Case study in Product Innovation: The Colgate Story

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‘’The faster we develop innovative consumer-driven products and speed them to world markets, the stronger and bigger our global brands will become’’

The statement is from 2000 annual report of Colgate. It reflects their focus on product innovation being a critical driver for growing their business and driving their market leadership. The focus on innovation has not changed or got diluted. Colgate has almost become a synonym for tooth paste in Indian household. It has more than 50% market share in Oral care products in India. The company recorded total revenue of Rs. 3600 crore last year, which again was a record breaking performance. The company has more than 90% penetration in urban markets, where as it has 63% in rural areas in a country where around 380 million people are still not using a tooth paste.  The company has always

The Competition

Colgate has it competition mainly from Procter and Gamble on a global front.  In India the oral care market is almost worth Rs 7000 crores. HUL, Dabur and Colgate have almost wiped out regional players from this market. Once a market gets consolidated to 2 to 3 players it shows its maturity. Now the global brand Procter and Gamble is also getting aggressive about its play in Indian market. However Colgate has focused on mainly three things – innovation, promotion and accessibility to beat the competition and stay ahead in the market.

Focus on Product Innovation

Innovation is a key core value that has been built into Colgate work culture. They believe in adopting innovation across technologies used, business practices and also product development.  The thrust on innovation is visible from some of their initiatives

  • Colgate has created around 9 Category Innovation Centres around the World who focus on developing products based on consumer needs and advancements in technology.
  • They have set up a fund which is allocated to selected employee projects across different regions and business functions
  • Put in place a state of the class technology development process end to end from basic research to formula optimization to the clinical documentation.
  • IP creation in many oral care practices and technology like Copolymer, a FDA approved plaque and gingivitis control measure and instant sensitivity relief
  • Training and skill nourishment programs targeted at developing employees creative thinking skills, etc.
  • Program for submission of ideas around oral care and animal nutrition with rewards for selected ideas

Colgate Maximum is one of their latest products which were launched to the Indian market. The company positions it as a premium product and they believe high income families would switch to their new brand, even cannibalizing some of their lower priced brands. The new product can also bring in families who are using other premium products. This product claims maximum cavity protections compared to any other oral care brand in the market.

Innovation around consumer insights

Todays’ consumers are demanding, health conscious and price sensitive. Colgate has always focused on bringing product innovation around consumer needs. The feedback from consumers and oral healthcare professionals are fed back to the product development process to ensure that innovation is driven by consumer insights. For example for innovative products from Colgate globally include:

  • Colgate maximum cavity protection tooth paste
  • Pro sensitive relief tooth paste
  • Suavitel Fabric conditioner with fragrance
  • Tooth brush designs
  • Pure and Clear liquid soaps in collaboration with Palmolive
  • Therapeutic weight management food for dogs, etc

They bring in technology experts like IBM to help them in ensuring they integrate innovation to their practices and also to transform ideas to commercially viable and consumer friendly products.

Is Product Innovation enough?

Innovation of Colgate doesn’t end on product alone. In Peru they came up with something innovative in shops where women go around with shopping carts labelled with various Colgate toothbrush brands to engage with shoppers. Then the way they extended their reach through small stores like cash and carry stores in Africa is another innovation in sales and distribution.

Colgate always emphasized on that fact that unless the innovation is communicated to the different stake holders, it is of no use. Hence they always gave equal importance to brand communication through integrated marketing campaigns. These campaigns leverage ATL and BTL digital communications and social media channels, to engage a range of audiences from consumers to oral practitioners. One of the best examples of such a campaign was ‘Feeding is believing’. The other part of their communication strategy is around customized communications targeting consumers who are visiting different retail outlets and shoppers educating on the product benefits and differentiation. Innovation is clearly tested and endorsed among the dental and veterinary professionals to strengthen their brand endorsement, which in turn builds market share and brand loyalty.

So how an organization can not only focus on continuous innovation in technology, processes and products but also to make sure that it is communicated, endorsed and accepted by different stake holders – Colgate is a perfect example!!

[message_box title=”Disclaimer” color=”red”]The case is prepared based on secondary data and the purpose of this case study is to just bring out the key marketing strategies and techniques deployed by different firms from our perspective.[/message_box]

 

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