The Colgate-Palmolive Company

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SWOT Analysis

Strength

- Brand Visibility- Intelligent advertising techniques have helped them to make their brand visible and high customer loyalty.

- Efficient Supply Chain- They reduced the switching cost to minimum by making the product available in each and every corner of the country.

- Wide varieties of products.

- Financial position- Colgate is operating over 200 countries in the world, and is operating for 2 centuries hence their financial base is so strong.

- Market share- They are enjoying a very huge market share in their industry and have high market penetration.

Weakness

- Saturated market- There are many players fighting in the market, so it is more saturated market share can be eaten by anybody.

- Cost control- They acquire their property on rant which adds to operations cost, thus they have to price at a higher price than their rivals.

Opportunities

- Product line expansion- Using various strategies like line stretching, line filling etc. they can increase their sales revenue and can give more value to the customers.

- Capturing the rural market of developing countries- There are more competitors in the urban market compared to the rural market. So the best way to withstand the competitors is to capture more and more rural markets.

- Business expansion through mergers and acquisitions- This is an untouched strategy for the brand Colgate. This technique is very advisable for new market entry and also for making competitive advantage.

- Increasing the usage rate- The product’s usage rate can be increased by using various strategies like advertising, doctor’s prescription, word of mouth etc.

Threats

- Competition- More and more competitors and entering the market day-by-day. It is very difficult for the company to differentiate all of its products to make an upper hand.

- Low Margins- With the increased competition there can be chances for price wars. So the maximum selling price that can be put is based on the competitor’s price, also discounts and other offers must be provided regularly to keep the customers intact. This resulted in very low margins.

- Raw material prices- Increase in the price of the raw material makes the company to increase the selling price of the product. But this high price is not easily justifiable in a competitive market.

- Ethical Issues- There was one recommendation by the “Ethical Consumer Research Association” that the Colgate toothpaste must be banned because it is tested in animals. Arguments like this in the future may affect the company’s goodwill.

- Switching of customers- Because of presence of so many alternatives, the company must be very careful with the strategies they follow otherwise customers will go for other products. So, they must be extremely careful in checking whether the product in available, about the price set and discounts or other offerings.

CSR Activities Implemented

The main CSR activities implemented by Colgate during 2015-16 are:

- Bright Smiles, Bright Futures- This activity was implement by Colgate with the prime aim in promoting education. This was a project that was implemented across India. As a part of this project, the company reaches children giving them primary education about basic oral care.

- Oral Health Month- This was another activity for promoting preventive health care which was also an all India project. This national oral care awareness program is conducted has been conducted by Colgate for more than a decade in association with Indian Dental Association (IDA). Last year’s objective was “Keep India Smiling” launched on November 1, 2016 covering almost 1300 towns all over India. They offers a completely free dental checkup in the nearest dental clinic for all its customers.

- “Saksham” program with SEEDS- This program was implemented in Lucknow, Uttar Pradesh. It mainly emphasizes on skill and vocational training for uplifting economically weaker youth there.

- Seva Mandir- This project was initiated in Rajasthan giving the emphasis on the conservation of natural resources and also on education.

All these CSR activities are implemented either by the company itself or in collaboration with other NGOs or trusts.

Distribution Strategy

Colgate have their own distribution network by the name Colgate Palmolive Co Distributors. There is no single distributor but have different set of subsidiaries that have access in different regions. They also cooperates with a global shipping company called Magellan Transport Logistics. To make their product to various medical stores and other normal department or grocery shops they have a three-tier distribution system i.e., manufacturer- regional distributor- sub regional distributor- retailer- customers.

Conclusion

Colgate is a company who have fought against many rivals in a very competitive and unstable environment. Their unique marketing strategies helped them to do so. They have built a strong brand image in the mind of their customers and they made their product available everywhere including medical stores. Their association with Indian Dental Association helped them to build this image. They path that they showed is something that is helpful for many companies.