Colgate Marketing Plan 2011

Max Firestein

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Table of Contents

Page Number

Executive Summary……………………………………………………………………..4-7

Colgate Toothpaste Analysis…………………………………………………………..8-20

Company Overview………………………………………………………..........8-9

Product Overview ………………………………………………………………...9

Product Analysis……………………………………………………………….9-13

Market………………………………………………………………………...13-14

Target.………….……………………………………………………………..14-16

Price……………………………………………………………………………...16

Promotion………………………………………………………………………...17

Place……………………………………………………………………………...18

Trends………………………………………………………………………...18-19

Strengths, Weakness, Opportunities and Threats…………………………….19-20

Competition

Aquafresh…………………………………………………………………………….21-24

Product Analysis..……………………………………………………………21-22

Market……..…………………………………………………………………….22

Target…………………………………………………………………………22-23

Price……………………………………………………………………………..23

Place/promotion…………………………………………………………………23

Strengths and Weakness……………………………………………………..23-24

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Crest……………………………………………………………………………..……24-27

Product………………………………………………………………………..24-25

Target…………………………………………………………………........…25-26

Market Share……………………………………………………………………..26

Price………………………………………………………………………....…...26

Promotion………………………………………………………………………...26

Place……………………………………………………………………………...27

Strengths and Weakness Analysis……………………………………………….27

Colgate Mission……………………………………………………………………….…28

Market Research Data………………………………………………………………..29-32

Keys to success and Critical Issues…………………………………………………..33-34

Goals……………………………………………………………………………………..34

Strategy ………………………………………………………………………………34-38

Control……………………………………………………………………………….…..38

Budget………………………………………………………………………………..38-39

Projections…………………………………………………………………………….….39

Work Cited……………………………………………………………………………….40

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Executive Summary

Perception of brand and category

Current status: Colgate Toothpaste has been fighting bad breath and maintaining proper

oral health for over 200 years. With an array of 40 different patented toothpastes and 13

classifications of oral care, Colgate remains competitive in the market place. The

toothpaste category sales are estimated at $3 billion or 3% of the oral health care

industry. The current Colgate market share is 36.2%. Crest is at 30% and Aquafresh is at

8.13% of the toothpaste market. Colgate is a strong earner and its market share reflects

this. Strong competition from Crest has cost Colgate valuable market share over the last

five years.

Critical Issues/Keys To Success:

- Colgate toothpaste is the leader within the product category holding 36.2% of

the market or $1,114,137,768 in sales.

- Colgate has a vast product line of toothpaste and many are less than a decade

old. While others date back over thirty years and the original is over one

hundred years old. Therefore, it is imperative to keep Colgate’s brands fresh

but maintain a rich history of quality products.

- The highest selling trend within toothpaste is the toothpaste and not

toothpaste-gel.

- The target market for Colgate toothpaste is Black and Hispanic individuals

age 18-35, with several children aged 7 and younger.

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- Colgate commits millions of dollars to community programs and the ADA’s

“Give A Kid A Smile” Program.

- Colgate has established ColgateSmile a social network, an interactive iphone

application, Facebook page, Twitter account and Myspace page.

- Colgate is committed to Reducing Environmental Impacts (REI) around the

world.

- Colgate is not the leader with regard to technological advancement within the

category.

Goals: In order to remain a leader in the category four goals must be achieved:

-Increase Colgate market share by 1.7% or $1,326,546,098

-Increase website traffic and Facebook friends by 10%.

-Carry over current 2010 margin at 18% of Colgate sales into 2011 expenditure.

- Systematically phase-out 5% of the brands that are currently struggling

financially.

Strategy:

Brand Reduction

The strategy is to phase-out unproductive toothpastes in the baking soda/gel varieties

specifically Colgate Baking Soda & Peroxide Oxygen Whitening Frosty Mint Striped

Gel, Colgate 2in1 Oxygen Whitening and Cavity Protection Winterfresh Gel. The

product packaging will be advertising other Colgate products in an attempt to retain

brand loyal users. By October 2011, these varieties of Colgate will no longer be produced

for the United States market. In effect, this will generate more cash flow that can be

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diverted into the creation of new brands and new marketing campaigns thereby

decreasing stress upon margin levels.

Fostering Positive Colgate Image

In order to gain favorable PR and keep Colgate in the light of the media, this plan

suggests a campaign that will donate a 1% of specially marked packages to a charity of

ones choice. Partnering with www.charitynavigator.org to create a micro list of charities

and their information. Purchasers will be able to choose and track the donations via the

Colgate website by answering several demographic questions and entering a unique code.

Facebook will feature a separate page that will promote Colgate, describe the

donation campaign and charities offered by charitynavigator.org. Also, a downloadable

iphone application will be created to track contributions. This marketing tactic will foster

a positive image of Colgate, create an increase of sales in specific Colgate brands, harvest

demographic customer information, draw added consumers to the Colgate website and

more of a presence on Facebook.

Increase Brand Share

Colgate is one of the most recognized brands in the United States and the world. Colgate

is popular among the consumer target and beyond. It has an amazing 93% penetration

while only retaining 35% of the market. In terms of the product life cycle, Colgate

toothpaste is beyond the mature stage. Some brands have declined with regard to sales,

profits, customer interest and market share.

This idea will be retrofitted to print ads as well by using the same twenty images

with the smiling, foamy face and underneath the images will appear the Colgate slogan,

“Colgate A World of Care.” This marketing campaign has the ability to touch a vast

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consumer base. There is universality to the idea. The concept relates and is identifiable

with people because “everyone brushes their teeth in the their pajamas.” Maslow’s

hierarchy of needs dictates that the identifiably social component of the commercial will

appeal to the subconscious of viewers creating the added value necessary to enhance the

image of Colgate and gain added market share. Choosing actors specifically by gender

and racial profile can appeal to start-up and young bustling families. This commercial

will attract potential users and reaffirm current consumers. The investment in a

revitalizing campaign to improve the image of Colgate will inevitably increase market

share by 1.00% or $11,141,377 at a minimum.

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Company Overview

Colgate Toothpaste has been fighting bad breath and maintaining proper oral health for

over 200 years.

Company Timeline[3]

• 1806-William Colgate starts a starch, soap and candle business on Dutch Street in

New York City.

• 1857-Upon the death of founder, William Colgate, the company is reorganized as

Colgate & Company under the management of Samuel Colgate, his son.

• 1896- Colgate introduces toothpaste in a collapsible tube.

• 1911- Colgate distributes two million tubes of toothpaste and toothbrushes to

schools, and provides hygienists to demonstrate tooth brushing.

• 1953-Colgate-Palmolive Company becomes company's official name.

• 1956- Colgate opens corporate headquarters at 300 Park Avenue in New York

City.

• 1968- Colgate toothpaste adds MFP Fluoride, clinically proven to reduce cavities.

• 1996- Bright Smiles, Bright Futures oral health education program expands to 50

countries, and today reaches over 50 million children annually.

• 1997- Colgate Total toothpaste is introduced in the U.S. and quickly becomes the

market leader. Only Colgate Total, with its 12-hour protection, fights a complete

range of oral health problems.

• 2000- Colgate creates, Colgate 2in1 Toothpaste.

• 2007- Colgate launches Colgate Max Fresh toothpaste line.

• 2009- Colgate launches Colgate Luminous.

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Product Overview

Toothpaste works with tooth brushing to clean teeth and fight plaque and bacteria.

Specifically:

• Toothpaste contains abrasive materials that physically scrub away plaque. In

addition, toothpaste abrasives help remove food stains from teeth and polish tooth

surfaces.

• Toothpaste delivers fluoride to the teeth. Fluoride incorporates itself into tooth

enamel weakened by acid attack, making it more resistant to future acid attack

from plaque bacteria and food.

• Technological improvements in some toothpaste contain ingredients that

chemically hinder the growth of plaque.

Colgate’s brands consists of a multitude of unique toothpastes lines, specializing in the

preservation and treatment of oral hygiene. Colgate has created an array of 40 different

patented toothpastes keeping Colgate competitive in the market place. There are 13

different classifications and varieties of Colgate toothpastes. Colgate’s toothpastes

feature; cavity protection, plaque & gingivitis prevention, long lasting fresh breath, tartar

control toothpastes, tooth whitening, baking soda and peroxide, enamel strengthening,

sensitivity relief and toothpaste designed for children.

Product Analysis[3]

* Colgate Cavity Protection Great Regular Flavor * Colgate Cavity Protection Winterfresh Gel * Colgate Tartar Control Whitening Cool Mint Gel * Colgate Tartar Control Whitening Crisp Mint Paste

* Colgate Total Advanced Whitening * Colgate Total Advanced Clean * Colgate Total Advanced Fresh Gel * Colgate Total Clean Mint * Colgate Total Whitening Paste * Colgate Total Whitening Gel * Colgate Total Mint Stripe

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* Colgate Total Enamel Strength *Oxygen Bubbles Whitening Brisk Mint® Paste *Oxygen Bubbles Frosty Mint Striped™ Gel * Colgate 2in1 Oxygen Whitening * Colgate 2in1 Whitening * Colgate 2in1 Icy Blast * Colgate 2in1 Kids Strawberry * Colgate 2in1 Kids Watermelon * Colgate Max Fresh w/ Mini Breath Strips * Colgate Max Fresh w/ Mouthwash Beads * Colgate Max White w/ Mini Bright Strips * Colgate Sparkling White CinnamonMint * Colgate Sparkling White Mint Zing * Colgate Sparkling White Caribbean Cool

* Baking Soda & Peroxide Oxygen Whitening Frosty Mint Striped™ Gel * Colgate Baking Soda & Peroxide Whitening * Colgate Sensitive Multi Protection * Colgate Sensitive Enamel Protect * Colgate Sensitive Maximum Strength Whitening

* Colgate ProClinical Daily Whitening * Colgate ProClinical Daily Cleaning * Colgate ProClinical Daily Renewal for Enamel * Colgate Dora the Explorer Mild Bubble Fruit * Colgate SpongeBob Mild Bubble Fruit * Colgate My First Toothpaste * Colgate Pop Stars * Colgate Luminous Crystal Clean * Colgate Luminous Paradise Fresh

Colgate Regular: In over 173 years, Colgate’s original flavored mint

toothpaste has changed very little. It cleans, strengthens, protects teeth and breath.

Colgate’s Original formula uses active fluoride to keep teeth and gums healthy.

Colgate Regular is ADA approved and doctor recommended.

Colgate Tartar Control Toothpaste: One of the top sellers in the Colgate

toothpaste line and for good reason. Colgate Tartar Protection fights tartar build up

and removes stains to whiten teeth and fight cavities.

Colgate Total is the most popular toothpaste under the Colgate brand. It has

eight products and flavors within the line that all promote 12-hour protection from:

gingivitis, stains, plaque, whitening, cavities, tartar, weak enamel, tender gums and

bad breath. Colgate Total’s products all protect against these unwanted oral issues,

but some target specific individual problems in a variety of toothpastes and gels.

Including, Colgate Total Enamel Strength Striped paste, protects from acid wear

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for 12 hours. Colgate Total Advanced Whitening uses Dual-Silica Technology to

remove tooth stain and helps to prevent new stains from forming. Colgate Total

Advanced Clean is available in both a gel and paste form and contains silica, which

is similar to what dentists use to maintain a professional cleaning feel. Colgate Total

Advanced Fresh Gel contains an added flavor booster to keep breath ultra fresh for

up to 12 hours. Colgate Total Clean Mint Paste has a delightful mint taste. Colgate

Total Mint Stripe Gel is a minty blend of gel and paste that leave the users mouth

fresh and clean.

Colgate Oxygen Bubbles Toothpaste: When activated, the product foams to

get in between teeth to fight cavities and kill germs that cause bad breath. Oxygen

Whitening works to gently remove surface stains to reveal the natural whiteness of

your teeth.

Colgate 2in1 Toothpastes is a mix of two distinct features in one gel

toothpaste. Whitening foaming that gets between teeth to fight cavities and kill germs

that cause bad breath and Oxygen Whitening works to gently remove surface stains

to reveal the natural whiteness of teeth

Colgate Sparkling White Toothpaste is clinically proven to protection teeth

from wear and tear staining. The formula is a patented creation for sparkling, healthy,

white teeth accompanied by a unique flavor experience. It is available in the following

flavors: Colgate Sparkling Mint Zing, Colgate Sparkling White CinnaMint, and Colgate

Sparkling White Caribbean Cool.

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Colgate Sensitive Multi Protection fights tartar, removes plaque, promotes

healthy gums and whitens teeth for a healthier smile. The sensitive element in the three

Colgate Sensitive Toothpastes protects from painful oral sensation. Colgate Sensitive

Enamel Protect helps protect tooth enamel from acid attacks. Colgate Sensitive

Whitening helps restore the natural whiteness of teeth.

Colgate Pro Clinical is relatively new to the market. It comes in three varieties

inspired by dentists to create a high quality and satisfaction guaranteed product.

Colgate Max Line established in 2007 consists of three varieties. Colgate Max

White with Mini Bright Strips freshens breath and helps to bring back the natural

whiteness of a persons smile. Colgate Max Fresh with Mini Breath Strips is packed

with hundreds of mini breath strips. These breath strips unleash a powerful rush of

freshness and are formulated to whiten teeth. Colgate Max Fresh with Mouthwash

Beads contains concentrated mouthwash beads that leaves the users mouth ultra clean

and fresh.

Colgate has several lines of toothpaste targeting children in regard to packaging,

flavor and theme. Including Colgate Dora the Explorer Mild Bubble Fruit, Colgate

SpongeBob Mild Bubble Fruit, Colgate My First Toothpaste and Colgate Pop Stars.

Colgate Luminous is Colgate’s newest brand launched in early 2009. It is

manufactured in two flavors, Crystal Clean Mint and Paradise Fresh Colgate.

Luminous is a specific formula that safely lifts off yellowing surface stains to restore

the natural whiteness to teeth. Using fluoride mineral formulation, Colgate

Luminous strengthens weakened teeth enamel. Colgate Luminous Reinforces

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enamel layers by rebuilding the weak spots on teeth, protecting against stains and

yellowing that occurs over time.

Colgate Products Percentage Breakdown

Market Information

Oral Heath Industry

Americans brush their teeth with toothpaste 200 billion times a year. [1] The oral health

industry is a vibrant sector of the current economy equal to $106 billion annually, of

which 3% will be spent on toothpaste products. [1] The toothpaste market itself is

increasing up, a 8% in 2010 to 2008 and 12%from 2005. [7] Therefore, it can be assumed

that the market will continue to increase over the next 5 five years.

Toothpaste Market

Toothpaste in the United States is a massive market. Sales are estimated $3,133 million

total market sales, consuming an average of 895,379,714 tubes per year. [8] Colgate-

Palmolive (stock symbol (CL) is publicly traded on the New York Stock Exchange at $75

6.00%

7.00%

18.00%

12.22%

14.86%

10.13% 3.67%

25.58%

2.50% Colgate 2 in 1

Colgate Max Fresh

Colgate Regular

Colgate Sparkling White

Colgate Tartar Protection

Colgate with Baking Soda and Peroxide

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a share and is worth an estimated $15,327,000,000. [9] Colgate Toothpaste contributes

10% or $1.5 billion to the total value of Colgate-Palmolive. [3] With a penetration of

76.35%, almost 3/4 of the families in the United States have tried Colgate toothpaste at

least once. [8]

Based upon past and current Colgate toothpaste market share percentages, future market

share can be expected to grow to record highs. At the current rate of increase, market

share can be predicted to surpass the five-year benchmark high of 37.3% to a new record

of 37.5% in 2011. [3]

Colgate must maintain that leading position to ensure future growth over the next

several years. Dips in market share have occurred in the recent past such as in 2008-2009.

In order to maintain current consumers and attract new potential users, it is imperative

that Colgate vitalizes new or existing appreciation among consumers for their toothpaste

brands

Colgate Toothpaste Target Consumer Profile

The over all target consumer for Colgate’s many toothpastes are Black and Hispanic

men/women aged 18-34 with a college education employed as professionals earning

$75,000 or more. The target consumer is currently married with children, six years old or

younger, living in homes worth $200,000-$499,000 in the top five media markets in the

United States. [7], [8]

2006 2007 2008-2009 2010

Percent Change 2.00 1.96 -4.6 350.00%

Market Share 35.30% 37.30% 32.70% 36.20%

Percent Change Value $22,124,832 $22,124,833 $51,904,857 $37,676,156

Margin 18% 18% 18% 18%

Total Market Value $1,106,241,637 $1,128,366,470 $1,076,461,612 $1,114,137,768

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Colgate Toothpaste Overall Target Market

Colgate has so many products it becomes necessary to aim strategies at a limited target

consumer. Based upon demographics supplied by MRI and Spectra, the target consumer

of Colgate is categorized as “younger bustling family” living within the mid-scale

suburban mix community. The target’s life is centered on his/her family. The target earns

for there household, while balancing interests and pursuits. Media selection, outdoor-

activities and neighborhood selection all mirror a family centric target.

The consumer lives in the midscale suburban mix placing the target in the middle of the

socioeconomic ladder. The midscale suburban mix can be characterized by residents that

earning a living in blue-collar jobs and live in older, modest homes in ethnically diversity

areas.[8]

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Price

Colgate features products in the oral health isle of almost all stores carrying oral health

products. Colgate has a large span of shelf space on nine rows, totaling 35 items per store

that illustrates the wealth of variety Colgate offers. It is important to note that Colgate is

the first product on display in the toothpaste section of the oral health isle. The subtotal of

all of Colgate’s products per ounce is 28.58 equaling $0.81 per ounce, making it the most

expensive brand of the three toothpaste category leaders. The most expensive toothpaste

per ounce is the Colgate Pro Clinical, which is featured at eye level on the top shelf. The

least expensive toothpaste per ounce is the Colgate Regular super tube, which is located

on the second shelf from the store floor or shin level of the consumer.

Established Couples

2+ person HHs, No Children, 35-54

Senior Singles

1 person HHs, No Children, 65+

Senior Couples

2+ person HHs, No Children, 65+

Empty Nest Couples

2+ person HHs, No Children, 55-64

Total

Small Scale Families

Small HHs with Older Children 6+

Start-Up Families

HHs with Young Children Only < 6

Older Bustling Families

Large HHs with Children (6+), HOH 40+

Younger Bustling Families

Large HHs with Children (6+), HOH <40

Independent Singles

1 person HHs, No Children, 35-64

Young Transitionals

Any size HHs, No Children, < 35

LifeStyle

BehaviorStageCos

Centers

Affluent

Suburban

Spreads

Comf

Country

Struggling

Urban Cores

Modest

Working

Towns

Plain Rural

LivingTotal

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Promotion

The Colgate Toothpaste promotions can be found throughout the marketing mix in a

variety of mediums. The advertisements and promotions are located in a targeted media

selection that appeals to the target consumer.

• Website: Colgate has a dynamic website with the title, “Colgate World of Care,”

that details products, oral care, company history, e-newsletter and special offers.

The website also has a social networking page called Colgate Smile to engage the

consumer to get involved with their oral health and the Colgate-Palmolive

Company. Colgate also has social media pages on Facebook, Twitter and

Myspace. [3]

• Coupons: Colgate Toothpastes has printable weekly coupons online in the special

offers section of the website. Colgate coupons can also be found as cutouts in the

weekend coupon sections of 500+ newspapers around the country.

• Television: Colgate and its advertising agency produce several television

advertisements a year using humor and pseudo scientific displays to appeal to

consumers.

• Magazines/Outdoor: Colgate’s marketing campaigns have been known to use

historical, sexual, cultural and social inferences in their advertisements.

• Donations: Colgate donates millions of dollars annually to the ADA’s “Give a

Kid A Smile.” Colgate is a direct partner with this ADA program. [3]

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Place

Colgate’s product distribution is immense. Almost all super markets, discount chains and

pharmacies such as Wal-Mart, Albertsons, Target, Walgreens and CVS carry Colgate

Toothpaste. Colgate toothpaste is physically located in the oral health isle of stores.

Colgate toothpaste can sometimes be found in more prominent locations when on sale or

launching new products into the market.

Trends

Health Trend: It is proven through scientific study that a healthy lifestyle which

includes exercise, eating and drinking with health in mind. As society grows more aware

of the benefits of a healthy lifestyle, marketers have created an abundance of products to

cater to this growing trend. These include tens of thousands of products such as gyms in

and outside the home, health drinks, foods high in fiber, low in fat and rich in vitamins. A

healthy lifestyle extends into oral health awareness also.

Dietary and Habits: Some foods have a strong residue such as garlic, onion,

cheeses, alcohol and coffee, which causes an adverse effect on oral freshness. Tobacco is

a popular stimulant in many cultures around the world and is an accompaniment before,

after and during meals, with coffee or alcohol. Tobacco is now illegal to use indoors in

most major cities throughout the U.S. Tobacco is damaging to proper physical/oral health

and is linked to causing cancer, bad breath and stained teeth.

Technology: Technology is changing daily life within the world markets from the

way people create and use a shopping list to the cars people purchase. Toothpaste has a

direct correlation with the toothbrush. Every year new toothbrush models come out

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claiming superior plaque removal using such selling points as super sonic technology to

blast away plaque build up or crisscrossing bristles to lift and brush plaque away. Also

under the heading of technology are cameras and Facebook. Today people carry cameras

at all times. Any event is now a potential photo shoot. The ease of access and

spontaneous nature of camera usage requires the consumer to be aware of their smile at

all times.

Social/Cultural: Humans are social beings and face-to-face interaction is

commonplace in business, relationships, school, family and with friends. Halitosis creates

a stressful social interaction making it difficult to be close to someone suffering from bad

breath. The media has made fresh breath the norm and anything contrary is unacceptable,

putting emphasis on toothpastes to sweeten breath even hours after brushing.

Traditions: Within our ever-changing world, consumers enjoy products and

services that they feel a connection to or have a history with. A person knows they can

trust a product they saw their parents use. There is something intimate and potentially

nostalgic about bathroom products. This helps Colgate to maintain its status as a mature,

trustworthy product and symbol of the Colgate-Palmolive Company.

Strengths, Weakness, Opportunity and Threat Analysis

Strengths: Colgate has a history of producing quality products and a stellar reputation

for oral health products. Colgate has strong channels of distribution not only on a national

scale but also globally. Thereby, Colgate is the number one selling toothpaste in the

world. [3] Colgate is accepted by the ADA as effectively helping to prevent and reduce

tooth decay. Within Colgate’s website is a social network that asks consumers to get

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involved with the brand called “Colgate Smile.” Colgate has 40 product facings in stores,

which is the most out of any toothpaste brand. Colgate has 93% product penetration. [8]

Weakness: Within the product life cycle most of Colgate products are either mature or

declining, creating the need for Colgate to keep introducing new products. Colgate’s

product line is broad with over 40 different products varying in tube size, quantity, flavor

and desired effect. [3] Toothpaste promotion is cutthroat. Products are frequently on sale,

which appeals to price buyers and potential brand switchers. This may also cost the

company profits due to regular users taking advantage of the discounted price.

Opportunities: Colgate commands 37% of the toothpaste market share opening the door

to brand growth through marketing, acquisitions and mergers. [8] Colgate’s brand image is

an ever-revolving door opening the opportunity for rebranding and new

promotion/marketing tactics to be explored.

Threats: Aquafresh’s products use innovative technology in packaging and development.

Within the last several years Colgate has lost its leadership position to Crest. While the

lost market share was regained, Colgate must remain aware of the competition. [3], [8] Both

Crest and Aquafresh products are cheaper per ounce than Colgate’s.

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Competition Situation Analysis

Aquafresh

Products

Aquafresh was established in 1973, and is currently owned by GlaxoSmithKline (stock

symbol (GSK). [6] Aquafresh is originally known for its tri-colored red, white and

turquoise stripes. The Aquafresh product line has expanded into some unique features not

offered by other toothpaste brands. The Aquafresh Extreme line uses micro-active foam

to clean and smooth teeth over time, creating a deeper clean feeling among consumers. [2]

The Aquafresh ISO-Active products start as gel from a unique pressurized canister that

turns into an “active foam” similar to shaving cream but retrofitted for toothpaste. [2]

Advanced White products are advertised to safely penetrate the tooth enamel to create

greater whitening rather than potentially harmful and abrasive techniques to polish teeth.

Also, Aquafresh advertises unique flavored toothpastes such as citrus mint and icy mint

in Aquafresh Advanced as well as a children’s flavor bubblegum-mint. All of these

features make Aquafresh a modern and competitive toothpaste brand.

Products[2]

Aquafresh ISO-Active Aquafresh ISO-Active Whitening Fresh Impact, Aquafresh ISO-Active Whitening Deep Impact Aquafresh ISO-Active Whitening Lasting Impact

Aquafresh Advanced Aquafresh Advanced Protection Aquafresh Extreme Clean

Aquafresh Extreme Aquafresh Extreme Clean Whitening Action Aquafresh Extreme Clean Freshening Action Aquafresh Extreme Clean Polishing Action‘s

Whitening Aquafresh White and Shine Original Aquafresh Ultimate White

Aquafresh Original Aquafresh Cavity Protection

Aquafresh Extra Fresh Aquafresh Tartar Control Whitening

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Aquafresh Maximum Strength Kids Aquafresh Bubble Mint Paste

Market

Aquafresh, owned by global giant GlaxoSmithKline PLC (Stock symbol: GSK), [2] had

total annual sales for 2010 equate to $28,368 million. Aquafresh’s market share of 8.13%

translates to $918,937,367 or 3.23% of the GSK net sales. [8] Aquafresh’s market

penetration is approximately 18.11%.[8]

Target

The target market consumer for Aquafresh toothpaste is men and women age 18-35. The

target is collage educated and earns an income of $50,000-$75,000 in office occupations.

They are married and market profiles are most similar to younger bustling families. The

Younger Bustling Families behavior stage is predominantly White and Hispanic. 60% are

non-Hispanic Whites with 2.7 children, aged 6-17. [7], [8] At this behavior stage children

develop their own tastes and needs, and begin to rebel against their parents. They are

seeking to define their boundaries and this will manifest itself in what they eat, fashions,

music, movies and television programs. This busy family lives in a house they own in

neighborhoods classified as Cosmopolitan Centers. [7], [8]

These Cosmopolitan Centers are typically found in the most densely populated

urban cores of our major metropolitan centers. The target consumer resides in a mix of

multi and single unit housing, ranging from high rise apartment buildings to smart

townhouses and other single family housing. They are socially and politically liberal.

Within these neighborhood classifications interests include the arts, environment, and

human rights. They believe in taking care of themselves as well, and are receptive to a

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health and diet issues. Television can be a poor choice for reaching this group, which has

fairly low levels of viewing. Magazines, newspapers, and the internet are more likely to

guide their choices. Cosmopolitan centers residents are above average readers as

measured by Spectra. [7], [8]

Price

Aquafresh had only nine product facings, none of which were eye level with the

consumer. The subtotal of the product per ounce is $0.75 ranking in the middle between

Crest (low) and Colgate (high).

Place/Promotion

Aquafresh can be found in the oral health isle at the following stores; Target, Walgreens,

Walmart, Costco, CVS Pharmacy and Wegmans. Aquafresh can also be found online at

these websites: Costco,com Drugstore.com and Amazon.com. [2] Aquafresh has a

comprehensive promotions campaign using outdoor, print and television created by

MediaCom. The online design of the Aquafresh website is modern and easily navigable.

Strengths and Weakness Analysis

Strengths: Aquafresh uses innovative oral health technologies to appeal to a younger

audience. The packaging of Aquafresh Extreme Clean is a shimmering, glittery box that

appears hip and current. This along with low product facings is a marketing ploy to

appeal to children whose eye level is lower than adults. Aquafresh is priced in the middle

of the toothpaste market in order to appeal to consumers.

Weakness: Aquafresh is a strong brand owned by the world's third largest pharmaceutical

company. While the Aquafresh original is instantly recognizable by its distinct red, white

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and blue ribbon, other newer products are not as known. Aquafresh shelf facings are

weak. Aquafresh products are usually displayed on the shelf below the consumers’

waistline. Compared with Crest and Colgate, Aquafresh has fewer facings in stores.

Aquafresh appeals to a younger demographic leaving out older, higher spending

consumers.

Crest Toothpaste

Products[5]

Crest Nature’s Expressions Gel Toothpaste — Pure Peppermint Fresh Crest Baking Soda & Peroxide Whitening with Tartar Protection Striped Toothpaste — Fresh Mint Crest Kid’s Barbie Burstin’ Bubblegum Gel Toothpaste Crest Kid’s Cavity Protection Gel Toothpaste — Sparkle Fun Crest Kid’s Spider-Man Liquid Gel Toothpaste — Super Action Mint Crest Kid’s Sesame Street Cavity Protection Toothpaste — Bubble Fun Crest Plus Scope & Extra Whitening Toothpaste - Mint Splash Crest Plus Scope Liquid Gel Toothpaste — Minty Fresh Crest Plus Scope Liquid Gel Toothpaste — Peppermint Crest Sensitivity Clinical Sensitivity Relief Whitening Plus Scope Toothpaste Crest Sensitivity Clinical Sensitivity Relief Extra Whitening Toothpaste Crest Tartar Protection Gel Toothpaste — Fresh Mint Crest Tartar Protection Toothpaste — Regular Crest Tartar Protection Whitening Toothpaste — Cool Mint Crest Tartar Control Whitening Plus Scope Liquid Gel Toothpaste — Minty Fresh Crest Cavity Protection Gel Toothpaste — Cool Mint Crest Cavity Protection Toothpaste — Regular Crest Extra Whitening with Tartar Protection Gel Toothpaste — Clean Mint Crest Extra White Plus Scope Outlast Toothpaste — Long Lasting Mint Crest Multicare Whitening Gel Toothpaste — Fresh Mint Crest Pro-Health Enamel Shield Toothpaste — Fresh Clean Mint Crest Pro-Health Night Toothpaste — Clean Night Mint Crest Pro-Health Clinical Gum Protection Toothpaste — Clean Mint Crest Pro-Health Toothpaste — Clean Cinnamon Crest Pro-Health Gel Toothpaste — Clean Mint Crest Pro-Health Whitening Gel Toothpaste — Fresh Clean Mint Crest Sensitivity Clinical Sensitivity Relief Whitening Plus Scope Toothpaste Crest Sensitivity Clinical Sensitivity Relief Extra Whitening Toothpaste Crest Vivid White Striped Toothpaste — Invigorating Mint Crest Vivid White Striped Toothpaste — Refreshing Mint Crest Vivid White Night Striped Toothpaste — Moonlight Mint Crest Vivid White Night Striped Toothpaste — Revitalizing Mint Crest Whitening Plus Scope Striped Toothpaste — Minty Fresh Striped Crest Whitening Plus Scope Striped Toothpaste — Cool Peppermint Crest Whitening Plus Scope Striped Toothpaste — Citrus Splash Crest Wild Expressions Liquid Gel Toothpaste — Burstin’ Bubblegum Crest Wild Expressions Liquid Gel Toothpaste — Cinnsational Swirl Crest Whitening Expressions Striped Toothpaste — Refreshing Vanilla Mint Crest Whitening Expressions Striped Toothpaste — Extreme Herbal Mint Crest Whitening Expressions Gel Toothpaste — Cinnamon Rush Crest Whitening Expressions Gel Toothpaste — Wintergreen Ice Crest Whitening Expressions Liquid Gel Toothpaste — Refreshing Vanilla Mint Crest Whitening Expressions Liquid Gel Toothpaste — Cinnamon Rush Crest Whitening Expressions Liquid Gel Toothpaste — Extreme Herbal Mint

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25

Crest appeared on the market in 1950 with a revolutionary cavity preventative

product created by Proctor and Gamble. [5] The classic Crest product line consists of a

classic mint flavor in both gel and paste form. This toothpaste addresses the issue of fresh

breath and cavity prevention in weak areas. Beyond the classic line, Crest has expanded

to 40 plus individual toothpastes. This allows Crest to appeal to a broader market than

most other toothpastes. Crest created many innovations over the past 60 years, including

a vast amount of creative flavorings in both gel and paste form such as: Cinnamon Rush,

Refreshing Vanilla Mint, Burstin’ Bubblegum, Scope Minty Fresh, Herbal mint and

Citrus Splash. Crest also has the widest variety of children’s toothpaste. These kid’s

toothpastes come in gel form and feature famous children’s characters. For instance,

Barbie toothpaste come in Burstin’ Bubblegum flavor and Crest Kid’s Spider-Man

Liquid with Super Action Mint flavor.

In 2004, Crest introduced a higher quality, dentist-inspired toothpaste product line

called Crest Pro-Health. Crest Pro-Health is the only toothpaste accepted by the

American Dental Association for six different areas: cavities, gingivitis, plaque,

whitening, sensitivity, and bad breath.

Target

The Crest target consumers are white men and women aged 35-54. These capable men

and women are college graduates earning $50,000-100,000+. These individuals are

married with children aged 6-17 years old. [7], [8]

The Crest lifestyle and behavior is that of older bustling families, established

couples and empty nesters that all live in their own homes in cosmopolitan centers. These

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26

urbanites are involved in their community’s civic happenings and also politically. [7], [8]

These dual income families are well off and tend to splurge on personal items, but are

also mindful of the financial burden of their children’s future college price tag.

Market

Proctor & Gamble (stock symbol PG) has been producing household goods, health and

well being, as well as, beauty and grooming products for over 179 years. P&G is the

parent company of such brands as Tide, Bounty, Febreze, Gillette and Crest. P&G’s

estimated enterprise value is $20,935 million. Specifically, the market share for Crest in

2010 is 32%, which is equal to $1,029,757,700 in Net Sales. That is 8.95% of the P&G

health care segment and only half of a percent of its overall net sales. [1]

Price

Crest has 37 product facings at consumer eye level and preferred shelving areas. Crest is

the category leader in product volume offered with 37 facings per store. Crest toothpaste

is also the least expensive of the three major brands at $0.69 per ounce.

Promotion

Coupons are the largest form of promotion offered by the home product giant P&G.

Coupons can be found online via the Crest and Oral-B e-newsletter. Sent out monthly, the

e-mail newsletter includes updates, latest advances, new products and exclusive offers at

P&G. Crest also sends out the P&G BrandSaver found in over 500 local Sunday

newspapers nationally. [5] This coupon booklet provides discounts on P&G products that

are redeemable at purchase. [5]

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27

Place

Crest toothpaste products can be found in the oral health isle of the following stores:

Target, Walmart, Kmart, Dominicks, Sam’s Club, Walgreens, Meijer, Jewel Osco and

CVS. Crest toothpaste can also be found at Amazon.com, Drugstore.com CVS.com

Walgreens.com and Soap.com. [5]

Strength and Weakness Analysis

Strengths: Crest, owned by Proctor and Gamble (stock PG), is a huge company.

It is thirteen times the size of Colgate-Palmolive. P&G has more available capital and

over all presence throughout the market place. Crest spent $1.3 billion over the last 5

years on advertising. Based upon market research, Crest out ranks other brands in taste

preference. Crest has the most product facings in a given store and cheapest overall price

per ounce.

Weakness: Proctor and Gamble is a huge company where Crest makes up a very

small percentage of the total sales of the company. Therefore, it would seem that Crest

products are given a large marketing budget but lack the proper care and attention needed

to foster consumers and market share. Crest goes against the current and past trend by

offering more gel than most other toothpaste companies. Crest spends an incredible

amount on advertising but their market penetration is only equal to 62% of the market

place. [8]

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Colgate Mission[3]

Based upon Colgate and its competitor’s situation analysis, a comprehensive strategic

plan has been compiled with goals, rational, insights and initiative. These elements are in

accordance with the three fundamental values stated in the Colgate Mission statement.

The three fundamental values of Caring, Global Teamwork and Continuous Improvement

are the foundations for Colgate’s business strategy and are reflected in every aspect of

work life.

Caring: The company cares about people; Colgate employees, customers,

shareholders and business partners. Colgate is committed to perform with compassion,

integrity, honesty and high ethics in all situations and to listen with respect to others and

to value differences. The company is also dedicated to protect the global environment and

to enhance the communities where Colgate users live and work. It is also committed to

be compliant with government laws and regulations.

Global Teamwork: Colgate is part of a global team that is committed to working

together across countries and throughout the world. By sharing ideas, technologies and

talents, the company can achieve and sustain profitable growth.

Continuous Improvement: Colgate is committed to improving every day in all it

does, as individuals and as teams. By better understanding consumers' expectations and

continuously working to innovate and improve products, services and processes, Colgate

will "become the best."

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Market Research Results

Survey findings from multiple toothpaste questionnaires shed light upon consumer minds

and behaviors. The research has determined toothpaste traits the consumer finds

important when making purchase decisions.

Buy Process Percentages:

The survey analyzed the rank of important characteristics when buying toothpaste. This

chart breaks down the importance of each quality in to percentages. The toothpaste

composite of criteria is: flavor 20%, price 20%, availability 19%, past usage 15%,

packaging 14% and tube size 11%. The research specifically highlights the almost equal

importance of price, flavor, and quality of toothpaste. These three elements make up

60% of the decision making process.

19%

20%

14% 15%

20.00%

11% Availabilty

Flavor

Packing (tube, box color)

Past Usage

Price

Tube Size

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Preferred Toothpaste Qualities:

The survey also revealed what attracts individuals to specific brands: Colgate, Crest and

Aquafresh toothpaste. The data agreed that consumers use toothpaste products based

upon flavor, price and availability. This data confirmed that consumers preferred the

flavor of Crest toothpaste over the other brands. The survey also showed that the

packaging of Colgate toothpaste the weakest element discussed in the survey.

!

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Toothpaste Purchase Location:

85-69 Str. Agree

68-52 Agree

51-35 Indifferent

34-18 Disagree

17-1 Str. Disagree 0 N/A

The analysis of information illustrates where consumers buy their toothpaste. The

majority of consumers buy their toothpaste, according to rank, at the supermarket, retail

chain and pharmacies stores.

0

20

40

60

80

100

120

Box Membership

Stores

Retail Chain Internet Pharmacy Supermarket

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Product Quantity:

The data showed that most purchasers of toothpaste buy their products individually

showing less importance for cheaper bulk buys. 66% of consumers interviewed spent an

average $2-5 monthly for toothpaste products.

The chart above shows how consumers felt about using coupons when purchasing

toothpaste. 25% are indifferent 16% are strongly agree, agree, strongly disagree, and N/A

this data can be interpreted to mean that coupons are not the greatest form of incentive for

toothpaste consumers.

!

!

16%

16%

25%

8%

16%

16%

Strongly Agree

Agree

Indefferent

Disagree

Strongly Disagree

N/A

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33

Critical Issues/Key To Success

- Colgate toothpaste is the leader within the product category holding 36.2% of

the market or $1,114,137,768 in sales.

- Colgate has a vast product line of toothpaste and many are less than a decade

old. While others date back over thirty years and the original is over one

hundred years old. Therefore, it is imperative to keep Colgate’s brands fresh

but maintain a rich history of quality products.

- The highest selling trend within toothpaste is the toothpaste and not

toothpaste-gel.

- The target market for Colgate toothpaste is Black and Hispanic individuals

age 18-35, with several children aged 7 and younger.

- Colgate commits millions of dollars to community programs and the ADA’s

“Give A Kid A Smile” Program.

- Colgate has established ColgateSmile a social network, an interactive iphone

application, Facebook page, Twitter account and Myspace page.

- Colgate is committed to Reducing Environmental Impacts (REI) around the

world.

- Colgate has many creative advertisements in several forms of media such as

magazines, coupons books and television spots.

- Colgate is not the leader with regard to technological advancement within the

category.

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34

- Colgate’s products can be found in almost all major grocery stores and online

retailers.

Goals

Colgate toothpaste product goals and measurable accomplishments for 2011:

-Increase Colgate market share by 1.3% or $14,483,790 to reconfigure total sales

to $1,128,621,559

-Increase website traffic by 10% and Facebook friends by10%.

-Carry over current 2010 margin at 35% of Colgate sales and expenditure into

2011.

- Systematically phase-out 5% of the brands that are currently struggling

financially.

*1% of the market share is equal to $11,141,377 whereas, 5-7% would be increasing sales dollars to an unrealistic amount.

Strategy

Brand Reduction

To insure that the three goals are met and maintained, a series of strategies are to be

implemented. Keys to success can be determined based upon Colgate and its

competitions’ past and current market share, trends, strengths and weaknesses. Over the

past sixty years there has been a power struggle between Colgate, Aquafresh and Crest to

acquire market share. As a category leader it is imperative to follow and predict trends

within the United States toothpaste industry. Based on the MRI data, regular paste

outsells beyond all other types of toothpaste and has the highest percentage of users.

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Therefore, the strategy is to phase-out unproductive toothpastes in the baking soda/gel

varieties specifically Colgate Baking Soda & Peroxide Oxygen Whitening Frosty Mint

Striped Gel, Colgate 2in1 Oxygen Whitening and Cavity Protection Winterfresh Gel.

This will be accomplished by removing coupons and all promotional items in stores,

advertisements, online, printed publications and television. The product packaging will

be advertising other Colgate products in an attempt to retain brand loyal users. By

October 2011, these varieties of Colgate will no longer be produced for the United States

market. In effect, this will generate more cash flow that can be diverted into the creation

of new brands and new marketing campaigns thereby decreasing stress upon margin

levels.

Fostering Positive Colgate Image

Colgate can position a positive image by presenting itself as a proactive, helpful product

that is good for teeth, but also for community and country as a whole. In order to gain

favorable PR and keep Colgate in the light of the media, this plan suggests a campaign

Baking Soda and Peroxide

'09

Tartar Control Trend '09

Trend Whitening '09

TrendGel '09 Trends Paste '09

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

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36

that will donate a 1% of specially marked packages to a charity of ones choice. Donations

will grow parallel to product sales by partnering with www.charitynavigator.org to create

a micro list of charities and their information. Purchasers will be able to choose and track

the donations via the Colgate website by answering several demographic questions and

entering a unique code.

Facebook will feature a separate page that will promote Colgate, describe the

donation campaign and charities offered by charitynavigator.org. Also, a downloadable

iphone application will be created to track contributions. This marketing tactic will foster

a positive image of Colgate, create an increase of sales in specific Colgate brands, harvest

demographic customer information, draw added consumers to the Colgate website and

more of a presence on Facebook.

Increase Brand Share

Colgate is one of the most recognized brands in the United States and the world. Colgate

is popular among the consumer target and beyond. It has an amazing 93% penetration

while only retaining 35% of the market. In terms of the product life cycle, Colgate

toothpaste is beyond the mature stage. Some brands have declined with regard to sales,

profits, customer interest and market share. Colgate’s brand image is nostalgic yet

antique in comparison to the cutting edge features of Aquafresh ISO-Active. Colgate’s

newest line, Colgate Luminous, simply does not compete with respect to the innovative

features offered by competitors. With few products in the pipeline, this plan suggests that

Colgate embrace its current brands and create a marketing campaign to reflect the

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37

national impact of Colgate. The advertising will be a globally inspired campaign similar

to the Pepsi Cola “forever young commercials” and “Microsoft Me” Ads.

The television spots will depict a montage of 20 images of individuals in pajamas

smiling into a bathroom mirror with toothpaste on their faces. Each image will appear for

1.2 seconds. Each image is to fade out as the next image fades in. The age, ethnicity, sex,

world location and toothpaste will change in each of the clips.

Each image setting is a different bathroom. The actors in the scenes have their

backs to the camera but will be looking into a mirror (that the camera can see) smiling

with toothpaste foam on their face. The sink countertop will feature different Colgate

toothpaste in each scene that is deliberately visible to the camera. After 24 seconds and

all 20 clips will have run their course and the last segment fades-in with all the

individuals turned facing the camera, clean faced and smiling. The Colgate slogan,

“Colgate A World of Care” then appears.

This idea will be retrofitted to print ads as well by using the same twenty images

with the smiling, foamy face and underneath the images will appear the Colgate slogan,

“Colgate A World of Care.” This marketing campaign has the ability to touch a vast

consumer base. There is universality to the idea. The concept relates and is identifiable

with people because “everyone brushes their teeth in the their pajamas.” Maslow’s

hierarchy of needs dictates that the identifiably social component of the commercial will

appeal to the subconscious of viewers creating the added value necessary to enhance the

image of Colgate and gain added market share. Choosing actors specifically by gender

and racial profile can appeal to start-up and young bustling families. This commercial

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38

will attract potential users and reaffirm current consumers. The investment in a

revitalizing campaign to improve the image of Colgate will inevitably increase market

share by 1.00% or $11,141,377 at a minimum.

Colgate Control Plan

To insure the goals of this plan and easy access of continuity, a set of controls are

to be established. This plan suggests renewing the company subscription to Spectra

Systems and to assess Colgate’s penetration within the United States consumer market.

This plan also suggests preferred card services from all retails environments to be

reported to the marketing department in order to further appraise Colgate’s penetration.

The accounting department is to report quarterly total (excluding new brands)

Colgate toothpaste earnings to the marketing department in order to determine company

statistics compared to years past. The accounting department is also to report all

toothpaste coupon usage by retail chain and region. Tech support and website analytics

departments are to report monthly Colgate toothpastes webpage visit counter. Also a

count of the number of member’s from: Colgate Smile, Facebook, Twitter and Myspace.

Thank you in advance to all the members within these departments for your help and

cooperation.

Budgeting Information- 17.63% of sales = $198,981,900 to be dispersed to spent

Production of new commercial campaign $2,000,000

Television $43,000,000 Placement Out Of Home: $23,000,000 Magazine: $23,000,000

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39

Placement Internet: $29,000,000 Ad placement Google words Donation campaign: $18,981,900 Colgate Choice Donation ADA “Give A Kid A Smile” In Store Promotion: $60,000,000 Product Slotting Colgate Signage Total: 198,981,900

Projections

2010 2011 2012 2013 2014 2015

% change 3.50% 1.30% -0.90% 3.30% 2.20% 1.75%

Market Share 36.20% 37.50% 36.40% 39.10% 41.30% 43.50%

% change value $37,676,156 $14,483,790 ($10,157,594) $36,909,310 $25,418,212 $20,663,851

Margin 18% 18% 18% 18% 18% 18%

Total Market Value $1,114,137,768 $1,128,621,559 $1,118,463,965 $1,155,373,275 $1,180,791,487 $1,201,455,338

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40

Work Cited

1. 2011, By. "Americans to Spend $106 Billion on Dental Care." TopNews United

States. Web. 08 Dec. 2010. <http://topnews.us/content/211645-americans-spend-106-

billion-dental-care>.

2. "Aquafresh Products." Aquafresh: A Lifetime of Protection. GlaxoSmithKline.

Web. Oct.-Nov. 2010. <http://www.aquafresh.com/Products_Main.aspx>.

3. Colgate A World Of Care. Colgate-Palmolive Co. Web. Fall 2010.

<http://www.colgate.com/app/Colgate/US/HomePage.cvsp>.Colgate Quarterly

reports

5. "Crest Toothpastes." Crest Healthy, Beautiful Smiles for Life. Proctor & Gamble.

Web. Oct.-Nov. 2010. <http://www.crest.com/crest-products/crest-toothpastes.aspx>.

6. Mehdi, Syed Nazare. "Colgate-Palmolive (NYSE: CL)." WikiInvest. 2009-2010.

Web. Nov.-Dec. 2010. <http://www.wikinvest.com/stock/Colgate-

Palmolive_Company_(CL)>.

7. Http://www.mriplus.com. Rep. MRI, Fall 2009. Web. Fall 2010.

<http://www.mriplus.com>.

8. Spectra Systems. 2009. Web. Oct.-Nov. 2010. <https://www.spectrainfinet.com>.

"PG Income Statement | Procter & Gamble Company (The) Stock - Yahoo! Finance."

9. Yahoo! Finance - Business Finance, Stock Market, Quotes, News.

Http://www.yahoo.com. Web. Oct.-Nov. 2010. <http://finance.yahoo.com/q/is?s=PG

Income Statement&annual>.