TOPIC: DISTRIBUTION PLAN OF

“COLGATE TOOTHPASTE”

BY

RANJAN KR.MISHRA
JKBS/PGDM/057
 INTRODUCTION

Colgate-Palmolive Company is an American

diversified multinational corporation focused on the
production, distribution and provision of household,
health care and personal products, such as soaps,
detergents, and oral hygiene products (including
toothpaste and toothbrushes). Under its "Hill's" brand,
it is also a manufacturer of veterinary products. The
company's corporate offices are on Park Avenue in
New York City, across from the Waldorf Astoria. In
India, it operates under the name as Colgate-Palmolive
(India) Limited and its head office is at Mumbai.
 … contd.

1806, William Colgate, himself a soap and candle

maker, opened up a starch, soap, and candle factory
on Dutch Street in New York City under the name of
"William Colgate & Company". After his death, the
company was renamed as “Colgate & Company”. In
1928, Palmolive - Peet bought the Colgate Company
to create the Colgate – Palmolive - Peet Company. In
1953 "Peet" was dropped from the title, leaving only
"Colgate - Palmolive Company", the current name.
 … contd.
Colgate-Palmolive has long been in fierce competition
with Procter & Gamble, the world's largest soap and
detergent maker. In 2005, Colgate sold the
underperforming brands Fab, Dynamo, Arctic Power,
ABC, Cold Power and Fresh Start, as well as the
license of the Ajax brand for laundry detergents in the
U.S, Canada and Puerto Rico, to Phoenix Brands, LLC
as part of their plan to focus on their higher margin
oral, personal, and pet care products.
In 2006, Colgate-Palmolive announced the intended
acquisition of Tom's of Maine, a leading maker of
natural toothpaste, for US $100M. Tom's of Maine was
founded by Tom Chappell in 1970.
 SEGMENTATION
Colgate toothpaste products can be divided into segments catering to the
needs of the consumers. The following is the basic way of segmenting the
toothpaste products:
  
 COLGATE DENTAL CREAM: It helps cleaning breath and guards teeth
from tooth decay. This is for the general people and for family use.
  
COLGATE TOTAL 12: This product of Colgate has decay preventing
dentifrice, prevents gingivitis, reduce formation of plaque and tartar above
gum line. This is especially helpful for protecting teeth enamel and all round
protection of teeth. Focus of this product is upon the hygiene conscious
consumers and patients who are suffering from gum problems.
  
COLGATE SENSITIVE: This product prevents nerve ends; provide
effective relief from pain of sensitive teeth and gently whitens the gums.
This product targets the hygiene conscious customers and also the patients
who are suffering from serious teeth and gum problems.
 … contd.

COLGATE MAX FRESH: The gel properties of this product of

Colgate gives freshness along with protection. This product specially
targets the young generation who avoids bad breath and inculcate
the word “freshness”.
 
COLGATE KIDS TOOTHPASTE: This product helps to prevent
tooth decay of the kids. This product is specially designed for the
kids.

COLGATE FRESH ENERGY GEL: This product of Colgate has the

freshness which gives freshness and energy to the user and helps to
avoid bad breath. This product targets the young generation who
prefers freshness.
 … contd.
COLGATE HERBAL: This product contains herbal ingredients for
white teeth and freshness which removes bad breath and removes
plaque. This product is designed for the people who believe in
ayurvedic products and avoid using strong chemicals.
 
COLGATE CIBACA FAMILY: This product is designed as a
complete family dental cream. The product targets all age groups and
all types of consumers, basically, the rural and township areas with
low per capita income as well as urban areas.
 
COLGATE ACTIVE SALT: This product is popularly known as
everyday family toothpaste, combined with minty taste with a dash of
salt for a unique brushing experience. The product is designed for
individuals who trust natural element like salt as a tooth care
ingredient.
 TARGET MARKETS
Colgate has the whole toothpaste market as its target market.
Being one of the oldest varieties of toothpaste, the Colgate Dental
Cream has been marketed as a synonym for toothpaste. Colgate
Total 12 claims to provide a 12-hour protection from germs.
Hence, this variety of Colgate toothpaste is targeted at the
educated, urban people who brush their teeth twice. Colgate Max
Fresh, with its multiple flavours, seems to target the youth. It also
associate brands like iPod and sports like Kayaking with it through
the means of gifts / prizes which further enforces the belief that
Colgate Max Fresh is for the youth. Colgate Kids toothpaste is
clearly, as even the name suggests, targeted at kids. The
advertisements and packing of the toothpaste further suggests that
it is meant specifically for the smaller kids.
 …contd.
Colgate Fresh Energy Gel is clearly aimed at the youth. Its sleek
toothpaste cover and the picture of a young couple on it
unambiguously emphasize this point. Colgate Herbal targets the
traditional and the naturalist market which is pretty apparent from
the name as well as the tagline “Strong teeth, healthy gums,
naturally” and the use of squirrel as the central character in its
advertisements. Colgate Advanced Whitening specifically
targets people with plague problems as the toothpaste claims to
provide whiter teeth within 14 days. Colgate Active Salt
toothpaste targets customers with orthodox thinking who believe
that salt is good for teeth. Colgate Cibaca is a product for the
economy segment. The target market is basically the rural and
township areas with low per capita income as well as urban areas.
 POSITIONING
Colgate Dental Cream positions itself as toothpaste that has the necessary
calcium and minerals to provide decay protection, strong teeth, germ
protection and fresher breath. Lately, with competition from indigenous
“vegetarian” toothpastes, Colgate Dental Cream has also positioned itself as
an “always 100% vegetarian” toothpaste. The tagline of is advertisements,
“Trusted by generations to make teeth stronger”, clearly aims to position
the Dental Cream as a toothpaste that has been used over generations and
hence creating a kind of emotional attachment with the toothpaste. Colgate
Total 12 have been projected as the “most advanced toothpaste” that
provides 12 hour germ protection even after eating and drinking by building a
protective shield around the teeth. It also tries to position itself higher in terms
of reliability of its claims by telling the consumers that its formula is a patented
one and the toothpaste is the most recommended one by the dentists.
Colgate Max Fresh positions itself on the basis of “freshness”. The tagline “A
new dimension of freshness” brings home this very point. Colgate Kids
Toothpaste tries to position itself based on emotions which is apparent in its
tagline “Makes fighting cavities fun”.
 …contd.
It also provides the names of familiar cartoon characters like Tweety and
Bugs Bunny to the various flavors that it markets and hence associating
the tastes with the feelings of kids towards these cartoon characters.
Colgate Fresh Energy Gel, as the name itself suggests, basis its marketing
strategy on the toothpaste providing “freshness”. It positions itself as a
“gel” (note that here it tries to differentiate itself from a toothpaste) for fresh
breath and strong / white teeth. The emotional positioning of Colgate Fresh
Energy Gel is implicit by the way of the photo of the couple on the
toothpaste pack and in the advertisements. It obviously wants to strike a
chord with the young, and also the budding, couples of the country.
Colgate Herbal positions itself based on basically only one attribute, i.e.
being herbal. The Colgate Cibaca Family Protection toothpaste positions
itself in a very standard way by claiming to provide strong teeth and
fresh breath. Colgate Advanced Whitening toothpaste has a very unique
positioning as it is very focused on specific attributes like restoring
natural whiteness, preventing stains from adhering and fighting
plague. The Colgate Active Salt toothpaste positions itself alongside the
other toothpastes that claim to fight gums and result in healthy gums and
teeth.
 THE PRODUCT

Various Brands of Colgate toothpaste are as follows:

 
Colgate Dental Cream
Colgate Total 12
Colgate Sensitive
Colgate Max Fresh
Colgate Kids Toothpaste
Colgate Fresh Energy Gel
Colgate Herbal
Colgate Cibaca Family Protection
Colgate Active Salt
VARIOUS TYPES COLGATE TOOTHPASTE
 PRICE
Sl.
PRODUCT PRICE
No.
20 gram–Rs. 5/-, 40 gram–Rs. 10/-, 50 gram–Rs.
1. Colgate Dental Cream
14/-, 100 gram–Rs. 30/- and 200 gram–Rs. 50/-
2. Colgate 12 150 gram–Rs. 62/-

3. Colgate Sensitive 100 gram–Rs. 58/-

150 gram–Rs. 50/- (Both Blue and Green
4. Colgate Max Fresh
Flavours)
5. Colgate Kids Toothpaste 150 gram–Rs. 48/-
50 gram–Rs. 15/-, 100 gram–Rs. 32/- and 200
6. Colgate Fresh Energy Gel
gram–Rs. 58/-
7. Colgate Herbal 100 gram–Rs. 29/- and 200 gram–Rs. 54/-
50 gram–Rs. 10/-, 100 gram–Rs. 17/- and 200
8. Colgate Cibaca Family Protection
gram–Rs. 27/-
9. Colgate Active Salt 100 gram–Rs. 29/- and 200 gram–Rs. 54/-
 PLACE
Colgate is sold over almost all the retail outlets of India
viz., Kirana stores, supermarkets, medical shops, co-
operative stores, etc. It is well-distributed through the
supply chain of company distributors to wholesalers to
retailers to final consumers. All the products are
available in the all-India market, including semi-urban
and rural markets which are their primary focus areas.
 
But the various varieties of Colgate are not so easily
available other than in the oral care outlets or super
markets. The small tubes of Colgate are also available in
small road-side shops and from the vendors.
 PROMOTION
Colgate normally gives out small product samples at
annual events like “Oral Health month” to remind target
consumers, especially kids to take better care of their
teeth after eating sweets. This method does not drive
strong results as most consumers tend to forget the
message, even if they have collected the samples. Now,
instead of giving away product samples, Ice cream and
cotton candy were given out. The stick carrying the ice
cream and cotton candy carries a hidden message.
Once consumers are done the message printed on the
tip of the stick shaped like a toothbrush reveals “Don’t
forget” with the Colgate logo. This simple message
effectively reminded consumers to brush their teeth.
 …contd.
Advertising of Colgate products is basically done through television
commercials. Famous personalities like Sunny Deol, Viveik Oberoi,
Virendar Sehwag, etc. had been associated with this brand in past
for a quite a long time. Sales promotion is not done at the retailer
level, apart from possible recommendation by the shopkeeper.
 
 The company has backed its products with a very strong distribution
network. The company’s distribution network covers 940 direct
accounts and 3.8 million retail outlets. Colgate is the 2nd most
widely distributed product in the country. The company is tying up
with initiatives like EChoupal and Disha to further strengthen its
distribution network.
  
Over the years, Colgate has been able to develop strong brand
equity. It has been voted the “The Most Trusted Brand” in the
country for 3 consecutive years in the AC Nielsen Brand Equity
Survey.
CRITICAL ANALYSIS (SWOT ANALYSIS)

The potential
 
As per estimates, 12.2% of the total world population lives
in rural India. Currently, only a small portion of region has
been tapped. Although, expansion in rural areas requires
huge investments, it is a market that cannot be overlooked
and has huge potential. In India, urban per capita
consumption is 153 gms whereas rural consumption is a
mere 38 gms.
Competition
 
The company has been facing immense competition from organised
as well as unorganised players. In the late 1980s, Hindustan Lever
used the novelty element in gel toothpaste to make steady inroads
into Colgate's dominance in the oral care market. Its gel toothpaste,
Close-Up helped HLL become the second largest paste brand;
posing a stiff challenge to Colgate. However as the novelty of gel
toothpastes wore off, HLL renewed focus on its other brand
Pepsodent to help it protect its turf. Its attempt at offering a low priced
brand Aim was not completed and the brand was subsequently
pulled back after launching it in early 2000. Both Close Up and
Pepsodent have a combined market share of 30% The current
brands offer distinct propositions; Close Up addresses the youth with
new benefits and value-driven propositions, whereas Pepsodent is
firmly entrenched on the family health platform with variants catering
to oral health.
Concerns
 
The company has high reliance on a single category (Oral Care),
which accounts for 94% of its sales and 98% of its profits. A large
part of the company's product folio consists of premium products,
which do not have a large potential market in India. This is evident
as new launches by the parent in India have been much lower than
other markets. Colgate cut prices of its products. The company has
been able to increase its margins by continuously cutting
advertising expenses, which cannot go below a certain point, owing
to its single product dependence.

In conclusion, the company is likely to see continued bottom line

expansion over the next one year owing to tax benefits and
operating leverage but revenue growth will remain challenging. As
of now, Colgate is not among our top picks in the FMCG space.
 CONCLUSION
India is still a nascent country in dental hygiene, with the majority
of the population still not having access to modern dental care
but relying on substances like coal ash and neem sticks. As the
penetration level of the rural segment is at a low of 30 percent,
this means that only 200 million of our 740 million rural
population use toothpaste. In India, per capita toothpaste
consumption stood at 74g in 2005, which is amongst the lowest
in the world, compared to 350g and 300g in Malaysia and
Vietnam respectively. Toothpaste enjoys a country wide
penetration level of 50%. The penetration levels of dentifrice in
the country have been on an upward trend over the last few
years driven by strong improvements in toothpaste penetration.
With the huge consumer base waiting to be tapped and the
expected rise in purchasing power as the economy picks up, oral
hygiene in India may receive a fresh lease of life.
THANK YOU…