Toothpastes

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Product Features
 Toothpaste is a low involvement product
 Grinds away the leftover food and plaque on your
teeth, with the help of your toothbrush
 Abrasive paste
 The abrasive in toothpaste is called dicalcium
phosphate dihydrate
 The other main part of toothpaste is the paste which is
made up of water and things to help it spread through
your mouth easily

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The Toothpaste Market
 Industry size: Rs 25 billion
 Toothpaste can be considered as a solution to the need
of oral care
 Types of toothpastes:
• Whites
• Gels
• Herbals
 Players: MNC dominated market (Colgate, HLL)
 Market growth: 7-8% CAGR
 Per capita consumption: 82 gms
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Porter’s Five Forces Analysis
 Competition in the sector
• Dominated by large multinational companies such as CP, HLL
• A few Indian companies such as Dabur, Anchor and Babool
 Threat from substitute products
• Traditional products like twigs of the neem tree, salt, ash, and other herbal
items
• Toothpowders with 23% market share can act as a threat to the toothpaste
markets
 Threat of new entrants:
• Sector is not capital intensive
 Bargaining power of suppliers
• Most of the companies in the industry are integrated backwards
• Manufacturing is largely outsourced
 Bargaining power of customers
• Very low

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Players
Company Types of toothpaste
Colgate Palmolive Whites, Gels
HLL Gels
Balsara Hygiene Ltd (now Dabur) Herbal
Dabur India Ltd Toothpowders, Gels
Smithkline Beecham Gels
Anchor White
Vicco Labs Herbal

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Market Share
2 % 1%
3%
4%

5%

39%

13 %

16 %

17 %

Colgate Dental Cream Pepsodent

7
Consumer Needs
 Clean teeth
 Prevention of tooth decay
 Fresh breath
 Prevention of plaque, tartar and other diseases

8
Customer Segments

Customer
segments

Habit driven

Value-driven
(price conscious)

Variety seeking

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Competitors
 MNC dominated markets
 Two largest players constituting 84% of the
market share
 Brand-wise share:
• Colgate 51%
• HLL 33%
• Dabur 9%

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Colgate
 51% market share
 Flagship brand is largest selling toothpaste brand

Product Share
Colgate Dental Cream 39%
Cibaca Top 5%
Colgate Gel 4%
Colgate Herbal 2%
Colgate Total 1%

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HLL
 India’s leading FMCG company
 Late entrant
 33% market share
• Pepsodent 17.6%
• Closeup 15.3%

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Dabur
 Acquired Balsara
 Presence in all segments
 30% share in toothpowders
 9% share in toothpastes
• Babool 5%
• Promise + Meswak 4%

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Developing Marketing Strategy

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Positioning
 Colgate
• Diversified portfolio
• Market leader
• Quality products, catering to all needs of customers
• Colgate gel positioned as lifestyle product
• Colgate Total for tartar control
• Cibaca Top for low income groups
 HLL
• Closeup: Targeted towards youth. Fresh breath, confidence
inducing
• Pepsodent: Providing extended protection from germs and tooth
decay
 Dabur
• Herbal oral care for all segments

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Product-Service Innovations
 Colgate
• Continuous line extention and upgradation
• Increased R&D spending
• 40% sales (2004) came from new product launches
• Variants like Colgate Total, Fresh Energy Gel, Colgate Herbal to fill all
gaps
 HLL
• 3-way convergence of product availability, brand communication and
brand experience
• Creating new touch points
• Using the HLL distribution network
• Aggressively entering the out-of-home consumption category
 Dabur
• New campaign (Subah babool ki to din tumhara)
• New packaging
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Delivering Marketing Programs

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Promotional Strategies
 Low involvement products
 Mostly habitual purchases, low brand loyalty
 Differentiation through marketing
communications required

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Colgate
 Freebies galore
• One of the first to introduce BOGOF
• ‘Below-the-line’ promotion strategy
• Large discounts on offer (upto 25%)
 Coverage by higher realizations
• Sustained promotional offers possible because of high
manufacturer margins
• 30-35% price hike during 2000-03 on almost all brands
 Ad-spend/Sales ratio 18.2% (2001)  19.9% (2002)
 Operating profit margins 8.2%  9.2%

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HLL (Closeup and Pepsodent)
 Rural:Urban mix = 30:70
 Target is to achieve a 50:50 mix
 Removing weak brands and strengthening strong brands
• Aim, green variant of Closeup, Closeup oxyfresh withdrawn from
the market
• Strong brands like Pepsodent Germicheck flanked by brands like
2-in-1 and Pepsodent G
 Looking at brand extentions with a ‘whitening’
proposition
 Free dental insurance (Rs 10,000) scheme launched in
2002 for Pepsodent
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HLL
 Strategic advertising
• Tie-up with the movie ‘Kyon, Ho Gaya Na’ (2004)
• ‘Kya aap closeup karte hain’ jingle, designed by
Lintas
• Pepsodent-Shaktiman contest (2005)
• ‘Dhishoom-dhishoom’ campaign for Pepsodent
 Market expansion by using the tagline ‘twice-a-
day brushing’ for Pepsodent

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Dabur
 New packaging with logo and celebrity
endorsement
 Harping on natural strength of teeth by
strengthening the roots
 ‘Live life big bite’ campaign
 Media spend: Rs 5 crore in 2005-06

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Gearing Up for the Future
 Huge opportunities because of low per-capita
consumption
 Reaching rural consumers key to growth
 Consumer education also necessary to increase
toothpaste use

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Gearing Up for the Future (Cont.)
 Colgate
• Competencies in analysis, microbiology, packaging and consumer
research
• Target
­ Faster project implementation
­ Better supply chain management
 HLL
• Segmentation of general trade
• Self-service stores and supermarkets
• Project Shakti
 Dabur
• Plans to restructure its sales and distribution structure in line with
the recommendations of Accenture
­ Increase direct coverage to gap outlets and gap towns where Dabur is
not present

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Launching P&G’s Crest in India
 History
• First-ever toothpaste to use clinically proven fluoride to prevent tooth
decay
• Endorsed by the American Dental Association
 Current status
• Colgate knocked Crest off its throne as the No. 1 toothpaste in 1997 with
the launch of Colgate Total
• In late 2000, after five years of research and development Crest
Whitestrips was introduced
 Rationale for entering the Indian market
• Penetration of modern oral care products and average per capita
consumption of toothpaste very low
• Industry sources expect penetration of oral care products to increase
around 65-70% from current levels of around 49% in the next three to
four years time

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