Professional Documents
Culture Documents
An Analysis
Nachiket Mujumdar
20130120120
Introduction
Colgate Max Fresh’s (CMF) introduction to the US market drove Colgate-Palmolive’s (CP) US
market’s value share up to 34.8% ahead from Procter & Gamble (P&G) at 2nd place with 31.6% value
share. Nigel Burton, the president of global oral care at Colgate-Palmolive Company (CP), is reviewing
market launch plans for a new toothpaste, Colgate Max Fresh (CMF) by CP’s Chinese and Mexican
subsidiaries. Both launch plans involved departures from the CMF marketing program for the USA
launch six months earlier. Burton must decide whether the costs of marketing program adaptation in
China and Mexico can be justified.
US LAUNCH
Breath Strip in Toothpaste
US retail toothpaste market - $438 million with a growth rate of 8% since 2000
From Table B in the case, CP and P&G are on a head to head competition for the 2004 value share of
toothpaste market with 34.8% and 31.6% value share respectively.
Exhibit 2A shows that in terms of US Market Toothpaste Benefit Importance, cosmetics benefits such as
‘breath freshening’ and ‘whitening’ are at 3rd and 5th places respectively while therapeutic benefits :
‘protection against cavities/contains fluoride’, ‘reduces plaque buildup’ and ‘controls tartar’ are at 1st,
2nd and 4th places respectively.
This shows that in the US market there is more therapeutic benefits sought from toothpastes. Exhibit
2B on the other hand qualifies that consumer benefit data. It shows that between 2000 and 2004 data.
There is a dwindling importance of the therapeutic benefit : ‘anti-cavity/tartar’ at -22.7% while there is a
growth in cosmetic benefits : ‘whitening’ at +16.4% and ‘freshening/cleaning’ at +2.9%. For 2004,
therapeutic benefits total at 53.4% while cosmetic benefits add up to 46.6%.
CMF’s success in the US market is attributed to the fit in the needs, wants and expectations of the
consumers with the products main benefits: breath freshening and teeth whitening.
1. Positioning: CMF was positioned as a premium brand. It was positioned midway between
offering therapeutic as well as cosmetic benefits.
2. Pricing: It was priced at par with CWE.
3. Product: The transparent bottles created a visual impact when placed on the retail shelf.
4. Promotion: Promotion was through
a. Media: To create awareness
b. Website
c. Program sponsorships
d. Instore sampling, merchandising displays, sales promotions
The reality is that the U.S. Marketing team took little or no account of the global transferability of their
program. They simply sought to develop the best possible marketing program for the U.S. This becomes
apparent once the Mexico launch is introduced. The U.S. advertising was, most obviously, country-
specific because the celebrity, Emily Proctor, was not known outside the U.S. Global marketing
strategy involves understanding and addressing differences across markets, the dilemma arises
when trying to balance the global brand and appeal to distinct regions.
Successful global marketing campaigns leverage similarities to preserve a consistent message
and limit costs while also customizing advertising to align with regional cultural preferences.
CHINA LAUNCH
Whole New Dimension of Freshness
Sr Changes Reason
No.
1 Name change – Max Fresh -> Icy The biggest challenge was creating the right communication.
Fresh Max Fresh did not strike the right chord with the consumer.
2 Term change – Breath strips -> Breath strips was unknown. A meaningful phrase was
Cooling crystals required
3 Advertising strategy Communicating freshness was a challenge.
4 Emily Procter -> Jay Chow as a Need to connect to the youth on an emotional level. CSI and
celebrity Emily Procter were unknown in China
5 Complete makeover of the brand To create differentiation and appeal
6 Introduction of new flavors Chinese toothpaste market was developing quickly, new
flavors were popular, competitors were introducing new
flavors
7 Clear bottles -> Clear tubes Cost considerations
8 Clear stand up tube Maximum visual impact at point of sale
The marketing adaption costs for the CMF launch in China are much larger than in Mexico.
As the Asian market was favorable towards freshness, it would be easy to launch the product in China.
The product should have been launched earlier.
1. The media expenditure was very high. 1.5 million(Celeb ads) vs. 0.5 million (Adapting existing
strategy)
2. Flavor change, Packaging change and color change added $1.77M ($200000 + $1.5M + $7000) to
the capital cost and delayed launch.
MEXICO LAUNCH
New Dimension of Freshness
The CMF launch was to neutralize the anticipated launch of CWE which threatened the market
domination of CP.
But with the launch of Crest Cool Explosions, PnG is threatening the value share of CP. CP can secure its
market share by launching CMF in the Mexican market. CP dominates Crest in Mexico so any new CP
product can probably obtain distribution. The pro-forma PnL for CMF launch predicts net operating
profits in the first year itself (25% of sales) and a steady growth (11% in the second year).