Cottle Taylor
Expanding the Oral Care Group in India
Factors Driving Demand
The economic and political condition of a country Frequency of use
Price of the product Distribution & Retail network
Rising disposable income of the customer Demographic trends & customer perception
Expenditure on Marketing & Advertisement Migration of people in urban areas
Awareness of Oral Hygiene Availability of Substitutes
Forces & Internal Company Issues for Growth
In Favor Against
Collaborative Environment in company 50% of all Indians are not concerned with
preventing or curing dental problems
Majority of Indians wanted to upgrade to
More than 75% of Indians live in less than
inexpensive modern oral care products $2/day
Cottle has strong distribution network They didnt perceive a need for more
profitable & sophisticated products
Exposure to info increasing due to mobile
advancement in mobile tech High illiteracy
Inconsistent daily wages in rural area
Growing affordability
Dependence on Natures Drugstore
IDAs effort to increase awareness
Association of dental problems with eating
Influence of western habits habits
Study outcome about efficiency of battery brushes Change brush when handle breaks or bristles
flatten
in removing plaque
Inexpensive & locally available ingredients
Forces & Internal Company Issues for Growth
Patels Strategy Effect
Patel wanted to retain expenditure at 9% of sales Increase in number of rural brushers
Thought that company would not like to spend too Create a larger customer base for future
much money at the time of recession
Drive sales of low end brushes
Wants to create new consumers
Keep expense minimum for company
Wants to increase brush usage
Sale of mid- range and premium toothbrush
Patel wanted to focus mainly on : unaffected
Persuading consumers to brush for first time 20% increase in sales respite increase in
Increase incidence of brushing toothbrush prices
Forces & Internal Company Issues for Growth
Langs Strategy Effect
Lang proposed increase in ad expense to 12% Increase in expenses for company (ad 12%)
Based on strategy used in Thailand New customers created is comparatively lower
Strategy more focused on : High increase in switching from low end to mid
Persuading consumers to upgrade to mid range or range and premium products
premium products More sale of mid range and premium products
Forces & Internal Company Issues for Growth
Toothbrush Products 2009 2010 E 2010 E $ Revenue
In millions Patel Lang Price/Unit In millions ($)
In millions In millions (After 20% Patel Lang
Increase)
Complete 230.6 276.7 267.5 0.18 49.81 48.15
Sensitooth 29.9 35.9 34.7 0.216 7.75 7.5
Low End Fresh Gum 15 18 17.4 + 0.216 3.89 3.76
Manual 9 9.7 10.4 16 0.228 2.21 2.37
Surround
%
Kidsie 15 16.2 17.4 0.144 2.33 2.51
Total 299.5 356.5 347.4 - 65.99 64.29
Mid Range Zagger 34.4 43 75.7 + 0.348 14.96 26.34
Manual Directionflex 8.6 10.8 18.9 120 0.636 6.87 12.02
%
Total 43 53.8 94.6 - 21.83 38.36
Battery Swirl Brush 1.5 1.7 1.88 + 7.68 13.06 14.44
Operated Refills 0.2 0.2 0.3 25 0.672 0.13 0.2
Brushes and %
Refills Total 1.7 1.9 2.18 - 13.19 14.64
Total 344.2 412.2 444.18 - 101.01 117.29
Forces & Internal Company Issues for Growth
Weightage % Patel Lang
Toothbrush Gross Revenues 100% 101.01 117.29
Less(-): Trade Discounts 10% 10.10 11.73
= Net Revenue 90% 90.9 105.56
Less(-): Variable Manufacturing, Selling and 46% 46.46 53.95
Distribution Costs
= Gross Margin 44% 44.44 51.61
Less(-): Advertising 9%(P)/12%(L) 9.09 14.07
Less(-): Consumer Promotions and Merchandising 3% 3.03 3.52
Less(-): Selling, General and Administrative Costs 14% 14.14 16.42
= Profits from Operations - 18.18 17.6
Forces & Internal Company Issues for Growth
COMPARISON BETWEEN THE TWO APPROACHES
117.29
120 101.01
100
80
60
40
18.18 17.6
20
0
Patel Lang
Revenue
Forces & Internal Company Issues for Growth
Lang's strategy projects a revenue of $117.29 million compared to $101.01 Million for patels strategy
but gross profit for Patel's strategy ($18.18 Million) is more than Lang's strategy ($17.6 Million)
Patels strategy generates more users hence creating a larger customer base for future
Patels strategy should be followed for 2010 and Lang's strategy may be implemented once first time
users are increased
There should be different weightage given to the 3 key messages for rural, Urban and semi-Urban
areas
