“Sparking Optimism in Everyone, Everyday”, With this mission in mind, Colgate Palmolive, through its persistence efforts positioned itself in such a manner that the people in India started calling toothpaste Colgate. That is indeed the power of Marketing!
More than 200 years old, the company Colgate-Palmolive, focussed in the Personal Care business, has its Oral Care segment accounting for over 90% cent of the Company’s sales turnover. Within Oral Care, the Company continues to sustain the leadership position both in the Toothpaste and Toothbrush categories, despite a challenging business and competitive environment.
History
Founded in 1806 by William Gate, the journey of Colgate started as a starch, soap, and candle business on Dutch Street in New York City. Upon the death of founder William Colgate, his son Samuel Colgate, reorganized the company as Colgate & Company. While initially, it sold toothpaste in jars; in 1896, the company introduced a toothpaste in collapsible tubes.
In 1864, BJ Johnson opened a soap factory in Milwaukee, selling soaps made from palm and olive oil, thus the name ‘Palmolive’ for the company originated. Later, the company merged with another soap manufacturer owned by Peet Brothers to form Palmolive Peet. Later in 1928 Palmolive Peet acquired the Colgate Company to create the Colgate Palmolive Peet; name Peet, being later dropped off.
Industry Overview
The oral care industry provides a huge opportunity in India. In 2019, the sales of oral care at retail value was estimated to be Rs 133718 million and it is forecasted that it will rise to Rs. 176287.4 million in 2024.
SWOT ANALYSIS
Strengths
- Popular Brand Name
- Strong Distribution Channel Network
- Strong Profitability Position allowing it to spend on R&D and Expansion Plans
Weaknesses
- Relatively weaker position in Natural (Ayurvedic) Products Segment
- Saturated Market
Opportunities
- Market Consolidation through M&A
- The increasing market size of other products in the oral care segment due to growing awareness e.g. Mouthwash
- Increasing the usage of Toothpaste in India
Threats
- High Competition
- Brand Switching
- Decreasing Margins due to high competition
- Rising Raw Material Cost
- Portrayal as Non-Indian Company
4 Ps of Marketing
Product
Colgate offers a wide variety of products in different ranges. Some of the prominent ones in the oral care segment are as follows:
PRODUCT MIX
| Toothpaste | Tooth Brush | MouthWash and Toothpowder |
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The entire product portfolio has been designed to cover each and every market segment and thus, every product has been positioned accordingly.
For example,
- Colgate Kids Zero has been designed for children, an all-natural fruit-flavored kids’ toothpaste, with 0% artificial preservatives, colors, flavors or sweeteners.
- Colgate Visible White is positioning toothpaste as a ‘beauty care product’ with Kiara Advani as its brand ambassador, one of its own unique positionings in the toothpaste segment.
- Colgate Super Flexi Virat Pack: A special edition of Super Flexi toothbrush with Virat Kohli Signature. This limited-edition range marked the first-ever autographed range of toothbrushes by Colgate.
- Colgate Charcoal Clean Toothpaste: It includes Charcoal – the new trending ingredient in personal care & Oral care. With its clutter-breaking black packaging, this black gel toothpaste launched in 2019 is already a hot favorite amongst users and across key retail customers.
Price
Due to its brand name, the company can charge a higher price from its customers. However, with recent product launches it is trying to cater to both low and high price segments.
Place
The company has a strong distribution network from metro cities to the unreachable villages of the country. While the industry majorly relies on retail stores, the growing trend towards online purchasing has seen moderate growth. As a result, its products are also available on various platforms such as big basket, Flipkart, etc.
Promotion
The company relies on advertising and hence launches various campaigns from time to time. While it invested heavily for decades to increase consumer awareness about oral care, how it intends to boost the sales of products by roping various actors such as Virat Kohli, Deepika Padukone, etc. from time to time.
In the recent past, due to the high competition, it has increased its advertisement expenditure
The trust that Colgate created among the people through its marketing mix is not only evident from its market share position but also the praise and awards, it has received many years ago. To name a few,
“Colgate Vedshakti” was selected as Prestigious Brands of India 2020 in the category of FMCG – Toothpaste. It was voted as India’s Most Trusted Oral Care brand for the 9th consecutive year by The Economic Times Brand Equity Most Trusted Brand consumer survey conducted by Nielsen.
Colgate won the GOLD in Marketing for Brand Rejuvenation of Colgate Strong Teeth campaign at the Indian Marketing Awards 2019. It was also ranked as India’s Most Trusted Oral Hygiene Brand for the 9th consecutive year in TRA’s Brand Trust India Study Report 2019.
Moreover, its CSR initiatives focusing on oral health and promoting education among children add to its positive brand image.
Also Read: The Hershey Company – A Little Something For Everyone
Competitive Advantage
One of the companies being regarded and honored as one of the global producers of various products especially for personal hygiene is Colgate-Palmolive.
With a view to promoting their oral products to their target market, the company has been able to use various marketing strategies approaches. In line with above the line promotions, the company uses television, radio and newspaper advertisements and many more. In addition, the company also promotes their products in famous magazines and internet banner ads as well.
It can also be said that Colgate-Palmolive also uses a via-the-line promotion approach. This is done by considering a via the line communication approach. The company does this by hiring an advertising agency which helps them to make a better advertising campaign for their products.
It can be said that or In a general sense, advertising is being utilized to be able to impart to the consumers the availability of a particular product or service.
Colgate-Palmolive pursued a multipronged marketing strategy to support the introduction of Irish Spring’s reformulated bar and liquid soap. In order to introduce a wide audience to its new image and latest product offerings, Colgate-Palmolive aired television commercials for both products and ran print ads in a variety of magazines. Furthermore, the company especially concentrated on free-standing inserts and product sampling to convince consumers to try the updated Irish Spring. Coupons were an essential aspect of the relaunch of Irish Spring bar soap. In order to make these coupon ads eye-catching, the company included a four-leaf clover shape that could be scratched off-like a lottery ticket-to reveal a savings amount applicable to the product.
Competitive Dynamics
The Oral Care Segment continues to be one of the competitive segments with major players such as HUL, Dabur, Amway, etc.
However, amidst this high competitive scenario, Colgate continues to be the largest player for decades.
However, the uprise of Patanjali’s low pricing and herbal appeal hit the Toothpaste segment hard wherein Dant-Kanti, the second-largest revenue generator for the company started seeing a high growth rate in the initial years. While in 2018, Patanjali doubled its market Volume share, it came at the expense of HUL and Colgate. And this transfer of market share is expected to increase.
Future Outlook
The swift entry and success of Patanjali in the Indian market was a quick shock difficult to foresee. But its entry has caused a sense of disruption in the market segment and this recent rise in competition has posed a serious challenge to Colgate’s leadership position. Its competitors such as HUL, Patanjali, Dabur are huge in size (and backed by other businesses) that they are here to stay and will give a tough fight. The recent update of its toothpaste portfolio, huge advertisement expenditure, and quick product launch are the signs of a long battle.
Let’s see whether Colgate will be able to keep itself smiling for a long in India.
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