Business Communication

Assignment - 1

Submitted To – Mr. Anup Dubey

Submitted By
Pratiksha Singhi - 202032051

Mohit Prasad - 202032067

SECTION D
 Report on portfolio diversification
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Report on portfolio diversification

Market prospects for

introducing a chocolate
flavoured toothpaste in India

Toothpaste, with a market size of around 10,000 crore, is one the most highly penetrated
products and is growing at an annual rate of 2 to 3 percent.

Recent market trends denote a shift from generic all-in-one toothpaste to more varied
offerings. This is in line with the global trends where specialty toothpastes are being
developed.

The growth is attributed to smart advertising and marketing and the trend of “premiumisation”
of oral care.

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 Report on portfolio diversification
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Report on portfolio diversification

Market prospects for introducing a
chocolate flavoured toothpaste in India

Table of Contents

1. Executive summary
2. Introduction
3. Current Market Scenario
4. SWOT Analysis
5. Recommendations
6. Appendix

Executive summery
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Executive Summary
The purpose of this report was to assess the market prospects of introducing chocolate
flavored toothpaste in the Indian market. India’s oral hygiene market particularly the
toothpaste segment is one of the most dynamic, fastest growing and competitive sector
of the FMCG industry. Over the time, it has changed from a static to dynamic, less
competitive to more competitive, traditional to more organize and advanced one. The
toothpaste market in India has gone through tremendous change on account of
encouraging demand side and supply side factors along with supporting government
policies. Over the last five years, India’s oral hygiene market has grown with a CAGR of
11.4% and has become a significant FMCG sector in India. The future outlook for the
toothpaste market of India appears to be very promising owing to various market
conditions and educative initiatives on part of manufacturers and government which has
led to increased demand from consumer side as well as offers great potential growth
opportunities to the manufacturers. Through “premiumisation” and production of varied
innovative oral care products, a large market segment can be captured. Toothpaste was
and will remain the largest category, Convenience store will be dominating the
distribution channels and the use of Screw Top closure type is anticipated to grow at a
CAGR of 2.8%.The recent domestic trends mirror the global shifts where toothpastes
are being repositioned in beauty/lifestyle category. In such a scenario, portfolio
diversification in the toothpaste segment by means of offering a premium product at
competitive prices would be a prudent decision.

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Introduction
Indian oral care market has shown tremendous growth by value & volume in last few
years in FMCG sector of India. Growing oral care market is driven by change in life style
of consumers, various health education initiatives by government and manufacturers
alike, demand of premium products, rising of disposable income etc. Toothpaste is
dominant in oral care market. It is a primary product in daily oral hygiene and has huge
presence in urban and rural areas. Increasing health and personal oral hygiene
standards and knowledge has meant that, Indians are now more aware how their dietary
habits affect their oral health. With increasing disposable income a typical person is now
willing to pay more for ensuring a pleasant and wholesome oral care regime. This has
helped toothpaste category to grow drastically in oral care market. Presently the
toothpaste market is valued around INR 10,000 crore and is growing at 2-3%. The
product penetration is high and reflects the global trend of a shift towards demand of
more value added alternatives to generic products. The top ten toothpaste brands in
India are

1. Colgate
2. Pepsodent
3. Close Up
4. Oral-B
5. Sensodyn
6. Patanjali Dant Kanti
7. Meswak
8. Vicco Vajradanti Ayurvedic toothpaste
9. Himalaya Herbals
10. Dabur Red
The analysis of popular toothpaste brands reveals following consumer behavioral
tendencies

 Growing demand for refined and value added alternatives.

 Rising popularity of specialized products e.g. toothpaste specifically designed
for sensitivity, teeth whitening etc.
 Preference for products which are made with natural ingredients
 Importance of factors such as taste, fragrance etc. in purchase decision.
 Demand for premium products.

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Current Market Scenario

Toothpaste Market can secure a decent growth rate of 4.80% between 2018
and 2025. The market size is also touted to reach USD 21,642 Million by 2025.
The COVID-19 outbreak has had a mildly negative impact on the toothpaste
industry, with the temporary shutdown of manufacturing facilities and weakened
demand. Even as the world is trying to curb the spread of SARS-CoV-2,
toothpaste companies are striving to bolster their supply chains and accelerate
their operations to control further losses. Additionally, with the gradual lifting up
of the lockdown across countries and the novel coronavirus under control, the
global market can recover faster in the coming years. In view of escalating
cases of dental issues like cavity, the need for effective oral hygiene has
increased substantially among consumers. As a result, the surge in cavities and
dental caries has fostered the need for effective toothpastes that inhibit the
growth of plaque and bacteria. Growing consumer awareness regarding oral
health backed by the soaring number of government initiatives can also be
favorable for the toothpaste market in the years ahead. The high consumption
rate of sugary beverages and foods combined with the prevalence of urban
lifestyles has been a major growth booster in the Indian toothpaste market. The
size of the Indian herbal toothpaste market has been blossoming on account of
the accelerated preference for specialized toothpaste for certain dental
diseases. Dental whitening has emerged as one of the top toothpaste market
trends over the years, which manufacturers are capitalizing on by launching
new and unique flavors. The escalating preference and sales of herbal products
among consumers can be a huge opportunity for renowned brands in the near
future. Consumers are increasingly opting for natural products that are devoid
of any chemicals, in view of the rising cases of tooth abrasions. This factor can
be leveraged by the players to capture a higher share in the global industry
during the evaluation timeline. Different types of toothpastes in the global
market are herbal, sensitivity, whitening, smokers, children’s, and others.
Children’s toothpaste type can reach nearly USD 3,516.4 million by 2025, as a
result of the growing concerns among parents regarding their children’s oral
health. Manufacturers are constantly using tactics like attractive packaging
styles and appealing advertisements to garner the kid’s attention. While, the
sensitivity toothpaste type could touch USD 5,438.3 million by 2025, due to
escalating number of people brushing overzealously as well as the presence of
abrasive ingredients. The segment has been a wider customer base worldwide
owing to the accelerated incidences of tooth sensitivity. Another lucrative
segment can be herbal toothpaste, which can experience the fastest expansion
rate of 5.48% and reach USD 3,925.9 million by 2025. The toothpaste industry
is rife with new launches by reputed firms with the aim to appeal to the evolving
consumer preference and demands. Innovative toothpastes with more features
and benefits are launched, aided by smart marketing, which not only favor the
global market but also intensify the competition between players. The growth in
India’s oral hygiene industry is mostly influenced by changing consumer
behavior, companies’ business strategies, govt. policies and the increasing
entrance of various leading international brands in the Indian market.
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With rising disposable income and changing tastes and lifestyle, consumers are
trading-up for expensive premium products. The mass product market has also
expanded on account of increasing population with the emergence of middle
class. Image consciousness and oral health awareness has led to increased
demand for advance oral care products. To reap the benefits of increased
consumer demands, companies are strategizing their actions accordingly. They
are focusing on innovation and launch of new products, targeting untapped
rural market through production of natural herbal oral care products,
premiumisation is playing a lead role, investing huge amounts in
advertisements through digital platform as well as through campaign and
marking their strong presence in the primary and advanced oral care product
market such as toothpaste & mouthwash to tap the potential opportunities.
Some of the key macroeconomic trends driving growth in oral hygiene industry:
 Increasing populations with rising middle class boosting the mass market.
 Rising GDP, leading to increased spending on improved oral care products.
 Increasing purchasing power along with rising GDP per capita.
 Non-increasing unemployment rates with increasing labor force, hence
increasing consumer base.

Competitor Analysis
The main competitors

 Close Up: Right now the bestselling toothpaste in the market. They have some
amazing flavors like mint, herbal flavors etc. There USP-FRESHNESS.
 Colgate: Colgate is considered as the oldest toothpaste in our country with basic
features and trustworthy formulation.
 Pepsodent: This is another important competitor they are offering cavity fighting
formula in their toothpaste and doing very good as well.
 Patanjali Dant Kanti: a complete herbal formulation. Noted for its efficacy.

Some of the prominent brands offering chocolate flavored

toothpastes in India are
 Cha Cha chocolate toothpaste
 Theodent Kids chocolate toothpaste
Despite the competition, chocolate flavored toothpaste can become a profitable
proposition if advertising, marketing, and packaging is done right as the numbers
of identical alternatives available in market are limited

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SWOT ANALYSIS
STRENGTHS
Firstmover's Advantage
Unique Product
Limited Competition
Largely Untapped Market
Easy Segmentation, Targeting, and
Positioning can be done
SWOT
ANALYSIS
OPPORTUNITIES
Create and Dominate in an entirely
new market segment(Kids+Young
Adults)
Diversify into secondary and tertiary
oral care products
Tap new modes of establishing Brand
loyalties(use of social media,
consumer recomendation, etc.)
Discovery of Latent Consumer Needs
7
WEAKNESS
Distribution highly dependant on
dealers
Production process needs to be
strictly monitored to set and maintain
standards
High R&D costs
Needs aggressive advertising and
marketing
THREATS
High Product Penetration
Strong and Established competitiors
Acceptance level can not be
predicted with 100% accuracy
Established Players can steal the
idea and use their existing
production capacity to offer it at lower
price
 Report on portfolio diversification
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Recommendation
It would be prudent to engage into Portfolio Diversification by means of entering
the Indian market via chocolate flavored toothpaste at this juncture. The
toothpaste market is the leading segment in Indian FMCG sector. Market has
witnessed consistent growth over the years and is expected to grow at a
wholesome rate in the coming years. Although the product penetration is high the
segment which Mr. Musk wants to venture into has little direct competition
presently. Given Mr. Musk’s credentials, industry experience and knowledge he is
in an advantageous position vis-à-vis several other new entrants. The marked
shifts in consumer behavior demand for premium products, rising disposable
income coupled with increased awareness about oral health care is fueling the
demand for specialty toothpastes which not only serve the basic purpose of
maintaining dental hygiene but also provide an array of value additions. In such a
scenario if the proposed product is well positioned and the market appropriately
segmented and targeted then the product has the potential to carve a distinct
identity for itself.

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Appendix

1. https://www.prnewswire.com/news-releases/india-oral-care-market-2017-
2022-urban-consumers-in-india-moving-towards-premium-products-like-
mouthwash-whitening-and-sensitive-toothpastes-with-changing-hygiene-
habits-300537867.html
2. https://www.prnewswire.com/news-releases/global-toothpaste-market-
trajectory--analytics-report-2020-herbal-and-natural-toothpastes-give-tough-
competition-to-conventional-toothpastes-301133147.html
3. https://www.fooddive.com/press-release/20160614-toothpaste-is-the-
largest-category-in-india-oral-care-market-ken-research/
4. https://www.marketresearchfuture.com/reports/toothpaste-market-7221
5. https://www.statista.com/statistics/649401/market-share-oral-care-
companies-india/