Factors driving the demand for oral care

products in India
Awareness campaigns by IDA leading to oral hygiene awareness
Western Influences through media
Rural population moving to urban India
Change in lifestyle because of higher disposable incomes
No. of people below poverty line going down
Easy distribution and accessibility leading to more visibility
Internal company issues
Declining US revenues
Senior management looked at emerging markets to offset domestic losses
Lang, VP Marketing for Greater Asia and Africa is under pressure to deliver the results
Being able to accelerate the growth in Thailand Lang expects the same from India
Patel forecasts a 20% growth with increase in pricing by 20% and is a conservative
approach according to Lang
Line pressure at every level
 INDUSTRY FORCES (ECONOMIC)

Disposable Income going up 80% population lived on less than

$2 a day

No. of people below BPL going down Just 3 of the 37 states and territories
accounted for 30% of the total GDP

GDP has increased 146 times as Around 93 million people lived in

compared to 1990 slums
 INDUSTRY FORCES (SOCIAL)

In semi-urban and rural India consumers 50% Indians not concerned with
purchase most household products preventing dental problems
including oral care products

50% market hasnt been penetrated yet Only one dentistry personnel
available per 10000 people

Western influences on the society Around 93 million people lived in

leading to lifestyle changes slums
 INDUSTRY FORCES (BEHAVIORAL)
Incorporation of western lifestyle
Behavioral impact of awareness through
IDA campaigns
A majority of people are willing to
upgrade the products theyre using
Traditional practices of oral hygiene
still in practice
Rural population 5 times reluctant to
use modern oral care products as
compared to urban people
People blames dental problems to
bad eating habits and not their
improper care and dont usually
replace toothbrushes until completely broken
GROWTH OPPORTUNITIES
50% people still dont use toothbrushes for dental hygiene
Frequency of usage is limited to one use daily for majority of the people
Upgradation from low range to mid and premium range products for better oral care
Switching to new products after a certain period of usage
 Rural people, with low disposable income, Persuad Increasing More time and cost
going to incur huge investments in awareness ing to frequency efficient, proposes
programs and advertisements use of usage better opportunity for
sales

An opportunity playing on Upgradation Changing Behavioral change required, time

changing lifestyle, heavy to mid and brushes taking option, will need awareness
advertisements needed, premium after campaigns and can be
but time efficient option range usage communicated with other messages
 2009 2010E Patel 2010E Lang 2010E New Plan

P/U P/U (after P/U (after P/U (after

Unit Sales manufacturer Unit Sales 20% Revenue % increase Unit Sales 20% Revenue % increase Unit Sales 20% Revenue
(million) selling price Revenue % increase (m) increase) (m $) (volume) (m) increase) (m $) (volume) (m) increase) (m $)

Complete 230.6 0.15 34.59 20 276.72 0.18 49.8096 16 267.496 0.18 48.14928 17 269.802 0.216 58.27723

Sensitooth 29.9 0.18 5.382 20 35.88 0.216 7.75008 16 34.684 0.216 7.491744 17 34.983 0.2592 9.067594
Low End
Manual Fresh Gum 15 0.18 2.7 20 18 0.216 3.888 16 17.4 0.216 3.7584 17 17.55 0.2592 4.54896

Surround 9 0.19 1.71 7 9.63 0.228 2.19564 16 10.44 0.228 2.38032 17 10.53 0.2736 2.881008

Kidsie 15 0.12 1.8 8 16.2 0.144 2.3328 16 17.4 0.144 2.5056 17 17.55 0.1728 3.03264

Total 299.5 356.43 347.42 350.415

Zagger 34.4 0.29 9.976 25 43 0.348 14.964 120 75.68 0.348 26.33664 50 51.6 0.4176 21.54816
Mid range
Manual Directionflex 8.6 0.53 4.558 25 10.75 0.636 6.837 120 18.92 0.636 12.03312 50 12.9 0.7632 9.84528

Total 43 53.75 94.6 64.5

Swirl Brush 1.5 6.4 9.6 13 1.695 7.68 13.0176 25 1.875 7.68 14.4 15 1.725 9.216 15.8976
Battery
Operated Refills 0.2 0.56 0.112 0 0.2 0.672 0.1344 25 0.25 0.672 0.168 15 0.23 0.8064 0.185472

Total 1.7 1.895 2.125 1.955

344.2 70.428 412.075 100.9291 444.145 117.2231 416.87 125.2839

 2009 2010E Patel 2010E Lang 2010E New Plan

Tothbrush gross revenues 100 70.428 100.9 117.22 125.83

Less: Trade Discounts 10 7.0428 10.09 11.722 12.583

Net Revenues 90 63.3852 90.81 105.498 113.247

Less:

Variable manufacturing, selling and distribution

costs 46 32.39688 46.414 53.9212 57.8818

Gross Margin 44 30.98832 44.396 51.5768 55.3652

Less:

Advertising 9 6.33852 9.081 14.0664 12.583

Consumer promotions and merchandising 3 2.11284 3.027 3.5166 3.7749

selling, general, and administrative costs 14 9.85992 14.126 16.4108 17.6162

Profit from Operations 18 12.67704 18.162 17.583 21.3911

RECOMMENDATION
Langs strategy projects a revenue of $117.29 million compared to $101.01 million in Patels
strategy
But gross profit for Patels strategy ($18.18 million) is more than Langs strategy ($17.6 million)
Patels strategy generates more users hence creating a larger customer base for future
Patels strategy should be followed for 2010 and Langs strategy may be implemented once first
time users are increased
There should be different weightage given to the 3 key messages for rural, urban and semi-urban
areas