Launching of a toothpaste brand in algeria using 'marketing plans and startegies' - December 17th, 2008 DECLARATION We, Siddhesh

Sood and Kashif Khan, students of Amity Global Business School, Mumbai declare that the work done on the project entitled, SIKA Limited is original. And any references used in this report have been duly acknowledged. The study on the process involved in this project and conclusions reached thereby are the copy right of the author. This report must not be reproduced without prior permission of the author. To the best of my knowledge and belief the subject matter presented here is original and has not been submitted to other University or Colleges till date.

Place: Mumbai Siddhesh Sood, Kashif Khan. Date: AUTHOR

ACKNOWLEDGEMENT

I would first, like to express my gratitude to the Almighty who gifted me the patience, perseverance and enthusiasm, which helped me make my project a success. I would like to thank my Professor for being wonderful and inspiring guide at every stage of this project. It has been a wonderful experience. And I am grateful to the Computer Technology, without which this project would not have been completed.

SIKA Limited

1) Introduction 2) The Tooth Paste Industry

History Of Toothpaste The Algerian Consumers 3) SIKA as a brand 4) Product Description 5) Executive summary 6) Situation analysis 7) Product mix 8) Target markets 9) Marketing strategies

10) Distribution

Introduction The world's oldest-known formula for toothpaste, used more than 1,500 years before Colgate began marketing the first commercial brand in 1873, has been discovered on a piece of dusty papyrus in the basement of a Viennese museum. In faded black ink made of soot and gum Arabic mixed with water, an ancient Egyptian scribe has carefully described what he calls a "powder for white and perfect teeth". When mixed with saliva in the mouth, it forms a "clean tooth paste". According to the document, written in the fourth century AD, the ingredients needed for the perfect smile are one drachma of rock salt - a measure equal to one hundredth of an ounce - two drachmas of mint, one drachma of dried iris flower and 20 grains of pepper, all of them crushed and mixed together. The result is a pungent paste which one Austrian dentist who tried it said made his gums bleed but was a "big improvement" on some toothpaste formulae used as recently as a century ago. The discovery of the formula caused a sensation among Austria's normally sedate dentists when it was disclosed at a dental congress in Vienna. Dr Heinz Neuman, who attended the meeting where the recipe was unveiled, said: "Nobody in the dental profession had any idea that such an advanced toothpaste formula of this antiquity existed." On trying it himself, he said: "I found that it was not unpleasant. It was painful on my gums and made them bleed as well, but that's not a bad thing, and afterwards my mouth felt fresh and clean. I believe that this recipe would have been a big improvement on some of the soap toothpastes used much later." Modern toothpaste is produced by mixing sodium fluoride, a cleansing product that gives the paste its bulk, with triclosan - a whitener, and E number flavourings. The recipe was written in Greek, the official language of Egypt for about 1,000 years until the last temples closed in the sixth century AD. It was discovered among part of the largest collection of ancient Egyptian documents in the world - 180,000 items up to 3,500 years old, including stone and clay tablets - gathered by the Habsburgs, the rulers of the Austro-Hungarian empire. The foundation of the collection was a mass of papyri, purchased in 1878 after being found on a rubbish dump outside the ancient Egyptian city of Crocodilopolis. Dr Hermann Harrauer, who heads the papyrus collection at Austria's National Library in Vienna and who found the recipe, said: "It's a fascinating document. It was written by someone who obviously had some medical knowledge, as he used abbreviations for medical terms. "As papyrus was hard to come by, it was often reused, and this document had on the back details of correspondence between monasteries, implying that perhaps the person who wrote it was connected with them in some way. Maybe he was a monk. By the fourth century AD, Egypt had been Christianised and Christian monks were also physicians, and this would fit in with what we know." Dr Harrauer's team is painstakingly translating and filing the documents, of which only a fraction have so far been deciphered. He said: "We still don't have an idea about half of what is here. It's a treasure trove waiting to be opened." Dentists have recently discovered the beneficial properties of the iris, which has been found effective against gum disease and is now in commercial use again.

The Toothpaste Industry History of Toothpaste Ever wonder where toothpaste and mouthwash came from? Have you ever thought about what people used for toothpaste before the invention of Crest, Colgate or Aquafresh? (North American brand name toothpastes). Below are some interesting, point form facts and recipes that may help satisfy your curiosity - or spur it on!! Back in the Days of Buddha. The activity of keeping the mouth clean dates all the way back to the religious figure Buddha. It has been recorded that he would use a "tooth stick" from the God Sakka as part of his personal hygiene regimen. In 23 - 79 AD the practice of oral hygiene included: Drinking goats milk for sweet breath Ashes from burnt mice heads, rabbits heads, wolves heads, ox heels and goats feet were thought to benefit the gums. (This probably wouldn't go over very well today) Picking the bones out of wolves excrement and wearing them (maybe in the form of a necklace?) was considered to be a form of protection against toothaches. Washing your teeth with the blood from a tortoise three times a year was a sure bet against toothaches as well. Mouthwashes were known to consist of pure white wine or old urine.

The 18th Century The earliest record of actual toothpaste was in 1780 and included scrubbing the teeth with a formula containing burnt bread. (A common North American breakfast)

The 19th Century In the 19th century, charcoal became very popular for teeth cleaning purposes. Most toothpastes at this time were in the form of a powder. The purpose of the tooth powder was not only to clean the teeth, but to give fresh breath. (Hmmm....that idea isn't so outdated!!) The succulent strawberry (still available today) was considered to be a "natural" solution for preventing tartar and giving fresh breath.

The 20th Century Liquid cleansers (mouth rinses) and pastes became more popular, often containing chlorophyll to give a fresh green or blue color.

Bleeding gums became a concern as well as aching teeth. In 1915, leaves from certain trees in South East Asia (Eucalyptus) were beginning to be used in mouthwash formulas. (Eucalyptus)

So....what's in the toothpaste of the 90s? sodium monofluorophosphate (not to be confused with MSG) color flavoring fluoride foaming agents detergents humectants (prevent the paste from hardening) Herbal toothpastes have gained popularity for people looking fornatural" toothpaste or for those who don't want fluoride in their dental cleansers. Some herbal toothpastes contain: Peppermint oil

Myrrh

Plant extracts (strawberry extract)

Special oils and cleansing agents And the 21st Century. If the trends of the 20th century continue we should see more toothpaste that whiten and brighten the teeth, are canker sore friendly, and give you the ultimate brushing or rinsing experience. The more things change, the more they stay the same!

The Algerian Consumers

Recently, there has been a huge growth in the number of different flavors for toothpaste on the market - a trend that is set to have caught the imaginations of many consumers who have grown tired of box standard mint flavorings. Many consumers base a lot of their purchase decisions on how comfortable a toothpaste feels in their mouths, whether the taste is good enough, whether the toothpaste suits their mouth, or whether the toothpaste contains all the possible ingredients for protection of their teeth. They also base their purchases around the ability of the toothpaste to remove food particles; plaque removal and gum stimulation. In Algeria , when it comes time to purchasing a toothpaste, there are three different consumer groups. Therapeutic Cosmetic Uninvolved brushers Therapeutic brushers are concerned with oral care problems. They brush to prevent disease or other oral health risks, and search out functionally effective products. Cosmetic brushers are concerned with bad breath and their appearance, and search for products that effectively deliver cosmetic benefits. Uninvolved brushers view all products as the same and lack interest in this product category. But, our target would be all three types of consumers which is quite huge.

Population: 33,333,216

Product Name SIKA Toothpaste From SIKA LIMITED.

SLOGAN Long-lasting breath and whitening forever.

Product description Types of toothpastes: A) Tooth Whitening toothpastes have either higher abrasion value than normal toothpastes to mechanically remove food, smoking and other stains from teeth, or/and special ingredients as Peroxide for teeth bleaching and whitening. B) Sensitivity toothpastes contain desensitizing agents to relief those with tooth sensitivity problems from the acute pain when teeth are exposed to hot or cold temperatures or sweet and sour foods. C) Fresh Breath toothpastes contain enhanced flavoring agents along with antibacterials to fight halitosis and provide fresher breath. D) For Children with pleasant flavors and colors for kids, and lower concentration of fluoride (500-1000ppm) to prevent cases of fluorosis.

SIKA LIMITED toothpaste will have much more ingredients than those some years ago.

Fluoride is the most popular active ingredient in our toothpaste due to its proved ability to prevent cavities. Our brand will use Sodium fluoride (NaF); some products would use Sodium Monofluorophosphate - SMFP (Na2PO3F). The concentration of fluoride in our toothpaste for adults is 1000 to 1450 ppm max. Antimicrobial agents that fight the bacteria of dental plaque. There are two kinds of antibacterial agents used as ingredients of toothpastes : - bactericidal agents as Triclosan that kill bacteria. Triclosan induces damage and lesions to the cell wall of bacteria resulting in bacteriolysis (death of the cell).

- bacteriostatic agents as Zinc (Zinc chloride or Zinc citrate) that stop the growth of dental plaque bacteria by inhibiting their metabolism. The combination of a bacteriostatic with a bactericidal agent as toothpaste ingredients is the most effective one to fight dental plaque and gum disease. Surfactants (detergents) and Foaming agents that help to carry away debris from the mouth and between the teeth. Common foaming ingredients in toothpastes are Sodium Lauryl Sulfate (SLS) and ammonium lauryl sulfate Anti-tartar agents as Tetrasodium Pyrophosphate (TSPP). Pyrophosphates are water-softening agents that remove calcium and magnesium from the saliva, so they can't deposit on teeth creating dental tartar (calcified plaque). Pyrophosphate does not remove tartar, it merely helps prevent its formation.

De-sensitizing agents to relieve tooth sensitivity. Strontium chloride works by blocking the tiny crevices (microtubules) that enable cold and heat sensations to reach the tooth's nerve. Potassium citrate and Potassium nitrate work in a different way by blocking the mechanism of pain transmission between nerve cells. Abrasives: Calcium phosphate (chalk) and alumina were used as the abrasive base of tooth pastes but they had the disadvantage of reacting with other chemical ingredients. Today the common abrasives are Silicon Dioxide (silica) and Titanium Dioxide. Hydrated silica is a transparent abrasive used not only in white opaque tooth pastes, but in gel toothpastes as well. Baking Soda (Sodium bicarbonate) is a mild abrasive. It has a mild whitening action and helps to keep an alkaline environment (not friendly for dental plaque bacteria) in the mouth. Teeth Whitening agents : SIKA toothpastes, except of the mechanical whitening action of toothpaste abrasives, use extra whitening ingredients as the Hydrogen Peroxide or Sodium carbonate peroxide that breaks down into sodium carbonate (washing soda) and hydrogen peroxide. SIKA Toothpastes would come in a variety of flavors, most often being some variation on mint.

Additional ingredients such as enzymes, vitamins, herbs, calcium, mouthwash are often included in the formulas. Other non active ingredients in toothpaste are humectants, coloring thickeners, water softeners and sweeteners as sodium saccharin.

I. Executive Summary

A. Summary of situation analysis SIKA Toothpastes involves different types of toothpastes which would be entering the market in 2008 by SIKA limited. This marketing plan summarizes the companys situation at the time different toothpastes were introduced and the different marketing strategies that we believe would be best for SIKA Limited and their new toothpaste. B. Summary of marketing strategies The marketing strategies include proposed strategies involving product, price, place, and promotion.

C. Budget summary Included in the marketing plan are pro-forma income statements for Launch of the toothpaste.

D. Growth Patterns Consumers first purchased toothpastes without much knowledge or information concerning the products benefits. As new product development increased, and consumers became better informed about the benefits of toothpastes, they began to focus their interest not only on cavity prevention, but also on the health of their gums, their oral hygiene, and their cosmetic appearance. Because consumer interest and toothpaste purchases began to increase, advertising and promotion also began to increase, which lead to the development and addition of the super-premium product class. Consumers began to purchase toothpastes based on the specific benefits each toothpastes and company had to offer.

II. Situation Analysis

A. Customers SIKA Limited would be entering its first year of operations. Its main markets would be concentrating in Algeria. It plans to introduce toothpaste in all the big cities of Algeria like Algiers, Constantine, Setif, Bijaya and Oran. SIKA Limited is looking at all possibilities of selling its toothpastes in algeria especially these 5 cities where there is maximum population. The customers would be provided with a whole lot of varieties in toothpastes.

B. Competitors There are some established brands in this field like Opalescence, Nano silver, Meswak and several local manufacturers These toothpaste brands would also be tempted to enhance their capacity utilization by trying to compete in the market. SIKA limited is aware that some big players are also eying this highly fragmented sector for entry through the contract manufacturing route which could lead to pressure on margins in the near future. SIKA limited is aware of its competitors strategies and hence it would be launching its products accordingly.

Weaknesses of Competition Many competitors striving to succeed in the oral care market such as Nano silver, Opalescence and meswak know that in order to be a leader in the oral care category, companies have to be able to compete in all areas of the oral care, besides toothpaste. Because there are many primary competitors in the oral care market, product innovation is a key factor to a companys success not only had to worry about cannibalizing their own products, they also had to worry about the new line of products that were being introduced by such companies as Nano silver, Opalescence and Meswak. With companies holding large shares of the market, SIKA toothpaste had to worry about the innovation of new products that could compete with the SIKA toothpaste. Companies that hold large market shares can afford to pay for more advertising for a newly developed product.

III. 4 PS OF PRODUCT MIX

1. Price Under a niche-positioning strategy, we would price the toothpaste at 20 DZD(dinars) for 100 grams, 40 DZD (dinars) for 250 grams . Under a mainstream-positioning strategy, the company would price the toothpaste at 30 DZD (dinars) for 100 grams, 60 DZD (dinars) for 250 grams. The price would be economical as compared to other toothpaste brands to earn maximum profits.

2. Product The product, the SIKA toothpaste, is a product that should add value to a buyers life. It should also add utility, and meet the wants and needs of targeted consumers. The product should be unique and different from all similar products that are already available on the market. The strategy is to differentiate the products design and packaging, which in return will cause the toothpaste to stand out.

3. Place The most important part of marketing is how our product will get from the seller to the buyer. Many products go through a channel of distribution, which involves manufactures, wholesalers, retailers, and consumers. The distribution strategy proposed for the SIKA Toothpaste is through dentists, plastic surgeons, drug stores, grocery stores, large retail stores, and department stores.

4. Promotion Product promotion is communication spread through advertising, publicity, and sales promotion. SIKA Toothpaste would advertise their products by using commercial, magazine ads, the radio, ads that are to be placed in dentist offices, billboards, and the sides of buses. Advertising would also be done to promote new products, remind consumers of existing products, and also promote the image of the company at hand. special coupons and rebates would be offered and also food products. Also, SIKA toothpaste would benefit from the usage of in-store displays.

IV. Target markets

1. Target market A and proposed strategies The first segment market that SIKA toothpaste will target will be consumers who are concerned about oral health issues, such as fighting plaque and gum disease. These consumers are known as therapeutic consumers, because they purchase products, toothbrushes, that will be the most effective when it comes to oral health care. These consumers buy and use products for themselves,. Consumers in this target market usually do not care about the price, as long as they are getting the highest quality products. Most consumers in this segment are adults, especially ones who have oral health problems. When distributing the SIKA toothpaste to this market segment, Emphasis would be placed on distribution to dentists, drug stores, grocery stores, and large retail stores. Dentists would be when distributing the new toothpaste because many dentists act as opinion leaders, meaning they have a big impact on what others think. Although Nano-silver is the main distributor when it comes to dentists, this would be a good opportunity for SIKA Toothpaste to gain competitive advantage over Nano-silver, by getting dentists to distribute the new toothpaste while selling the benefits to patients. Advertising and promotion would be done through commercials, magazines, radio, and ads put up in places such as dentists offices. These advertising and promotion mediums would target this segments consumers, and would focus on the benefits SIKA toothpaste has to offer in connection with oral healthcare. Commercials made for this market segment would also show the benefits of the toothpaste, possibly through demonstration. Commercials would air at night during prime-time, the time in which most people watch television, and during the day, especially during soap operas. These are the time periods in which more adults watch television. SIKA would direct market the toothpaste by sending special coupons in the mail to consumers or by offering rebates to consumers who purchase

other Nano-silver, meswak, opalescence oral care products. These rebates and coupons would act as an incentive to consumers when it comes to purchasing or trying the new toothpaste. These coupons and rebates could also be dispersed through hard to eat food products, such as popcorn. Also in-store displays could be set up through out stores. These in-store displays could also include demonstrations.

2. Target market B and proposed strategies The second segment market that we would target the new SIKA toothpaste would be consumers concerned with their oral hygiene, such as bad breath, and personal appearance. Many, but not all, consumers in this group are female adults who worry about what they look like. These consumers purchase products that will effectively deliver benefits Target B consumers feel the same way as Target A consumers when it comes to pricing. Most would be willing to pay more if the product offers more advantages than competing products, although because the toothpaste will be positioned as a mainstream product, price will vary in accordance to the prices of other toothpastes. When it comes to the distribution of this product, the toothpaste would be distributed through the same locations as Target A, with the addition of make-up departments of large retail department stores. The toothpastes should be distributed through dentists because many people who visit a dentists are concerned about their gums and would likely consider the different options available to them that will enhance their structure , such as their teeth. The toothpaste would be distributed through make-up departments because most people who shop for make up at large department stores are also concerned with keeping their teeth shining. Advertising and promotion should be done in a similar manner as Target A, through commercials, magazine ads, the radio, with the addition of placing advertisements on billboards and buses. The commercials and other advertisements should focus on the cosmetic benefits of the toothpaste. The ads would show well made up men and women, who one can tell place great emphasis on their looks, demonstrating the strengths of the new toothpaste. The placement of ads on billboards and buses throughout the larger cities will hopefully increase consumer demand because many people who live in large cities have important jobs that require them to look nice. Special promotions that SIKA can offer can be through other SIKA products that many consumers also associate with appearance and oral hygiene. Such products can include dental floss and mouth rinses. As with Target A, special rebates and coupons can be offered through these products. Also, the use of in-store displays could be useful when promoting the Toothpaste.

By placing the new toothpaste on the shelf between an existing toothpaste product and a competitors profits, this may or may not be a good idea. By placing the product next to an existing companys product, consumers may not see the benefits of switching, and could continue to prefer using the existing product rather than even considering trying the new one. But by placing the new product next to a competitors product, it may lead to the consumer questioning which product is better, hopefully causing the consumer to try the new product, over its competing product.

V. Marketing Strategy

A. General marketing strategy

1. Niche/mainstream positioning strategy The main focus of niche positioning would be placed on consumers who are concerned about the prevention of gum diseases. There would be many positive benefits to the company if SIKA Limited were to position the SIKA toothpaste as a niche product. These benefits would include : 1) By targeting the segment of consumers who are worried about gum disease; 2) SIKA Toothpaste would be able to charge premium prices. SIKA would be able to differentiate the SIKA Toothpaste from other toothpastes, because of SIKAs technological superiority over the other toothpastes already on the market. 3) It is safe to say that SIKA production would not decrease if SIKA limited were to position the Precision

as a niche product. And 4) If costs were to decrease then it would enable SIKA Limited to reduce the losses of Precision if it was not successful. Niche positioning not only offers positive benefits, but it also offers negative ones as well. Mainstream positioning would place emphasis on the SIKA toothpaste as being the most appealing and effective toothpaste available on the market. The advantages of using mainstream positioning for the SIKA toothpaste would be : 1) Most retail stores are under a mainstream position rather than a niche position. 2) In the super-premium category, the SIKA toothpaste would be the most superior product. 3) By positioning the toothpaste as a mainstream product, it would in return increase name recognition for SIKA. We believe that maximizing profits is the most important thing, and that positioning SIKA toothpaste as a mainstream product rather than a niche, it would create higher profits.

2. Product differentiation strategy By differentiating a product, it creates a difference that sets certain products apart from other products and also targets certain market segments. SIKA toothpaste would need a product differentiation strategy that will make the SIKA toothpaste unique from all other toothpastes already available on the market. The company will also need a strategy that will appease to certain consumer segments. By coming up with this strategy, it in return will cause SIKA limited to increase profits and market share. The main area of this strategys focus would be placed on the design and packaging of the toothpaste. For example, SIKA limited would make sure the consumers know that the toothpastes are of different packaging for a reason, for the reduction of plaque build-up in places such as the gum line and in between the teeth, and that no other toothpaste on the market is designed this way. A picture is placed on the toothbrush package showing the different types of toothpastes and an explanation of what each type is responsible for . Also, different toothpastes are of different colors representing the different lengths. This way the consumer will be able to differentiate the SIKA from all other toothbrushes. SIKA Limited would package the SIKA Toothpaste differently than the other toothpaste companies. The toothpastes packaging should be very colorful in order to draw customer attention away from other pastes. The name SIKA should also be placed on the packaging in a distinct font.

3. Price/quality differentiation strategy Our main focus here is on the customers. We want them to be able to get the most for their money. By producing a superior toothpaste, that offers more qualities than the other toothpastes available on the market, at or around the same price as the competition, consumers will hopefully want to purchase the SIKA toothpaste over the others. There will be more qualities offered at no extra charge. The price of the toothpaste if positioned as a mainstream product will have to be equal to the prices of the other toothpastes already available on the market. If the SIKA toothpaste is profitable and there is a high percentage of consumer demand, then SIKA Limited might want to consider increasing the price of the toothbrush by a small margin.

4. Mission marketing strategy SIKAS mission strategy is to be successful in the toothpaste market, and hope the SIKA toothpaste is not a failure. They would strive to gain a competitive advantage over other companies, while producing a profit,

and satisfying the wants and needs of buyers. A goal of SIKA is for the sika toothpaste to add utility or value to its consumers lives.

VI. Distribution

1. Types of Distribution Aside from convenience stores and large retail stores, many food stores play a key role in the distribution of oral health care products. Mass merchandisers gain share due to increased in-store promotional support . Because of the increase in the demand for oral care products, stores began shelving more oral care products. This would a big advantage for SIKA ltd because there would be more room in the stores for them to market the new SIKA toothpaste. Dentists would also play a big role in the distribution of oral care products.

2. Strengths/Weaknesses of Distribution Since many of the food stores began to open more shelf space for oral care products, this would allow for SIKA to situate the Toothpaste where they thought it would gain attention from consumers. The only drawback about distribution for SIKA was dentists. SIKA could hold the market share for the distribution of toothpastes in dentists offices.