Marketing Mix for Colgate - Case Study Example

?Table of contents 0 Introduction 2 1 Background information of Colgate Co. 2 2.0 Situational analysis of the market (SWOT) 3 3.0 Brief overview of competitors 5 4.0 Target Market 7 4.1 General information about consumer behaviour 7 5.0 Marketing mix for Colgate 8 5.1 Product 9 5.2 Price 9 5.3 Place 10 5.4 Promotion 10 Bibliography 12 Phase 1 1.0 Introduction Colgate is regarded as the world market leader in oral hygiene products such as toothpaste and it can be noted that this product line is made up of various brands that are very strong in different markets (Berger, 2010). As such, this report seeks to analyse the marketing strategy that is used by Colgate in its operations and it is divided into different sections. The first part looks at the background information of the company as well as the situational analysis. A brief overview of the company’s competitors will also be given and the main body of the report will look at marketing strategies used by the company such as market segmentation, product position as well as the detailed description of the product’s marketing mix. The report will also outline some of the competitors in this market that pose a challenge to the operations of Colgate in the oral and dental health care industry. 1.1 Background information about Colgate According to its official website, Colgate was established in 1806 and it was founded by William Colgate. To date, Colgate is regarded as the world’s leader in oral and dental health care and it offers products such as toothbrushes as well as toothpastes. Colgate operates in more than 200 countries though it is based in the US. According to Berger (2010), Colgate has a market share of 44,4 % in the world’s toothpaste industry and it operates in more than 200 countries. The company posted a profit of $3, 615 in the financial year of 2010. The brand is very popular in different countries. For instance, Colgate enjoys a lot of positive consumer response in large emerging economies such as India and Brazil. The company also offers different sizes of toothpaste to different customers. 2.0 Situational analysis of the marketing environment (SWOT) Basically, “SWOT analysis is a useful instrument that is used to help managers to identify internal strengths and weaknesses of a business and external opportunities and threats facing it,” (Strydom, 2004, p. 31). SWOT stands for strengths (S), weaknesses (W) while on the other hand the external environmental factors are regarded as either opportunities (O) or threats (T) and these factors help the company determine its current position in the market in order to map an effective strategy to realize its intended goals. The table below shows the SWOT analysis for Colgate. Table 1: SWOT analysis for Colgate Strengths The company has good human resources management practices which entails that it has a dedicated workforce The company also uses effective marketing strategies in selling its products Innovation is prioritized in terms of product development and it incorporates dental professionals in its operations Colgate is a leader in dental hygiene The company operates in many countries across the globe Weaknesses The major weakness of this company is that it spends less on media advertising compared to its rival competitors Opportunities The major opportunity of the company is based on the aspect related to growing dental hygiene market across the whole world. The emerging markets also provide a good opportunity for Colgate Threats The major threat faced by Colgate is related to competition from other rival competitors. There are chances of substitute products being offered by other companies and this affects price of products offered. The other threat is related to currency fluctuations in different countries where Colgate operates Basically, the managers in a company should take advantage of the company’s strengths and opportunities while they put measures in place that are designed to minimise the weaknesses and threats. This section explains in detail the contents of the above table. As noted in the table above, Colgate has many advantages given that it leverages its operations on the strengths it has. This company is regarded as a world leader dental and oral hygiene and it also uses effective marketing strategies to sell its products to different people. The other strength of the company is that it designs its product to offer maximum protection to the people and it also strives to offer products that can leave the teeth sparkling clean. It can also be seen that the company has major opportunities given that it operates in different countries across the globe. The other opportunity is that it has a strong presence in the emerging economies and these help it to generate more revenue from its operations However, it can be noted that the viability of the company is threatened by the existence of competitors in this same industry. There are also different players in this particular industry and they also offer oral and dental health products. This entails that Colgate should be innovative when it designs its products. It can be observed from this situational analysis that the company’s strengths and opportunities outweigh its weaknesses and threats which gives it a competitive advantage in the dental and oral health sector. This enables the company to realise more revenue from its operations. 3.0 Brief overview of three main competitors The main competitors in the dental hygiene industry are Unilever, Procter & Gamble and the Clorox Company (Berger, 2010). These companies also offer products that are meant for oral and dental health care. To a certain extent, they impact on the operations of Colgate since the customers can choose another substitute. Proctor and Gamble offers a lot of personal care products such as tooth paste and tooth brushes. The company logo of this organization is shown below. Source: http://www.pg.com/en_US/index.shtml Some consumers in Australia prefer to buy the products that are offered by this company since it specializes in offering personal care products. Unilever is one of the major competitors in this particular industry. It offers various products that are related to personal care and it operates in different countries. The picture below shows some of the products offered by this company. Source: http://www.unilever.com/aboutus/ Competition in this sector entails that there is war among the operators in this sector since they try to charge favourable prices that can attract as many customers as possible. Unilever uses various pricing strategies that are likely to appeal to the interests of the customers so that they can purchase the products offered. This somehow affects the viability of Colgate. Clorox company is the other main actor in this particular sector. It offers products that are designed for personal care as well as cleaning different household goods. The company logo is shown below. Source: http://zw.linkedin.com/company/the-clorox-company However, it can be seen that there are also other small competitors in this market. These competitors pose a challenge to Colgate’s marketing initiative since this entails that there are various substitutes available in the market. 4.0 Target market The company targets different segments of consumers from all walks of life across the globe since dental hygiene is required by all people regardless of their age. For instance, young professional ladies are the major targets of the company since these people are more interested in their public appearance. Therefore, there are different factors that are considered by the company when segmenting the market. Basically, market segmentation is described as the process of dividing a large market into smaller segments that are comprised of people with similar needs (Solomon, 2009). The company generally targets consumers on the basis of different factors such as behaviour as well as benefits sought from the product as going to be explained below. It can be observed that customers in this particular country have varying interests and these shape their behaviour towards the products offered by Colgate. 4.1 General Consumer Behaviour/Traits of the Target Market The consumers mainly seek to derive two benefits from using toothpaste that is offered by Colgate. Some customers buy this product in order to protect their teeth against cavities and bacteria that can cause tooth decay. Some customers seek toothpaste that whitens their teeth. In Australia, the major targeted customers are females who are mainly worried about their appearance in public. However, the company also targets other customers such as young people. Basically, Colgate leverages its product design on these two basic elements that shape the behaviour of many customers towards the products it offers in the dental care market. The customers are also attracted by its tooth brushes since they are designed in different forms. Some of them are soft while others are brittle and the choice of the customer depends on these factors. 5.0 Detailed description of the marketing mix According to Kotler & Armstrong (2004), marketing mix mainly deals with four elements which include product, price, place and promotion since they significantly impact on the way a product is marketed to the customers. High ethical standards are given priority in Australia so as to operate in a professional way. For instance, the Market and Social Research Society in Australia helps to set the ethical standards that should be followed by different professionals operating in this particular sector. Marketers of health care products are expected to comply with various regulations that are designed to ensure that their operations are within the expected standards. There are different regulatory bodies in Australia that monitor the activities of different marketers of products that are made by different companies. Therefore, this section looks at the marketing mix that has been adopted by Colgate in carrying out its marketing activities. 5.1Product The company offers a wide range of products such as tooth brushes and toothpaste. The toothpaste offered by Colgate is designed to offer maximum protection to teeth while some of the products are designed to whiten the teeth. There are different sizes of toothpastes that are offered by Colgate. Some are small while others are medium and large. The company also offers products such as tooth brushes and these also come in different sizes and types. The toothbrushes are also in different colours and their quality differs depending on the choice of the consumer. These products are marketed through different channels of communication and they are sold through different shops. Below are some examples of products that are offered by Colgate. Products offered by Colgate Source: . 5.2 Price The prices of toothpastes offered by Colgate vary from place to place as a result of different factors. Since these products are sold in different countries, it can be noted that the currency value of that particular country determines the price of the toothpaste. It can also be noted that toothpastes come in varying sizes. For instance, small tubes of toothpaste are relatively cheaper compared to larger tubes. It can also be noted that the company charges premium prices for some of its products that are of high quality. Some customers prefer quality products that can guarantee maximum cavity of their teeth. The price of the products offered by Colgate start from $0,50 and they vary depending on the size of the toothpaste. Many people are willing to pay high prices since they are aware of the benefits that are likely to be derived from using this particular product. 5.3 Place Colgate collaborates with different retail outlets as well as wholesales across the globe. According to Berger (2010), Colgate strives to ensure greater visibility of its products in different stores across the globe. It has an assortment of products that are found in many retail shops particularly grocery supermarkets and other small stores. Colgate’s products are also distributed through dental care professionals across the globe since these are responsible for referring their clients to use this product in order to protect their teeth. Products offered by Colgate are also distributed through pharmacies since they are health related. It can be seen that these products are distributed through dental surgeons to different clients. Many people often seek advice from the dental surgeons about their oral health care and they are usually referred to buy Colgate products since they are designed to protect their teeth from decay. 5. 4 Promotion strategies Colgate mainly uses the strategy of advertising to promote its products. It mainly uses local media in different countries such as newspapers as well as radio and television to advertise its products. It can also be seen that the company uses the internet to advertise its products. The company uses colourful advertisements in order to appeal to the interests of many customers from different places. An example of one advertisement by this company is shown below. Source: . In this advertisement, the company is trying to portray that Colgate toothpaste is ideal for all ages. Both young and old people can use this product for their oral and dental health care. According to its annual report of 2010, the company also uses the strategy of lowering prices whenever it introduces a new product in the market. The other aim of this strategy is to create loyalty among different consumers so that they can continue buying the product. Clients are also presented with gifts for buying the products offered by this particular company. For instance, buyers of new products in the market are presented with T-shirts as a token of appreciation for buying the goods offered. The company uses commercials on television to promote its products to different people across the whole country in Australia. The promotion strategy is to differentiate the product from all other similar products that are offered in this particular country. Basically, it can be seen that there are many factors that shape the oral and dental health care industry in Australia. As noted, there are many players in this particular sector therefore, there is need for Colgate to be innovative in designing its products so that they can appeal to the interests of many customers. Various promotional strategies should also be used by the company in order to lure many customers to its products. However, it can be safely said that Colgate is regarded as the world leader in dental and oral hygiene as a result of the fact that it offers quality products. Young people in particular are the major customers of this particular product since they interested in their appearance especially in public. It has also been observed that the company targets customers of all ages since this product is designed to protect the health of all people regardless of their age. Bibliography Advertising Education Foundation, Viewed 4 November, 2012, from: . Belch, GE & Belch, MA 2008, Advertising and Promotion: An Integrated Marketing Communications Perspective, McGraw-Hill, Boston. 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