Strategic Marketing : Colgate Essay Example

top-selling company worldwide. To emphasize its significance within the global market, Colgate implements Rouser Reeves' Unique Selling Proposition (USP) strategy developed by Madison Avenue according to Blandishing V., C.S Aragua (2006). Kurt (2008) mentions that Colgate utilizes various marketing approaches such as television, radio, and newspaper advertisements to promote their products and leverage their strong brand image. In order to identify strategic alternatives, Moon (1999) highlights that Colgate conducts a SWOT analysis which assesses their strengths, weaknesses, opportunities,and threats. Gibson (2008) states that Colgate's strong brand image has resulted in increased sales and ample cash flow for operations. The company has solid market share in the US, Asia,and Europe.The growth of Colgate's earnings can be attributed to increasing awareness among people about dental health.Moreover,Coglate excels at developing global business and product selling capabilities while keeping an eye on competitors.However, an analysis using the SWOT framework reveals that Colgate's product line is perceived as dull and there is a high level of leverage. This lack of innovation in their existing production line could result in lower profit margins. On the other hand, the analysis also shows that Colgate has a dominant presence in the global oral care market. In countries like the US with smaller Spanish populations, there is an opportunity for Colgate to increase its market share. In addition, they can focus on introducing more personal care products in India and other Asian countries to further drive growth.

Moreover, with increased health awareness worldwide, there are opportunities for Colgate to expand its offerings with new products. However, there are also threats facing Colgate such as intensifying competition in the global market, limited private label growth, and

significant price increases for their products (Colgate 2013). Furthermore, Colgate categorizes external factors into four major types using PEST or PESTLE Analysts after assessing their impact on business operations (David, 2011). Political factors like government trading policies, political stability, taxes, and labor laws imposed by government overspending can influence how business is conducted (Colgate 2013). Various regulations enforced by governments may have an impact on Colgate's production processes as well as its marketing and selling activities (Colgate 2013).Economic factors are important for both the economic growth of a country and business operations. Colgate's senior management has the responsibility to assess their home country's economy and stay updated with changes in taxation trends for products and services. If involved in foreign trade, they also need to consider tariffs, exchange rates, and import-export ratios (Colgate 2013). Fluctuating exchange rates can pose a threat to Colgate's earnings.

Socio-cultural factors refer to the perspective of the general public or society (CHIP 2014). The perception of Colgate by the public is crucial for building its brand image. Additionally, these socio-cultural factors contribute to advertising and publicity, as they play a role in shaping the brand image. Therefore, it is important for the company to have a strong presence in media and press (CHIP 2014).

According to Maxine N. Laurie & Marc Mapped (2004), it is crucial for the company to show respect towards the elderly population and cater to minority interests when introducing new products.

Technological factors also have a significant impact on business operations according to Colgate (2013). Technology plays a vital role in improving productivity and implementing advanced techniques such as Just-Len-Time (JIT) and Six Sigma, which enhance production capacity and

maintain quality.Colgate uses Porter's five force analysis to gain a competitive advantage in its global business operations and attract investors and stakeholders (Porter, 2008). Despite weak business strategies, Colgate maintains low bargaining power of suppliers through factors like partnership, supply chain management, training, and dependency (Aragua 2006).

The strength of Colgate lies in its customers. With over 200,000 manufacturing units worldwide and a daily customer base exceeding 26 million (Del 2007; Porter, 1980), customers choose Colgate for its widespread availability, affordability, high-quality products,and technological advancements that lead to customer satisfaction.

In the home care and oral care industries,new competitors offering similar high-quality products pose competition for Colgate. However,the company stands out due to its advanced technology capabilities (Gibson 2008). Colgate's reputation is built on technology, products,business ethics,and corporate social responsibility to foster brand loyalty among consumers (Promo Magazine 2005).

However,the company faces a threat of substitutes as customers may opt for alternative products due to increased costs.In response,colgate lowers prices and employs marketing strategies like promotional campaigns to differentiate itself from competitors (Porter 1979;Storefront 2009;sedateness.Mom2012).Colgate uses segmentation, targeting, and positioning (STEP) strategy to effectively reach its audience and establish its products or services in the market. This involves dividing the target market into subsets with common needs and creating tailored strategies for these segments (Guava 2005). By understanding consumer needs through market segmentation, Colgate gathers relevant information for effective positioning. Colgate employs various targeting strategies based on geographic, demographic, cryptographic (behavioral), and behavioral factors (Goldstein 2007). These factors help identify specific customer segments to focus marketing efforts on.

Additionally, Borden (1965) states that marketing management is built on the foundation of product, price, place, and promotion aspects known as

the "4-As." The 4-As are compared to Einstein's theory of relativity and Quantum Mechanics. They are used when launching new products with marketing strategies (Storefront 2009). Colgate utilizes the 4-As to endorse their products and increase revenue. Their product can be tangible or intangible and should cater to different market segments (Kerri 2001; Kurt 2008).

Price refers to the money exchanged between customers and sellers for goods and services. This is achieved through different distribution channels (Kettle 1997).Determining the price of a product involves considering factors such as market share, competition strategies and numbers, raw material costs, and customer perception (Ante, 2006). The organization currently employs multiple pricing methods. Penetration pricing allows them to establish a monopoly in the market despite initial losses but with potential for significant profits (Kettle, 2012).

Price skimming entails initially setting a high price for a product and later reducing it (Kettle, 2006). Place refers to the location where customers purchase products. As explained by Kettle (2012), place is the distribution method that physically delivers products to customers. This can involve both direct and indirect selling methods. The selection of target countries and market entry techniques are vital for companies like Colgate through foreign direct investment and direct marketing techniques.

Promotion involves marketers using various communication methods to raise awareness about products. Advertising, sometimes utilizing celebrity endorsements (Kettle, 2012), plays an important role in branding products. Integrated marketing communication is crucial for promoting products like Colgate toothpaste; however, it may not have the best quality toothpaste on the market according to current trends. Customers are increasingly using more advanced products and have not found anything innovative in Colgate.The lack of technological progress

has hindered advancement, but Colgate continues to sell a significant quantity of toothpastes due to their cheaper price. Despite the availability of products with advanced technology in the market, they do not generate high sales. This is partly because celebrity endorsements have increased advertising costs, which need to be reduced for higher overall profits. Nonetheless, Colgate remains a prominent player in the market and is globally recognized as a brand.

Although newer products may not yet be familiar with Colgate, it is likely that customers have used Colgate toothpaste in the past. This further supports the recommendation that customers desire innovative products. To fulfill this demand, the company should focus on developing location-specific toothpaste tailored to meet the demands and age groups of each population. For instance, sensitivity issues should be addressed for older individuals while strengthening teeth muscles should be prioritized for younger individuals.

Currently, promotional efforts are mainly focused on educational advertisements across different markets to position Colgate as a provider of premium products. This strategic approach aims to increase market share in the premium segment without negatively impacting sales in traditional markets.To stay competitive in the toothpaste market, it is important to implement contemporary marketing techniques that are essential for success today. These techniques include using relationship marketing strategies to build stronger connections with customers through price discounts, offers, and strong branding to create customer loyalty.

Colgate should prioritize social marketing and incorporate best practices in product production and promotion to enhance their marketing efforts. Improving the branding of their final products is especially important for consumer goods like toothpaste where Colgate currently lacks recognition. Therefore, it is recommended that the company focuses on branding

and advertising initiatives.

Developing good customer relations through relationship marketing is also significant for Colgate. The STEP marketing strategy includes five key communication factors: advertising, sales promotion, public relations and publicity, personal selling, and direct marketing. Advertising involves formally presenting ideas, goods, and services to potential customers through various media platforms suggested by the marketing mix. For Colgate's publicity efforts, television and radio advertising have proven particularly effective.Targeting niche markets is crucial for developing competencies in a global customer base, especially in the fast-moving consumer goods (FMC) sector. Sales promotion acts as a technique to swiftly promote products. The text emphasizes the importance of strengthening relationships between organizations and consumers through business-to-business (B2B) and industrial marketing. Communication, advertising, and promotion play a significant role in modern marketing, particularly for Colgate. Advertising has a profound influence on shaping consumer behavior and targeting specific products.

Following recommendations from STEP, technology can be used in production and research to offer innovative and healthy products that cater to consumers of all ages. Marketers must continuously analyze and understand customers' psychological needs to meet their requirements effectively. Continuous product innovation is crucial for maintaining competitiveness in today's market.

Giving priority to quality product development while utilizing technologies like SIT and Six Sigma ensures the creation of stable global products. According to STEP, Colgate should take advantage of the advertising potential that comes with communal engagement.

The success of new products or stocks largely depends on their performance during the initial months as a publicly traded business.Once businesses release their stocks in the marketplace, it is typical to see a substantial rise in turnover and revenue. If Colgate can seize this opportunity effectively, they have

a high likelihood of succeeding. The stocks were announced recently, and it will take around one or two months for them to be sold. Marketers need to aim for the highest sales targets, with advertising being recognized as the most effective tactic for influencing customer behavior. Therefore, classified ads play a crucial role and should possess creative and attention-grabbing qualities that capture consumers' attention.