Colgate Max Fresh Essay

Gross world product up 2.5% in 2005, following two years of 1% growth. boilers suit emerge market economies exploding + 10% GDP growth in China and + 6% growth in Latin America. Political values in emerging markets may make it difficult for foreign competition to enter market without domestic partner and / or foreign investment & market diversification slight attractive(import / export tariffs). Situational analytic thinking Situational Analysis Industry Purpose of the Oral Personal Care industry is to prevent teeth and gum diseases and deliver ornamental benefits. Scope of the industry includes tooth previous(prenominal)e, floss, mouth rinses and toothbrushes. Industry Definition CompetitionColgate has dominant market value share in China (32%) and Mexico (82%). China market fall apart with Colgate & P&G representing 53% of share. Situational Analysis Industry Product Development growth strategy with launches of premium tier shuffling extensions jacket Whitening Expressio ns (US) eyeshade With Scope (US), Colgate Icy Fresh (China), Crest Cool Expressions (MX).Brand Position Competition strategy (P&G)C+S = toothpaste + mouthwash + bleachingCWE / CCE = mollify + toothpaste + whiteningEntering Emerging food markets under its Crest dishonor without JV partners. Leveraging x-brand scale with Crest + Scope.Built its brand around therapeutic benefits, while cosmetic benefits market growing fastest in Emerging Markets. Innovating in cosmetic segment a historic Colgate strongh centenarian. Heavily invests in advertising behind sore product launches. Situational Analysis Growth Market Strategies Porter Five Forces Analysis Global Oral Personal Care Colgate Palmolive Oral Care SWOT Analysis Situational Analysis Marketing Strategy Pricing Positioned as a superintendent-premium brand, price parity to Crest Cool Expressions (14.99 15.99 pesos). Marketing Budget $2MM marketing budget aimed to jam means trial through in-store merchandising, sampling, an d public relations. Corporate Marketing Strategy ObjectivesColgate goop Fresh (CMF) Mexico Marketing PlanStrategicGrowth driven by in high spirits margin core business.Advertising focused on high margin products and high potential markets. Innovation driven 40% of sales from products launched in past 5 years. TacticalGrowth Strategy Product Development Super Premium segmentGrowth Targets China 2% YR1, 2.8% YR2 MX 5% YR1, 6% YR2 value share. Will require trading up consumers. Value Proposition CMF would drive new dimension of freshness Target Market Geared towards 18-34 yr. old adults (female oriented) augment Colgates strong competitive position in Value & Mid-Tier. Situational Analysis Marketing StrategyWill US obtained media course of studys translate? fecal matter Colgate effectively trade-up consumers?What impact will supportnibalization capture on profitability?Is market full-grown enough in Mexico for premium segments?Will benefits of CMF convey to Mexico consumers?BASE S testing and Consumer Viability office showed marginal promise.. CMF Marketing Concerns for MexicoSymptoms of Colgate Palmolives Primary Problem Emerging Market consumers are price sensitive Crest attacking cosmetic segmentConsumers investigate through trial vs. large initial purchase Despite Growth in key areas Colgate-Palmolive operating profits and net income are down. +6.5% unit brashness growth+7% sales buck growth+0.1% growth in gross profit margin-2% Operational Profit-7% Net IncomeTo drive growth Colgate-Palmolive is looking to focus on higher margin core businesses. Core Elements of the Strategic Problem In the US toothpaste market CP is seeing a 3.1% increase in volume of sales attributable to the Super Premium Toothpaste Category.Global Strategic Opportunity exists in the Premium Toothpaste market. Represents $75 M sales dollar increase and innate market cap of $409.5 M dollars Only the Premium Toothpaste Category is growing at a substantial rate.In 2004 CP capture d 60% of that gross revenue Dollar Increase in the US largely dues to the incoming of Colgate Max Fresh.In order to continue to grow CP must(prenominal) find a way to develop their Premium Toothpaste product CMF in emerging countries. Colgate Palmolives Primary ProblemWould the costs of adopting CMF in to each one new country provide fit incremental sales and profits to justify the added complexity of localized marketing and rollout images associated with those new markets. Colgate-Palmolive must continue to globalize its Premium Toothpaste Strategy. Any solution must balance they cost of localization with the expected sales and profit increase for each new market. Also it is in Colgate-Palmolives best interest to develop reusable guidelines as it approaches other new markets similar to China and Mexico. Colgate Palmolives Secondary ProblemsType 1 Establish a tactical marketing plan for the CMF rollout in an emerging market where Colgate-Palmolive has little previously establi shed presence(China)Type 2 Establish a tactical marketing plan for the CMF rollout in an established market that has high competitor activity(Mexico). In order to establish an effective global strategy two types of secondary problems must be solved in the Colgate Max Fresh Case Study Any solution must balance they cost of localization with the expected sales and profit increase for each new market. Secondary Problem Detail Need to introduce a product to push Colgate-Palmolive profitability Colgate has worldwide share, the only way to expand is to drive high margin business. China(new markets) have strongly entrenched local brands.Colgate Max fresh will need to compete with its own joint venture brand Darlie(High End). Due to new product introduction at the Super Premium Toothpaste Market competitor Crest has 3% growth year to year, Colgate Equity Brands have been stagnant for 3 years. CP is not only loosing out on possible profits but also slowly loosing market share to its 1 compet itor. Market is unfamiliar with CMF breath stripsUS Marketing Video will be ineffective due to the US Star involved. Is it worth creating new celebrity back marketing content? Will the Go Big or Go Home strategy work in China and other similar markets? How can Colgate-Palmolive best enter the Chinese Market with CMF. ChinaSecondary Problem Detail Colgate-Palmolive knows P&G will be introducing Crest Cool Expressions(CWE) in Mexico in the near future. CO must develop the best marketing plan to stunt P&G Crest Cool Expressions while hold dear their overwhelming market share. 82% Value share for Colgate-PalmoliveCP needs to create a marketing plan to introduce CMF with limited budget and maximize regional utility. Due to CPs large inherent market share, the goal of the Mexican campaign will be to maximize the product funnel. There is a large opportunity present to upsell customers from the Big Red Brand toothpaste to the new CMF toothpaste. Mexico See Exhibit 17 Will waiting to introd uce CMF until after the CWE product introduction change the company estimates of profitability? Can the Mexico Snowsurfer commercial be better standardized for global marketing plans? Going forward how will CP utilize this marketing plan for future markets? Colgate-Palmolive beau monde Alternatives Locally make the clear bottle Works for China, not Mexico ChinaAllows for ease of expansion of the Colgate Max Fresh brand in clear bottle to other regional locales Also, provides future capabilities for use in other new products ProblemsThis does add 20% variable cost to COGSInitiates a 6 month delay on production$1.5 M sunk cost before productionAlternatives Colgate-Palmolive Company AlternativesRegional Market AlternativesMexicoChinaColgate-Palmolive Company Alternatives Provide more trial availability with the smaller packages to sway more to give CMF a try CMF has the breathstrips or cooling crystals within the toothpaste, and then bundle the breath strips package with CMF to build awareness. Stop utilizing celebrities to promote CMFProvide regional flavorsKeeps product as a premium productCost of $200,000 per flavorHas shown promising outcomes in other regionsIn China, Crest utilized a tea flavor and Colgate a salt flavor In Russia, after cathartic a local flavor, the toothpaste market share rose from 11.8% in 2002 to 24.9% in 2005. Colgate-Palmolive Company Alternatives Allows for greater differentiation between the CWE toothpaste In Mexico, drop the price from 15.99 pesos to 14.99 pesos to protect a greater share of CP market share. In Mexico and other markets CP is highly entrenched in, utilize clear bottle In Mexico, Keep the price at 15.99 pesosImplementation Strategic Vs. Tactical Plans The strategic plan moving forward for emerging markets will be to use an easily customizable commercial and adapt it to quadruplex countries Colgate is the dominant toothpaste brand world wide, so our primary goal will be to prevent Crest from gaining market share and also to upsell our existing customers to the super premium segment We agree with the decision to use a celebrity commercial in China due to the size of the market share the Crest is cultivating Each region and culture has a different set of values and preferences Each region will have a unique tactical plan to maximize effectiveness Jay Chou Colgate Max Fresh Commercial Implementation in China Dispensing the toothpaste in clear bottles to build brand awareness Colgate-Palmolive has invested a large amount of capitol in the Max Fresh marketing campaign Maximize the recidivate on investment byTransition to less valuable packaging once consumers are familiar with product Include breath strip samples with Max Fresh tooth paste in selected markets Snowsurfer Commercial (English Dub) Implementation in Mexico Our strategies in Mexico will be very similar to our plan in other emerging markets Focus will be on preserving our market share instead of new growthUse clear bottle and breath st rip samples in select markets to increase brand awareness Colgate accounts for 82% of total market share compared to 10.2% of Crests total market share Crest + Scope only accounts for 3%of total market share dance orchestra price at 14.99 pesos per 100 mlWe will re-evaluate our Colgate Total (19.36 pesos per 100 ml) marketing campaign to focus on the affluent 40+ age assort to minimize cannibalization Implementation in Brazil Characteristics of the Brazilian Market 71% of Brazilians agree that music is an significant part of my life 33% have participated in trips to the beach in the last 30 days 76% agree that it is important to be attractive to the opposite sex 65% agree that it is important to keep young looking32% express the desire for plastic surgery in order to improve their appearanceStatistics from Geoff Wicken, KMR GroupTactical Strategy Brazil Vollyball is the 2nd most popular sport in Brazil To become a sponsor on the FIVB circuit, we must apply by July 31, 2006 update packaging to include Made in BrazilThe busy season in Rio De Janeiro December to March, so we recommend kicking off a average marketing campaign in October 2006 This will give Colgate-Palmolive a chance to evaluate the success of the BreathStrip samples in China and Mexico If we do not see the return on investment we will not include the promotional packaging in Brazil Brazilians place a high emphasis on existence attractive to the opposite sex, which means there could a tremendous opportunity to market Colgate Max Fresh as a product that will whiten teeth and make you more kissable Adapt the SnowSurfer commercial to the Brazilian marketSponsor a national beach vollyball tournamentConclusion Colgate-Palmolive is actively want ways to increase their operating profit and net income Introducing new high margin products to emerging markets will be critical to their success Marketing Colgate MaxFresh as efficiently and effectively as possible will be necessary in helping us achieve ou r financial goalsUNILEVER