ABC enjoys market share of 48. 4 in
ABC analysis Colgate Palmolive Introduction: For many consumers, the personal products sector is a family member. With recognizable companies such as Procter & Gamble, Avon Products, and Kimberly-Clark, many investors feel satisfaction invests in companies whose products they use daily. Another of these companies, Colgate-Palmolive (CL) is a 34 billion-dollar company with a lot of similarities with those companies. Colgate was founded in 1806 in New York as a soap and candle company. Colgate-Palmolive is now a multinational corporation selling oral hygiene products, soaps, and pet nutrition products.
The company currently has a market capitalization of over $34 billion and over 38,000 employees. Products include Colgate toothpastes and toothbrushes, Palmolive soap, Softsoap, Speed Stick, Irish Spring, and Science Diet, in addition to many more. Colgate-Palmolive consists of business segments like: Oral, Personal, and Home Care, and Pet Nutrition. Colgate-Palmolive is a stable, growing company with impressive international sales in a highly competitive but recession-resistant industry.It has an excellent market share of oral and personal care, as well as pet nutrition. Colgate Palmolive (India) Limited: Colgate is the largest players in the Rs 31 billion India oral care market.
Established in 1937 in india, the company enjoys market share of 48. 4 in tooth paste, 44. 3% in tooth powder and 34.
9% in tooth brush segments. Colgate has been has been ruling the Rs 3500 crore oral care segment for long with a market share of over 50%. The toothpaste segment can be divided in to three segments : white, Gel and herbal based on the product characteristic.Although the company’s operations have a largely been restricted to the oral care segment, Colgate has built its presence across the oral care pyramid unlike any other competitor. Colgate tooth paste: Colgate’s key products include colgate dental cream (CDC), Cibaca, Colgate Max fresh, Colgate total 12, Colgate advanced whitening, Colgate activ salt, Colgate tooth brush and palmolive shower gels, among others. Unlike competition, colgate has a strong presence across the oral care pyramid. This would enable the company to maintian its market share in the event of downtrading by consumers.
Also as market leader, colgate is well poised to capture opportunity arising from low penetration of oral care products in the country. Colgate tooth pastes: The growth in the oral care segment, going forward, would come from converting non users to tooth powder and then facilitating a gradual up trading by the consumers towards the tooth paste. Colgate, having estblished a leadershiip position across all the verticals, is likely to gain most in this scenario. In this section we’ll look at the various tooth pastes offered by Colagate Palmolive and their sales and revenues.Interms of shares, Colgate dental cream (CDC) is having the higest revenues of about 51% among all the tooth pastes offered by the Colgate tooth pastes. The second tooth paste which is having higher revenues Cibaca with almost 11%. There are set of tooth pastes like Colgate max fresh, colgate advanced whitening, Colgate active salt etc all together carry a revenue of 11%.
Fig -1: Colgate dental cream: It helps cleaning breath and guards teeth from tooth decay. This is for the general people and for family use.Colgate max fresh: The gel properties of this product of Colgate gives freshness along with protection.
This product specially targets the young generation who avoids bad breath and inculcate the word ? freshness?. Colgate herbal: This product contains herbal ingredients for white teeth and freshness which removes bad breath and removes plaque. This product is designed for the people who believe in ayurvedic products and avoid using strong chemicals. Colgate Family Cibaca: This product is designed as a complete family dental cream.
The product targets all age groups and all types of consumers, basically, the rural and township areas with low per capita income as well as urban areas. However, all these tooth pastes are catered to different set of tooth pastes like Cibaca is positioned at low price point taste which caters to rural areas and semi urban areas. Colgate dental cream caters to urban population and the other tooth pastes like Colgate max fresh, colgate advanced whitening, Colgate active salt are catered to higher end market.
These products are priced at premium of around 18%( advanced whitening) and 23% (max fresh)over the flag ship brand CDC. These offering has given the company to increase its market share above 5% over the past two years. The main reasons for this increase in revenues is also the raw materials for colgate . The maize production during the year is very high ie, it increased by 20% and therfore sorbitol which is one of the key raw materials for colgate helped in keeping the cost of this tooth paste at better position when compared to others and in generating higher revenues and profits.
Using ABC analysis we know that when there are more sales and revenue generated and if the products are bought regularly, it requires high inventory. So, in this case Colgate dental cream belongs to first category since this product is having sales when compared to others where it is high volume product. In the second category comes the Colgate Cibaca tooth paste which is having moderate sales despite its low cost as it is able to get only 11% of revenues. In the last category comes the set of tooth pastes which are catered to high end market which are generating revenues less than 11% all together.
Conclusion: This revenue generation from different varieties of the same product called will be varied according to changes in tastes of the customers and aslo the economic conditions also play an important role in analyzing the profits of a organization. What ever may be the reason for changes in the revenue generation the ultimate thing which is responsible for this change is the demand according to which we can predict which type of product that has to be kept in hand as inventory.