cottle taylor - expanding the oral group in india
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Cottle Taylor Expanding the oral group in India
Contents
Case 1
Marketing Strategy2
Recommendations3
Financial projections4
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“If you're trying to persuade people to do something , or buy something, it seems to me you should use their language, the language in which they think"
David Ogilvy
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Background
• Cottle-Taylor• Start up (1815)
• 4 main geographic divisionsNorth America, Europe, Latin America, Greater Asia/Africa.
• Product Lines• Oral care• Home care• Personal care
Background
• HR Practices• International work force (Local talent
hiring).• Collaborative environment.
• Operations. World wide presence• Manufacturing facilities in 75
countries.
Background
• Subsidiary cottle India• Focusing exclusively on oral care• Product Categories
• Toothpaste• Toothpowder• Toothbrushes
• Push Strategy through dentists.
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Target Market & Media Vehicles
• Both rural and urban• Men and women (Age 20-35)Media• Television Ad 50%• Print Ad 30%• Billboards 15%• Radio 5%
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Current scenario
• Global recession (US sales decline)• Targets
• Get offset of sales from emerging markets • Brinda Patel(Director Marketing India) projected
20% growth in sales.• Michael Lang(VP Marketing for Asia/Africa) had
pressure to increase it up to 25-30% from the region
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Current scenario
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• India• World’s Largest Democracy.• Rapid GDP Growth (146 times greater
than 1990).• 78% Rural and 22% Urban Population.• 37% lived below the poverty line.• 80% lived on less than $2/ day.• 93 million lives in Slums.
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Current scenario
• 50% of Indians were not concerned with dental problems.
• Rural people are 5x more reluctant to use modern oral care than Urban counterparts
• 10% growth from 2009-2010
FACTORS THAT CAN INCREASE DEMAND FOR CONSUMER GOODS:Income of the consumerprice of the compliment goodscustoms taste and preferences price of the substitute goodsAvailability & packagingBrands
FACTOR THAT CAN INCREASE SALES :ADVERTISEMENT
TELEVISION 25%
ADS IN NEWSPAPER 15%
RADIO 15%
DENTAL DOCTORS 25%
Salesmen 20%
REASONS TO USE A PARTICULAR BRAND:Healthy tooth& gums Long lasting freshness Prevention of tooth decay Whiteness , Good foam Use of natural herbs, Dentist adviceOTHER REASONS: Gift, discounts, extra quantity, price off
* Money spent to educate the people will be high for battery Operated brushes , which is the first mover disadvantage. * Chinese product will easily capture the market with low cost structure.* Uses of Herbal and ayurvedic products.* Usage of toothbrush Brands* Purchase because of dentist advice * Low literacy rate in India* No regular purchase
Roadblocks
65 percent Indians change their toothbrush only after visible signs of damage & 55 percent change only when the bristles start bending.43 percent are compelled to change only when the toothbrush starts looking dirty and 32 percent change once the bristles start coming out.Consumer brushing pattern.
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Three Key factors to be addressed
1. Persuading consumers to brush for the first time.
2. Increasing the incidence of brushing.
3. Persuading consumers to upgrade to mid range or premium products.
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Uneven distribution of factors
• Urban, semi urban:• Message 1 (10%)• Message 2 (40%)• Message 3 (50%)
• Rural:• Message 1 (60%)• Message 2 (35%)• Message 3 (5%)
Issues
• To develop a revised data driven marketing plan
• Which of the three factors would better resonate with urban and rural areas
• How to design the effect of product mix for higher revenue
• Which projection would meet a higher revenue
Factors determine demand for Oral Care Products
(a) Amount of disposable income/income – Economical in nature(b) Oral hygiene awareness. (c) Frequency of brushing the teeth(d) Advertisements, Promotional expenditure
(e) Accessibility to quality toothbrushes-Distribution. .(f) Competitors products (toothbrush in this case).(g)Advertisements, Promotional expenditure
Social in nature
Segmentation
Cottles current market segmentation is on the following factors:-
• Area: Rural, Semi urbanUrban
• Income • Oral Hygiene Awareness.
Other possible segmentation bases are : • Education • Age
Targeting
Develop a primary market in
• Rural areas for toothbrushes by promoting low end toothbrushes to people who do not brush
• Medium range toothbrushes to the people currently using low level brushes
• For primary market in urban area battery operated toothbrushes should be promoted.
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• For the low end manual brushes: We should target consumers from semi urban and rural India, as they are not concerned on spending a part of their disposable income on sophisticated products.
• For the mid-range manual brushes: We should target middle class consumers from urban areas, with medium price sensitivity.
• For the battery-operated brushes: We should target consumers from upper middle class or upper class, who are, to a large extent, aware of oral hygiene and who do not mind spending on sophisticated products(including battery-operated brushes) for oral care.
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Positioning
Patel’s current proposal of allocating promotion budget equally is on the following three activities:-
• Persuading consumers to brush for the first time,• Increasing the incidence of brushing and • Persuading consumers to upgrade to mid-range or
premium products..
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Problem with Patel’s projection
Allocating promotion budget equally on those three activities is a wise idea because:
• More than 50% of Rural India do not use a toothbrush to clean their teeth.
• Among the brushers, only 23% of the sample surveyed brush 2 times/day.
• Only 8.6% of the toothbrush users replace the brush every three months (ideal replacement time).
Spending promotional dollars on battery operated brushes to a large extent is not a good idea because only0.5% of the sales of Cottle India come from battery-operated brushes
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Indian Household Disposable Income: 2005 & 2009
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Disposable 2005 2009
Income Households Households
per Day (Millions) (Millions)
Above US$500/year $ 1.37 202.5 46.7% 219.0 42.7%
Above US$1,000/year $ 2.74 186.7 43.0% 208.7 40.7%
Above US$5,000/year $ 13.70 33.6 7.8% 64.2 12.5%
Above US$10,000/year $ 27.40 7.3 1.7% 15.2 3.0%
Above US$25,000/year $ 68.49 2.1 0.5% 3.3 0.6%
Above US$45,000/year $ 123.29 1.0 0.2% 1.6 0.3%
Above US$75,000/year $ 205.48 0.5 0.1% 0.8 0.2%
Above US$150,000/year $ 410.96 0.2 0.1% 0.4 0.1%
TOTAL HOUSEHOLDS 434.0 513.1
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Cottle Toothbrush Sales by Product Category for India
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Product Average Price Cottle India
Low-End Manual $ 0.15 87%
Mid-Range Manual $ 0.34 12.50%
Battery-Operated $ 5.60 0.50%
Primary Marketing Objectives of Cottle
• Securing early market share in emerging markets.
• To achieve a toothbrush unit growth rate of 25-30% in 2010 in India.
• To educate consumers from semi urban and rural areas about oral hygiene so as to increase the oral care sectors growth rate and in turn their own company's market share by being the pioneers in that field.
Primary Marketing Objectives of Cottle should be:-
SWOT Analysis
Strength
Weakness
Opportunity Threat
1. Frequent and many innovations in a low involvement product like toothbrush2. Introduction of new features regularly3. Aggressive
1.More innovations to differentiate from the competitors2.Increasing involvement in personal care products3.Differentiated advertising methods to attract customers
Indian market not as responsive to innovations in toothbrushes as global market
1.Aggressive competition 2.Regular introduction of new products by competitors3.Copied innovation by competitor
ATL Marketing Strategy
• Above the Line Marketing Strategy.
• Promotional activities carried out through mass media, such as television, radio, out-of-home, magazines, cinema and newspaper for above the line promotional activities.
Cottle ATL Startegy
• Advertise through bill-boards in the post locations of metro’s.
• Advertise aggressively on automatic tooth-brush.
• Link it to CSR activity to educate society on brushing twice and market the product.
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New Market launch
• Regional Celebrity Marketing
Celebrities create image in the mind of customer.
Help brand building
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BTL Marketing Strategy
• Below the Line Marketing Startegy.
• Non-media communication or advertising, and has become increasingly important in the communications mix of many companies.
• It is efficient and cost-effective for targeting a limited and specific group.
Cottle BTL Strategy – Towns/Villages
• Updating “Anganwadi” workers in villages about the oral hygiene and providing the free samples to people who come oral health problems.
• Free health check – ups in towns schools and colleges and provide them with samples.
Cottle BTL Strategy – City
• Flavored tooth paste. • Social Media Marketing
• Internet Marketing • Kiosk’s set – up at malls/shopping areas.
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RecommendationsPromoting the idea of oral care through-1. Providing with free tooth brush
to one member of a family. Possibly one who is a school going student (rural area)
2. Providing total package of oral care products with discounted rate to those schools who has hostel facilities.
3. Giving higher profit margin to the retail shop owner for every product sold.
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• Mobile van with salesmen who will go to house to house to sell the products.
• Collaborate with the indigenous company those produce traditional oral care products.
Recommendation Recommendations
Through the Line
• This strategic approach allows brands to engage with a customer at multiple points (for example, the customer will see the television commercial, hear the radio advert and be handed a flyer on the street corner).
• Enables an integrated communications approach where consistent messaging across multiple media create a customer perception.
Tooth Brush sales projection
ProductCategory
Patel’s Projection2009
Thailand in 2009
Unit Sales (m)
Lang’s Projectio
n 2009
Unit sales
projected
Low end 86.54% 70% 310.9 78.2% 347.4
Mid range 13.0% 25% 111.035 21.3% 94.62
Battery operated
0.46% 5% 22.2 0.5% 2.12
Revenue 100.9508 121.33 117.59
2010 Expected Sales
2009 2010 Expected Patel 2010 Expected LANG
Unit Sales (m)
% increase
Unit sales(m)
p/u (after 20%
increase)
Revenue$(m)
% increase
Unit sales(m)
p/u (after 20%
increase)
Revenue$(m)
Low end manual
complete 230.6 20 276.7 0.18 49.08 16 267.5 0.18 48.15
sensitooth 29.9 20 35.9 0.216 7.7544 16 34.7 0.216 7.5
fresh gum 15 20 18 0.216 3.888 16 17.4 0.216 3.76
surround 9 7 9.7 0.228 2.2116 16 10.4 0.228 2.91
kidsie 15 8 16.2 0.144 2.3328 16 17.4 0.144 2.51Total 299.5 356.5 65.9928 347.4 64.82
Mid range manual
zagget 34.4 25 43 0.348 14.964 120 75.7 0.348 26.34
directionflex 8.6 25 10.8 0.63 6.804 120 18.9 0.63 11.9Total 43 53.8 21.768 94.62 38.24
Battery operated
swirl brush 1.5 13 1.7 7.68 13.056 25 1.87 7.68 14.36
refills 0.2 0 0.2 0.67 0.134 25 0.25 0.67 0.17Total 1.7 1.9 13.19 2.12 14.53
344.2 412.2 100.951 444.14 117.59
*Revenue (2009) $70.1 m
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Income Statement
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% 2009Patel 2010
(E)
2010 expected
LANG Gross Revenue 100 70.1 100.9508 117.59Less: Trade Discounts 10 7.01 10.09508 11.759NetRevenues 90 63.09 90.85572 105.831Less:
Variable Manufacturing, selling costs 46 32.246 46.4273 54.0914Gross Margin 44 30.844 44.418352 51.7396Less:
Advertising 9 6.309 9.085572Ad(12%)14.110
8Consumer promotions 3 2.103 3.028524 3.5277Selling,admin costs 14 9.814 14.13312 16.4626Profit from Operations 18 12.618 18.171444 17.6385
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