Colgate Toothpaste

Practicum
#5
Bus 306 Spring 2014
By
Patrick Sasaki
Bret Russell
Sean Curtis
Michael Isom
 Colgate Commercial
https://www.youtube.com/watch?v=_3G7vpYd3S8

3:38-4:25
Chapter 12: Marketing Channels
-Delivering Customer Value

Chapter Objectives
-Objective 1: Marketing Channel uses and their Functions.

-Objective 2: Behavior and Organization of Market Channels.

-Objective 3: Distribution Channel Decisions.

-Objective 4: Channel Management and Distribution.

-Objective 5: Logistics and Supply Chain Management

 Supply Chains
-Supply Chains
-Consists of upstream and downstream partners.

-Downstream partners are distribution channels such as retailers and

wholesalers.

-Distribution Channels
-Marketing channels directly affect every marketing decision.
Colgate Distribution Relations
-Colgate’s prices are affected by
its supplier type.

-Their new products must be

able to adhere to channel
partner operations.

-Colgate’s sales decisions are

based on its downstream
channels.
http://english.vietnamnet.vn/fms/business/85431/foreigners-
sell-toothpaste-at-below-production-costs-.html
 Number/Layers of Channel
Levels
-Channel Levels
- Three types of channel levels.

-Channel 1 (Direct Marketing Channel)

-Company sells directly to consumers.

-Channel 2 (Indirect Marketing Channel)

-Company uses only one distribution channel.

-Channel 3 (Indirect Marketing Channel)

- Company uses more than one marketing channel.
 Channel Levels
Number of Levels Channel 1 Channel 2 Channel 3

1
Producer Producer Producer

2
Wholesaler

3 Retailer Retailer

Consumer Consumer Consumer

 Colgate's Distribution
Model
Channel Behavior and Organization...
-Channel Behavior
-Channel partners rely on one another for maximum efficiency and
profit. If disagreements occur, channel conflict arises.

-Horizontal and Vertical Conflicts

-Horizontal, is conflict between same channel levels.
-Vertical, is conflict between different channel levels.
 Channel Behavior and Organization...
-Vertical Systems
- A vertical system: Has channel leadership and includes producers,
wholesalers, and - retailers. Types of VMS-
Corporate VMS: Ownership. Contractual VMS: Contracts. - Administered VMS:
Power.

- Horizontal Systems
- A horizontal system is when two channels of the same level join
together to create a better marketing opportunity.
 Vertical Marketing System Horizontal Marketing
System

http://www.impowerable.com/protect-the-
planet/how-mcdonalds-and-wal-mart-affect-your-
http://www.mbaknol.com/marketing- food/
management/concept-of-distribution-channels-in-
Channel Behavior and Organization...
-Multi-Channel Multi-Channel Distribution
Distribution
- Organizations create multiple
distribution channels to reach
various segments.
-Changing Channel
Organization
-A changing world filled with
advanced technology calls for
different distribution measures.
Distribution Channel Decisions
-Analyzing Customer Needs
-Each channel level must be selected carefully, each level adds value to the
customers.

-Setting Channel Objectives

-A company must figure out which channels work best for each segment.

-Identifying and Evaluating Alternatives

-Marketing Channels vary in types, numbers, and responsibilities.

-International Distribution Channels

-International intermediaries face complex and challenging issues.
Colgate’s Distribution Decisions
-Colgate implements Intensive
Distribution: As many as outlets as
possible (Trunick, 2011)
-Colgate’s International Distribution
Channels consist of One Central
Distributor for the entire region(Trunick,
2011)
 Channel Management Decisions
-Selecting, Managing, and Evaluating
Distribution Members.

-Distribution Policy
-Exclusive distribution is when a company allows only a certain outlets to
carry its
products.

-Exclusive dealing is when a company requires a channel to not handle its

competitor’s products.
 Logistics and Supply
Chain Management
-Importance and Goals of Logistics
-Functions
-Warehousing
-Inventory Management
-Transportation
-Information
-Integration of Logistics
-Involves teamwork, building relationships, and third-parties.

http://www.imperiallogistics.co.za/imperial-news/566/imperial-wins-colgate-palmolive-contract
Colgate’s Logistics Success
-Transportation- 65 Ocean Containers, 3800 Truck Loads per week.
(“Colgate palmolive,”)

- Negotiated Global Tender Agreement allowing cheaper shipping

overseas (Colgate palmolive,”)

-Green Logistics-Colgate cut 1.8 million miles of line haul from its
system, which equates to 300,000 gallons of diesel and 3,000 tons of
carbon emissions (“Colgate palmolive,”)

- Integrated -Third Party Logistics- Outsourced Logistics to Imperial

Logistics Co. (“Imperial logistics, 2014)
What we Learned
Michael- The importance of marketing channels and the roles that they play. Also the different
levels there are and how they work.

Patrick-The amount of time and effort it takes a product to go from raw material to end user.
The intricate design of a supply/distribution chain and the importance of each decision.

Bret- I found it intriguing that third-party logistics can play an such important role in distribution
marketing. As it is affects every other decision.

Sean- The internet has produced a lot of channel conflict and disintermediation for companies.
 References
-Imperial Logistics. (2014, January 30). Imperial wins Colgate-Palmolive contract. Retrieved April 3, 2014,
from http://www.imperiallogistics.co.za/imperial-news/566/imperial-wins-colgate-palmolive-contract

-Marketing (15th th ed., p-Kotler, P., & Armstrong, G. (2014). Principles op. 191-216). Upper Saddle
River, NJ: Pearson.

-Francis, A. (2010, September 23). Concept of distributing channels in marketing. In MBA Knowledge.
Retrieved April 3, 2014,
from http://www.mbaknol.com/marketing-management/concept-of-distribution-channels-in-marketing/

-Trunick, P. (2011). Colgate logistics delivers smiles. Retrieved from

http://www.inboundlogistics.com/cms/article/colgate-logistics-delivers-smiles/

-Colgate palmolive. (n.d.). Retrieved from http://p7distributioncasestudy.wikispaces.com/Colgate Palmolive