Vous êtes sur la page 1sur 19

Principles of Marketing

Group Project

Group No


104016: Mukul
103497: Krishnakant
103878: Vishwanath
103209: Naren
Prof. P. Venugopal
JPNagar, Blore

XLRI, Jamshedpur

Case study Overview

Industries all over the world face a challenging task of sustaining these conditions of
economic downturn. The challenge is not just sustaining but also showing a similar
growth rate as in early years. The situation in India is not different and every Industry is
under the axe of this Economic slowdown and hence doing every bit to sustain in this
These conditions affect every industry, but industries in luxury segment are affected more
than the industries which provide the basic needs of the countrys population. Indian Oral
Care Industry falls in the other segment and although affected by the downturn it still is
better positioned than other adversely affected industries.
Indian Oral Industry comprises of companies which provide dental care products to the
consumers. Dental care products can be
Tooth powder
Mouth wash
Indian population is widely spread in terms of standard of living and monthly income and
hence in many parts of the country, traditional ways of teeth cleansing mechanism are
used. These are Neem tweaks, ash, etc and here lies a great opportunity for the other
toothpastes, manufacturing companies to expand their market.
From the above noted products, toothpastes, toothpowder can be considered in the same
segment of mouth cleansers. Following is the way these products are penetrated in the
Indian population.

Lets concentrate on toothpastes and understand the toothpaste industry in India which is
now more than Rs 2200 crore industry. We will look into the marketing details of Indias
major toothpaste giants.
Although many people in India still clean their teeth by toothpowders and Neem tweaks,
urban areas highly depend on toothpastes for daily teeth cleansing activity. With the
survey done, we realized that only 40 % of urban population brush twice a day. To

confirm the statistic, we also found that per capita consumption of toothpaste is only 70
grams which is very less compared to other countries. Thus toothpastes giants have a
huge market to capture in order to increase its per capita consumption.
Population is increasing at 1.9% per year and every person will need to buy toothpaste.
Thus toothpaste manufacturers need to increase their production year on year as the
number of consumers is ever increasing.
Following are the major areas where toothpastes companies can concentrate on in order
to improve their share in the India Oral Care industry
1. Rural market who still believe in traditional methods of teeth cleansing
2. Encouraging consumers to brush twice a day, thus to increase the per capita
consumption of toothpaste
3. Increase the market capture in urban areas
4. Increase in the production rate to satisfy increasing population and hence increase the

Toothpaste Giants in India

Toothpaste market in India is mainly concentrated within few product companies and we
can concentrate on this Oligopoly market to understand the toothpaste market in detail.
These giants are Colgate and Closeup toothpastes.
Market share in India is widely shared by Colgate and HUL. As per the available data,
Colgate controls 55% of market share and HUL has a control on 31% of the market by
volume. These percentages are fluctating slightly over last few years, and it also depends
on which survey you look.

We also performed a survey in urban cities taking data from 47 users. It indicates that
49% market share is covered by Colgate while HUL covers 44% of the toothpaste
Our task is to identify the Marketing strategies applied by these companies and to
understand how the companies who come from different background work in India and
depending on their background how their marketing strategies differ. Hence to understand

this difference in marketing strategies, we have chosen four toothpaste products out of
which two are Multinational companies while other two are Indian brands.
So we will be concentrating on following toothpaste manufacturing companies:

Most of the information captured here is from the various internet websites or the
company website. We added our own interpretation of the data and few suggestions of the
potential company stratagies.

In 1806, William Colgate, himself a soap and candle maker, opened up a starch, soap, and
candle factory on Dutch Street in New York City under the name of "William Colgate &
Company". Over the years, it became one of the biggest consumer product oriented
company in the world. There products range from paper napkins, soaps, detergents, oral,
personal and dental care and cosmetics.
Promoted by Colgate-Palmolive USA, the parent operates through its 51%
subsidiary and has a presence in India since last 50 years. The companys flagship
product, Colgate Dental Cream is the largest selling toothpaste in India. The company
acquired Hindustan Ciba Geigy (Cibaca) in the year 1994, which helped it increase its
market share.
Colgate is considerably backward integrated. It has captive manufacturing facilities for
flavor and other ingredients, which yield significant cost savings. It has also set up a
world-class facility for manufacture of Di-calcium Phosphate, a key ingredient in

Colgate with its dominant position in Indian oral care markets is well poised to capture
industry growth. It is the market leader in the Indian oral care market, with a 48.7 per
cent market share in the toothpaste segment, 46 per cent market share in the toothpowder
market and a 37 percent share in the toothbrush market. This foreign-based public limited
company has maintained its position as the undisputed leader for more than a decade.
In view of its dominant positioning in oral care category, significant free cash flow
generated, high dividend yield, long term growth prospects and low penetrated oral care
industry, significant rural presence, coupled with enhanced profitability, the company is
considered to be having a good prospect.
(Rs Mn)
Pat (%)
















The company has achieved consistent sales and earnings growth for the last 5 years, with
ROCE in excess of 60%. In the last 5 years total income has grown at a CAGR of
12.43%, operating profit has grown at a CAGR of 12.40% and bottom-line has grown at a
CAGR of 21%.
The company management aims at margin gains through efficient supply chain
management and bringing down cost of operations. Colgate has expanded its Baddi (taxefficient zone) capacity in FY08-09 to 66,000MT from 40,000MT in FY07. This plant
enjoys the excise exemptions for the first 10 years. Also it has income tax exemption for
the first 5-years and 30% exemption for next 5-years. These benefits will help to boost
the margins with lower income tax and excise duty.
In view of the financial prudence to make effective use of capital, address the
overcapitalization issue and reward shareholders, Colgate has reduced its share capital
from Rs1.36bn to Rs136m in FY08. The number of shares outstanding and shareholding
structure of the company have remained unchanged. This reduction is in the best interest
of the Company and its Members and has improved the return ratios like RoCE and RoE
significantly and should continue in the foreseeable future as well.
The company is quite shareholder friendly in its distribution policy. It has consistently
paid out about 75 - 85 per cent of its earnings as dividends each year. Dividend yield is
one of the best in the FMCG universe at 3.3% in FY08.



Dividend Payout (%)





Its a name synonymous with the Indian oral care industry. The companys parent has a
presence in over 200 countries worldwide. In India, Colgate ranks No.1 in top of the
mind recall in many consumer surveys.
Faced with tough competition from HLL during early 2000, Colgate made a slew
of successful new launches to protect its market share namely Colgate Herbal, Colgate
Gel & revitalized Colgate Cibaca Top (in the low price segment).
The company has continuously relied on innovations to stay ahead of the competition. It
launched 3 new innovative variants during the course of FY06.
Colgate Active Salt Which capitalizes on the traditional use of salt for oral care
Colgate Advanced Whitening Which contains microcrystals that polish ones
teeth, restores and maintains their whiteness.
Colgate MaxFresh Gel An innovative gel-based toothpaste with cooling crystals

Current portfolio

Colgate Dental Cream

Colgate Total
Colgate Herbal
Colgate Kids Toothpaste
Colgate Advanced Whitening
Colgate Active Salt
Colgate Fresh Energy Gel
Colgate Max Fresh
Colgate Cibaca

SWOT analysis
As per our estimates, 12.2% of the total world population lives in rural India.
Currently, only a small portion (about 15%-20%) of region has been tapped. Although,
expansion in rural areas requires huge investments, it is a market that cannot be
overlooked and has huge potential. To put things in perspective, the per capita
consumption of toothpaste in India is only 70 gms, as compared to 262 gms for Thailand,
376 gms for Mexico and 518 gms for USA (Source: Colgate, Equitymaster Research). In
India, urban per capita consumption is 153 gms whereas rural consumption is a mere

The company has been facing immense competition from organized as well as
unorganized players. HLL is the closet rival of Colgate with a share of 34% with its
Pepsodent and Close-up (gel where it has a lions share) brands.
The latest entrant in the organized sector is LG that has ventured into the FMCG market
and launched premium consumer products across 8 categories including toothpastes,
shampoos, soaps, detergents, etc. Also, there has been speculation from sometime now
that P&G (its worldwide rival) would debut its billion-dollar-plus toothpaste brand Crest
in India. This could intensify competition in the segment.

The Company has high reliance on a single category (Oral Care), which accounts for
94% of its sales and 98% of its profits (FY04). A large part of the companys product
folio consists of premium products, which do not have a large potential market in India.
This is evident as new launches by the parent in India have been much lower than other
markets. In the last couple of years, the companys top line has stopped growing and in
order to achieve growth, Colgate cut prices of its products by an average 17% in April
2003 (Source: Company Annual Report). The company has been able to increase its

margins by continuously cutting advertising expenses, which cannot go below a certain

point, owing to its single product dependence.

Strong financial performance
Focus on innovation and new product
Colgate business planning initiative

Emerging markets growth
Deploying advance technologies
Untapped rural population

Youth market


Product recalls
Highly leveraged


Competitive landscape from other

Private label growth
Increasing commodity prices

Falling consumer confidence in the US

As expected, Colgate spends lot of revenue on advertisements; be it print media or
television. Though toothpaste typically have a lot of loyalty among customers,
advertisements is a way to reach new customers as well as potential folks who are
looking at trying new varieties based on promotions.
Colgates advertisements focus on:
It being a family oriented toothpaste which has toothpaste catering to adults and kids
A health oriented toothpaste. You see tag lines like:
o Number 1 recommended by dentists
o It helps prevent plaque and gingivitis
o Fights tartar build-up, bad breath and helps prevent cavities

Close up Toothpaste is a product of Hindustan UniLever Limited (HUL).
HUL is India's largest Fast Moving Consumer Goods Company, touching the lives of two
out of three Indians. HULs mission is to add vitality to life through its presence in over
20 distinct categories in Home & Personal Care Products and Foods & Beverages. The
Company meets every day needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life.
In December 2008 quarterly results, HUL has already declared 17% growth and 21%
growth in the FMCG segment. As per the latest reports from HUL Limited, Close Up was
the product which made growth in the companys oral care category.
HUL products can be broadly classified into Home and Personal Care and Food
Products. HUL has so many products in the Home and Personal Care that we can again
classify it in the following

Oral Care (CloseUp, Pepsodent)

Personal Wash (Lux, Hamam, Dove)
Skin Care (Fair & Lovely, Vaseline)
Laundry (Surf Excel, Wheel)
Hair Care (Sunsilk, Clinic)
Deodorants (Axe, Rexona)
Color cosmetics (Lakme)
Ayurvedic Health Care (Ayush)

According to year 2007 reports, HUL sales were Rs. 14757.42 lakhs with an after tax
profit of Rs. 1769.06 lakhs
Close Up toothpaste takes a special place in the Market of Indian Toothpastes Industry.
The reason for this is the way HUL has targeted its audience and the kind of market
segment HUL has targeted while marketing the Closeup Toothpaste.
Close up Toothpaste was launched in the year 1975 and it was the first toothpaste to
appear in the gel form. The most unique feature of Close up toothpaste was its 'gel' form
which was the first of its kind in the Indian Oral Care industry. This became one of their
strongest points while identifying the Marketing Product and the Marketing Universe

Marketing Product:
As Close Up were the first to bring out the gel form of toothpaste in the market, it worked
in their favor and put Close Up in the land of no competition, at least for short span of

time before the other competitors caught pace with the fast moving Closeups gel

Technical Product: Toothpaste

Competition: Other brands of toothpastes from competitors like Colgate

Functional Product: Mouth freshness, sparkling teeth

Competition: At the time of launch, Close Up had no direct competition because of its
unique gel format. But other brands could catch up at fast pace.

Emotional Product: Freshness attracts youths towards each other.

Competition: Mouth Wash, breath fresheners

Marketing Universe: Close Up had a very unique campaign of targeting the youth of
the country desiring for mouth freshness and sparkling teeth at the same time. Every
Close Up advertisement had teenagers involved and it showed how the freshness created
by gel toothpaste attracts other people towards you.
To confirm this, we also went through latest Closeup Advertisements. Few points easily
noticed from the Closeup advertisement.
Closeup always emphasizes on young people bonding together because of fresh
It always makes a point that closeup is targeting young generation of India
Thus we can say, the Marketing Universe for Close Up is the Indian youth.
Closeup has also come up with a jazzy, funny website which targets young people of
India and brings them together. Its http://www.closeupuniverse.com

The Marketing Environment:

In order to identify the Marketing Environment for Closeup Toothpaste, the Micro
Environment as well as Macro Environment factors needs to be identified:

Macro Environment: It is classified on the basis of SocioCultural: targeting towards youth which is now 31% of the country's total
population (http://www.euromonitor.com/Special_Report_Global_youth_populations),
youth might come up with a new need
Technology: other companies jumping into gel toothpastes manufacturing, other company
delivering gel toothpaste before Close Up, new innovation overpowering close up's
demand in near future

Internal Environment:
Machinery: New machineries for generating this new gel toothpaste.

Money: Investment needed initially for new machines to support this innovative product
idea. Later to market this new idea to the target audience, marketing budget could

Marketing Effort:
As Close up was coming up with a product one of its kind the main challenge of the
marketing department was to attract young people and make them believe the usefulness
of the gel toothpaste over the regular toothpastes.

SWOT Analysis


1. Backed up by second largest FMCG

company of India.
2. Market Leader in gel toothpastes
3. Close Up targets the youth of India
which is around 31% of current Indias

1. Rural Market of India

2. Establish themselves as toothpaste to
strengthen teeth
3. Close Up can also focus on satisfying
different set of people who concentrate on
health and care.



1. Not establishing them as toothpaste to

strengthen teeth which is a basic attribute
of any toothpaste in market.
2. Cannot establish them as family
3. Since Close up is established, consumers
relates to closeup with gel and freshness.
No other strong attributes

1. Mouth Wash is becoming increasingly

popular. It might offset Close-ups market
2. Colgate has maximum market share for
Oral Care industry.
3. Close up is not into toothpowder, which
Colgate has a strong hold. Loyal customers
can move from Colgate toothpowder to
Colgate toothpastes.

Marketing Strategy - Ideas and Goals identified from SWOT

Closeup is the market leader in gel toothpastes. Thus it is a world leader in a particular
segment of toothpastes which they should capitalize on. Closeup targets the youth of the
country. India youth population is 31% of total population. This percentage is ever
increasing and hence maintaining the current marketing Universe Closeup can look for
increasing its market share in India. Closeup has always focused on freshness and white
teeth. This also is depicted from the way Closeup attracts young crowd.
Since its establishment close up has not concentrated on satisfying the basic need of
people. i.e. Strong and healthy teeth by killing germs. Close ups competitor and number

one brand in India, Colgate holds this segment of the market. Closeup can look for
getting into this market by coming up with new products.
Close up targeted this segment of market by coming up with new toothpastes which are
high in Vitamin quantities which help get strong teeth.
Close up can stretch its marketing strategy of targeting youths to the rural market. 65% of
Indian population still lives in rural areas and this is the market which can be tapped by
closeup. By doing this Closeup can also plan to upset the Colgates maximum market
share in India. Rural market is still using traditional tooth cleansing mechanisms and
tooth powders. Close up with its new products can attract the rural India and capture the
market before anyone else does it. This can be Close ups best strategy of encashing on
the opportunity and also react to the threat of Colgates increasing highest market capture
which is already 55%.
New product of close up which provide Vitamins, fluoride, mouth wash and micro
whiteners can give Close up new attributes to market on. Thus it can compete with
Colgate in a segment which Colgate clearly is the number one in India.

Survey Result:
We conducted a survey in which we identified that 85% of users who use Closeup
regularly look for freshness or white teeth. But at the same time, only 54% of users who
look for freshness really opt for closeup. This shows that although Closeup toothpaste
provides freshness to the users, it still needs to spread this message effectively.

Also the above graph shows what closeup consumers actually think what closeup
provides. From this we understand that although Close Up has not taken conscious effort
to market kill germs attribute, still people think it to be. Hence Closeup can actually
take advantage of this situation and can bring out new products which concentrate on
killing germs
Survey Link: http://www.surveymonkey.com/s.aspx?



Founded in 1952 by late Shri K.V.Pendharkar, the VICCO Group has emerged today as
makers of the best internationally known products of the Ayurveda, the ancient Indian
system of natural medicines. Having production units at Dombivli, Nagpur and Goa in
India, their annual turnover has scored to Rs. 1500 millions. Their best known products
are Vicco Turmeric skin / sun screen cream, Vicco Vajradanti powder and paste and Vicco
SF (Sugar free) paste. Under the able guidance of Shri. G.K.Pendharkar, Chairman,
the company has established strong foothold in almost every developed country in Asia,
Europe, America, Africa and Australia. Combining ancient wisdom with modern
technology, the company has expanded business activities into investment, trade,
advertising and education sectors as well, 13 of its associate companies.
Right from its inception in the 1952, the VICCO Group of companies has been charting
an unwavering course that has catapulted the group into international limelight. Today, 50
years later, the group stands majestically as a grand conglomerate of 13 companies.


The annual turnover has scored to Rs. 1500 millions.

With sustained efforts and a sound marketing strategy, the company is poised to
push its present turn-over of Rs.1500 millions p.a. to Rs.5000 millions by the
year 2010.

Marketing product:
Functional product
Vicco Vajradanti
Offers this unique formula in a dental care paste that has natural astringent, antiseptic,
and analgesic properties. These ingredients also stimulate and reinforce gums, while
resisting plaque formation. It gives you strong gums, which makes your bite mighty,
which no cosmetic toothpaste can ever give.

Technical product
It is positioned as an ayurvedic product which cleans, protects and strengthens teeth.
It has got 20 pure herbal extracts long established by Ayurvedic herbal tradition to be
good for teeth, mouth and gums.

Emotional product
The positioning is done in such a way it gives you strong gums, which makes your
every bite mighty, which no cosmetic toothpaste can ever give. It is focusing more on
ayurvedic which helps in better teeth.

Current Behavior
VICCO has been successfully carving out a niche for itself in the field of dental care
globally. The company is exporting its products to countries like U.S.A., Canada,
Mexico, Surinam, Africa, Mauritius, Fiji, Saudi Arabia, Kuwait, U.A.E., Qatar, Oman,
U.K., Germany, Holland, Italy, Cyprus, Srilanka, Hongkong, Singapore, Malaysia, West
Indies, Iceland, Australia, New Zealand amongst others.
About 15% of company's total production goes to overseas market. VICCO products
constitute 4% of India's paste market.
An ever-growing popularity of its present products, coupled with a definite plan of
introducing newer products both domestic and international markets, the above targets
do not look far-fetched

Market Universe:

The target is the family people and the people who are health conscious and
inclined towards ayurveda and herbal care.
More of an International Market.

SWOT Analysis:

Vicco attains a level of purity and
sanitary production that is unmatched
by its competition.
No artificial chemicals like
competitors, produced purely from 20
herbal extracts.
Maximum coverage in the rural
Peoples inclination towards Ayurvedic
Expensive when compared with
Lack of variety.
Focus of the company is diversified on
the other products.
Focusing the international market more
than the domestic.

Can target young generation, by a
slight change in the product.
To increase the focus of the local
Try and reduce cost reasonably to
increase sales.
Bring variety in tooth paste making it
attractive to young generation.
Competitors exposure and
development towards ayurvedic
Market leaders producing Herbal and
Ayurvedic paste.
Rural people having reach to other
competing products.
Other herbal and ayurvedic products
availability at a lower price.


The ad film are shown across 1,000 cinema halls a huge mass media and also
shown on Doordarshan channels during prime time shows, some of the handful to
pick up from, but extremely effective in terms of reach.
The ad is shown in a manner where a grandfather cracking open a walnut with his
strong white teeth and tell: Vicco Vajradanti toothpaste makes teeth stronger.

Dabur Red Toothpaste

Manufactures overview
Dabur India Ltd,(Company) is the 4th Largest FMCG Company in India. Over more than
a 100 years Dabur India Ltd have been dedicated to providing nature-based solutions for
a healthy and holistic lifestyle.
Company was established in 1984 by Dr. S K Burman. Its basic motive was to
manufacture of ayurvedic drugs by setting up manufacturing units and setting up
Research and Development Labs. Company added Oral Care Products in the 1970s.
Company has shifted its base from Kolkata to New Delhi in 1972. In 2000s Company
developed its strategy and celebrated a turn over of RS 1000 crores Company expanded
its oral care market by completing the acquisition of Balsara Hygiene and Home Products
in 2005. This acquisition gave Dabur access to Balsaras oral care products like Babool,
Meswak and Promise. The Babool and Meswak products will be good strategic fit with
Dabur as they too, are positioned as herbal products. The acquisition pushed Daburs
market share in the Rs 1980 crore toothpaste market, which is dominated by Colgate and
Hindustan Lever, from 1.8 per cent to 8 per cent. Also Company developed its oral care
market and increased its territory. Company is also aiming to double its revenue and
profit by the end of 2009-2010.

Interpretation of product
Functional product
Tooth cleansing paste

Technical product
A viscous liquid gel made up of cloves (lawng), Mint (pudina), cloves oil and natural
ingredients (ayurvedic) to clean tooth.

Emotional product
Making friendship with dabur red will vanish all the toothache

Natural and ayurvadic product.

Current Behavior

Dabur Red is reasonably priced as compared to closeup, colgate, pepsodent and

other gel toothpaste.
End consumers biased towards any product which reads Ayurvedic or Natural
o though it has an unusual name Dabur Red.
The dominant flavour of Cloves (Laung) and Mint (Pudina) is much like the
earthy smell that emanates from the wet soil after a first rain.
Indian brand

Market Universe
Dabur had been looking to develop the oral care market as 30 per cent of the population
in India does not use toothpaste or toothpowder, but relies mainly on ash. Dabur
anticipated that this consumer segment will switch to toothpowder and then toothpaste.
Dabur Lal Dant Manjan and Dabur Red Toothpaste have been targeted at this segment.

Dabur Red toothpaste is the diversification of Dabur Lal Dant Manjan.

Customers shifting from tooth powder to toothpaste.
Northern India mainly.

SWOT Analysis

Century Old Company
Established Brand
Ayurvedic/ herbal Product line
Leader in Tooth powder market
Innovativeness in Promotions
Exploring new geographical areaslocal as well global
White tooth powder consumers
Launching new product like gel
Southern Indian market
Exploring new geographical areaslocal as well global
The higher income group
can be targeted also as its an
ayurvedic product

Profitability is uneven across
product line
Less popularity in southern Indian

Competition in the FMCG sector from

well established names (colgate,
pepsodent, close up)
Competition in the herbal and
ayurvedic products (vicco bajradanti)
Markets where Ayurvadic products are
not recognized

Dabur India Ltd. a 100 years old company and has its own legacy has already formed a
brand name and a valued brand equity. Its the market leader for herbal products. Dabur
India Ltd. can use its strengths to market its product in the new geographical area (global)
and firstly in southern Indian market. As dabur being the leader in tooth powder market
can also target the white tooth powder consumers to switch to the dabur tooth powder
first and then switch to the dabur toothpaste. Dabur has a great promotional strength
which can be used in the southern Indian market as promotional aspect in southern Indian
market is not up to the mark.
Dabur has currently targeted a segment which was not using toothpaste and was relying
on ashes by keeping its price low and promoting as a natural product. Dabur can stretch
its marketing strategy also by targeting the higher income group by enhancing its
emotional product as their competitor vicco bajradanti.
Promotional activities needs to be improved in the region which doesnt recognizes
herbal or ayurvadic products (overseas). After the acquisition of Balsara Hygiene and
Home Products in 2005, Dabur has the strength to launch new product i.e. gel toothpaste which is
very much recognized in the current oral care market.

Marketing & reading the advertisement campaigns


Dabur campaigns are innovative. Daburs brand logo has been created in a such a way
that it shows the emotional level positioning of its brand. Daburs logo shows a tree
which represents nature and represents its product to be natural and herbal.
Dabur red tooth paste campaign study state that dabur red toothpaste comprises all
natural ingredients like tomar, mint and cloves which keeps the tooth strong.
Dabur red campaign shows a mother teaching her kid about dabur red and says dabur
red se dosti yani taklife rahe door!!.
Campaign is created to show that dabur red is a natural product which makes the tooth
very strong and prevents the toothache and gives a healthy tooth. With the advertisement
dabur is trying to position its toothpaste at a emotional level product.

Centres d'intérêt liés