Colgate is an established name in every household in India, and it has been able to retain its position as market leader over decades in the country, with its single-brand strategy. In recent times, however, there has been a surge in the competition faced by Colgate, both from giant industry competitors like Pepsodent and Oral B in the mouth cleanser segment (germ and tooth decay, multi-benefits and gel) and niche competitors in emerging segments such as sensitivity and gum-care.
Recommendations
1) Germ and tooth decay, whitening and multiple benefits
In the Indian market scenario, Colgate and Pepsodent are seen as arch-rivals. And to compete against Pepsodent in the above segments, Colgate should use its own brand name and a single-brand strategy.
Reasons:
a) To establish a new brand from scratch against Pepsodent, time and capital will be required
b) Colgate enjoys huge brand loyalty from customers in these segments. Diluting that will serve no purpose and will put it at a disadvantage against Pepsodent.
2) Sensitivity and gum-care
In these segments, we think Colgate should counter Sensodyne and Parodontax by launching new niche brands
Reasons:
a) Perception among people :
As per our survey with over 100 people, more than 70 per cent associated Colgate with the image of ‘Colgate Strong teeth’ or ‘Colgate Total’, the generic version of Colgate.
Given past marketing, people perceive Colgate as a non-specialist brand.
b) Secondly, major competitors in these segments (Sensodyne and Paradontix) have adopted and marketed themselves as niche in the market instead of taking on Colgate head-on.
And hence in these segments, the best strategy would be to come up with an entirely new brand, which can build itself as a niche product in these segments. For example, Coca-Cola markets its products, Thums up and Sprite such that each product has its separate identity. But all of them used the mother company to enter the market. Colgate should adopt a similar approach for its specialist products. Also, this strategy will not dilute the image of brand Colgate.
3) Gels
For this segment, Colgate should endeavour to promote/market its already existing product “Maxfresh” in such a way so as to achieve the same impact that “Close up” made in the late 1980s. Maxfresh should be marketed such that people perceive it as an entity in itself, instead of Colgate Maxfresh. This will help separate its identity from Colgate and establish itself as a gel product.
Conclusion
To sustain growth, Colgate should adopt an amalgam of both the single-brand strategy and multi-brand strategy. To compete in conventional segments (germ and tooth decay, whitening and multiple benefits) with industry stalwarts like Pepsodent and Oral-B, Colgate should use its own brand name (single-brand strategy). Whereas to compete with products such as Sensodyne and Paradontax emerging in the niche segments of sensitivity and gum, Colgate should adopt multi-brand strategy and devise new brands especially for these markets.
(Sanchit Malik and Pankaj Kumar Thakur are pursuing an MBA from IIM Indore, Mumbai Campus)