Date: 6/10/2015
Subject: Colgate Max Fresh: Global Brand Roll-Out (Case 1)
Colgate-Palmolive Company
Current Marketing Strategy Review
Since 1806, Colgate-Palmolive Company (CP) has experience success in every industry embarked upon. Nigel Burton, president of global oral care at CP, had only experienced three years of CP’s success and now faced the decisions of the upcoming Colgate Max Fresh (CMF) global launch. Both China’s and Mexico’s management did not test the marketing plan prior to submitting their recommendations to Burton. Due to the limited time and costly proposals Burton had to consider whether or not the adaptions were imperative to the global success of CMF.
CP only obtained 30% of their sales in the US. The launch of CMF in the US assisted with a record 34.8% value share in the toothpaste market but Procter & Gamble was only 3.2% behind with 31.6% value share. In 2004, CP reported a +0.1% to 55.1% growth in gross profit margin which highlighted the success of the current products but also the impact of CMF. CP’s strategy to improve negatively affected sections and maintain current improvement growth was to focus “on its higher margin core businesses.” (Quelch&Randle 2007) This is accomplishable by increasing spending for advertisement through focusing primarily on the high margin products and new markets. The products launched since 2000, drove sales which increased the market share and market leadership.
Burton understood with the new strategy in place and the positive outcome over the last few five years, the importance of proper global marketing of CMF. The company has utilized marketing testing to ensure CMF is buyable in each region. One popular model used to establish testing is the 4 or 7 Ps of marketing. Based upon the information currently gathered by management each advertisement and CMF requires customization for a profitable impact.
CP will benefit by adapting to each region. Each region is requesting minor changes that could potentially double the estimated profit. Although, these minor changes are costly and in some cases could extend the launch past it approximate global launch date. CP has improved their growth in the US due to proper marketing investment in CMF.
Accessing the CMF launch in the U.S.; Please describe and evaluate its strategies and the results.
The US retail toothpaste market in 2004 was $2,438 million with a growth rate of 8% since 2000. The market is dominated by four manufacturers according to Table B. The table shows that CP and P&G lead the market, with 34.8% and 31.6% respectively and are locked in a head to head competition for value share lead within the toothpaste market. Seeking to launch a marketing campaign in the U.S., a market analysis was done and the details were in Exhibit 2A and 2B.
Benefit Importance of the US Market Toothpaste was detailed in Exhibit 2A. According to the data collected in this survey sampling, cosmetic benefits such, breath freshening, whitening did not score as high as the therapeutic benefits such as cavity protection, contains fluoride, tarter control and plaque reduction. The data suggest that there are more therapeutic benefits sought by toothpaste consumers in the U.S.
The data in Exhibit 2B supports and qualifies the consumer benefits data in Exhibit 2A. The data suggest that over a period between 2000 and 2004 therapeutic benefits were trending downward with negative 19.3 changes, however for the year 2004 therapeutic benefits totaled 53.4% and cosmetic benefits totaled 46.6%. This still shows that principal consumer sentiment was higher for the therapeutic benefits.
Understanding the analysis and being able to meet the consumer’s desire, expectations and needs made the CMF launch in the U.S. successful. The increased product benefits breath freshening of +2.9 and teeth whitening +16.4 fueled the overall success.
CMF U.S. launch analysis.
The CMF U.S. Launch is the reason behind the 34.8% market share lead. CMF was priced on par with the competitor. CMF was positions as a premium brand, it advertised promising freshness and whitening to the consumer. This was detailed in Exhibit 3 the U.S. Concept Statement. The promotion and advertising of the product sought to create awareness through the media, program sponsorships, sales promotions,