Cottle – Taylor Case
Factors determining demand for toothbrushes
• • • • • Oral Hygiene Healthier , Whiter Teeth and gums Plaque removal Fresh breath Preventing Cavities
How can demand be increased
• By creating awareness about the importance of hygiene • By instilling habit of brushing teeth daily • By increasing the frequency of changing toothbrush
• To remain competitive, Cottle had reduced price of toothpaste and toothpowder in India, which resulted in the dip of profit margins. • With 46% of market share in Toothbrush market in India, Cottle is the market leader and enjoying first mover advantage. • Cottle is trying to increase its customer base, by creating awareness about oral hygiene as around 50 % of Indians do not use oral care products.
Accelerate toothbrush market development
• Educating and informing :increasing informative campaigns, observing ‘oral health care month’ • Ads in digital media :rather than just focusing on television promotion should also promote through online ads • Clinically proven toothbrushes :launching more clinically proven toothbrushes
• Free offers with toothpaste :as already a market leader in toothpaste with more than 50% market share • Targeting lower middle and upper lower class with cheaper and reasonable products :targeting people who use low quality products from China and Vietnam • Collaboration with dentists :-increasing the collaborations • Product websites :- launching websites for specific products highlighting their benefits and procedures of use.
Target Market Segments
• According to SEC classification, all groups except E2 and E3 will be suitable target market for Cottle, i.e., ▫ A1,A2,A3 ▫ B1,B2 ▫ C1,C2 ▫ D1,D2,E1
Segments to Focus
• Among above mentioned segments, Cottle should focus mainly on C1,C2,D1,D2, due to following : ▫ These segments constitutes the major chunk of consumers. ▫ Most of the Non-users come under these segments. ▫ These segments will be potential customers of high end products in future.
Cottle should not spend advertising dollars promoting battery-operated toothbrushes in India due to following reasons • Large chunk of Indian population is not the potential target market for battery-operated toothbrushes .There will be a gradual shift to higher end brushes after customers are aware and conscious of oral hygiene . • Presently Cottle’s focus is on securing market in low and mid range products. Therefore it will not be wise decision to promote batteryoperated toothbrushes
The Swirl Swirl Refills
Exhibit 9 Cottle India: 2009 Percentage Income Statement from Toothbrushes Toothbrush gross revenues Less: Trade Discounts = Net Revenues Less: Variable manufacturing, selling and distribution costs = Gross Margin Less: Advertising Consumer promotions and merchandising Selling, general and administrative costs = Profit from Operations 100% 10.0% 90%
Exhibit 9 Cottle India: 2010 Expected Percentage Change in Income Statement from Toothbrushes Toothbrush gross revenues Less: Trade Discounts = Net Revenues Less: Variable manufacturing, selling and distribution costs = Gross Margin Less: Advertising Consumer promotions and merchandising Selling, general and administrative costs = Profit from Operations 100% 6.0% 94%
9% 3% 14% 18%
13% 3% 12% 26%