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Cottle Taylor Expanding the oral group in India

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Contents

Case

2
3 4

Marketing Strategy

Recommendations

Financial projections

If you're trying to persuade people to do something , or buy something, it seems to me you should use their language, the language in which they think" David Ogilvy

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Background
Cottle-Taylor
Start up (1815)

4 main geographic divisions Product Lines


Oral care Home care Personal care

North America, Europe, Latin America, Greater Asia/Africa.

Background

HR Practices
International work force (Local talent hiring). Collaborative environment.

Operations
. World wide presence Manufacturing facilities in 75 countries.

Background
Subsidiary cottle India Focusing exclusively on oral care Product Categories
Toothpaste Toothpowder Toothbrushes

Push Strategy through dentists.

Target Market & Media Vehicles

Both rural and urban Men and women (Age 20-35) Media Television Ad 50% Print Ad 30% Billboards 15% Radio 5%

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Current scenario

Global recession (US sales decline) Targets


Get offset of sales from emerging markets Brinda Patel(Director Marketing India) projected 20% growth in sales. Michael Lang(VP Marketing for Asia/Africa) had pressure to increase it up to 25-30% from the region

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Current scenario

India
Worlds Largest Democracy. Rapid GDP Growth (146 times greater than 1990). 78% Rural and 22% Urban Population. 37% lived below the poverty line. 80% lived on less than $2/ day. 93 million lives in Slums.

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Current scenario

50% of Indians were not concerned with dental problems. Rural people are 5x more reluctant to use modern oral care than Urban counterparts 10% growth from 2009-2010

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FACTORS THAT CAN INCREASE DEMAND FOR CONSUMER GOODS: Income of the consumer price of the compliment goods customs taste and preferences price of the substitute goods Availability & packaging Brands

FACTOR THAT CAN INCREASE SALES : ADVERTISEMENT

TELEVISION ADS IN NEWSPAPER RADIO DENTAL DOCTORS Salesmen

25% 15% 15% 25% 20%

REASONS TO USE A PARTICULAR BRAND: Healthy tooth& gums Long lasting freshness Prevention of tooth decay Whiteness , Good foam Use of natural herbs, Dentist advice OTHER REASONS: Gift, discounts, extra quantity, price off

Roadblocks
* Money spent to educate the people will be high for battery Operated brushes , which is the first mover disadvantage. * Chinese product will easily capture the market with low cost structure. * Uses of Herbal and ayurvedic products. * Usage of toothbrush Brands * Purchase because of dentist advice * Low literacy rate in India * No regular purchase

65 percent Indians change their toothbrush only after visible signs of damage & 55 percent change only when the bristles start bending. 43 percent are compelled to change only when the toothbrush starts looking dirty and 32 percent change once the bristles start coming out. Consumer brushing pattern.

Three Key factors to be addressed

1. Persuading consumers to brush for the first time. 2. Increasing the incidence of brushing. 3. Persuading consumers to upgrade to mid range or premium products.

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Uneven distribution of factors Urban, semi urban:


Message 1 (10%) Message 2 (40%) Message 3 (50%)

Rural:
Message 1 (60%) Message 2 (35%) Message 3 (5%)

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Issues

To develop a revised data driven marketing plan Which of the three factors would better resonate with urban and rural areas How to design the effect of product mix for higher revenue Which projection would meet a higher revenue

Factors determine demand for Oral Care Products

(a) Amount of disposable income/income Economical in nature (b) Oral hygiene awareness. (c) Frequency of brushing the teeth Social in nature (d) Advertisements, Promotional expenditure (e) Accessibility to quality toothbrushes-Distribution. . (f) Competitors products (toothbrush in this case). (g)Advertisements, Promotional expenditure

Segmentation

Cottles current market segmentation is on the following factors: Area: Rural, Semi urban Urban Income Oral Hygiene Awareness. Other possible segmentation bases are : Education Age

Targeting
Develop a primary market in Rural areas for toothbrushes by promoting low end toothbrushes to people who do not brush Medium range toothbrushes to the people currently using low level brushes For primary market in urban area battery operated toothbrushes should be promoted.

For the low end manual brushes: We should target consumers from semi urban and rural India, as they are not concerned on spending a part of their disposable income on sophisticated products. For the mid-range manual brushes: We should target middle class consumers from urban areas, with medium price sensitivity. For the battery-operated brushes: We should target consumers from upper middle class or upper class, who are, to a large extent, aware of oral hygiene and who do not mind spending on sophisticated products(including battery-operated brushes) for oral care.

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Positioning

Patels current proposal of allocating promotion budget equally is on the following three activities:-

.
Persuading consumers to brush for the first time, Increasing the incidence of brushing and Persuading consumers to upgrade to mid-range or premium products. .

Problem with Patels projection


Allocating promotion budget equally on those three activities is a wise idea because:
More than 50% of Rural India do not use a toothbrush to clean their teeth. Among the brushers, only 23% of the sample surveyed brush 2 times/day. Only 8.6% of the toothbrush users replace the brush every three months (ideal replacement time).

Spending promotional dollars on battery operated brushes to a large extent is not a good idea because only0.5% of the sales of Cottle India come from battery-operated brushes

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Indian Household Disposable Income: 2005 & 2009

Disposable
Income per Day

2005
Households (Millions)

2009
Households (Millions)

Above US$500/year Above US$1,000/year Above US$5,000/year Above US$10,000/year Above US$25,000/year Above US$45,000/year Above US$75,000/year Above US$150,000/year TOTAL HOUSEHOLDS

$ $ $ $ $ $ $ $

1.37 2.74 13.70 27.40 68.49 123.29 205.48 410.96

202.5 186.7 33.6 7.3 2.1 1.0 0.5 0.2 434.0

46.7% 43.0% 7.8% 1.7% 0.5% 0.2% 0.1% 0.1%

219.0 208.7 64.2 15.2 3.3 1.6 0.8 0.4 513.1

42.7% 40.7% 12.5% 3.0% 0.6% 0.3% 0.2% 0.1%

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Cottle Toothbrush Sales by Product Category for India

Product
Low-End Manual

Average Price
$ 0.15

Cottle India
87%

Mid-Range Manual
Battery-Operated

$
$

0.34
5.60

12.50%
0.50%

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Primary Marketing Objectives of Cottle


Primary Marketing Objectives of Cottle should be: Securing early market share in emerging markets. To achieve a toothbrush unit growth rate of 25-30% in 2010 in India. To educate consumers from semi urban and rural areas about oral hygiene so as to increase the oral care sectors growth rate and in turn their own company's market share by being the pioneers in that field.

SWOT Analysis
Strength Weakness

1. Frequent and many innovations in a low involvement product like toothbrush 2. Introduction of new features regularly 3. Aggressive

Indian market not as responsive to innovations in toothbrushes as global market

Opportunity 1.More innovations to differentiate from the competitors 2.Increasing involvement in personal care products 3.Differentiated advertising methods to attract customers

Threat 1.Aggressive competition 2.Regular introduction of new products by competitors 3.Copied innovation by competitor

ATL Marketing Strategy Above the Line Marketing Strategy. Promotional activities carried out through mass media, such as television, radio, out-of-home, magazines, cinema and newspaper for above the line promotional activities.

Cottle ATL Startegy Advertise through bill-boards in the post locations of metros. Advertise aggressively on automatic tooth-brush. Link it to CSR activity to educate society on brushing twice and market the product.

New Market launch Regional Celebrity Marketing Celebrities create image in the mind of customer. Help brand building

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BTL Marketing Strategy


Below the Line Marketing Startegy. Non-media communication or advertising, and has become increasingly important in the communications mix of many companies. It is efficient and cost-effective for targeting a limited and specific group.

Cottle BTL Strategy Towns/Villages

Updating Anganwadi workers in villages about the oral hygiene and providing the free samples to people who come oral health problems. Free health check ups in towns schools and colleges and provide them with samples.

Cottle BTL Strategy City

Flavored tooth paste. Social Media Marketing Internet Marketing Kiosks set up at malls/shopping areas.

Recommendations Promoting the idea of oral care through1. Providing with free tooth brush to one member of a family. Possibly one who is a school going student (rural area) 2. Providing total package of oral care products with discounted rate to those schools who has hostel facilities. 3. Giving higher profit margin to the retail shop owner for every product sold.
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Recommendation

Recommendations

Mobile van with salesmen who will go to house to house to sell the products. Collaborate with the indigenous company those produce traditional oral care products.

Through the Line This strategic approach allows brands to engage with a customer at multiple points (for example, the customer will see the television commercial, hear the radio advert and be handed a flyer on the street corner). Enables an integrated communications approach where consistent messaging across multiple media create a customer perception.

Tooth Brush sales projection

Patels Product Projection Category 2009 Low end Mid range 86.54%

Thaila nd in 2009 70%

Unit Sales (m) 310.9

Langs Unit Projectio sales n projecte 2009 d 78.2% 347.4

13.0%

25%
5%

111.035
22.2

21.3%
0.5%

94.62
2.12

Battery 0.46% operated Revenue 100.9508

121.33

117.59

2010 Expected Sales


2009
Unit Sales (m) complete sensitooth surround kidsie Total zagget Mid range manual directionflex Total swirl brush Battery operated refills Total Low end manual fresh gum 230.6 29.9 15 9 15 299.5 34.4 8.6 43 1.5 0.2 1.7 344.2 $70.1 m % increase

2010 Expected Patel


Unit sales (m) 276.7 35.9 18 9.7 16.2 356.5 43 10.8 53.8 1.7 0.2 1.9 412.2 p/u (after Revenue % 20% $(m) increase increase) 0.18 49.08 16 16 16 16 16 120 120 25 25

2010 Expected LANG


Unit sales (m) 267.5 34.7 17.4 10.4 17.4 347.4 75.7 18.9 94.62 1.87 0.25 2.12 444.14 p/u (after Revenue 20% $(m) increase) 0.18 0.216 0.216 0.228 0.144 0.348 0.63 7.68 0.67 48.15 7.5 3.76 2.91 2.51 64.82 26.34 11.9 38.24 14.36 0.17 14.53 117.59

20 20 20 7 8 25 25 13 0

0.216 7.7544 0.216 3.888 0.228 2.2116 0.144 2.3328 65.9928 0.348 14.964 0.63 6.804 21.768 7.68 13.056 0.67 0.134 13.19 100.951

*Revenue (2009)

Income Statement
%
Gross Revenue Less: Trade Discounts NetRevenues Less: Variable Manufacturing, selling costs Gross Margin Less:
Advertising Consumer promotions Selling,admin costs Profit from www.themegallery.com Operations

2009
70.1
7.01 63.09

Patel 2010 (E)


100.9508
10.09508 90.85572

2010 expected LANG


117.59
11.759 105.831

100
10 90

46 44

32.246 30.844

46.4273 44.418352

54.0914 51.7396 Ad(12%)14.11 08 3.5277

9 3

6.309 2.103

9.085572 3.028524

14
18

9.814
12.618

14.13312
18.171444

16.4626
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