Colgate-Palmolive Company

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Marketing Strategy 1. Problem and Issue Statement 1.1. Increased competition from rivals and private labels

MKW 3440

Colgate-Palmolive company, simply known as, Colgate, is one of the world's largest consumer products companies by market share, with commercial presence in more than five continents (Euromonitor International, 2011). In the past decade, particularly in the personal care and home care segments, Colgate has faced vigorous competition across the globe (Euromonitor International, 2011). Rivals include, large multinational corporations, local corporations as well as private label brands or store brands, of large retailers such as, WalMart, Target, and other supermarket chains (Euromonitor International, 2011). Although, Colgate's exposure to private labels is limited, the company’s primary objective remains to increase its organic growth through penetrating emerging markets (Euromonitor International, 2011). In order for the company to accomplish this goal, it is advised that Colgate watches out, for the private label trend (Euromonitor International, 2011). According to Euromonitor International (2011), private label brands from large retailers are now considered to be highly sophisticated and an attractive alternative to customers, particularly in emerging markets, as these products often sell at lower price points and the retailers have the point of sale data on consumer behaviour, and are therefore in a better position to understand the consumer’s behaviour. This trend, may become problematic for Colgate in the near future, as private label brands are expected to increase and be high on retailers agendas, directly affecting the company in several aspects of business, including, the pricing of its products, promotional activities, new product introductions, profitability and market share (Euromonitor International, 2011). the growing competitiveness of some local players in China and fiercer competition in overall oral care, personal care and home care segments led to a significant decline in Colgate’s market share (Euromonitor International, 2005). For Colgate to remain competitive, it is important that it strengthens its brands, invest in ground-breaking innovative product launches, as well as defend its trademark, patents, and trade dress rights, against legal challenges that may be brought by competitors (Euromonitor International, 2011).

1.2. Not capitalising in China like the market leaders in the industry Although, Colgate-Palmolive operates a diversified business operation and its largest revenuegenerating regions in the world are in the emerging economies, however, the company is less dominant in China with regard to their personal care and oral care segments (Euromonitor International, 2011). Compared to other emerging markets such as Brazil, Russia, and India, China presents a strong growth opportunity for Colgate-Palmolive, as consumers increasingly perceive

Colgate-Palmolive Company

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Marketing Strategy

MKW 3440

oral care and personal care in terms of achieving greater attractiveness, over hygienic, deodorising and antiperspirant functions (Euromonitor International, 2011). This is problematic for Colgate as its campaign for oral care has always been positioned as health products (Euromonitor International, 2005). As a result, In 2011, Procter & Gamble ranked number one in oral care, with a 21% value share (Euromonitor International, 2011). Oral care in China, is predicted to continue its growth pace over the forecast period and it is therefore important for Colgate to amend their current positioning strategy to accompany the product’s cosmetic appeal (Euromonitor International, 2005). In addition, Colgate should conduct greater segmentation of the market, where products will be aimed at agespecific groups as well as products designed specifically for men or women, or even lifestyles habits such as smokers or coffee drinkers as this will increase the market reach,...
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