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Colgate In Argentina

.. hoose to market Colgate Total toothpaste in 4.2, 6, and 7.8 ounce squeezable tubes. Considering that 84.5 percent of Argentines live in urban areas, Colgate-Palmolive could achieve greater economies of scale and better measure correlation between promotions and sales by distributing Colgate Total through larger, more modern grocery store chains located in densely populated, cosmopolitan Buenos Aires and Southern Santa Fe. As stated earlier, Colgate-Palmolive should market Colgate Total toothpaste to younger, married, middle class, Argentine women to fulfill their needs for value (longevity of product benefits requires fewer brushings per day than regular toothpastes to achieve similar benefits), convenience (multi-faceted nature of product features acts as a substitute for purchase of regular toothpaste and antibacterial mouthwash), and peace of mind (special formula performs much better against most major adult preventative concerns than competing products). At first glance, demand for toothpaste in Argentina appears to be selective, but substantial primary demand has yet to be cultivated due to lack of personal income and/or consumer education. Worldwide annual per-capita consumption of toothpaste averaged 363 grams or 12.8 ounces while consumers in India used only 67 grams of toothpaste annually.

The average annual per-capita consumption of toothpaste in Argentina is probably somewhat lower than the worldwide average due to a lower average personal income and a lack of consumer education. However, with the help of Colgate-sponsored mobile clinics that would bring dental hygiene programs, dental care professionals, and product samples to uneducated consumers throughout the major urban areas in Argentina, primary demand for toothpaste could grow along with selective demand for Colgate Total. Cultural constraints often inhibit the fulfillment of international marketing objectives. Due to the cultural similarities between Latin America countries, it is entirely plausible that government officials and local businessmen in Argentina customarily accept bribes from domestic and foreign-owned corporations. Despite the fact that local citizens regard these practices as an observed cultural tradition, American businessmen should not conduct business deals according to the adage When in Rome, do as the Romans do, especially if they involve bribery. The Foreign Corrupt Practices Act deems that any bribes paid to foreign officials, candidates, or political parties as being illegal, and those company officials, directors, employees, or agents found guilty of paying a bribe or authorizing payment of a bribe are subject to stiff penalties.

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Since Colgate-Palmolive already operates in more than 200 countries throughout Asia, Latin America, Central Europe, and Africa, Company officials, directors, employees, and agents are probably very familiar with questionable business practices-when judged according to U.S. ethical standards and law codes. However, although measures must be taken to grease the wheels, perhaps it would be safer and just as effective for Colgate-Palmolive officials, directors, employees, and agents to have a sales expense account at their disposal so they could use company funds to take influential people deep-sea fishing or sky-diving rather than pay an outright bribe (Cateora 181). Economies of scale occur when a company markets a product globally and experiences higher levels of efficiency through the standardization of marketing mix elements. Colgate-Palmolive could standardize the paste, tube, and packaging materials for Colgate Total toothpaste.

If another nearby factory in a neighboring country also manufactures product for Spanish-speaking consumers-such as Ecuador, standardization could be achieved for the copy imprinted on the Colgate Total tubes and boxes. Colgate Total appeals to members of the emerging middle classes in other Latin American countries, so standardized consumer and trade advertising could be implemented across borders to appeal to socioeconomically similar target markets. However, some primary research should first be conducted to test consumer reaction to language differences, such as colloquialisms and annunciation. Developing the Marketing Mix The lions share of the product decisions have already been made by Colgate-Palmolives product development team. After analyzing product information, the marketer subdivided product information for Colgate Total toothpaste into features, advantages, and benefits. In its consumer advertising, Colgate Total toothpaste should focus on communicating product features, advantages, and especially the benefits that most appeal to target market members. The features, advantages, and benefits for Colgate Total toothpaste are as follows: ADA Seal of Acceptance Advantages: Protects against plaque, gingivitis, and cavities Benefits: Increased confidence in product claims and benefits Unique Colgate Total formula (fluoride and Tricloscan) Advantages: Works to fight plaque, gingivitis, tartar, cavities, and bad breath; remains the only toothpaste in the United States made with the antibacterial ingredient, Tricloscan, which effectively controls a wide range of bacteria.

Benefits: Added-value derived from special formula that addresses most major adult oral preventative concerns under the guise of one product. FDA clearance Advantages: Affirms that the FDA believes this everyday toothpaste is safe for all patients over 6 years old, and most important, effective for its intended use, which validates its product claims and benefits derived from its new ingredient. Benefits: Greater reassurance as to products basic safety and efficacy Patented co-polymer additive called Gantrez, or PVM/MA Advantages: Prolongs the retention of Tricloscan on oral and soft tissues and in plaque, causing product benefits to continue to work, even after you eat or drink something, for up to twelve hours after you stop brushing. Benefits: Added-value derived from increased longevity of active ingredients, and corresponding product benefits. Key compensatory flavor ingredients Advantages: Influenced an overwhelming majority of consumers to choose Colgate Total over their regular toothpaste based on taste.

Benefits: Pleasurable taste and brushing derived from toothpaste flavoring Carton made from recycled material Advantages: Motivates consumers to perceive the product as being green, or environmentally sensitive. Benefits: Peace of mind from purchasing an environmentally conscious product As mentioned earlier, Gantrez provides Colgate Total with a sustainable competitive advantage, which dictates that Colgate-Palmolive implement a product differentiation strategy. In terms of product pricing, a product differentiation strategy equates to a value-pricing strategy. Value-pricing methods determine product price based on consumer demand, or charging what the market will bear. Value-pricing applies to Colgate Total because it provides customers with unique benefits that far exceed production costs. By differentiating its product from that of competitors, Colgate-Palmolive incorporates inelasticity into Colgate Totals demand curve, which means consumer demand would be very insensitive to a change in product price.

According to the price inelasticity concept, Colgate-Palmolive could raise the price for Colgate Total in Argentina above the going market rate while increasing revenue and enjoying increased margins (Nylen G-78, G-233). Colgate-Palmolive manufactures Colgate Total toothpaste in 4.2, 6.0, and 7.8 ounce tubes that retail in the United States for $2.49, $2.99, and 3.49 respectively. Starting with the base price for Colgate Total in dollars, which already includes a target level of profit, the marketer may arrive at the cost to end consumers in Argentina. A strong correlation has been shown to exist between toothpaste price and sales because on average, smaller sizes are more affordable to the greatest number of people. Since larger sizes of Colgate Total may be priced beyond the budgets of some middle class Argentines, the marketer stipulates that initial product introduction will initially only involve the smaller 4.2 ounce tube priced at $2.49. The calculations for import taxes and fees are as follows (Argentina Trade Regulations and Standards): Base Price $2.49 Freight (8%) .20 C&F $2.69 Insurance (1.5% of C&F) 4 Dutiable Base $2.73 10% Duty 27 3% Statistics Tax 8 VAT Base $3.08 Port Costs (6%) 18 Freight Forwader Fees (1.5%) 5 Bank Charges (2%) 6 Subtotal $3.37 VAT (21%) 70 Grand Total $4.07 If Colgate-Palmolive integrates a consumer education theme throughout its promotional mix for Colgate Total in Argentina, its new toothpaste will usurp the toothpaste product category and steal considerable market share away from competitors. Research conducted by Colgate-Palmolive has shown that a direct relationship exists between increases in income and educational levels and per capita toothpaste and toothbrush consumption, especially in high growth markets where consumption has grown by more than two hundred percent over the last five years.

Taking these statistics into consideration, Colgate-Palmolive should implement educational programs similar to those that achieved successful sales results in other nations with low-frequency consumption of toothpaste, such as India. Colgate-sponsored mobile clinics specially adapted to appeal to the needs and tastes of Argentines could bring dental hygiene programs, dental care professionals, and product samples to housewives in residential neighborhoods and working mothers in the business districts of major cities. These mobile clinics would increase consumer awareness of Colgate Total toothpastes product features, advantages and benefits, which would grow product adoption and usage frequency. If employed in a culturally sensitive manner, this education-based aspect of the promotional mix could serve as a catalyst for incremental growth in sales in Argentina. To further integrate consumer-directed education about the prevention of periodontal disease and the benefits of Colgate Total, Colgate Palmolive should promote its new product through select print and television media.

Colgate-Palmolive should place full color spreads in housekeeping and businesswoman magazines targeted at housewives and working mothers. The Colgate Total toothpaste logo and tube should be pictured, but the advertisements should focus on conveying to mothers the perceived harm(s), such as gingivitis and cavities, that could negatively influence the health of their children and husbands. A cents-off promotional coupon redeemable at the local, major cosmopolitan grocery store chain should be included on the lower right hand corner of each spread. Complimentary half page newspaper advertisements posted in the business and fashion sections of major newspapers, such as La Nacin and Clarn, should share similar advertising copy and cents-off similar to magazine advertisements. Colgate-Palmolive should wrap-up its promotional campaign with television commercials and sponsorship of product-based game shows and soap operas. Colgate-Palmolive could include humorous commercial based on the cultural mainstays of Argentine culture, such as skits played-out on gaucho or tango settings.

Consumer-based television commercials would target parents of middle-aged family households. Advertising copy would focus on family-wide product benefits, such as value, convenience, peace-of-mind, but would focus on perceived risk for adults surrounding bad breath. In the Latin American culture, people maintain very little distance between each other when speaking, which could make for some embarrassing situations for those people with bad breath. Finally, housewives who stay at home and care for the house and children habitually watch product-based game shows and telenovelas, or soap operas. To reach housewives, Colgate-Palmolive should advertise its Colgate Total toothpaste on these day and evening shows.

Control and Evaluation Colgate-Palmolive could implement several control measures to measure the effectiveness of current marketing strategies. For example, the Company could conduct coupon tracking analysis of promotional coupons disbursed through local newspapers and magazines. In this context, tracking of specially numbered coupons could tell management in which areas promotional effectiveness and/or consumer consumption are/is highest. Feedback gathered from coupon redemption analysis would effect future modifications in the distribution and promotion strategies present in the marketing plan. By choosing to initially conduct a new product roll-out through more modern grocery stores, Colgate-Palmolive could request and analyze sales records for Colgate Total toothpaste on a store-by-store basis to conduct correlation analyses to determine which promotional strategies yielded the best results based on a regional basis.

Again, feedback gathered from these correlation analyses would effect future modifications in distribution and promotion strategies. Colgate-Palmolive should also solicit for valuable feedback from its customers, employees, and distributors. A toll free number should be placed on every package and tube of Colgate Total toothpaste so that customers can ask questions about product usage or give feedback on product performance. Colgate-Palmolive should also solicit for feedback from domestic employees and distributors. No one knows the Argentine marketplace better than the local players, and their feedback plays an integral role improving efficiency and profitability in international markets.

Invaluable feedback gathered from customers, employees, and distributors would give management the feedback they need to modify product design, marketing mix strategies, distribution processes respectively. Bibliography 1. An Innovative Sheen In Oral Care. (toothpaste marketing of Colgate-Palmolive Co.)(Brief Article)(Interview). Drug Store News, Nov 15, 1999 v21 i18 p14 2. Argentina. Country Commercial Guide, FY 2000.

3. Border crossings: brands unify image to counter cult of culture. (companies strive to develop global brand products). Brandweek, Oct 31, 1994 v35 n42 p24(5) . 4. Colgate-Palmolive posts higher results. United Press International, Oct 21, 1999, p1008294u1548.

5. Colgate profit rose 18% in second period, led by Latin America. Wall Street Journal; New York; Jul 25, 1997 6. Dusseau Charles. A new opportunity.

(Mercosur: Achievement and Perspectives). Latin Finance, September, 1993 n50 pTF57(6). 7. Harvilitcz, H., Colgate, Church & Dwight report good quarters . Chemical Market Reporter; New York; Aug 3, 1998 8.

Kahale Roxana M. Argentina. (trade regulations)(includes directory) (The Latin America Trade Finance Directory, 1993-94). Latin Finance, Jan-Feb 1994 n54 p94(1). 9.

Kindel, S., Selling by the book. (Colgate-Palmolive’s global product-rollout strategy detailed in its ‘bundle books’) (includes related articles). Sales & Marketing Management, Oct 1994 v146 n11 p100(7). 10. Miler, C., Not quite global: marketers discover the world but still have much to learn. Marketing New, July 3, 1995 v29 n14 p1(4).

11. Randy Mye R., Palagonia, L., MERCOSUR’s potential market is now over 200 million people with a combined economy of nearly $1 trillion. Business America, August 1996 v117 n8 p17(2). 12. Parker-Pope, T.,Whistle-Blower: P&G Calls the Cops As It Strives to Expand Sales in Latin America Noted Marketer Tries to Sell Antitrust Notions in Bid To Catch Its Giant 13. Rivals Sending In Legal Precedents.

Wall Street Journal; New York; Mar 20, 1998. 13. Wirth Fellman, M., C-P sinks teeth into global opportunities. (Colgate-Palmolive Co.’s receipt of the 1997 New Product Marketer of the Year award). Marketing News, March 30, 1998 v32, n7 pE2(2).


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