Colgate Max Fresh Case Study

Topics: Marketing, Toothpaste, Advertising Pages: 6 (2075 words) Published: November 2, 2010
Colgate Max Fresh:
Global Brand Roll-Out

Executive Summary
The United States, Mexican and Chinese markets all took very different approaches to the release of Colgate-Palmolive’s (CP) newest oral care product in 2004-2005. The new toothpaste is called Colgate Max Fresh (CMF). It is a cavity preventing gel with breath-freshening strips suspended in it that dissolve while consumers brush their teeth. The technology behind the breath strips is patented, and Colgate was hoping the product would be a big success by providing unique freshness. In the United States, research was done and new bottling was designed to optimize the appearance of the new toothpaste. The advertising was also focused on the freshness that result from the breath strips and the product was very successful. CP then decided to release the product worldwide. In Mexico the ad campaign was changed as well as a few other minor changes, but not much was spent on altering the marketing mix for CMF. Colgate Max Fresh proved popular in Mexico and profits were seen in the first two years. In China, millions were spent on reconfiguring the marketing mix, and sales were not high enough to make up for the expenses in either of the first two years. In the first year alone, CMF saw a net loss of over $10 million. I have evaluated three options for reducing costs and increasing sales and have determined that the Chinese marketers decided to change the marketing mix too quickly. Instead of looking into what aspects of the U.S. marketing mix would and would not work in China, they made assumptions. The advertising campaign that they came up with was expensive and ineffective. Chinese consumer preferences should have been highlighted in the promotional campaign, and more elements from the original U.S. marketing mix that were costly to “improve” might not have needed to be changed at all.

Current Situation
Colgate-Palmolive (CP) is a worldwide company that specializes in oral, personal, and home care, as well as pet nutrition. Of particular interest in this case is oral care. Colgate is an oral care name that is known around the world. Colgate-Palmolive has the majority value share in the United States, Mexico, and China. In each country, Procter and Gamble’s (P&G) Crest toothpastes are ranking second in market value share. In Mexico, the difference between PC and P&G is huge – PC has market share above 80%. However, in the U.S. and China the market shares are very close: In 2004, Colgate had 34.8% and Crest had 31.6% value shares in the U.S.; in China Colgate had 23.6%, Colgate through partnerships had an additional 8.5%, and Crest had 21.2% shares. CP management was pressured to compete hard against Crest’s new product called Crest Whitening Expressions (CWE). In August 2004 CP launched a new toothpaste product called Colgate Max Fresh (CMF) in the United States. CMF was advertised as premium toothpaste that would provide a “whole new dimension of freshness.” The product was so successful that CP decided to launch it worldwide. Colgate-Palmolive’s organizational structure is split up by geographic lines, each region having its own management. However, there is another split by category – there is one group responsible for oral care product strategy, resource allocation, and best-practices transfer between regions. This case focuses on the launches in the U.S., China and Mexico. In all three countries flavors varied and different strategies were used in packaging and promotion of Colgate Max Fresh, as described in the table below.

| United States| China| Mexico|
Product name| Colgate Max Fresh| Icy Fresh| Colgate Max Fresh| Flavors| Cool Mint (blue)Clean Mint (green)| TeaCitrusMint (light green)| Cool Mint (blue)Clean Mint (green)Cinnamint (red)| Launch date| August 2004| August 2005| May 2005|

Ad campaign| TV star Emily Procter “looks beyond the obvious.”| Rock-star Jay Chow and “extreme living.”|...
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