C570: Strategic Marketing Management
Cleopatra – Marketing Strategy Changes
What are the most important possibilities for improving the results for the Cleopatra product in Canada?
If Colgate-Palmolive wants Cleopatra to be successful in Canada, they need to make a few major changes to their strategy. As seen from the first assignment on segment attractiveness, the Canadian soap market has matured and the only way to grow is by drawing more market share from competitors. Although they targeted the correct segment by focusing on Skin Care, they made several mistakes by making assumptions and conducting incomplete research before product launch. Colgate-Palmolive should hit all of the 4Ps – Product, Price, Place and Promotion – to improve their chances of success.
First, Colgate Palmolive needs to increase market research into potential customers for Cleopatra in the precise target market (Quebec, not Toronto). This would create a better picture of the market and show where success potentials could be hiding in the form of missing qualities of existing products or price potential. It is obvious that the high price is a deterrent to many purchases. However, only 20 percent say that high price is a deterrent for Cleopatra. There are indications that certain qualities of the soap, such as degrading too quickly or becoming too lathery, having a strong perfume, etcetera, could be undesirable for the Canadian market while they are totally acceptable traits to the fashion conscious French market. In short, more sound information could help implement changes to the formula that would improve the rate of customer return by matching expectations for premium quality soap with the properties of Cleopatra.
Secondly, Colgate-Palmolive must cater to retailers. They tried to shift the balance of power from retailers to manufacturers by creating a unique product in Cleopatra for the Canadian market. This is the largest and most important possibility for Cleopatra to improve their results in Canada. Due to the maturity in the Canadian soap market, growth must be taken from competitors and the gatekeepers to that growth are retailers. Colgate-Palmolive attempted to circumvent the retailers with marketing to generate a customer demand that retailers would be forced to pay attention to. They failed in this endeavor partly because they were overambitious (100 percent distribution in first year), and because this was supposed to be driven by customer demand. They were unable to get their product on the shelves in many places. Twenty-nine percent of customers responded with “non-availability where they shopped” as being the prime reason to “why they hadn’t tried Cleopatra.”
Prior research among retailers about their willingness to stock Cleopatra based on customer demand alone and without any concessions from Colgate-Palmolive would have given the company a better picture of retailer strengths. Retailers punished Colgate-Palmolive for not giving them discounts by either ignoring them or sidelining them to the bottom shelves. This must be reversed in order for Cleopatra to achieve any success. It was too much to break into a competitive market with a new product that costs more than its competitors and work against the retailers. If Cleopatra becomes wildly successful, they may be able to eliminate or reduce the amount of discounts they are giving to retailers, but initially Cleopatra will have to pay to play, as part of product promotion.
If Colgate-Palmolive works with retailers, they have encouraging initial data to suggest it could be a successful product to compete in an attractive segment, skin care. The opportunities for revenue growth in this sector are greater due to the high margins and the protections from competitors who won’t want to decrease their margins as Cleopatra makes inroads. In the skin care segment, it is not a race to the bottom like the utility or the refreshment segment....
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