tier I
cities/premium customers. At the same time, we are retaining the sub-brands such as Max Fresh, Total
and Active Salt for everyday customers.
2.3 Demographic Segmentation: Demographically, we would be segmenting Colgate products based
on need and age. Brands such as Sensitive and Toothpaste for Diabetics are placed for the older
generation. While Visible White, Max Fresh, and Vedshakti are set for Gen X and Gen Y.
2.4 Psychographic Segmentation: Colgate follows psychographic segmentation in its products. For
example, Fresh Breath will be connected to Max Fresh Brand or White Teeth attached with Visible
White brand. Not to forget, the Colgate brand itself is perceived as toothpaste that gives you strong
teeth.
2.5 Targeting: Colgate Vedshakti is a new product that Colgate introduces. The target segment is the
consumers living in urban areas.
● They are more health-conscious
● Willing to pay for ayurvedic toothpaste
● They are open to experimentation and can be influenced more easily.
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Colgate Toothpaste for Diabetics is another new product introduced. The target is the 77million
diabetic patients in India.
● They are very conscious about dental health, as high blood sugar levels catalyze many
dental issues.
● Not an option instead of a necessity
● Previously Colgate Total was used by Diabetics patients; now, they can choose separate
brand under the same name
3. POSITIONING:
3.1 Positioning Statement: "To ensure that you have your best smile throughout the day, Colgate
offers very high-quality innovative toothpaste products made with nature's goodness to ensure all-
round protection to your teeth with no side-effects."
3.2 Value Proposition: Colgate toothpaste products guarantee to protect your teeth against cavities,
gingivitis, plaque, and tartar buildup while having endorsements by Dentists and hygienists all over the
world.
3.3 Perceptual Map: - After gauging the perception of Colgate among its competitors, we have tried
to come up with a current perceptual map and a future perceptual map defining our future positioning
aims.
3.4 Current Perceptual Map:
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Colgate has the highest brand awareness among its competitors but is perceived as a synthetic
toothpaste brand.
3.5 Future Perceptual Map:
We plan to increase Colgate's perception as a natural Toothpaste brand by focusing campaigns on
Swarna Vedshakti and Cibaca Vedshakti.
4. PRODUCT: -
4.1. Core product: The Colgate toothpaste is focused on providing a healthy smile to you and your
family members
4.2. Augmented products: Toothbrush with varying bristle designs and varieties of toothpaste
products targeted to customers with different needs, thereby maintaining the customers' oral healthcare.
Toothpaste products' effectiveness on the customer's oral health care can be improvised by utilizing a
properly designed toothbrush that satisfies the customer's need.
4.3. Branding: The current branding strategy used by the company is adequate to cover the target
market.
4.4. Packaging: The packaging of toothpaste is strictly regulated by institutions such as FDA and BIS,
thereby leaving less scope for modification of toothpaste tubes.
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5. PRICE:
5.1. Value-Based: Colgate Vedshakti and Toothpaste for Diabetics will be positioned in the premium
segment for the perceived value of toothpaste. Moreover, the natural way of producing Vedshakti will
also drive up the cost and, at the same time, the worth of the product. Thus, it is proposed to increase
the price above competitors after the initial penetration into the market to target the affluent customers
and give them a notion of a premium product. Thus, value pricing makes sense.
Quantity Dabur Red Patanjali Colgate Colgate
Vedshakti Vedshakti
(Current) (Predicted)
100g Rs 52 Rs 45 Rs 57 Rs 54
300g Rs 149 Rs 130 Rs 143 Rs 143
600 g Rs 222 Rs 255 Rs 285 Rs 285
The current pricing of Colgate may demotivate consumers from shifting from Pathanjali and Dabur to
Colgate. Thus, the price of 100g product will be reduced to slightly above both competitors while
maintaining the same price 300g and 600g options.
5.2. Skimming Pricing: We have positioned our Colgate Vedshakti product as a natural toothpaste.
Hence, we are trying to maximize our revenue from our market segment by pricing it at a premium
rate.
5.3. Price Elasticity Consideration: We initially assume price elasticity of demand to be inelastic as
toothpaste is an everyday use item. Thus, there is little change in order concerning price change.
Tactics Example
Fine-tuning of the As the product is organically produced & is having a high-quality
price according to perception, pricing a little above market price makes sense. But price
segment. should not be way above market price. Thus, considering price
elasticity to be inelastic, Rs 54 for 100g makes sense.
6. PLACE:
6.1. Marketing Channel: We plan to focus our efforts on selling Colgate Vedshakti and Toothpaste
for Diabetics by using direct and indirect channels to leverage Colgate's brand value and network to
boost sales.
6.2. Direct Channel: Colgate has always focused on developing its direct channels to increase ease of
access to the consumers. Continuing this practice, we plan to partner with dental associations, medical
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stores, and Ayurvedic healthcare associations to sell Colgate Vedshakti and Toothpaste for diabetics.
This will also strengthen the image of these two kinds of toothpaste as benefitting healthcare.
6.3. Indirect Channel: Our focus will be more on online distribution. We will mainly sell our
products through the official company site.
6.4. Distribution intensity: Intensive and Selective
We will use intensive distribution for Colgate Vedshakti as awareness and popularity of natural
toothpaste are increasing. So, more and more people need to be aware of our product. While
Toothpaste for Diabetics is a niche product, we will only release this product through limited channels
like medical stores in cities.
7. PROMOTION: -
7.1. Consumer Behavior: It was found from a survey conducted at Coimbatore district (Tamil Nādu,
India) for determining consumer behavior that almost all classes of people recognize Colgate
toothpaste irrespective of their educational background, gender, and age. It is essential to know
consumer behavior for marketing purposes to devise various methods for increasing their promotion
and reach in the market.
Another survey made in Bengaluru City (Karnataka, India) showed that almost 54% of the respondents
were only aware of this brand, not the others. The brand is recognized through its unique packaging;
people find the packaging synonym to the brand and its product.
7.3. Message: In India, the brand uses the tagline "Smile Karo Aur Shuru Ho Jao" (smile, and get
started). The brand's purpose is "Everyone deserves a future to smile about," which is similar to the
tagline used in India.
7.4. IMC: One of the critical programs that make the company stand out from the crowd is its
participation in social causes such as helping children get educated by providing sponsorships and
scholarships. Colgate recently donated $42,000 to Starlight Children's Foundation. Free dental
checkups for children and awareness on dental care through each city made the brand gain popularity.
They communicate directly to consumers through emails, brochures, texts, calls. Also, send them
coupons via mail.
7.5. Push Strategy: They use a push strategy to provide free samples in events, such as Kumbh Mela,
one of the largest gatherings of devotees, by setting up washroom services. They give free
toothbrushes and toothpaste to children. Children can influence their parents to buy the product making
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this a successful way of sales promotion. Colgate is known for its collaboration with successful
celebrities (Movie stars and Youtubers) to endorse their brand. They recently came up with a
YouTube show called "Smile Show, "where they collaborated with Influencers. They use billboards,
newspapers, YouTube ads, and pop-ups as part of their advertisement. Constant engagement with
customers through social media such as Twitter, Instagram, and Facebook is an ongoing advertisement
strategy.
REFERENCES: -
1. https://www.financialexpress.com/industry/oral-care-the-ayurvedarevolution/1349093/
2. https://www.newindianexpress.com/business/2021/mar/18/colgate-palmolive-launches-
toothpaste-for-people-with-diabetes-2278434.html
3. http://ijariie.com/AdminUploadPdf/
A_STUDY_ON_CUSTOMER_ATTITUDE_TOWARDS_COLGATE_TOOTHPASTE_WIT
H_REFERENCE_TO_COIMBATORE_DISTRICT_ijariie7308.pdf
4. https://core.ac.uk/download/pdf/288022484.pdf
5. Colgate Annual Report 2020-2021
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