CASE STUDY: SENSODYNE OVERTAKES COLGATE IN SENSITIVE CATEGORY
The sensitive toothpaste segment accounts for less than 10% of the country's Rs 5,400-crore toothpaste market at Rs 470 crore, but is growing at 50% a year. Oral care giant Colgate Palmolive, which controls about 53% of the country's toothpaste market, has been selling its Sensitive brand in India since the last seven years. India had very low levels of awareness on the condition of tooth sensitivity. Over the past two years, Sensodyne has invested in creating awareness both through media and through dental detailing which has led to good category growth. GlaxoSmithKline's Sensodyne has overtaken Colgate Sensitive to become the top-selling sensitive toothpaste brand in modern retail outlets and pharmacies that account for most sales in this category. Hindustan Unilever, the second-largest toothpaste maker, recently expanded its Pepsodent Expert Protection range to tap the rising demand for premium products. "Over the last few years, the premium segment of the oral care category grow well ahead of the market," Colgate too has aggressively marketed premium products, and analysts say the market leader is not facing any big risk. "We don't see an immediate risk for Colgate as the category is not very big in Colgate's portfolio. And Colgate being market leader in oral care, if the segment interests the company, it will grow faster benefiting all the players involved
INDUSTRY ANALYSIS :
1. Competition in the sector:
It was mainly dominated by three market leader: Colgate Palmolive, Hindustan Unilever Limited and Dabur. They jointly hold a market share of 85% both by volume and value. Apart from there were a few Indian companies such as Anchor,Babool which captured a significant market share in this industry. In 2011, GSK Healthcare has come up with Sensodyne which is capturing a major market share in the healthcare industry. It plans to engage customers through experiential marketing through chill tests and plans to capture 5% of overall toothpaste industry’s market share 2. Threat from Substitute Products:
There is a high threat from substitute products.
Traditional products like twigs of the neam tree, salt, ash and other herbal items. Apart from that various Glycerine Mouthwash has also come up like Johnson and Johnson has come up with its glycerine Mouthwash which stops your teeth from remineralising by putting like a shiny coat on them. Apart from that Toothpowders like Vicco Dantmanjan also possess a threat to the industry capturing 23% of market share
3. Bargaining Power of Suppliers:
Most of the industries are integrated backwards and the manufacturing is outsourced. However there are many players in this industry such as GSK, Dabur, HUL etc. thus suppliers have to compete by offering quality and competitive products at low prices. Switching Costs is very low thus supplier bargaining power is less.
4. Bargaining Power of Buyers:
Bargaining Power of buyers is huge as they have a lot of products competing in the same category like Colgate, Sensodyne, Anchor. Apart from that there are substitutes also available. So they have more bargaining power to choose from a wide variety of products at convenient prices.
5. Threat of New Entrants:
Due to rising per capita income, premiumisation and the customers becoming more conscious about their health their spending pattern on oral healthcare industry is increasing and thus there is a scope for new entrants to come and set up their plants. Apart from that the industry is not very capital intensive which increases the threat of new competition
* COMPETITIVE ANALYSIS:
Until 2010 the oral care sector was primarily dominated by Colgate Palmolive, Hindustan Unilever Limited, Dabur but now new competitors like GSK Sensodyne have also entered the industry. 1. Colgate:
It has come with a number of dental therapies under the banner of Oral Care Pharmaceuticals...
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