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Colgate Max Fresh: Global Brand Roll-Out Essay Sample

Colgate Max Fresh: Global Brand Roll-Out Pages
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This case presents the devised strategies of Colgate-Palmolive Company to take their new product Colgate Max Fresh, which was very successful in US markets, global especially China & Mexico. This presents a classic case of challenges faced by a company in introducing their successful markets in global markets. In 2004, Colgate-Palmolive is the leader of US toothpaste market with a value market share 34.8% and Crest from Proctor & Gamble is closing behind at 31.6%. Colgate Max Fresh played a pivotal role in regaining the market share from Crest, making Colgate leader in US toothpaste market. Colgate Max Fresh used its signature mini breath strips in the toothpaste to freshen peoples’ breath.

In the international market, Colgate-Palmolive had a commanding lead with a global toothpaste market value share of 39.7% in 2004, compared to Proctor & Gamble with only 14.7%. Colgate looked to continue its dominance in the toothpaste market by taking advantage of the increase in the demand of cosmetic attributes to toothpaste. As the competition in US market is fierce, Colgate-Palmolive had decided to introduce their flagship product CMF in Chinese and Mexican markets. Now they are at a critical juncture to take critical strategic decisions for the introduction of CMF in Chinese and Mexican markets pertaining to their marketing programs, including communication, flavour, pricing, and message. Strategy for China

Chinese toothpaste market was largely dominated by Colgate-Palmolive with 32.1% market value share including its joint venture with Darlie and San Xiao brands. Though the Chinese preferred the therapeutic aspect of toothpaste, freshness segment is growing and showing future promise The Chinese also tended to prefer the lower-priced brands over the premium brands. With a large share of the market and high interest in freshness, the introduction of Max Fresh was looking promising, but the biggest challenge was getting the communication to the consumers correct. The strategy devised for introduction of CMF in Chinese market is modification of the product suited to the local tastes. Icy Fresh:

Mostly used to develop customer connect. This term according to Levin will help to develop easily recognisable brand identity. Cooling Crystal: Chinese consumers were unaware of the term “breath strip” which was a unique feature of the CMF. Thus the strategy to rephrase the term as “cooling crystal “was agreed upon. This would help to reap the maximum benefit by keeping the global feature intact but at the same time localising for better connect. Celebrity endorsement: CP found the need to connect to the youth at the emotional level. Jay Chow the rock star and a embodied representation of “extreme living” was chosen to endorse the brand. The product being of the cosmetic category the celebrity connects could impact. In this era of globalisation choosing local celebrities and the huge investment in reshooting the commercial might not add much to the ROI through increased sales. Flavour and Visualisation:

In order to go all out CP narrowed down three flavours after screening fifteen options. They were aggressive to create differentiation by flavour as the past data represented consumer inclination towards the same. But too much data is dangerous. Thus testing 15 flavours was too much to invest in with respect to cost and time. Even visualisation technique was used to attract the consumer at the first sight. The packaging representing the unique feature of “breathing strip” was developed in a clear stand up tube to satiate the commercial need. Research and development should be done by keeping the regulations in mind. Failing to adhere to the packaging standards come with extra cost. Even investing too much in attributes not that significant might lead to misallocation of resources. Scepticism to win over the competitor has made Colgate venture into too much data analytics as suggested by one of the managers. Strategy for Mexico

In the case of Mexico, the situation of Colgate-Palmolive was relatively similar to that of China being the market leader with a value share of 82%. The Mexicans were mainly concerned about getting cavity protection at a cheaper price. The key intent of the test marketing in the Latin American country was to measure the purchase intent, liking, value and uniqueness. Soon CP realised to tap this market they needed to go low on price as the willingness to pay for consumers in such countries are low and concentrate on sales promotion. Concept and Product Results:

The focus on “new dimension of freshness” was definitely a much needed strategy. Realisation of Torres that sales promotion linked with too much benefit would dilute the unique feature of the product gave CP a head start. Mexicans as we see were more pro towards the therapeutic benefits like healing of cavity thus attracting these consumers towards cosmetic benefits would need brand identity building to create a whole new recall value. Price and Advertising:

The “Snowsurfer” concept was unique and helped consumer to perceive the value of the new benefits that they would receive. Pricing strategy was an area where confusion still remained. If lowering of the price by one dollar did not impact the bottom-line then 25% increase in the sales volume was a lucrative idea. Even size of the product to be sold in the market was well chosen based on the localised data. Q1: Did China and Mexico each do a good job of adapting the launch to meet local consumer needs? What is the likely profit impact of each plan? Which of the purposed adaptations were ‘must haves” versus “nice to haves”? The whole strategy is based on localization of products. In China, The proposed plan is to modify CMF product to suit to the tastes of Chinese consumers. The strategy devised by the Chinese division is ideal for adapting the Colgate Max Fresh to its market. It addressed the imminent communication problem very well by renaming CMF as Colgate “Icy Fresh” for more consumer appeal.

Also, as the concept of breath strips is new to Chinese, they renamed them as “Cooling Crystals”. Adapting the flavours of Tea, Citrus, and Mint, including a lighter green for the mint also appealed most to Chinese consumers and increased the success of their marketing plan. Developing the new advertisement suited to Chinese market is a “must have” as it provides theme a much greater opportunity for success, even though it cost them a lot. The celebrity Jay Chow as compared to Emily Procter was a lot more recognizable to the market and his endorsement in the ads will definitely attract youth. This is the market that is needed to be targeted too because this is typically the age group that will buy toothpaste for a cosmetic use as opposed to cavity protection. They should have taken care so that the proposed clear stand-up tube meets packaging standards and should have introduced CMF in clear tube out on the market.

However, in the case of Mexico, more emphasis is laid on developing the product functionality. The marketing strategy may not be considered as ideal. The positives in the strategy include testing and introduction of flavours preferred by Mexican consumers. Change in advertisement suiting to local taste can be considered as a good strategy. Even pricing parity with Crest adds more appeal of CMF to consumers. The problem was that the Mexican consumers were concerned about a lack of cavity protection because they thought the product is focused on freshness. As the strategy is focussed on the freshness aspect alone in advertising, they may not provide much appeal to the consumers who use toothpaste majorly for therapeutic reasons. The other problem was that they did not match Crest’s Cool Expressions introduction of November 2004 and instead had to wait until May of 2005. Category

China
Mexico
New TV advertisement
Must have
Must have
Celebrity endorsement
Nice to have
Nice to have
New Flavors
Nice to have
Nice to have
New Packaging
Nice to have
Nice to have
Competitive Pricing
Must have
Must have
Different Sizes
Must have
Must have
Renaming “Breath Strips”
Must have
NA
Renaming “Icy Fresh”
Must have
NA

Q2: From a global CMF perspective, what is the short- and long-term impact of the complexity born out of these local adaptations? Is this added complexity good or bad for the global CMF business? Globally, the local adaptations will be expensive to implement in the short-term. It may be expensive to adapt the strategy devised for Chinese Markets, but in the long-term it will be very profitable because freshness is something that the Chinese are responsive to and is showing future promise. In Mexico, the adaptation is cheaper as compared to that of China, but they may not reach the market as well as they would have liked. It may have just held off Crest in the short-term for value share, but they need to look at meeting the consumers’ concerns. The added complexity is important to Colgate Max Fresh’s global business strategy because it shows that they have given much importance to the consumer needs. Localization of the product is very important to add more appeal to the product and it increases customers’ awareness and attract customers towards the freshness segment.

Q3: What guidelines could Burton propose going forward to optimize new product introductions for CP worldwide, for the regions, and for the country subsidiaries? As per our understanding, Burton, being president at global level, could provide following guidelines of how to introduce new product in emerging markets: Localization of product – As freshness segment is relatively new; it makes responsibility of CP to increase awareness of Freshness segment in the consumers’ mind. To achieve this localization of product is the best path available. Planned product launch date – Much importance should be given to the product launch date as they may lose the first mover advantage and the competitor might have introduced similar product in the market. Technology and product qualifications processes are different in every country and can take long periods of time. Resources should be allocated accordingly and efficiently to meet the timely targets. Delays not only increases costs but also increase the risk of losing market share.

Customers’ needs and preferences – Understanding customer needs comprehensively plays an important role in the preparation for introducing a new product. The features like color, flavor, and type of packaging should be selected according to what local customers prefer. Cultural differences between nations should be given prime importance Customer Communication – Customer communication plays a pivotal role in the introduction of a new product. Communication to consumer should be clear and easy to catch for local customers. Research needs to be done to identify the emotional attachments of customers and try to link the product concept with them. Advertising – Advertising helps in persuading consumers to buy the product. For CP, the most efficient way to do it is television advertising with locally famous celebrity endorsement. The celebrity should be chosen according to the target audience and geographical location. Through the advertisements, they should be able to connect with the consumers at an emotional level. It will definitely help to promote your product.

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