Table S1 - Initial Cottle Taylor share on segments 2010 (without any

promotional spend)
Group
Identifier

Income
Group

Product
Segment

No. of
2010 Users
Brushes per (mn)
year

L1

Low

500

L2
M1
M2
M3
H1
H2

Low
Medium
Medium
Medium
High
High

Neem, Ash
etc.
Low
Low
Medium
Medium
High (Swirl)
High (Swirl +
Refills)

2010 Cottle
Brushes
Projection
(mn)
0

1
1
1
4
1
1+3

235
82.6
23.3
6.75
1.68
0.07

235
82.6
23.3
27
1.68
0.28

Assumptions:
Without any promotional spends, 2010 users of Cottle products per income group
will grow at same rate as the average growth rate of various income groups per
year.
For replacement frequency increases, consumers move from 1 to 2, i.e. 1
replacement in a year.
Units Target
1. As per annexure-1, total target units product-wise: Low = 347.4 mn, Mid = 94.6mn,
High = 2.13 mn units.
2. As per Table S1, initial projections without ad spend product-wise: Low = 317.6 mn,
Mid = 50.3mn, High = 1.96 mn units.
3. Extra unit to be sold product-wise = 1 -2: Low = 29.8 mn, Mid = 44.3 mn, High =
0.13 mn units.
Targeting Strategies
1. High Segment Growth (0.13 mn units)
Target segments here are H1 and M2, each contributing 0.065 mn units.
H1 -> Increase Frequency = 0.065/1.68 = 3.8% response from H1
group on replacement frequency.
M2 -> Move from Mid to High = 0.065/23.3 = 0.2% response from M2
group on movement.
2. Mid Segment Growth (44.3 mn units)
Target segments here are M1 and M2.
M2 -> Increase Frequency for 50% group = 23.3/2 = 11.65 mn units =
50% response from M2 group on replacement frequency (neglecting
0.2% movement to high group since very small)
M1 -> Move from Low to Mid = 44.3 11.65 = 32.65 units =
32.65/82.6 = 40% response from group M1 on movement.
3. Low Segment Growth (29.8 + 32.65 = 62.45 mn units)
Initial requirement of 29.8 + 32.65 movement from M1 to mid segment.

 Target segment here is L1.

L1 -> Start Brushing = 62.45 mn units = 62.45 / 500 = 12.5%
response from L1 group on start brush.
Summary
3 strategy segments with their target segments:
a) More Brushes ( Start Brushing focus): Target L1 12.5% response
b) More Cottle Brushes (Replacement Frequency focus): H1 (3.8% response)
and M2 (50% response).
c) More premium Brushes (Move to next level focus): M2 (0.2% response) and
M1 (40% response).
Our ad-spend in 2009 = 8.4 mn. Implies per strategy segment = 8.4/3 = 2.8 mn
dollars.
Current ad-spend according to Langs plan (Annexure 1): 17.58 mn dollars.
Resource Allocation
Since historical growth rate in low segment has been approx. 16% as required even
now; ad spend in dollar amount does not increase i.e. 2.8/17.58 = 16% of total ad
spend.
Among Movement to next level and Replacement, both need significant movement
but movement to next level requires greater push hence we allocate the remaining
budget in ratio Movement: Replacement = 3:2. Therefore Movement ad spend =
3*14.8/5 = 8.88 mn and Replacement ad-spend = 5.92 mn.
Customer Lifetime Value per Group Identifier (discount rate be 10%, Churn
Rate be 5% and Additional Value per year be 5%)
L1 = 0
L2 = Yearly Income / (Additional Value Churn Rate + Discount Rate) = 0.085/0.1 =
$0.85.
Similarly,
M1: $0.85
M2: $1.65
M3: $6.6
H1: $28
H2: $39.1

Annexure-1
Cottle Taylor.xlsx