BUILDING A D2C STRATEGY

FOR
COLGATE-PALMOLIVE
Team Conquerors
IIM Bangalore

Aditi Chandak Akriti Gupta Piyush Kabra

CEO CMO CFO
Intern@BCG Intern@Accenture Intern@Brookfield
 D2C Strategy: Drivers, Customer Segmentation and Product Portfolio
Research Methodology and Insights Find your reason to smile! A one stop solution of oral and body care needs for you and your loved ones. Subscribe to unlock happiness! Suitable product portfolio combined with
Our Big Idea targeted marketing complemented by customer convenience forms the core of our idea.
✓ Market Research conducted using 2 focus group discussions for users and non-users of D2C
websites; 15 Depth interviews & 78 responses for survey recorded.
✓ On the basis on our Primary and Secondary research, we found out that D2C brands sell a full Awareness Pre-purchase questions Actual Purchase Post-purchase
experience proposition that are not only limited to the product’s attributes but encompasses the ✓ Sentiment value advertisements, ✓ Seamless Experience
product, the product’s use, the community of other user and benefits. ✓ Effectiveness of chatbot in ✓ On time delivery
word of mouth, promotions, Social ✓ Payment Options
✓ recommendations ✓ Packaging quality, right product
65% users have shown a desire to shift to totally online modes of buying after the pandemic Consumer media campaigns
✓ Price points and discounts available
✓ Perks of Subscription &
✓ Returns & money back options
✓ 58% users feel that D2C solves their issue of authenticity of products ✓ Eye catching website and tagline Membership
✓ 85% users prefer personalization and are willing to pay a higher price for customized pdts'.
Journey ✓ Delivery time ✓ Responsiveness & Effectiveness of
✓ Success of ad campaign through ✓ Availability of last mile delivery
✓ 40% users prefer subscription models for habitual purposes like oral care & groceries ✓ Product availability the customer support
KPIs like click through rate & ✓ Discounts and Coupon Redemption
✓ 45% users are open to try newer gifting practices like gifting personal care packs ✓ Navigation & in-site searching ✓ Loyalty loop
conversion to page visits

D2C drivers – Success and Failures Product Portfolio on the website Building a community: Mission is to build a community around our brand through personalization, user reviews, blogs & social media activities.

Consumer & Audience Oral Care Products Connect with Doctors Subscriptions Smart Pick Membership Know your products Exclusive Online
✓ Focused on building a community of users through engaging them in brands ✓ Toothpaste combos: Family/travel packs with bulk “Take our Quiz” feature Become a Colgate PRO Products like Speed Stick
Free online consultations Subscriptions with Detailed product
mission; transform customer experience & understand their needs better discounts to make curated boxes Member to unlock & Charcoal Clean can be
to our customers for flexible frequencies and descriptions and
✓ Targeting Millennials: Penetration of mobile phone and internet along with ✓ Mouthwashes: Whole range of flavours including both oral care advantages like exclusively D2C & should
both dental and skincare. product offerings (Family ingredients; ‘How To’
increasing propensity of millennials to try new products ✓ Electric toothbrushes: New product introduced in the and body care products. discounts, faster delivery be explicitly stated to
Integrate site with tele Packs, Hostel Students, section on best practices
✓ User Generated Content: Companies like MAC engage users more with their brand mkt Can be personalized for and free samples and incentivize users from
dentistry site Millennials living alone) of oral and body care
by allow users to share their video stories and reviews on D2C websites gifting purposes as well free visits to doctors buying from our website
Body Care Products
Design Target Customer Segments – Psychographic Profiling
✓ Soaps & Sanitizers: Handwash, shower gels, sanitizers
✓ Easy and Smooth Checkouts; On-site search & Navigation; Full proposition clear on THE ‘ELITE HOUSEWIFE’ THE ‘YOUNG EXECUTIVE’ THE ‘HOSTEL STUDENT’ THE ‘HOUSE- ON-WHEELS’
(in value combos)
homepage along with the company’s mission Age: 35-45 yrs. Tier-1 resident Age: 20-30 yrs. Earning member Age: 16-24 yrs. College-going Age: 35-45 yrs.
✓ Haircare: Range of shampoos
✓ How-To Guides: Comprehensive instruction guides provides confidence; Video ✓ Speed Stick (From global portfolio): Range for men & Fresh graduates living away from their People who have a job on the move,
Moved out of home to an unknown
Instructions: Beauty companies provide videos to increase engagement women to go along with personal care segment Experimentalists, practice elaborate parents. Supposedly Sole breadwinners with huge travelling schedules. Require
city for higher education. Get most of
✓ Detailed and thorough Product descriptions; High quality & relevant images hygiene care routines & are ready to of the family & concerned for their travel packs that can be allowed in all
their essentials on campus and don’t
try new products, buy different parents. Order medicines and groceries modes of transportation (airports).
Business & Operating Model, Supply Chain do routine grocery. require only
“DIG-ETAIL”: Omnichannel strategy products for different members of the for parents and for self online. Can Look for Special delivery of
specific products on a need-basis
✓ Subscription Models: Nespresso offers great deals to encourage customers to sign Data + Experience + house based on specific needs send home new oral/body care customizable travel packs unavailable
up; Auto replenishment options & flexibility in delivery makes it compelling Sale + Scale + Share products (even as gift packs) in the grocery stores.
Relationships
✓ Free Delivery over a certain threshold leads to lower operational costs
✓ Loyalty Programmes: Referrals, discounts and other benefits like early access to SALES Recommendations
ENGAGEMENT INSIGHTS
newer products, free samples encourage users to order more INSIGHTS ENGAGEMENT B-to-B model Family Pack Care Package /Gift Hamper Kid’s Special
✓ Outsourcing last mile delivery & fulfilment to third parties leads to cost savings Third Owned SALES The website can cater to corporate Bundling of the products to create a A fun kids package which contains
Specially prepared packs adequate for

Grofers
Party Retail orders as well such as bulk orders from family pack, consisting of assortment customized toothpaste (based on latest

D2C
Products and Price Points Retail Experience gifting purposes. It would contain
Hotels, Dentists, Hostels, Flights, etc. of products for everyone. It would cartoon release) and toothbrush along
Partners s exclusive items from the product
✓ Exclusive Online Products: Highlighting exclusive online like L’Or does makes The retailers can also order monthly include toothpaste and toothbrush with a sticker collection/ collectible
portfolio such as a well scented shower
customers aware that they can’t buy it elsewhere from the website through an integrated along with a pack of floss or a small item. This could be extended to include
gel, handwash, & high end oral care
✓ Exclusive Online Bundling: Offering different flavor samples like Twinings & Teapigs, platform of the Colgate Digi-order mouthwash. The pack will be provided special kids soap pack and shampoo.
products like the electric toothbrush.
bundling offerings together and giving discounts to incentivize users application. at a discounted price.
✓ Product Personalization: Product customization by Nike & Cadbury takes the Brand Presence, Brand Character,
purchase decision away from being price focused Identity & Utility Engagement &
Advocacy
✓ Gifting Options: Attractive gifting options like those provided by Cadbury & FitBit

Marketing and Promotion

✓ D2C will currently complement retail and ecommerce
✓ Free Samples: Beauty brands like La Roche-Posay allows user to chose free samples
channels but in the long run, we plan to convert our
– this also helps in insights for new product development
ecommerce customers to D2C customers
✓ Extended Warranties: Exclusive extended warranties like Cloud Nine, money back
✓ While in third party retail channels, we focus on
guarantees like Dollar Shave Club and easy returns add value for users
achieving scale and share, through our D2C channel,
✓ Advertisements: Social media & influencers help in customer acquisition
we plan to interact with customers to create
Failures meaningful experiences and build relationships
✓ Colgate-Palmolive is an established brand name in
✓ Competition: Caspers failed-IPO due to intense competition in D2C space
every household; we will leverage this relationship to
✓ High Customer Acquisition Costs: SoftBank pulling funding out of Brandless,
maximize onboarding of customers on D2C channel
Edgewell dropping bid to take over Harry’s because of high losses
Benefits and Challenges D2C lays out
✓ Engaging with customers directly – create better brand experience and increase customer loyalty ✓ Narrow Product Range, Small Basket Size and low frequency
✓ Using customer data to analyze preferences & reactions: R&D insights for new product Purchase
development & identifying best customers for increased affinity and sales ✓ Awareness of Colgate Palmolive Range
✓ Uncover new markets & improvements to products; cut out on middlemen margins ✓ Interaction with other channels – ecommerce & retail
✓ Create insights that can complement retailer and distribution channel ✓ Balancing Customer acquisition costs & Lifetime Value
Link to pitch –
https://drive.google.com/file/d/1imFKSyjoRvKVfX0cOuxUAsEM4mGcIWkO/view?usp=sharing
Link to financial model - https://drive.google.com/file/d/1R7HFqeD5wQZ7KBBX53YV-
Link to website model -
jmKD1A6YtDH/view?usp=sharing
https://drive.google.com/file/d/1n8exvkmARH4x7AmazPO3SwQ7vsKOV1VT/view?usp=sharing
 D2C Strategy: Marketing Launch Plan and Financial Impact
Marketing Strategy Market Sizing
Online Medium Offline Medium S No Description Tier I Tier II Assumptions and References
1 No. of cities 6 15 Starting delivery with 6 Tier 1 and 15 Tier 2 cities
Budget Estimates Marketing Funnel ✓ Colgate Pack Advertisement: Having a promo code or bar 2 Population 4,12,81,140 3,02,23,590
Awareness leading to code on Colgate-Palmolive products and hence forth giving 3 Population (18+ to 40) 1,98,14,947 1,45,07,323 Assumption: 40% are of age 18-40
60L reach, 120K Engagements,
interest through insta them discounts when they buy from websites. Increasing 4 Total Population Size 3,43,22,270
35L impressions; 0.5L redirects
30 Lacs stories, interest to desire customer engagement of the website, revenue growth
Ad Types: Feeds, Stories to get 5 Digital buyer penetration 70.7% http://www.statista.in/statistics/261664/digital-buyer-
website clicks and engagements through influencers 7 Total Market Size in India 2,42,65,845 penetration-in-india/
✓ Sponsorships: : Collaboration with technical, business,
20L reach, 10L Engagements, 10L Interest to desire through 8 Total Expenses ( Person) 537
entrepreneurship fest. E.g. Mood Indigo IIT Bombay,
impressions; 0.6L redirects in-stream. Skippable ads. Oral Care Avg. Expense 91 http://www.statista.in/outlook/70060000/119/oral-care/india
30 Lacs Rendezvous IIT Delhi, Vista IIM Bangalore
Ad Types: in-stream ads, video leading to action by YT Soaps & Sanitizers Expense 132 http://www.statista.in/outlook/70020200/119/body/india
discovery adds to get video clicks channels like FilterCopy ✓ Dentist Camps: Organizing free health check up camps, Hair Care Avg. Expense 147 http://www.statista.in/outlook/70040000/119/hair-care/india
collecting data and sending them regular reminders to visit Shower Care Avg. Expense 166 http://www.statista.in/outlook/70030000/119/shower-bath/india
80L reach, 300K Engagements, Awareness leading to
the website. Increasing customer engagement of the website 9 Total Addressable Market 13,01,98,39,227
30L impressions; 0.5L refers interest through FB feeds.
30 Lacs Ad Types: in-stream ads, feed ads, Interest to desire through Development Cost
video ads, carousel ads, friends & influence posts ✓ Malls, Stalls and Trade Fair: Promotional events showcasing
the website along with distribution of coupons, special S No Description Value Assumption & References
50L reach, 100K Engagements, Interest to desire through discount to generate awareness Development Cost 1,18,80,000
20L impressions; 0.4L refers promotions during premium 1 Website Development 88,80,000 Assuming 10 software engineers and 3 manager with a monthly salary of 50,000 and 80,000 respectively
30 Lacs slots on Netflix and Hotstar. Website Maintenance 30,00,000 Assuming we need 5 software engineers for app maintenance with a monthly salary of 50,000
Ad Types: Sponsored Posts, video ✓ Promotion of website and products offers through mobile
ads, video views Desire to action by ad display banners, banners on metros, billboards in metro etc. Marketing cost 5,61,02,320
placement in popular shows Ad Development 1,00,00,000 Assuming cost of developing an ad to be 1,00,00,000
Cohort Requirement Unique Message for Cohort Precision Marketing Plan Assuming advertising in 2 channels (one general entertainment and one news channel), Ad time of 20 sec
TV Ads 2,08,80,000 https://www.themediaant.com/television/abp-news-advertising
Daily arguments on which variety of hygiene care They can be pulled towards the platform through Ad is run 15 times in a day for 1 month, 8 times a day second month and 7 times a day for third month
Elite housewives look for a single platform where
products to be used in the house? Buy something targeted TV advertisements as well as banners and Assuming a print size of 30 cm X 25 cm and an average print rate 800 per sqcm (for 10 days)
they can find products for all the family members. 2 Print Ads in Newspaper 60,00,000
different for every member and spread love! advertisement boards in the marketplaces https://timesofindia.releasemyad.com/tariff/Times-of-India-Display-Advertisement
Young adults already use the online platforms for Are you constantly concerned for your parents’ well OTT advertisements and social media campaigns can Assuming 100,000 ad views per month on YouTube and 2,00,000 clicks on Facebook
groceries and looking to move towards more being, especially while being away from home? Send be functional. Colgate can also set camps around Social Media 1,20,22,320 http://learningcatalyst.in/youtube-monetization-rates-in-india/
authentic and specialized D2C websites them care packages with the hand-picked products! corporate events to spread awareness. http://www.clickconversion.in/facebook/facebook-advertising-cost-india/
Influencers 52,00,000 Assuming 10 influencers, post per week per influencer, avg. influencer reach 10K-100K followers
Been borrowing daily essentials from your Sponsorship in fests and through social media Referrals 20,00,000 Assuming referrals (INR 100) 20,000 times. Assuming a person gets referral bonus maximum 5 times
College students are limited to their campus and
roommates? No time to shop? Get all your body care hashtag campaigns which not only generate interest 3 Analyst 30,00,000 Assuming 5 analyst with 50000 salary per month
daily utility items are something they need regularly,
products at the click of the button, anytime! but also facilitate easy onboarding of the segment Total Cost 7,09,82,320
The travellers have a specific need, travel packs of Is your schedule completely packed with travel Break even Analysis and Customer Lifetime Value Analysis
Through brochures, ads and announcements on
essentials, which are not available in local grocery plans? Buy convenience pocket packs for daily
major transport hubs. No S. No. Spend Customers Budget Customer Value
shops essentials exclusively from our website! Description Year 1 Year 2 Year 3 Year 4 Year 5
Non Customers 0.00 2,02,50,140
1 Revenue 2,21,42,584 7,30,70,526 13,39,62,632 20,63,02,453 29,17,70,611
Customer Engagement Retail, B&M Stores 3.99 1,30,42,463
2 Gross Revenue 1,43,92,679 4,82,26,547 8,97,54,963 14,02,85,668 20,13,21,722 Year 1 5,61,02,320
✓ Virtual Meets/Special Messages: Lucky draw events to give an opportunity to our customers to bag virtual meets or personalized messages on their gift Ecommerce 4.00 10,29,668 5,61,02,320
hampers from our ambassadors - Kartik Aryan and Sara Ali Khan. (1 in 30 lucky hampers get a personalized message, 1 in 1000 customers get a virtual meet) 3 Annual Expenditure 7,09,82,320 7,80,80,552 8,58,88,607 9,44,77,468 10,39,25,215 D2C Category 3.14 -
✓ Occasion Marketing: Special coupons on birthdays to make it more personalized, campaigns around festivals like “Gift A smile This Diwali” to inc. gift boxes sales Non Customers 0.00 2,02,50,140
4 Delivery Cost 36,90,431 1,21,78,421 2,23,27,105 3,43,83,742 4,86,28,435
Retail, B&M Stores 3.46 1,04,40,775
✓ Hashtag Challenges: Hashtag Challenges on Insta like #SmileChallenge, #BrushingChallenge to engage users to post content and build stronger communities 5 Total annual Cost 7,46,72,751 9,02,58,973 10,82,15,712 12,88,61,210 15,25,53,650 Year 2 1,97,55,190
Ecommerce 3.44 8,23,587 5,61,02,324
✓ Referrals: Expanding the community using Referral schemes; On every 5 referrals, get a gift / discount coupons
6 Profit -5,25,30,167 -1,71,88,447 2,57,46,919 7,74,41,243 13,92,16,961 D2C Category 6.09 28,07,769
✓ Feature Challenge: Notable customers experience can be shared through official Instagram, FB pages developing user confidence through customer review
7 Cumulative Profit -5,25,30,167 -6,97,18,614 -4,39,71,695 3,34,69,548 17,26,86,509 Non Customers 0.00 2,02,50,140
Business Vision and Timeline Retail, B&M Stores 3.41 85,60,460
Year 3 9,94,87,181
Assumptions Ecommerce 3.41 24,20,933 5,61,02,313
Revenue: Assuming that we can capture only 1% of the potential market and the market grows D2C Category 6.03 30,90,737
Year 1: Launch of website, Product portfolio in Year 3: Launch of an application that complements Year 5: Increasing assortment on the website to by 10% y-o-y basis and the company's market share increases by 2% for the next 4 years) Non Customers 0.00 2,02,50,140
which Colgate-Palmolive is the leader the website and increase customer reach and sale include products like dish wash, fabric conditioner Gross Revenue: Assuming 75% Gross Margin in Year 1 (at 10% premium to existing gross Retail, B&M Stores 3.41 70,35,713
Year 4 17,22,42,239
Ecommerce 3.41 39,18,347 5,61,02,350
margins) and it improves by 10bps every year
D2C Category 6.03 31,18,071
Annual Expenditure: Includes the cost of Development and initial marketing expenditure
Year 4: Break even year, Total Revenue is Rs. 20.63 Cr. Non Customers 0.00 2,02,50,140
Year 2: Revenue grows 3.3 times, expansion of delivery across (assuming the costs increase by 10% Y-o-Y basis)
Moving away from 3PL to have inhouse delivery service Retail, B&M Stores 3.41 57,84,177
more cities (growth in line with successful D2C websites) Delivery Cost: Total Deliveries * Avg. Cost of delivery (Total deliveries increase in proportion to Year 5 23,78,08,073
Ecommerce 3.41 51,67,253 5,61,02,349
the revenue while cost of delivery is assumed to be constant) D2C Category 6.02 31,20,701