Tooth Paste Market Share 2009

Colgated Dominated the market till 1980. With the entry of Competition in 1990. Market share of colgate declined gradually over the years.
33%

Tooth paste market share 2009

Colgate Palmolive HLL Balsara Others

10% 6%

51%

In 2009 market share of CPIL was just above 50%.

CPIL Performance 1996-97 to 2000-01

1200 1000 800 Sales(Rs. Crore)

Net Profit Margin

9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Net Profit margin

Axis Title

600 400 200 0 1996-97 1997-98 1998-99 1999-00 2000-01 Axis Title Net Profit(Rs. Crore)

199697

199798 7.85%

199899 4.59%

199900 4.62%

200001 5.55%

Net Profit Margin 8.21%

Profit Margin decreased over the years. During 1998-99 when market was growing at the rate of 12% but CPIL growth was in negative.

Growth Trend
Year 1996-97 Net Net Sales(Rs Profit(Rs. Profit Growth rate of . Crore) Crore) Margin sales 960.6 78.9 80 45.7 51.8 8.21% 7.85% 4.59% 4.62% 6.15% -2.30% 12.55% Market Growth Rate 12 6 growth in profit 1.39% -42.88% 13.35%

1997-98 1019.7 1998-99 996.2

1999-00 1121.2

2000-01 1126.9

62.5

5.55%

0.51%

20.66%

With the entry of competition profit margin for CPIL decreased over the years.

Actual Margin for Stockist

Shah Enterpirses-A/c CPIL Gross Margin @5% Expenses (Sep'00 to Feb'01) Rent @ 10,000pm salaries: Van drivers 2* 3000pm Merchandisers 1*2000 pm Van Depriciation 2*5000 pm Godown Rent @ 5000 pm Electricity 2000pm Interest Bank 9 @ 18% for 6 months Other 3@ 24% for 6 months Van running 2*3000 pm Total expenses Net Margin Rs Lakhs 4.35 0.60 0.36 0.12 0.60 0.30 0.12 0.81 0.36 0.36 3.63 0.72 As % of Sales 5.00% 0.69% 0.41% 0.14% 0.69% 0.34% 0.14% 0.93% 0.41% 0.41% 4.17% 0.83%

Inventory Holding
Sales in 180 days is 87 lakhs. Sales in a day=87/180=0.483 Inventory Holding Period=21 days Inventory to be held=21*.483 = 10.15 lakhs

Actual Inventory held=18 Lakhs Stockist was pressurised to held the inventory of 20 lakhs.

Problems
Expenses for stockist was very high which squeezed their actual ROI & net margin. Growth of CPIL was not in Sync with the market growth rate. Stockists were piled up with the stock. In practice considerable peaking of sales occurred towards the end of the month. 60% sales in the last week and 20% sales on the last day

 Company was spending on advertisments but were not giving adequate margins to its stockist who was key link in their distribution channel.