Brighter Smiles for the masses – Colgate vs.

P&G
PGP-BL01 | Section B | Group 04

Name Roll No.

Aadhar Hasija PGPBL0134

Charmi Agarwal PGPBL0141

Kamal Singh PGPBL0146

Karthika Warrier PGPBL0147

Rahul Krishnan PGPBL0155

Q1: What is the goal of Mr Ayman Ismail (PnG, GM for Global Oral Care; PnL) and What is the goal of Mr
Mcbride (President Colgate)?

Ismail is responsible for profit and loss accounting of the Oral Care business of PnG. With loss in White Strip’s
market share from 80% to 37%, his goal is to maintain or improve the profitability of White Strip and regain the
lost market share by counter acting Colgate’s launch of Simply White.

Mcbride’s goal is to maintain the sales momentum of Simply White and to anticipate the counter moves of his
rival and respond with the befitting measures and be the leader of the at-home-tooth-whitening market.

Q2: What should be the response of Mr Ayman Ismail? What would be the reaction of Mcbride to the same?

Response of Mr Ayman Ismail to Simply White:

Comparative advertising campaign against Simply White complimented with a drop in price of White Strips.

Reasoning: Contribution Margin of White Strips (79%) is higher than Simply White (45%). So they can afford to
reduce the price. To compensate the loss of profit by reducing the price, launch strong comparative advertising
campaign to establish White strip makes teeth 5 times more white, and can remain the white for longer amount
of time. This can increase the sales (revenue) & regain the market share from Simply White.

Reaction of Mcbride to Mr Ayman Ismail:

Increase Marketing Budgets and strengthen their message and do not engage in price war by maintaining their
original price.

Reasoning: They are already low cost leaders in this category and have higher market share. So they will not
reduce the prices any further. Mcbride should respond to the comparative advertising by strengthening their
communication and allocating more budget to their marketing campaign.

The above conclusion was formulated using the framework of competitive analysis.

Competitor Analysis:

Low Resource Similarity. High

High
P & G v/s Colgate
Market
Commonality

Low

Market Considered: Oral Care Market

Two Action Reaction pairs are considered for each of the Options P&G has:

1. Action: Launch of Simply White by Colgate & subsequent capture of Market

Reaction: Mr Ayman Ismail’s multiple option (each option individually evaluated)

2. Action: Mr Ayman Ismail’s multiple option (each option individually evaluated)

Reaction: Mcbride’s possible counter action for Mr Ayman Ismail’s options

Option 01: P&G Response to Simply White

Attempt to block Colgate’s advertising or force the company to change its message
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed High Low Impact
Type Tactical • Financial
High High High Magnitude Low Performance: Low
Scope Low Impact
Location USA
Colgate’s Anticipated Response (counter move) to P&G’s Option 1
Defend the case by substantiating the claims.
Colgate can cite the measure of whiteness using P&G’s proprietary CIELAB values of b* only.
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Share: Low
Speed High Impact
Type Tactical • Financial
High High High Magnitude Low Performance: Low
Scope Low Impact
Location USA

Option 02: P&G Response to Simply White

Price Cut (*Assuming PnG won’t reduce the prices below $15)
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood Low • Market Position:
Speed High Low Impact
Type Tactical • Financial
High Low High Magnitude Low Performance: High
Scope Low Impact
Location USA
Colgate’s Anticipated Response to P&G’s Option 2
Stayput with the same price level (seeing the deep pockets of PnG)
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed NA Low Impact
Type Tactical • Financial
High High High Magnitude Low Performance: Low
Scope Low Impact
Location USA
 Option 03: P&G Response to Simply White
An introduction to new product (*Internal announcement)
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed Low High Impact
Type Strategic • Financial
High High High Magnitude Low Performance: High
Scope Low Impact
Location USA
Colgate’s Anticipated Response to P&G’s Option 3
Product Improvements and increase marketing and R&D budgets
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed Low High Impact
Type Strategic • Financial
Low High High Magnitude Low Performance: High
Scope Low Impact
Location USA

Option 04: P&G Response to Simply White

Increase in the Media Weights for P&Gs current ad campaign
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed High Medium Impact
Type Tactical • Financial
High High High Magnitude Low Performance:
Scope Low Medium Impact
Location USA
Colgate’s Anticipated Response to P&G’s Option 4
Product Improvements and increase marketing and R&D budgets
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed Low High Impact
Type Strategic • Financial
Low High High Magnitude Low Performance: High
Scope Low Impact
Location USA

Option 05: P&G Response to Simply White

Comparative advertising campaign directed at Simply White
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed High Medium Impact
Type Tactical • Financial
High High High Magnitude Low Performance:
Scope Low Medium Impact
Location USA
Colgate’s Anticipated Response to P&G’s Option 5
 Increase Marketing Budgets and strengthen their message
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed High High Impact
Type Tactical • Financial
High High High Magnitude Low Performance: High
Scope Low Impact
Location USA

Option 06: P&G Response to Simply White

An increased use of coupons
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed High Low Impact
Type Tactical • Financial
High High High Magnitude Low Performance: Low
Scope Low Impact
Location USA
Colgate’s Anticipated Response to P&G’s Option 6
Stayput - no discounting required; already priced low
Drivers of Competitive Behaviour Interfirm Rivalry Measure Outcome
Attributes
Awareness Motivation Capability Likelihood High • Market Position:
Speed NA Low Impact
Type Tactical • Financial
High High High Magnitude Low Performance: Low
Scope Low Impact
Location USA