real-world’ strategic report in business operating major
miller236
colgate-palmolive_presentation_2.pptxGroup 8
Jake Brand, Ben Brown, Brianna Corcoran, Mamadou Sall, Xiaoyue Sun
Historical Performance Analysis
Resources & Capabilities
Efficient Supply Chain
Strong Marketing Department
Operating in Over 200 Countries
Trademarks/Patents
New Logistics Program Generating Significant Savings A new freight and logistics program in the United States is offering retail customers flexibility and cost transparency by providing incentives to place more efficient orders, such as full truckloads. The program is expected to generate over $5 million in annual savings and will soon be expanded globally
Core Competencies
Excellence in R&D
Synergy Between all Brands
Brand Recognition
Innovation at Colgate continues to be a key driver of profit - able growth worldwide. Insights into consumer behavior and research that identi - fies unfulfilled consumer wants and needs guide Colgate’s consumer innovation centers as they develop the next generation of new products. For example, an insight that taking a shower is one of the most pleasurable experi - ences for women each day led to the launch of Palmolive Nutra ·Fruit, a line of shower gels with moisturizing cream and fruit fragrances. Supported by an integrated marketing campaign themed “so pleasurable, it’s addictive,” Palmolive Nutra ·Fruit shower gel is driving market share gains throughout Europe and the South Pacific. At Hill’s, researchers learned that obesity affects an estimated 45% of dogs in the U.S. Recognizing that dog owners have difficulty putting their overweight pets on a diet, Hill’s introduced a complete nutritional system of pre-measured pet food and biscuit packs. The new line, which includes Hill’s Prescription Diet Therapeutic Weight Reduction Program, available only through veterinarians, and Science Diet Weight Loss System, sold in specialty pet retail outlets, has been very well received by both veterinarians and consumers. At Colgate, innovation extends beyond new products to all business functions. In just one example of process innovation, Colgate developed an online proprietary tool that helps orchestrate the timing and consistency of the Company’s marketing messages across all media channels.
Colgate’s strong relationships with professionals have contributed to making Colgate and Hill’s the most recommended brands by dentists and veterinarians worldwide. Professional endorsements build credibil - ity for Colgate’s brands and drive product trial.
Optimizing Product Visibility In Small Rural Shops In small rural shops where space is limited, Colgate representatives work closely with shop owners to achieve the ideal assortment of Colgate products with the best visibility. Special packaging that serves as a self-display unit, such as toothbrush dispensers and hanging sachets, is just one technique that provides merchandising flexibility for shop owners and superior visibility for Colgate products.
Competitive Advantage
Cost Efficient
Efficient Supply Chain
Excellence in R&D
One way Colgate is generating significant savings is through business simplification, reducing the number of formulas, packaging, ingredients and sizes of our products. One example is dishwashing liquid, which has been relaunched across Europe using just one cost-efficient, environmentally friendly bottle design for six different Colgate brands. In total, the number of bottles used in the category in Europe was reduced from 21 to 14. In North America, the Company introduced a more concentrated dishwashing liquid formula and also reduced the number of bottle sizes used, resulting in significant savings. A new process technology in Brazil is allowing Colgate to save more than $2 million annually on purchases of tallow, a key ingredient in bar soap production. Instead of buying high-quality tallow available only from a limited number of suppliers, Colgate developed the ability and capacity in-house to upgrade more widely available lower-cost tallow. As a result, Colgate’s high quality standards are maintained at a reduced cost. The process has been so successful, it is being considered by other geographies, as well as being explored for other ingredients.
Corporate-Level & Business-Level Strategy
Equity Alliance with E-commerce Giant Alibaba (BABA) in China
Focus on the Home Goods Industry
Oral Care
Personal Care
Home Care
Pet Nutrition
Business-Level Strategy: Cost Efficient
Working closely with the Company’s retail customers to share expertise and grow category sales has long been a cornerstone of Colgate’s business strategy. In the United States, Colgate collaborated with supermarket chain Kroger to reorganize the oral care aisle. Based on a variety of shopper insights and customer data, Colgate’s cross-functional commercial team worked closely with the retailer to implement a more shopper-friendly aisle. The new design attracted more shoppers and increased category sales. Reinforcing the importance of customer service, Colgate has created an innovative, activity-based training course that focuses on the key role that supply chain collaboration plays in delivering against customer expectations. Participants, who include customer development, customer service and supply chain personnel, learn through team exercises how to address supply chain and other commercial challenges and still deliver best-in-class service to Colgate’s retail partners at the lowest cost.
International Strategy
Product Innovation
Middle Class Families
Target Emerging Markets
Consumer Research
Manage Foreign Currency Exposure
Minimize Impact on Earnings
Integrated Marketing Campaigns
Continued expansion into international markets and in new channels is the foundation of Colgate-Palmolive’s future growth potential.
The company derived 80% of its net sales last year from outside North America.
The company derived 80% of its net sales last year from outside North America.
Specifically, the emerging markets are a focal point for the company. Colgate-Palmolive’s annual revenue is evenly split among developed and emerging markets.
For example, the company generates approximately 27% of its sales from Latin America, and another 15% from Asia. These are high-growth markets with rapidly expanding middle classes. As such, they are fertile territory for a consumer staples giant like Colgate-Palmolive.
Take China for example—a country with a population of 1 billion and a rising middle class. Colgate-Palmolive’s toothpaste market share in China has nearly tripled since 1995.
Innovation at Colgate continues to be a key driver of profit - able growth worldwide. Insights into consumer behavior and research that identi - fies unfulfilled consumer wants and needs guide Colgate’s consumer innovation centers as they develop the next generation of new products. For example,
At Hill’s, researchers learned that obesity affects an estimated 45% of dogs in the U.S. Recognizing that dog owners have difficulty putting their overweight pets on a diet, Hill’s introduced a complete nutritional system of pre-measured pet food and biscuit packs. The new line, which includes Hill’s Prescription Diet Therapeutic Weight Reduction Program, available only through veterinarians, and Science Diet Weight Loss System, sold in specialty pet retail outlets, has been very well received by both veterinarians and consumers. At Colgate, innovation extends beyond new products to all business functions. In just one example of process innovation, Colgate developed an online proprietary tool that helps orchestrate the timing and consistency of the Company’s marketing messages across all media channels.
Product quality and innovation, brand recognition, marketing capability and acceptance of new products largely determine success in the Company’s business segments.
We manage our foreign currency exposure to minimize the impact on earnings of foreign currency rate movements through a combination of cost-containment measures, selling price increases and foreign currency hedging.
(changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profitability and cash flows we receive from non-U.S. markets or increase our labor or supply costs, as measured in U.S. dollars, in those markets)
Staying Close To Consumers Colgate researchers interact with consumers in their homes to gain a better understanding of their oral, personal and home care habits. These insights, combined with traditional research, help Colgate identify opportunities for new products and create the most effective brand messaging.
Close Relationships With Dental Professionals By educating the dental community about the science behind Colgate’s newest products at international conventions, Colgate helps build professional recommendations for the Colgate brand, and particularly for Colgate Sensitive Pro-Relief in the important sensitivity segment.
International Strategy Examples
Rural India
Utilize Market Research
Increasing Awareness in Malawi
Oral Care Education
Launch of Colgate Sensitive Pro-Relief
Integrated Marketing Campaign
Mix of Traditional & Non-Traditional Media
an insight that taking a shower is one of the most pleasurable experi - ences for women each day led to the launch of Palmolive Nutra ·Fruit, a line of shower gels with moisturizing cream and fruit fragrances. Supported by an integrated marketing campaign themed “so pleasurable, it’s addictive,” Palmolive Nutra ·Fruit shower gel is driving market share gains throughout Europe and the South Pacific.
To better understand consumers in rural India, for example, Colgate researchers immersed themselves in the lives of villagers for two days, observing and discussing their oral care habits, how they clean their homes and other daily routines. A key learning was that mothers hope for a better life for their children through education. Based on this insight, Colgate implemented a special promotion that helped build awareness for good oral care habits and offered scholarships to children.
Another way Colgate connects with today’s consumers globally is by utilizing integrated marketing communications that include a mix of traditional and non-traditional media. The launch of Colgate Sensitive Pro-Relief toothpaste leveraged multiple digital touch points, including informative product web sites and online media featuring powerful consumer testimonials. These activities, combined with more traditional media and promotional events, are contributing to market share gains worldwide.
Increasing Oral Health Awareness Colgate strives to promote awareness of good oral health throughout the world. In Malawi, Colgate teamed with the Malawi Ministry of Health during Oral Health Month to help educate children and adults about good oral care habits. The campaign included a powerful tele - vised message that promoted healthy oral care habits and highlighted the Ministry’s support of Colgate products.
Potential Challenges for International Strategy
Potential cultural barriers
Brand awareness may not be as strong in new countries’ markets
Cost of entry to new countries could be high
May need to ally with or acquire other companies in order to succeed in new countries
Ex: alliance with Alibaba as supplier in China
Key Issue
Competition in the Market
Low Product Differentiation
Growing Presence of Large Retailers & Discounters
Retail Trade Consolidation Trend
growing presence of large-format retailers and discounters. With the growing trend toward retail trade consolidation, we are increasingly dependent on key retailers, and some of these retailers, including large-format retailers, may have greater bargaining strength than we do. They may use this leverage to demand higher trade discounts, allowances or slotting fees, which could lead to reduced sales or profitability. We may also be negatively affected by changes in the policies of our retail trade customers, such as inventory de-stocking, limitations on access to shelf space, delisting of our products, environmental or sustainability initiatives and other conditions.
Recommendations
Make an Acquisition
Related Diversification
Horizontal Acquisition with Foreign Company
Invest in Middle East and Africa
Growing population
Easy to reach
1.
2.Pepsodent(Unilever toothpaste in india) is always colgate’s toughest competitor. inhave always been at loggerheads and the situation does not look like improving in the near future. Where colgate has the brand value, Pepsodent has the powerful distribution suppot of HUL. Because of all other products of HUL, pepsodent reaches even rural areas easily and hence has a high turnover
Sources
http://www.marketing91.com/swot-analysis-of-colgate/
http://www.marketing91.com/marketing-strategy-of-colgate/
http://www.suredividend.com/dividend-aristocrats-cl/
