How many is too many?
COLGATE is a market leader in the US, Latin America and in many European markets with its myriad of brands. Its laundry detergents alone include Fab, Sudsil, Hurricane, Ajax and Cold Power. Besides its many detergents, Colgate is better known for its toothpaste and sells over six brands (Colgate, Ultra Brite, Dentagard, Colodent, Crystal and Sensitive). In addition, Colgate sells five brands of hand soaps (Palmolive, Irish Spring, Softsoap, Protex and Glycerine); three brands of fabric softener (Sauvitel, Fluffy and Cuddly), three brands of dish-washing liquid (Palmolive, Ajax and Dermassage), two brands of deodorants (Speed Stick and Teen Spirit) and even sells the well-known brand of pet food under the Hill’s brand of pet foods. Moreover, many of its brands are offered in several sizes and formulations. For example, you can buy large or small packages of powdered or liquid Hurricane laundry detergent in a variety of forms – regular, unscented, colour safe or with bleach etc.
With so many brands, it is not hard to conceive that many of Colgate brands compete with each other on the same supermarket shelves. Why would Colgate introduce several brands in one category instead of concentrating its resources on a single leading brand? The answer lies in different people wanting different mixes of benefits from the products they buy. Take toothpaste as an example. People use toothpaste generally to get their teeth clean. But they want other benefits from their toothpaste – such as affordability, fresh breath, cavity protection, and guard against the build-up of plaque, plus its ability to strengthen enamel or be gentle on sensitive teeth. We all want all or some of these benefits from our toothpaste, but we may have different priorities for each benefit. To some people, fresh breath is the most important; to others, guarding against the build-up of plague matters most; still others want cavity protection that safeguard their enamel and ensure a radiant smile every time. Thus there are groups – or different segments within the toothpaste buying market and each segment may seek a different selection of benefits.
Colgate has identified at four broad segments within the toothpaste market, along with numerous sub segments in each, and has developed a different brand/sub-brand specially designed to meet the needs of each. The segments and the brands offered are:
- The Worriers segment consists of people that are primarily concerned about preventing tooth decay. These people buy tooth paste brands that are particularly effective at preventing cavities, reducing plaque, etc. Large families comprise the majority of this segment. Parents are very concerned about decay prevention with their children. This segment tends to consume a large amount of toothpaste (heavy users) and prefer brands such as Colgate Cavity Protection.
- The second segment consists of Sociables - individuals concerned primarily with fresh breath and white teeth. Again, a very different set of needs is implied as compared with the segment previously described. The individuals comprising this segment are primarily teens and young adults still "playing the game." Sociables are very concerned about that nice pretty smile that displays lots shinny white teeth. Sociables are targeted by a brand such as Ultra Brite Tootpaste.
- The Sensories segment consists of individuals who are more interested in toothpastes that have pretty colors and good taste. This is a very different set of needs than exists in the previous two segments. As you might expect, this segment primarily consists of children. Kids generally tend to look for oral gratification in most things they consume, so Colgate responds with Crystal White Toothpaste or Colgate Toothpaste for Kids
- The fourth and final segment is a Generalist segment comprised primarily of adult males. This segment is what is referred to as a 'low involvement' segment for toothpaste. They are not overly involved with the product, but realize that they need to buy and use toothpaste -- it is part of their daily lifestyle maintenance. For this segment Colgate offers it Colodent Toothpaste
By segmenting the market and having several toothpaste brands, Colgate has an attractive offering for customers in all important preference groups. All its brands combined hold a market share much greater than any single brand could obtain. Above all, with these multiple brands and the success it has enjoyed, Colgate has demonstrated its savvy use the principles of segmentation, targeting and positioning.
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3. Suggest alternative segments for Colgate to enter and suggest how the brands for the segments should be promoted.
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