Question

Given that Colgate Canada plans to hike its marketing spend by $3 million for the toothpaste category, how would you spend it?

Describe the characteristics of demand and segmentation in the toothpaste market. What is the typical buying and decision process for a consumer buying toothpaste? How do the various elements in the marketing mix influence the buying process so that Colgate’s product is ultimately the one that is purchased?

Outline the effectiveness of Colgate’s marketing mix.

How do the main competitor compete and differentiate in this market?

How do you think competitors will react?

Discuss the pros and cons of the alternatives listed in the case.

Answer 1

Answer :

Colgate Canada is planning to spend $3 million on marketing for the category of toothpaste, the average oral care consumer was more concerned with fresh breath and white teeth compared to the other psychographic categories. This was good news for Colgate since 52 per cent of the population was looking for whiter and shinier teeth and those characteristics were offered by most of their produce. The key preferences customers were looking for better overall gum quality, after using clean teeth and a good price while purchasing toothpaste. Consumers were also searching for toothpaste that would have unique health benefits and boost overall safety. Colgate will use the $3 million to raise awareness about its products that will boost their market share as a result. Company's innovation van bake makes Colgate toothpaste more unforgettable to prospects. Investing your surplus dollars in an interactive campaign can be a great way to make your audience interactions more of a dialogue, and less of a call-out, especially if you haven't done one before. Increasing exposure on social media sites by enhancing or endorsing your posts is one of the easiest ways to get more eyeballs on your goods or services, and it is also fairly cost-effective compared to other methods. Being able to monitor your marketing effectiveness and the various channels you use is of vital importance for successful marketing.

Growing marketing mix factor is crucial to Colgate's toothpaste because it is a product with low involvement and is purchased habitually. Product features such as tooth prevention, teeth brushing and whitening, along with other health benefits, improve the appeal of the products because they are unique to what customers are looking for. Consumers are looking for a competitive price among different brands, not the cheapest price. High on freshness ingredients, the transparent look and youth-centred approach gave Colgate some sleepless nights at the time. Kimberly gained a large market share, prompting Colgate to produce a similar product for some time and to change its tactics. In addition to Pepsodent's direct attack, the entry of a large international player like procter and gamble has further intensified competition in the general category of toothpaste. Brands like Sensodyne and Paradontax came along with aggressive marketing campaigns and built small sub-categories for themselves, probably at Colgate 's expense. Colgate replied with Colgate Sensitive but Sensodyne still has a larger share of the market for sensitive toothpaste. Unilever also attacked Colgate with Pepsodent on the 'healthy teeth' platform, thus attacking two fronts. Depending on where the Colgate goods are distributed contributes directly to sales and market share. The more sales Colgate produces, the more products Loblaw Cos Ltd., Sobeys Inc., and Metro Inc. make. Colgate also sells its goods in other stores but these three have the biggest market share among Canada's retail stores. The brand 's primary goal is to protect and increase its market share rather than broaden the market. In the oral care industry, there are four major players, these four firms have more than 80 per cent of market share. The top three players in the toothpaste industry have more than 75% of the market share, with the smaller rivals breaking up the remaining percentages. This is well understood that the number one product can always succeed, so if a company can present its brand as the superior brand, its sales will be considerably higher than its rivals, giving them a significant competitive advantage.

In an increasingly aggressive environment, the business can proceed with a single-brand strategy or build different products to combat the complex market more effectively. The five main areas that companies are competing to conquer are oral health, tooth sensitivity, teeth whitening, children's and fresher air. Colgate currently invests more of its biggest rivals and has the second-most sales. If my estimates were right, Colgate would have to sell an impressive amount of toothpaste to break even with their rise in the marketing budget. I believe rivals will appreciate the fact that Colgate has been growing their advertisement budget. Colgate wants to increase the number of promotional products to improve the exposure of the company, I think that is a brilliant idea. Since more than 60 per cent of customers enter the shop without any hint what product they are going to buy. If promotional items were to be placed around the goods or at the door, this would provide customers with an assisted recall as they determine which product to buy. It is one last push as the consumer makes his choice. The negative side of this decision is that many rivals are using this approach and securing such ad placements is challenging and costly. With more frequent advertising, they might be wasting most of their budget by buying ad space for consumers who continue to see their ads. Colgate ads may not be seen by a different demographic, but the same ads do not attract new consumers over and over. Of the five alternatives discussed by Richard Werner, I feel that decision one is the best choice to make. There's no need to raise the marketing budget because they will have to sell too many extra toothpaste bottles to break even. I recommend, however, that the marketing plan be changed by getting more promotional products in the product aisles and when the consumer walks in the store.