Consumer Behaviour Analysis And Strategic Recommendations For Colgate Toothpaste Essay.

Product Overview (Colgate Toothpaste)

Colgate toothpaste is one of the major products of Colgate-Palmolive, which is the world leader in oral care products (toothpaste, mouthwash, and toothbrushes) ahead of Procter & Gamble (P&G). Colgate toothpaste and toothbrush is one of the famous brand products of Colgate-Palmolive. According to a market research company Kantar Worldpanel, Colgate is the only brand, which is purchased by more than half of all households (Martin, 2015). The Colgate has a global market penetration of 77% and the global market share of this product is more than 45%. The product is known for its growing market sales in the world. But from last few years due to the large number of competitors (such as Oral-B, Pepsodent, and Sensodyne etc.) and changing buying behaviour of consumers, company is facing lots of challenges in the market and it results in a decline in sales of Colgate toothpaste. Although, the Colgate Company still is the leading company in Australia in oral care in value terms in 2017. Colgate has several products in toothpaste segments such as Colgate Total, Colgate Max Fresh, Colgate Active Salt, and Max Cavity Protection Plus. Colgate Cibaca and Colgate Herbal are two other products that company launched in LPT and Herbal segment respectively. Although, in Australia company holds 60% of the market share and faces heavy competition from Sensodyne (GlaxoSmithKline), Oral-B (P&G), and Macleans’s (Lewis, et.al, 2015).

Colgate Market Strategy (Product- Toothpaste)

Product

The Colgate-Palmolive deals in several products in Toothpaste segment such as Colgate Total, Colgate Max Fresh, Colgate Active Salt, and Max Cavity Protection plus etc. They target young, kids, and old age person according to the demand of their specialize toothpaste such as Colgate herbal for old age people, Colgate max-fresh for young age people etc.

Price is one of the important parts of the marketing mix that generates revenue for the company while other elements of the marketing-mix generate cost only. The company must set their price in such a way that competes with other competitors and it should be in order to provide expected value to its customer. Price should be according to the market demand and supply basis. Colgate has maintained the custom of launching new products at low-cost prices so that every consumer of the product uses it at least as a trial. Before setting a price company should take care of following things:

• Pricing objective
• Competitors prices strategy
• Identifies the demand
• Importance of pricing for Target customer
• Estimated cost of the product

Coalgate is using the direct second level of distribution to make its products available for its customers. The company should focus on the distribution channel and keep in touch with them in order to track the customer and competitors as well. The company should focus on to provide distributor’s own godowns and store to distribute the products. The company should assign the responsibility of each distributor to provide the product to the retailer at his doorstep.

Critical Analysis

Promotion is a part of the marketing mix that facilitates the company to interact with its existing and potential customers. Colgate does promotion of its new products through Advertising, although Personal selling, Advertising, publicity, and public relation are other the key elements of the promotion strategy of a company. Colgate gives high approach on the direct approach to customers (Gonsalves and Vastani, 2015). The sales team of the company visit cities after cities and spread awareness among people about the tooth whitening with Colgate toothpaste. The company focuses on improving its performance by focusing on core global business in combination with worldwide financial strategies.

SWOT stands for Strength, Weakness, opportunities, and threats that help a company in the strategic planning by providing an analytical framework for studying the company’s position and strategy. Strength and Weakness are the internal factors of the organisation and opportunities and threats are the external factors of the company. It allows a company to analyse different factors, which affects the operations of a company. The SWOT analysis of Colgate is as below:

• Company’s presence in more than 200 countries is the biggest strength of the Colgate.
• The top quality of the product
• Strong Financial Position
• A good social image of the company
• Segmented products according to the age and types of people
• Well-established and renowned distributors all over the world

• Mainly focuses on urban areas while rural and suburban areas are neglected by the company at some extent.
• A very low budget for promotion as compared to its competitors

• Health consciousness of people explores the opportunities for Colgate to exploit this growing market by introducing new products.
• The shift of demand trend from artificial product to natural products is a good opportunity for the company to capture this new evolving market.
• Innovative technology and new products launches

• P&G and Oral-B is capturing the market rapidly
• Increasing market competition with new competitors
• Increasing cost of raw materials and manufacturing cost as well

One of the best ways of analysing the market of Colgate is to investigate the competing businesses of the company. The Competitors analysis provides all the relevant information about the company, which is necessary for business. There are numbers of competitors arises of Colgate in oral products segments and they continuously challenging the Colgate products with natural toothpaste products. The Competitors analysis helps to identify that which type of products should be offered to the customers (Haider and Shakib, 2018). By evaluating the competitor's strategy of branding, packaging, pricing strategy, their product segmentation, and evaluation of target market helps the company to launch the product in a proper and specific area where the company can easily reach out to its target customers.

Buying Decision-making Process

The buying behaviour is one of the main aspects of measuring the influence of the company in the Toothpaste market. The buying decision process is almost the same as the consumer buying decision process. Colgate provides a variety of products to its customers that provide a wide range of choices to the customers (Agnihotry, et.al, 2016). There are different needs of the customer identified by the company and the Colgate provides a number of alternatives of a single product after identifying needs of the customer.

If the person is buying the product of Colgate first time, which could be a new task buy and he/she will be satisfied by the quality of toothpaste that company provide, then there is direct re-buying process is involved. If the firm is satisfied with the product, and wants to consider some alternative as well then consumers again go with re-buying of products (Rajagopal, 2017).

SWOT Analysis of Colgate

Social influences matter to an equitable degree in the case of any product marketing. Cultures matter when the type of product meets the cultural requirements or not. In some part of Asia, Beef is banned by the people neither it can be used in a product, while Australia is one of the big beef consumption countries. The influence of friends and family members also does matter for suggest and refer Colgate products for use (Akpan, 2016).

In our society, a person having bad breathe problem leaving a bad impact on the other people. This is the perception of people that drives them towards the Colgate toothpaste (Cheng, 2018). Because of this Colgate toothpaste, target this perception of people and focuses on the strategy of providing whitish and clean teeth to people by removing the germs and bad mouth smell. Hence, Colgate provides a variety of toothpaste products such as Colgate Fresh Breath, Colgate tingly Red, Colgate herbal etc.

The way a customer reacts towards a product is called his/her attitude towards the product. A customer attitude does not constantly display purchase behaviour towards a specific product. The taste and preference of a customer change from time to time, because of certain reasons. The customer might not be buying the same product on the same day but might buy the same product in another day (Akram, Merunka, and Shakaib, 2011). The cause may be money, social influence, or his purchase behaviour.

STP stands for Segmentation, Targeting, and Positioning of the product according to the market requirement and scope in the market for the particular product.

Segmentation: Colgate divides its market on the basis of customer age and their needs. The company also provide different alternatives of their toothpaste such as herbal for old age people, Colgate Max-fresh for younger people, and Colgate Max Cavity protection plus for those people having bad mouth smell (Jamieson, et.al, 2016).   

Targeting: The target audience of Colgate is derived from its various types of segmentation (demographic, psychographic, and benefit segmentation). The company target both male and females, aged 20-40 years old, who belongs to both the lower and upper-income group. This demographic of people tend to be sufferers of sensitive teeth (Virani, 2013). 

Positioning: Colgate positioned itself as a brand itself as it provides quality products to its customers at premium prices. The Colgate toothpaste target those people who suffer from sensitivity in their teeth. Colgate positioned itself as a company that offers extra benefits to its customers.

Competitors Analysis

Colgate is one of the leading brands in oral hygiene and it is known for its dominance in the oral care industry from past few decades. Colgate is also known for its marketing strategy, but from last few years, Colgate has to face challenges in sales of their product worldwide because a large number of competitors entered into the oral care industry. Oral-B, Sensodyne, and Macleans’s give strong competition to the Colgate.  To face these challenges Colgate has to focus on three main strategies that help in retaining their customers and increasing the sales as well.

In a highly global competitive market, Colgate is largely depended on the key retailers in its developed market. The emergence of e-commerce channel and other sales distribution channel, the competitors of Colgate largely affects the business of Colgate. Thus, even though Colgate shares more than 67% market in the world and 60% market in Australia, they should focus on promoting the product on e-commerce channels via Wal-Mart, Alibaba, Amazon, and Mark & Spencer etc. (Mondol, 2018). The key retailers of Colgate have greater bargaining strength. They use this advantage and demanded higher trade discount, slotting fees, and allowances which reduce the profitability of the company and in return, it adversely affect the sales of Colgate. Thus, Colgate should focus on other channels of distribution for their oral care products. Moreover, for this reason, it is better to use E-commerce channels for distribution of products. 

There are large numbers of competitors entered into the oral care market after Colgate with a variety of products. The growth of Colgate depends on the success of the existing product, as well as the launch of new innovative products such as Herbal Toothpaste and those products, which are made by natural and herbal products. Thus, Colgate should identify the opportunities and trends what customer needs. The current demand for people recently shifts to artificial products to natural products. However, there are many competitors of Colgate made Herbal Products in Oral care (Mehta, 2017). Thus, the company should more focus on those products, which is made by Herbal and natural resources. For this purpose, Colgate should identify and anticipate consumer needs in advance and should respond to them with quality products according to their demand. 

Productivity is the core of any business organisation. Colgate should promote a large number of awareness programs all over the world about the benefits of Brushing. This drives people towards using Colgate on daily basis. Colgate thinks that business simplifications and operational efficiencies increase the agility of the company so the company can be smarter and faster. Through these initiatives, Colgate increases the demand of the product through their Values of Caring people, Continuous Improvement and Global Teamwork. The company can also launch various Oral health care education programs to promote oral health care. The company should also look for cost reduction in production through minimising the unnecessary cost of production (Bozkurt and Ergen, 2016).

Buying Behaviour of Consumer

Conclusion

Colgate is one of the leading brand names in Oral care products, but they still face challenges because of a large number of competitors entered the market with a variety of product. The main cause behind the sales decline of Colgate is that its distribution channel and not anticipated the trend of demand of consumers. If the Company wants to promote their sales, they must focus on another way of promotions than Advertising, such as social media. They must also focus on e-commerce channel to sale their oral care products such as Toothpaste and Toothbrush because a large number of people shifted from physical purchasing to online purchasing.

References

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