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Colgate - Grade: 7.0

Marketing (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)

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Major Project – Colgate 1

Assignment Cover Sheet

Bachelor of Business (Talented)

Group Name Marshmallow

Group Member 31181020556, 31181020119, 31181021366, 31181020823
Number
Subject Name Principles of Marketing
Lecturer Dr. Ho Phu Hai
Title of Assignment Major Project
Length 3275 words
Due Date 30/8/2019
Date Submitted 30/8/2019

Declaration:
❑ I hold a copy of this assignment if the original is lost or damaged.
❑ I hereby certify that no part of this assignment or product has been copied from any
other student’s work or from any other source except where due acknowledgement
is made in the assignment.
❑ No part of the assignment/product has been written/produced for me by any other
person except where collaboration has been authorised by the subject lecturer/tutor
concerned
❑ I am aware that this work may be reproduced and submitted to plagiarism detection
software programs for the purpose of detecting possible plagiarism (which may
retain a copy on its database for future plagiarism checking)

Signature: ……………………………………………………………………….

Note: An examiner or lecturer/tutor has the right not to mark this assignment if
the above declaration has not been signed)

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Major Project – Colgate 2

MAJOR PROJECT

Marshmallow Group

Bùi Phúc Trâm Anh

Trần Mỹ Duyên

Nguyễn Ngọc Linh Đan

Vũ Bảo Nam

Principles of Marketing

August 30, 2019

Dr. Ho Phu Hai

Ms. Gabriel Adderley

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Major Project – Colgate 3

Introduction

Colgate History

Colgate-Palmolive is known as a multinational company with the United States

headquarter established in 1806 (Shahbandeh, 2019). During the operation, Colgate

engages in the production, distribution, supply of personal health care products and

toothpaste is considered as the most popular and best-selling product (Hung, 2009).

Since the establishment, Colgate has been acquired more than 7 companies around the

world and expanding business scale across 200 countries. Having joined in Vietnam’s

market in 1996, Colgate acquired DaLan - a well-known toothpaste brand at that time and

then immediately wiped out it to build up Colgate’s own marked toothpaste items (Anh,

2019).

Mission Statement

Since the mission of the company from the very first day of operation, Colgate is

committed to working with passion, dignifying the integrity, honesty, high ethics in any

situations.

Maslow Hierarchy

According to Maslow Hierarchy, in terms of physiology and safety, toothpaste

helps to make dental hygiene. Moreover, dentifrices also give consumers breath fresh in

order to avoid embarrassing and unintended incidents. Due to the values, Colgate

company brings to the consumers, in 2017, “Colgate Palmolive is included in the ten best

corporate social responsibility provided” by Forbes (Strauss, 2017).

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Major Project – Colgate 4

Body

Environment analysis and SWOT.

After discussing Colgate's brand mission and how they deliver the value to

consumers in Vietnam through the deep understanding about Maslow's hierarchy of

needs, we will now proceed to analyze how micro and macro factors affect the

environment in which Colgate operates.

Micro factors. Firstly, about micro factors, let’s begin with Company factors. Being

a subsidiary of Colgate-Palmolive, a very large and long-standing company with over 200

years of operation (Colgate Palmolive, n.d.) helps Colgate's Company factors including

top management, finance or operations are now relatively stable. Next, Supplier factor,

thanks to Colgate owning a factory right in Vietnam, they can take advantage of available

resources such as production materials and abundant labor resources in a very effective

way. Coming to the third micro factor - Marketing Intermediaries, there are many

intermediary enterprises supporting Colgate in Vietnam such as Big C, Lotte mart in

reseller and distribution section; VMLY&R Vietnam in marketing service agencies; and a

lot of banks in the financial intermediaries section. Next is the customer factor, in Vietnam,

there are two main types: consumer market such as households, ordinary consumers;

reseller market includes wholesale channels like Metro, Co.op mart and retail channels

such as convenience stores and grocery stores. Finally, Competitor factors, Colgate is

competing with Close up or P/S in the same toothpaste market. At the same time, Colgate

also has to compete with substitute products such as mouthwash and chewing gum from

well-known brands like Listerine, Doublemint, etc.

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Major Project – Colgate 5

Macro factors. Next is macro factors affecting Colgate in Vietnam. The first factor

is Demographic, with the diversity of segments in Vietnam, Colgate has to launch more

than 15 product types to satisfy a lot of different customers (Colgate, 2019). Secondly,

about economic forces, with Vietnam’s market economy developing quite steadily and a

GDP of $ 3,000 a year (Hiếu, 2019), it is quite easy for the majority of people to buy

Colgate products The third is Natural Environment Factors, thanks to the favorable

geographical position and mild weather conditions in Vietnam, Colgate's raw material

supply is always guaranteed, in addition, the transportation and sale of products is quite

convenient. Moreover, recently, people are becoming more aware of environmental

protection, so Colgate also needs to minimize environmental pollutants in all their

activities. Next is the technology factor, the rapid development of technology worldwide

has required Colgate to constantly change and adapt so that their production and

business activities take place optimally and not outdated. Lastly, Political and Legal factor,

in general, the politics in Vietnam is relatively stable and the government has created

many favorable conditions for foreign businesses like Colgate to develop. What Colgate

needs to do now is to comply with the law and solve and eliminate problems of counterfeit

products.

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SWOT Table.

Strengths Weaknesses

● Large and long-term brand ● High-cost operation

● Variety of product lines ● Brand dilution

● Efficient supply chain ● Lack of investment in new

● High market share technology

● Weak online marketing

Opportunities Threats

● Unexploited rural markets ● The market is gradually

● Merging and acquiring other saturating

companies ● Imitation of the counterfeit

● Expanding their product line ● Too many competitors

● Growing apprehension on

chemicals

Note: Datas for Strengths, Weaknesses, Opportunities and Threats from (Bhasin, 2019), (Ghoda,

n.d.), (Fernfortuniversity, n.d.)

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STDP

Segmentation

Geographic Demographics Psychographic Behavioral

Tooth Rural and urban - Age: 3 - 10 - Being no or less Light users

decay - No income awareness about

prevention oral hygiene

- Depending on

purchasing decisions

of parents

-Love using

toothpaste with

different tastes

Bad fresh Rural and urban - Age: 11 - 20 - Being more Potential

prevention - Mainly using conscious of oral users

pocket money hygiene and

appearance

- Teeth Rural and urban - Age: 21-30 - Considering more Tend to try

whitening - Middle or about ingredients different

high income and teeth whitening types

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Gum Rural and urban - Age: 31-40 - Looking for good- Potential

disease - Middle and quality of products users

prevention high income for family

- High criteria of

quality and

ingredients.

- Using familiar

products due to busy

life

Periodonta Rural and urban - Age: 40+ - Tend to use Medium

l disease - Still working therapeutic users

prevention or being toothpaste.

retired

Targeting. Colgate has been targeting to a range of customers, however, the age

from the twenty-one to forty is the group that this brand mostly focuses on due to the

outstanding demand and products affordability comparing to the other segments. At this

age, “people are at risk of facing many dental problems such as gingivitis that could lead

to periodontal at the older age” (Steven, 2019). Since the sense of personal as well as

home dental protection, the middle-aged consumer demand could be said to be quite high

that they seriously look for the high-quality criteria of ingredients. Especially, by reason of

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Major Project – Colgate 9

busy life, instead of trying different brands of toothpaste, people in this age group are

likely to become loyal customers to the brand which offers them the value they are looking

for (MCDougall, 2015)

Differentiation. Particularly, with a large selection of toothpaste brands, Colgate still

able to attract the consumers by its own marketing differentiation. Owning a “whitening”

attribute with uses Hydrogen Peroxide whitening technology helps this product line to be

in best whitening toothpaste list in recent years (Maggiore, 2016)

Positioning.

As can be seen in the positioning map, Colgate is considered one of the best-quality

toothpastes. As the results provided by Cochrane Collaboration - a British charity

established to organize medical research - has found out that Colgate toothpaste helps

“removing 22% plaque, tartar from teeth and gingivitis, 48% decline in bleeding gums and

5% decrease in tooth decay” (Wilson, L. 2016). For example, Colgate Total is the toothpaste

that is approved by both the United States Food and Drug Administration and the American

Dental Association (Verduin, P. 2015). Comparing to the other brand, Colgate quality is a bit

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Major Project – Colgate 10

inferior to Sensodyne; in contrast, the price of Colgate toothpaste is still cheaper and

reasonable than the other one.

4Ps and Evaluation of Marketing Mix

Next are the discussion and analysis of marketing mix, also known as 4Ps

including Product, Place, Price, and Promotion. Additionally, the marketing mix involves

a series of actions or strategies that the company uses to promote its brand or product in

the market (The Economic Times, n.d.)

Product. Colgate's product analysed here is Colgate's toothpaste, which is considered a

daily consumer product of people. Or more specifically, Colgate toothpaste is a

convenience product when consumers can easily find and buy frequently, immediately.

In the analysis, the product will have 3 levels, namely Core customer value, Actual product

and Augmented product, by doing this Colgate can better understand the different levels

of need a customer has for a product (EPM, n,d.). First is the core customer value section,

which includes the most basic needs of consumers when choosing to buy products, thus

the core customer value that Colgate brings within their toothpaste products is to satisfy

the daily dental hygiene needs of customers. Secondly, about the actual product, usually

a product will have many features but there are few core values. Similarly, in Colgate

toothpaste products, there will be many actual products attached like the value of Colgate

brand name which lasts for more than 200 years (Colgate Palmolive, n.d.); many features

such as whitening, prevent tooth decay or fresh smell, etc; and many ways of packaging

products such as small sizes for travel to big sizes for a large family. The final level will

be the augmented product of Colgate toothpaste such as dedicated customer care

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Major Project – Colgate 11

regimens, dental care centers and customer support hotlines printed right on the product

packaging. Moreover, there is also convenient for customers when they can easily find

and buy Colgate products. In addition to 3 levels of product, is the analysis and evaluation

of Colgate's branding strategy. Colgate is currently using line extension strategy which

means they will add new features to their existing products, rather than developing the

new products (Linton, n.d.). For instance, Colgate will launch Colgate Max Fresh green

tea product beside Colgate Max Fresh products existing on the market. Thereby, more

than 15 toothpaste products have been launched in Vietnam (Colgate, 2019) in order to

increase the product variety in here. By using this tactic, Colgate will have many great

advantages such as enhance the ability to meet the variety of customer needs, reduce

production costs, build more relationships with retailers and increase the distance with

their competitors (Marketing Study Guide, n.d.). In contrast, Colgate also faces some

dramatically risks such as confusing consumers and retailers; arises some invisible costs

like image dilution or production complexity; and the risk of increasing more competition

with their rivals (Money Matters, n.d.) .

Place. To deliver products to the customers, Colgate has been adopting an

effective way of the distributional channel. The manufacturers would directly distribute the

merchandise to the wholesalers who then continue dispatch these products to the

retailers. And the retailers are the last to offer the items for the consumers. What is more,

according to the data we got from the survey (Appendix B), Colgate toothpaste is widely

available in many places in Vietnam namely supermarkets, medical stores or even

grocery stores in rural areas. The wide distribution of Colgate toothpaste is one of the

contributory factors that attract more and more people to consume this product line.

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Major Project – Colgate 12

Likewise, in an age of advanced technology, Colgate also gives the customers another

option of online shopping that people could look for Colgate toothpaste through reliable

websites such as Shopee or Lazada. Instead of wasting time going out for buying

products; nowadays, with a single click, people are able to purchase what they desire in

a faster and convenient way (Cornell, n.d). Consequently, by this strategy, Colgate has

advantages in reaching various customers and satisfy them. The robust distribution

system once again shows the popularity of Colgate all over the world in general and in

Vietnam in specific.

Price. The third factor that we analyze in Colgate marketing mix strategy is Price.

When Colgate approach in the Vietnam market in 1995, while equitized domestic

toothpaste companies, they also lowered their price to expeditiously attract a large

number of customers and fasten the process of gaining high market share. As a result,

they are now holding 25% of Vietnam toothpaste market, and is one of the two largest

toothpaste brands in Vietnam (Phương, 2019).

The application of market penetration strategy is continually being used by Colgate

nowadays in the Vietnam market. Research shows that the Colgate’s toothpaste price in

Vietnam is only ⅓ compared to other countries in Southeast Asia (Nhi & Minh, 2013).

The adjustment in price of Colgate to fit personal income is reasonable, as the

international price of Colgate is quite high for most of Vietnamese, which might be

challenging for Colgate to maintain a high market share with such price, especially when

there are companies that are selling their products with competitive price like Unilever

(P/S, Closeup), GlaxoSmithKline (Sensodyne, Aquafresh) or other domestic brands (Da

Lan, Doreen).

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Major Project – Colgate 13

Some other price strategies that are used by Colgate are quantity discounts and bundle

pricing. Having the advantage of variety in products - 9 lines of toothpaste, 6 lines of

toothbrush and 5 lines of mouthwash (Colgate, 2019), Colgate can easily create bundles

that serve different segments at the same time like Family Package, Travel kit, Adult

Sensitive Bundle, etc. Selling in bundles enable Colgate to offer customers a better price,

sell more products and save budgets in distribution and packaging. Moreover, bundles

can be used as a place for selling extra-product, like introducing new products, or getting

rid of inventories.

Promotion. The last marketing mix tool is Promotion. To build good relationships

with customers, not only do companies need to create customer value by developing

good products, selling them with attractive price or making them available to target

customer, but they also have to promote the value to their clients by communicating it

clearly and persuasively (Kotler & Armstrong, 2014). The key value that Colgate delivers

to its customers is the happiness and self-confidence in bright smile. It was showed

consistently in the logo (a white smile on red background), the packaging, and also in

their advertisement and PR plans.

A unique point in their promotion strategy is professionals’ approval. Colgate smartly

attached their products to the image of dentists giving advice on dental care. This can be

observed in advertisements of Colgate Decay Prevention, Colgate Total or Colgate

Sensitive. Furthermore, they also created a lasting impression in customers mind with the

statement “Colgate - Recommended by dentists”. The ingenious application of

association endorsement is a competitive advantage of Colgate, which was proved to

raise purchase intention and customers credibility (Daneshvary & Schwer, 2000).

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Major Project – Colgate 14

Another remarkable factor in their promotion mix is Colgate Oral Health Month campaign,

which is organized annually in October, in collaboration with the Vietnam National

Hospital of Odonto-Stomatology, with the goal of raising public awareness of oral health

care. The "Dental Health Month" program takes place with a series of propaganda and

free dental check. These are considered CSR activities, which do not only raise brand

recognition, but also favorable publicity and a good corporate image (Epstein-Reeves,

2012).

Issues and recommendations.

The very first issue of Colgate is a misleading advertisement. Colgate was accused to

be in breach of advertising rules by using misleading information in its TVC. According to

Derbyshire (2007), the Advertising Standards Authority (UK) claimed that the survey method

was not appropriate to lead to the conclusion that "More than 80% Of Dentists recommend

Colgate". The article has shown some illogical points in Colgate’s survey. First of all, this

survey was conducted by calling telephones to dental professionals, which is not reliable as

we could not confirm the identity of dentists. Next, the survey indicated that each dentist can

choose many different brands. However, the headline makes customers misunderstand that

80 percent of dentists recommend Colgate over other brands and only 20 percent of dentists

recommend other brands. The Colgate’s misleading headline was just one in numerous

cases of deceptive advertising, which has a lot of negative impacts on consumers and the

competitive market. It is obvious that providing consumers with false information is unethical

and illegal that may lead to consumers’ serious health problems. Furthermore, false ads can

create a “lemon market”, in which deceptively advertised products eliminate honestly

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Major Project – Colgate 15

advertised products from the market. Specifically, Colgate’s toothpaste products can create

a bias in consumers’ purchase intention as they sound more reliable; and as a result, the

unfair competitive advantage was created within Colgate might force other toothpaste

brands to leave if they cannot find a characteristic that has the same level of reliability.

(Cawley, Avery, & Eisenberg, 2013)

In the first issue of Colgate, there are two cases that Colgate has to deal with. If Colgate

has clear evidence about the survey, it should public the specific data to prove that its slogan

is reliable. Otherwise, Colgate should quickly replace another slogan before all customers

recognize the problem. In details, Colgate needs to remove advertisements containing

misleading information. Next, the brand may release a campaign linked to CSR activities or

a much attractive worldwide advertising so as to build customer reliability. The second issue

of Colgate is about the promotion strategy: weak online marketing. In a study conducted

annually by Totally awesome, a pioneer in digital media for children, more than 75 percent

of children from 6 to 14 years old in 7 Asia Pacific countries chose the Internet instead of

television. In Vietnam, the percentage of children who prefer to access the Internet is up to

66% (Brands Vietnam, 2017). However, Colgate has hardly promoted advertisements on

Internet sites like Facebook, Youtube, or Instagram. Although Colgate has an official fan

page, it has not really caught the attention of many people. In details, while Colgate

Facebook fan page has around 100,000 likes, the competitive brand – Closeup – gains up

to 11,500,000 likes. The fact that Colgate has not exploited Internet sites is a remarkable

point of losing potential consumers to competitors.

In the second issue, to basically solve this, Colgate needs to build stronger online

marketing strategies to reach its target customers. Some suggestions are promoting its

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Major Project – Colgate 16

ads online websites or social networks, recruiting a young communications team who is

energetic and has understanding of trends to attract young customers. To make

campaigns more efficient, Colgate should increase its coverage degree on the Internet

by collaborating with artists, influencers or KOLs to be mentioned in their online activities.

For example, it can pay for Chau Bui – a hot fashion KOLs on Youtube – to appear on

her review Youtube channel to promote for Colgate White Optic line.

The third issue is the counterfeit Colgate toothpaste. According to Huyen (2015),

Department of Science and Technology cooperated with the Ministry of Public Security

to confiscate 506 types of counterfeit Colgate toothpaste in Vietnam. There are

indications that these products contain diethylene glycol instead of fluoride, which may

lead to kidney or liver disease (Geller, 2007).

As can be seen from the third issue – counterfeit toothpaste – it seems unable to

remove all the counterfeit toothpaste on the market. However, there are some ideas to

face it. Colgate has to sign contracts with both reliable offline and online distribution

channels such as supermarket, Tiki, Lazada,…to make sure that these distribution

channels only sell Colgate genuine products and avoid importing fake goods.

Furthermore, Colgate needs government policy and support to guarantee the brand’s

exclusive rights in order to eliminate counterfeit products on the market. Colgate also

needs the main help from customers who directly use the products. Besides providing

software or tips to identify the differences between real and fake toothpaste, Colgate has

to warn consumers about oral diseases by using low-quality toothpaste. For instance,

customers must not trust the 50 percent discount or buy 1 get 1 free campaign because

a health care product cannot be at that low price.

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Conclusion

In general, Colgate Toothpaste is quite successful in Vietnam when they are

currently occupying a large share of the market thanks to a deep understanding of

customer insights and effective marketing mix strategies. However, there are still a lot of

significant issues that Colgate needs to solve in order to develop stronger and take the

leading position in toothpaste industry in Vietnam.

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companies-with-the-best-csr-reputations-in-2017/#2e8871e6546b

The Economic Times. (n. d.). Definition of 'Marketing Mix'. Retrieved from

https://economictimes.indiatimes.com/definition/marketing-mix

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Verduin, P. (2014) Setting the record straight about Colgate Total toothpaste. Fox

News. Retrieved from https://www.foxnews.com/opinion/setting-the-record-

straight-about-colgate-total-toothpaste

Wilson, L. (2016). Clinical benefits with Colgate Total toothpaste. Dentistry.co.uk.

Retrieved from https://www.dentistry.co.uk/2016/03/31/clinical-benefits-with-

colgate-total-toothpaste/

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Appendix A: Colgate’s positioning map

Appendix B: Survey

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[Translation]

Where do you usually find Colgate sold?

- Grocery store

- Market

- Supermarket

- Convenience store

Appendix C: Colgate - Recommended by dentists

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Appendix D: Colgate Oral Health Month

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