BUSINESS REPORT: COLGATE-PALMOLIVE AUSTRALIA

MARKET SIZE FOR COLGATE-PALMOLIVE

Colgate-Palmolive is an American multinational size corporation that produces and distributes various kinds of personal products, soaps, detergents, health care products and oral hygiene products including toothpastes and toothbrushes. It is one of the highest growing companies in its industry and its successes are well known. The Colgate Company has a market in over 200 countries and territories throughout the world. The company itself was founded in 1806 under the laws of state Delaware in 1923, USA. In recent years in spite of recession the company has grown and has spread to various markets similarly it has seen potential in Australia. Just a decade ago the market of Australia was not a very significant one for Colgate Palmolive Company. Colgate manufactures various products and they are all grouped in two basic product segments, the Oral, Personal and Home Care; and Pet Nutrition. Colgate is a global leader in Oral care products with the leading toothpaste and toothbrush brands sold throughout the world. Many of the properties of the company are based in USA, but still amongst most significant new properties and new investment areas are Asia/Africa in whose estimates is Australia. For the analysis of the growth of Colgate sales in Australian market it is best for us to view the charts and statistical data and financial reports from the Colgate-Palmolive Company itself. Amongst most important reports that we will use for reference are annual reports ranging from 2005 till 2010. Under these reports Australia is included in section of countries which belong to the Asia/Africa segment so when we refer to the data of Australia we will refer to the generalized data regarding total sales in this segment respectively paying attention to the results achieved in Australian market. In 2005 Australian market for Colgate-Palmolive products of both categories were not as attractive as will prove in later years, where we can notice some basic movements and growth in below presented charts and tables. Furthermore it is very significant to mention that the growth of the Colgate-Palmolive company has not stopped in the years of recession but has continued on in later years truly is giving us an insight in to a great success of a giant corporation.

MARKET GROWTH Australia was becoming more and more significant part of the general trading of the Colgate Company and in latest years has grown to become one of the very significant segments. Very interesting is that formerly the accounting and management for Australian market was done inside the Asia/Africa segment of the corporation, but from after the year 2006 it was transferred to the European management. Clearly Australian market was gaining in importance to the Colgate-Palmolive company. The next charts and data will present the movement and growth of the sales of Colgate products in Australian market in years between 2005 and 2011. Table 1

(Numbers in US Dollars millions)

Chart 1

Charts and data will present the movement and growth of the sales of Colgate products in Australian market in years between 2005 and 2011. From the Table 1 and Chart 1 it is noticeable that the growth in sales of Colgate products in Australia

was significantly growing from years earlier than 2005 and as we will see the trend will continue on later. However, as growth continues the management of the company sees the opportunities in Australian market and for this reason shifts the management of Australian market to the staff of the European market, so later Australia will be added to the market segment Europe/South pacific. Net sales as we can see increased for 6, 5% for Asia/Africa segment, from which 34% belongs to Australian market sales. In later years numbers for Australian market only got better and total sales increased from $11,396 million to more than $12,000 million in 2006/07 and on to more than $15,000 million in 2010. Overall there was a certain decline in growth of Colgate sales all over the world and partly this has been felt in Australia, but much less than in the rest of the world. The world recession has significantly impacted Colgate Company, however it has managed through intense innovation and production, as much as quality management to overcome the obstacles put in front of it and still manages to achieve amazing success. Next charts will present the data from 2007 to 2010 and will receive common comment on how the situation evolved and how it is expected to evolve in coming years.

Table 2 and Chart 2

The year 2007 was equally and even more profitable for the Colgate-Palmolive company as innovations in both Oral, Personal Products and Health Care and Pet Nutrition product program have shown significant success. The years prior to global recession have shown very significant growth in sales and expansion for the company. In gross the total sales of Europe/South pacific area in 2007, from the data shown in the Table 2. Are telling us of how magnificent success did the European and Australian market have grown. Magnificent growth of the sales has been seen in products such Organic sales, Palmolive Naturals Balsams and Gels, Colgate 360 and Sonic Power battery toothbrush as much as in many others. However, recession years as can be seen in the Chart 2; have lowered the total amount of sales of the Colgate Company and in many turn this has affected the total sales of products in Australian market. In this instance for the reasons of the recession Europe/South Pacific sales for Colgate amounted to 8% decline in unit volume sales. In this year total sales of this segment in comparison to the world sales were only 22%. The sharpest decline however was not related to the Australian segment where the recession hit Australia at much slower pace and most of the innovation and new investments have made Australia soon recover from this slump. Whereas according to the data presented in annual reports, sales in Australia till the year 2010 have grown up to 800 million. Certainly the pace of growth of Colgate has dropped since the heavy rise at the start of the decade, but by the end of it, every single chart shows recuperation and recovery, which is totally expected. The total market share of Colgate-Palmolive company in the Australian market is only left to some approximate estimates around 30% to 50% of the market where rest of the brands hold significant portion of this segment. In every sense Colgate Company has achieved success in maintaining its growth and stability during the troubling years and has made a significant investment in to innovation and new facilities around Australia, approximating to the level of more than 500 million in only 2009. These estimates certainly add to the fact that Colgate managed to efficiently survive and maintain its market dominance in an area such is Australia. The fact that dozens and tens of new products were introduced not only

in Australian market, but mainly in Australian market, is providing us a great incentive to better understand the true nature of development of Colgate in Australia.

MARKET SHARE OF COLGATE IN AUSTRALIA In large part in Australia different segments of Oral, Personal Products and Health Care along with Pet nutrition products have received different market shares and values of shares. According to this data accurate estimates can be made regarding the development of each particular part of industry for Colgate Company in Australia and hence the sales of each product from each single category can be estimated. In example mouthwash products have reached levels of sales in Australia that reach $56 million and whose growth is increasing every for 4, 7 cents per share. In this section Colgate reaches $11.3 million of total sales which reach the level of around 20% of the total market share. The total number of units sold for the mouthwash division of products is around 10 million units. Another interesting product is skincare products that have Grocery value of 203 million. This number is huge even for Colgate and in this sense we can justify the earlier presented data about the growth of total sales of Australian market. In many ways various kinds of products are available along with many different brands but still Colgate has its own divisions where it dominates the market. Cosmetics products in Australia reach the grocery value of $18.8 million form which about 45% belongs to the Colgate and Palmolive brand. This is an amazing success for Colgate and certainly brings it to be a brand competing in many markets. Jet another interesting category in which Colgate brand is competing is the toothpastes market. Probably this market is one of the strongest markets that Colgate Palmolive competes in Australia it reaches total Grocery value of around $250 million from which around $70 million belongs to the Colgate-Palmolive company. This number is certainly showing how important truly is Colgate in the Australian market, having the share of 28%.

23% 2% 2% 5 %
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68%

Other segments in which Colgate brand is dominant are the shower gels, where the total market value is $ 69, 8 million from which about $23 million belongs to Colgate-Palmolive. Only one in front of the Colgate-Palmolive brand in Australia is the Unilever brand. Colgate-Palmolive brand is one of the better brands in many areas in Australia and as we have seen it is growing still. CONCLUSION Final statement about Colgate-Palmolive Australia progress and market development certainly must emphasize the fact that in all the years reviewed by this report; this company has maintained its growth and in every way has increased its progress and total value. Level of importance has shift the Australian market to be as important as European market is, hence creating a true boom of growth and expansion for Colgate in Australia. Most of the numbers show growth from $11,000 million dollars to amazing $15,000 million dollars total sales of this company globally. It is clear that large proportion and significance in this growth has been seen in what Australia has contributed to the total campaign. Also as we have seen from the data Colgate-Palmolive brand dominates in many segments and areas delivering most of the market share and most of the total units of products sold. The development of the industry for ColgatePalmolive Company has been very important as it provided the shield of recent recession and helped the market to recover through the efforts of the competition as much as with the efforts of the Colgate Company itself. It is totally safe to state how there is a good future in front of Colgate brand in Australia in many different products and industries. As a final conclusion we can state that growth of importance of Australian market for the Colgate-Palmolive brand in general and the winning market share levels it has in Australia regarding most important products of Oral Hygiene, certainly shows us how truly successful is the Colgate brand and how much it is delivering in spite of its competition and bad economic recession times.

REFFERENCE: Robert Webster (2005). Colgate-Palmolive Annual Report 2005. New York: 2005 Colgate-Palmolive Company. 54. Available URL: http://investor.colgate.com/annual.cfm Robert Webster and Richard Alcorn(2006). Colgate-Palmolive Annual Report 2006. New York: 2006 Colgate-Palmolive Company. 57. Available URL: http://investor.colgate.com/annual.cfm Robert Webster and Richard Alcorn(2007). Colgate-Palmolive Annual Report 2007. New York: 2007 Colgate-Palmolive Company and Acme Printing Company. 68. Available URL: http://investor.colgate.com/annual.cfm Robert Webster (2008). Colgate-Palmolive Annual Report 2008. New York: 2008 Colgate-Palmolive Company. 68. Available URL: http://investor.colgate.com/annual.cfm Robert Webster (2009). Colgate-Palmolive Annual Report 2009. New York: 2009 Colgate-Palmolive Company. 54. Available URL: http://investor.colgate.com/annual.cfm Robert Webster and Richard Alcorn (2010). Colgate-Palmolive Annual Report 2010. New York: 2010 Colgate-Palmolive Company. 54. Available URL: http://investor.colgate.com/annual.cfm