SWOT ANALYSIS:
Strengths:
- An old and successful brand name
- Experience of working in emerging markets
- Knowledge of developing or growing economies
- Good financial backing
- Diversified company
- The company is experience high growth in sales, net income, and earnings per share
- 38% Market Share in the oral care industry
- Full variety of oral care product – In 2009 alone, Cottle-Taylor was able to sell 46% of all tooth brush sold in India
Weakness:
- Margin of the company falls on low-end products
- Weak distribution network in India
- The company’s overall margin is falling in countries like USA, and hence needs more financial backing for standing on firm footings in emerging markets
- Conservative forecasts developed by the finance department of the company
- Problems in inventory planning due to poor supply chain network
- High prices of market offerings might discourage consumers
- Foreign companies are not welcomed
Opportunities:
- Half of population still do no prefer brushing, therefore the market is open and can be targeted
- There is a willingness among the general India population to upgrade to brushing
- Cottle-Taylor plans to have a marketing/selling network of around 450,000 retail outlets
- Western influence – People would be converted to the idea of brushing if the ads are made in way that shows that brushing is trendy and is practiced by foreigners
- Training to supply partners and network partners can enhance the company’s supply of products
- Can easily secure the share in low-end markets by targeting the consumers through incentives
- Education is becoming widespread and hence people are more aware of dental benefits of using modern healthcare
Threats:
- India is a low income country with 80% of Indian population living on $2/day
- Lack of awareness among Indians about dental care
- Usage of brush goes beyond 3 months
- Competitors are already investing in the market
- Brand image of a foreign brand
- Indians associate the foreign brands with “East India Company” which ruled India for many years
Problem:
The major problem for the company is to target the low-end consumers. Majority of the population in India earns around $2 or less. This is the main fact that should be used by the company in designing its marketing campaign and deriving a strategy to do well in India. Since, the general population in India is poor, it is wise for the company to invest bulk of its marketing budget towards this market. Similarly, the company needs to entice and encourage people use modern methods of dental care and brushing through its marketing campaign. The company should also target to increase the incidence of brushing in India. Since, India is a country where tobacco, cigarettes, paans, and guthkas are used, the condition of dental hygiene and care is very bad in India. This results in large market for Cottle-Taylor to target. Although there is a lot of competition in the market, the good financial backing and the experience that the company has in emerging markets should be suffice in beating the competitors.
Another issue with the company is its foreign brand image. People of India view foreign companies with suspicion. A good alternative for Cottle-Taylor is to merge with a local company to improve its brand image. It should use the supply chain network, and other competencies of the partner in India, and should provide it with high quality products and technology to succeed in the market.
Apart from these two problems, the major problem which Brinda and Lang are worried about is how to allocate the marketing budget. Both have brought forward different alternatives that can be used. Brinda plans to have an equally distributed budget, while Lang wants more weightage to be given the high-end products. Currently 80% of the Cottle-Taylor’s marketing budget is spent on low-end products. This is similarly to a developing market like Thailand.
However, another worrying trend for Cottle-Taylor in India is the lack of sales coming from the mid range market, and there is absolutely low existent budget for battery operated products. If we look at sale figures and marketing budget trends in a developing country like Thailand, it would help us develop an effective marketing policy for the Indian market:
It can be clearly seen that the medium-range and battery operated products have gained momentum in the Thailand market. Hence, Lang is justified in giving a little more weightage to the mid-range and battery operated products. Probably Brinda just wants to make sure that each category is granted the budget equal to the sales generated by that category. Brinda must realize that this option will be suitable if Cottle-Taylor had wanted to maintain and sustain its sales. In case of Cottle-Taylor, they want to achieve growth in these categories because they are high margin products. In order to gain momentum in that segment, the company will have to give more marketing room to maneuver ATL and BTL campaigns and more budget to marketing increase sales in the high margin categories. This will require careful planning, a dedicated and hard working staff and people with the necessary skills in supply chain and supply network to implement and execute the company’s strategy efficiently. Hence, the marketing budget needs to increase for the latter two categories, but a better plan could be suggest to Brinda and Cottle-Taylor, then what is being advocated by Lang.
The first alternative or plan of action that Cottle-Taylor should follow is rural targeting. Since, rural population is financially more well off, educated and is willing to spend more on dental hygiene and care, they should be targeted by the company. The allocation of budget should be 65% for the Message 1, 32% for the Message 2, and 3% for Message 3. The plan of action of this campaign will be to include both pull and push marketing strategies. In the pull alternatives, the idea is to aware consumers about the dental hygiene and care. This will be done through educating people and giving them messages through regulatory bodies on dental health in India. The grand plan is to partner with India Dental Association (IDA) and also to give free sampling toothbrushes. These samples will be from the company’s mid-range and battery operated products. It will be done to tell people about the new products and how they are better. Since, the rural population is being targeted here, there are chances that some of them will be shift from low-end category to mid-range or battery operated category. This will be financially beneficial for the company.
The next step will be to increase awareness through mass media. In India, the entire population can be targeted through TVs and Cinemas. Adds about the dental care, and about the company’s product during the intermission breaks can be very enticing medium for the general public. Similarly, ads during the cricket match will also have great impact on the consumers. These two mediums target the entire India and should be used by Cottle-Taylor to make sure that the large numbers of people are targeted.
The second step in the campaign will be push marketing. These will incentives for the network partners to work hard and to sale more of the company’s products. Here rewards, and benefits in the form of discounts will be given, and the selling of company’s products will be done through small retail outlets. Since, these are the shops most widely used in India, they will be the most effective selling medium. A good thing here will be to introduce the product in small and compact package. The company should try to save packaging cost and transfer it to consumers in terms of lower retail prices. This will again entice the India consumers who are found to be price oriented. Another good strategy will be to keep the products on shelves near the entry point. This will increase the sales of the company’s products. Another option for the company is to keep the product in out of category displays. For example, keeping the product where batteries are kept will make sure that the Cottle-Taylor products do not get exposed to competitors as well as they are distinguished. The company should end its marketing campaign by having a made with some Hollywood actor being casted. Since, people of India are highly influenced by Western Media and celebrities this will encourage them to buy the product and Cottle-Taylor would be successful in moving from low-end products to mid-range or battery operated products.
It can be concluded from the above discussion that India is a vast market. The purchasing power of people in India is less as compared to other developing countries. However, this trend is changing through awareness effort of the government, and widespread education in India. People these days do give importance to their dental hygiene and care. As a result, a large number of companies are already targeting the huge India market. Cottle-Taylor is also present in India, but 80% of its sales is coming from low-end, low margin product. The company wants to shift consumers towards using the high end and mid range products. Therefore, the company has decided to pursue an intelligent and effective strategic marketing campaign. This involves increasing the marketing budget for mid-range and battery operated products. It will enable the company to sell more of those products. The company will use both the pull and push marketing techniques in order to improve its position in the market of these products. Later on the consumers will be targeted through wide availability of the products and an effective ad in which a Hollywood celebrity will be used. This will ensure that the company achieves its target in the segments it wants to target.
