Marketing Analysis of Colgate Total Toothpaste - Case Study Example

Marketing analysis of Colgate Name: Institution: Introduction The concept of marketing can be give analytical explanation by taking in to account different components that constitute it. Marketing is a concept that has always been explained by different scholars in different ways. The use of internet has also increased in the whole world. It is noted that there is always a direct correlation between internet use and business to business marketing. This paper will ascertain hypothesizes that try to explain this research problem. Different findings shall be analysed in a more cognitive and coherent manner so as to show the validity of the hypotheses. The results will be explained in a vivid manner (Chernev, 2007). The product chosen to research in the Australian market is the most famous product of Australia named Colgate. Colgate, a white cream, product made using fluoride chemicals and extracts, though it has gone global, its production it is also made by Australia and this has made it to become one of the iconic and most selling products in Australia since it was first introduced to the consumers. Since then, popularity of Colgate has never reduced in the market, and almost all of Australians are obsessed of the unique features of Colgate as compared to other toothpastes in the market. According to the statistics of different researchers, nearly 80 per cent of households in Australia have Colgate as their preferred toothpaste. Colgate-Palmolive Australia Pty. Ltd. It is a company that was established in 1921 and is part of the larger Europe/South Pacific geographical division of Colgate Palmolive in US that is the main company. This report will focus on Colgate, a part of Colgate-Palmolive oral care products that retail in Australia. Oral care is viewed from the business point of view and also from the medical point, a very well established and known business. It has four main market segments, which are economic segment, medicinal sensitivity, taste and cosmetic as well as beauty conscious. Colgate in Australia is the market leader, and is followed but not closely by Mclains and Sensodyne. The competitive environment of this market is an oligopoly, with fast moving new products and new brands being introduced. Introductions and innovations, mostly driven by beneficial needs in the market are the products being introduced. Colgate is a product that uses a reactive pricing strategy and which is applicable for this market of Australia. The competitive advantage is that it has established distributional channels. The researcher feels that the medicinal segment of the product could be in a little bit narrower, to give a larger room for the introduction of more innovative products into the market, such as Colgate Total Grind Control, and to establish a very new segment into the market, Environmental. Colgate as a company spend more money on the marketing segment than any of their closest competitor, however, the researcher feels that they could redirect some of the revenues and enhance their branding of the products to a higher level, as well as to introduce the digital branding engagement (Lilien, & Rangaswamy, 1998). The target market There are consumers that base their purchases decision on the environmental factors that are in the country for the product and that are growing. A recent on-line survey showed that 91% believed that pro-environmental behaviours make a difference. The cosmetic segment on the other hand we fell could be a bit wider, and cater for men as well as women. The market segment profile “Walking down the dental care aisle in the supermarket, consumers must wade through “advanced formulas”, “multiaction” pastes, “extreme-clean” products and even “micro-cleaning crystals” when deciding what to buy. Toothpaste, the ubiquitous daily essential, is an example of market segmentation at its most successful. Although just two companies, Colgate Palmolive and GlaxoSmithKline, control 92% of the Australian toothpaste market, there are certainly more than two products on the shelves. As if regular toothpaste was not cleaning teeth sufficiently, we now have whitening, tartar control, sensitive and enamel-lock toothpastes as well as products tailored to children. “As a dentist, I’m quite amazed when I go through the supermarket aisle and look at just how many toothpastes are on the shelf,” says Dr Peter Alldritt, chairman of the Oral Health Committee at the Australian Dental Association (ADA). “How do people choose?” (Colgate-Palmolive Company SWOT Analysis, 2003) Demographic characteristics: Age groups: the researcher spent two days in Coles observing the costumers behaviour of Colgate, great keen was put on their age are looks like 16 to 50 years old. In addition, The most of them are adults and even buy Colgate for their children and themselves (Grossman, & Tayloe Murphy Institute, 1984). Gender group: Colgate attracts all of Australian male and female that takes up 50 percent respectively. Because Colgate is a local product, most of Australians started use the product from their childhood and hence a market dominance by the toothpaste Region of the consumers: the sale of the Australian product is mostly in the Australian regional and from the figures provided it shows that 72 percent of Colgate is sold in Australian, and the other 28 percent is sold outside the country. It sells well throughout the world. Behavioural characteristics: Volume usage: Colgate has a variety of packaging with different volumes for fulfilling the different people’s needs and the prices attached. For example, Colgate has 25 gram, 50 gram, 75 gram and 150 gram. 150gram is family packaging for larger families that use a lot of Colgate. The tube of 75 gram is very convenient to bring and the price is for everyone’s convenience. The marketing mix PLACE Colgate is a company, which is based in Australia and all over the world, however, it should be noted that the research only focuses on the Australian market. The company supplies its products globally in many countries. The company also has its branches in China and Canada being the major markets including all over the world. It must be noted that this company’s manufacturing activities are found in very many countries due the fact that the company have a vibrant technology base which allow for the manufacturing of the products. It is worth noting that the company has well developed outlets for the supply of its products. This has significantly promoted the desire to acquire these products by many people. Australia is one of the major markets for these products. The outlets have been spread so as to capture the market in a more efficient manner. This allows the consumers to get the products of the company close to their places of residence. This ensures that the products have high elasticity. Price Because of the popularity of Colgate, it always keeps the similar price in different supermarkets in Australia and the discount of Colgate is not often. However, Colgate has become basic requirement for local people, so the price of Colgate cannot be very high and it must suit for the price of convenience product. The major competitor of Colgate is Sensodyne, which is produced by Great Britain. Moreover, Colgate doesn’t have a lot of competitors in Australian. There are only two major competitors of the toothpaste. From the shelves and sizes of these two competitors, it is clear that these two products are not succussed comparing with Colgate because their marketing strategies are a little bit suppressed by Colgate. Furthermore, these two products just can be found in Woolworth. Although the price of these two products is cheaper than Colgate, the sales and popularities cannot compare with Colgate (Kotler, 1980). Price strategy is a good way to attract customers. But in the promotion of celebrating Australian Day, the limited edition ‘Australia’ jar, the price of Colgate didn’t change. From the common sense of the price, if the company launch a limited edition, the price would increase, for a lot of people would collect it. However, the fact is the price was same as original Colgate. The objective is the manager wants to a lot of sales of special Colgate jar to attract more customers. The price is consistent with the company’s strategy for the other 3 Ps. For product, Colgate has come into mature stage in PLC. For promotion, they just advertise their product occasionally, and they just remind Aussie to buy Colgate for their children and don't forget this traditional costume. For place, the managers of Colgate distribute Colgate into every major supermarket in Australian and consumers can purchase Colgate easily. So, the price of Colgate is stable with a little bit fluctuation in Australian supermarket (Onkvisit & Shaw, 1993). PROMOTION The company has very vibrant promotion techniques. The company has explored the use of major advertising sites like the Alibaba.com and other promotional websites. It must also be noted that the company also advertises on major financial and economic newspapers. These include the Financial Times, Wall Street journal, the Economist and the New York Times among others. It must be noted due to a vibrant promotion techniques used by this company, the company has received very high ratings. These ratings have been in terms of positive customer satisfaction (Colgate-Palmolive Company SWOT Analysis, n.d). Advertisement It is vivid to note that Colgate have used vibrant advertising to promote the products. The company has used different types of media to assist in advertising. For example the company has used internet to promote its products. Advertisement in the internet is a very fundamental technique since it allows many people in the global environment to view the products. It must also be noted that the company has also developed the use of e commerce that ensure that customers view and purchase goods online. Exhibitions The company has also employed the use of exhibitions in promotion of the company’s products. In this method the company has ensured that they show their products in trade fares. The company has also developed display of the products in their major retail outlets. The display of the products has really accounted for a bigger percentage of the company’s income. This is because this method allows people to see the products and choose their preferred choices. Coupons Through this method, Colgate has developed brochures that contain relevant information about the company’s products. This includes their location, the brand and amount of the product and the price of each brand or size. This method is a very important way of promotion since it is always cheap. The method is also efficient due to the fact that it does not consume much time. It only involves printing and supplying of the coupons to the targeted consumers or customers. It is however true to note that the method would only be appropriate for literate persons since it involves majorly reading and formulation of the information contained in it in as far as the product is concerned (Reeder, et al 1991). Segmentation Segmentation can be considered as a very fundamental factor in relation implementation of the marketing strategy of Colgate. This will involve division of the market in to different sections so as to enable for easier monitoring of the market. To ensure that a marketing strategy is successfully implemented, a manager must ensure that segmentation is considered to the latter. Increase in market size Segmentation will also increase the size of the market for the company’s products. For instance, Colgate has ensured proper segmentation of the product market. This has ensured that the company has more customers due to increased market size. Increase competitiveness Segmentation has also increased the competitiveness of Colgate in the market. This has enabled the company to study the competitors in relation to their styles of promotion. It is also fundamental to note that segmentation has also increased brand loyalty for Colgate. Brand loyalty has ensured that the product become very strong in terms of competition in the market. Heidingsfield & Blankenship, 1947). Improve communication It is also prevalent to note that segmentation of the product is also likely to improve communication. This is due to the fact the manager knows the market for the product. This will ensure that appropriate information that pertains to the product is communicated to the relevant buyers. This has always been the case with Colgate. Since the company’s manager knows the market segments in relation to the product, he is likely to ensure that he communicates only to the segment market (Vitale, et al, 2011). Increase profitability Since segmentation affects many factors that relates to the performance of the company like communication, loyalty by the customer among others, it is likely to result in to improve profitability of the company. For instance it is worth nothing that Colgate has witnessed increased profitability due to market segmentation. This is as a result of high sales volume that has been brought by customer loyalty for the company’s brand. Targeting Target marketing is a very fundamental tool in marketing mix of the company. This involves the act of dealing with a specific market. This method of marketing has several advantages. The importance of this element of marketing shall be explained in relation to Colgate Company. It has enabled Colgate Company to drill the benefits of their products to the market so as to benefit the consumers. This has ensured that the customers have maximum utility that comes with the products of Colgate. Targeting also allows a manager tom determine the types of businesses to work with. Thos will be in terms of partnerships or even in terms of supply of the company’s products and raw materials. It is therefore important to note that targeting is very important and should always be upheld by companies (Lehmann, & Winer, 1988). Targeting of market has also improved the profitability of Colgate. This is because the company has put all its efforts on a specific market hence ensuring that matters that pertain to wastage of time are avoided significantly. Targeting also enables the company to manage and formulate ways of marketing the product. A focus on one market will ensure that the company has more time formulate and implement proper promotion methods. The promotion methods will be those that are in line with the requirements of the target market. Targeting also improves communication for the company’s marketing strategies and policies. Because the company just focus on a few markets it is very easy to communicate to the specific markets, this allows the company to maximize the use of its resources hence reducing wastage of resources and time. Competitive Advantage Colgate's Board of Directors has a belief that good corporate governance is the key to success and this accompanies and facilitates the long-term dream and ambition of business success. Their main strategy as selected by them is to involve their concerns for the consumer's health. However, they also have to respect the Mother Nature in that way of their increase of competitiveness. A good example, Colgate has been able to help people who have diabetes. But the question is how? Well, the best argument that the put across is that people with diabetes are 2x times more likely to get affected with serious gum disease (Kotler, 1997). As part of the cure, and with the help of Colgate Total toothpaste, the company is able to fight off those germs (unlike other toothpastes) that cause this terrible gum disease. Colgate Total toothpaste is a brand of Colgate that reduces 90% of plaque germs that cause gingivitis. This is because it is the most common form of gum disease, for 12 hours. According to their sources, it is also the only FDA-approved of all other toothpastes that help to prevent gingivitis. In addition, the Colgate is the number one recommended toothpaste among others by different dentists and hygienists to help in gum care. Other advantages that the toothpaste brings to the consumers are that it has the ability to prevent not only gingivitis but also prevent other disorders like plaque, cavities, and stinky breaths! Tartar build up. For the Company to be environmental friendly, this company has given and made a 34.5% reduction in the water usage for its production from the year 2002 to 2010. In addition, Colgate Company also has initiated a program to educate people with a name Bright Smiles in which they have covered over 650 million children around the globe. It is through these things that make the company acquire a competitive advantage over other Colgate. Factors like these make more consumers to desire and also appreciate the companies that have the program and others (MCB University Press, 1993). In addition it makes their products sell even more. In addition, the highest level of a good branding creates more value of the product and gives Colgate a higher competitive advantage. This digital branding engagement in the world is growing by every day; there is the need for them to tap into what consumers are saying about their products and also try to influence more and more consumers and the growing number of people so as to take purchase decisions online. Conclusion This section has tried to capture in a nut shell some of the issues discussed above. It is salient to state that Colgate Company is the most growing company in the toothpaste sector. This has been majorly contributed by the ability of the company to capture a bigger market than the competitors. Macroeconomic factors have affected the company (Taylor & Wills, 1969). This has ensured that the company only moves its manufacturing to countries where the opportunity cost is very low. This is important since the firm is always aiming majorly on maximization of profits at the lowest cost possible. The company has also been experiencing a positive deviation in their profit margins. The company has also been affected by different macroeconomic factors. The fiscal and monetary policies have affected the company’s ability to outsource and offshore for cheap labour in other countries. Countries with poor monetary and fiscal policies especially in the developing countries have always shown a steady rise in the rate of inflation. This has adversely discouraged the company’s investment in those particular countries. It must also be registered that variations in the exchange rates observed in many countries have also played a role the globalization of the company. This has seen the company mainly exporting to countries with better exchange rates so as to register high levels of net profit (Engelson, 1995). References Chernev, A. (2007). Strategic marketing analysis. S.l.: Brightstar Media. Colgate-Palmolive Company SWOT Analysis. (2003). Datamonitor Plc. Colgate-Palmolive Company SWOT Analysis. (n.d.). (Business Source Complete.) London: Datamonitor Plc. Engelson, M. 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