Colgate Leans On Retail Marketing, New Products For Market Edge

Colgate-Palmolive hopes to expand its oral care position with online and in-store marketing, educational outreach and a "very rich pipeline of new products," a top executive said.

A 6.7 percent increase in global advertising spend in 2008 preceded by a 17.1 percent increase in 2007 helped drive the firm's global toothpaste market share to 44.8 percent, according to financial reports and CEO Ian Cook.

But even from that leading position, Colgate still has opportunities to "increase share, increase penetration and very importantly increase consumption over a considerable period of time into the future," Cook said Sept. 9 at the Barclays Capital Back-to-School Consumer Conference.

In one strategy, Colgate will dedicate some ad funds to "moving more of our commercial activity to events at the store floor," which is mainly where consumers make purchase decisions, Cook said.

He said roughly 50 percent to 80 percent of decisions are made in the store, and decision-making behavior varies by retail environment, which is why it is important to tailor marketing.

For example, in four Southeast Asia countries, Colgate partners with retailers through a pilot program to reposition oral care "as a true health category" and make the shopping experience easier, more attractive and more engaging for consumers.

Through the program, Colgate added flags to aisles to educate consumers about different products and benefits, used "glorifiers" to show specific features of premium products - such as sensitivity relief versus cavity prevention - and provided leaflets consumers can read in the store or take away to understand the category better.

Positive pilot results prompted Colgate to expand the program in Asia, Cook said.

Colgate took a different approach in Turkey, where many adults brush only once a day but insist children brush twice, he said. It posted ads on bus stops outside retail stores and hung fliers about oral hygiene in aisles other than the oral care row to remind parents about the importance of their dental hygiene. For example, fliers next to sunscreen said, "Mom, you are protecting your skin. What about our teeth?" Fliers next to detergent said, "Mom, our clothes are perfectly white. What about our teeth?"

The campaign increased the company's toothpaste market share 1.4 percentage points to 28.2 percent, and boosted its toothbrush share 1.4 percentage points to 17.4 in just one month from April to May 2009.

Based on this success, Colgate will expand the marketing campaign to other countries, Cook said.

Colgate also moves beyond retailers and directly markets to communities in emerging markets.

For example, Colgate's Bright Smiles, Bright Futures campaign, which began in 1994, teaches oral hygiene to children. It gives children in the Philippines, for instance, enough toothpaste and brush samples to give their parents so that "the parents could be brought in by the child," Cook said.

The program reaches more than half a billion children in 80 countries, many of which are developing.

In particular, Cook noted, Colgate targets Mexico, Russia, China and India, which are the "most populous countries on the planet" and offer "terrific potential" considering most residents do not brush daily, let alone twice a day.

So far Colgate's outreach efforts in these countries helped the company gain 35 percent of the market share in Russia, 50 percent in India, 32 percent in China and 70 percent in Brazil, Cook said.

Virtual Advertising Plays Key Role, Too

Colgate relies on advertisements in the virtual world as much as in the real world - particularly in developed markets.

"We are using a lot more online [marketing] than maybe we used five years ago," said Cook.

He explained that Colgate relies heavily on its Web site, Colgate.com, as a "gateway into all the other brands of the company."

The Web site includes more than 500 articles and videos about oral health, interactive experiences with the product, promotions and links to social media like Twitter and YouTube, which generate the "buzz that is an important part of getting brand messaging out these days," Cook said.

The content is drawing more people to the site with nearly 23 million visits last year, compared to 16 million in 2007 and 8 million in 2006.

The firm also connects with professionals on the site by providing education with certificates and information professionals can give patients.

Partly as a result, 40 percent of dentists around the world now recommend Colgate compared to 28 percent in 2004, according to Cook.

Colgate also relies on traditional television advertising too, with a series of ads featuring testimonials from Brooke Shields and dentists (¹ (Also see "Product Launches Shelter Colgate From Higher Costs, Slower Economy" - Pink Sheet, 4 Aug, 2008.)).

Colgate Entices Consumers With New Products

Colgate aims to claim more of the oral care market by introducing "value-added innovative products at all price points," including Colgate Pro-Relief , Colgate Max Fresh and Wisp .

Pro-Relief offers European consumers "new technology in the sensitivity area," which is about 10 percent of the global market, and is "clinically proven to provide instant relief on topical application and superior relief over a two-week brushing period to the currently leading brand," Cook said. He compares the value of Pro-Relief to much more expensive anti-sensitivity polishing paste used in dental offices.

Max Fresh toothpaste with whitening and mouthwash beads sells for $3.99 on drugstore.com and targets younger consumers in the U.S. Its Web site plays up its teeth-whitening and breath-freshening capabilities. Included on the site are dating tips and a music download and video of the winner of a competition sponsored by Colgate and MySpace to find a new sound for Max Fresh.

Colgate targets on-the-go consumers with Wisp, a small, portable toothbrush with a "freshness gel bead," Cook said (² (Also see "Colgate Plans Launches With Advertising To Boost Second-Half Sales" - Pink Sheet, 3 Aug, 2009.)).

- Elizabeth Crawford ( ³ [email protected] )