Marketing Consumer Behaviour of Colgate Toothpaste

This report analyses the marketing consumer behaviour of Colgate toothpaste. It covers Colgate's market strategy, SWOT analysis, competitors analysis, buying behaviour of consumers, and recommendations to increase sales. The report suggests focusing on e-commerce retailers, innovation and new products, and increasing productivity to increase sales.

Running Head: Marketing Consumer Behaviour
Colgate
Report
System04104
9/22/2018

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Executive Summary
Colgate Palmolive is one of the leading brands in the FMCG sector and it is known for its
oral healthcare products and Personal care product all over the world. It covers almost 67.1%
market of total oral care market in the world. In today’s world customer is the most vital part
of any business organisation. Therefore, it is essential to know the customer needs, customer
satisfaction, and their behaviour. The purpose of this report is to find out the reasons for the
declining sales of Colgate toothpaste and know the changing customer buying behaviour and
demand. Although at the same time, there are large numbers of competitors competing with
Colgate for the same. Therefore, this report includes measuring present consumer buying
behaviour at the purchase of Colgate toothpaste. At the end of this report, there are three
strategic factors has been discussed to help the Colgate to increase its toothpaste sales and
identify the customer buying behaviour.

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Table of Contents
Executive Summary...............................................................................................................................1
1. Product Overview (Colgate Toothpaste)........................................................................................3
2. Critical Analysis..............................................................................................................................3
2.1 Colgate Market Strategy (Product- Toothpaste)..........................................................................3
2.1.1 Product.................................................................................................................................3
2.1.2 Price......................................................................................................................................3
2.1.3 Place.....................................................................................................................................4
2.1.4 Promotion.............................................................................................................................4
2.2 SWOT Analysis of Colgate............................................................................................................4
2.3 Competitors Analysis...................................................................................................................5
2.4 Buying Behaviour of Consumer...................................................................................................6
2.4.1 Buying Decision-making Process...........................................................................................6
2.4.2 Buying Situation....................................................................................................................6
2.4.3 Social and Cultural Influence................................................................................................6
2.4.4 Buyer perception..................................................................................................................6
2.4.5 Attitude of Customers...........................................................................................................7
2.5 STP of Colgate Toothpaste...........................................................................................................7
3. Recommendations (Three Key Strategies).....................................................................................7
3.1 Focusing on E-commerce Retailers....................................................................................8
3.2 Should Focus on Innovation and New Products.................................................................8
3.3 Increasing Productivity......................................................................................................8
4. Conclusion.....................................................................................................................................9
References...........................................................................................................................................10
Appendix.............................................................................................................................................11

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1. 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% (Appendix fig. 2 and 3). 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
(Appendix fig. 1). 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).
2. Critical Analysis
2.1 Colgate Market Strategy (Product- Toothpaste)
2.1.1 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.
2.1.2 Price
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

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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
2.1.3 Place
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.
2.1.4 Promotion
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.
2.2 SWOT Analysis of Colgate
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

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analyse different factors, which affects the operations of a company. The SWOT analysis of
Colgate is as below:
Strength:
 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
Weakness:
 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
Opportunities:
 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
Threats:
 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
2.3 Competitors Analysis
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

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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.
2.4 Buying Behaviour of Consumer
2.4.1 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.
2.4.2 Buying Situation
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).
2.4.3 Social and Cultural Influence
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).
2.4.4 Buyer perception
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.

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2.4.5 Attitude of Customers
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.
2.5 STP of Colgate Toothpaste
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.
3. Recommendations (Three Key Strategies)
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.

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3.1 Focusing on E-commerce Retailers
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.
3.2 Should Focus on Innovation and New 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.
3.3 Increasing Productivity
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).

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4. 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.

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References
Agnihotry, A., Fedorowicz, Z., Worthington, H.V., Manheimer, E. and Stevenson, R.G.
(2016) Systematic reviews in oral health: a quality imperative. Journal of Evidence‐Based
Medicine, 9(2), pp. 47-52.
Akpan, S.J. (2016) The influence of cultural factors on consumer buying behaviour (A case
study of pork). British Journal of Marketing Studies, 4(6), pp. 44-57.
Akram, A., Merunka, D. and Shakaib, A. M. (2011) Perceived brand globalness in emerging
markets and the moderating role of consumer ethnocentrism. International Journal of
Emerging Markets, 6(4), pp. 291-303.
Bozkurt, F. and Ergen, A. (2016) Art of war and its implications on marketing strategies:
Thinking like a warrior. International Journal of Research in Business and Social Science,
3(3), pp. 37-47.
Cheng, L.C. (2018) Brand sensitivity and consumer buying behavior: An exploratory study of
proprietary Chinese medicine. Journal of China Marketing Volume, 6(2), p.25.
Gonsalves, J. and Vastani, H., (2015) A study of brand recall in oral health care
category. Reflections-Journal of Management, 3(1), pp. 88-96.
Haider, T. and Shakib, S. (2018) A Study On The Influences Of Advertisement On Consumer
Buying Behavior. Business Studies Journal, 9(1), pp. 86-92.
Jamieson, L.M., Elani, H.W., Mejia, G.C., Ju, X., Kawachi, I., Harper, S., Thomson, W.M.
and Kaufman, J.S. (2016) Inequalities in indigenous oral health: findings from Australia,
New Zealand, and Canada. Journal of dental research, 95(12), pp. 1375-1380.
Lewis, A., Wallace, J., Deutsch, A. and King, P. (2015) Improving the oral health of frail and
functionally dependent elderly. Australian dental journal, 60(9), pp. 95-105.
Martin, A. (2015) Colgate Bought by over half of the world’s households [online]. Available
from: https://www.kantarworldpanel.com/global/News/Colgate-bought-by-over-half-of-the-
worlds-households [Accessed: 23/09/2018].

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Mehta, N. (2017) Colgate-Palmolive's Attempt of Patenting Toothpaste Formula. Patent Law
and Intellectual Property in the Medical Field, 16(8), pp. 148-169.
Mondol, J.R. (2018) Distribution Channel Strategies at the ACI Ltd: A Study on Colgate
Toothpaste. Business Studies Journal, 59(5), pp. 88-96.
Rajagopal, A. (2017) Research continuum on consumer education and brand knowledge: A
critical analysis. Journal of Transnational Management, 22(4), pp. 235-259.
Virani, A. (2013) Consumer personality trait, brand persona and brand loyalty: a pragmatic
study of Colgate toothpaste buyer. International Journal of Humanities and Management
Sciences, 1(2), pp. 155-158.

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Appendix
1. Net sales, Gross profit, Diluted Earnings, and Dividends Paid by Colgate from
2013-2017.
2. World Market Share of Toothpaste

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3. Market Penetration of the Colgate products worldwide