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Strategic Cost Management
Prof: Dr. K.Sontake
Introduction My case is about how Colgate Palmolive India Ltd used the fundamental 4P marketing concept to turn the trend and be a proactive competitor in the FMCG market. .
Consolidated Indian presence and became a blue chip company on the Indian bourses. Colgate-Palmolive entered a new category ² household surface care.... Manufacturing went state-of-the-art. Halo Shampoo. Toothbrushes.. Palmolive Shave Cream. and became a company dedicated to the oral health of the Nation. 1980s -1990s. Charmis Cream.Snap Shot Colgate-Palmolive was incorporated in India in the year 1937. The Indian consumer was offered top-of-the-line products ... 1960s ² 1970s. Launched Colgate Dental Cream.. Launched various oral care and personal care products like Colgate Toothpowder. with the launch of Axion dish washing paste.
The company remained sluggish in the marketing warfare A follower rather than a leader Reactive rather than proactive in introducing smart strategy.Bugaboo Year 1999 showed a fall of 43% in their net profit. . The brand lacked freshness and aggressiveness in its marketing efforts.
Colgate for Oral care -----Palmolive for Personal care AND Submitted them to proven marketing principles & guidelines * Cost of custom research service depends on project scope .Riposte The new management team gave a new look to the company. Colgate Palmolive India Ltd. distinguished the two strong equities in India. .
4Ps PRODUCT PRICE PLACE PROMOTION .
popular and economy. Focused on only those products within this category which could give results.Product Strategy: Colgate reorganised its portfolio Introduced a wide range of products but with very clear positioning. Introduced new products in whichever segment the need gap was felt. a relaunch took place to reposition the product over the product life cycle. In oral care. freshness. Wherever sluggishness was felt. . Colgate identified four categories ² premium.
To adhere Colgate pulled out 4 variants Colgate double protection Calcigaurd Fresh mint Fresh strips And Launched Colgate Herbal ² Targeted at semi-urban. rural areas ² priced cheaper than colgate dental cream In other segments Battery operated Colgate Act brush Pamolive Naturals Transparent Soap in the premium toilet soap segment Palmolive range of shaving products was expanded Charmin Skin Cream with vitamins was repositioned Colgate Cibaca Top And Revitalised ² Colgate Dental Cream .
per capita consumption of toothpaste in India is only 107gm compared to 300gm in Europe. Indian market is an unsaturated one and there is great potential to be exploited. in urban areas. the toothpaste market is expected to grow at 6% per annum. In this sense. value growth will be higher than volume growth. For instance. As a whole. banyan tree sticks and ash for cleaning teeth.50 % Almost 30% of rural households use traditional materials such as neem. as more consumers switch to value added products.Scope Penetration of oral care products . Only about 15% of Indian toothpaste users brush twice a day. Growth in the rural areas will be driven by conversion of non-users While in the urban areas ² by intensity of use. The increase in rural incomes due to abundant rainfall this year will also benefit Colgate due to its high exposure to rural markets. Also. .
000 villages within the next five years. It plans to have 1million retail outlets by the end of the year.40. . Colgate Palmolive makes its best to enhance their availability in different kinds of retail outlets and in as many geographical areas as possible. It plans a foray into 1.Place : Reaching out to customers And the company is further strengthening its distribution network.
. Bright Futures Program in collaboration with the Indian Dental Association. Introduction of a Toll Free Consumer Helpline for easy access to the company. 1 . nurturing mutually beneficial relationships with its various trade partners For Consumers ¶Colgate Ke Andar Kya Hai· for rewarding consumer loyalty.Promotion Strategy: Boarding the land. undertook a series of communication initiatives Colgate Shoppe ² where select retail outlets in key cities depict a clear dominance of Colgate-Palmolive Hero no.wherein stockists salesmen are motivated with recognition and reward for outstanding achievements Dil Se ² which reward wholesalers for their loyalty and consistency in marketing the company·s products. Rural Promotion the school Dental Health education program ² The Young India Bright Smiles.
. Anchor. Babool.Outcome Obviously this led to a 10% increase in its advertising expenditure but it resulted in 21% increase in net profit and a 8% increase in sales in spite of tough competition from big players like ² Meswak.
It has set up a world class facility for manufacture of DiCalcium Phosphate. while inventory and debtor days were maintained at levels 28 days and 14 days respectively. It has a World Class Technology and Research Centre. which yields significant cost savings. The company has implemented SAP to enhance operational and supply management effectiveness. Overhead expenses reduction exercise. The company has set up a wholly owned subsidiary in Nepal for manufacture of toothpaste and toothpowder. a key ingredient in toothpaste. Backward integrated. It has manufacturing facilities for flavour and other ingredients. Operations therefore generated cash of Rs. Besides. At the same time. .Price Strategy Introduced a flanking pricing strategy by launch of brands in all price segments.2 bn. creditor days registered a sharp increase from 82 days to 110 days. Colgate Palmolive has adopted a Global Raw Materials/Packaging Materials Suppliers System.
Conclusion : . The company has adopted efficient Supply Chain Management and undergone cost reduction exercise. The interactions between the different elements of the marketing mix have put into action a virtuous circle.On the Move. . The money thus saved was invested in advertising and distribution and to launch new products at the same time increasing operational profit.
Ranked as ¶Best Employers in India· in a survey conducted by BT-Hewitt and Best Employers in India .2000 ² 2007 The ultimate vote of Consumer Confidence & Corporate Success Voted Brand No. in a survey by Brand Equity ² A C Nielsen ORGMARG. 1 ¶Most Trusted Brand·.1 in A&M·s annual survey of India·s Top Brands conducted by Taylor Nelson Sofres-MODE Ranked India·s no. For 4 consecutive years.
THANK YOU What the company has shown us is fundamental marketing concepts can always help companies in their market strategy. Sometimes you can be unique by following basic rules YOUR CALL .