Marketing presentation – Pepsodent

Changing face of the Indian consumer

More aware and selective

Has faster changing needs and habits

Increased ability to spend on a wide range of products

Availability and willingness to use credit

Quality conscious

Rural consumers are specially price sensitive.

A company which was established keeping all these in mind with a vision “Meeting everyday needs of people everywhere” was Hindustan Lever Limited or HLL as we all know.

A few fast facts about the company:

India’s largest fast moving consumer goods company

30 power brands

Leadership in home and personal care, foods and beverages.

About 40000 employees.

1931- Unilever registers company in India – Hindustan Vanaspati Manufacturing Company

1956 – HVM, LBIL, UTL merge to form HLL

1996 – HLL and BBLIL merge

1998 – Pond’s India Ltd merges with HLL

2001 – Project shakthi HLL’s partnership with rural self help groups

2003 – Launch of Hindustan Lever Network.

Explain the business structure looking into the slide.

Categories and brands: Include soaps, detergents, household, oral, skin, hair care, deodorants, Colours, beverages, foods, cooking oils, ice creams, health care, confectioneries and network marketing.

Introduce the 4p’s

Product

Price

Promotion

Place

Product – Tooth Paste

Brand portfolio –

Pepsodent regular

Pepsodent 2 in 1

Pepsodent G

Price:

Pepsodent Regular – Triclosan + Sodium Fluoro Phosphate + Calcium Glycerophosphate.

40g -Rs.10

80g – Rs.20

175g – Rs40.

Pepsodent 2 in 1 – Silica + Sorobil + Triclosan + Sodium Fluoro Phosphate

50g – Rs.19

Pepsodent G

100g – Rs 40.

Pricing strategies

*Penetration

32 per cent of toothpaste demand originates from rural areas

68 per cent coming from urban areas

Rs 500-crore toothpowder market depends almost entirely on rural demand.

“Today we want 50 per cent of our sales from our rural turnover.”

Understanding the potentiality of rural area, it aims to penetrate into the rural area.

*Competitive Pricing

The pricing is altered with due comparison with it’s competitors pricing.

Promotion

*Toothbrushes are low-cost, high-margin products, they have been the favourite add-ons in promotional campaigns

*Pepsodent launches insurance for dental care

*Offers Free Dental Insurance of Rs. 1000/- to its consumers

(Pepsodent Dental Insurance, a first of its kind initiative in the oral care category in India. Undertaken through a partnership with the New India Assurance, India’s largest General Insurance Company, Pepsodent now offers its consumers free dental insurance of Rs. 1000/- on purchase of any pack of Pepsodent.)

*Many recent toothpaste promotions focus on offering the consumer additional quantities of toothpaste at the same price.

Place

Look into the slide and read.

Segmentation

Ø Geographic- (Density) Urban , rural , semi -urban

Ø Behavioural – ( 2 in 1)

Ø Psycho graphic – ( 100 % vegetarian)

Ø Demographic – Age & Family segment

Targeting

Ø Pepsodent, Pepsodent G and Pepsodent 2-in-1 are targeted at the family segment and are positioned on the health platform.

Children – ads of dishum dishum – through them penetrate into family.

Ex: The rather impolite fat instructor being taken to task the second time in his life for gorging himself on ice-cream by a student’s mother is perhaps something a lot of children hope will happen to their teachers

As stated above that is a best way to target the kid’s interest and become their favourite which would eventually end up influencing the whole family.

PositioningMarket leaders in- Oral health

Positioning Statements

Fights Germs Even Hours After Brushing – Regular

New- Long Lasting Germ Protection For Your Family

Protects Teeth Freshens Breath – 2in1

Checks Germs For Gums Protection – Pepsodent G

New – Makes Gums Healthier Fights Germs Longer

We think they are apt because –

ØThreat of substitute – very less. …

Ø Degree of rivalry / level of competition – is very high with colgate, even to an extent to close-up

Ø Entry & Exit barriers – high , due to adv. costs , brand loyalty, awareness
level , users.

Ø Buyer’s power

Ø Supplier’s power

Marketing war

The market leader- Colgate Palmolive

The challenger- Hindustan Lever

Result-Marketing war between the two FMCG giants gets tough.

Colgate-Palmolive (India) currently leads with an over 50 per cent market share in the Rs 1,000-crore toothpaste market.

Pepsodent vs colgate

*Pepsodent alone has garnered a share of 16 per cent in the overall 37 percent share of HLL.

*Colgate-Palmolive (India) currently leads with an over 50 per cent market share in the Rs 1,000-crore toothpaste market.

* *Pepsodent launches insurance for dental care and claim it to be a unique concept

*But the market leader also runs similar initiatives in conjunction with the Indian Dental Association (IDA

Ø”Free toothbrush” offers to sales

*HLL’s 4 per cent shrank in value terms.

Ø”Free toothbrush” offers to sales

* Colgate’s 14 per cent shrank in value terms.

*Refocused on low-unit packs (smaller packs of toothpastes at affordable prices).

Did the same as HLL.

*Pepsodent – child-centric campaign* *Colgate Blue Gel- Fresh Energy Gel-youth centric campaign.

What makes Colgate the market leader?

32 percent – Rural Areas

68 percent – Urban Areas

Rs 500-crore – Depends on Rural

HLL has a presence mainly in the toothpaste and toothbrush markets, Colgate has a significant presence in toothpowders as well. Therefore, it has a larger exposure to the rural market(Around 32 per cent of toothpaste demand originates from rural areas, with 68 per cent coming from urban areas, while the Rs 500-crore toothpowder market depends almost entirely on rural demand. While HLL has a presence mainly in the toothpaste and toothbrush markets, Colgate has a significant presence in toothpowders as well. Therefore, it has a larger exposure to the rural market.)

Colgate’s strategy

*There have hardly been new product launches from the two major players over the last couple of years.

*Few new launches over this period, appear to be part of a strategy to protect Colgate’s existing brands.

Colgate Herbal and Cibaca Top)*This strategy has helped Colgate score a few points over HLL in the ongoing battle for shares between the two largest players in the oral care segment.

While Colgate appears to have won this battle, this may be a temporary respite in the marketing war between Colgate and HLL.

HLL plans to have a presence in every segment of the oral care market and will be addressing this segment.

Considering Colgate, its main competitor, has already launched an electronic toothbrush, HLL may look at brand extensions with a `whitening’ proposition.

Extending the franchise of Pepsodent to the categories such as whitening strips, tablets and whitening kits is a possibility for them to transform from market challengers to market leaders.

(For instance, Unilever already has an array of whitening-based technology-driven products such as whitening strips, tablets and whitening kits. Extending the franchise of Pepsodent and Closeup to these categories is a possibility, according to the company)

Logical analysis

Pep – (n) Liveliness

(v) To make more lively

Dent – Adjective of teeth (or)

A hollow place in a hard even surface made by a blow or pressure.If the dent is teeth it is giving liveliness to the teeth and if it is a hollow space or the cavity created by the germs it is to kill them and give back the teeth life.

Hence the brand name is absolutely apt.

The Bond For Complete Oral Care – Germs Bond – Orizing.British Dental Health Foundation

Approved products

While only 47 per cent of the population in India uses toothpastes and 27 per cent use toothpowder, nearly 260 million people in India are yet to adopt good oral care practise. This makes the players feel that oral care would be a good marketing horizon.

The company markets 110 brands it is an ethos HLL shares with its parent company, Unilever, which holds 51% of the equity.

The shrinking market size has spurred the two largest players in the market into frenetic activity to pep up growth rates. The players first trained their guns on enhancing the penetration level, that is, bringing new users into the toothpaste segment. Toothpastes now reach only 67 per cent of the urban households and 33 per cent of the rural households, and there is considerable scope for market expansion through the conversion of toothpowder users. There was also potential for converting users of red toothpowders to white toothpowders. For much of 1999 and 2000, both Colgate and HLL pepped up their rural distribution network and refocussed on low-unit packs (smaller packs of toothpastes at affordable prices). However, the crisis in the agricultural economy appears to have impeded these efforts at penetration. The break-up of the toothpaste market between urban and rural areas has not changed significantly during the period. Nor has volume growth in toothpastes or white toothpowders, picked up to any significant extent.

As the novelty of gel toothpastes wore off, white toothpastes turned in higher growth rates than the gel segment. This had an impact on HLL for whom Close-Up is the largest oral care brand. Close-Up turned in negative growth rates much of 2001 and its share in the toothpaste market fell marginally.

HLL’s renewed focus on Pepsodent helped it protect its turf. The brand sustained robust double-digit growth rates for much of 2001, with its share moving up from 11.1 per cent to 13.8 per cent by 2001-end.

Smaller brands such as Forhans, Promise, Babool and Meswak have found it difficult to match and sustain the promotional frenzy of the larger brands.