The company

Cottle- Taylor is a Philadelphia based multinational corporation which was founded in

1815 as a soap manufacturer. By 2009, with a revenues of $11.5 billion, their products were in
sold in more than 200 countries around the globe. More than 200 products were offered to serve
the three main consumer-product categories which comprised the home care, personal care and
oral care group. Geographical expansion and new product development have always been
emphasized in order to penetrate into foreign markets. In the recent years, because of the
declining performance in the U.S. market itself, Cottle began to look into the emerging markets
with enormous exploitable potential. India, which served as one of the most important emerging
market targeted by Cottle, focuses exclusively on the oral care sector.

Problem Identification and Analysis

SWOT Analysis
Strengths

Weaknesses

Collaborative work
force with both
international
managers and locals
First-mover advantage
Being recognized as
oral care authority

Forced to lower prices

for toothpowder and
toothpaste
Distribution difficulties

Opportunities

Threats

Huge population and

rapid economic growth
Half of the population
were still not concern
with the dental
problems
Wide distribution
network

Increasing competition
Low income earnings of
consumers
Rural consumers
attitudes toward
modern oral care
products

Strengths
In Cottle-Taylor, they believe that a collaborative work force with both international and
local talent is the key to achieve success in the international markets. In India, having a
collaborative environment allows them to utilize the knowledge and talents of their employees at
their best. While the U.S. headquarters provide marketing and sales support for the Indian local
team; the local team, who has a better understanding about the Indian market conduct market
research and provide strategic advice for the company. Moreover, Cottle does enjoy a first-mover
advantage in India. By understanding the importance of raising Indians concern with oral care,
Cottle was the one who aim to raise sales through consumer education. Besides, Cottle India
started their partnership with the Indian Dental Association (IDA) to organize dental health
outreach campaigns and conduct research studies. This has led to results by which Indians
considered them as an oral care authority and held their products in high regard. In 2009, they
occupied a 38% market share in the oral care market.

Weaknesses
Cottle has shown their weakness in the production of toothpaste and toothpowder. They
were forced to reduce their gross margin from 31% to 25% since 2004 because of the threats
from competitors who were able to produce even more efficiently or who were willing to lower
their profit margin to penetrate the market. As a result, they decided to leverage their competitive
advantage in the production of toothbrushes and thus focus on the toothbrush market.
Furthermore, they faced distribution difficulties when it comes to regional differences. There
were times communications was a problem when distributors do not speak local dialect.
Regional cultural practices and holidays disrupted distribution routine as well.
Opportunities
India, as the worlds largest democracy with a population of 1.16 billion by 2009 has
obviously represents a huge demand market for all international companies. Although poverty
remains as a crucial issue in the country, their outstanding economic growth has been seen as a
positive driver to attract foreign investors like Cottle. Besides, the fact that half of the Indians did
not use toothbrush in their oral care routine has served as an important opportunity which
motivated Cottle to expand their market in Indian aggressively. In addition, Cottle has a wide
distribution channel of 450,000 retail outlets across the country which allows them to target their
consumers more effectively. For example, they were able to target higher-income earners by
funneling most of their higher-range products to urban retail stores.
Threats
Cottle is forced to face with the increasing participation of competitors in the oral care
product market. They have primary competitors like SarIndia who offered nature-based products
and also some minor competitors from China and Vietnam who offered low-priced products to
the market. Note that 80% of the Indians lived on less than $2 a day. In this case, most of the
consumers are extremely price-sensitive especially the rural consumers. Therefore, it is essential
for Cottle to always consider the price factors to secure their market share in India. Moreover, as
a huge part of the Cottle potential consumers, it is found that rural consumers are 5 times more
likely to refrain from using modern oral care products. This represents a problem for Cottle to
solve in order to influence the rural consumers to switch their oral care product preference.

PORTERs analysis
Threats of new entrants Power of suppliers
Cost of entry for
toothpaste,
toothpowder and

High availability of
supplies
Low switching cost

Threat of
New
Entrants

Bargaini
ng
power of
buyers

Competiti
ve Rivalry

Competitive rivalry

Low switching
cost
Increasing
number of
competitors

Bargaini Considered as

ng
power of
Threat
substitutes
Power of buyers
suppliers

High
substitution
Low switching
cost
availability
High substitution
Low
switching cost
availability

Threat of
Substitut
es

Generally, the bargaining power of Cottles suppliers is low as ingredients were

inexpensive and available in India itself. In this case, Cottle is allowed to switch their supplies
from local suppliers to foreign suppliers or vice versa whenever they think it is more viable to do
so.

Besides, the threat of substitution is high. This is driven by the high availability of
substitutes which including traditional products such as Neem twigs, tobacco, black salt and
other modern oral care products offered by competitors such as Hinda-Daltan. The costs for
consumers to switch from Cottle to other substitute products is low.
Moreover, the power of buyers is high. It is easy for them to switch their product
preferences anytime as substitutes are highly available as mentioned. In India, many consumers
are extremely sensitive to the price changes due to instability of income. In other words, they
could switch their purchase easily to opt for more affordable option.
Furthermore, because the ingredients and blending equipment for toothpaste and
toothpowder were not cost-prohibitive, the threat of new entrants is high as competitors can
easily start up their operations in the market. On the other hand, the threat of new entrants for
toothbrush is lower as the manufacturing process of toothbrush required considerable financial
and manufacturing resources. In this case, Cottle has a competitive advantage in the production
of toothbrush due to their continuous investment in those resources over the years. Thus, it is not
as easy for new competitors to enter the toothbrush market.
Lastly, the competitiveness in the market is moderate. Cottle was able to gain early
market share by building an image as an oral care authority. Indians do held their products in a
high regard. Although the emergence of competitors forced Cottle to reduce their gross margin
for toothpaste and toothpowder, they remain as the major toothbrush seller in Indian who owns a
46% of market share. However, the competition will not stop here, competitors like SarIndia who
offered natural-based products are seeking their way to challenge Cottles position in the Indian
market.

Identification of problems
The above two analysis models have explained the general environment of the Indian
market. Cottle India, who aims to expand their oral care group in India, decided to focus on the
toothbrush market according to their competitive advantage. Advertisement has always been an
important tool used by Cottle to expand their influence. Generally, Cottle India emphasized three
key messages in their advertisements. First, to persuade consumers to brush for the first time.

Second, to increase their brushing frequency and third, to persuade consumers to upgrade to
higher-range product. While Patels initial intention was to focus more on the low-range products
to attract new rural brushers and increase the brushing incidents of users, Lang thinks that they
should focus more on motivating existing customers to switch their preference of products from
low-range to mid and high-range products. Lang proposed to increase the advertising budget and
shifting product mix and messaging towards the higher-range audiences as he sees higher
potential in this segment. However, Patel was not confident with Langs assumption as she thinks
a large portion of the demand market are comprised of rural consumers who lived on limited
budget. Therefore, Patel needs to know which plan is actually the optimal plan for Cottle India to
generate higher revenues as compared to the proposed 20% increase in toothbrush unit sales.

Question 3: How should Cottle accelerate the development of the toothbrush market in India?

In order to accelerate the development of the toothbrush market in India, there are several
recommendations that Cottle-Taylor should consider before the implementation. First of all, Cottle should
focus on toothbrush market, Cottle should target mid range and battery-operated products, in order to be
the first to secure the market by creating brand awareness through survey, advertising in schools and rural
areas and set dentists as potential distributors.

Cottle can target the overall India market by analyzing their market thoroughly, as only good market
analysis can create good communication to accomplish the success. Thus, market segmentation is
essential. It is a market strategy to target market by breaking a market into different segments, which are
geographic, demographics, psychographic and behavioral.

Since Cottle had three types of toothbrushes product lines (low-end, middle-range and battery-operated
toothbrushes), it enables Cottle to find their potential audiences who might be interested by the different
lines. It is also one of the ways to appeal their audiences needs and interests by satisfying their demands.

The low-end toothbrushes: The Complete, The Sensitooth, The FreshGum, The Surround and The Kidsie.
Low-end manual toothbrushes are for rural and semi-urban consumers who do not use toothbrushes, with
low income and price sensitive people. Mid-range manual toothbrushes are The Zagger and Directionflex.

From the above product lines, they could set up a promotion campaign for the public by raise up the
awareness. They can partner with India Dentist Association (IDA) by providing free dental checkups, free
product sampling and proper instructions for oral care. Indirectly, it also created a good image of social
responsibility. Through the surveys that they have collected, they can also do so product changes in
pricing, featuring and packaging. Enhancement of the distributors, it might widen the distributor circles to
grocery shops, convenience stores, supermarkets or even hypermarkets.

What are Cottles target market segments?

The target segments for the above product lines could be low-end and medium-range toothbrushes.
Battery operated toothbrushes could be one of the segments, but only in small subset. Cottle should focus
on the sale of low and medium, as there is huge rural and semi-urban population where about 500 million
consumers do not use toothbrush at all. Mostly semi-urban and rural areas are aware of the products, as
those consumers purchase household products, including oral care products at small, cramped
independent grocery shops. Smaller-sized products with affordable price are prone to attract people to
purchase. Battery-operated toothbrushes are The Swirl and Swirl Refills and they are normally selling at
convenience stores, department stores, supermarkets and specially retailers. Majority target is those
higher disposable incomes and less price sensitivity consumers, as they believe premium price products
are delivering better value.

Which of these segments makes the most sense for Cottle to reach?

According to the market analysis, premium products should be the most sense for Cottle to reach in order
to persuade consumers to upgrade to mid-range or premium-projects. Based on the case study, Langs
strategy projects a renevue of $ 117.29 million compared to Patels strategy o$ 101.01 million, although
Lang has proposed an increase of promotion expenditure to 12%. It indicated that it would be high
increase in switching from low-end to mid-range and premium toothbrushes.

In year 2009, roughly 78% of the population was actually live in the rural towns and villages and 22%
live in urban settings, but this does not mean that the conversion cannot be done. Poverty makes them to
seek high wages as manual laborers outside the rural areas, which indirectly migrating to cities. This also
could be the best target to achieve high sales.

Another important segment was fall on the basis of higher GDP, in the 4 states: which are Maharashtra,
Uttar Pradesh, and Andra Pradesh (where Patel had grown up) have accounted 30% of total Indias

GDP, and the remaining GDP associated with 33 states.

Question 4: promotional-mix proposal for 2010 based on the optimistic market projection
for Cottles toothbrush product line.

Cottle-India advertising strategy

Three messages were outlined in the advertising strategy for Cottle-India. First message
involves convincing people in the rural area to brush for the first time. Second message involves
increasing the incident of brushing while third message promotes existing customer to upgrade to
mid-range and premium products. All these messages aim to increase the profit margin and
generate unit sales as high as 30% in the Indian market. As for 2010, they have planned to
increase the marketing budget from 9% to 12%. They have the option to choose to distribute
equal budget across all 3 messages or focusing on specific and particular messages. For
instances, Cottle india could focus only on message 3 to promote their medium-range and
premium product and encourage unit sales at the urban area. In other words, budget of message 3
will be increase to 6% while maintaining equal budget for the rest of the messages.

Alternatives 1

The first alternatives would be targeting rural and semi-urban area by focusing more on
message 1 and 2. This strategy correspond to Patels suggestion that by focusing message 1 and
2, the campaign would convey companys message towards the lower income group. The
importance of brushing is educated towards the potential consumers in the rural area as well as
the benefits of brushing often. Furthermore, the first option aims to increase brand awareness in
the rural area. People in the rural and semi-urban areas are encourage to brush for the first time
using the products such as toothbrush offered by Cottle-India. They are also encouraged to brush
and replace their toothbrushes more often. By focusing on the first alternative, sales unit of the
low-end products will increase as more new customers are attracted in the short term. Increasing
brand awareness as the company penetrate the rural market could result in increase new
consumer base as people brush for their first time. Cottle-India could also potentially secure a
large market in the long run.

Advertising - Media strategy

The company uses promotional tools such as television advertisement, outdoor

advertisement, radio and print ads.

Television (50%)
Television ads could include visual and voice for easy understanding. General
information and demonstration of brushing should also be conveyed in the TV ads. Furthermore,
ads should be developed with the help of the locals to ensure proper language and culturally
relevant.

Outdoor Advertising (20%)

Outdoors advertising such as billboards and hoardings could be place at the entrance and
all over the rural and semi-urban areas. These locations could maximize exposure and potentially

create awareness. Ads should be bright in colors and easy to understand as literacy rate is low in
the rural areas. These ads should also be implemented around retails stores to encourage trials.

Newspaper (25%)
Prints ads on newspaper should include basic information about the product such as price
as well as simple to understand graphics with bright colors to convey the core value of the
toothbrush advertised.

Radio (5%)
Radio ads should be convey using easy to understand voice emphasizing about the
benefits of brushing teeth with Cottles product. The main objective is to encourage new
customers to try Cottles toothbrush for the first time as well as increasing trials as time
progresses.

Sales Promotion

3% of budget is allocated from the total revenue for Cottle-Indias sales promotion. This
promotional mix that focuses marketing the low-end products towards the rural and semi-urban
area encourages frequent and repetitive purchase from new and existing customers. Cottle-India
can offer different sizes bundle of toothbrushes whereby bigger volume at a higher price while
smaller volume at a more affordable price for the lower income groups. They can also provide
free samples or coupons as well as complimentary products at retails store to encourage trials.

Personal selling

Cottle-India can have sales force directly selling to agencies like the IDA as well as
dentist. The company can explain the benefits of their products to the dentist to convince them to
use their products. Essentially, Cottle-India can use dentist as intermediaries to sell to other
consumers. They can also convince supermarkets and retail stores to stock up their products and
display them on shelves to encourage trials from potential new customers.

Public relation and Internet

Cottle-India can also work with agencies such as IDA to promote the importance of oral
care to create awareness. Campaigns can be held together with IDA to educate people in the
lower-income groups to start brushing their teeth. Samples, coupons and giveaways can be
provided during the campaign to generate more awareness and publicity. This could eventually
help the company to have a positive image. The company could also implement promotional
tools such as internet to promote their products. Social medias could be utilized to provide
information about their products as well as communicate with their potential customers.

Alternative 2

The next alternative for the company would be targeting the urban area by focusing on
message 3. Message 3 tries to convince the higher income group to switch from low-end range
products to medium range products and potentially to the premium battery-operated product.
Cottle-India could do so by promoting the benefits of the higher end products as compared to the
low-range product. Cottle-India will have increase in profit as the product lines have significant
higher profit margin as compared to the lower-ends product. This message strategy tried to
duplicate the results in Thailand. As both Thailand and India are emerging markets, similar
outcomes are expected such as increase revenue growth from the increase sales units of the
medium to premium range products. In the long run, Cottle-India are able to secure their market

share with the premium products with loyal customers. Furthermore, they can also position their
brand as a premium and with high quality.

Advertising - Media strategy

The company uses similar promotional tools such as television advertisement, outdoor
advertisement, radio and print ads. However, the content should differ as this alternative focuses
on selling their higher end product.

Television (50%)
Television ads should also include visual and voice for easy understanding. Benefits and
special features of the medium and premium range products should be emphasized in the ads to
encourage trials. Furthermore, ads should be developed with the help of the locals to ensure
proper language and culturally relevant.

Newspaper (30%)
Newspaper ads should include basic information about the premium products such as the
benefits of using a battery-operated toothbrush. Higher budget are allocated for newspaper ads as
people in the urban areas are more likely to have the habit of reading newspapers.

Outdoor Advertising (15%)

Outdoors advertising such as billboards and hoardings could be place at densely
populated areas all around the urban cities. For instances, billboards can be set up at major

highways that has high traffic. These locations could maximize exposure and potentially create
awareness for the premium products. The ads can display information such as benefits and price
of the products.

Radio (5%)
Radio ads should also focus on the benefits of Cottles medium to premium products. The
radio ads can be short and informative while it should be aired during peak hours to maximize
exposure.

Sales Promotion

3% of budget is also allocated from the total revenue for Cottle-Indias sales promotion.
The sales promotion in this alternatives aimed to encourage consumers to switch up to medium
or premium range toothbrushes. It can be done by providing complimentary products and have
promotional prices. For instances, a free refill could be complimented with a purchase of a
battery-operated toothbrush. Special promotional pricing would also encourage consumer to
switch as they will perceive a higher value for the product purchased.

Personal selling

Cottle-India can also market their premium products to dentist and IDA by explaining the
advantages yield by using their products. These group of people are targeted as they are more
likely to understand the benefits of using a good toothbrush. Since they have the expertise and

knowledge about oral care, they might potentially be able to help Cottle- India sell their product
towards other consumers. Similar strategy was used in Thailand and Cottle-India should also
utilize the dentist distribution channel to reach the potential market of the battery-operated
toothbrush consumers. The company could also convince supermarkets and retail stores to stock
up and sell their products.

Public relation and Internet

Cottle-India can work with agencies such as IDA to promote the importance of oral care
to create awareness. Cottle-India can also participate in public events to display their premium
products towards the public audience. Demonstration of the special features of the medium and
premium products can be done to encourage the audience to opt for their products. This could
also eventually help creating brand awareness and build strong positive image for the company.
The internet especially social medias can also be used to provide useful information about the
products and allow communication with the public. The social media can also help generate
publicity as consumer may spread the brands name through word of mouth.

Selection and evaluation of alternatives

The second alternative as to focus more on selling the medium and premium range
product are more likely to work out to meet the companys objective. In other words, by focusing
on message 3 which focuses on the higher income group, it is more likely to achieve the goal of
30% sales unit growth. The sales revenue will also experience growth as the medium and high
end products have higher profit margin. Alternative 1 may not work as well as poverty still exist
in majority of the rural area. In other words, risk is significantly higher to target potential
consumer who has no stable income and are reluctant to change.

There has been a growing upward trend for the income of households in India indicating
increasing disposable income, therefore people are more capable to afford the higher ends
toothbrushes. It is also expected that India would have similar growth trend as Thailand, this
would result in a larger share of mid-range and high-end unit sales if the awareness of benefit
using premium products could be conveyed towards the target market. The effectiveness of the
campaign can be measured by surveying consumers recall and intention to buy as well as
measuring the sales and profit margin.

Question 5: Prepare a contingency promotional plan in case some of your assumptions for
the original plan are not met. Provide rationale to your assumptions.

Contingency plan is an alternative plan to overcome any unforeseen circumstances and risks
during emergency. It usually named as back-up plan. It is essential to set up good contingency
planning in the business setting, as it might impact on the future business operation in a very
serious way.

In this study, Patel and Lang believed that spending more money on advertising could help the
company to boost up approximately 25% to 30% unit sales growth. However, Patel is wondering
if the increase in advertising and promotional will face any obstacles such as culture barriers, as
Patel forecasts the sales conservatively. Lang is the total adverse of Patel, because Lang is a risk
taker. Lang believed that by increasing toothbrush-related advertising and promotional spending
beyond 12% of sales could actually accelerate the market development in India, as similar as in
Thailand in year 2007. Lang also argued that this strategy was achievable in the future year 2010.

In cases whereby the unit sales objectives for the premium product were not met due to lack of
awareness and exposure, Cottle should increase the marketing activity by allocating more budget
to advertise more heavily on the benefits of the higher end products. Furthermore, regions that do

not met the sales objective should also be reorganized and reevaluate to come out with a more
effective marketing strategy. For instances, using a more appropriate media strategy to convey
relevant message to induce trial and elicit demand from consumer. Additionally, regions that met
sales objectives should be rewarded to further motivate to increase performance.

Furthermore, competitors is always an issue in business, as when Cottle is doing promotional

advertising, competitors tend to gain from the Cottles marketing expenditures, in term of selling
points and prices. Cottle have to combat this circumstance through strong authoritative
perceptual positioning. Focus more on concepts and awareness rather than physical appeal,
which might let them to the best success. Cottle also can maintain a reasonable price for certain
cost sensitive consumers especially the consumers who living in rural and semi-urban. They
prefer more valuable and affordable package offers such as combo pack or buy one free one.

Despite the allocation of promotion budget on increasing unit sales of medium and premium
product is prioritized; more focus should also be put on raising the oral hygiene awareness in
Indias population. In fact, 80% of the population is living at disposable income of less than of
$2 per day, whilst only 20% of the population is living at disposable income of more than $2 a
day. The population in India has grown but so has poverty. Due to low discretionary spending
and the culture does not associate health issues with not brushing teeth, Cottle India would face a
bit challenge in referring them to purchase. Hence, it is recommended to provide them incentives
in term of discounts and educate them of proper use of oral products and inform them about the
use and benefits, which eventually help Cottle India to boost up their sales revenues.

References

Quelch, J. & Zalosh, A. (2012). CottleTaylor: Expanding the Oral Care Group In India. Retrieved f