Cecillio Kwok Pedro recognized an opportunity in producing aluminum toothpaste tubes for Colgate and Unilever and by 1977, he invested and opened Aluminum Container Inc. It was the start of his battle against entrenched giants to becoming the number here toothpaste producer in the Philippines . However, in 1986, a new packaging arrived and the two multinational companies (MNC) decided to switch to plastic tubing. Instead of closing down, Pedro decided to use his machinery and make and offer his own toothpaste. Knowing little about toothpaste, he had technical tie-up with a Japanese company and Lamoiyan Corporation was formally launched in 1988 and produced the first tube of Hapee. Sales have been thwarted by three significant barriers: consumer fears that locally produced goods were inferior, their preference for Colgate’s taste and the lack of awareness of the Hapee brand. Pedro and Lamoiyan Corporation counteracted these obstacles by capitalizing on their tie-up with a Japanese company, imitating Colgate’s taste and doing aggressive promotional strategies like sponsoring the Philippine Olympic team. Pedro also signed an exclusive contract with Sesame Street and featured the characters. Hapee created a niche in the kids market. Hapee toothpaste entered the market at a 50% discount and the multinationals made no move to combat the band. Hapee then dropped to 30% discount and soon, captured 20% market share. The entry of Hapee to the market didn’t only force Colgate to counteract Hapee’s pricing and broad product line. Its entry also attracted other rivals, selling their product at a price lower than Hapee’s. To achieve low-price status and higher margins for Hapee, Lamoiyan countered these products with Kutitap, a separate “blocking brand”. He likewise expanded to making dishwashing paste, Dazz, which resulted from a brainstorming about creative ways to salvage their rejects. Pedro also began to explore opportunities for further company growth by achieving deeper channel penetration with existing products, launching new products and expanding internationally. II.Statement of the Problem
What competitive strategies should Cecilio Kwok Pedro take for Lamoiyan Corporation to proficiently increase its market position in local market and penetrate a global market share? III.Objectives
After a year, Lamoiyan Corporation would achieve the following objectives: •Increase local market share by 20%
•Gain a 5% share in global market
•Increase by 50%, brand image and awareness of Lamoiyan products IV.Case Facts
•The first multinational company to enter the Philippine toothpaste was the Colgate-Palmolive Company. For 50 years, the company monopolized the market and Colgate-Palmolive received 70% of its revenues from its toothpaste operations. •The proliferation of Colgate made the brand synonymous with toothpaste in the Philippines. •An Anglo-Dutch Unilever Group had entered the market with its 20% market share in its few years and soon after reached 30%. •Unilever’s success was partially attributable to its being the first “gel” toothpaste on the market and its resultant appeal to the teenage segment. •Teenagers comprised almost 40% of the Philippine youth and Close-up has a young, modern image, positioned as breath-freshening toothpaste targeted the teenage market. •By 2002, gel toothpaste from Unilever and others constituted 57% of the volume of toothpaste sold in the Philippines.
•Toothpaste product has been a fundamental aspect for hygiene. •Manufacturing process and costs are within the industry’s average level. •Cecilio Pedro, founder, has a strong entrepreneurial background and awarded as “Ten Most Outstanding Young Men Award” •Has an initial tie-up with Japanese companies
•Good promotional strategies in partnering with Philippine Olympics Team and Sesame St. •Effective low price strategy in penetrating the market...