COLGATE MAX FRESH: GLOBAL BRAND ROLL-OUT

An Analysis
Nachiket Mujumdar
20130120120
Introduction
Colgate Max Freshs (CMF) introduction to the US market drove Colgate-Palmolives (CP) US
markets value share up to 34.8% ahead from Procter & Gamble (P&G) at 2nd place with 31.6% value
share. Nigel Burton, the president of global oral care at Colgate-Palmolive Company (CP), is reviewing
market launch plans for a new toothpaste, Colgate Max Fresh (CMF) by CPs Chinese and Mexican
subsidiaries. Both launch plans involved departures from the CMF marketing program for the USA
launch six months earlier. Burton must decide whether the costs of marketing program adaptation in
China and Mexico can be justified.

US LAUNCH
Breath Strip in Toothpaste
Assessing the US market conditions
US retail toothpaste market - $438 million with a growth rate of 8% since 2000
From Table B in the case, CP and P&G are on a head to head competition for the 2004 value share of
toothpaste market with 34.8% and 31.6% value share respectively.
Exhibit 2A shows that in terms of US Market Toothpaste Benefit Importance, cosmetics benefits such as
breath freshening and whitening are at 3rd and 5th places respectively while therapeutic benefits :
protection against cavities/contains fluoride, reduces plaque buildup and controls tartar are at 1st,
2nd and 4th places respectively.
This shows that in the US market there is more therapeutic benefits sought from toothpastes. Exhibit
2B on the other hand qualifies that consumer benefit data. It shows that between 2000 and 2004 data.
There is a dwindling importance of the therapeutic benefit : anti-cavity/tartar at -22.7% while there is a
growth in cosmetic benefits : whitening at +16.4% and freshening/cleaning at +2.9%. For 2004,
therapeutic benefits total at 53.4% while cosmetic benefits add up to 46.6%.
CMFs success in the US market is attributed to the fit in the needs, wants and expectations of the
consumers with the products main benefits: breath freshening and teeth whitening.
Critical analysis of the US launch
1. Positioning: CMF was positioned as a premium brand. It was positioned midway between
offering therapeutic as well as cosmetic benefits.

2. Pricing: It was priced at par with CWE.

3. Product: The transparent bottles created a visual impact when placed on the retail shelf.
4. Promotion: Promotion was through
a. Media: To create awareness
b. Website
c. Program sponsorships
d. Instore sampling, merchandising displays, sales promotions
The reality is that the U.S. Marketing team took little or no account of the global transferability of their
program. They simply sought to develop the best possible marketing program for the U.S. This becomes
apparent once the Mexico launch is introduced. The U.S. advertising was, most obviously, countryspecific because the celebrity, Emily Proctor, was not known outside the U.S. Global marketing
strategy involves understanding and addressing differences across markets, the dilemma arises
when trying to balance the global brand and appeal to distinct regions.
Successful global marketing campaigns leverage similarities to preserve a consistent message
and limit costs while also customizing advertising to align with regional cultural preferences.

CHINA LAUNCH
Whole New Dimension of Freshness
Assessing the Chinese market conditions
1.
2.
3.
4.
5.
6.

Market size: $868 Million with a growth of 38% since 2000

Skewwed towards Theurapatic segment but freshness segment is increasing
Major competitiors are Darlie, Crest Tea fresh
Market heavlily skewewed towards lower priced local brands
Premium market 30%
Significatn price difference Premium product 11 12 RMB
Local product 4 RMB
Reason and changes in CP plan in the Chinese market
The CP China changes to the CMF marketing launch were justifiable as per Chinese market situations.
CPs market position in China is more similar to the U.S. than Mexico. CP and Procter & Gamble are in a
battle for market share leadership.
Sr
No.
1
2
3
4
5

Changes
Name change Max Fresh -> Icy
Fresh
Term change Breath strips ->
Cooling crystals
Advertising strategy
Emily Procter -> Jay Chow as a
celebrity
Complete makeover of the brand

Reason
The biggest challenge was creating the right communication.
Max Fresh did not strike the right chord with the consumer.
Breath strips was unknown. A meaningful phrase was
required
Communicating freshness was a challenge.
Need to connect to the youth on an emotional level. CSI and
Emily Procter were unknown in China
To create differentiation and appeal

Introduction of new flavors

7
8

Clear bottles -> Clear tubes

Clear stand up tube

Chinese toothpaste market was developing quickly, new

flavors were popular, competitors were introducing new
flavors
Cost considerations
Maximum visual impact at point of sale

The marketing adaption costs for the CMF launch in China are much larger than in Mexico.
As the Asian market was favorable towards freshness, it would be easy to launch the product in China.
The product should have been launched earlier.
The impact of the changes in the Chinese launch were as follows,
1. The media expenditure was very high. 1.5 million(Celeb ads) vs. 0.5 million (Adapting existing
strategy)
2. Flavor change, Packaging change and color change added $1.77M ($200000 + $1.5M + $7000) to
the capital cost and delayed launch.

MEXICO LAUNCH
New Dimension of Freshness
Assessing the Mexican market conditions
1.
2.
3.
4.
5.

Toothpaste market - $348 Million with a relatively flat demand

Difficult to secure incremental shelf space to accommodate new product launches
Colgate dominates with 8% market share followed by Crest at 10%.
Market heavily skewed towards therapeutic segment
Majority of consumers focused on basic oral care

Evaluation of the launch plan in Mexico

The CMF launch was to neutralize the anticipated launch of CWE which threatened the market
domination of CP.
1. The pricing of CMF was at par with Crests Cool Explosions.
2. As Crest would lose more than fair share as compared to Colgate, cannibalization was not a big
issue.
3. In the concept stage, consumer appeal of CMF was strong but the consumers suspected a
corresponding lack of cavity prevention and whitening benefits. The debate was between
positioning the product as all inclusive vs. single minded approach.
4. The media advertising was based on the advertising that combined the explosive power to
freshen with extreme living.
5. Promotion activities included in-store merchandising, sampling and PR to promote the core
benefits.

CMF is not essential to the Mexican portfolio as the toothpaste market is growing at a slow rate. Colgate
already owns the majority of the market and also the environment does not support new launches. The
US launch strategies will also not be applicable in the Mexican market as the conditions are very
different.
But with the launch of Crest Cool Explosions, PnG is threatening the value share of CP. CP can secure its
market share by launching CMF in the Mexican market. CP dominates Crest in Mexico so any new CP
product can probably obtain distribution. The pro-forma PnL for CMF launch predicts net operating
profits in the first year itself (25% of sales) and a steady growth (11% in the second year).