Colgate_Max

MEMORANDUM RE: Colgate Max Fresh: Global Brand Roll-Out Summary: The Colgate Palmolive (CP) had a global lead in personal care and household products. The company’s largest business was the oral care products. The introduction of Colgate Max Fresh gave the company a leading share of toothpaste in U.S. of 34.8% as compared to its rival company Procter and Gamble (P&G) at 31.6%. The Colgate Company also had a global share of 39.7% while Procter and Gamble had only 14.7% in 2004. Nigel Burton, company’s president for global oral care division looked to introduce Colgate Fresh Max in China and Mexico. They wanted to continuous their dominance in those regions by taking advantage of the increased demand for cosmetic benefits i.e. freshening and whitening while the rival company, Procter and Gamble, had dominated in the therapeutic segment of anti-cavity formula. Burton had to analyze the project by making sure that that the launch would create enough profits while finding a right fit for the local consumer’s needs. He also had to find the overall added value to the company brand franchise and respond to the introduction of P&G’s Crest Whitening Expressions in China and Mexico. Problems/Opportunities The Colgate Palmolive had to overcome many problems in the course of adapting to their marketing strategy including the language barrier, flavor selection, pricing and message delivery. In China Colgate was already leading the market with a share of 32.1% including a joint project with Darlie and San Xiao, the local brands. Originally local people favored the therapeutic feature but there was a growing trend for the fresh breath aspect which was a plus for the launch of Colgate Fresh Max. The consumers preferred the lower- priced products as compared to the premium products that made a big market for the product. The biggest challenge was getting the consumer communication correctly. The concept of breath strips was new so it was replaced by, “Cooling Crystals” and the Chinese consumers did not catch the “Max Fresh” phrase so it was launched as, “Icy Fresh”. The Colgate company targeted the younger segment, in which there was a growing trend of fresh breath feature by using an “extreme living” concept. The problem was that they chose Jay Chow, a new edgy celebrity, who had high celebrity, “Talent fees”. Another problem was the packaging standards and even though it was tested that they preferred the clear tubes, this kind of packaging was ignored. There was a problem of flavors selection of the toothpaste too, which was corrected by choosing the flavors of Tea, Citrus, and Mint with a lighter shade. This color selection alone took four weeks and cost the company $7000. Colgate Max Fresh was launched by advertising on the internet, through a website, a public relations event, in store displays, trade support, consumer sampling, and advertising. In Mexico though Colgate had a big market share of 82% but they faced problems in launching the Fresh Max venture. The Mexican consumer strongly believed in the therapeutic aspect and the Fresh Max launch did a poor job of portraying this concept. The consumers were concerned about the lack of cavity protection because the product claimed freshness only. The advertisement did not include the important cavity -fighting aspect. The Mexican consumers were very price sensitive too and they wanted to get the therapeutic protection at a lower rate. Another problem was about the entry date in the market. They wanted to introduce it before the November 2004 launch of its rival company’s Crest Cool. Colgate Palmolive missed the deadline. And some managers claimed it did not make much difference because Colgate Palmolive had a much bigger share already, i.e. 82% versus 10%.for Procter& Gamble. The Colgate Company decided to change the flavors to Cool Mint, Clean Mint, and Cinnamint which satisfied the local taste. Also the company would advertise by showing a “Snow surfer” using Colgate Fresh Max to get a, “Joy ride for your mouth” They would campaign this image by using in-store merchandising, sampling and public relations. Options: IN China the Colgate Palmolive used a good strategy to overcome the communication, flavor selection, pricing and message delivery. Changing the advertising plan from American television star Emily Proctor to the Chinese rock star jay Chow might be a good idea and may increase the market share in long run but it was very expensive. The Colgate Palmolive Company could have chosen any other young celebrity, who did not cost that much but gave the similar message. The other problem was created when the Colgate Company failed to get the clear stand-up tube on the market. Studies had showed that the consumers liked the novel shape and modernity of the tube. The company had already spent extra $7,000 to fix the problem I suggest that this packaging should be adapted gradually because it depicts the product’s aesthetics and point -of –differentiation. This could be a key factor to boost the sales. The company was using different means to advertise the product, they should expand the market plan, to include dentists and get endorsement from them. The biggest problem with the launch of Colgate fresh Max in Mexico was with the marketing style. There was a big demand for therapeutic qualities while the product focused on freshness. In reality it does fight cavities, so the package needs to say the word, “Fights cavities”. The new packaging will incur more costs but the increase in sales will offset it. The other option could be using the same boxes for the mean time and put big colorful signs next to the items on the shelves that will say the word, “Fights cavities". This will satisfy the concerns of the local consumers and increase the market share in Mexico. Another option is about pricing the product. It was estimated that Colgate Fresh Max could increase sales volume by +25% if the price was decreased from 15.99 to 14.99. I suggest that even little lower penetration price of 14.75 will gain a competitive edge for the Colgate Palmolive company. Colgate Palmolive had put a lot of effort and money to implement the marketing plan in China and they will succeed well in it but in Mexico they did not adapt successfully to the consumers’ concerns. Burton and Colgate Palmolive’s rest of the management team has to make sure that if they want to succeed globally they consider and meet every aspect of the local needs and concerns.