AJMC 2013 2ND INTERNATIONAL CASE CONFERENCE

Dentonic
Strategies 2012
July 23, 2012

Abstract

The Dentonic case study aims to point out a positioning error made by Ala
Chemicals and their folly in pursuing an upward-line-stretch with a brand
name whose association is with a lower end product. This case is meant for
a course in Marketing Management.

Key words in the case study:

Positioning, Over-Postioning, Brand Extension, Product Strategy, Brand
Extension.

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Dentonic: looking for new horizons

Syed Amiruddin Alavi, (normally addressed as Mr. Alavi), Director and Founder of Ala
Chemicals mused over the recent changing trends in the dental care business and its
impact on his brand Dentonic, the indisputable leader in the tooth powder category over
almost five decades, and its extension strategy into the to the tooth paste category.

While Dentonic powder and its relatively recent line extension Dentonic Plus were highly
successful and proved to be cash cows for the company, Dentonic tooth paste did not
seem to have made the same impact on the market.

Dentonic powder had been so successful that it had become a generic name in the
tooth powder category, Mr. Alavi had been therefore very confident that the same
pattern would be observed in the case of Dentonic tooth paste. Market acceptance, he
thought, would logically be as smooth as it had been for the powder.

However the story that unfolded for Dentonic toothpaste was far from what he had
visualized. Dentonic tooth paste had not met with much success. In fact some premium
stores had discontinued providing shelf space to the brand, and some that did agree
were unwilling to carry the complete portfolio - only the larger packs of Dentonic powder
(170mgs and 200mgs) were accepted.

Mr. Alavi was quite baffled, as the quality of the toothpaste was comparable to any
premium toothpaste brand in the market. He could not understand what had prevented
Dentonic toothpaste from achieving the success it deserved. He wondered why the
strong brand equity of Dentonic tooth powder did not immediately rub off on Dentonic
tooth paste.

Mr. Alavi recalled the time when he had first launched Dentonic Tooth Powder in 1961
and the boom period from 1963 to 1996. He looked at the note his elder son Sagheer

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Alavi had sent him confirming that Dentonic powder has finished 2011 with 80% market
share.

Evolution of brand Dentonic

In his office Mr. Sagheer Alavi was finalizing his sales and marketing strategy for the
Dentonic line of products for 2012. He had understood the reaction of his father to the
2011 year-end sales figures when they had met to review the years performance.

He recalled his father saying that it was back in 1958, when he, a young man of 25 had
been suffering from a severe dental disease called Gingivitis. His father had tried all
remedies available, and had even consulted several qualified dentists but to no avail.
He spent sleepless nights because of the severe pain in his teeth and bloody gums.

Mr. Alavi used to work for a sugar mill in Bangladesh at the time, and that is where he
came across his Messiah - a humble dentist who gave him a powder to use. After using
it for about 5-8 days he saw a significant difference in his condition. Within a matter of
months he was completely cured of the disease. It was then that it occurred to him that
he could market the powder as a branded product, as it had so efficiently cured his
Gingivitis and felt good for daily use as well. The dentist was a generous man, who saw
the spark in Mr. Alavis eye and agreed to part with the formula. Mr. Alavi wasted little
time in having the formula patented. That was the beginning of the journey of Ala
Chemicals and the Dentonic brand.

Ala Chemicals started on 26th September, 1963, with an initial capital of only Rs.6,000.
At first Dentonic tooth powder was only bought by few people. Other toothpowders
available in the market at the time were Dentogene marketed by the Dentogene
Laboratory, and Tibet a product of Kohinoor Chemicals, but neither seemed to draw
many consumers of dental hygiene products. People were not accustomed to using
tooth powder and home-made dental cleaning powder made out of powdered charcoal
or Dandasa, a chewing stick plucked off a Neem tree were generally preferred. They

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believed branded tooth powder had lime (a mineral composed of different calcium
salts, the majority being calcium carbonate - CaCO3) as the base and had some
essential oils.

The product was positioned as a superior teeth cleaning agent. Advertising of Dentonic
tooth powder was based on an emotional appeal and used humour as well. In fact, the
company was the first to use an animated cartoon character in its advertisement for
tooth powder. The advertisement initially produced in the US remains as an icon among
advertisement used in the country. The same character was used on billboards, posters
and print advertising as well as on Dentonic packaging as a part of its iconic composite
logo.

The tagline that Mr. Alavi chose was based on his companys mission i.e. to provide
good dental hygiene to all segments of the society at an affordable price.It read as:
Sabse behtar sabse aala Dentonic.

Dentonic powder was targeted primarily towards the blue collar working class
comprising families in the lower to middle income brackets. Apart from Dandasa, this
particular class of customers used products like Luqmani Manjan, a black tooth powder.
Dentonics value proposition was a high quality dental care solution at an economical
price. A poster in Sagheer Alavis room had a bold caption which said: Dentonic for a
beautiful healthy smile!

Ala Chemicals was also a pioneer in the packaging of tooth powders. Apart from
introducing tooth-powder in a plastic container, it was also the first to introduce tooth
powder in sachets at a nominal price of 10 paisas. The sachets allowed potential
customers to try out the product and realize its worth before buying a larger pack. This
proved to be a success.

Dentonic powder thus continued to grow from strength to strength and became the oft-
quoted success story among local brands. The product was also endorsed by

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independent bodies. Two prestigious dental hygiene institutions, such as the Hamdard
Dental College and Altamash Institute of Dental Medicine, reported on the basis of tests
they conducted that the use of Dentonic powder showed a significant reduction in
plaque accumulation and Gingivitis. Dentonic was also the first tooth powder company
to be ISO 9000 certified and the product has been approved for use by the Dental
Association of Pakistan.

Shifting Market Trend in Tooth Powders

Dentonic powder has successfully held 80% market share during the 1990s. Khaaas
and Trident brands each had nearly 10% market share. The reason Dentonic dominated
the dental powder market was that it was a high quality product, very effective for oral
care, and had a strong heritage.

Aspirations for a better lifestyle characterize most consumers that holds true for
Dentonic powder users as well. Mr. Alavi kept a close eye on consumer behavior as
well as developments in the Dental Care product category. He observed that one of the
reasons why young middle and lower income users were inclined towards toothpaste
rather than tooth powder was that they felt that the foaming generated during the use of
toothpaste helped clean teeth better. Based on the observation he had a new variant of
Dentonic tooth powder developed with a foaming agent added to it. The product was
launched under the name of Dentonic Plus and its foaming action communicated as its
value proposition. The product proved to be an instant success particularly among
younger consumers.

The birth of Dentonic toothpaste (2002)

During the 1990s sales of Dentonic tooth powder were beginning to stagnate although
the dental cleaning category continued to grow at a steady rate. Mr. Alavi realized that if
he continued to rely on tooth powder alone and stay away from toothpaste, it would be
at his own peril. The writing was clearly on the wall his product portfolio had a major
gap that had t be filled if he wanted to capitalize on the market trend. He still believed
that tooth powder had potential particularly in the price sensitive dental care market. But

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then toothpaste brands like Medicam and English priced at Rs.12 for a 40gms pack had
become a direct threat to his tooth powder priced at Rs. 10 for a 45gms pack. One of
them had even started using the slogan: Powder ki qeemat mein toothpaste i.e.
Toothpaste for the price of tooth powder.

Mr. Alavi felt that the time had come to enter the toothpaste market. Ala Chemicals R&D
went to work and produced a remarkable product. Tests confirmed that the toothpaste
they had come up with compared favourably with any premium toothpaste in the
market.

Competition in the Toothpaste Market

The toothpaste market was dominated by a small number of large firms, such as
Colgate Palmolive, P&G, GSK, Unilever - and then there were some large size lower
price brands like Medicam. The market had growing during the first 10 years of the
millennium at a compound annual growth rate (CAGR) of 3-4%.

Among the growth drivers were whitening toothpastes, multifunctional toothpastes

such as mouth fresheners, anti-cavity, total solution providers, as well as specialized
products such as herbal formulations and sensitive teeth toothpastes. Plain fluoride,
very popular at one time, no longer seemed like an attractive proposition.

The premium segment was dominated by brands such as Colgate with 40.5% market
share and a host of brands such as Close-Up, Pepsodent, Macleans Aqua Fresh,
Sensodyne and some imported toothpastes. The mid-segment was catered to by
brands such as Sparkle, Listerine, and Forhans. Lower priced brands included
Medicam, Dr. White and Natural.

Every brand had a USP for the core product as well as other line extensions. For
instance, Close-Up was known for fresh breath, Colgate as the total solution
provider, Macleans as a whitener, Crest as anti-cavity, Sensodyne for sensitive

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teeth and Medicam as the remedy for a variety of gum diseases. The large company
brands were aggressively promoted.

Most brands were promoted on TV as well as through print ads, and billboards. The
premium brands and their line extensions were also prominently displayed in outlets.

The toothpaste category accounted for almost 92% in value terms. Nearly 36% of
toothpaste users cleaned their teeth every day. According to the National Health Survey
of Pakistan, 50% of the population in the rural areas used miswak and use of
toothpowder is the second common method for oral hygiene in such areas.

Marketing Strategy for Dentonic Toothpaste

Dentonic was launched in May 2002. It was targeted at upper income households (SEC
A and B). It was positioned as top quality toothpaste that not only cleans teeth, but also
gives consumers the confidence to smile. This was supported by the fact that Dentonic
toothpaste contained MFP fluoride with calcium GP helped strengthen teeth and
effectively protected against cavity as well as TRICLOSAN, a clinically proven
antibacterial agent for healthier gums and teeth. These benefits were encapsulated in
the advertising sign-off which said: Ab khul ke muskurein hum.

The toothpaste pack sported a combination of blue, red, and white colours. The words
fluoride toothpaste were written on the top of the panel, whereas the brand name
stood out in white against a blue background. A visual of water splashing on a brush-
head with tooth paste on it created a feeling of freshness. The Pakistan Dental
Association (PDA) approved mark was prominently displayed on the pack as well.

In the word-mark Dentonic the letter O was replaced by the Ala logo or smiling face
caricature that appeared on all Dentonic products. At the bottom of the panel words to
the effect of anti-plaque, mouthwash, lesser cavity, brighter teeth, and mint flavor were
mentioned.

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The price of Dentonic toothpaste was kept 10% below Colgate (Rs.18 for a 50gms pack
compared to Rs.20 for Colgate) Colgate was the premium toothpastes in the market.
The two other pack sizes 75gms and 100gms were priced at Rs.25 and Rs.30
respectively. The company also strongly supported the launch and spent Rs. 10 million
in the first year, 50% of it in the first three months. TV accounted for 70% of the
promotional budget. This was considered necessary in anticipation of a strong response
from established brands such as Colgate, Close-up and Macleans.

Distribution in the first year focused more on mid-size general merchants, groceries
(kiryana stores in popular jargon) and selected premium stores the latter to establish
an upscale image for the brand. Trade was also incentivized in the belief that a
combination of push n pull strategy would generate trial and get the product going. It
was also decided to leverage the brand name Dentonic, which had a strong heritage
and a name in the dental care market among a large audience across cities and towns.

Toothpaste Launch Advertising

The launch ad showed a family of four husband, wife and two kids - posing for a
family photograph. As the photographer encourages the family to smile expressions on
everyones faces change. Animated action then follows in sync with a lively song in the
background. Problems of yellow teeth, cavities, a life full of problems are highlighted,
promptly countered by suggestions that the use of Dentonic would make the teeth
sparkle, the breath smell fresh and leave a minty flavor in the mouth. In the closing
sequence the scene returns to the opening shot, flash-gun lights up and the film closes
on a freeze frame of a smiling family literally. The sung line Ab khul ke muskurein
hum leaves the audience enraptured.

Sales Performance
During the first year (2002), toothpaste sales remained on target aided by distribution on
the strength of the Dentonic brand name. A total of 10 million units were sold. In the
following year however sales dropped to 8 million. Despite efforts to push sales and a

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re-run of the launch campaign there seemed to be little response from the trade or
customers.

Relaunch of Dentonic Toothpaste

In 2005 Mr. Alavi decided to relaunch Dentonic toothpaste. He believed that the product
did not fit into the premium category, and launching it as such was a mistake. His son
Sagheer Alavi had also been reporting back to him that retailers felt that the product did
not move out of the shelves because of price. Something drastic had to be done.

Mr. Alavi therefore set about developing a new strategy. The first step taken was to
reduce the price of Dentonic toothpaste across the board. The drastic price reduction,
he knew would have a severe impact on revenues. He therefore decided to keep his
advertising cost low and revert to Dentonic tooth powders traditional advertising
platform and execution.

The new TV commercial was therefore an adaptation of the old Dentonic tooth powder
and placed a toothpaste pack between two packs of tooth powder on either side. The
objective was to return to the core Dentnic customers and upgrade them from powder to
toothpaste. The slogan used over many years for Dentonic tooth powder Dentonic
twice a day, everyday especially before going to bed - was incorporated in the
campaign. The campaign was aired on GEO TV over a six month period, spending a
total of Rs.3 million in 2005.

In terms of product, however, several line extensions of the toothpaste were introduced.
These included Dentonic Ultra-whitening Gel in an attractive green and white packing
with Dentonic branding in blue. Apart from the benefits of fluoride and anti-cavity
toothpaste, the gel included a microwhitener for stronger, whiter teeth. A combination
of eucalyptus and mint were added to leave the mouth more refreshed.

Three variants of the product were introduced in 140 gm and 70 gm packs - Refreshing
Lemon Mint in a yellow and white pack design, Refreshing Peppermint in blue and

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white and Refreshing Cinnamon in red and white. Dentonic toothpaste for sensitive
teeth was also introduced in direct competition with the more pricey Sensodyne tooth
paste.

Impact on Sales
In 2005, the year that most the new toothpaste variants were introduced sales hit a
record high of 14 million units. However in the very next year i.e. 2006 the figure
dropped to 11 million. Despite below-the-line promotional efforts at the trade level sales
remained flat at about 11 million between 2006 and 2009, and dropped further down to
10 million units in 2010.

Dentonic looking for help

Mr. Alavi wondered what had gone wrong over the years. How was it that despite
offering a large portfolio designed for a large variety of consumers Dentonic toothpaste
showed no sign of carving out a niche for itself in the toothpaste market?

All the ingredients were in place, he thought - the packaging was attractive, the quality
was as good as any, prices were competitive, and the new ad campaign was being
used. An independent retail audit of premium stores showed that Dentonic toothpaste
was placed on the lower shelves whereas the top shelves stocked had premium brands,
prominently displayed with all their full lineups. The reason given for this was that the
only reason Dentonic toothpaste was carried because upper class customers bought
Dentonic for their servants. For themselves, they preferred either Colgate or Aqua Fresh
or Macleans or Sensodyne.

Was the new jingle used in the new ad campaign for Dentonic toothpaste its swan
song?

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Exhibits

Dentonic Tooth
Powder

Regular Dentonic Plus

Dentonic Toothpaste

Reguar Ultra whitening Sensitive teeh

Mint Lemon Mint Cinnamon Peppermint

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Relative Market Share Relative market Share of

of Dentonic Dentonic Toothpowder
Toothpaste
Medicam Colgate Close-up

10%
11% 10% Dentonic
Trident
45%
Khaas

80%
44%

Oral Care Volume Share

OTHER BRANDED
Mr.. WHITE, 1.2% , 10.5%

DENTONIC, 1.4%

NATURAL, 1.6% COLGATE, 28.8%

DOCTOR, 1.9%
MINTO, 2.4%

A1 TOOTHPASTE ,
4.8%

COSE UP, 6.6%

ENGLISH, 12.2% MEDICAM, 15.7%

SPARKLE, 13.0%

COLGATE MEDICAM SPARKLE

ENGLISH COSE UP A1 TOOTHPASTE
MINTO DOCTOR NATURAL

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TOOTHPASTE PRICES 2012

BRAND Pack size Rs.
Dentonic 75gms 30.00
Colgate 75gms 58.00
English 70gms 13.00

References

Interview with Mr. Alavi (Founder of Ala Chemicals)

Danishs Blog
Pakistan Oral care market report, 19th May 2010
Toothpaste market in Pakistan 2014
Oral hygiene market overview in Pakistan 2014
Company website for Dentonic Pakistan

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