Singapore: Colgate Smile Whitening Care Business Strategy Executive Summary

I. Singapore a. Highly developed, sophisticated and growing market b. Per Capita GDP of $62,100, an increase of 13% over previous year. c. Business-friendly; low corruption, low taxes, no tariffs on consumer goods d. But small; population only around 5 million inhabitants

II. Market a. Colgate possesses incredibly strong brand image; 2nd favorite brand amongst

Singaporeans b. Strong competition for oral care; Singapore is a world-leading recipient of FDI.

i.Procter and Gamble, Church and Dwight, Clorox Company competitors. c. However, not a developed market in teeth-whitening systems; opportunity d. Increasing spending on cosmetics and hygiene, and new retail space built;

economic improvement and high growth means discretionary spending rising. e. Target market of young professionals (between 18-44), earning between

S$63,000 and S$120,000 per year. III. Entry Strategy

a. Colgate already possesses a market presence in Singapore; the headquarters of Colgate Singapore are located there.

b. Thus no need to pursue a Greenfield FDI strategy; this has already been done. c. Our strategy is to use Colgate’s existing resources to pursue a Global

Standardization strategy in Singapore i.Keep products similar throughout developed Asian markets, using Singapore

as base. ii.Singapore is very small, so tailoring our product specifically for this market

would not be practical; instead create an economy of scale by producing for a greater Asian market.

iii.Try to keep costs low because of pressures from competition. iv.Produce in Malaysia, which has larger labor force with cheaper wages than

Singapore, and an agreement with Singapore to avoid double taxation. 1. Colgate already possesses production facilities in Malaysia.

IV. Implementation Plan

a. Highlight cosmetic benefits of product to well-to-do young professionals b. Our product, Colgate Smile, is a teeth-whitening system that consists of trays

and gel that are worn in the mouth several times a week. c. Priced around S$60 (~$45 USD), which is similar to what such a product costs in

the United States, so on par with future competition. d. Marketing Mix heavy on technology; Singapore is a very high-tech society with

almost universal internet penetration; 75% of the population use Facebook.

i.Thus heavy Facebook promotion; viral marketing, fanpages, tailored advertising

e. Strategy of continuing to work in cooperation with dentists who recommend the product; capitalizing on Colgate’s strength as the world’s #1 dentist-recommended brand.

f. Place targeted ads in airports and luxury shopping centers, where our core customer base will be located.

i.Also on public transportation; half of Singaporeans take public transport daily. g. Expect to break-even within 2-3 years

i. Price = S$60 (assume 40% markup) ii. Cost thus S$36 per unit iii. Profit = S$24/unit iv. Market size of 1m, if 30% buy the product, revenues of S$ 7.2m/year in

Singapore. v. Total costs of S$10.8m in first year, less every year after that due to

improved marginal revenue

C O L G AT E S M I L E

SINGAPORE

PRODUCT

• Colgate Smile •  Whitening system of gel

and trays •  Whitens teeth by up to

8 shades within 3 weeks •  Applied 4 times a week

for half an hour •  Includes three weeks

worth of gel •  Price: ~$60 SGD •  (~$45 USD)

COUNTRY INFORMATION

•  Population: 4,740,737 • Growth Rate: 0.817% • GDP per Capita:

$62,100 •  Increased 13.3% from

last year •  Ranked 5th in the world

•  Exchange Rate: 1 USD = 1.27063 SGD

•  Exports: $358.4 billion •  14th largest exporter in

the world

•  Imports: $310.4 billion •  15th largest importer in

the world

COUNTRY INFORMATION

•  Free Market Economy •  99% of goods duty-free

•  Open and Corruption-Free Environment •  Stable Prices •  Inflation = 2.8%

•  Singapore attracts major investments in pharmaceuticals and medical technology production

MARKET ANALYSIS

•  Colgate is second-most favorite brand amongst Singaporeans, after Google. •  Retail sales benefiting from rapid growth—6.9% in

2010 •  Many thousands of square feet of new retail property

opened in 2012 •  Emphasis on luxury retail

•  58.6% increase in spending on recreation and culture

•  Sell in specialized person good retailers •  Specialized personal goods retailers made $9.4 billion in

sales last year

•  Competitors: •  Oral B and Crest by P&G

MARKET ANALYSIS

•  Singaporeans are increasingly health-conscious •  Spending on health related activities rose 7.9% in 2010 •  The World Health Organization ranks Singapore�s

healthcare system as 6th overall in the world •  Offering some of the most advanced dental care in Asia •  Increased focus on cosmetic dentistry

•  Ranked most globalized nation in 2006 •  The Economist Intelligence Unit in its �Quality-of-Life

Index� ranks Singapore as having the best quality of life in Asia and eleventh overall in the world

MARKET ANALYSIS

•  Young affluent consumers are most likely to try teeth whitening products: •  18-45 market, with those earning between $50k and $99.9k •  Therefore, our target market will be •  Young professionals •  18-45 years of age •  Income between ~SGD 63k and SGD 120k

•  Total Market Size= ~1 million consumers

SWO

T Weakness

•  Lacks initial niche establishment

•  Price-setter •  Mainly focused on

adults

Opportunity •  High growth potential •  Low competition •  Initial company

penetrating market •  Room for added

pricing •  Corner the market as

niche marketer •  New market expansion

Threats •  Leveraged

competitors •  P&G

•  Adverse reaction fro customers

•  Small market size

Strength •  Exceptional company

leadership and reputation

•  Specific stable customers

•  High brand recognition •  80% use Colgate

ENTRY STRATEGY

• Global standardization Strategy •  Provide same expected Colgate experience •  Advantage with current brand recognition

•  Keep prices low •  Capitalize on economies of scale •  Singapore has less demand for local

responsiveness because of educated, modern population •  Opportunity to add value with differentiation

ENTRY STRATEGY

•  Colgate already has a fully-owned subsidiary in Singapore •  Thus no need to do a licensing/franchisee/M&A strategy •  Colgate Singapore handles marketing and sale of Colgate

products

•  Thus use Colgate�s already-invested resources to market and distribute Colgate Smile •  Import inputs from Colgate Malaysia

•  Effective strategy already being pursued, as evidenced by brand penetration

ENTRY STRATEGY

•  Singapore is a small market, difficult to make profit? •  Combine with activities in similar markets to get economies

of scale •  Hong Kong, Shanghai, Beijing, Taipei, Kuala Lumpur

•  All advanced, developed cities with similar markets

•  Set up headquarters in Singapore to expand throughout Asia •  Singapore ideal because of friendly business climate

•  Take advantage of standardized product throughout these markets, tailor to local preferences only slightly

IMPLEMENTATION PLAN

•  Technology-focused advertising campaign •  74.8% of the population uses Facebook •  Facebook Viral Marketing •  Facebook Advertising •  Facebook Video

•  LCD screens in retail locations •  Explain benefits of the product with in-store commercials

•  Human resources Strategy: •  Train existing employees

IMPLEMENTATION PLAN

•  Dentist recommendations •  no. 1 reputation with dentists world wide.

•  Advertising at Singapore Changi Airport •  Advertising on public transportation vehicles such

as busses, rails, and taxis

Advertising Budget:

IMPLEMENTATION PLAN

•  Place: •  Sell at Health and beauty retail stores •  Guardian and Watson: Upscale places that will appeal to target

customers •  Break even point: likely in 2-3 years (similar amount of

time to most ventures in Singapore) •  Break even when fixed costs match revenue from sale-

variable cost •  Price = S$60 (assume 40% markup) •  Cost thus S$36 per unit •  Profit = S$24/unit •  Market size of 1m, if 30% buy the product, revenues of S$ 7.2m/

year in Singapore. •  Total costs of S$10.8m in first year, less every year after that due

to improved marginal revenue

CITATIONS

All information from: •  CIA World Factbook •  Mintel Business Research Group •  http://www.edmontonjournal.com/business/Singapore+miracle+dims+income+grows/5245568/

story.html •  http://marketing-interactive.com/news/23338

•  http://www.google.com/url?q=http%3A%2F%2Fwww.nationsencyclopedia.com%2FAsia-and-Oceania%2FSingapore-CUSTOMS-AND-DUTIES.html&sa=D&sntz=1&usg=AFQjCNHGh3GcaW0dIfcgEKYeOoPSv-7jTw

•  http://academic.mintel.com.ezproxy.library.wisc.edu/sinatra/oxygen_academic/search_results/show&/display/id=545347/display/id=583491#hit1

•  http://www.google.com/url?q=http%3A%2F%2Fweb.ebscohost.com.ezproxy.library.wisc.edu%2Fehost%2Fpdfviewer%2Fpdfviewer%3Fvid%3D9%26hid%3D111%26sid%3De335fef0-93ef-47cc-8f8e-ead228fe67ae%2540sessionmgr114&sa=D&sntz=1&usg=AFQjCNFtleUb6qYcsgmj0PqU4vLfOBB_jA

•  http://www.oralb.com/international/

•  http://sg.finance.yahoo.com/q/co?s=CL •  http://www.business-standard.com/india/news/singapore-arm-to-pick12-stake-in-colgate-india/217791/ •  http://www.business-standard.com/india/news/singapore-arm-to-pick12-stake-in-colgate-india/217791/ •  http://export.gov/singapore/doingbusinessinsingapore/index.asp