Colgate launches offensive to take on P&G’s Oral B toothpaste

12 Jul,2013

By Kala VijayaRaghavan & Sagar Malviya

 

Last week, when Procter & Gamble launched Oral B, its first toothpaste in India, perhaps no one else was watching it more closely than Prabha Parameswaran, the MD of rival Colgate, also the market leader in the Rs 5,000-crore oral care market.

 

Ms Parameswaran’s swift and no-holds-barred retort to the P&G threat has by all accounts left the latter overwhelmed in the market.

 

A heap of 250-odd Colgate toothpaste packs greets customers at a leading supermarket in the suburbs of Mumbai. Almost each of the neatly stacked packs forming a mini-pyramid has either BOGO (buy one get one) printed on it or carries reduced price tags. Here and across 4.5 million retail outlets, Colgate is being a shameless bully, elbowing P&G out of any shelf space. It is throwing toothbrushes, pastes, and brand events and promotions with trade partners, and discounts, all to deny or delay giving P&G even a toehold. Such promotional intensity wasn’t there even two weeks ago.

 

“Several large retailers haven’t even stocked P&G’s new toothpaste as the margins offered were lower than Colgate and GSK,” said two officials at leading supermarkets.

 

This is already turning out to be a costly battle – Colgate has hiked its advertising and promotion spends by 31% during the first half of this calendar year.

 

Devendra Chawla

“There has been a new-found aggression in Colgate during the past year,” says Devendra Chawla, president-Food Bazaar at the Future Group.

 

P&G India is hardly a wimp when it comes to a scrap for market share. The Cincinnati-headquartered company has had dozens of such brawls with arch rival Unilever in segments such as detergents, shampoo and skin creams. But this is the first time P&G is wrestling with Colgate.

 

“Though it is still very early, our launch of Oral B toothpaste and initial plans are very much on track,” a P&G spokesperson said, responding to an email about the battle with Colgate. “We are very pleased with the response and support we are receiving from both our customers as well as the professional community.” Ms Parameswaran, 51, too is quite familiar with the exertions of such battles. Before she was elevated to the top job in India, she had fought P&G for over a decade at their home turf – the US – and more recently Mexico, where she was the marketing head until 2012. Colgate controls more than half the market and Ms Parameswaran is fiercely guarding every inch. In the months preceding P&G’s first toothpaste launch, she was hitting the roads, meeting dealers, distributors and trade partners, say sources in direct know of things. A media-shy Colgate declined comment. “Ms Parameswaran has fired up the organisation,” says a highly placed official privy to recent happenings within Colgate.

 

Since she took charge in February 2012, Colgate’s market share has increased from 53.1% to 55%, its highest since 1998, and a rare instance of a market leader gaining new ground. In the same period, its stock has risen 41%, even as the BSE Sensex has gone up just 14%. “Colgate is like a well-oiled machine. What a very good leader can do with such a welloiled machine is what is happening now at Colgate,” says Abneesh Roy, associate director at Edelweiss Securities. “Usually, the market leader tends to protect share rather than drive further growth. Colgate has managed growth under Ms Parameswaran,” he adds. Roy, who had met Ms Parameswaran recently, says she comes across as an extremely savvy marketer with a curiosity to know what is happening in other categories.

 

“Colgate has usually tended to do well under attack, earlier from Pepsodent and later from low-cost brands such as Anchor,” says Vikram Kaushik, ex-MD of Tata Sky. He was executive vice-president (marketing) at Colgate-Palmolive (India) in 2004. Ms Parameswaran has worked with Colgate for two decades. She started off with experiences across verticals including initiatives to revitalise its personal care business that included the launch of Palmolive Naturals soap, Palmolive Optims and the male toiletries and skin care equities. She moved to New York as associate director (global business development), oral care, in 1997, and was later the vice-president (marketing) for Colgate India between 2007 and 2009.

 

Ms Parameswaran worked with Lintas India (now Lowe Lintas) before joining Colgate and had handled HUL campaigns, including ‘Zara sa Rin!’, ‘Dur ho ja meri nazron se!’ (for Wheel) and ‘Dhoondte reh jaoge!’ (for Surf Ultra). “I remember her then for her team leadership skills as well as witty sense of humour. She was extremely insightful,” says Pranesh Misra, chairman & MD, Brandscapes Worldwide. He had worked along with Ms Parameswaran in Lowe Lintas on HUL brands. “After years at Colgate in different geographies and roles, she has further sharpened her skills in marketing and business leadership,” he adds.

 

(With inputs from Amit Bapna)

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

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