Title:

MARKETING PLAN OF COLGATE

Submitted By…

Name: Nowrin Hoque

ID: 6034

Batch: 6th

Submitted To…

Prof Dr. Md. Kamal Uddin

Course Name: Global Marketing

Department of International Business

University of Dhaka

Colgate Marketing Plan

Table of Contents Page NumberExecutive Summary……………………………………………………………………. .4-7Colgate Toothpaste Analysis…………………………………………………………..8-20Company Overview………………………………………………………......... 8-9Product Overview ………………………………………………………………... 9Product Analysis………………………………………………………………. 9-13Market………………………………………………………………………... 13-14Target.………….…………………………………………………………….. 14-16Price……………………………………………………………………………... 16Promotion………………………………………………………………………... 17Place……………………………………………………………………………... 18Trends………………………………………………………………………...18-19Strengths, Weakness, Opportunities and Threats…………………………….19-20CompetitionAquafresh…………………………………………………………………………….21-24Product Analysis..……………………………………………………………21-22Market……..…………………………………………………………………….22Target…………………………………………………………………………22-23Price……………………………………………………………………………..23Place/promotion…………………………………………………………………23Strengths and Weakness……………………………………………………..23-24Marketing PlanCrest……………………………………………………………………………..……24-27Product………………………………………………………………………..24-25Target…………………………………………………………………........… 25-26Market Share……………………………………………………………………..26Price………………………………………………………………………....…...26Promotion………………………………………………………………………...26Place……………………………………………………………………………...27Strengths and Weakness Analysis……………………………………………….27Colgate Mission……………………………………………………………………….…28Market Research Data………………………………………………………………..29-32Keys to success and Critical Issues…………………………………………………..33-34Goals……………………………………………………………………………………..34Strategy ………………………………………………………………………………34-38Control……………………………………………………………………………….…..38Budget………………………………………………………………………………..38-39Projections…………………………………………………………………………….….39Work Cited……………………………………………………………………………….40Marketing Plan

Executive Summary

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The Colgate-Palmolive company is acknowledged as the world’s leader in personal care. This report analyse the Colgate’s current situation in order to give recommendations on their actual toothpaste product line.

The report is divided into two parts. The first parts will analysis the current situation of Colgate. On the basis of a SWOT analyse the strengths, weaknesses, opportunities, and threats of the company as well as of Colgate’s toothpaste product line will be analysed. Furthermore additional information on the company’s current market share, profitability, sales and the external environment of Colgate within the scope of the PEST analysis will be presented. At the end of the first part the competitive advantage of Colgate will be mentioned. The second part includes a suggested marketing strategy of the author using marketing tools such as segmentation targeting & positioning, SMART objectives as well as the marketing mix. To better recommend improvements, the actual state of Colgate referring to their products, objectives, etc. is in some parts shortly mentioned. At the end a conclusion is drawn concerning the current situation of Colgate and suggested improvements for the future.

Perception of brand and category

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Current status: Colgate Toothpaste has been fighting bad breath and maintaining proper oral health for over 200 years. With an array of 40 different patented toothpastes and 13 classifications of oral care, Colgate remains competitive in the market place. The toothpaste category sales are estimated at $3 billion or 3% of the oral health care industry. The current Colgate market share is 36.2%. Crest is at 30% and Aquafresh is at 8.13% of the toothpaste market. Colgate is a strong earner and its market share reflects this. Strong competition from Crest has cost Colgate valuable market share over the last five years.

Keys To Success:

Colgate toothpaste is the leader within the product category holding 36.2% of the market or $1,114,137,768 in sales.

Colgate has a vast product line of toothpaste and many are less than a decade old. While others date back over thirty years and the original is over one hundred years old. Therefore, it is imperative to keep Colgate’s brands fresh but maintain a rich history of quality products.

The highest selling trend within toothpaste is the toothpaste and not toothpaste-gel. The target market for Colgate toothpaste is Black and Hispanic individuals age 18-35,

with several children aged 7 and younger. Colgate commits millions of dollars to community programs and the ADA “Give A Kid

A Smile” Program. Colgate has established Colgate Smile a social network, an interactive iphone application,

Facebook page, Twitter account and My space page. Colgate is committed to Reducing Environmental Impacts (REI) around the world. Colgate is not the leader with regard to technological advancement within the category.

Colgate’s success is linked to its culture, which encourages all Colgate people to demonstrate personal leadership every day. Personal leadership also include three fundamental global values of the company: Caring, Continuous Improvement and Global Teamwork.

Goals

The main goals of Colgate are to better understand consumers behaviour, launching new products through innovation, increasing effectiveness and efficiency as well as strengthening the leadership worldwide ( Colgate-Palmolive Annual Report 2009, p.4) In order to remain a leader in the category four goals must be achieved:

Increase Colgate market share by 1.7% or $1,326,546,098 Increase website traffic and Facebook friends by 10%. Carry over current 2010 margin at 18% of Colgate sales into 2011 expenditure.

Introduction

Colgate is the world market leader in oral hygiene products. The toothpaste product line consists of strong brands. This is due to a very successful marketing strategy of the company in the past.

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But especially in a competitive environment like the personal care industry it is essential for Colgate that it upgrades its organisational as well as marketing strategies in order to meet the customer’s needs and strengthening the leadership. Furthermore nowadays a wide range of different toothpaste products is offered to the customers. This in particular means for Colgate that they must differentiate their products from the competitor’s products by being innovative and unique. Moreover the toothpaste market is growing constantly which means that more different needs and expectations of the customer will arise. Therefore Colgate must make use of marketing tools such as market segmentation to better identify their needs in order to supply them with the right products.

Company Profile

Colgate, founded in 1806 by William Colgate, is acknowledged as the world’s leader in personal care sales including oral hygiene products such as toothbrushes and toothpastes. Colgate has many subsidiary organisation located in more than 200 countries, but it is publicly in only two, the United States and India. Colgate Toothpaste has been fighting bad breath and maintaining proper oral health for over 200 years.

Company Timeline• 1806-William Colgate starts a starch, soap and candle business on Dutch Street in New York City.• 1857-Upon the death of founder, William Colgate, the company is reorganized as Colgate & Company under the management of Samuel Colgate, his son.• 1896- Colgate introduces toothpaste in a collapsible tube.• 1911- Colgate distributes two million tubes of toothpaste and toothbrushes to schools, and provides hygienists to demonstrate tooth brushing.• 1953-Colgate-Palmolive Company becomes company's official name.• 1956- Colgate opens corporate headquarters at 300 Park Avenue in New York City.• 1968- Colgate toothpaste adds MFP Fluoride, clinically proven to reduce cavities.• 1996- Bright Smiles, Bright Futures oral health education program expands to 50 countries, and today reaches over 50 million children annually.• 1997- Colgate Total toothpaste is introduced in the U.S. and quickly becomes the market leader. Only Colgate Total, with its 12-hour protection, fights a complete range of oral health problems.• 2000- Colgate creates, Colgate 2in1 Toothpaste.• 2007- Colgate launches Colgate Max Fresh toothpaste line.• 2009- Colgate launches Colgate Luminous.

Growth and profitability

Global sales as reported were $15,327 million during the financial year ended December 2009 ($15,330 million in 2008). The operating profit was $3,615 million during 2009, an increase of

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16.6% over 2008. At present, Colgate has a market share of 44, 4% in the world’s toothpaste market operating in more than 200 countries and territories. In the United States, one of the world largest consumer markets, Colgate is the market leader in toothpaste sales with a market share at 36.2 % (Colgate-Palmolive Annual Report 2009, p.2-4). Operating in more than 200 countries the company is not depending on one single market. Significantly for the global presence is that over 82% of the company's 2009 revenues came from outside the United States. The markets in industrialised countries are largely saturated. Because of the strong presence especially in emerging countries such as India and Brazil Colgate takes advantage of the positive consumer trends in these countries and can compensate the sluggish economic growth in industrialised countries. Please see appendix to find further financial information on Colgate.

Product OverviewToothpaste works with tooth brushing to clean teeth and fight plaque and bacteria.Specifically:• Toothpaste contains abrasive materials that physically scrub away plaque. In addition, toothpaste abrasives help remove food stains from teeth and polish tooth surfaces.• Toothpaste delivers fluoride to the teeth. Fluoride incorporates itself into tooth enamel weakened by acid attack, making it more resistant to future acid attack from plaque bacteria and food.• Technological improvements in some toothpaste contain ingredients that chemically hinder the growth of plaque.Colgate’s brands consists of a multitude of unique toothpastes lines, specializing in them preservation and treatment of oral hygiene. Colgate has created an array of 40 different patented toothpastes keeping Colgate competitive in the market place. There are 13 different classifications and varieties of Colgate toothpastes. Colgate’s toothpastes feature; cavity protection, plaque & gingivitis prevention, long lasting fresh breath, tartar control toothpastes, tooth whitening, baking soda and peroxide, enamel strengthening, sensitivity relief and toothpaste designed for children.

Product line analysis

The Colgate has a fairly wide product mix, consisting of dozens of brands that you can ´trust to care for yourself, your home, and the ones you love`. This mix is organised into five major product lines: oral care, personal care, household care, fabric care and pet nutrition (Amstrong, G. (2009) Marketing: an introduction, p.243). The most recognizable product line is oral care, including 31 different toothpaste products. Please see appendix to find all toothpaste products of Colgate.

Product Analysis

* Colgate Cavity Protection Great Regular Flavor* Colgate Cavity Protection Winterfresh Gel

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* Colgate Tartar Control Whitening Cool Mint Gel* Colgate Tartar Control Whitening Crisp Mint Paste* Colgate Total Advanced Whitening* Colgate Total Advanced Clean* Colgate Total Advanced Fresh Gel* Colgate Total Clean Mint* Colgate Total Whitening Paste* Colgate Total Whitening Gel* Colgate Total Enamel Strength*Oxygen Bubbles Whitening Brisk Mint® Paste* Colgate 2in1 Oxygen Whitening* Colgate 2in1 Whitening* Colgate 2in1 Kids Strawberry* Colgate 2in1 Kids Watermelon* Colgate Max Fresh w/ Mini Breath Strips* Colgate Max Fresh w/ Mouthwash Beads* Colgate Max White w/ Mini Bright Strips* Colgate Sparkling White CinnamonMint* Colgate Sparkling White Mint Zing* Colgate Sparkling White Caribbean Cool* Baking Soda & Peroxide Oxygen Whitening* Colgate Baking Soda & Peroxide Whitening* Colgate Sensitive Multi Protection* Colgate Sensitive Enamel Protect* Colgate Sensitive Maximum Strength Whitening* Colgate Pro Clinical Daily Whitening* Colgate Pro Clinical Daily Cleaning* Colgate Pro Clinical Daily Renewal for Enamel* Colgate Dora the Explorer Mild Bubble Fruit* Colgate My First Toothpaste* Colgate Luminous Crystal CleanColgate Regular: In over 173 years, Colgate’s original flavored mint toothpaste has changed very little. It cleans, strengthens, protects teeth and breath. Colgate’s Original formula uses active fluoride to keep teeth and gums healthy. Colgate Regular is ADA approved and doctor recommended.Colgate Tartar Control Toothpaste: One of the top sellers in the Colgate tooth paste line and for good reason. Colgate Tartar Protection fights tartar build up and removes stains to whiten teeth and fight cavities.Colgate Total: is the most popular toothpaste under the Colgate brand. It has eight products and flavors within the line that all promote 12-hour protection from: gingivitis, stains, plaque, whitening, cavities, tartar, weak enamel, tender gums and bad breath. Colgate Total’s productsall protect against these unwanted oral issues, but some target specific individual problems in a variety of toothpastes and gels. Including, Colgate Total Enamel Strength Striped paste, protects from acid wear for 12 hours. Colgate Total Advanced Whitening uses Dual-Silica Technology toremove tooth stain and helps to prevent new stains from forming.

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Colgate Total Advanced Clean: is available in both a gel and paste form and contains silica, which is similar to what dentists use to maintain a professional cleaning feel. Colgate Total Advanced Fresh Gel: contains an added flavor booster to keep breath ultra fresh for up to 12 hours. Colgate Total Clean Mint Paste has a delightful mint taste. Colgate Total Mint Stripe Gel is a minty blend of gel and paste that leave the users mouth fresh and clean.Colgate Oxygen Bubbles Toothpaste: When activated, the product foams to get in between teeth to fight cavities and kill germs that cause bad breath. Oxygen Whitening works to gently remove surface stains to reveal the natural whiteness of teeth. Colgate 2in1 Toothpastes: is a mix of two distinct features in one gel toothpaste. Whitening foaming that gets between teeth to fight cavities and kill germs that cause bad breath and Oxygen Whitening works to gently remove surface stains to reveal the natural whiteness of teethColgate Sparkling White Toothpaste is clinically proven to protection teeth from wear and tear staining. The formula is a patented creation for sparkling, healthy, white teeth accompanied by a unique flavor experience. It is available in the following flavors: Colgate Sparkling Mint Zing, Colgate Sparkling White CinnaMint, and Colgate Sparkling White Caribbean Cool.Colgate Sensitive Multi Protection fights tartar, removes plaque, promotes healthy gums and whitens teeth for a healthier smile. The sensitive element in the three Colgate Sensitive Toothpastes protects from painful oral sensation. Colgate Sensitive Enamel Protect helps protect tooth enamel from acid attacks. Colgate Sensitive Whitening helps restore the natural whiteness of teeth.Colgate Pro Clinical is relatively new to the market. It comes in three varieties inspired by dentists to create a high quality and satisfaction guaranteed product. Colgate Max Line established in 2007 consists of three varieties. Colgate Max White with Mini Bright Strips freshens breath and helps to bring back the natural whiteness of a persons smile. Colgate Max Fresh with Mini Breath Strips is packedwith hundreds of mini breath strips. These breath strips unleash a powerful rush of freshness and are formulated to whiten teeth. Colgate Max Fresh with Mouthwash Beads contains concentrated mouthwash beads that leaves the users mouth ultra clean and fresh. Colgate has several lines of toothpaste targeting children in regard to packaging, flavor and theme. Including Colgate Dora the Explorer Mild Bubble Fruit, Colgate SpongeBob Mild Bubble Fruit, Colgate My First Toothpaste and Colgate Pop Stars.Colgate Luminous is Colgate’s newest brand launched in early 2009. It is manufactured in two flavors, Crystal Clean Mint and Paradise Fresh Colgate. Luminous is a specific formula that safely lifts off yellowing surface stains to restore the natural whiteness to teeth. Using fluoride mineral formulation, Colgate Luminous strengthens weakened teeth enamel. Colgate Luminous Reinforces enamel layers by rebuilding the weak spots on teeth, protecting against stains and yellowing that occurs over time.

Colgate Products Percentage Breakdown

Market InformationOral Heath Industry

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Americans brush their teeth with toothpaste 200 billion times a year. The oral health industry is a vibrant sector of the current economy equal to $106 billion annually, of which 3% will be spent on toothpaste products.The toothpaste market itself is increasing up, a 8% in 2010 to 2008 and 12%from 2005.Therefore, it can be assumed that the market will continue to increase over the next 5 five year.

Toothpaste MarketToothpaste in the United States is a massive market. Sales are estimated $3,133 million total market sales, consuming an average of 895,379,714 tubes per year. Colgate-Palmolive (stock symbol (CL) is publicly traded on the New York Stock Exchange at $75 a share and is worth an estimated $15,327,000,000. Colgate Toothpaste contributes 10% or $1.5 billion to the total value of Colgate-Palmolive. [3] With a penetration of 76.35%, almost 3/4 of the families in the United States have tried Colgate toothpaste at least once. Based upon past and current Colgate toothpaste market share percentages, future market share can be expected to grow to record highs. At the current rate of increase, market share can be predicted to surpass the five-year benchmark high of 37.3% to a new record of 37.5% in 2011. Colgate must maintain that leading position to ensure future growth over the next several years. Dips in market share have occurred in the recent past such as in 2008-2009. In order to maintain current consumers and attract new potential users, it is imperative that Colgate vitalizes new or existing appreciation among consumers for their toothpaste brands.

Colgate Toothpaste Target Consumer ProfileThe over all target consumer for Colgate’s many toothpastes are Black and Hispanic men/women aged 18-34 with a college education employed as professionals earning $75,000 or more. The target consumer is currently married with children, six years old or younger, living in homes worth $200,000-$499,000 in the top five media markets in the United States.

Customer

The selling of Colgate’s products depends on chain reactions. If there is a growing population rate worldwide or in local markets, the need for oral hygiene products increases. Today the world population is approximately 6.85 Billion, predicting a world with 9.2 people by midcentury. Because of the globally presence of Colgate, there will be 2.35 billion new potential customers until 2050 (United Nations world population prospects 2008). Here is to point out that the average age of the population is not essential because all people have a need for oral hygiene products. Furthermore Colgate offers premium products which mean the consumer is willing to pay a high price for the product in order to receive high quality products.

Colgate Toothpaste Overall Target Market

Colgate has so many products it becomes necessary to aim strategies at a limited target consumer. Based upon demographics supplied by MRI and Spectra, the target consumer of

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Colgate is categorized as “younger bustling family” living within the mid-scale suburban mix community. The target’s life is centered on his/her family. The target earns for their household, while balancing interests and pursuits. Media selection, outdoor activities and neighborhood selection all mirror a family centric target.The consumer lives in the midscale suburban mix placing the target in the middle of the socioeconomic ladder. The midscale suburban mix can be characterized by residents that earning a living in blue-collar jobs and live in older, modest homes in ethnically diversity areas.

PriceColgate features products in the oral health isle of almost all stores carrying oral health products. Colgate has a large span of shelf space on nine rows, totaling 35 items per store that illustrates the wealth of variety Colgate offers. It is important to note that Colgate is the first product on display in the toothpaste section of the oral health isle. The subtotal of all of Colgate’s products per ounce is 28.58 equaling $0.81 per ounce, making it the most expensive brand of the three toothpaste category leaders. The most expensive toothpaste per ounce is the Colgate Pro Clinical, which is featured at eye level on the top shelf. The least expensive toothpaste per ounce is the Colgate Regular super tube, which is located on the second shelf from the store floor or shin level of the consumer.

PromotionThe Colgate Toothpaste promotions can be found throughout the marketing mix in a variety of mediums. The advertisements and promotions are located in a targeted media selection that appeals to the target consumer.• Website: Colgate has a dynamic website with the title, “Colgate World of Care,”that details products, oral care, company history, e-newsletter and special offers.The website also has a social networking page called Colgate Smile to engage the consumer to get involved with their oral health and the Colgate-Palmolive Company. Colgate also has social media pages on Facebook, Twitter and Myspace.

• Coupons: Colgate Toothpastes has printable weekly coupons online in the special offers section of the website. Colgate coupons can also be found as cutouts in the weekend coupon sections of 500+ newspapers around the country.

• Television: Colgate and its advertising agency produce several television advertisements a year using humor and pseudo scientific displays to appeal to consumers.

• Magazines/Outdoor: Colgate’s marketing campaigns have been known to use historical, sexual, cultural and social inferences in their advertisements.

• Donations: Colgate donates millions of dollars annually to the ADA’s “Give a Kid A Smile.” Colgate is a direct partner with this ADA program. PlaceColgate’s product distribution is immense. Almost all super markets, discount chains and pharmacies such as Wal-Mart, Albertsons, Target, Walgreens and CVS carry Colgate Toothpaste. Colgate toothpaste is physically located in the oral health isle of stores. Colgate

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toothpaste can sometimes be found in more prominent locations when on sale or launching new products into the market.

TrendsHealth Trend: It is proven through scientific study that a healthy lifestyle which includes exercise, eating and drinking with health in mind. As society grows more aware of the benefits of a healthy lifestyle, marketers have created an abundance of products to cater to this growing trend. These include tens of thousands of products such as gyms in and outside the home, health drinks, and foods high in fiber, low in fat and rich in vitamins. A healthy lifestyle extends into oral health awareness also.

Dietary and Habits: Some foods have a strong residue such as garlic, onion, cheeses, alcohol and coffee, which causes an adverse effect on oral freshness. Tobacco is a popular stimulant in many cultures around the world and is an accompaniment before, after and during meals, with coffee or alcohol. Tobacco is now illegal to use indoors in most major cities throughout the U.S. Tobacco is damaging to proper physical/oral health and is linked to causing cancer, bad breath and stained teeth.Technology: Technology is changing daily life within the world markets from the way people create and use a shopping list to the cars people purchase. Toothpaste has a direct correlation with the toothbrush. Every year new toothbrush models come out claiming superior plaque removal using such selling points as super sonic technology to blast away plaque build up or crisscrossing bristles to lift and brush plaque away. Also under the heading of technology are cameras and Facebook. Today people carry cameras at all times. Any event is now a potential photo shoot. The ease of access and spontaneous nature of camera usage requires the consumer to be aware of their smile at all times.Social/Cultural: Humans are social beings and face-to-face interaction is commonplace in business, relationships, school, family and with friends. Halitosis creates a stressful social interaction making it difficult to be close to someone suffering from bad breath. The media has made fresh breath the norm and anything contrary is unacceptable, putting emphasis on toothpastes to sweeten breath even hours after brushing.

Traditions: Within our ever-changing world, consumers enjoy products and services that they feel a connection to or have a history with. A person knows they can trust a product they saw their parents use. There is something intimate and potentially nostalgic about bathroom products. This helps Colgate to maintain its status as a mature, trustworthy product and symbol of the Colgate-Palmolive Company.

Colgate Toothpaste Overall Positioning

Positioning Strategy:

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All marketing strategy is built on STP: Segmentation, Targeting, and Positioning. A company discovers different needs and groups in the marketplace, targets those needs and groups that it can satisfy in a superior way, and then positions its offering so that the target market recognizes the company's distinctive offering and image. If a company does a poor job of positioning, the market will be confused as to what to expect. If a company does an excellent job of positioning, then it can work out the rest of its marketing planning and differentiation from its positioning strategy.

Positioning is the act of designing the company's offering and image to occupy a distinctive place in the mind of the target market. The end result of positioning is the successful creation of a customer-focused value proposition, a cogent reason why the target market should buy the product. Hertz is thought of as the world's largest auto-rental agency, Coca-Cola as the world's largest soft-drink company, and Porsche as one of the world's best sports cars. These brands own these positions, and it would be hard for a competitor to claim them.

As companies increase the number of claimed benefits for their brand, they risk disbelieve and a loss of clear positioning. In general, a company must avoid four major errors:

1. Underpositioning: Some companies discover that buyers have only a vague idea of the brand. The brand is seen as just another entry in a crowded marketplace. When Pepsi introduced its clear Crystal Pepsi in 1993, customers were distinctly unimpressed. They didn't see "clarity" as an important benefit in a soft drink.

2. Overpositioning: Buyers may have too narrow an image of the brand. Thus a consumer might think that diamond rings at Tiffany start at $5,000 when in fact Tiffany now offers affordable diamond rings starting at $1,000.

3. Confused positioning: Buyers might have a confused image of the brand resulting from the company's making too many claims or changing the brand's positioning too frequently. This was the case with Stephen Jobs's sleek and powerful NeXT desktop computer, which was positioned first for students, then for engineers, and then for businesspeople, all unsuccessfully.

4. Doubtful positioning: Buyers may find it hard to believe the brand claims in view of the product's features, price, or manufacturer. When GM's Cadillac division introduced the Cimarron, it positioned the car as a luxury competitor with BMW, Mercedes, and Audi. Although the car featured leather seats, a luggage rack, lots of chrome, and a Cadillac logo stamped on the chassis, customers saw it as a dolled-up version of Chevy's Cavalier and Oldsmobile's Firenza. The car was positioned as "more for more": customers saw it as "less for more."

Strengths, Weakness, Opportunity and Threat (SWOT) Analysis:

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Strengths: Colgate has a history of producing quality products and a stellar reputation for oral health products. Colgate has strong channels of distribution not only on a national scale but also globally. Thereby, Colgate is the number one selling toothpaste in the world. Colgate is accepted by the ADA as effectively helping to prevent and reduce tooth decay. Within Colgate’s website is a social network that asks consumers to get involved with the brand called “Colgate Smile.” Colgate has 40 product facings in stores, which is the most out of any toothpaste brand. Colgate has 93% product penetration.Weakness: Within the product life cycle most of Colgate products are either mature or declining, creating the need for Colgate to keep introducing new products. Colgate’s product line is broad with over 40 different products varying in tube size, quantity, flavor and desired effect. Toothpaste promotion is cut throat. Products are frequently on sale, which appeals to price buyers and potential brand switchers. This may also cost the company profits due to regular users taking advantage of the discounted price.Opportunities: Colgate commands 37% of the toothpaste market share opening the door to brand growth through marketing, acquisitions and mergers. Colgate’s brand image is an ever-revolving door opening the opportunity for rebranding and new promotion/marketing tactics to be explored.Threats: Aquafresh’s products use innovative technology in packaging and development. Within the last several years Colgate has lost its leadership position to Crest. While the lost market share was regained, Colgate must remain aware of the competition. Both Crest and Aquafresh products are cheaper per ounce than Colgate’s.

Swot-Analysis of the company

A Swot analysis is a technique specially designed to help identify suitable marketing strategies for a company to follow. It encompasses both the internal and external environments of the firm (Hollensen, S. (2003) Marketing Management: a relationship approach, p.265).

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Climate

A company exists within an external environment consisting of the actions of other players such as the government and competitors who are outside the business. A PEST analysis is a useful tool for understanding the ‘big picture’ of the environment in which an organization is operating. Colgate is affected by all external environment factors listed in the following table

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Competitors

The main competitors are Unilever, Procter & Gamble and the Clorox Company. The personal care industry is mostly controlled by these companies. On the one hand in order to gain more market share within this industry, the only way is to take it away from one of these competitors. On the other hand Colgate must also be aware of losing market shares to their competitors.

Competition Situation Analysis

AquafreshProductsAquafresh was established in 1973, and is currently owned by GlaxoSmithKline (stock symbol (GSK). Aquafresh is originally known for its tri-colored red, white and turquoise stripes. The Aquafresh product line has expanded into some unique features not offered by other toothpaste brands. The Aquafresh Extreme line uses micro-active foam to clean and smooth teeth over time, creating a deeper clean feeling among consumers. The Aquafresh ISO-Active products start as gel from a unique pressurized canister that turns into an “active foam” similar to shaving cream but retrofitted for toothpaste. Advanced White products are advertised to safely penetrate the tooth enamel to create greater whitening rather than potentially harmful and abrasive techniques to polish teeth. Also, Aquafresh advertises unique flavored toothpastes such as citrus mint and icy mint in Aquafresh Advanced as well as a children’s flavor bubblegum-mint. All of these features make Aquafresh a modern and competitive toothpaste brand.

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ProductsAquafresh ISO-ActiveAquafresh ISO-Active Whitening Fresh Impact,Aquafresh ISO-Active Whitening Deep ImpactAquafresh ISO-Active Whitening Lasting Impact

Aquafresh AdvancedAquafresh Advanced ProtectionAquafresh Extreme CleanAquafresh ExtremeAquafresh Extreme Clean Whitening ActionAquafresh Extreme Clean Freshening ActionAquafresh Extreme Clean Polishing Action‘sWhiteningAquafresh White and Shine OriginalAquafresh Ultimate WhiteAquafresh OriginalAquafresh Cavity ProtectionAquafresh Extra FreshAquafresh Tartar Control WhiteningAquafresh Maximum Strength Kids Aquafresh Bubble Mint Paste

MarketAquafresh, owned by global giant GlaxoSmithKline PLC (Stock symbol: GSK), had total annual sales for 2010 equate to $28,368 million. Aquafresh’s market share of 8.13% translates to $918,937,367 or 3.23% of the GSK net sales. Aquafresh’s market penetration is approximately 18.11%.

Target

The target market consumer for Aquafresh toothpaste is men and women age 18-35. The target is collage educated and earns an income of $50,000-$75,000 in office occupations. They are married and market profiles are most similar to younger bustling families. The Younger Bustling Families behavior stage is predominantly White and Hispanic. 60% are non-Hispanic Whites with 2.7 children, aged 6-17. At this behavior stage children develop their own tastes and needs, and begin to rebel against their parents. They are seeking to define their boundaries and this will manifest itself in what they eat, fashions, music, movies and television programs. This busy family lives in a house they own in neighborhoods classified as Cosmopolitan Centers. These Cosmopolitan Centers are typically found in the most densely populated urban cores of our major metropolitan centers. The target consumer resides in a mix of multi and single unit housing, ranging from high rise apartment buildings to smart townhouses and other single family housing. They are socially and politically liberal. Within these neighborhood classifications interests include the arts, environment, and human rights. They believe in taking care of themselves as well, and are receptive to a health and diet issues. Television can be a poor choice for reaching this group, which has fairly low levels of viewing. Magazines, newspapers, and the

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internet are more likely to guide their choices. Cosmopolitan centers residents are above average readers as measured by Spectra.

PriceAquafresh had only nine product facings, none of which were eye level with the consumer. The subtotal of the product per ounce is $0.75 ranking in the middle between Crest (low) and Colgate (high).

Place/Promotion

Aquafresh can be found in the oral health islet at the following stores; Target, Walgreens,Walmart, Costco, CVS Pharmacy and Wegmans. Aquafresh can also be found online at these websites: Costco,com Drugstore.com and Amazon.com. Aquafresh has a comprehensive promotions campaign using outdoor, print and television created by Media Com. The online design of the Aquafresh website is modern and easily navigable.

Strengths and Weakness AnalysisStrengths: Aquafresh uses innovative oral health technologies to appeal to a younger audience. The packaging of Aquafresh Extreme Clean is a shimmering, glittery box that appears hip and current. This along with low product facings is a marketing ploy to appeal to children whose eye level is lower than adults. Aquafresh is priced in the middle of the toothpaste market in order to appeal to consumers.Weakness: Aquafresh is a strong brand owned by the world's third largest pharmaceutical company. While the Aquafresh original is instantly recognizable by its distinct red, white and blue ribbon, other newer products are not as known. Aquafresh shelf facings are weak. Aquafresh products are usually displayed on the shelf below the consumers’waistline. Compared with Crest and Colgate, Aquafresh has fewer facings in stores. Aquafresh appeals to a younger demographic leaving out older, higher spending consumers.

Crest ToothpasteProductsCrest Nature’s Expressions Gel Toothpaste — Pure Peppermint FreshCrest Baking Soda & Peroxide Whitening with Tartar Protection Striped Toothpaste — Fresh MintCrest Kid’s Barbie Burstin’ Bubblegum Gel ToothpasteCrest Kid’s Cavity Protection Gel Toothpaste — Sparkle FunCrest Kid’s Spider-Man Liquid Gel Toothpaste — Super Action MintCrest Plus Scope & Extra Whitening Toothpaste - Mint SplashCrest Plus Scope Liquid Gel Toothpaste — Minty FreshCrest Plus Scope Liquid Gel Toothpaste — PeppermintCrest Sensitivity Clinical Sensitivity Relief Whitening Plus Scope ToothpasteCrest Sensitivity Clinical Sensitivity Relief Extra Whitening ToothpasteCrest Tartar Protection Gel Toothpaste — Fresh MintCrest Tartar Protection Toothpaste — RegularCrest Tartar Protection Whitening Toothpaste — Cool Mint

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Crest Cavity Protection Gel Toothpaste — Cool MintCrest Cavity Protection Toothpaste — RegularCrest Extra Whitening with Tartar Protection Gel Toothpaste — Clean MintCrest Extra White Plus Scope Outlast Toothpaste — Long Lasting MintCrest Multicare Whitening Gel Toothpaste — Fresh MintCrest Pro-Health Enamel Shield Toothpaste — Fresh Clean MintCrest Pro-Health Night Toothpaste — Clean Night MintCrest Pro-Health Clinical Gum Protection Toothpaste — Clean MintCrest Pro-Health Gel Toothpaste — Clean MintCrest Pro-Health Whitening Gel Toothpaste — Fresh Clean MintCrest Sensitivity Clinical Sensitivity Relief Extra Whitening ToothpasteCrest Vivid White Striped Toothpaste — Refreshing MintCrest Vivid White Night Striped Toothpaste — Moonlight MintCrest Vivid White Night Striped Toothpaste — Revitalizing MintCrest Whitening Plus Scope Striped Toothpaste — Cool PeppermintCrest Whitening Expressions Striped Toothpaste — Refreshing Vanilla MintCrest Whitening Expressions Striped Toothpaste — Extreme Herbal Mint Crest appeared on the market in 1950 with a revolutionary cavity preventative product created by Proctor and Gamble.

The classic Crest product line consists of a classic mint flavor in both gel and paste form. This toothpaste addresses the issue of fresh breath and cavity prevention in weak areas. Beyond the classic line, Crest has expanded to 40 plus individual toothpastes. This allows Crest to appeal to a broader market than most other toothpastes. Crest created many innovations over the past 60 years, including a vast amount of creative flavorings in both gel and paste form such as: Cinnamon Rush, Refreshing Vanilla Mint, Burstin’ Bubblegum, Scope Minty Fresh, Herbal mint and Citrus Splash. Crest also has the widest variety of children’s toothpaste. These kid’s toothpastes come in gel form and feature famous children’s characters. For instance, Barbie toothpaste come in Burstin’ Bubblegum flavor and Crest Kid’s Spider-Man Liquid with Super Action Mint flavor. In 2004, Crest introduced a higher quality, dentist-inspired toothpaste product line called Crest Pro-Health. Crest Pro-Health is the only toothpaste accepted by the American Dental Association for six different areas: cavities, gingivitis, plaque, whitening, sensitivity, and bad breath.

TargetThe Crest target consumers are white men and women aged 35-54. These capable men and women are college graduates earning $50,000-100,000+. These individuals are married with children aged 6-17 years old. The Crest lifestyle and behavior is that of older bustling families, established couples and empty nesters that all live in their own homes in cosmopolitan centers. These urbanites are involved in their community’s civic happenings and also politically. These dual income families are well off and tend to splurge on personal items, but are also mindful of the financial burden of their children’s future college price tag.

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MarketProctor & Gamble (stock symbol PG) has been producing household goods, health and well being, as well as, beauty and grooming products for over 179 years. P&G is the parent company of such brands as Tide, Bounty, Febreze, Gillette and Crest. P&G’s estimated enterprise value is $20,935 million. Specifically, the market share for Crest in 2010 is 32%, which is equal to $1,029,757,700 in Net Sales. That is 8.95% of the P&G health care segment and only half of a percent of its overall net sales.

PriceCrest has 37 product facings at consumer eye level and preferred shelving areas. Crest is the category leader in product volume offered with 37 facings per store. Crest toothpaste is also the least expensive of the three major brands at $0.69 per ounce.PromotionCoupons are the largest form of promotion offered by the home product giant P&G. Coupons can be found online via the Crest and Oral-B e-newsletter. Sent out monthly, the e-mail newsletter includes updates, latest advances, new products and exclusive offers at P&G. Crest also sends out the P&G Brand Saver found in over 500 local Sunday newspapers nationally. This coupon booklet provides discounts on P&G products that are redeemable at purchase.

PlaceCrest toothpaste products can be found in the oral health isle of the following stores: Target, Walmart, Kmart, Dominicks, Sam’s Club, Walgreens, Meijer, Jewel Osco and CVS. Crest toothpaste can also be found at Amazon.com, Drugstore.com CVS.com Walgreens.com and Soap.com.

Strength and Weakness Analysis

Strengths: Crest, owned by Proctor and Gamble (stock PG), is a huge company. It is thirteen times the size of Colgate-Palmolive. P&G has more available capital and over all presence throughout the market place. Crest spent $1.3 billion over the last 5 years on advertising. Based upon market research, Crest out ranks other brands in taste preference. Crest has the most product facings in a given store and cheapest overall price per ounce.Weakness: Proctor and Gamble is a huge company where Crest makes up a very small percentage of the total sales of the company. Therefore, it would seem that Crest products are given a large marketing budget but lack the proper care and attention needed to foster consumers and market share. Crest goes against the current and past trend by offering more gel than most other toothpaste companies. Crest spends an incredible amount on advertising but their market penetration is only equal to 62% of the market place.

Colgate Mission

Based upon Colgate and its competitor’s situation analysis, a comprehensive strategic plan has been compiled with goals, rational, insights and initiative. These elements are in accordance with the three fundamental values stated in the Colgate Mission statement. The three fundamental

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values of Caring, Global Teamwork and Continuous Improvement are the foundations for Colgate’s business strategy and are reflected in every aspect of work life.

Caring: The company cares about people; Colgate employees, customers, shareholders and business partners. Colgate is committed to perform with compassion, integrity, honesty and high ethics in all situations and to listen with respect to others and to value differences. The company is also dedicated to protect the global environment and to enhance the communities where Colgate users live and work. It is also committed to be compliant with government laws and regulations.Global Teamwork: Colgate is part of a global team that is committed to working together across countries and throughout the world. By sharing ideas, technologies and talents, the company can achieve and sustain profitable growth.Continuous Improvement: Colgate is committed to improving every day in all it does, as individuals and as teams. By better understanding consumers' expectations and continuously working to innovate and improve products, services and processes, Colgate will "become the best."

Market Research ResultsSurvey findings from multiple toothpaste questionnaires shed light upon consumer minds and behaviors. The research has determined toothpaste traits the consumer finds important when making purchase decisions.

Buy Process Percentages:The survey analyzed the rank of important characteristics when buying toothpaste. This chart breaks down the importance of each quality in to percentages. The toothpaste composite of criteria is: flavor 20%, price 20%, availability 19%, past usage 15%, packaging 14% and tube size 11%. The research specifically highlights the almost equal importance of price, flavor, and quality of toothpaste. These three elements make up 60% of the decision making process.19%ube SizePreferred Toothpaste Qualities:The survey also revealed what attracts individuals to specific brands: Colgate, Crest and Aquafresh toothpaste. The data agreed that consumers use toothpaste products based upon flavor, price and availability. This data confirmed that consumers preferred the flavor of Crest toothpaste over the other brands. The survey also showed that the packaging of Colgate toothpaste the weakest element discussed in the survey.

Implementation

Strategy:

Brand ReductionThe strategy is to phase-out unproductive toothpastes in the baking soda/gel varieties specifically Colgate Baking Soda & Peroxide Oxygen Whitening Frosty Mint Striped Gel, Colgate 2in1 Oxygen Whitening and Cavity Protection Winter fresh Gel. The product packaging will be advertising other Colgate products in an attempt to retain brand loyal users. By October 2011,

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these varieties of Colgate will no longer be produced for the United States market. In effect, this will generate more cash flow that can be diverted into the creation of new brands and new marketing campaigns thereby decreasing stress upon margin levels.

Fostering Positive Colgate ImageIn order to gain favorable PR and keep Colgate in the light of the media, this plan suggests a campaign that will donate a 1% of specially marked packages to a charity of ones choice. Partnering with www.charitynavigator.org to create a micro list of charities and their information. Purchasers will be able to choose and track the donations via the Colgate website by answering several demographic questions and entering a unique code. Facebook will feature a separate page that will promote Colgate, describe the donation campaign and charities offered by charitynavigator.org. Also, a downloadable iphone application will be created to track contributions. This marketing tactic will foster a positive image of Colgate, create an increase of sales in specific Colgate brands, harvest demographic customer information, draw added consumers to the Colgate website and more of a presence on Facebook.

Increase Brand ShareColgate is one of the most recognized brands in the United States and the world. Colgate is popular among the consumer target and beyond. It has an amazing 93% penetration while only retaining 35% of the market. In terms of the product life cycle, Colgate toothpaste is beyond the mature stage. Some brands have declined with regard to sales, profits, customer interest and market share. This idea will be retrofitted to print ads as well by using the same twenty images with the smiling, foamy face and underneath the images will appear the Colgate slogan,“Colgate A World of Care.” This marketing campaign has the ability to touch a vast consumer base. There is universality to the idea. The concept relates and is identifiable with people because “everyone brushes their teeth in the their pajamas.” Maslow’s hierarchy of needs dictates that the identifiably social component of the commercial will appeal to the subconscious of viewers creating the added value necessary to enhance the image of Colgate and gain added market share. Choosing actors specifically by gender and racial profile can appeal to start-up and young bustling families. This commercial will attract potential users and reaffirm current consumers. The investment in a revitalizing campaign to improve the image of Colgate will inevitably increase market share by 1.00% or $11,141,377 at a minimum.

Colgate Control PlanTo insure the goals of this plan and easy access of continuity, a set of controls are to be established. This plan suggests renewing the company subscription to Spectra Systems and to assess Colgate’s penetration within the United States consumer market as well as other parts of the world.This plan also suggests preferred card services from all retails environments to be reported to the marketing department in order to further appraise Colgate’s penetration.The accounting department is to report quarterly total (excluding new brands) Colgate toothpaste earnings to the marketing department in order to determine company statistics compared to years past. The accounting department is also to report all toothpaste coupon usage by retail chain and region. Tech support and website analytics departments are to report monthly Colgate toothpastes webpage visit counter.

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References:

1. 2011, By. "Americans to Spend $106 Billion on Dental Care." TopNews United States.

2. "Aquafresh Products." Aquafresh: A Lifetime of Protection. GlaxoSmithKline.

3. Colgate A World Of Care. Colgate-Palmolive Co. Colgate Quarterly reports

4. "Crest Toothpastes." Crest Healthy, Beautiful Smiles for Life. Proctor & Gamble.

5. Mehdi, Syed Nazare. "Colgate-Palmolive (NYSE: CL)." WikiInvest. 2009-2010.

6. Finance - Business Finance, Stock Market, Quotes, Web. Oct.-Nov. 2010. PG

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