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Colgate Max Fresh Global Roll-Out
Company at a Glance – Colgate Palmolive
Business Overview
● $10.6 Billion Revenue (2005)
● Operating in 200 Countries
● 70% of sales outside the US
● Compete in Oral Personal & Home Care; Pet Nutrition segments
● Brands: Colgate, Palmolive, Speed Stick, Ajax, Hills Science Diet
Colgate Objectives
● Consistent unit volume, revenue and gross margin growth.
● Focus on high margin core businesses.
Organization Structure
● Regional Presidents with P&L responsibility.
● Global business development groups organized by category, responsible for global Market
Share.
Case Facts
USA
• Colgate Max Fresh (CMF) launched in 2004
• Less cannibalization than expected
• More trading up than expected
China
• August 2005 launch recommended
• Addressing communication challenges is key
(naming, breath strips concept)
Mexico
• May 2005 launch recommended
• Effective launch plan vs. speed to market seen as
more critical.
Situational Analysis
Environment
Economic
• Gross world product up 2.5% in 2005, following two years of < 1% growth.
• Overall emerging market economies exploding; + 10% GDP growth in China and
+ 6% growth in Latin America.
Socio-cultural
• Adaption of Western cultural values.
• Increased focus on cosmetic attributes of consumer products.
Political
• Political values in emerging markets may make it difficult for
• foreign competition to enter market without domestic partner and / or;
• foreign investment & market diversification less attractive (import / export
tariffs).
Situational Analysis
Industry
2 Industry Definition
• Purpose of the Oral Personal Care industry is to prevent teeth and gum diseases
and deliver cosmetic benefits. Scope of the industry includes toothpaste, floss,
mouth rinses and toothbrushes.
Competition
• Colgate has dominant market value share in China (32%) and Mexico (82%).
• China market fragmented with Colgate & P&G representing 53% of share.
Situational Analysis
Industry
2 Competition Strategy (P&G)
• Product Development growth strategy with launches of premium tier brand
extensions Crest Whitening Expressions (US) Crest With Scope (US), Colgate Icy
Fresh (China), Crest Cool Expressions (MX).
Brand Position:
• C+S = toothpaste + mouthwash + whitening
• CWE / CCE = flavor + toothpaste + whitening
• Entering Emerging Markets under its Crest brand without JV partners.
• Leveraging x-brand scale with Crest + Scope.
• Built its brand around therapeutic benefits, while cosmetic benefits market growing
fastest in Emerging Markets.
• Innovating in cosmetic segment; a historic Colgate stronghold.
• Heavily invests in advertising behind new product launches.
Situational Analysis
Marketing Strategy
3 Objectives
• Growth driven by high margin core business.
• Advertising focused on high margin products and high potential markets.
• Innovation driven: 40% of sales from products launched in past 5 years.
Advertising
• Advertising aimed to convince customers that CMF would
provide them with a whole new dimension of freshness.
• Targeted at adults in the age group of18-34.
Highlights:
• Launched in US in August 2004.
•
Marketing
Cannibalized other CP toothpaste brands less
than expected. • Creative promotions which leveraged package visuals,
• Successfully traded many existing Colgate and program sponsorships on TV channels and
consumers up to higher-priced variants. websites.
• Promised customers freshness, with a • In-store sampling, merchandising displays, money back
whitening reassurance, using mini breath rebates, “buy one get one free” packs, etc.
strips.
China Launch
Assessing the Chinese Toothpaste Market-
⦁As Crest would lose more than fair share as compared to Colgate, cannibalization was not a big issue.
⦁The debate was between positioning the product as all inclusive vs. single minded approach.
⦁The media advertising was based on the advertising that combined the explosive power to freshen with
extreme living.
⦁Promotion activities included in-store merchandising, sampling and PR to promote the core benefits.
⦁CMF is not essential to the Mexican portfolio as the toothpaste market is growing at a slow rate.
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