Case Study on Sensodyne

Topics: GlaxoSmithKline, Toothpaste, Good Pages: 6 (1968 words) Published: August 27, 2012

GlaxoSmithKline trying for its second foray in the oral care market through Sensodyne toothpaste: Challenges Ahead

In January 2011, GlaxoSmithKline Consumer Healthcare India (GSKCH) launched its global oral care brand Sensodyne in the Indian market. Sensodyne is a toothpaste for sensitive teeth and is a global leader in the premium toothpaste category across the world. The brand was previously owned by Block Drug Company INC and was acquired by GSK in 2001. This was the second foray of GSK in the oral care market after Aquafresh which was discontinued due to poor consumer response. GSK was excited about the launch and had planned to invest Rs. 25 crores for the launch phase of Sensodyne in India. The aim of the company was to acquire 5% share in the overall toothpaste market in the next three to five years.

Case Study

“The aim is to make it a Rs 100 to Rs 150 crore brand in the next three years. Sensodyne is likely to contribute 8 to 10 per cent of our growth in India. Therefore, we are adopting a 360-degree marketing and advertising plan for Sensodyne,”  -Shubhajit Sen, Executive VP-marketing, GSKCH(India)

GlaxoSmithKline: An Overview
GSK was formed in 2000 by the merger of GlaxoWellcome plc (formed from the acquisition of Wellcome plc by Glaxo plc), and SmithKline Beecham plc (from the merger of Beecham plc, and SmithKline Beckman Corporation). It is the world's third-largest pharmaceutical company measured by revenues (after Johnson & Johnson and Pfizer). GSK has a portfolio of products for major disease areas including asthma, cancer, virus control, infections, mental health, diabetes and digestive conditions. It also has a large consumer healthcare division which produces and markets oral healthcare and nutritional products and over-the-counter medicines including Boost, Horlicks and Gaviscon. The company had sales of around Rs. 1813 billion and made a profit of Rs. 623 billion in 2007. The consumer healthcare division of the company recorded a turnover of Rs. 2025 crores and a net profit of Rs. 232 crores in the year 2009. In the year 2010, the company improved its figures with a turnover of Rs. 2430 crores and a net profit of Rs. 299 crores (Annexure I and II).

FMCG Sector in India: An Overview
Fast Moving Consumer Goods (FMCG) sector in India is coming up as the most viable sector and has been showing phenomenal growth since the last decade. At present, Indian FMCG sector is worth Rs. 1300 billion and expected to be around a whooping value of Rs. 4000 to Rs. 6000 billion by 2020. FMCG are the products that are generally sold quickly and at a relatively low price. It refers to those low involvement retail goods that are replaced or fully used up over a short period of days, weeks, or months, and within one year. They have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. It includes products ranging from packaged foodstuffs, dairy products, beverages, toiletries, cosmetics, oral care products etc.

Oral Care Industry in India: An Overview
The oral care consumer goods market in India mainly comprises toothpastes, toothbrushes, toothpowder and mouthwashes. The industry accounts for about 16% of the personal care industry. The market is presently estimated at Rs. 4200 crores, of which toothpaste contributes the largest chunk, accounting for approximately 75% of the total market (Exhibit 1). The toothpaste market is estimated at Rs. 3100 crores and is expected to reach Rs. 3226 crores by 2012. The market in India has remained largely untapped as only 55% of the Indian population uses toothpaste and less than 15% users brush twice a day. In rural India, the penetration is much less at only about one third of that in urban areas. This gives marketers ample space to expand the market with new users in this region. Exhibit 1

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