Mktg 612 - Cottle Taylor Case

Cottle-Taylor Case Write-up

MKTG 612 | September 12, 2013

Cluster 2, Cohort F, Learning Team F5:

Claire Fauquier, Ossama Ghazal, Sherry Lee, Theo Orsher, Allison Silverstein, Jackie Wong

I. Introduction

Case framework

Cottle-Taylor’s (“Cottle” or “the company”) Michael Lang (VP of Marketing, Greater Asia and Africa) has asked Brinda Patel (Director, oral-care marketing, India) to prepare a revised toothbrush marketing plan to support 30% unit sales growth for the India division of the company’s oral care group in 2010.

Marketing focus

Lang is focused on three key messages for Cottle’s marketing budget: 

1. Persuading customers to brush for the first time
2. Increasing incidence of brushing
3. Persuading customers to upgrade to mid-range or premium products

Key query for this case write-up

Should Cottle’s marketing strategy be similar to what Patel originally designed (targeting lower-income individuals with a 20% unit increase), Lang’s plan, or a third alternative?

II. 5C Situation Analysis

Company

Cottle is an American company, established in 1815, which serves the oral care, personal care, and home care markets. 50% of its revenues ($5.7 billion) come from emerging markets, and the company therefore has a strategy to hire and invest in local talent in order to drive country-specific innovation.

Cottle India focuses exclusively on oral care: toothpaste, toothpowder, toothbrushes, with plans to introduce mouthwash and dental floss. At current levels, Cottle’s distribution network includes 450,000 retail outlets from small bodegas, to closet-sized urban sidewalk vendors and supermarkets. Cottle’s market entry approach introduces basic product models at competitive prices in order to increase brand awareness. Eventually, Cottle introduces its customers to more sophisticated products (which are more profitable), such as advanced manual and electric-powered toothbrushes. Cottle currently maintains a 38% share of India’s oral care market, with the following breakdown: 17.5% of the toothbrush market, 48.7% of the toothpaste market, and 33.8% of the toothpowder market. Cottle also has 46% of total toothbrush sales in India.

Competitors

Cottle holds 38% of the total oral care market volume in India.  Also, the company maintains the largest share of toothbrush unit sales in India, controlling 46% of the market. Cottle’s two main competitors in the toothbrush space are Hinda Daltan, a subsidiary of a French consumer products company, with 21% share, and SarIndia, an Indian consumer products company with 11% share. The remaining 22% comes from imported products from China and Vietnam. These products tend to be of lower quality, with little or no brand recognition. It is noteworthy that the cheapest Chinese toothpaste and toothpowder has decreased Cottle’s margin by 6%.^[a]

Customers

India's population is the largest in the world, with 1.6 billion people. Of this, 78% live in rural towns and villages and over 3/4 of the population still lives on less than the equivalent of US$2.00 per day. Roughly 37% of the population lives below the poverty line, as established by the World Bank. However, GDP growth is rapid, with the 2009 GDP 146 times larger than that of 1990.

In terms of oral health care and hygiene, more than 50% of rural India does not use a toothbrush. While this is a staggering figure, given that India's population is so large, the potential market for Cottle is then 78% of 1.6 billion people halved^[b], which is 624 million. This represents a significant potential customer base. Given IDA's plans to educate the public on oral hygiene best practices, this number will only increase.