How Market Segmentation Is Carried Out in the Toothpaste Market of Sri Lanka

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  • Topic: Marketing, Sri Lanka, Target market
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  • Published : February 25, 2013
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Individual Assignment – MCP 2131

MBA in HRM - 2010/2012

Registration No. 610047223

Objective

The objective of this paper is to discuss how market segmentation is carried out in the toothpaste market of Sri Lanka, and how products are targeted at the selected segments. This paper will provide;     An introduction to the toothpaste market of Sri Lanka and its segmentation An introduction to the selected company operating in the toothpaste market and the segments it is targeting Reasons for the company to select the toothpaste market and segments in particular The role of the Human Resource Department of the company in this context

Introduction to the Toothpaste Market of Sri Lanka and its Segmentation

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced generally within a years’ duration. Examples of FMCG commonly include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars. 

Introduction to the toothpaste market of Sri Lanka

The toothpaste market in Sri Lanka is very competitive and there are many local and multinational companies involved in manufacturing toothpaste in Sri Lanka. Oral care may have once been a narrow market segment; but today, it represents a booming sector with several sub segments. It serves as a channel for products that address gum disease, cavities, plaque and tartar build up, sensitive teeth and even a condition known as dry mouth. There is also another segment that represents fresh breath and white teeth. The ingredients that go into toothpastes are often used to position them differently across different demographic groups and regions. In Sri Lanka, the oral-care market has a high degree of penetration 1

Individual Assignment – MCP 2131

MBA in HRM - 2010/2012

Registration No. 610047223

through toothpaste and toothpowder products. Toothpowder preceded toothpaste for centuries, when oral care was essentially a habit of keeping teeth white. 

Segmentation in the toothpaste market of Sri Lanka

Toothpaste and toothpowder have a combined household penetration in Sri Lanka of 89%. In 2005, Lanka Market Research Bureau (LMRB)1 estimated this market to be worth Rs. 2.5 billion. Toothpaste accounts for marginally over Rs. 2 billion, with an annual volume of approximately 4,500 metric tonnes. The market is dominated by two brands: Signal – with a 53% volume share in 2005 – marketed by Unilever Sri Lanka; and Clogard – with a 33% share in 2005 – marketed by Hemas. The other significant player in this market is Supirivicky, a local Ayurvedic toothpaste from Siddhalepa, with an 8% share of sales volume. The rest of the market consists mainly of herbal brands.

Herbal/Ayurvedic Toothpaste: Both locally and globally, there is a new trend in the toothpaste industry, to move towards natural and herbal products. As raw materials are not a problem and are available in abundance, this has not been very much a challenge for the Sri Lankan market in the manufacture of herbal or Ayurvedic toothpaste. However, from the statistics shown above, there still does not show an increase in the demand for herbal or Ayurvedic toothpaste produced, in the Sri Lankan market.

Whitening and Fresh Breath Toothpaste: With the trend of maintaining personal care and the increasing focus on personal grooming, a market for whitening teeth and fresh breath has been created in the recent past. This trend has driven companies operating in the toothpaste market to research, develop and manufacture oral care products that will satisfy the needs of this market segment. Various...
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