RURAL MARKETING FINAL

REPORT

SUBMITTED BY-

MANAV SINGH

DM17MA33

MARKETING ANALYTICS
COLGATE

Type Public

Industry Personal Care

Founded 1806

Headquarter United States

Key People Ian M. Cook, C.E.O

Revenue US$ 17.42 BILLION (2013)

No. of employees 37,700 (2012)

Slogan “world of Care”

Website www.colgatepalmolive.com

History
• In 1806, William Colgate introduced starch, soap and candle factory on Dutch Street in
New York City under the name of "William Colgate & Company".

• In 1857, William Colgate died and the company was reorganized as "Colgate &
Company" under the management of Samuel Colgate, his son.

• In 1873, the firm introduced its first toothpaste, an aromatic toothpaste sold in jars.

• His company sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in 1896.

• 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.
• Today Colgate has numerous subsidiary organisations spanning 200 countries, but it is
publicly listed in only two, the United States and India.

Introduction
• The brand name ‘Colgate’ is synonymous with toothpaste. This world-renowned brand is
sold in more than 200 countries.

• In India, the company has successfully replicated the strong brand image and awareness
in the minds of consumers.

• Today, Colgate is a household name in India with one out of every two consumers using
a modern dentifrice. The company manufactures and markets its oral care, personal care and
household care products under the ‘Colgate-Palmolive’ brand name.

• Colgate India earns around 93% of its revenues from the oral care segment.

The Toothpaste Market

• Oral hygiene continues to be under aggressive competition, with sales increasing each
year making it a Rs. 3,000 crs. Market.

• The toothpaste segment is largely a two player industry, Colgate Palmolive & HUL
accounting for 85% of the entire market.

• Oral care is expected to have a value CAGR of 9% at constant 2013 prices to reach
INR131.0 billion by 2018

Long term growth drivers for the industry

• Improving penetration

• Through better distribution and conversion from other modes of oral care

• Increased usage

• Improved per capita consumption through increased usage frequency

• Population growth

• An annual 1.5% increase in population will help broaden the user base for oral care.
Colgate Palmolive milestone
• 1806: Company is founded by William Colgate in New York to make starch, soap, and
candles.

• 1873: Toothpaste was launched

• 1928: Colgate and Palmolive-Peet merge, forming Colgate-Palmolive-Peet Company.

• 1937: the company moved into India.

Colgate Palmolive milestone in India

• 1937: launch first toothpaste Colgate dental cream

• 1949: launch tooth powder and toothbrush

• 1950: Palmolive shave cream

• 1976: launch programme “young India.”

• 1989: Palmolive extra care soap launched.

• 2003: launch oral health month program

• 2003 to Present: No. 1 Toothpaste Brand in India

Colgate Palmolive products

Colgate Toothpaste: •Colgate Sensitive

Tooth brush •Colgate Cibaca

•Colgate Total 12 •Colgate Active salt

•Colgate360 Tooth powder

•Colgate cibaca •Colgate Max Fresh

•Colgate Zigzag •Colgate Fresh Energy Gel

Market Share

The Brand Equity of Colgate

• In 1992,93,94 Colgate was ranked No 1 brand in all categories surveyed by annual brand
power survey India.

• In 1997 Colgate calciguard and Colgate plus get IDA seal of acceptance.

• 1999 Colgate was rated “India's premier brand” by A&M annual survey of India's top
brand.

• 2002 again No 1 brand in India- surveyed by Taylor Nelson MODE.

• “ Best Employer India”- surveyed by BT Hewitt

• 2003-05 ranked “Most trusted Brand in India” Surveyed by AC neilson ORG-MARG.

• 2009 celebrated Colgate Oral Health month.

• 2013 to till now Colgate is the most successful Brand in India

Major competition to Colgate in rural

India

• Pepsodent
• Close up
• Babool
• Meswak
• Dabur red
• Amar
• Anchor white
• Other small Players

Segmentation
• The Company has divided its market into two product segments: Oral care & Personal
care.
• Colgate is considered to be the global leader in the Oral care Products such as toothpaste,
Toothbrushes and many other pharmaceutical products.
• Colgate also possesses a strong market in the Personal Care segment that includes
products like bar, liquid hand soaps, shower gels, shampoos etc.

• Geographic Segmentation Strategy:

The Colgate Company has implemented this strategy by expanding its business in over
200 countries. The company does not market the same product in every country. For instance, in
United States they are selling sixteen different types of toothpastes while in UK; they are selling
twenty two different types of varieties.

• Demographic Segmentation Strategy :

The Company caters the market segment based on different demographics such as age,
gender, social class etc. For kids aged 8-10, they have products like transitional toothpastes.
They have a separate section for infants, children, teenagers and adults.

• Psychographic Segmentation Strategy:

Here the company sells the products considering the lifestyle and needs of the consumers.
For people who are sensitive about their teeth, they have introduced Sensitive pro-relief
toothpaste and brushes which are made to decrease tooth sensitivity issues.
The Product Life Cycle
A company's positioning and differentiation strategy must change as the product, market and
competitors vary over the Product Life Cycle. to say that a product has a life cycle consist of four
things:-

1. Products have limited life

2. Product sale passes through different stages, each posing a different challenge and
opportunity to seller.

3. Profits rise and fall at different stages of life cycle.

4. Products need different strategies in different life cycles.

1. Introduction:
A period of slow growth, because the product is just introduced in the market, the profits here are
nonexistent due high cost of advertising and other product introduction strategies.

For Colgate-

• 1873 Colgate toothpaste introduced in jars to market.

• 1986 Colgate toothpaste sold in tubes called as Colgate ribbon.

• 1937 Colgate entered Indian market.

• 1949 it touched a new height in India.

• 1976 it tried to growth it's sales in India by launching YOUNG INDIA PROGRAM -
"bright smile becomes brighter".

2. Growth:
A period of rapid market acceptance and substantial profit improvement.

For Colgate-

• 1990 to 2003 Colgate reaches out to every rural customer and strengthen it's supply
chain.

• Colgate herbal white toothpaste launched.

• 2003-2009 Colgate awarded no.1 toothpaste brand for 7 consecutive years.

• Colgate acquired 51% market share during this period.

• Launched many initiatives and promotions to further increase it's sale

• As it's initiative it started oral care weak and targeted schools and Anganwadis

3. Maturity:
A slowdown in sales growth, because the product has achieved acceptance by most potential
buyers. I believe this to be more of a stable stage for the product, where the graph is almost flat.

For Colgate-

• HUL and P&G emerged as major competitors for Colgate.

• With some other niche player Colgate facing tough competition in toothpaste market.

• they roped SRK as their brand ambassador in 2009

• oral health month launched in 2010.

• colgate with IDA worked to develop toothpastes for different needs of customer.

• 2011-2013many variants of Colgate toothpaste launched.

4. Decline:
Here the sales show a downward drift and profits decrease. This is where the company has to
really think of ways to get its product back in business. It may try hard at advertising, or may be
add new features, but basically come with a new marketing strategy to increase its falling profits.

SWOT Analysis

• Strengths
Geographically diversified industry.
Strong brand image.
Strong market share.
Appealing advertisements.
Huge sales growth.
Skilled workforce.
Strong promotional strategies.
• Weaknesses
Saturated market.
Market share is limited due to the presence of other strong FMCG Brand
Fake Brands are supplied under their brand names

• Opportunities
Tap rural market and increase penetration in same
Emerging markets may attract business
Differentiation strategy is required.

• Threats
Increase in commodity prices.
Fierce competition.
New entrants in the market can be a threat to Colgate

4A’s adapted by Colgate to attract Rural India

Acceptability:
• They try to position some innovative toothpaste with a brand name other than Colgate but
under the umbrella of Colgate Palmolive
• Focusing toward rural rich and consuming class by endorsing the development of
‘Colgate Ayurvedic Toothpowder
• They came up with sachets of tooth powder and position toward rural population who
buy in smaller lots.
• Eg: 1.They launch different toothbrushes for different age groups.

Affordability:
• As rural consumers are price conscious people, so its good to set a low price for them
• Quantity which the Colgate offers to consumer is much higher than its competitors at the
same price
• Colgate has adopted Market penetration pricing strategy in order to gain market
dominance.

Availability:
• 940 direct accounts
• 3.8 million retail outlets.
• 2nd most widely distributed product in the country.
• The company is tying up with initiatives like E-chopal and Disha to further strengthen its
distribution network .
• In 1998, Colgate contacted 6 million people in 20,000 villages.
Awareness:
• It is often said that markets are made, not found. This is particularly true of the rural
market of India.
• It is a market meant for the truly creative marketer. Promotion has become the biggest
challenge, to rural marketers today.
• Rural marketers have to skillfully communicate with a much larger but scattered audience
characterized by variations in language, culture and lifestyles.(companies have to adopt the
principle of multi-national companies i.e., “ think global and act local”

Colgate create awareness of their product in:

• Melas
• Door to door selling
• Haats
• Sampark campaign
• Vans
• Free dental checkup
• Free samples

The requirement is threefold (for strategic promotion)

1. To explore the available media at the different locations.
2. To develop region-specific consumer profiles to understand the characteristics of target
market.
3. To design right communication and motivation strategies to induce target audience to buy
the product.

Sampark Penetration
• Suggesting and implementing a rural promotional scheme was what Colgate called
‘Sampark’ for, as they were specialist in rural advertising category.
• Going in for mass media would not prove to be costly but the reach would be limited as,
still only very few people own and possess a T.V. or a radio. Sampark decided to their
advertising by door to door selling

Distribution Channel
• Whole seller
• Retailer
• Vans
• Weekly Haats
• Bazaars
• Wholesalers

The Indian wholesaler is principally a Galla – Kirana (food-grain) merchant who sustains the
belief that business is speculative rather than distributive in character.

• Retailers

Village retailers have traditionally been among the most mobile of rural residents.

CREDIBILITY

He enjoys the confidence of the villagers.

INFLUENCE LEADER

His role as influence leader is indisputable.

BRAND PROMOTER

In rural market retailers remains the deciding factor to sell particular brand. Retailers helps in
identification and selection of brands, there is less influence of shelf displays and point of
purchase promotion.

• Melas and Fairs:

This is another low cost distribution channel available to the marketers. It is comparable with
urban events like Wills Trophy, India International Trade Fair (IITF),Most of the fairs are
associated with either a religious event or a festival. Among the most famous melas is the mighty
Kumbh Mela at Allahabad (Triveni Sangam), Pushkar mela in Rajasthan, Kullu Dusshera mela
in Himachala Pradesh, Sonepur mela in Bihar and Makar Vilakku in Kerala. According to the
Indian Market Research Bureau (IMRB) around 8000 melas are held in rural India every year.

• Educational Films :

Educational films were also shown in between movies in theatres, these are usually 10-40
seconders which were educational and used to feature either actors, local lenders, for a farmer
just like the ones viewing the documentary, later on after the movie would end free samples were
distributed to the audience

• Teachers Training Program

Teachers Training Program is an integral part of the School Dental Health Program, conducted
regularly across the country to promote preventive dental health care. Colgate also has launched
its first-ever online school curriculum featuring fun and entertaining activities.

• “ Oral Health Educational Program”

The Colgate Rural Initiative , targeted at rural areas with a population between thirty and a
hundred thousand people. The dental check up camps were supervised by teams of dentists and
organisers who interacted with over 1 lakh people teaching them the benefits of oral hygiene.

• ITC E-Choupal

Colgate, a company also tied up with ITC E-Choupal and Rotary to spread the message of dental
care and oral hygiene to villages across India.

The campaign successfully targeted over 156 villages in Uttar Pradesh in association with
Project Disha and 36 villages in Maharashtra. In addition, dental camps were also conducted in
the Dussera Mela at Kota.

Vans:

Free Dental Check-up in mobile vans

Challenges face by companies:

• Many companies view the rural markets as great opportunity for expanding their sales but
find distribution as a major problem. Unfortunately, it is almost impossible to transplant
strategies which work successfully in urban markets on to rural markets.

The road blocks to reach the rural customers are:

Lack of adequate transport facilities.

Large distances between villages.

Lack of Good roads connecting villages to nearest townships.

 Lack of proper retail outlets·

Lack of mass media infrastructure.

Conclusion
• Colgate is still most successful brand in Rural India
• Future for Colgate also seems bright
• Main reasons are:
Strategic initiatives
Creating Demand in rural areas
Innovative Promotions