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TOOTHPASTE INDUSTRY OVERVIEW

The concept of toothpaste in India is relatively new. In ancient and medieval India oral hygiene
was taken care of by home made and ayurvedic products.

Practically all of rural India prefers cleaning their teeth with traditional products such as neem
twigs, salt, ash, tobacco or other herbal ingredients, contributing to a low per-capita consumption
of branded oral care products. According to WHO, India’s overall awareness of oral hygiene is
still very poor. The dentist-to-population ratio is 1:35,000 in comparison to 1:7,500 as recom-
mended by the WHO. But with burgeoning middle class and multi-pronged advertising
campaigns, there is now a latent demand for the formal oral care products and this is set to rise
exponentially in the coming years. Growth is also likely to emanate from consumers ‘upgrading’
to matured, value-added and innovative products in this category. Of late, growth of modern
trade has also propelled brand sales, especially in the urban markets.

Overall, the oral care sector is mainly represented by toothpaste. Other products include
mouthwashes, sprays, teeth whiteners and oral rinses. In India, there is also significant usage of
toothpowders, especially in semi-urban and rural areas.

In India, toothpowder was primarily targeted at people who used traditional products like salt,
neem twigs and other herbal products. Brands like Colgate, Dabur, Babool, Vicco are the
prominent players in the toothpowder market in India.

Over the past decade it has become evident that growth opportunities really lie in the rising
demand for toothpaste as the toothpowder is beginning to show a phase of decline, as more and
more consumers are switching from powders to pastes. According to Amit Burman, vice
chairman, Dabur India Ltd, the toothpowder market is growing slowly and has been largely
stagnant, whereas the market for toothpastes has been witnessing strong double-digit growth,
largely driven by a consumer shift in rural markets from toothpowders to toothpastes.
However in the last few decades the toothpaste industry in India has shown impressive growth.

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Toothpaste market comprises of three pillars, namely:

 Essential Care: these are paste based products catering the need of health benefit and
Oral hygiene. These give solution to your basic dental problems like tooth decay, cavity
problem and more. For example toothpaste like Colgate, pepsodent.
 Advanced Care: These products are also a paste based product catering to the sensitive
needs of individuals with sensitivity in their teeth. For example Sensodyne and Colgate
Sensitive
 Freshness Segment: these are Gel based products specially designed for catering the
problems of bad breath and non-whiteness of the teeth. For example Close-up and
Colgate maxfresh.

The oral market in India is estimated to be closer to Rs 2,700 crores of which the largest
contributor is the toothpaste segment accounting for approximately 75% of the total market in
India. It is expected to reach Rs. 3,226 crores by 2012. The fastest growing segment of the
toothpaste market is the Rs. 900 crore gel segment, where HUL’s Close Up has widened its lead
with a 60% share.

The growth in the urban market has been largely by the Gel segment. Presently, a large chunk of
the market is still held by Colgate. The major players in the toothpaste industry being Colgate
Palmolive and HUL, as well as several minor players like Balsara Hygiene, Dabur, etc.

In India toothpaste usage as compared to other countries is very low which signifies about the
potential of the market. In Urban India the usage of toothpaste per person per year is just
190gms. Where as it is 200gms of toothpaste per person per year in developing countries as
Indonesia and Thailand. In developed countries as USA and other European countries the
toothpaste usage is 375 gms per person year. In India the toothpastes companies are going in for
advertising on a heavy note, on an average the companies managing this FMCG category are
spending 6.15% of their sales on development.

Unlike in western countries, the market for new-age oral care products such as mouth freshening
washes, dental flosses and teeth whitening products are at a nascent stage in India. The limited
use of these products is also for now restricted to urban areas only.

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 2. EVOLUTION OF CLOSE UP

Initially most of the toothpaste catered to the essential Care of the customers i.e. providing them
with Oral health benefit, however there was a research and development conducted by Lever
Brothers and based on the findings, an Anti-essential care product was invented. The product
was invented with an innovative concept to cater to the need of freshness and whiteness with
some additional enhanced benefits. One of which included the Gel based feature. Close-up was
the first of its kind in the World to enter the toothpaste industry with a Gel based paste in the
year 1967. However it entered Indian market in the late 1975.

Close up toothpaste is a famous product from the house of Uniliver. Thousands of people across
the world swear to start the day, by brushing their teeth with Close up toothpaste. For
generations, toothpaste was associated with an opaque pepper mint flavor substance. Uniliver
came out with this unique concept of brushing teeth with the help of a red gel. Unlike the usual
pepper mint flavor of other toothpastes, Close Up came up with a spicy cinnamon flavor that was
enough to kick start the day

Slowly they understood what the consumers were looking for and started providing them
innovative solutions like crystal form lemon close up Green Core, Jares, Snowman Green, Red
Hot Menthol Chill and Close up white now toothpaste. This made Close up toothpaste, the best
whitening toothpaste. Each paste took the concept of gel toothpaste to the next level. As a
consumer there was much on offer from the house of the Close up toothpaste.

There was no need for the product in the market earlier, however, close up created a need for the
product in the market.

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 3. RISE AND FALL OF CLOSE UP

By 1980, Close Up had 3% of the 16,000 tonnes toothpaste market. The production capacity was
doubled through a deal with the third party manufacturer and the brand was taken National. Over
the next year and a half, the premium slashed by 30%. In 1983, Colgate started fearing after
witnessing a downfall in market share and started airing its campaign by inviting customers into
its Dental ring of confidence by stressing more on breath and posing as a complete toothpaste.
Close Up countered this move by sharpening product benefits, while urging the customers to do
the HA test by blowing air on their palm. The message was that Close Up feels a lot cooler
which reiterated the basic benefit of a fresh breath.

In 1987, Close Up was much below expectations with only 4.5% of the 32,000 tones toothpaste
market.

Two basic problems were identified:

(1) Appearance of Toothpastes detracts prospects from its serious buyers.
(2) Commercials displayed too much of proximity between couples which was too much for a
mother, who actually purchased the Toiletries.

1998, the 3 P’s in Close Up’s Marketing mix was reworked in Tamil Nadu, where people have a
strong sense of Oral Hygiene and the area has a cost effective media Reach. The three reworked
Ps are as follows:

(1) Product:
• Blue mint flavor introduced.
• Tangerines of Read reduced. (for serious buyers.)
• Soft Squeeze lamitubes for toothpastes introduced for the first time in the country.

(2) Communication
• Advertisement focus moved from spotlight to Gregarious couples. This group orientation was

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more acceptable to the Mother.

(3) Distribution
• Took Brand to Sub Urban and Rural areas.
• Posters and Mobile Vans arrived in areas where Urban lifestyle was a matter of aspiration. This
was a purposeful move as the company did not want the Brand to be saddled with a restrictive.

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 4. MARKET SEGMENTATION & POSITIONING

4.1 Market Segmentation

Market segmentation is broadly classified into two categories:

 Specific need based segment

a. Enhancement needs : this cater the need for having fresh breath and whiteness of
teeth
b. Hygienic needs : This caters to the overall Oral care needs

 Demographic segmentation
The segmentation was specially to target youth between 18-25 years, however it did not
alienate the people who were above the age of 30 years (especially the ones who feel
young at heart).
This product was also targeted to those groups of audiences who liked experimenting
with different products.

Close up is targeted at young people; the target market being “Multi Brand Households” where
the young does not use what their parents use. This particular targeting was significant when
Close Up was launched because Colgate positioning was a sort of oral care and hygiene benefits.
Also, Colgate was going for a broad market constituting of all the age groups.

4.2 Positioning

A large part of Close Up's success is because of its brand positioning. "

Close up falls under the third pillar of toothpaste “Freshness Segment” particularly dealing the
need for white teeth and freshness. Also Close Up has positioned itself for Emotional benefit of
closeness and rational benefit of freshness.

The name “Close Up” was propounded with a motive of building social confidence to get closer
to others.

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Close Up was positioned as a youth oral care brand from the very beginning. In 2004, the brand
was re-launched with a publicity blitz that communicated virtues of a ‘Vitamin Fluoride system’
present in the product -- a powerful mix of vitamins, fluoride, mouthwash and micro-whiteners,
for fresher breath and stronger, whiter teeth.

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 5. MARKETING MIX

5.1. PRODUCT
Close Up falls under the umbrella brand HUL – Hindustan Unilever Limited. The level of
product may be discussed as below:
 Core benefit : Hygiene
 Basic product – Toothpaste
 Expected product – Freshness
 Augmented product - Various Flavor
 Future Product – Target sensitivity segment.

Product line of Close Up is:

 Red Hot
 Menthol Chill
 Peppermint Splash
 Lemon Mint
 Fire Freeze

The colour of the toothpaste depends upon the flavor. The colour also is decided with a motive to
evoke the mood and desire to affect the purchase decision of the potential customer. Various
colors of the same flavor are tested in the market and the best color for that flavor is selected.

The strength of the product is its USP of catering the customers who desire a fresh breath along
with white teeth.

There were extensive market test conducted by the producer before manufacturing and offering
the product in the market. The tests that were conducted were on the basis of the concept,
product testing, communication route, and the final advertisement.

Innovation : The first-move advantage in the gel market has helped Close Up secure an edge
over the other brands. A large part of its success can be attributed to two factors - youth-centric
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product positioning and an innovative product pipeline. The most recent addition to its arsenal
has been the Fire Freeze variant.

Packaging – The Packaging of Close Up is designed to exhibit liveliness and freshness. The
pack of the product has a metallic effect to make it more lively and attractive.

It also has a couple being featured on its pack to help the target audience identify with the
concept of the product. Close Up was the first brand who featured a couple on its cover.

The packaging was designed in par with the competitors in the market. The color of the pack of
Close Up was decided as per the color of the toothpaste. The package of the product also
comprised with the details as per the norms laid down for consumer product. The packs offered
in rural area are relative of smaller, with a motive to enable the daily wage worker to purchase
the product.

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 5.2 PRICE

The price of the product is the same for the rural and the urban market, however the products are
offered in a smaller pack in rural area to enable them to purchase the same. Decision to fix the
price is taken into consideration after evaluating the competitors pricing strategy. However the
price for Close Up was on premium basis at par with the premium variance of the competitors.

In India, there is a high consideration given to the basic need of the consumer and based on
which price of the product is decided, which is mostly in parity with the basic needs.

With respect to the pricing aspects of the distribution channel, there are some trade discounts
given to the intermediaries, also there is a facility of 2-3 days credit purchase for the wholesalers
and distributers

Brand name Size Amount (Rs.)

Close Up Red Hot 40g 15

80g 33

150g 59

150g *2 (combo saver pack) 94

Close Up Menthol chill 150g 58
80g 32
Close Up Peppermint 150g 55
Splash
Close Up Lemon Mint 150g 60
Close Up Fire Freeze 80g 35

150g 65

5.3 PLACE

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Close Up has its presence in both, Urban as well as Rural market. However the sale is
comparatively more in Urban – 60% and less in Rural area – 40%.

In International market the presence of Close Up is felt in Brazil (as No.2 in Toothpaste market).
In Thailand, Philippines Close Up is the No.1 in the toothpaste market and in Nigeria it holds a
share of 82%. The market share of Close Up in India is 18% of the toothpaste market and it ranks
third in the toothpaste segment (after Colgate and Oral - B) and no.1 in the Gel segment.

Close Up toothpaste is made by Lever Brothers Limited (Unilever) and used all over Africa -
Limbe, Malawi to Lusaka, Zambia.from Tema in Ghana, Nairobi in Kenya, Uganda, Ethopia,
Tanzania, Thailand, Phillipines.

HUL has concentrated on building their rural distribution networks by rolling out smaller units of
toothpastes at affordable prices. The companies have also been using channels such as e-
choupals and Disha to further reach the rural population.

Distribution Channel of Close Up

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 CLOSE UP
Carrying & Forwarding Agents

Redistribution Stockists

Wholesalers

Rural Retailers Urban Retailers

Consumers

5.4 Promotion:

Promotion for Close Up is done through various modes of media. There is advertisement
telecasted on television, especially on the youth oriented channels like MTV and so on. The
Close Up tune “PAAS AAO..PAAS AAO…PAAS AAO NA...” is very popular among the
youth.

There are also promotional activities on radio, and outdoor media like banners and hoardings.

Also there are promotional activities done in mall. In Philippines promotion was carried out by
asking people to get their breath tested and then they were asked to brush their teeth in mall, after
which again there was a test conducted to know the difference in the freshness of their breath

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after using Close Up. The findings of this
experiment were that the subjects were convinced
that Close Up was effective in providing
freshness.

There was also a promotional activity conducted

in Nigeria by contacting the Schools and
helping the young students to
understand the effect of using Close Up.

Close Up also conducts promotional activities in colleges all over the world to increase their sale.
They have recent tied up with online gaming company Zapak. The brand plans to use the
gaming platform to promote 'Fire Freeze'. Gaming apart, the brand is also betting on Facebook.

Close Up has sponsored a reality show called ‘Nachenge Gayenge Joomenge’ on Doordarshan.

The brand recently roped in South Indian brand ambassador Suriya to protect its turf in the
South (Andhra Pradesh and Tamil Nadu), where the brand has historically been strong.

Based on the promotional activities, there was a finding that Peppermint Splash was currently
doing well in the market, however the newly introduced product – Fire Freeze is yet to pick up
on sales in metro cities for which there are more promotional strategies introduced.

Advertisements :

Kya aap Close Up karte Hai??

Paas Aao Na…..The Closer the Better

Dooriyo Ko Mitaao …. Paas Aao

6. MARKET SHARE

In terms of volume, Close Up increased its share from 11.7% in 2005-06 to 12.1% in 2006-07
and 12.7% in 2007-08 and 18% in 2010

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Colgate is the clear leader in toothpastes, in both volume and value, with 53.1 percent share each
in 2011 followed by HUL’s Close Up which holds 18 per cent volume share (value 17 percent).
The remaining 30% is occupied by brands such as Pepsodent, Dabur, Babool and recently launched
Sensodyne.

7. COMPETITION

Main competitor for Close Up is Colgate - Colgate Max Fresh and Colgate Fresh Energy Gel in
gel form.

To break into Close Up's stronghold, Colgate's Max Fresh gel has also been trying to don a
young image. A few months ago it roped in numerous celebrities like Shahid Kapoor, Genelia
D'Souza, Virender Sehwag, Gautam Gambhir and Zaheer Khan to promote the power of
freshness. It is also building an engaging Facebook page and organised a Max Fresh Alarm
contest during the IPL season 4, where winners got the opportunity to meet cricketer Virender
Sehwag.

However, breaking into the youth space will not be an easy feat for Colgate's Max Fresh as
Colgate gel's biggest handicap is its mother brand equity of a serious health brand and this fact
itself makes it less appealing to younger consumers.

Colgate has been actively advertising its gel toothpaste in the south and hence, in order to
counter this, Close Up roped in Suriya as its Brand Ambassador in the south.

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Close Up's success has not been enjoyed by Hindustan Unilever's sister brand Pepsodent (white
toothpaste) which has seen a steady decline in sales in the last few years.This has largely been
due to getting the price points and rural strategy wrong

Apart from the market competition, Close-up also faces completion from:

 Toothpowder.

 Traditionally used Neem twigs.

 Shelf space of the vendor.

 To have Close – Up as a brand recall name in the minds of the consumer.

For facing and surviving the competition in the market, Close Up always comes up with some
innovation in the product.

COMPANY BRAND NAME

Colgate-Palmolive India Limited Colgate Dental Cream, Colgate Active Salt and
Colgate Total 12;

Colgate Max Fresh and Colgate Fresh Energy

Gel in gel form;

Colgate herbal; Colgate Cibaca; and Colgate

Advanced Whitening, Colgate Max Citrus
Blast, Colgate Max Peppermint Blue, Colgate
Max Spicy Red and Colgate Sensitive

Hindustan Unilever Ltd Pepsodent

Vicco Group of Companies Vicco Vajradanti Paste, Vicco Vajradanti Sugar

Free paste, Vicco Vajradanti powder

Henkel India Limited Neem active

Johnson & Johnson Ltd. Listerine and Coolmint Listerine.

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Dabur Co. Dabur Red, Dabur Red Gel, Babool, Babool
Neem and Meswak.

7.1. Competitors Pricing

Brand Name Size Amount (Rs.)

Colgate Maxfresh 150g 60

150g *2 (combo pack) 100

Colgate Maxfresh 40g 15

Colgate Maxwhite 150g 65

Babool Mint Fresh gel 145g 30

Anchor Red gel 150g 45

8. MARKET SURVEY ANALYSIS

Research Objective: To study the toothpaste market and strategies Close Up can adopt to gain a
larger market share.

Research Methodology:

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Data has been collected from a sample of 60 people, both males and females. We have targeted
three age groups namely, 18-25 years, 26-35 years and 36 and above.

Since the target group for Close Up is 18-25, we have collected and tabulated our findings so as
to see how receptive this age group is to the toothpaste. Close Up doesn’t target, but extends its
market maximum up to the people of the age 36. Majority of the people above 36 are actual
customers of the brand and hence data has been collected from these two age group as well.

ANALYSIS

1. Preferred Toothpaste Brand

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It is observed that 45% of the age group 18-25, 70% of the age group 26-35 and 65% of the age
group 36 and above prefer Colgate as a Brand for toothpaste whereas 25% of the 1st age group,
15% of 2nd age group and 20% of 3rd age group prefer Close Up and the remaining prefer
Pepsodent and other brands. The market share of Close up is significantly lower than Colgate.

Looking at this we can see overall 61% market is occupied by Colgate, 20% by Close Up and
12% use Pepsodent and 7% people use other brands. This shows that Close Up has good, decent
and consistent market share of close to 20% in all age groups.

2. Preferred Qualities in a Toothpaste

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It is observed that people of the age group 18-25 and 26-35 want Freshness as the main quality in
their toothpaste. This is followed by Cavity Prevention, whereas in the age group 36 and above is
the other way. The third quality people want is whitening followed by Sensitivity and then
Flavor for all the age groups.

Overall people wanted freshness as a factor in their toothpaste but they did not want to
compromise on cavity prevention. For older people sensitivity was also an issue. We saw a very
minor population wanting flavors in the toothpaste this shows that toothpaste having freshness
will do for consumers but flavors are not what a customer desires in toothpaste.

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3. Factors Affecting Purchase Decision

Purchase Decision
Other
3%

Price
21%
Advertisement
5%
Brand
49%
Availability
Packaging
21%
1%

The biggest factor that affects a purchase decision for toothpaste in all the age groups is Brand
(49%). People are brand conscious. The Availability of the product and its Price, both factors

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accounts for 21% each that affects the purchase decision. While Advertising and Packaging
affects the purchase decision marginally

Here we can see that Colgate is so much into the minds of consumers that when they talk about
brand and choosing toothpaste the first one which comes to consumers mind is Colgate. To break
the rhythm Close Up should focus more on brand building in minds of younger generations.

4. Preference

Majority people across all the age groups prefer Paste Variety toothpaste. Here, more than 50%
of people have opted for paste variety and close to 20% people opted for gel variety. Close Up
operates basically in gel market and it is difficult to change the mindset of people using paste
variety .thus Close Up should cater to the masses and get into large scale production of paste
variety. Also medium sized tubes are preferred by the consumers.

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 5. Advertisements:

It is observed that the advertisements are viewed by majority of the audience.

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As far as the ads go the message is very well conveyed to the audience. We can say that Close
Up comes up with innovative ads that have permanently set into the into the minds of consumers.

6. Customer Satisfaction

The Experience of the consumers when they used Close Up the last time was recorded. Around
40% of the consumers are satisfied with the product. However it’s also observed that 25% could
not comment on this as they have never used Close Up.

Hence we have listed some recommendations to help Close Up increase its market share and
popularity amongst the masses.

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 9. RECOMMENDATIONS & CONCLUSION

Based on the observations of the survey and the primary data collected at HUL, we have
concluded the need for below:

 Currently Close Up’s main target market is the youth between the ages 18 – 25 years.
However, we feel that Close Up should extend its target audience beyond this age group say
to a maximum of 35 years as people feel young at heart and associate them with the brand.

 In India, the decisions (in middle class house) regarding purchase of the toothpaste are
taken by the mothers. Hence such advertisement should be telecasted which would appeal to
all kind of consumers and at the same time focus on their target segment-the youth.
Ad Concept: Mother goes shopping. She observes a group of youngsters on the way
exuding confidence and enthusiasm. She sees Close Up in their shopping bag and decides to
buy it for the son and daughter.

 As per our survey analysis, the most commonly used toothpaste amongst all age groups is
Colgate. Also, the survey revealed that the consumers are brand loyal and hence getting
them to change their preferences would be a tough job for Close Up. They must focus on
brand building and crossing the popularity of Colgate to gain a higher market share. Close
Up should tie up with various Doctors, Clinics and Hospitals around the country as through
our survey, it was noticed many consumers would change their brand on the basis of their
Doctors recommendations.

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 The positioning of Close Up was clear in the minds of a consumer as a product promoting
Freshness. When asked what comes to your mind when you hear “Close Up” people gave us
a variety of answers like:
 Freshness
 Red gel paste
 Two lovers
 Paas Jitna Behtar Utna
 The boy with the Afro – Jya Aap Close Up Karte Hai?
 Smile and White Teeth

What we could see is that the Gel paste and Freshness was something that many people
remembered so the positioning of Close Up was clear in minds of consumers as a youth
brand. They recalled Close Up as a tooth paste for freshness and gel variety. Hence we
recommend, if Close Up continues with this image and builds on it, it can gain a higher
market share.

 Close Up should be extensive promotional strategies in Urban areas (like mobile dental
check up) conducted to attract new customers. As per our survey, we have observed that
many people have not tried Close Up. Close Up should try spreading awareness by give out
free samples of their product outside colleges. Also, they should give out free samples with
HUL brands like Axe Deodrant and Lakme in order to gain popularity. Also, they should
start giving free toothbrushes along with their packs.

 Close-up should also get itself involved in the paste based segment to increase its market
share, as most of the Indians (especially the mothers and the higher age group) prefer paste
based toothpaste for use.

 Today’s consumer look for more than freshness and whitening in a toothpaste. Cavity
prevention is now an essential feature which has to be present in every toothpaste. Along
with the ‘Freshness’ Factor Close Up should also focus on Cavity prevention as the youth is
more aware of the benefits of Oral care and hygiene.
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  The appearance of Close up (in terms of the packaging) did not have any major changes
from the time of its introduction, hence it was noticed that it had a negative effect on the
purchase decision of the potential customer. Close up should propagate some constructive
changes that would not only have a positive impact on the target audience but would also
appeal new customers.

 More preference should be given to manufacturing and packaging of Close up in a middle

sized tube as most of the audience prefer purchasing a normal (or mid-sized) toothpaste.

 Close Up should choose known celebrities as their brand ambassadors for their product
(rather than new models) which can be one of the major factors to boost up the sales
turnover of the product.

 Close Up should go in for Product Diversification and come out with a new product that
caters to Cavity Prevention and Sensitivity. The target audience for this product should be
36 and above.

Based on our survey we also found out that they may use Close Up in the future and hence, in
order to convert these prospective customers into potential customers, Close Up should cater to
their needs through our findings.

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 ANNEXURES

SURVEY QUESTIONNAIRE

Name: ___________________ Age Group: 18-25 26-35 36 and above

Sex: Male Female

1. Which toothpaste brand do you prefer?

 Colgate  Pepsodent  Close Up  Others ____

2. What qualities do you look for in toothpaste?

Freshness Flavor Whitening Cavity Prevention  Sensitivity

3. Which factors affect your purchase decision?

Price Advertisements Availability Packaging Brand

Please specify in case of any other __________________

4. Do you prefer?

Gel Variety Paste Variety  Either would do

5. Size Features you like in toothpaste

Small Size tube  Medium Size tube Large Size tube Makes no difference

6. What kind of offers would most likely make you purchase another brand of toothpaste?

Buy One Get One free Price Reduction Coupons No Brand change

7. Have you seen the Close up ads?

Yes No

8. Do they appeal to you?

Yes No

9. How satisfied were you in terms of product effectiveness the last time you used Close-Up toothpaste?

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Very dissatisfied Dissatisfied Not sure Satisfied Very satisfied Not applicable

10. What comes to your mind when you hear ‘Close up’?

_______________________________________________

11. Do you plan to purchase Close-Up toothpaste in the future?

Yes No May be

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