COTTLE-TAYLOR:

EXPANDING THE ORAL CARE

GROUP IN INDIA
BYJASHON YAMNAM
KANU PRIYA SINGH
KRITIKA JINDAL
KUNAL SURVE
MANAN SETH
MANAS RANJAN TRIPATHY

COTTLE-TAYLOR: AN INTRODUCTION
1815 to
2009
Home Care
Personal Care
Oral Care
Products
Products
Products
Operations in 200 Countries over 4
Geographical
Divisions
Revenue: $11.5
billion ($5.7 billion from
Emerging Markets)

Hand Soap
Operating out of
Philadelphia

Company had an international workforce

Invested heavily in foreign Communities
Manufacturing Units in 75 Countries
HQ relies on Local Managers for Strategic Advice and
Research
Secure early Market Share in Emerging Markets

COTTLE-TAYLOR IN INDIA
CALLED COTTLE INDIA
FOCUS ONLY ON ORAL CARE
WIDE DISTRIBUTION NETWORK WITH 4,50,000 RETAIL OUTLETS
OUTLETS INCLUDED SMALL SHOPS, ROAD SIDE VENDORS, MEDIUM & LARGE
STORES AND EVEN SUPERMARKETS
% Market Share
MARKET SHARE (2009)- 38%
46% MARKET SHARE OF TOOTHBRUSH SOLD IN INDIA

22

21
11

HINDA-DALTAN AND SARINDIA MAIN COMPETITORS

46

Hinda-Daltan
Others

SarIndia Cottle

INDIAN CONDITIONS
MORE THAN 75% OF INDIANS LIVE ON $2 A DAY
INDIAN MARKET INCLUDED URBAN, SEMI-URBAN AND RURAL
AREAS
LARGE PORTION OF POPULATION STILL RELIES ON TRADITIONAL
PRODUCTS LIKE NEEM TWIGS, BLACK SALT, TOBACCO, CHARCOAL
AND ASH
50% OF INDIANS NOT CONCERNED WITH PREVENTING OR CURING
DENTAL PROBLEMS(2007 STUDY)
RURAL POPULATION 5 TIMES MORE LIKELY TO REFRAIN FROM
USING DENTAL CARE PRODUCTS OVER URBAN COUNTERPARTS
ONE DENTISTRY PERSONNEL FOR EVERY 10000 PEOPLE
MAJORITY OF POPULATION DO NOT VISIT DENTIST
NO DENTAL INSURANCE IN INDIA

BRUSHING FREQUENCY AND REPLACEMENT

Brushing Incidence
In India

Replacement Incidence

7
23

8.6

22

91.4

39

1 Time/Week 2 Times/Week 3 Times/Week 1 Time/Day

2 Times/Day

Replaced in 3 Months

STRATEGY IN INDIA
PARTNERS INDIAN DENTAL ASSOCIATION FOR PROMOTION OF ORAL HYGIENE
LOWERED PRICE FOR BASIC TOOTHPASTE AND TOOTHPOWDER (MARGIN
REDUCED FROM 31% TO 25%)
AS MARGIN ON TOOTHPASTE AND TOOTH POWDER WENT DOWN, FOCUS
SHIFTED TO LOW AND MID RANGE TOOTHBRUSHES (INCREASE PRICES BY
20% DUE TO INFLATION )
PLANS TO SLOWLY INTRODUCE HIGH END TOOTHBRUSHES AND ANCILLARY
PRODUCTS LIKE MOUTHWASH AND DENTAL FLOSS
USE OF DENTISTS TO PUSH SALES

MARKETING TILL 2009

9% OF TOOTHBRUSH SALES SPENT ON TOOTHBRUSH
ADVERTISING
3% ON PROMOTION AND MERCHANDISING
10% ON OFF INVOICE ALLOWANCES FOR TRADE DEALS
ADS TARGET MEN AND WOMEN AGED 20-35
HQ RELIED ON COUNTRY
AdMANAGERS
Expenses TO ADD LOCAL FLAVOR TO
GLOBAL ADS

TV

Newspapers

Billboards

Radio

CURRENT SCENARIO
DECLINING US REVENUES
SENIOR MANAGEMENT LOOKED TO EMERGING MARKETS TO OFFSET
DOMESTIC LOSES
MICHAEL LANG, VP OF MARKETING FOR GREATER ASIA AND AFRICA, IS
UNDER PRESSURE TO DELIVER RESULTS
HE NEEDS HIGHER UNIT SALES AND REVENUE CONTRIBUTION FROM INDIA
BRINDA PATEL, DIRECTOR OF ORAL CARE MARKETING FOR INDIA,
PRESENTS SALES FORECAST SUPPORTING 20% INCREASE IN TOOTHBRUSH
SALES
LANG FINDS FORECAST CONSERVATIVE
LANG WAS PREVIOUSLY ABLE TO ACCELERATE GROWTH IN THAILAND AND
EXPECTS SAME PLAN TO WORK IN INDIA
PATEL GIVEN 2 DAYS TO PRODUCE REVISED MARKETING PLAN TO ACHIEVE
GOAL OF 30% SALES GROWTH

PROBLEMS TO BE SOLVED
DETERMINE WHOSE PLAN (PATEL OR LANG) WOULD CREATE A HIGHER
REVENUE
INCREASE UNIT SALES BY 30%
DEVELOP A MARKETING PLAN BY WEIGHING 3 KEY FACTORS:

PERSUADING CONSUMERS TO BRUSH FOR FIRST TIME

INCREASE INCIDENCE OF BRUSHING
PERSUADE CONSUMERS TO UPGRADE TO MID RANGE OR PREMIUM
PRODUCTS

PATELS STRATEGY
PATEL WANTED TO RETAIN EXPENDITURE AT 9% OF SALES
THOUGHT THAT COMPANY WOULD NOT LIKE TO SPEND TOO MUCH MONEY AT
THE TIME OF RECESSION
WANTS TO CREATE NEW CONSUMERS
WANTS TO INCREASE BRUSH USAGE
PATEL WANTED TO FOCUS MAINLY ON :

PERSUADING CONSUMERS TO BRUSH FOR FIRST TIME

INCREASE INCIDENCE OF BRUSHING

EFFECTS OF PATELS STRATEGY

INCREASE IN NO OF RURAL BRUSHERS
CREATE A LARGER CUSTOMER BASE FOR FUTURE
DRIVE SALES OF LOW END BRUSHES
KEEP EXPENSE MINIMUM FOR COMPANY
SALE OF MID- RANGE AND PREMIUM TOOTHBRUSH UNAFFECTED
20% INCREASE IN SALES RESPITE INCREASE IN TOOTHBRUSH PRICES

LANGS STRATEGY
LANG PROPOSED INCREASE IN AD EXPENSE TO 12%
BASED ON STRATEGY USED IN THAILAND
STRATEGY MORE FOCUSED ON :
PERSUADING CONSUMERS TO UPGRADE TO MID RANGE OR PREMIUM
PRODUCTS

EFFECT OF LANGS STRATEGY

INCREASE IN EXPENSES FOR COMPANY (AD 12%)
NEW CUSTOMERS CREATED IS COMPARATIVELY LOWER
HIGH INCREASE IN SWITCHING FROM LOW END TO MID RANGE
AND PREMIUM PRODUCTS
MORE SALE OF MID RANGE AND PREMIUM PRODUCTS

SALES PROJECTION
2009
In
millions

2010 E
Patel
In
millions

Complete

230.6

276.7

267.5

Sensitooth

29.9

35.9

34.7

Fresh Gum

15

18

17.4

Surround

9.7

10.4

Kidsie

15

16.2

Total

299.5

Zagger

Toothbrush Products

Low End
Manual

Mid Range
Manual
Battery
Operated
Brushes

2010 E
Lang
In millions

$
Price/Un
it (After
20%
Increas
e)

Revenue
In millions ($)
Patel

Lang

0.18

49.81

48.15

0.216

7.75

7.5

0.216

3.89

3.76

0.228

2.21

2.37

17.4

0.144

2.33

2.51

356.5

347.4

65.99

64.29

34.4

43

75.7

0.348

14.96

26.34

Directionflex

8.6

10.8

18.9

0.636

6.87

12.02

Total

43

53.8

94.6

+
120
%

21.83

38.36

Swirl Brush

1.5

1.7

1.88

7.68

13.06

14.44

Refills

0.2

0.2

0.3

0.672

0.13

0.2

Total

1.7

1.9

2.18

+
25
%

13.19

14.64

+
16
%

INCOME STATEMENT
Weightag
e%

Patel

Lang

Toothbrush Gross Revenues

100%

101.01

117.29

Less(-): Trade Discounts

10%

10.10

11.73

= Net Revenue

90%

90.9

105.56

Less(-): Variable Manufacturing, Selling

and Distribution Costs

46%

46.46

53.95

= Gross Margin

44%

44.44

51.61

Less(-): Advertising

9%(P)/12%
(L)

9.09

14.07

Less(-): Consumer Promotions and

Merchandising

3%

3.03

3.52

Less(-): Selling, General and

Administrative Costs

14%

14.14

16.42

= Profits from Operations

18.18

17.6

Comparison between the two approaches

117.29
120

101.01

100
80
60
40

18.18

17.6

20
0

Patel

Lang

Revenue Profit

SUGGESTIONS
Urban Areas

Semi Urban Areas

55

30

15
25

40
55

Message 1
Message 3

Rural Area

Message 2

70

STRATEGY IMPLEMENTATION
Urban Areas (Metros
and Large Cities)

Semi-Urban (Small
Cities, City Outskirts)

Rural Areas (Villages)

Organise Dental Camps

in Schools for Kids
Give Discount Coupons
to School Kids
Use Celebrities for
Premium Products
Kiosk Marketing of Mid
Range and Premium
Products outside Malls

Organise Dental Camps

in Schools for Kids and
Parents
Give away free
merchandise to kids
Kiosk Marketing for Low
End and Mid Range
Products
Use Local Celebrities for
Marketing

Use On the Go
Marketing in Rrural
Areas
Organise Dental Camps
Give away free
Merchandise
Distribute pamphlet for
advertise (pictographic)

CONCLUSIONS
LANGS STRATEGY PROJECTS A REVENUE OF $117.29 MILLION COMPARED TO
$101.01 MILLION FOR PATELS STRATEGY
BUT GROSS PROFIT FOR PATELS STRATEGY ($18.18 MILLION) IS MORE THAN
LANGS STRATEGY ($17.6 MILLION)
PATELS STRATEGY GENERATES MORE USERS HENCE CREATING A LARGER
CUSTOMER BASE FOR FUTURE
PATELS STRATEGY SHOULD BE FOLLOWED FOR 2010 AND LANGS STRATEGY MAY
BE IMPLEMENTED ONCE FIRST TIME USERS ARE INCREASED
THERE SHOULD BE DIFFERENT WEIGHTAGE GIVEN TO THE 3 KEY MESSAGES FOR
RURAL, URBAN AND SEMI-URBAN AREAS