Submitted by

SIDDHARDHA KARANAMSID: 306857

as the part of course work for module M04MKT Principles of Marketing under the guidance of Mr. Mark Goodman and Mr. Balwant Samra

®

Principles of Marketing – M04MKT 2010

Table of Contents

1. Executive summary..........................................................................................................................2

2. Introduction........................................................................................................................................3

3. Colgate’s orientation.........................................................................................................................4

3.1 Conclusion...................................................................................................................................7

4. SWOT analysis..................................................................................................................................7

4.1 Conclusion.................................................................................................................................12

5. Competitive advantage..................................................................................................................12

5.1 Conclusion.................................................................................................................................13

6. Marketing Mix analysis...................................................................................................................13

6.1 4-Ps............................................................................................................................................14

6.1.1 Product Customer solution 14

6.1.2 Price Customer cost 17

6.1.3 Place Convenience 19

6.1.4 Promotion Communication 20

6.2 Additional 3-Ps...........................................................................................................................23

6.2.1 People 23

6.2.2 Physical Evidence 23

6.2.3 Process 23

6.3 Recommendations.....................................................................................................................24

7. References.......................................................................................................................................25

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Principles of Marketing – M04MKT 2010

Table of Figures

1. Figure 1: Net sales of Colgate ……………………………………………………………….. 4

2. Figure 2: Marketing orientation …………….………………………………………………… 7

3. Figure 3: Product-marketing expansion grid ……………..………………………………… 8

4. Figure 4: WTI prices per annum ………………………..……………………...………… ....11

5. Figure 5: 4-Ps of Marketing Mix ……………………………………….………………… ….14

6. Figure 6: Various Colgate toothpaste ……………………………….…………………….17

7. Figure 7: Price, earnings and Dividends of Colgate ……………….…………………….18

8. Figure 8: Price list of Colgate Active Salt in India ………………….…………………….18

9. Figure 9: Supply Chain in Colgate …………………………………….…………………… .19

10. Figure 5: Advertising …………...……………………………………….……………………. 21

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Principles of Marketing – M04MKT 2010

1. Executive summary

Colgate-Palmolive Company is a $15.3 billion consumer products worldwide company that

serves people of above two hundred countries and territories. These consumer products make

peoples’ lives healthier, easier and enjoyable. Around 75% of sales are from the global

operations. Colgate-Palmolive’s core businesses are in Oral Care, Personal Care, Home Care

and Pet Nutrition (Colgate 2008).

The company is leading the business of toothpaste under its brand name Colgate, an oral

hygiene product. The company manufactures a wide range of toothpastes. In 1873, Colgate-

Palmolive Company introduced its first toothpaste Colgate Ribbon Dental Cream in glass jars.

Later in 1896, this toothpaste began to sell in a collapsible tube (Colgate 2007a). Colgate has

successfully ruled about half of the toothpaste market all over the world. This report will be

focusing on Colgate toothpaste of the Colgate-Palmolive Company. The main aim of this report

is to investigate and analyse the marketing activities of Colgate toothpaste.

What is the Colgate’s orientation? What are the strengths, weaknesses, opportunities, and

threats (SWOT) of Colgate? What are the competitive advantages of Colgate? What is the

impact of Colgate’s marketing mix?

This report will try to address all these questions and more.

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Principles of Marketing – M04MKT 2010

2. Introduction

Colgate-Palmolive Company is an American multinational corporation of the production,

distribution and provision of households, health care, personal products as well as oral hygiene

products. The company was founded by William Colgate in 1806 and was then named as

‘William Colgate & Company’. After the death of founder in 1857, the company was named as

‘Colgate & Company’ (Colgate 2007a).

During 1864, ‘B.J. Johnson Company’ was developing a new soap consisting palm and olive oil.

This soap became very popular and B.J. Johnson Company went on to change its name to

‘Palmolive Company’. ‘Peet Brothers’, a Kansas based soap manufacturer merged with well-

known ‘Palmolive’ and was named as ‘Palmolive-Peet’. In 1928, ‘Colgate & Company’ was also

merged and the company became ‘Colgate-Palmolive-Peet Company’. However, in 1953, Peet

was dropped from the name and the company is ultimately known as ‘Colgate-Palmolive

Company’ since then (Colgate 2007a).

Colgate is an oral hygiene product and one of the brands of Colgate-Palmolive Company. The

company manufactures a wide range of toothpastes. In 1873, Colgate-Palmolive Company

introduced its first toothpaste in glass jars. Later in 1896, this toothpaste began to sell in a

collapsible tube (Colgate 2007a). Colgate has successfully ruled about half of the toothpaste

market around the globe. Colgate’s nearest competitors are the Procter & Gamble (P&G) i.e.

Crest ® toothpaste and Unilever i.e. Pepsodent ®, Close up ®, and Signal ® (Datamonitor

2008a).

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Principles of Marketing – M04MKT 2010

3. Colgate’s orientation

Nature of Demand

Over the century, market for toothpaste has remained constant. Even today, people are highly

concerned about the cavity prevention, whiteness of teeth and odorless teeth. Colgate

frequently comes out with a range of innovative toothpastes and is selling these with top quality

as well as performance (Laird et al n. d.).

Extend of Demand

In 2001, Colgate toothpaste had the sales of about $551.5 million, giving 32.5% share of the

U.S. market and the volume sales raised 3.1% to 233.3 million units sold (Laird et al n. d.).

As shown below is the net sales of Colgate from year 2004 to 2008. We can notice that the

sales are increasing yearly.

FIGURE 1: NET SALES OF COLGATE

(Colgate 2008: 4)

Orientation

Colgate tries to sense the customer needs and demands. This proves that the company is

marketing oriented. Let us now analyze the Colgate’s orientation towards the marketplace.

Companies have their respective beliefs concerning their marketing efforts which are usually

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varied from company to company. The challenging concepts beneath which companies perform

their marketing activities are (Kotler and Keller 2006: 15)

Production Concept: Customers are attracted to those products which are extensively

available and cheaper. Organizations following this concept targets on accomplishing

the large production competence, minimal costs and bulk distribution (Kotler and Keller

2006: 15).

Colgate follows this concept and has proved for the worldwide availability including the

rural areas with global presence in over 200 countries and territories (Colgate 2008).

Colgate products are sold for affordable price. Colgate is leading in toothpaste business

therefore the productivity is high resulting in mass distribution.

Product Concept: Costumers are attracted to those products which have the best

quality, performance and innovative features. Organizations following this concept

targets on developing advanced innovative products and improving them regularly

(Kotler and Keller 2006: 15).

Colgate strongly follows this concept and has designed their business strategies

accordingly. Colgate prioritizes in innovating new products and improving existing

products by innovative ideas regularly.

Selling Concept: Organizations embark on robust promotion and selling efforts. This is

followed with unwanted goods (buyers not interested in buying) like insurance,

encyclopedias etc. This is mostly practiced by the organizations with congestion. These

organizations’ only aim is to sell what they have. They do not bother about what the

market demands are (Kotler and Keller 2006: 15).

Colgate does not follow this concept as Colgate focus on what the market demands for.

Colgate produces their products as per the customers’ demands and needs.

Marketing Concept: This came into sight in the mid 1950s with a philosophy of ‘Sense-

and-respond’ i.e. customer-centered. Earlier the philosophy was ‘Make-and-sell’ which

was product-centered. This concept aims at finding right products for your consumers

rather than finding right consumers for your products. Organization becomes more

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Principles of Marketing – M04MKT 2010

valuable compared to their competitors in the means of innovation, delivery and

communication with enhanced customer value (Kotler and Keller 2006: 16).

Colgate follows this concept as well. Colgate tries to sense the customers’ requirements

and respond by developing the products which fulfils all their requirements. Mostly,

Colgate is first to launch unique featured products in the market. Due to this, Colgate

has a tough competition with its competitors like P&G and Unilever who equally trying

hard to introduce new products (Datamonitor 2008a). As time passes the demands of

customers varies so Colgate offers its toothpaste in three key lines to attract aged

customers, adults and kids (Kotler and Keller 2006: 249).

Holistic Marketing Concept: This involves development, design and implementation of

marketing programs, processes, and activities that recognizes organization’s breadth

and interdependencies. Precisely, this concept is an approach to marketing that tries to

identify and resolve the opportunity and difficulties of marketing activities. There are four

main elements in Holistic marketing namely (Kotler and Keller 2006: 16)

o Integrated marketing involving communications, products & services, channels

o Social responsibility marketing involving Ethics, Environment, Legal and

Community

o Relationship marketing involving Customers, Channel and Partners

o Internal marketing involving Marketing department, senior management and

other departments

Colgate strictly follows this concept as it includes most of the marketing activities.

Colgate’s Business strategies

Colgate strictly follows the leadership strategy which aims at the main businesses of the

company namely: Oral Care, Personal Care, Home Care and Pet Nutrition (Colgate

2008: 2).

Globally, all the Colgate employees work together to achieve in Driving Growth, Funding

Growth and become Best Place to Work (Colgate 2008: 2).

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Colgate’s history of robust performance comes from Colgate’s main worldwide

businesses with a victorious worldwide financial strategy. The financial strategy is built to

grow the gross profit margin and drop the costs to fund growth initiatives and produce

higher profitability (Colgate 2008: 2).

3.1 Conclusion

Colgate is a Marketing orientation company. This can be clearly shown below

FIGURE 2: MARKETING ORIENTATION (Jobber 2007: 6)

4. SWOT analysis

“SWOT analysis is a structured approach for evaluating the strategic position of a business by

indentifying its Strengths, Weaknesses, Opportunities and Threats” (Jobber 2007: 63). To get a

clear idea of Colgate toothpaste’s outlook, it is useful to analyze the company’s as well as the

product’s (toothpaste) Strengths, Weaknesses, Opportunities and Threats (SWOT). Additionally,

a SWOT analysis summarizes the outcome of marketing audit of the company (Jobber 2007:

61).

Strengths

First to introduce in market: In 1873, Colgate-Palmolive Company introduced its first

toothpaste in glass jars. Later in 1896, Colgate was the first toothpaste which began to

sell in a collapsible tube (Colgate 2007a).

Brand Image: Strong customer perceptions. Colgate is most reliable and renowned

brand around the globe today. This image would aid in attracting new customers. In

2005, around 14 European countries were participants to name their most reliable

brands in various categories. Colgate was chosen for the most trusted brand in the

toothpaste category with 53% of votes (Jobber 2007: 331).

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Customer needs

Potential market

opportunities

Marketing products

and services

Customers

Principles of Marketing – M04MKT 2010

Robust market place: Leads the toothpaste market in United States with the market

share of above 35% and also leads in few of the European countries (Datamonitor

2008a).

Global presence (in above 200 territories and countries): Colgate has successfully ruled

about half of the toothpaste market around the globe (Cadit 2003).

Performance sustainability: The year 2007 created a history in company by a strong

operating performance. In 2007, company’s revenues increased by 12.7% to $13,789.7

million and the net profit increased by 28.4% (Datamonitor 2008b: 5). Robust financial

performance reinforced the financial position of the company. This gained the

confidence and trust of the company’s partners and shareholders which is very helpful

for the company’s growth.

Innovative and introducing new products: Colgate prioritizes on product innovation.

The company endeavours to launch new innovative products and also works on creating

innovative ideas to market their existing products (Datamonitor 2008b: 5). Ansoff

proposed the “product-market expansion grid” which can be used for analysing the new

rigorous expansion opportunities (Kotler and Keller 2006: 48).

FIGURE 3: PRODUCT-MARKET EXPANSION GRID (Kotler and Keller 2006:48)

The company operates its oral care’s innovation centre in New York. There are totally

nine innovation centres of the company for different products (Datamonitor 2008b: 5)

Colgate’s Global Innovation Fund encourages their employees to come up with

innovative ideas for which they are waged. The company has also teamed up global

innovation specialists to gather innovative ideas. In 2008, Colgate with Givaudan S. A.

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1. Market- Penetration Strategy 3. Product-development strategy

2. Market- Penetration Strategy (Diversification strategy)

Current products New products

Current markets

New markets

Principles of Marketing – M04MKT 2010

jointly developed the internal fragrance for all the Colgate products (Datamonitor 2008b:

6).

The robust product development and innovation is beneficial in revising the Colgate’s

product line at regular period and this would certainly result in growth of revenue and

customer’s reliance.

Colgate Business Planning (CBP): CBP is a planning and execution process which

started in 2006 to improve the market margins and shares of the company. This process

assures a constant move to commercial investment throughout and a worldwide

attention on increasing the return on investment. It also let the company to plan the aims

for more than a year in terms of brands and customers. This evaluates the performance

against these parameters and adjusts whenever necessary. Implementation of the

CBP’s first phase namely CBP essentials began in the end of 2007 where around 50

countries were representing above 80% of Colgate’s worldwide trade investment and 6

other countries had finished the entire CBP implementation. In 2008, CBP was

implemented in 12 more other countries (Datamonitor 2008b: 6).

First International Malaysian Halal Logo: Colgate created a history by being the first

company to acquire the first international Malaysian Halal logo on its Colgate®

toothpaste manufactured in Thailand. Colgate was first who obtained the Halal

certification from Halal Industry Development Corporation (HDC) (Colgate 2009b; Daily

Express 2008).

Weaknesses

Excessive debt: In 2007, Colgate had a debt of about $3,222 million i.e. equity ratio of

1.47 compared to its competitor P&G whose was 0.53. In 2007, company’s interest

increased to $157 million. Earlier the interest was $136 million in 2005 and $120 million

in 2004. This resulted in an unfavourable consequence on company’s liquidity position

and may perhaps hinder its reliability in the market (Datamonitor 2008b: 7).

Summon up: In 2007, the company had to summon up two pet products due to issues

with the supply of wheat gluten at a contract manufacturer. Though these products holds

small portion of sale of the total sales but affected the brand value and the operating

profit of the company (Datamonitor 2008b: 6).

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Principles of Marketing – M04MKT 2010

Opportunities

New products: Colgate is keen on constant innovation and introduction of new products

which attracts the customers’ attention and also grows in the range of products with the

increase in market share (Ivythesis Typepad 2008).

Growing demand of oral products: There is a huge growing demand of the Colgate

oral care products all over the world. Colgate is popular for its oral care products and this

is considered to be the main source for the growth in company’s revenues (Ivythesis

Typepad 2008).

Widespread marketing: Global customer awareness can be done mostly by marketing.

Colgate is successfully marketing their products regularly. Colgate can grow their

revenues by global marketing which would most probably attract more and more

customers (Ivythesis Typepad 2008).

Hispanics in U.S: Colgate performs promotional campaign and exclusive marketing to

attract the Hispanic market by television, on-line media and print. The growing

population of Hispanics in U.S. can be the cause of development in Colgate’s revenues

(Datamonitor 2008b: 7).

Threats

Accusation: Recently, Colgate was accused for the involvement in illegal price-fixing

cartels. Moreover, Colgate and other few companies illegally swapped the data with

retailers regarding ongoing price talks (Datamonitor 2008b: 8).

In 2006, German competition regulator noticed that Colgate planned to increase by 5%

price of all the Colgate toothpaste brands. As Colgate carried out the report of the

cooperative role, Federal Cartel office did not charge any fine on them (Datamonitor

2008b: 8).

Such kind of accusations would surely affect the brand image and high chances of drop

in the market share.

Losing U.S. customers’ confidence: In recent times, it has been noticed that the U.S.

customers’ confidence on Colgate is continuously dropping. This was based on the

reports from around five thousand U.S. households. However, this drop has resulted in

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the reluctance of customer spending. In 2007, company produced $3,321.5 million i.e.

24% of the total revenue from the U.S. market. This shows that Colgate has extensive

business in U.S. markets and the dropping customers’ confidence would highly distress

the image of all Colgate products (Datamonitor 2008b: 8).

Costly fuel and raw materials: Colgate requires products which have go through

numerous price fluctuations due to inflations, recessions, external circumstances, and

variations in legal agricultural activities. Colgate had to confront the unpredicted rise in

raw material and packaging money due to the partial evade against product cost

fluctuations. For manufacturing the products, Colgate has to reliant on the energy

suppliers. Additionally, the distributors and shipping firms are reliant on the gasoline and

diesel (Datamonitor 2008b: 8).

As per the prediction of the US Energy Information Administration, the following table

shows the West Texas Intermediate (WTI) prices for recent 3 years (Datamonitor 2008b:

8).

Year WTI price

2007 $72 per barrel

2008 $122 per barrel

2009 $126 per barrel

FIGURE 4: WTI PRICES PER ANNUM (Datamonitor 2008b: 9).

Since the company has a huge distribution network, increased fuel cost is most likely to have a

straight impact. This will affect the margins of Colgate. The company will be unable to grow in

the costs of raw materials which results in low profits and operations.

Competitors: There are a couple of companies who are toughly competing with Colgate

toothpaste. These competitors are also working hard in introducing new products and in

increasing their market share. The nearest competitor of Colgate toothpaste is Crest of P&G

and other being Unilever (Ivythesis Typepad 2008).

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Principles of Marketing – M04MKT 2010

Forex risks: Since, Colgate is spread worldwide in around 200 countries and territories;

there are huge threats in the business operations. This is also one of the vital reason for

which the company would be extensive affected (Ivythesis Typepad 2008).

Counterfeit Colgate toothpaste: In 2007, U.S. Food and Drug Administration announced

that the Colgate–Palmolive Company were alerting about the counterfeit Colgate toothpaste.

It is been noticed that the toothpastes are deceptively packaged as “Colgate” which was

found in various dollar-type discount provisions in New York, New Jersey, Pennsylvania,

and Maryland. The company clearly mentioned that the counterfeit toothpastes are not

distributed or manufactured by the Colgate-Palmolive Company (U.S. Food and Drug

Administration 2007; MSNBC 2007).

Recently, from 28 November to 5 December, two major retailers Sainsbury’s and Boots

were swindled in selling the counterfeit Colgate toothpaste (Telegraph 2008).

This is a serious threat for the company as counterfeit toothpastes may contain harmful

ingredients and mar the brand image. Additionally, this reflects the financial status of the

company.

4.1 Conclusion

Colgate has to maintain all their strengths and grab all the opportunities. On the other hand,

Colgate should sooner overcome all its weaknesses and work harder on the threats.

5. Competitive advantage

“Competitive advantage is the achievement of superior performance through differentiation to

provide superior customer value or by managing to achieve lowest delivered cost” (Jobber

2007: 27). Colgate follows the strategy of increasing the market leadership positions for its main

products. Due to this strategy, the company is delivering vigorous worldwide growth. The key

products of the company are toothpaste, toothbrushes, bar and liquid soaps,

deodorants/antiperspirants, dishwashing detergents, household cleaners, fabric conditioners

and specialty pet food (Colgate 2008: 2).

Colgate is more than a century old company and have since then been the well-known for its

innovative products. Colgate’s oral care is the only sector of many that leads in the market by

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producing the huge gross margins (Cadit 2003). Colgate’s lead is a vital strength and bestows a

substantial competitive advantage compared to its competitors: P&G and Unilever (Datamonitor

2008a).

Being first in market is a great opportunity to rule the market as well as a clear advantage for the

business. Colgate was first to introduce toothpaste in a collapsible tube (Colgate 2007a).

Colgate is first to have the first international Malaysian Halal logo on Colgate toothpaste

packaging (Colgate 2009b; Daily Express 2008). Introduction of Colgate Business planning

(CBP) was a powerful and profitable for the company. Colgate’s innovation for new products

and existing products is remarkable worldwide. The global presence of Colgate comforts the

customers for buying. Colgate leads in the toothpaste business and owns high market place.

The brand image of Colgate is a strong perspective for the customers (Datamonitor 2008b).

Importance of marketing has also played a vital role in Colgate’s growth which is incredibly a

Competitive advantage. Colgate focuses mainly on advertising and have been spending lots

day-by-day (Colgate 2007b).

5.1 Conclusion

All the strengths and opportunities of Colgate are the competitive advantages.

6. Marketing Mix analysis

Marketing strategy is generally obtained by the 3 key elements namely the target markets,

competitors’ targets and the competitive advantage (Anderson 2008). Once the marketing

strategy is finalized, the company starts looking into the facts of the marketing mix. “Marketing

mix is the set of controllable, tactical marketing tools that the firm blends to produce the

response it wants in the target market.” (Armstrong and Kotler 2009). The brand image is

obtained by utilizing the fundamentals of marketing mix (Jobber 2007: 332).

6.1 4-Ps

Marketing mix is essential for the company to develop the demand for its products. This can be

collectively done by the four vital categories which are well-known as 4-Ps of marketing mix.

The 4-Ps are namely Product, Price, Place and Promotion (Armstrong and Kotler 2009: 83).

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Target customers

Intended Positioning

PRODUCT

VarietyQualityDesign

FeaturesBrand name

PackagingServices

PRICE

List priceDiscounts

AllowancesPayment period

Credit terms

PROMOTION

AdvertisingPersonal sellingSales promotionPublic relations

PLACE

ChannelsCoverage

AssortmentsLocationsInventory

TransportationLogistics

Principles of Marketing – M04MKT 2010

FIGURE 5: 4-PS OF MARKETING MIX (Armstrong and Kotler 2009: 83)

6.1.1 Product Customer solution

“Product is a good or service offered or performed by an organization or individual, which is

capable of satisfying customer needs” (Jobber 2007: 28). Colgate toothpaste is the product that

appends importance to the customers’ lives (Pauszek n. d.).

Brand name and Quality

Quality comes first when the company is product oriented. Colgate toothpaste’s quality factors

are meticulously tested to guarantee consumer satisfaction. Colgate has proved for the best

quality by the huge number of customers and constant demand for its products. Recently,

Colgate launched new toothpaste Colgate Luminous™ which is selling in high demand. Colgate

toothpastes have led the Colgate-Palmolive Company in the oral care sector and also generate

the maximum gross margins (Foolonahill n. d.).

There is a strong customer perception for Colgate products. Colgate is now the most reliable

and renowned brand. In 2005, 14 European countries participated to vote for their most reliable

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Principles of Marketing – M04MKT 2010

brands in various categories. Colgate with highest votes (53%) in toothpaste category was

chosen as the most trusted brand (Jobber 2007: 331). Colgate is 58th among the top 100 global

brands (Business Week n. d.). This shows how powerful and popular the Colgate brand is for all

its products especially for the Colgate toothpastes. Each and Every brand of toothpaste

specifies about its unique feature in the product. For Example: Colgate Herbal White toothpaste

– ‘Herbal’ in the brand name is clear and the ‘White’ in brand name highlights the assurance of

‘pearly white teeth’ (Foolonahill n. d.).

Features and Variety

Colgate mainly focuses on innovation. They come up with new innovative products having

unique features and also improve the existing products by appending new differential features.

For example: Colgate Herbal White toothpaste assures of a ‘unique formula’ which involves a

particular blend of eucalyptus, calcium, minerals and lemon extracts (Foolonahill n. d.). Likewise

all the Colgate toothpastes have their respective unique formulae. Colgate toothpastes contain

original baking soda with total protection compared to other toothpastes (Oup n. d.).

Colgate’s kid’s toothpastes have unique features which attract the children to brush for long and

more frequently (Kotler and Keller 2006: 267).

As the Colgate is keen on more and more innovation with numerous features, Colgate has a

variety of toothpastes. List of the global brands in Colgate toothpastes are as follows (Colgate

2008: 3)

Colgate Total® Advanced

Colgate Triple Action

Elmex

Kolynos

Meridol

Sorriso

Tom’s of Maine

Colgate Total®

Colgate® Max Fresh®

Colgate® Sensitive

Colgate® Tartar Protection

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Colgate

Colgate Fresh Confidence

Colgate Herbal

Colgate Propolis

Colgate Simply White

Ultra brite ®

Colgate Luminous™

Colgate® Visible White®

Colgate® 2in1

Colgate® Sparkling White

Colgate® Baking Soda & Peroxide Whitening Oxygen Bubbles

Kids Toothpastes

Design and Packaging

Colgate’s focus on innovation also concentrates on the product designs and their packaging. As

shown below are the few of many varieties of Colgate toothpastes with outstanding innovative

designs and packaging. We can see the uniqueness of each and every product with different

style, colours and names. This proves how Colgate is keenly working on attracting the

customers and understanding the new generation.

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Principles of Marketing – M04MKT 2010

FIGURE 6: VARIOUS COLGATE TOOTHPASTES (Colgate 2007)

For example: Colgate Herbal White toothpaste’s green-colored packaging boosts the herbal

ingredients, the pneumonic of mint leaves, lemon and eucalyptus complements the ingredients

in the toothpaste. The two bright colours red and blue (word ‘new’) are examined to attract

customers’ eye in the stores (Foolonahill n. d.).

Quantities of the toothpaste available in the market are mostly in three sizes - 50g, 100g and

200g (Foolonahill n. d.).

6.1.2 Price Customer cost

“Price is the amount of money customers must pay to obtain the product.” (Armstrong and

Kotler 2009: 83). The price of any product partially highlights its quality. Although the Colgate

toothpaste’s quality leads in the toothpaste category globally, the price of the toothpaste is fixed

only after clearly examining the prices of other leading toothpastes which are already in the

market or will be launched soon in the market. This strategy of pricing, aids in positioning the

toothpaste as a conventional product than a niche product (Laird et al n. d.).

Below shown are the price, earnings and dividends chart of the Colgate-Palmolive Company

from the year 2003 to 2008.

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Principles of Marketing – M04MKT 2010

FIGURE 7: PRICE, EARNINGS AND DIVIDENDS OF COLGATE (Corporate Information n. d.)

List price

Let us consider one of the Colgate toothpaste for the discussion of list price. Colgate Active salt

- The list price of this toothpaste in India is shown below for different quantities.

Size of Colgate toothpaste (in grams)

Price (in Indian Rupees)

50 g Rs. 13100g Rs. 26200g Rs. 47

FIGURE 8: PRICE LIST OF COLGATE ACTIVE SALT IN INDIA (Colgate 2009)

Discounts and/or Allowances

There are not many discounts and allowances for the Colgate toothpastes (Foolonahill n. d.).

Payment period and/or Credit terms

As Colgate is one of the companies for the Fast Moving Consumer Goods (FMCG) especially in

toothpaste category, credits are not allowed. Even though the retailers allow credit on purchase

for all the items, however no credits allowed for Colgate toothpaste (Foolonahill n. d.).

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Warranties and Returns – These facilities are not offered for the Colgate toothpastes

(Foolonahill n. d.).

6.1.3 Place Convenience

“Place includes company activities that make the product available to target consumers.”

(Armstrong and Kotler 2009). The vital role of marketing is the process of how the product is

being sent from seller to buyer. Through the dentists, stores, pharmacies etc, distribution

strategy is been offered to the Colgate (Pauszek n. d.).

Channels

The Colgate toothpastes are sold in retail outlets like supermarkets, malls, pharmacy, co-

operative stores etc. The products are distributed by the Colgate’s supply chain as shown below

(Foolonahill n. d.).

FIGURE 9: SUPPLY CHAIN IN COLGATE (Foolonahill n. d.)

Coverage

Colgate toothpastes are available in almost all countries around the globe. Colgate serves

people of above two hundred countries and territories. Now, their market also includes the semi-

urban and rural areas where the company is primarily focusing on (Foolonahill n. d.).

Locations

Colgate has successfully ruled about half of the toothpaste market around the globe. Colgate

serves people of above two hundred countries and territories. Colgate toothpastes can found

easily in any store. They are placed in oral care section in every store. In few places the

products of lowest quantity are placed near the payment counter on a trial basis (Foolonahill n.

d.).

Inventory

The retailers’ stocks vary by its size (Foolonahill n. d.).

Logistics

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Distributors Wholesalers Retailers Consumers

Principles of Marketing – M04MKT 2010

Colgate sets a remarkable standard for the on-time delivery of products and make sure that the

products meets the customers’ demands. Colgate’s customer services department are doing

well and are in-force for tracking the customers by getting feedbacks from them. Colgate

mentions their details on the packaging and gives the details of contacting them like contact

number, email address, website etc through which the customers can discuss their experience

of using Colgate product (Kotler and Keller 2006).

6.1.4 Promotion Communication

“Promotion means activities that communicate the merits of the product and persuade target

customers to buy it.” (Armstrong and Kotler 2009). Widespread promotion of Colgate products

has made it a synonym to toothpaste (Wa In U.S., Colgate employed extremely embattled

incorporated marketing campaign which involves TV, print advertising, assortment of

promotional events and on-line contents (Colgate 2007).

Advertising

Advertising involves internet, print, outdoor, broadcast etc (Armstrong and Kotler 2009: 383).

In 2004, Colgate invested large budget examining new on-line advertising campaign to realize

the competence of appending on-line advertising to media mix. On this, E-business director of

Colgate Palmolive, Gabi Stade said: "The objective is to test whether including online within the

media mix works more efficiently than TV and traditional media alone. At Colgate-Palmolive we

are always keen to push the boundaries of the marketing mix while being sure to track any

innovations to assess their effectiveness." (Whitehead 2004).

In 2007, growth in gross profit margin and saving programs supported in the development of

advertising for introducing new products and improvement in market shares globally. In Brazil, a

mix of robust advertising focused on the benefits of the products, endorsements and

testimonials. During 2007, 20% of the total toothpaste sales are from the Brazil whereas four

years later the sales were just 1% (Lee and Johnson n. d.). The importance and growth of

advertising the Colgate products is shown below. We notice that company is spending lots for

advertising so the budget increases yearly.

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FIGURE 10: ADVERTISING (Colgate 2007b: 3)

Few of the advertising slogans of Colgate toothpaste:

Colgate toothpaste (1945)

Advertising slogan: “It cleans your breath while it cleans your teeth” (Wininspiration n. d.).

Colgate toothpaste (1967)

Advertising slogan: “The Colgate ring of confidence” (Wininspiration n. d.).

Colgate Total toothpaste

Advertising slogan: “Number 1 recommended by dentists.” (Textart n. d.).

Colgate Oxygen toothpaste

Advertising slogan: “Pure. Fresh. Clean.” (Textart n. d.).

Translation disaster of one of the Colgate toothpaste: In France, Colgate launched toothpaste

called "Cue", unfortunately it happen to be the name of a popular porno magazine (The

University of Texas at Austin 2009).

Colgate is attracting the growing population of Hispanic in U.S. by printing the ads in Spanish.

Colgate focuses on advertising their products in rural areas (example: India) where the people

are almost unaware of the products (Lee and Johnson n. d.).

On October 2006, Colgate posted online advertisement on yahoo homepage. This resulted in

increase of visitors to yahoo 94 million and the traffic to the Colgate Total site increased to

2000% (Kramer 2007).

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Personal selling

Personal selling involves incentive programs, sales presentations and trade shows (Armstrong

and Kotler 2009: 383).

Colgate has advertised their toothpaste products on the show where the audience sang in the

upbeat tube where the spokeswomen adorned about the virtues of Colgate Tartar Control

toothpaste in Spanish. This was targeted to attract the growing population of Hispanic in U.S.

(Lee and Johnson n. d.).

Sales promotion

Sales promotion involves demonstrations, discounts, displays and coupons (Armstrong and

Kotler 2009: 383).

By 2003, the company expected rural India to draw above half of the revenue as company had

spent 5 times more of it for marketing in rural areas. Many of the rural Indians were not aware of

the toothpaste tubes. Less than 15% of rural Indians were using the dentifrice. Since ages to

clear their mouths, rural Indians were using the charcoal powder and indigenous plants. Colgate

showed the infomercial video to the people and also offered them free samples. They marketed

by the subtext of “Colgate is good for your breath and teeth”. They also demonstrated how to

use the toothpaste with toothbrush. To encourage and attract the people to buy Colgate

toothpaste, Colgate offered free toothbrushes to few children (Lee and Johnson n. d.; Kotler and

Keller 2006: 671). Colgate offers coupons via on-line with the help of several on-line coupon

sites (Kotler and Keller 2006: 588).

Public relations

Public relations involves web pages, press releases, special events and sponsorships

(Armstrong and Kotler 2009: 383).

On April 2008, Colgate declared regarding an exclusive online promotion of Mother's Day

featuring Mary Mary’s music (Grammy award-winning Gospel duo). By taking part in the

promotion of "Send Her A Colgate Smile!", customers could tribute their mothers with a musical

E-card which had an inspiring Mother’s Day song with a verse from A Mother's Smile. This song

was specially written for Colgate and was performed by Mary Mary (Target Market News 2008).

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Colgate has their official worldwide websites where the company regularly updates information

such as yearly annual report, products, interviews with management faculties etc. The website

is www.colgate.co.uk.

Since 18 years, Colgate is marketing to the elementary schools through its Bright Smiles, Bright

Futures program (Event marketer 2009).

6.2 Additional 3-Ps

The additional 3-Ps (People, Physical Evidence and Process) affects the distinctive

characteristics of service ‘product’.

6.2.1 People

The people mean the customers and/or employees of the Company. “Valuing Colgate People"

is a training program for employees introduced in Colgate to motivate people of all race and

religion. This aids to achieve goals, corporate objectives of Colgate, to be aware of their values

and how to respect others for their contributions (Colgate 2009).

6.2.2 Physical Evidence

There is no much physical evidence of Colgate toothpaste.

6.2.3 Process

Colgate’s customer services department are doing well and are in-force for tracking the

customers by getting feedbacks from them. Colgate mentions their contact details on the

packaging like contact number, email address, website etc through which the customers can

discuss their experience of using Colgate products (Kotler and Keller 2006).

6.3 Recommendations

We recommend that Colgate promote more of their products commercially, with magazine ads,

in the radio, ads in dental clinics/ hospitals, dental colleges/universities, in billboards, and on

sides of public transportation (coaches/buses). We also recommend Colgate to offer more of

special coupons, discounts and rebates to their customers. Colgate could be beneficial when

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there are in-store displays (Pauszek n. d.). Colgate should work on the physical evidence as it

is equally important for public awareness of the products.

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