English Toothpaste
Short Description
Oral Care Industry Analysis - English toothpaste...
Description
Shahan Irshad 34354 | Shahbaz Siddiqui 33210 | Adnan Ali 33211 Sadia Asad 33877
| Hina Sheikhani Sheikhani 31970
| Shehzad Shehzad Khatri 34274
Sir Tariq Raheem Strategic Marketing Management
Sarwana & Sohzsihm is one of the leading Pakistan Pakistan based multi-national company, company, manufacturing oral-care, oral-care, beauty & personal-care products, and very recently entering into foods products.
In collaboration with Sohzsihm Inc., Florida, USA, company has a focus on developing unique and innovative innovative products, setting newer standards and market ma rket trends
Its focus on expanding with breakthroughs and innovative product ideas, taking pride in quality and satisfaction, both internally and to the end-consumer. end-consumer.
Sarwana & Sohzsihm. Sohzsihm. English toothpaste was launched in late 90’s by Sarwana
It only expresses the importance of the customer for the company. It says:
Wrong positioning of the product i.e. lowest price toothpaste has created negative impact on customers mind and customers assumed that to achieve the lowest price company must have compromised on the quality, while for the products which are for healthcare or personal care, customers are sensitive on the quality parameters.
Due to ineffective distribution strategy, the product was not available throughout the market as compare to other competitive brands, which were covering the whole market. On the other side, TVCs and marketing campaigns focusing on the prices, were unable to create the pull.
With no variants, company was offering one product for the whole market, while the market was very well divided into submarkets with their own needs and required solutions.
Pakistan Oral Care Value its sales to PKR 21.2 billion in 2014
Oral Care is likely to grow by a CAGR of 8% (Percent)
Oral Care currently available at PKR 26.7 billion by 2017 – Pursuing
The forecast period to reach sales of PKR 31.15 billion in 2019
Source:PublishedEuromonitor – aprivatelyowned,London-basedmarketintelligencefirm,providingmarketresearch, businessintelligencereportsanddatatoindustrycategorybriefingreport
As per Industry Structure, toothpaste contribute around 73% of the total Oral Care market. With this information, we can value the total category in Billion PKR as follows:
Toothpaste market can be further divided into the following sub categories according to the intended use and the product feature.
Standard Toothpaste
Natural, English, Shield, Sparkle
Mouthwash / Gel Fresh
Closeup, Colgate Maxfresh, Aqua Fresh
Whitening effect / Bicarb Soda
Forhens, Mcleans, A1, Colgate Active Salt, Sodawhite
Senstivity Toothpaste
Sensitive, Sensodyne
Kids Toothpaste
ABC, Kodomo
Smokers Toothpaste
Dr. Smokers
Medicated
Medicam, Colgate Dental Crème
Herbal
Colgate Herbal, Miswak
Colgate is leading the category with the 36% share
Closeup with 18% share
Sensodyne at 13% Share
Medicam is having a reasonable share of 7%
Rest of the 26% is shared by other brands including English, Doctor ’s, Mcleans, Sparkle,
Forhen’s, Sodawhite, Minto, ABC etc
- Lower Price - Attractive Retail Margins - Efficient Distribution - Market knowledge and existence - Brand Acceptance
- No variants (Current)
- Growing market and category year over year
- Counter attack from existing market leaders
- Under positioned.
- Already existence in the market.
- Very strong competition.
- Low switching cost in category.
- Expected Customer response influence due to the previous image of the brand
- Existing Image in Customer Mind.
Total market: around 20 Billion PKR with a CAGR of 8% Target for Next two years: Min. 10% share from the total toothpaste market i.e. 2 Billion Target for 5th Year: Min. 15% share from the total toothpaste market i.e. 2.86 Billion
Re-position the product on attributes and oral care. Re-build the brand image and grab the customers from all income groups instead of limiting the product to low income group. Go into line extension by introducing new variants according to customers need and competitors offering Develop the products with the consideration to cover the most of the sub categories to increase the customer base.
Market Segmentation: Instead of dividing the market on the basis of income groups and target any particular class, revised market segmentation would be “Undifferentiated”.
However,theproductofferingsareneedtobemodifyaccordingtothesub-categorieswhichareasfollows:
Standard Toothpaste
Mouthwash / Gel Fresh
Whitening effect / Bicarb Soda
Sensitivity Toothpaste
Kids Toothpaste
Smokers Toothpaste
Medicated
New
variants in the products are being launched which will give company an age over the brands other than the Colgate, as Colgate is already market and global leader in the category. Even few of the variants are unique which are not available in Colgate product range as well. The details of new variants in planned launch are as follows:
English
Kids Toothpaste English Anti Smokers English Fresh Gel
High
Mid-High
Mid-Lower
Shield
Aqua Fresh
Forhen’s
Sensodyne
Medicam
Kodomo
Colgate
McLeans
Close Up
Colgate
Colgate Sensitive
Colgate
ABC
Natural
Sparkle
Colgate Herbal
Hamdard Misvak
Soda White
Low End Price
Doctor Smokers
A1 Standard
Gel Fresh
Whitening
Sensitivity
Medicated
Kids
Smokers
Herbal
The new positioning of the product will be on the basis of Dental Care on the basis of products attributes with the help of new variants.
This will help to build a new image of the product in consumer mind and will replace the previous image of Low Price – Low Quality.
On the basis of new positioning of the products, new TVC to be released with signing the Dentists as brand ambassador.
In product development, company adopting the line extension strategy and adding more variants in the existing product line.
Anti Becterial Toothpaste - First & Innovative product with the Dentists endorsements Complete Cavity Production - With more Power of Calcium and Fluoride for the Cavities English Herbal Toothpaste - With Natural Ingredients for Dental Care Medipaste Dental Crème - Medicated Toothpaste for Pain, Swelling and Bleeding Issues
English Kids Toothpaste - For Kids start learning brushing the teeth; harmless if swallowed English Anti Smokers - For Hard stain of tobacco and cigarettes, Power of Soda Bicarb. English Fresh Gel - With Mouthwash and Gel, for fresh breath to target youth.
The distribution of the product was not efficient enough, and product was not available at many places and due to lack of access to the customer and visibility in shelves, walk in customers cannot be target in all regions.
Premier Distributor (Karachi South)
|
HM Saya (Karachi Central)
Burque Corporation (Karachi North)
|
Bolan Enterprises (For Balochistan)
Ravi Corporation (For Lahore)
|
Khwaja & Sons (For Upper Punjab)
S. Nizaam Deen (For Lower Punjab)
|
Capital Group (For Rawalpindi / Islamabad)
Shams Traders (For Peshawar Region)
|
Khan Traders – DI Khan (For Rest of KPK)
Since company is trying to get the market share equivalent to the Second largest brand i.e. Closeup, the pricing are also kept at slightly low from Closeup. Per gram cost of 70 gm and 140 gm tooth paste are kept lower than the Close-up offering of similar volume tube. For the Smaller Tube i.e. 35 gm, Closeup products are not so popular in this range, so the prices of this
Total Advertisement Budgeting 15 Days a month TV Channels Geo
Time Type
Per Minute
Prime Ordinary
ARY
Prime Ordinary
Express News
Prime Ordinary
News One
Prime Ordinary
Total Other Channels Total Digital Media Print Media
Per 30 Sec
Repeatition
Cost Per Day
Annual Budget
220,000
110,000
3
330,000
59,400,000
40,000
20,000
8
160,000
28,800,000
100,000
50,000
3
150,000
27,000,000
70,000
35,000
-
125,000
62,500
3
187,500
33,750,000
30,000
15,000
8
120,000
21,600,000
100,000
50,000
3
150,000
27,000,000
50,000
25,000
-
-
-
197,550,000 50,000,000 247,550,000 50 000 000
Product Development has already been conducted, now in the phase of pre- marketing through dental clinics and shopping malls. This is expected to be completed by the end of December.
Selection of Channel Partners have already been finalized. Some of them are in signing of contract, and this is also expected to finalize within month of December.
Commercial production of new variants will be started by the 1st January 2018. This has been reconfirmed to production as the initial feedback of the product is very good.
New TVCs and Printed Advertisement will be released by the 20th January 2018, after completion of the first lot and QC approval.
Planned Production in term of Finished Goods Cost – 2018 Pack
Product
Q1
Q2
Q3
Q4
35 gm.
Anti-Bacterial
16,875,000
16,875,000
16,875,000
16,875,000
70 gm.
Anti-Bacterial
67,500,000
67,500,000
67,500,000
67,500,000
140 gm.
Anti-Bacterial
28,125,000
28,125,000
28,125,000
28,125,000
35 gm.
Complete Cavity Production
13,125,000
13,125,000
13,125,000
13,125,000
70 gm.
Complete Cavity Production
52,500,000
52,500,000
52,500,000
52,500,000
140 gm.
Complete Cavity Production
21,875,000
21,875,000
21,875,000
21,875,000
35 gm.
Herbal
5,625,000
5,625,000
5,625,000
5,625,000
70 gm.
Herbal
22,500,000
22,500,000
22,500,000
22,500,000
140 gm.
Herbal
9,375,000
9,375,000
9,375,000
9,375,000
35 gm.
MediPaste
1,875,000
1,875,000
1,875,000
1,875,000
70 gm.
MediPaste
7,500,000
7,500,000
7,500,000
7,500,000
140 gm.
MediPaste
3,125,000
3,125,000
3,125,000
3,125,000
Planned Production in term of Units
Pack
Product
Q1
Q2
Q3
Q4
35 gm.
Anti-Bacterial
964,286
964,286
964,286
964,286
70 gm.
Anti-Bacterial
2,250,000
2,250,000
2,250,000
2,250,000
140 gm.
Anti-Bacterial
468,750
468,750
468,750
468,750
35 gm.
Complete Cavity Production
750,000
750,000
750,000
750,000
70 gm.
Complete Cavity Production
1,750,000
1,750,000
1,750,000
1,750,000
140 gm.
Complete Cavity Production
364,583
364,583
364,583
364,583
35 gm.
Herbal
321,429
321,429
321,429
321,429
70 gm.
Herbal
750,000
750,000
750,000
750,000
140 gm.
Herbal
156,250
156,250
156,250
156,250
35 gm.
MediPaste
107,143
107,143
107,143
107,143
70 gm.
MediPaste
250,000
250,000
250,000
250,000
140 gm.
MediPaste
52,083
52,083
52,083
52,083
Total Production Plan
8,184,524
8,184,524
8,184,524
8,184,524
2018
2019
2020
2021
2022
Turnover (Forecasted)
2,000,000,000
2,100,000,000
2,720,000,000
3,430,000,000
3,970,000,000
Product s & Producti on Cost
1,000,000,000
1,050,000,000
1,360,000,000
1,715,000,000
1,985,000,000
SELLING AND DISTRIBUTION COST
%
Salaries, wages and other benefits
1.30%
26,043,282
27,345,446
35,418,863
44,664,228
51,695,914
Travelling and conveyance Repairs and maintenance Vehicle running expenses
0.12% 0.01% 0.23%
2,488,069 188,432 4,586,634
2,612,472 197,853 4,815,965
3,383,774 256,267 6,237,822
4,267,038 323,161 7,866,077
4,938,817 374,037 9,104,468
15.00%
300,000,000
315,000,000
408,000,000
514,500,000
595,500,000
Postage, telephone and internet charges
0.05%
1,022,162
1,073,270
1,390,140
1,753,007
2,028,991
Rent, rates and taxes Printing and stationery Legal and professional Fr eight & D istr ibuti on C har ge s Ele ctr ic it y Insurance Security service charges Depreciation 4.1.5 Other expenses
0.26% 0.01% 0.00% 2.6 4% 0.0 3% 0.12% 0.02% 0.12% 0.09%
5,285,586 263,367 1,000,000 5 2,7 04, 607 5 34, 201 2,486,149 480,067 1,812,477
5,549,866 276,536 58,018 55 ,33 9,8 37 56 0,9 12 2,610,456 504,070 2,622,329 1,903,101
7,188,398 358,180 75,147 71 ,67 8,2 65 7 26, 514 3,381,162 652,891 3,396,540 2,464,969
9,064,781 451,675 94,762 9 0,3 88, 401 9 16, 156 4,263,745 823,314 4,283,137 3,108,398
10,491,889 522,784 109,681 10 4,6 18, 645 1,0 60, 390 4,935,006 952,932 4,957,450 3,597,767
398,895,032
420,470,130
544,608,931
686,767,879
794,888,770
1,398,895,032
1,470,470,130
1,904,608,931
2,401,767,879
2,779,888,770
Advertising and sales promotion
Total Expenses Budgets
Total Cost
Description
2018
2019
2020
2021
2022
Turnover (Forecasted)
2,000,000,000
2,100,000,000
2,720,000,000
3,430,000,000
3,970,000,000
Products & Production Cost
1,000,000,000
1,050,000,000
1,360,000,000
1,715,000,000
1,985,000,000
398,895,032
420,470,130
544,608,931
686,767,879
794,888,770
1,398,895,032
1,470,470,130
1,904,608,931
2,401,767,879
2,779,888,770
601,104,968
629,529,870
815,391,069
1,028,232,121
1,190,111,230
Total Expenses Budgets
Total Cost
Expected Profit (EBIT)
It is a very good opportunity for the company to re-enter the market with the aggressive strategy as proposed. The financial forecast and expected returns are calculated with very conservative estimation and it is expected that the actual revenue and returns would be even better. Contingency planning is also included in the plan to handle any adverse situation and minimize the risk and losses. Overall it’s a feasible picture for the company to invest in and the timing is also suitable considering the market situation.
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