case methodology - colgate

8/13/2019 CASE METHODOLOGY - Colgate

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MASTER OF BUSINESS ADMINISTRATION

MGT 6798

CASE METHODOLOGY:

SOFT N SHINY

An Individual Assignment

Submitted to:

Mr. Ayub bin Hj. Khalid

Submitted by:

Fakhrul Anour bin Abdullah G1136857


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CONTENTS

1- ABSTRACTS Page 022- INTRODUCTION Page 033- PROBLEM STATEMENT Page 054- SWOT ANALYSIS Page 075- CONCLUSION Page 086- RECOMMENDATION Page 097- REFERENCES Page 10


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ABSTRACT

We are used to being the number one in the market. Besides,

we have a good product and we strongly believe that we can

manage to get a bigger portion of the pie if we try harder.

Cik Rose (Product Manager of Colgate-Palmolive (M) Sdn. Bhd.)

This case will foresee that a certain confident and prove of a brand profit-making is not

necessarily beneficial to become the subject of supported income, especially in market strategy.

It is a lesson for other businesses to learn that an identity of a brand cannot simply be

transformed into other feature especially when it has fulfilled the four criteria (rare, variable,

costly to imitate and nonsubstitutable) of core competencies in creating competitive advantage.

Further analysis of the problem statement will raise certain factors of branding misplaced and

tendency of business misinterpretation.


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INTRODUCTION

Colgate is known for its famous toothpaste, Colgate (44.7% of global market share for

toothpaste) and its Palmolive cleaning products. Colgate Palmolive is one of the largest

consumer product companies with $16.7 billion in sales operating in over 200 countries. 75% of

Colgate Palmolives sales come from outside the USA. CL is basically divided in four segments:

Oral, Personal care, Home care and Others (Others includes Pet nutrition).1

Based in United States of America, Colgate-Palmolive (M) Sdn. Bhd. started off in 1960

as a manufacturing company of tooth-paste. It all began with the success of parent company;

Colgate-Palmolive Company USA manufactured soap and detergent products. With good

research and development teams from all around the world, the company has garnered profitable

world sales in many of its product categories.

But even though, the parent company was directly involved in the subsidiary companies,

but there is freedom in making decision of products well-being of marketing and sales in its

respective region. Thus in Malaysia, the subsidiary was responsible for the manufacturing of

product lines in four main ranges (Oral, Household, Toiletries and Personal Cares) but the

business strategy build mostly by the team worked in Colgate-Palmolive (M) Sdn. Bhd.


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Colgate-Palmolive (M) Sdn. Bhd. was a market leader in its entire product lines in

Malaysia, except for the category of soap and shampoo. The company conquered 55% of the

toothpaste market to make it a leader, meanwhile its soap lines maintain at number two positions.

In toothpaste market the company was a leader with Colgate, the brand has become a

generic name among consumers. The company was also a market leader for the most competitive

household product category; the laundry detergents. Brand such as Fab and Trojan held 34% of

the market share with Fab laundry bar captured 65% of it. Then there was Glo, the dishwashing

liquid introduced in 1975 that also had become a market leader. Followed by a brand of fabric

softener in 1980, Soflan that has captured 65% of the market share. Active in its research and

development with manufacturing new products with great successes, the company began

exporting their products specifically to Singapore, Hong Kong, Brunei, Fiji and Papua New

Guinea.

But not everything produced and made by Colgate-Palmolive (M) Sdn. Bhd. has its

magic touch of success. One sector of market that the company was still trying to conquer is the

shampoo market. In 1980 with Beecham, Bristol-Myers and Kao Tradings as its close

competitors, the company had yet struggled to find the right formula in its business strategy to

produce a shampoo brand that will be a market leader.

In 1938 the Colgate-Palmolive-Peet Company in Jersey City, N.J., introduced Halo, the zero soapshampoo. Their slogan was "Soaping dulls hair, while Halo glorifies it." The product came with adouble-your-money back guarantee. Advertisements claimed that the lack of oils and harsh chemicalsmade the product clean-rinsing and safe for children.2


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PROBLEM STATEMENT

In 1976, Colgate-Palmolive (M) Sdn. Bhd. introduced its

Colgate Family Shampoo with the idea of low-priced

product in good quality. Portrayed as value for your money in its advertisement campaigns, the

shampoo claimed to be medicated to eliminate dandruff and make hair soft. Packaged in

containers of three different sizes (60ml, 150ml and 300ml), the target market was Malays and

young users with low income. It was a success because of low pricing and promised benefits. A

year after launched, the product has captured 13% of market share before it became market

leader in 1978 with 20% of total market share.

But in 1979, the sales began to drop with market share slipped to 18% and continue to

drop to 16% in 1981. It had become an alert situation for the company to look for solution of the

problem. Based on the analysis made by the company, theory made that the increase in

competition contributed to the loss in sales. It was proven later with the flood of more new

brands came into the market.

Hence in January 1982, revitalization strategy was made to the product of Colgate

Family Shampoo by changing the brand, size and variants offered. The size increased (120ml,

200ml and 350ml), the brand changed to Colgate Herbal Shampoo (dropped the family name)

with variant added of herbal to further enhance the cosmetic image and revived the notion of its

ability to make hair healthier. Without changing the advertisement campaign of Value for Your

Money, the changes in product image hoped to increase sales but it didnt. Its market shares

continued to shrink in the following years and with more entry of other brands, by the end of

1984, the company only held 9% of the market share.

Over the years the Colgate-Palmolive Company usedcelebrities and program sponsorships to endorse their

product. In the 1940s, the product jingle, "Halo,Everybody, Halo," was introduced on the radio and early

TV. While the Halo bottle retained its distinctive shape, atthe end of 1954, Colgate-Palmolive introduced this new

blue, white, and gold packaging. In 1956, their ads

claimed they were Americas #1 Selling Shampoo.2


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In 1985, after further analysis to improve market share of its shampoo product thus

released new brand called Colgate Soft N Shiny Shampoo for cosmetic and medicated use.

With this new brand entry, Colgate-Palmolive (M) Sdn. Bhd. put a different product positioning,

modern packaging and a new advertising copy. With this new entry, it helped the rate of decline

in the market. But as the market share received more new entry of other brands from competitors,

efforts made by the company to achieve its target to be a market leader of the segment was

clarity that was hard to condition.

To further simplify the problem existed in the product segmentation of market for

Colgate-Palmolive (M) Sdn. Bhd., it is adequate to quantify the matters into these perspectives:

Shampoo market was shared by many producers and brands that caused high intensity in

competition.

Branding options offered to consumers were seemed not attractive enough to define certain

image of the product that was related to distinctive image of the company.

The companys name has been synonyms with certain type of product that the entry of the new

product within the companys line couldnt establish a different approach to the consumers

awareness.

Promotional campaign by the hired agent based in United States, HDM-DYR Sdn. Bhd. only

believed in visual presentation of electronic media instead of printed media. With a limited air-

time and non-frequent airing schedule, may affected short of awareness among consumers.

Majority competitors than enter the shampoo market and made lead were genuinely focus on

the hair-care products before any other products.

The latest shampoo products

release by Colgate-Palmolive inUK and US which based on

herbal formulation. The sameconcept has been used on its

subsidiaries in Asia likeVietnam, Philippine, Australia

and Malaysia as well.


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SWOT ANALYSIS

STRENGTHS

1) A world leader in therespective market with

most of its products

especially in toothpaste,

detergents and soap

2) Strong strategy in researchand development

3) Strong distributionchannels and branches of

proper business networks

4) Centralized supportWEAKNESSES

1) Unable to differentiate itsproduct segmentation tothe company established

label

2) Bestselling productsobscured the entrance of

new products

3) Limited advertisingstrategy

W-O

More trial and error needed

to be done to furtherregulate new ideas of its

shampoo brands. Mostimportantly, the company

needed to take out its

company name to theproducts brand in order to

avoid confusion.

S-O

As subsidiary of such

successful business wouldgive more benefit to

further extends its product

credibility. It also gave

extra assurance of thecompany to run proper

analysis of the market in

order to understand aboutentry and exit of product

segmentation.

OPPORTUNITES

1) In the industry ofsimple product with

easy formulation

2) High marketdemand

3) Distributionchannels that also

penetrated into the

rural areas

4) Flexible pricingmodel

THREATS

1) Highly competitivemarket

2) Product easilyimitated

3) Easy entry and exitmarket

4) Consumers demandon branding before

contents

5) Scarce supply onresources

W-T

Evaluate the packaging

style of the competitors,examined the contents

offered by them andrebranding to discriminate

simulacrum. Use the easy

and entry as the process ofendless trial and error to

exceed vitality.

S-T

With success of other

product line in itsproduction, the company

had better distribution

channel and proper

networking to strengthen itsability to expand sales of

new product. Proven best in

producing good products,new product entry convince

certain level of acceptance.


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CONCLUSION

Brand switching was common among consumers, because cosmetic shampoo was regarded as afashionable item. Meanwhile, shampoo industry was considered a dynamic market in the

cosmetic segment. Consumerstastes and preferences changed quite rapidly.

Based on a survey commissioned by Colgate-Palmolive (M) Sdn.

Bhd. dated 10th& 11thJanuary 1985; the results indicated that, on average,

about eight out of ten Malaysian female adults washed their hair with

shampoo. Out of these users, three quarters of them washed their hair two to

three times a week. The users were mainly urban Chinese, earning morethan $300 a month. Most of the time, users washed their hair themselves,

while one third visited hair saloons for that purpose.

The key attributes often sought by consumers in shampoo purchase, either in the cosmetic or

medicated segment were:

Fragrance Color Translucence (or opacity of the shampoo) The package image The additional product ingredients

In addition, consumers would also expect to enjoy the cosmetic benefits of the shampoo,

which included making the hair soft and shiny, making it smell nice, and becoming more

manageable.

Since shampoo could be considered a personal product, most purchaseswere made by female family members. However, for married females,it was also quite common for their husbands to buy the shampoo,mainly from provision shops and supermarkets.

Beside the key attributessought in the purchase of

a shampoo, consumersalso expected some

benefits from the use ofthe shampoo. Generally,

the basic functionalbenefits were the abilityto clean hair, to stop hair

loss, and to eliminatedandruff.


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RECOMMENDATION

In 1998, a year after the second generation of the Soft N Shiny Shampoo was relaunched,Colgate-Palmolive (M) Sdn. Bhd. managed to capture 6% of the market share. Looking at the

sales, although there was an increase of 1% in market share from the previous, there was actually

a decrease from 11% to 9% of the actual amount of shampoo sold. The product management

team led by Cik Rose knew that performance of its shampoo products was not enough for the

company and there was a need to reanalyze the product marketing strategy to determine what

went wrong, and to reformulate a more effective market strategy.

The problem of its shampoo would not be about the content but most of it about thebranding strategy. Colgate-Palmolive (M) Sdn. Bhd. needed to think more out of the box,

diversified its branding name for shampoo without taking familiarity of its company name.

Accordance to the survey it did in 1985, the company knew the choise of a suitable name would

be dependent on whether one wants either; a product related name or a reflection of being

special and unique. The answer is the

second choice; reflection of being special

and unique!

To further relate the product to

consumers, the trend of its classic Halo

promotion that used celebrities and other

media like comic media for extensive

awareness are recommended, so it could be

appealing to all level of consumers.

The team should ponder back to the classic time

of Colgate-Palmolive trend of early shampoo,

Halohow the brand name was distinctive from

its company name, to deliver a special and

uniqueappeal to consumers instead of stood

popular because of its producer.


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REFERENCES

1http://seekingalpha.com/article/923911-colgate-palmolive-dividend-stock-analysis

2http://americanhistory.si.edu/collections/search/object/nmah_210364

3http://forums.longhaircommunity.com/showthread.php?t=111187

I used Halo shampoo when I was a little girl (a looonnng time ago) and

to this day I remember how delicious it smelled. Are there any other

shampoos you remember from childhood that aren't around any more?

PetuniaBlossom3

Colgate-Palmolive-Peet Companys Halo Shampoo Top RCD Recording Star Ralph FlanaganHits a high note in dance tunes. "Halo, Everybody, Halo!"(1954)
http://americanhistory.si.edu/collections/search/object/nmah_210364http://americanhistory.si.edu/collections/search/object/nmah_210364http://americanhistory.si.edu/collections/search/object/nmah_210364http://forums.longhaircommunity.com/showthread.php?t=111187http://forums.longhaircommunity.com/showthread.php?t=111187http://forums.longhaircommunity.com/showthread.php?t=111187http://forums.longhaircommunity.com/showthread.php?t=111187http://americanhistory.si.edu/collections/search/object/nmah_210364

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