Colgate: Why It Dominated India | Business Case Study
Summary
TLDRThis video script explores Colgate's unique business strategies that led to its dominance in the Indian dental hygiene market. Despite being an American company, Colgate capitalized on unplanned toothbrush purchases by positioning products like impulse buys and focusing on in-store displays over billboards. They also tailored their products to consumer preferences, such as introducing a diamond-shaped toothbrush for comfort. The narrative highlights how Colgate adapted to changing consumer needs, from Hollywood's influence on white teeth to health consciousness, and its strategic partnerships with dental associations to maintain its market lead.
Takeaways
- 🏢 Colgate, originally a soap company, pivoted to oral hygiene products in 1873 and has since become a dominant player in the market.
- 📈 Colgate's annual sales are $6 billion, with a profit of $2.76 billion, largely driven by international sales, particularly in India where it leads the market.
- 📊 In India, Colgate holds a 56% market share, capitalizing on the high penetration rate of toothpaste in urban areas.
- 🔍 An insight from the 1990s revealed that 82% of toothbrush purchases are unplanned, similar to impulse buys like chewing gum.
- 🎁 Colgate's strategy included BOGO (Buy One Get One) schemes, which increased sales by 170% by bundling toothbrushes with toothpaste.
- 🏬 They focused on in-store displays rather than billboards, understanding that toothbrush purchases are often made on impulse within the store.
- 📍 Colgate strategically positioned their products in stores between Oral-B and Reach for optimal visibility and sales.
- 💡 They conducted research to understand customer preferences, finding that comfort in the mouth was the top factor influencing toothbrush choice.
- 💎 Colgate introduced a diamond-shaped toothbrush to cater to consumer preferences for comfort, emphasizing differentiation over mere functionality.
- 🌟 In response to Hollywood's influence on white teeth, Colgate introduced products like Colgate Visible White to meet changing consumer demands.
- 🔄 The company has adapted over the decades, reflecting shifts in consumer needs from comfort to whitening and health consciousness.
Q & A
What was the original product line of Colgate before entering the dental hygiene market?
-Colgate originally sold soap and only started making toothbrushes and toothpaste after some market research in the US proved there was demand.
When did Colgate first start selling toothpaste?
-Colgate's oral hygiene products were first sold in 1873, 16 years after the death of the founder William Colgate.
In what year did Colgate introduce toothpaste in glass jars and when did they switch to tubes?
-Colgate toothpaste was sold in glass jars and tubes were only introduced in 1896.
What is the estimated size of the toothpaste market in India and what is Colgate's market share?
-The toothpaste market in India is estimated at 6,000 crores and Colgate has a 56% market share.
What were the two lines of toothbrushes that Colgate launched in 1991 and what were their market segments?
-In 1991, Colgate launched two lines of toothbrushes: Colgate Classic and Colgate Plus. Colgate Plus was the premium segment, while Classic was the value segment.
What was the key insight that led to a significant increase in toothbrush sales for Colgate?
-The key insight was that 82% of toothbrush purchases are unplanned, similar to buying chewing gum in a store.
How did Colgate increase sales by 170% with their toothbrush and toothpaste bundles?
-Colgate increased sales by offering buy one get one schemes, mostly buy one toothbrush and get one toothpaste free.
Why did Colgate focus on in-store displays instead of billboards for their advertising?
-Colgate understood that toothbrush purchases are unplanned, so they focused on winning the advertising sphere of the entire store with in-store displays.
How did Colgate position their products in the store to maximize sales?
-Colgate positioned their product line in between Oral-B and Reach, another toothbrush brand, for maximal sales.
What was the unique feature of the Colgate toothbrush introduced in response to customer preferences?
-Colgate introduced the first ever diamond-shaped toothbrush that would fit perfectly in the mouth, with the tagline 'shaped to keep your whole mouth in shape'.
How did Colgate adapt to the changing consumer preference for white teeth influenced by Hollywood?
-Colgate introduced a line of products like Colgate Visible White and pivoted their marketing story to focus on white teeth.
What was the impact of the advertising standards authority's ruling on Colgate's marketing claims in the UK?
-In 2007, the Advertising Standards Authority in the UK told Colgate it could no longer claim that four out of five dentists recommended Colgate, as the investigation showed similar rates for competitors.
Outlines
🌏 Colgate's Global Dominance and Strategy in India
Colgate, a New York-based company, has been a significant player in the global oral hygiene market since 1873, with a unique approach to business that sets it apart from competitors. The company's annual sales reach $6 billion, with a profit of $2.76 billion, largely driven by international markets, which account for 64% of its sales. In India, Colgate holds a dominant 56% market share in the toothpaste market, valued at 6,000 crores and growing at a rate of 20% year-on-year. The company's strategy in India includes launching two lines of toothbrushes: Colgate Classic for value-conscious consumers and Colgate Plus for a premium segment. A key insight from the 1990s revealed that 82% of toothbrush purchases are unplanned, leading Colgate to market their toothbrushes similarly to impulse buys like chewing gum, which significantly boosted sales. Additionally, Colgate focused on in-store displays rather than billboards to capitalize on the unplanned nature of toothbrush purchases.
🛒 Winning the In-Store Battle with Unique Insights
Colgate's strategy focused on winning the advertising battle inside the store rather than through traditional billboards. They positioned their products between Oral-B and Reach for maximum visibility and sales impact. Further research by Colgate revealed that customers prioritized the comfort fit of a toothbrush in their mouth over other factors, prompting the company to introduce the diamond-shaped toothbrush with the tagline 'Shaped to keep your whole mouth in shape.' This innovation and the subsequent marketing campaign helped Colgate maintain its lead in the market. The narrative also touches on the importance of differentiation over superiority in product features, as customers often make choices based on brand perception and unique selling points rather than objective product benefits. Colgate's ability to adapt to changing consumer needs and preferences, such as the shift towards whitening products influenced by Hollywood, is highlighted as a key aspect of their enduring success.
🏆 Colgate's Enduring Success and Evolving Market Strategies
Colgate's long-standing presence in the market has seen it adapt to various changes in consumer needs and preferences over the decades. The company has introduced multiple product lines to cater to different segments, such as Germ Defense, Sensitivity, Whitening, Gel, and Children's products. Despite facing competition from brands like Oral-B and others in specific segments, Colgate has managed to maintain its relevance by continuously evolving its product offerings and marketing strategies. The narrative also discusses how Colgate leveraged its relationship with the Indian Dental Association to reinforce its credibility and trust among consumers. However, challenges such as the need to adapt to changing consumer demands and the rise of specialized competitors require Colgate to不断创新 and refine its approach to stay ahead in the market.
Mindmap
Keywords
💡Colgate
💡Market Share
💡Product Segmentation
💡Unplanned Purchases
💡In-Store Displays
💡Product Positioning
💡Consumer Insights
💡Differentiation
💡Hollywood Smile
💡Health Conscious
💡Indian Dental Association
Highlights
Colgate took over the Indian dental hygiene space two decades ago with a unique business strategy.
Colgate's oral hygiene products were first sold in 1873, starting with soap and later entering toothpaste after market research.
Colgate's annual sales are $6 billion, with $2.76 billion in profit, largely driven by international markets.
In India, Colgate has a 56% market share in the toothpaste market, which is estimated at 6,000 crores and growing 20% year-on-year.
Colgate launched two lines of toothbrushes in 1991: Colgate classic (value segment) and Colgate plus (premium segment).
82% of toothbrush purchases are unplanned, similar to buying chewing gum.
Colgate increased sales by 170% by offering 'buy one get one free' schemes, bundling toothbrushes with toothpaste.
Colgate focused on in-store displays rather than billboards to capitalize on the unplanned nature of toothbrush purchases.
Colgate uniquely positioned their products in stores for maximal sales, similar to optimizing SEO for in-store positioning.
Customer surveys revealed that 'fits most comfortably in my mouth' was the top factor in choosing a toothbrush.
Colgate introduced the first diamond-shaped toothbrush to cater to customer preferences for comfort.
In the 2000s, Hollywood influenced consumer preferences towards white teeth, prompting Colgate to introduce whitening products.
Colgate has a close relationship with the Indian Dental Association, sponsoring events and gaining trust.
In 2007, the UK's Advertising Standards Authority deemed Colgate's 'four out of five dentists recommend' claim deceptive.
Colgate has five product lines today, reflecting decades of changes in consumer needs.
Colgate is facing competition in each segment, with brands like Oral B and Sensodyne winning in specific niches.
The fight for low ticket products is inside the store, not on billboards, as customer needs are irrational and change every decade.
Transcripts
[Music]
Colgate is not an Indian company but it
took over the Indian dental hygiene
space two decades ago the reason I
wanted to make a business case study
about Colgate and I was telling my team
every single day we should do Colgate we
should do Colgate is because Colgate
played the game completely differently
to every other toothpaste company out
there colgate's oral hygiene products
were first sold all the way back in
1873 16 years after the death of the
founder William Colgate the company
originally sold soap and only started
making toothbrushes and toothpastes
after some Market Research in the US
proved that there was demand in fact
Colgate toothpaste was sold in glass
jars tubes were only introduced in 1896
today Colgate does $6 billion in annual
sales $ 2.76 billion of that is pure
profit even though Colgate is based out
of New York its bread and butter mostly
comes from International sales which
accounts for 64% of their sales the
toothpaste Market in India for example
is estimated at 6,000 crores and growing
20% year- on-ear toothpaste has super
high penetration around 78% of urban
India Colgate in India is the overall
market leader with 56% market share in
1991 Colgate launched two branches or
two lines of toothbrushes Colgate
classic and Colgate plus Colgate plus
was the professional segment it's a
premium segment while classic was the
value segment you've probably seen many
companies do this they'll have two
segments one for the average consumer
and one for rich people who can pay more
there's usually never tooo much of a
difference between the two products but
hey companies need to do this otherwise
they dilute their positioning one of the
executives in 1990s found a very
interesting piece of insight that 82% of
toothbrush buys are actually unplanned
people seem to buy toothbrushes the same
way you buy chewing gum in a store
you're walking around in a store you see
a chewing gum and you pick it up because
it doesn't cost much as you will learn
in our case studies most businesses are
built on top of a single unique insight
that other brands or companies simply
don't understand yet so here's what
Colgate did they sold their toothbrushes
like a pack of chewing gum or small
chocolate this and the rest of this
video is a very important lesson for the
viewers who want to understand how to
win in the low ticket product segment
okay so back to Colgate first thing they
did a lot of buy one get one schemes
mostly buy one toothbrush and get one
toothpaste free combining the toothbrush
with the toothpaste increase sales by
170% even though it looks like it's a
bundle the cost of toothpaste has
already been bundled with the cost of
the toothbrush number two they spent a
lot of their money on instore displays
instead of billboards while their
competitors were putting up big
Billboards Colgate understood that
toothbrush buys are unplanned so it's
not like somebody will look at a
billboard and go to a store and say yeah
I saw the billboard I want to buy this
now instead you need to win the
advertising sphere of the entire store
so while other said the city is our
domain and we will put up Billboards to
win your attention Colgate said screw
all that and they just won your
attention inside the
[Music]
[Music]
store
[Music]
the third thing is that they uniquely
position their product in the store they
realized the store is our domain so they
put their product line in between oralb
and reach which was another toothbrush
brand for maximal sales just like many
Sellers and business owners try to
optimize their Google SEO ranking today
Colgate optimized their instore
positioning they do not care about the
outside they realize you make the
purchase inside so let's win the inside
they ran another research survey to gain
more insights because like I said
insights run the business they realized
that while most toothbrush purchases are
unplanned people still made a choice
when presented options in a store
according to most customers these were
the reasons to choose a toothbrush the
first one will absolutely surprise you
that's right the first one is fits most
comfortably in my mouth that was the
number one customer need Pro proving
that customers are not rational when
making purchases at all Colgate had to
quickly adapt to this sentiment they
were winning in store but they also had
to make sure their product won against
the other people in the store so they
introduced the first ever diamond shaped
toothbrush that would fit perfectly in
your mouth and their tagline was shaped
to keep your whole mouth in shape in
1987 they differentiated even more by
making the toothbrush look even more
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this is another piece of insight for you
being diamond shaped and we know this
today is not any better for your teeth
of for cavity prevention you can ask any
dentist this whatever benefits it might
provide are minimal at best but what we
have learned when you are compared a
space of toothbrushes but it's very easy
to manufacture a toothbrush
differentiation matters more than being
better think about it how do people
choose between zomato and swiggy if you
ask people some people will say well I
choose zomato of faster delivery or I
choose swiggy because of better UI but
here's the thing both swiggy and zomato
are billion doll companies they can hire
each other's Talent they can copy each
other's UI they can steal each other's
uh drivers when a person doesn't have
any of these claims left they say well I
choose swiggy because it's orange and I
like orange or I choose zato because
they throw parties the truth is at scale
there is no real reason you would choose
a or b and that's my differentiation
being being different matters more than
being better because if you are better
someone with a unique brand will just
copy you if you are different that
becomes your calling card features are
not defensible your brand is and to
build a brand you need to be different
the master stroke of Colgate was that it
was different in a way that mattered to
the irrational customer who cared more
about shape than anything now Colgate
story doesn't end there in 2000s
something changed Hollywood became
massive actors were on the big screen
and the small screen and when they
flashed a smile they flashed a white
chines smile important to note here that
these Smiles w't natural it was because
of the magic of Dentistry specifically a
new technology called dental veneers so
what dentists used to do and they still
do is that they shave off a little bit
of your Ena the top of your teeth and
cement on dental veneers dental veneers
are tooth-like structures made of
porcelain that can be any color you like
earlier veneers used to be used to
correct the shape of bad or broken teeth
but now they were purely being used for
color correction for Hollywood companies
like Colgate had a hard time keeping up
with this because the number one
customer requested feature wasn't
Comfort in the mouth anymore it was pure
white teeth so they introduced a line of
products like Colgate visible White and
pivoted the marketing story to White
Teeth under the pressure from All Things
Hollywood
sir
dep cident makes my teeth white which is
why you should also try
it got
it gu
it in 2010 the story changed yet again
customers now started becoming very
health conscious Dental Health also
became very important and one company
that was starting to win because of this
change in customer needs was Oral B now
Oral B has always been a Nish it's
always been small there always looked as
a medical brand and dentists and you
know average customer didn't care in the
last decade let's get back to the denst
number one brand Colgate keeps talking
about the Ida the Indian Dental
Association guess what the Indian Dental
Association events are sponsored
by Colgate the idea in Colgate gives
scholarships to students every year as
well they have a very tight relationship
which is why they keep saying that
they're recommended they run various
programs and conferences on the national
level with association with each other
sponsor awards are also granted by the
Ida and sponsored by Colgate so while
oralb took decades to win the trust of
dentists Colgate simply started
sponsoring their events if you know what
I mean in 2007 the advertising standards
Authority in the UK told Colgate it
could no longer make the claim that four
out of five dentists recommended Colgate
investigation had showed that when they
had telephone people and and asked them
to list their favorite toothpaste their
competitors were recommended at similar
rates the claim was deemed deceptive so
Colgate in its modern form has been
around for many decades their product
line today literally represents the
Decades of changes in consumer needs
they have five product lines today
German tooth de which is the most modern
line sensitivity which is a niche line
whitening like I told you because of
Hollywood gel because it was messy it's
more like a comfort thing like I told
you in the beginning and finally the
children's segment which they started in
the early 2000s the problem right now is
that they are starting to lose in each
segment Oral B for example is winning
German tooth deck sodine is winning
sensitivity the multi-use segment where
you say this handles sensitivity plus it
handles germs plus it handles whitening
the audience gets doesn't care about
this even if you tell them this pace
solves all three of your issues audience
still prefers to buy a pcee that saws
just one Colgate has over the years
tried to fight these Subs segments all
of these individuals segments by
spinning out a separate toothpaste and
toothbrush for each for example they
have Colgate gel Colgate sensitive
Colgate herbal Colgate active salt
Colgate Total and Colgate active white
and so many more segments right however
the story Still Remains every decade
customer needs change and customer needs
are always irrational and finally if
you're selling low ticket products your
fight is not on the Billboards your
fight is inside the
story hey heyy Wy brush she put on the
cold gate go find your soulmate hey hey
Wy wnky brush your teeth go find your
soulmate before it's
[Music]
[Music]
tost recomend this but you want me very
prodct line for
decades he he Wy Wy brush your teeth put
on the cold gate go find your soulmate
hey hey Wy Wy brush your teeth go find
your soulmate before it's too
late go find your soulmate before it's
too
[Music]
late
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