Colgate Case Study

1582 words - 7 pages

1. Colgate should spend the $3 million in retailer support and also social media campaigns. They should not invest in the discounting of their product in the retailers but focus more on merchandising locations. Give the stores more incentives to place Colgate products at better eye-line viewpoints and even gondola shelves. I believe it is worth it to pay the slotting and listing fees for the better locations because customers who are loyal to the Colgate brand will buy the product regardless of location but new customers who are undecided will pick the one that is more convenient. With Social media campaigns, It is a must in today’s landscape. It can br as easy as just creating a “fun fact” ...view middle of the document...

Sociabales are usually between the ages of 18-34 and represent the biggest t share at 35%. The 2nd largest is the worriers, who are full adult ranged and represent a 30% share. Generalists come in 3rd at 20% and sensories come in last at 15%.
3. Consumers showed that the main factors that determined the sale was price, brand familiarity and dentist recommendations. The biggest oral concern when consumers chose their product was based on plaque and tarter build-up. However consumers who were not brand loyal often made their final selection in the store. The final selection was influenced by the brand preference, perceived efficacy, retail environment influences and price. For Colgate to be the final decision for the consumer, the product needs to be packaged well to be easily spotted on the shelf and the price needs to be competitive within the retailers.
4. Colgate’s current marketing mix is competitively strong and delivering favorable results. Their current product line covers all the needs based and psychographic based segmentation. The price on their base, premium, super premium, and mega premium toothpaste are slightly below the average selling points in the respective categories. They are placed in almost all retail stores like Loblaw and Sobeys. Their current promotion of the product seem to be working well since their ROI on advertising versus their net sales ratio is higher than that of their competitors from 2009-2012.
5. There are four competitors in the overall oral market that control 80% of the market share. In the toothpaste market there are three competitors who own 75% of the market share. The competitors in this market compete by positioning themselves in five of the major subcategories, oral health, sensitivity, whitening, children’s, and fresh breath. Within those categories, the competitors would have basic products all the way to super premium items. Most of these companies have numerous products in each category and price range in order to satisfy every consumer. Due to the stiff competition in the market, there is consistently new product introduced with technological advancements in the paste. It would be charged at a higher premium and would have a selling advantage. However it would not stay that way for long due to the fact that new products in this industry are easily copied and is not long before another company copies that product.
6. Colgate’s market share value percentage is 32. The company invested $14.7 million in advertising and delivered $18.4 million in operating profit back. That puts the advertising ratio to profit at 1.25. Each market share percentage requires a $450,000 advertising spend. At those numbers, the campaign goal for the $3 million should be able to generate $3.75 million in operating profit. It should also be able to boost the market share at least by 6%.
7. The way the industry is, it will not be long till the competitors copy what Colgate is doing. I believe that...

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