This case was prepared by Gurudas Nulkar as a basis of class discussion. This is not meant to depict a right or

wrong decision. The author may have disguised some names to protect confidentiality. Copyright © 2013 : Gurudas Nulkar

Oral B : To be or not to be

It’s not often that you see Bollywood actors on

stage with toothpastes in their hand. As Madhuri

Dixit walked in, Kainaz Gazder, Marketing Head

P&G India, hoped that with her million dollar smile

would work up their charm on Indian consumers.

This was the launch of the Oral-B Pro-Health

toothpaste – a first in this category for P&G India.

Even for an established giant like P&G, Kainaz knew

it was no small task to grab a market share from

Colgate Palmolive and Hindustan Unilever.

Between these two, they shared a whopping 76%

market of the estimated INR 6000 crores.

P&G India

Established in 1964 P&G India today serves over

650 million consumers. It is one of the largest

consumer goods companies in India. Its trusted brands are household names across India. These

include Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B, Head &

Shoulders, Wella and Duracell. P&G owns five plants and has more than nine contract manufacturing

sites which create over 26,000 jobs directly or indirectly. Consumer driven product development, a

robust supply chain and large promotion budgets ensure P&G is one of the enjoys large market

shares across Beauty & Grooming, the Household Care segment and the Health & Well Being

segments. Worldwide, P&G has two brands in the toothpaste market – Crest and Oral-B, but none in

India. With the launch of Oral-B, P&G hope to get a piece of this pie too.

The toothpaste market in India

In terms of in dental hygiene, India is still a nascent country, with majority of the population still

relying on traditional cleaning materials like coal ash, tobacco paste and Babool or neem sticks.

These still rule the rural areas. The oral care industry in India is worth nearly INR 6000 crores

annually (Table 1). Per capita consumption of toothpaste in India

stands at 127gms/year; one of the lowest in the world (Figure 1).

55% of Indians use toothpaste and only 15% brush twice a day.

The toothpaste demand is growing at a slow pace or about 8-10 %

annually.

The toothpaste category is dominated by two players - Colgate

Palmolive & Hindustan Unilever which account for nearly 76 % of

the market. For years, Colgate has dominated the toothpaste market in India. The Company is India's

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biggest oral care products company with more than 95 % of its sales coming from this product

category. The rest of the market is shared by few brands from local and multinational companies

(Table 2)

The way ahead for Oral-B

When Madhuri Dixit launched the Oral B Pro-Health, perhaps no one else was watching it more

closely than Prabha Parameswaran, MD of Colgate. P&G’s entry would lead to increased ad spend by

other players as they try to protect their market shares. Abneesh

Roy of Edelweiss Securities opines that Colgate, which has a strong

presence across all segments and price points, will be in a better

position to counter the new entrant. Colgate is already sharpening

its axe. Controlling more than half the market, Parameswaran will

fiercely guard every inch. A heap of Colgate toothpaste packs greets

customers at a leading supermarket across India. Most of them

have either BOGO (buy one get one) printed on it or sport reduced

price tags. Colgate wants to bully P&G out of any shelf space across

4.5 million retail outlets. They are throwing toothbrushes, pastes,

and brand events and promotions with trade partners, and

discounts, all to deny or delay giving P&G a toehold. With such

promotional activities, several large retailers haven't even stocked

P&G's new toothpaste since margins offered were lower than

Colgate and GSK. Colgate has hiked its advertising and promotion

spends by 31% during the first half of this calendar year. And yet,

P&G is not a novice to such intense rivalry. In the US, they have had numerous skirmishes with arch

rival Unilever in various product categories. However, in India, P&G takes on Colgate for the first

time.

Dabur too is an aggressive player. In 2011, they have expanded their oral care portfolio by launching

Dabur Super Babool+Salt Power Toothpaste. Strongly positioned on

traditional Indian dental care, this product ropes in Bollywwod actor

Irrfan Khan as the face of the brand. The Babool name and Irrfan’s

persona both have a rural appeal. Moreover, Dabur’s wide range

and popular brands like Chyawanprash, Vatika and Dabur Red make

it a formidable force in the market.

P&G feels that their launch of Oral B toothpaste and initial plans are

on track. In India, Oral-B has an wide range of toothbrushes

including CrossAction Pro-health 7 Benefits, CrossAction Pro-health

Superior Clean and Advantage Sensitive toothbrush. Oral-B’S floss

range includes Ultra Floss & Essential Floss. Oral-B has, close to a

30% market share in the toothbrush category in India and a strong

brand recall. P&G hopes to cash in on this brand recognition for

their new launch. The Oral-B Pro-Health has been specially

formulated for India and contains a patented ingredient, stabilised stannous-fluoride complex which

helps give significant and advanced at-home oral care, by providing the mouth all-round protection,

P&G India Brands

AmbiPur

Ariel

Duracell

Gillette

Head & Shoulders

Olay

Oral-B

Pampers

Pantene

Tide

Vicks

Wella

Whisper

Colgate Palmolive

Toothpaste Brands Colgate Dental Cream

Active Salt

Max Fresh

Total

Visible White

Sensitive

Pro-Relief

Colgate Kids

Colgate Herbal

Maxwhite

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the company says. Oral B Pro-Health already has a facebook campaign in place which reaches out to

the target segment.

Kainaz Gazder knew this fight was going to be a long one – a war, a clash of titans – one where P&G

would have to bring out its best innovations in differentiation, communication and channel

management. As she sat preparing for a sales meet, several questions were uppermost in her mind.

How do you differentiate the product in a market which has almost everything already? How do you

communicate this differentiation in a market which has over 300 TV channels and 100 newspapers?

Why would stores stock this new kid on the block if it has no market pull? Oral B is a large

international brand, how can this be useful in India, where domestic players connect well? The task

may get tougher as the Indian economy expanded at the slowest pace in a decade. P&G’s Healthcare

and Hygiene’s profit growth slowed Colgate’s Indian unit reported a drop in its net income for two

straight quarters.

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Table 1 Breakup of the Oral care market in India

Category Share

Toothpastes 60%

Toothpowder 23%

Toothbrushes 17%

Table 2 Sub-categories in the toothpaste market

Sub-category Approximate market size

White 50%

Gel 25%

Herbal 20%

Others 15%

Figure 1: Per capita consumption of Toothpaste

Table 3 : Other brands in the toothpaste category

Close up – targeted at the youth, this opaque, mint-flavoured gel debuted in 1967. With a mouthwash in the toothpaste, it is positioned as a confidence booster in those close & personal situations.

Meswak – Launched by Dabur, this herbal toothpaste with extracts of the indigenous Meswak plant is fast growing in a market which trusts traditional medicine.

Pepsodent – This toothpaste from the giant Hindustan Unilever is the serious competition to Colgate. With a range of over 6 products for adults and 4 for kids, Pepsodent taps a large spectrum of the market segments in India.

Vicco Vajradanti – This is home grown toothpaste developed by Vicco Laboratories operates in the niche segment of traditional herbal dental creams. Their tooth powder is strong in rural markets and gets it the strong brand recognition.

Sensodyne the largest brand for GSK and the oral care as a segment contributes 30 per cent to the overall global turnover. GSK India expects to tap almost five per cent market share.

Oral-B Pro-Health toothpaste will be available in mint flavour, in 140 grams tube for Rs 98 and 75

grams tube for Rs 59.