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Cottle-Taylor: Expanding the Oral Care Group in India



SLMT 4 || Group D1











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In 2009. However. had looked to emerging markets to offset domestic losses.S. faced with declining U. and Andhra Pradesh (where Patel had grown up)—accounted for 30% of India’s total GDP. farmers seeking higher wages as manual laborers were rapidly migrating to cities. Uttar Pradesh.16 billion. Primary Marketing Objectives • • • Securing early market share in emerging markets.2 million square miles of varied topography hosted a 2009 population of 1. While new wealth fueled improvements in urban areas. Changes in economic policy introduced in 1991 helped to shift the country away from the highly regulated and protectionist economic environment that was established when India gained independence from Britain in 1947. per day. the number of Indians living in slums (defined as dwellings with no solid roof and no on-site access to a toilet or clean drinking water) was projected to reach 8% of the population (93 million) by 2011. To achieve a toothbrush unit growth rate of 25-30% in 2010 in India. During the 1990s. Yet the distribution of newfound economic prosperity was inconsistent across India.Cottle-Taylor: Expanding the Oral Care Group in India Problem Statement Cottle’s senior management. revenues. with a median age of 25 and an annual growth rate of 1. To educate consumers from semi urban and rural areas about oral hygiene so as to increase the oral care sectors growth rate and in turn their own company's market share by being the pioneers in that field. India in 2009 Demographics and Economic growth India was the world’s largest democracy. was under pressure to deliver results. Propelled by the continual influx of rural residents to cities. foreign investors and businesses. roughly 78% of Indians (905 million) lived in rural towns and villages and 22% (255 million) in urban settings. India struggled to free vast swaths of its population from poverty. Some estimates suggested that as much as 80% lived on less than $2 per day.4%. in 2009 GDP was 146 times greater than in 1990. Its 1. The country was divided into 28 states and 9 territories. The GDP rapidly expanded as a result.25 U. Population control campaigns had succeeded in slowing growth rates to 17% for the first decade of the 21st century. and Lang. defined by the World Bank as $1. SLMT 4 || Group D1 Page 2 . abject poverty remained there as well. just three of the 37 states and territories—Maharashtra. Despite economic growth. He needed a higher unit sales and revenue contribution from India to boost his region’s bottom line. In 2009. Hindi was the primary language and English the second.S. as VP of Marketing for Greater Asia and Africa. although the number of officially recognized languages (excluding English) was 22. poured money into India. Roughly 37% (or 429 million individuals) lived below the poverty line. optimistic about growth prospects.

many Indians did not associate dental problems (such as cavities or bleeding gums) with improper oral care. charcoal. the oral care sector’s growth rate from 2008 to 2009 was 10%. tobacco. often referred to as “Nature’s Drugstore. and in rural areas a lack of skilled labor available to support dentists and technicians. efforts to institute dental insurance plans were underway by the IDA. In 2009. SLMT 4 || Group D1 Page 3 . propelled industry wide oral care growth within India. serving patients with higher incomes. A 2007 study revealed that 50% of Indians were not concerned with preventing or curing dental problems. Factors contributing to the shortage of dentists in India included the migration of Indian dentists to foreign countries for higher compensation. T h e v a s t majority of dental professionals were clustered in urban areas.000 people. free product samples. and ash. Brushing Frequency and Brush Replacement More than 50% of rural India did not use a toothbrush to clean teeth. and basic instructions for proper oral care. but instead attributed them to bad eating habits or genetics. few followed the IDA’s recommendations for brushing frequency (twice daily) and brush replacement (once every three months). Among brushers. a relatively small pool of qualified dental educators. though. A widespread practice was (and is) for Indians to chew twigs from the Neem tree. countrywide campaigns promoted by the Indian Dental Association (IDA) were designed to “inform. and just 2% visited one regularly. In 2005. the same survey also found that Indians who lived in rural areas were five times more likely to refrain from using modern oral care products than their urban counterparts. Especially in rural areas.” In 2004. According to the World Health Organization. Critical Factors The factors behind the retail of toothbrush. black salt. there was just one “dentistry personnel” (a term that includes dentists as well as dental assistants and technicians) for every 10. combined with the increasing incomes and influence of Western habits. talking in context of the Indian oral healthcare market 2009 can be numerous. the majority of Indians had never visited a dentist.Cottle-Taylor: Expanding the Oral Care Group in India Indian Oral Care Attitudes and Habits Dental hygiene had existed in India for centuries. educate and empower” citizens on oral health issues. Dental fees were typically paid out-of-pocket by patients and ranged from $10 for routine services to $500 for sophisticated procedures. Rising awareness of dental health benefits. many Indians still cleaned their teeth with traditional products like Neem twigs. Dental Professionals Overall penetration of dentists in India was low. In 2009. The IDA and its partners— including Cottle—provided free dental checkups.

Thus the following segmentations can be seen from the case – SLMT 4 || Group D1 Page 4 . Price – This is somewhat related to the above point. Availability – The majority of Cottle-Taylor India’s toothbrush consumer lived in the rural villages. They should utilize it to gain price advantage. comprising the majority of the Indian population (78% are living in villages) are extremely price sensitive. Here. the vast swaths of rural poor have no resources to afford even this basic lifestyle item. here cheap unbranded products from China and Vietnam proved as effective substitutes due to their price advantage. However the awareness and acceptance for dental care products is low and penetration of television and internet too is low. 2. With continued partnership with IDA. 2. Price competitiveness – More than 68% of Cottle Taylor India’s toothbrush sales happened to not so well to do Indians. Continuing partnership with IDA – IDA or Indian Dental Association’s campaigns are designed to educate the population about the merits of good oral health. poor infrastructure or the local population too small to be economically viable for the distributors. Awareness of oral health & Advertisements exposure – As the studies reveals. 4. Also. Cottle-Taylor India has become an authority on Oral healthcare in Indian consumer’s minds. 4. Thus there is tremendous scope to increase demand if the awareness increases. The only problem is that TV and internet penetration is low in rural India and thus ad exposure is limited. Market segments for Cottle-Taylor India: Cottle has segmented the Indian oral care market based on geographical and economic factors. The market has been deregulated. the middle class and lower economic strata get very little of this economic boom as most of it absorbed by the rich and well to do. This coupled with growing income and acceptance to cheap western health care products rather than home remedies can propel Cottle’s toothbrush sales here. Thus there is a huge income gap and low social mobility. It has been seen that those who were exposed to campaigns like this were two times more likely to purchase oral care products. given the uncertainty of the livelihood of a daily wage worker. 3. Economic situation of the country . 2009-10. Thus a marketing and advertising strategy which includes door to door selling would give better results and ROI. the availability of the products was limited due to lack of retailers.First let us understand the economic situation of the country. Here are some ways Cottle can start – 1. Ad spend and first mover advantage – Cottle is amongst the early movers in the tooth brush segment in the country. Utilize competitive advantage to keep prices low – Cottle has manufacturing expertise and infrastructure in the country for tooth brush production.Cottle-Taylor: Expanding the Oral Care Group in India 1. Thus. This customer segment was extremely price sensitive and giving quality product at lower prices can help them retain such customers. They have also segmented the market based on which product line is being considered. more than 50% of Indians were not concerned about preventing oral dental problems and attributed them (problems like bleeding gums etc) to bad eating habits. bringing in an influx of foreign investor’s money. However. Targeting the above factors systematically can help in increasing the toothbrush demand in India. 3. The rural poor.

high end manual and battery operated toothbrush users Segments which make the most sense for Cottle to reach: The data suggests that the high end battery operated brushes give highest profit margins to the company. The Advertising budget should be increased should be increased above 12% of sales as suggested by Lang. Free health check – ups in town schools and colleges and provide them with samples. I think the market segmentation is logical. Battery operated toothbrushes from Cottle. Collaborate with the indigenous company those produce traditional oral care products. Thus Cottle needs to balance between these two segments. Link it to CSR activity to educate society on brushing twice and market the product. middle income group and low income group Low end manual. However the volumes for this segment are very low compared to the low end manual tooth brush segment. as both are strategically important. “The Swirl” was the most sophisticated and high end product from them. Possibly one who is a school going student (rural area) Provide total package of oral care products with discounted rate to those schools who have hostel facilities. With a focused advertising campaign aimed at highlighting the functional benefits of these brushes like “3000 strokes per minute” and “better plaque removal” etc. SLMT 4 || Group D1 Page 5 . There is a perception amongst the emerging market consumers for Cottle that these expensive products are frivolous and they are well off with their good old manual tooth brushes.Taylor. Advertise aggressively on automatic tooth-brush. Promoting the idea of oral care through providing with free tooth brush to one member of a family. given the nature of the market and do not wish to change it. The company should offer schemes like discounts and product-bundling Better allocation of advertising funds should be made through different forms. Also they create a captive customer base that will come back for purchasing the refills.Cottle-Taylor: Expanding the Oral Care Group in India 1 2 3 Urban consumers and rural consumers High income group. Give higher profit margin to the retail shop owner for every product sold. For this segment. Follow regional celebrity marketing Update workers in villages about the oral hygiene and providing the free samples to people who come oral health problems. Mobile van with salesmen who will go to house to house to sell the products. the volumes are very high and have the potential to grow exponentially with the increase in disposable income and oral care awareness. It contributed the highest profit margin to the company. Recommendations                 Above the line market strategy must include advertising through bill-boards in the post locations of the metro’s. they can increase the retail volume of this high margin product thus improving their bottom line. Target different geographies for different products The company should utilize vast untapped market in rural India. However they should not overdo it as the market for this particular product is limited. the profit margin is moderate.