COLGATE-PALMOLIVE:

CLEOPATRA FAILED IN QUEBEC

RAJA RAMINDER SINGH-PLANT HEAD NUFLOWER FOODS & NUTRITION PRIVATE LIMITED

SMP-13 NIIT-IMPERIA-IIM-C Marketing Basics

Guidance by Prof. Ramendra Singh

COLGATE PALMOLIVE:CLEOPATRA SOAPLAUNCH IN CANADA Cleopatra SOAP a beauty care brand of Colgate Palmolive

launched in Canada in February 1986 in an Extravaganza in a very dramatic way.

Hostesses serving cocktails were dressed like Cleopatra, the queen of ancient Egypt.

Multimedia presentation of new brand with the award winning commercial.

Each of retailer guests received an exclusive three-dimensional Pyramid invitation.

Cleopatra was revealed to around 1000 audience with positive overwhelming response.

Colgate-Palmolive salespersons received an order of 2000 cases by the end of the launch day.

FRENCH EXPERIENCE WITH CLE0PATRA Cleopatra soap introduced in France in November

1984. Amazing market share of 10 % during start up in

1985 and market share shot up to 15% by end of 1985.

Cleopatra become number one brand in France. Premium product with 23% price premium

comparison to other brands. Success of Cleopatra soap in France encouraged the

organization to launch the same product in Quebec, Canada

MIXED REACTION OF CLEOPATRA AT CANADA Some Managers were enthusiastic about Market test

of Cleopatra in Canada. They were expecting even better performance of Cleopatra than that in France. They were Group Product Manager for Canada: Steve Boyd Assistant Product Manager: Stan house

Other Managers like Ken Johnson was skeptical about Cleopatra’s success in Canada.

RESEARCHES CONDUCTED ON CLEOPATRA IN CANADA Two types of research were conducted (1) First research on “Super group” of Professional Women. They

were introduced to the product, its price and advertising to openly discuss their Likes and Dislikes. Overall result were positive.

(2) Second research on typical consumers and exposed to advertising. 50 % of them were positive.

They were also given the soap bar to try at home. After one week the they were called over phone for their response. 64% of the group were ready to buy the Cleopatra soap.

These successful research confirmed the launch of the Cleopatra soap in Canada in the premium segment.

Background of COLGATE-PALMOLIVE CANADA Multinational consumer packaged Goods Corporation

operating in 58 countries marketed Personal care & Household products.

Annual Sales of $ 5.7 billion worldwide. Many of brands of Colgate Palmolive were Global Leaders. Colgate Toothpaste was number 1 and Palmolive Soap was

number 2 in the world in respective markets. Canada opened its doors in 1912 for Colgate Palmolive and

since then it had grown into a $ 250 million- a- year corporation.

Competitors of Colgate Palmolive were Procter & Gamble and Lever, dominated the Personal care and Household market sectors in Canada.

Products of Colgate Palmolive in Canada werePersonal Care- Toothpastes, Toothbrushes, Mouth rinse, Shampoo, Soaps, etc.Household Products- Liquids, Detergents, Food wraps, Cleanser, etc.

STATE OF CANADIAN SOAP MARKET In 1986, at the time of launch of Cleopatra,

Canadian soap market was worth $ 105 million to manufacturers.

Revenue projection was 4-5%. Major challenge was the Limited Shelf space

at that time. Retailers were all powerful and the deciding

authority for promotion and allocation of the products at their stores.

MAJOR REASONS OF INTENSE MARKET COMPETITION Volume growth slowed down and coincided with Canadian

population growth. Method of survival between different brands was to steal share

from other products. Increased competition was from no name and privately labeled

products. Launch of “Cosmetic” in nature products were increasing. Large bundle packs were developed, twin packs or utility

packs were introduced. Limited number of acceptable brands that consumer were

willing to buy. There were around 15 Mainstream brands and around 25 minor ones, which increased competition for choices.

Competition was price based. Liquid soaps also entered the market and held an 8 % share

DIFFERENT SEGMENTS OF SOAPS 3 SEGMENTS OF SOAPS(1) SKIN CARE SEGMENTS- BRANDS- Dove, Camay, Caress, Cleopatra, Aloe &

Lanolin, Palmolive(2) REFRESHMENT SEGMENT-BRANDS- Zest, Coast, Irish Spring Dial(3) UTILITY SEGMENT-BRANDS-Jergens, Woodbury, Cashmere Bouquet,LuxIVORY competes in all the three segments.The skin care was the largest of the three market segments.MARKET SHARE OF ALL THREE SEGMENTS FROM YEAR 1985 TO 1987

SEGMENTS 1985-Market share

1986-Market share

1987-Market share

SKIN CARE 37.3% 38.4% 38.8%REFRESHMENT

34.9% 33.4% 32.3%

UTILITY 27.8% 28.2% 28.9%

AVAILABLE SOAPS WITH HIGH MARKET SHARE DOVE –advertised as facial soaps for years dove was having a loyal

customer base because of its unique formulation and moisturizing capabilities, low additives & scent. As per Exihibit-3, Its market shares increase from 7.1(year1985) to 10.8 (year 1987) i.e.52%

IVORY- was an institution in Canadian market. This competed in all the 3 markets, with its 100 year heritage & ever powerful. (I use it because my mother use it) positioning. As per Exhibit-3, its market shares decreases from 28.2(year1985) to 22.9(1987) i.e.18 %

IRISH SPRING – Made especially for men but also used by females refreshment soap due to strong scent & high lathering capability.As per Exhibit-3, market share increased from 6.2 to 6.5 i.e.4.8%

ZEST- seen as family brand and market share increased 1.5 to 2.9 i.e. 93.3 %

CANADIAN CLEOPATRA-MARKETING STRATEGY The Colgate-Palmolive company introduced Cleopatra as a

“premium quality premium priced beauty soap” Colgate – Palmolive has already well – positioned products like Irish Spring(6.2%)-refreshment segment, Cashmere Bouquet (3.3%)-utility segment, Palmolive soap(3.7%)

Even knowing the risk, company avoided to rely on retailers. Company did not want to offer trade allowances and discounts. Company also planned that demand should come directly from

the consumers by generating their interest in Cleopatra with the help of strong media & promotions.

Followed completely different approach from industry norms by not taking retailers support of listing their product in their order account books.

AMBITIOUS OBJECTIVES OF THE COMPANY

Company targeted 4.5% Market share for 1986. 100% distribution of the products with retail

accounts. Maximum shelf presence same as current segment

leader DOVE Maintained Premium Pricing- (High cost) Strategy Expected that consumers should demand the

product & forced retailers to keep it in their store Company also wanted that both consumers &

salesperson should be enthusiastic about product from day one.

AMBITIOUS OBJECTIVES OF THE COMPANY Company majorly relied and emphasized on TV

Advertisement. Company targeted Out of 100 minutes of soap advertisement, at least 15 % should be of Cleopatra.

Target group was women between ages of 18 to 49 TV Advertisement was same as that was used in

France Advertisement was shot in Rome. Advertisement showed Cleopatra, eternal woman ,

holder of all secrets Tag Line ‘ A new soap that might well change the

face of the world’ as in Exhibit 4. Cleopatra –A new soap. The secret of beauty.

PROMOTION ACTIVITIES FOR CLEOPATRA From research projection was that 64% people would buy

after availability in market. “Free Bar coupons” were given to 250,000 households

in Quebec and this coupon could be exchanged to get free bar of soap from nearest store. All stores were fully informed.

“Cleopatra Gold Collection and Sweepstakes Promotion” which offered consumer a variety of popular & fashionable costume jewelry at very reasonable prices

Because it is a premium quality product, no discounts were offered

Cleopatra pricing was higher than Dove

PROMOTION ACTIVITIES FOR CLEOPATRA The most expensive brand of Colgate Palmolive in

Canada. Cleopatra has a competitive advantage over dove for

$ .476 per case i.e. $3.00+$0.77+$0.99 Soap was also given attractive shape. The logo was stand on ivory cover bar which

conveyed quality, luxury & prestige. The soap bar came out in its own gold colored

laminated carton. Laminated material was unique for reflecting unique

in shelf. Prevented the perfume from escaping.

RESULTS OF CANADIAN LAUNCH First month’s target 67% was achieved alone on launch evening. But from then on the brand started missing its targets. It showed very

discouraging results even after one year of its launch.

ACHIEVED SHARE OF VOICE TARGETS After 13 weeks, advertisement commercial created an

awareness of 63%, which was highest in the skin care segment.

At this time Camay was 49%, Dove was 24% and Aloe and Lanolin was 13%.

By the end of 1986, Cleopatra had achieved its share of voice target, which was the number 1 position in Quebec.

After promotion period , only 21 % of the coupons had been redeemed

The sweepstakes had been disappointing. Only 1500 people entered by the December Deadline.

Wrong distribution of coupons

NEW MARKET RESEARCH Over the first year small scale research had been done in

stores to understand consumer reaction, but this was of no use.

By January1987, a serious research was needed and a full blown tracking study was commissioned.

Two Panels were chosen from Quebec.(1) A random sample of 204 consumers.(2) An oversample of 99 Cleopatra ‘triers’Over 90 questions were asked to learn the key information needed:Brand awareness, usage, brand ratings, likes and dislikes, advertising recall, and trial information

MARKET RESEARCH RESULTSExhibit-9 clearly proved that brand Awareness of Cleopatra was 73.5% whereas that of Dove has

99.5%, Palmolive has 96.1% and Camay has 98.5%. People were not buying the new products coming in market ( Ever

tried Cleopatra was just 14.2%) People don’t prefer to use this product Occasionally( 8.8%) against

highest use of Dove and Camay soaps. People who tried Cleopatra has very less chances of leaving that brand

(Stopped using =1 %)Exhibits-10 clearly proved that People who have tried CLEOPATRA has given scoring higher in every

aspects. People who have not tried Cleopatra has given more score to Dove

and Palmolive

MARKET RESEARCH RESULTS

As per Exhibit-11(Likes/Dislikes) 29% of people said that the smell is good and pleasant

but 17%of people said it has strong fragrance /harsh fragrance

26% of people like that it makes lot of suds/foam but 12% of people said it is too harsh and not mild enough.

20% of people said it softens skin and 6%of people said it irritates the skin.

20% of people said that the price is too high 42 RESPONDANTS OUT OF 99 HAD NO DISLIKES

MARKET RESEARCH RESULTS

As per Exhibit-12 People want to buy CLEOPATRA occasionally i.e. 66% People don’t want to use CLEOPATRA everyday. Majority of Respondents have chosen product for Body only.

As per Exhibit-13 Most of the Respondents are not influenced after seeing the

advertisement. Respondents have no reaction after seeing the advertisement

DILEMMA The brand flopped so badly in Quebec due to short sightedness

& Impatience. Not properly advertised, even repetitive French advertisement

could not influenced Canadian people People considered this as Beauty Soap for Women only. Not Available at majority of stores. Dove and other variants use to sell Bundled packs , which

reduced no. of purchases in a year. Coupons were not distributed properly. Location of product on the shelf was not appropriate to attract

the customer. No innovations. Research was done in Toronto & Cleopatra introduced in Quebec

ACTIONS TO BE TAKEN Advertisement should be changed and should be shoot at best Canadian

locations. Achievable targets should be there. Too much fragmented should not be there. The company should compromise with the powerful retailers to carry forward

their brand by offering incentives and discounts. To improve shelf positioning of the product with other brands. The prices of Cleopatra should be same as that of Dove. Company should wait for some more time before scrapping the brand because

customers who tried the product were actually liking the product Company is wholly dependent on Advertisement, Canadian customers didn’t

that French advertisement Company should take steps to improve Promotional activities because all the

coupons were not redeemed Company could also sell Cleopatra in bundled packs.

THANK YOU