FINANCIAL

REPORTING,
STATEMENTS
& ANALYSIS II
LOVELY PROFESSIONAL UNIVERSITY

COURSE CODE: ACCM507

A C A D E M I C TA S K N U M B E R : 1
PROJECT
 COMPETITOR ANALYSIS
(FEATURES)

COLGATE OFFERS DIFFERENT MODELS OF

TOOTHPASTE
• COLGATE – ACTIVE SALT NEEM-780/KG
• COLGATE - SWARNA VEDSHAKTI-296/KG
• COLGATE – CAVITY PROTECTION-3859/KG

The tagline of Colgate is "Save water, brush with Colgate." Stronger, healthier gums. For longer lasting fresh breath.
MARKET SURVEY
CHECK THE BELOW LINK FOR DETAILED MARKET SURVEY OF 60 RESPONSES ON THE PRODUCT
https://docs.google.com/forms/d/e/1FAIpQLSeCOxn2eGWhYNHsMpx8MbAwKUQf8j06lI-gtWwTYYLd-8v6HA/viewform?usp=sf_link

* The Indian oral care market grew at a positive compound annual growth rate (CAGR) of 7.09% from 2015 to 2020. Thus, they
reached a sales value of INR 1,06,874.95 million in 2020. This is a 5.98% increase from 2019
 COMPETITOR
Colgate is a big American company that makes things to help keep your mouth clean and healthy. They make toothpaste to brush your
teeth with, toothbrushes to brush your teeth with, mouthwash to rinse your mouth with, and dental floss to clean between your teeth.
Colgate was initially the name of a soap-making company founded by William Colgate in 1806. Sixteen years after William Colgate
passed away in 1857, the company started selling oral hygiene products. Today, Colgate has become a leading brand in oral care.

UNIQUE SELLING POINT PRICING STRATEGY OF THE PRODUCT

Fluoride
Formulation COST PLUS
PRICING
Variety of Global
Formulas Presence BENCHMAR
KING PRICING Tiered
AGAINST STRATEGY Pricing for
UNIQUE
SELLING POINT COMPETITO OF THE Different
RS PRODUCT Variants
Flavors and Technological
Textures Innovations ADJUSTING
PRICING BASED
Specialized
ON DEMAND
Products

IN 1896, THE COLGATE COMPANY INTRODUCED COLGATE DENTAL CREAM, THE FIRST TOOTHPASTE PACKAGED IN A COLLAPSABLE TUBE
TARGET COSTING
A target cost is the allowable cost that can be incurred on a product and still earn the required profit from
that product. It is a market-driven cost that is computed before a product is produced. A budgeted cost is a predetermined
cost after a product is in production.
TARGET COST = PROJECTED - DESIRED PROFIT
FORMULA SELLING PRICE
RS 1,000 = RS 15,00 - RS 5,00

CIMA defines target cost as “a product cost estimate derived from a competitive market price.”
 PRODUCT AND ITS SPECIALIZATIONS
Toothpaste is a paste or gel that you use to clean your teeth. It contains many different ingredients, including abrasives,
fluoride, humectants, flavoring, and detergents. The specific ingredients in toothpaste can vary depending on the brand
and the country where it is made..
PROCESS OF MANUFACTURING THE PRODUCT
• The liquid base
- water, sorbitol/glycerin and other liquid ingredients.
• Rheology modifiers
- glycerin or the flavouring oil, with other powdered
ingredients to aid dispersion.
• The active ingredient
- Sweeteners and preservatives are added and dispersed.
• The abrasive/filler
- is then added.
• Flavoring and colouring are added.
• The detergent is added
- It is typically in solid form to avoid adding water to
the formulation at this stage

Toothpaste is composed of 20-42% water. Other components of toothpaste include: a mild abrasive to remove stains and debris, humectants to retain
moisture, non-caloric sweeteners for flavour, thickening agents to stabilize the paste, and detergents to make the paste foam and spread over the teeth.
 CRITERIAS DETERMINING THE PROFIT MARGIN CRITERIA

COSTS ( RM , FOH ) ECONOMIC FACTORS

MARKET CONDITIONS PROMOTIONAL STARTEGIES

CONSUMER PERCEPTION DISTRIBUTION COSTS

UNIQUE ELEMENT IN THE PRODUCT

Toothpaste with Nano-Hydroxyapatite
This will help in

RE- REDUCE
RE-ENAMEL RE-BUILD WHITEN REFRESH
MINERALISE PLAQUE

NANO-HYDROXYAPATITE are currently used for bone repair and bone regeneration in the form of granules, blocks and scaffolds, by itself or as composite with polymers
RAW MATERIALS
 DIRECT LABOUR

The cost of labour in toothpaste manufacturing can vary based on several factors, including the location of the manufacturing
facility, the level of automation, local “Labor laws”, and the skill level of the workforce. Here are some key considerations:

LABOUR SKILL BENEFITS AND

LOCATION AUTOMATION LABOUR LAWS UNIONIZATION
LEVEL OVERHEADS

FIXED OVERAHEAD
Fixed overhead expenses typically include items like facility rent or mortgage, salaries of permanent staff, insurance,
property taxes, and depreciation of machinery and equipment. These costs remain relatively constant regardless of the
volume of toothpaste produced. For a medium-sized toothpaste manufacturing unit, fixed overhead costs may range
from tens of thousands to several hundred thousand dollars per month.
 COST SHEET FOR THE TOOTHPASTE MANUFACTURE
10LAKHS UNITS (IN
GRAMS)
Total Cost Cost Per Unit Adminstrative Overheads:
Particulars Amount (Rs.)
(Rs.) (Rs.) Office Rent, Insurance and Cleaning 3,00,000
Office Salary 4,00,000
Direct Materials: Telephone Expenses and Audit Expenses 35,000
Opening Stock of Materials 20,00,000 Depreciation on office building and furniture 60,000
Add: Purchase of Materials 14,00,000 Director's Remunaration 13,00,000
34,00,000 Printing and Stationary 1,00,000 21,95,000 2.19
Less: Closing Stock of Materials 2,00,000 Cost of Production 98,20,000 9.82
Material Consumed 32,00,000 3.2 Add: Opening Stock of Finished Products 1,00,000 0.1
Direct Wages 15,00,000 1.5 99,20,000 9.92
Direct Expenses 2,00,000 0.2 Less: Closing Stock of Finished Products 2,50,000 0.25
Prime Cost 49,00,000 4.9 96,70,000 9.67
Factory (Works) Overheads: Selling and Distribution Overheads:
Fuel - Power and Water 7,00,000 Show Room Expenses 0
Lighting and Heating 3,00,000 Salesmen's Salary and Commission 12,00,000
Indirect Materials 4,00,000 Bad Debts 0
Wages of Foremen 2,00,000 Discount to Distributors 2,50,000
Factory Rent, Taxes and Insurance 12,00,000 Carriage Outwards 4,00,000
Depreciation on Factory Land, Buildings and
Warehouse Rent and Other Expenses 6,00,000
Plant 0
Advertising 5,00,000
Drawing Office and Works Expenses 0
Delivery Expenses 4,00,000 33,50,000 3.35
28,00,000
Cost of Sales 1,30,20,000 13.02
Less: Scrap Value & Defective Works 1,00,000
Add: Profit 32,55,000 3.25
27,00,000 2.7
Sales 1,62,75,000 16.27
Add: Opening Work in Progress 50,000 0.05
76,50,000 7.65
Less: Closing Work in Progress 25,000 0.025
Factory (Works) Cost 76,25,000 7.63
WAYS TO REDUCE THE COST OF THE CHOOSEN PRODUCT

EFFICIENC IMPROVEMENTS

VALUE ENGINEERING

LIFE CYCLE COST MANAGEMENT

COLLABRATION AND CROSS FUNCTIONAL TEAMS

TECHNOLOGY INTEGRATION

COST NEGOTIATION WITH SUPPLIER

Certainly, two common techniques of strategic cost management are Activity-Based Costing (ABC) and Value Chain Analysis.

✓ To reduce the cost of the chosen product, strategic cost management techniques
can be employed.
✓ Firstly, target costing involves determining a target cost for the
Market-driven innovation.
By analyzing and optimizing the production process, identifying cost drivers,
and negotiating with suppliers, the company can work towards achieving this
target cost.
✓ Secondly, value engineering focuses on maximizing the functionality of the product
while minimizing costs. This involves scrutinizing each component and process
Value-driven optimization.
By reevaluating design choices, materials, and production methods,
the company can enhance efficiency and reduce overall production costs.
✓ Implementing both target costing and value engineering can lead to a more
competitive pricing strategy and improved profitability for the chosen product.
 NAME REG. NO PEER RATING
K.NAVEEN KUMAR 12326373 10
AYUSHI 12315296 10
SHABBIR SHAIK 12316075 10
JASPREET SINGH 12315769 07
THANK YOU