Critical Success Factor for Colgate - Research Paper Example

Colgate Company Table of Contents Critical Success factor for Colgate 3 Marketing Goal 3 Marketing Strategy 3 Targeting and Segmenting 3 Product Analysis 4 Price 6 Promotion 7 Place 8 Positioning 9 Consumer Behaviour 9 10 SWOT Analysis of Colgate 10 Reference 12 Critical Success factor for Colgate Critical success factor for the brand can be briefed in the following manner. The brand has achieved market share of is 36. 3% due to its strong equity and category leadership quality. The company is facing strong market competition from Crest (30% market share) for the last five years. Colgate carries extended product line in order to fulfil multidimensionality of customer requirement and extend category leadership. Target market for the company is complemented by Black and Hispanic customers (in the age range of 18-35). The brand is not considered as technological leader by industry experts. Marketing Goal Increasing market share of the company by 2% within next two years. Increasing online promotional traffic by 10%. Maintaining sales margin of 20% for next year Systematically phase out 6% of poor performing product portfolio Marketing Strategy Targeting and Segmenting Target market for the company is limited. The company defines their target market as “younger bustling family”. The company targets customers belong to mid income suburban mix community (Cross and Miller, 2011, p. 34). Segmenting strategy of the company can be understood by analyzing their attempt to offer products to family centric persons (Cravens, 2009, p. 121). Family centric segmentation strategy of the company reflects from their outdoor activities, media selection and opinion leader selection (Rogers, 1995, p. 293). Pricing strategy of Colgate suggests that the company is targeting customers belong to middle of socioeconomic ladder (Farley and Haaga, 2005, p. 368). The company has segmented their market as customers belong to mid income family and ethnically diversified area. (Source: Firestein, 2011) Product Analysis Colgate Regular The company has changed very little of Colgate Regular over the course of time (Berger, 2010, pp. 5-6). This offering is complemented by mint flavour, active fluoride. It has the category benefit of strengthening and protecting teeth. Colgate Tartar Control Toothpaste This is one of the apex sellers in the portfolio. It has the category benefit of fighting cavities and removing stain from teeth (Percy and Rosenbaum-Elliott, 2012, pp. 317-318). Colgate Total This is the top selling category for Colgate brand. This category is complemented by eight other sub brands. Colgate Total offers product benefits such as 12 hour protection from plaque, cavities, weak enamel, gingivitis, tartar and tender gums. Colgate Oxygen Bubbles Toothpaste This product is targeted for customers suffering from bad breath and whiteness problem. USP of the item is use of fresh oxygen bubble for whitening purpose. Others Product portfolio of the brand is complemented by various other mutually different offerings such as Colgate 2in1 Toothpastes, Colgate Sparkling White Toothpaste, Colgate Sparkling Mint Zing, Colgate Sensitive Enamel, Colgate Sensitive Multi Protection and Colgate Pro Clinical. Products Percentage Breakdown (Source: Firestein, 2011) Price Colgate tries to offer thirty five items for every store. Important part of their retail strategy is that they try to place their product at front isles of store in order to catch the attention of customer. Weighted average shows that subtotal of all Colgate product is 28.60 ounce hence average price of each ounce Colgate toothpaste is $0.80. Most expensive toothpaste of the brand is Colgate Pro Clinical (each ounce price more than $0.90) while the least expensive item is Colgate Regular super tube. The company follows mixed pricing strategy complemented by both competitive and premium offering. They follow out and out competitive pricing in developing countries while in developed countries they adjust price in accordance with the market situation. Premium pricing is used for their upmarket offerings such as Colgate Pro Clinical, Colgate Sparkling Mint Zing and Colgate Sensitive Multi Protection (Berends, 2004, pp. 42-44). Promotion The company follows integrated marketing communication to promote their offering among customers (Belch, 2003, p. 198-200). They select media in accordance to relevance, reach and multidimensionality of advertising campaign (Black, 2011, p. 139). Promotional strategy of the company can be discussed in the following manner. Website of the company carries the title “Colgate World of Care” in order to engage past and first time visitors (Colgate, 2012). They use vibrant colour mix of red and white to attract new visitors. Front page of the website is complemented by picture of black mother and daughter giving hint of company’s branding message. The website contains company history, detail product portfolio; oral care FAQ, e- newsletter and special offer. Social media page called ‘Colgate Smile’ is also essential part of the website. The company uses social media networks such as Facebook, Myspace and Twitter to promote their brand. Colgate offers printable weekly coupons and customers can get such coupons from the special offer section of the website. The company focuses heavily on sales promotion for designing their offline promotional channel (Ferrell and Hartline, 2010, pp. 315-318). They offer weekend coupons to customers with the help of print advertisements published in more than five hundred newspapers across the country (Lee and Johnson, 2005, pp. 189-191). Television advertisement of the company is complemented by pseudo scientific displays and cartoons in order to nourish the humour quotient of customers. Outdoor advertisement of the company is known for their cultural, sexual, historical and social inferences. They also use magazines as print medium to create brand awareness among family centric consumers. The company organizes various corporate social responsibly programs such as “Give a Kid a Smile” and ADA campaign. They donate million of dollars in the CSR program in order to develop social image of the company among customers. Place The company has established extended product distribution network in order to garner profit margin. They distribute products to various super markets, discount chain and hypermarkets such as Target, Wal-Mart, Walgreens and Albertsons. Toothpaste of the company can be easily located in oral care section of retail stores. The company also distributes their product to food stores and mass merchandising stores in order to provide in-store promotional support (Pauszek, n.d.). Dentists played crucial role of opinion leader for customers suffering from oral problems (Odell, 2008, pp. 87-89). They provide banners, danglers and standee to provide support towards doctors promoting Colgate toothpaste among patients. Study shows that more than 20% of toothpastes of the company are sold by doctors while retail channel contributes rest of 80% sales. The company is planning to implement online sales channel in order to decrease the cost of value chain and increase profitability (Reponen, 2003, pp. 52-62). They have doubt over the success of online stores in developing countries because people in these countries still prefer offline retail channel as purchase medium (Slatter, 2006, p. 125). Positioning Positioning statement for the brand relies on unique selling proposition of each item (Steinhardt, 2010, pp. 233-236). The brand uses USP of prevention of gum, tartar problem for their niche segment while the same company focuses on USP of teeth whitening to mainstream market. The company focuses on nourishing family value in developing economies (Yu, 2012, pp. 34-35). Social value and family life plays crucial role for people belong to countries like China, India and other South Asian countries. Colgate changes their positioning strategy in accordance to demographics of particular market (Zikmund and Babin, 2006, pp. 12-15). Website of the company shows a positioning statement of caring to their customers. Consumer Behaviour Customers purchase Colgate toothpastes due to its medical usefulness and functional utility. Studies show that a set of customers perceive Colgate as value for money product while another set of customers nullify the medical importance of Colgate toothpaste. Customers purchasing Colgate toothpaste can be segregated into three parts such as cosmetic, therapeutic and uninvolved users. Therapeutic buyers purchase Colgate toothpaste due to its oral care benefits. Cosmetic buyers are concerned with bad breath and appearance. They purchase Colgate products due to its cosmetic benefits. Uninvolved buyers show little interest on product category and they purchase Colgate toothpaste on the basis of intuition. SWOT Analysis of Colgate Strength Weakness The brand has established strong equity in the mind of consumers. The company has given continuous dividend payment in order to attract investors. They have achieved strong sales growth in Asian market. The company has increased cost efficiency by 13% within last two years. Colgate is focusing on new product development with the help of forward integration and state of art technology deployment. The company showing poor sales result in east European market. Inventory of the company is growing at faster pace in comparison to sales volume. Equilibrium of product portfolio is perturbed by unequal category growth rate. Post retirement benefit to unfunded employees is increasing overall cost of operation. Opportunity Threat High birth rate of emerging countries gives opportunity to the company to enter children’s oral care market. The company can enter developing market with the help of strategic partnership with local players. Low level of customer loyalty in personal care product segment. Counterfeits are available in Brazil and African countries. Tumultuous operating environment in Latin America (read Venezuelan economy). Reference Belch, G. E., 2003. Advertising and Promotion. 6th ed. New York: McGraw-Hill Education. Berends, W. R., 2004. Price and Profit: The Essential Guide to Product and Service Pricing and Profit Forecasting. New York: William R. Berends. Berger, A., 2010. A Strategic Analysis of Colgate ́s Toothpaste Product Line: Marketing Strategy. Munich: GRIN Verlag. Black, K., 2011. Business Statistics: For Contemporary Decision Making. Hoboken, New Jersey: John Wiley & Sons. Colgate., 2012. Toothpastes. [online] Available at: [Accessed 14 November 2012]. Cravens, D. W., 2009. Strategic Marketing. 8th ed. New York: McGraw-Hill Education. Cross, F. B. and Miller, R. L., 2011. The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues. Stamford, Connecticut: Cengage Learning. Farley, R. and Haaga, J., 2005. The American People: Census 2000. Manhattan, New York City: Russell Sage Foundation. Ferrell, O. C. and Hartline, M., 2010. Marketing Strategy. Stamford, Connecticut: Cengage Learning. Firestein, M., 2011. Colgate Marketing Plan 2011. [pdf] Available at:< http://www.firemarketingbrand.com/downloads/Colgate%20Marketing%20Plan.pdf> [Accessed 14 November 2012]. Lee, M. and Johnson, C., 2005. Principles Of Advertising: A Global Perspective. London: Routledge. Odell, E. W., 2008. Clinical Problem Solving in Dentistry. 3rd ed. Amsterdam: Elsevier. Pauszek, K., No Date. Colgate-Palmolive Case-Marketing Plan. [pdf] Available at:< www.franklincollege.edu/pwp/kpauszek/Marketingplan.pdf> [Accessed 14 November 2012]. 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