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GRADUATE SCHOOL OF MANAGEMENT

INTERNATIONAL ISLAMIC UNIVERSITY


MALAYSIA



Module: Case Methodology (MGT 6798)

Individual Assignment : Colgate Soft and Shiny


Prepared By : Mohamed Ahmed Yusuf G1327311
Prepared For : Mr. Ayub Bin HJ. Khalid
Due date : June 12, 2014





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Table of Content
1 Background of the Company ....................................................................................... 4
2 The Industry ............................................................................................................... 5
3 Sales Operation .......................................................................................................... 5
4 SWOT Analysis ........................................................................................................... 6
5 Related Issue .............................................................................................................. 7
6 Problem Statement .................................................................................................... 7
7 Several Options .......................................................................................................... 8
8 Conclusion ................................................................................................................. 8



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1 BACKGROUND OF THE COMPANY
Colgate-Palmolive (Malaysia) Sdn Bhd is a subsidiary company of Colgate Palmolive
Company USA, started off in Malaysia in 1960 as a manufacturing company of
toothpaste. The parent company based in New York USA was originally a
manufacturer of soap and detergent products. These products were well accepted and
the company soon expanded into other parts of the world and also began to
manufacturing other products. Besides, the parent company is also responsible for
research and development, producing new formulae for new products and improving
the existing formulae.
Colgate-Palmolive (M) was responsible for the manufacturing of the following
product lines:
a) Oral Category Colgate Dental Cream, Colgate tooth brush
b) Household products Trojan, Fab, Fab Laundry, etc.
c) Toiletries Palmolive, Darling
d) Personal Care Products Soft and Shiny Shampoo, Code 10
Colgate-Palmolive (M) was a market leader in all its products lines e except for its
beauty soap and shampoo. However, with the help of Palmolives soap, the company
managed to maintain number 2 position in the beauty soap market. In toothpaste
market, Colgate has captured 55% of the market to become the market leader.
Colgates toothpaste was sufficiently established in Malaysia to lead the brand name
Colgate, became a generic name for toothpaste among customers. The company had
market leader for most competitive product category such as detergents i.e. Fab and
Trojan which held 34% in the market share whereas Fab Laundry bar captured 65% of
the market.
The company was also active in research and development in manufacturing new
products. As a result, new products introduced such as Glo Dishwashing liquid in
1975 and Softlan fabric softener in 1980, which have also become a market leader.
The company has expended their products to overseas namely Singapore, Hong Kong,
Brunei, Fuji and Papua New Guinea.


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2 THE INDUSTRY
In year 1980 in Malaysia, there were four shampoo manufacturers in Malaysia namely
Colgate Palmolive, Beecham, Bristol Myers and Kao Trading. All the companies
produced a range of hair care products of different variants and brand names.
Shampoo market could be divided into two segments which is the cosmetic and the
medicated or anti dandruff segments. A cosmetic shampoo would feature its ability to
clean hair effectively and result in beautiful manageable hair, while for medicated
shampoo would solve hair problems common to users including dandruff.
The local cosmetics and toiletries industry generally involves mixing and formulation
processes, using imported ingredients. Many of these companies are contract
manufacturers for products, such as shampoo and conditioners, hair care products,
perfumes and cosmetics. From January 2001, all cosmetic products must be registered
with the Health Ministry before they are put on sale. A two-year grace period has been
given to allow the manufacturers, importers and distributions of these products to
adhere to the ruling. Currently, there are no import restrictions, import licensing
impediments or import quotas governing these products except for the 20% to 30%
import duty on talcum powders, face powders and hair preparations. The cosmetics
and toiletries market in Malaysia has registered an average growth of 10.0% over the
1996 - 2000 periods. Sales value of the industry totaled RM2.4 billion in 2000.

3 SALES OPERATION
In year 1976, Colgate Palmolive has introduced Colgate Family Shampoo with the
idea of producing good quality and low priced product. The target market was rural
Malays and young users with low income. The way the shampoo is packaged in a
60ml-150ml and 300ml containers. The products are well accepted because of low
pricing and promised benefits. Since Colgate is able to capture 13% of the total market
share a year after launching, they have become a leader in the market with 20% market
share in 1978.
The control of the market was not able to stay long and the sales began to drop. The
market dropped 16% in 1981 and the company has taken few steps to analyze the
situation. Four major competitors namely Kao Trading, Bristol-Mayers, Zaitun
Industry Sdn. Bhd. and UNZA was the reason of the drop in sales. It becomes a threat
for Colgate in the cosmetic segment of the industry.

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Beside, shampoo was generally considered a simple product as its formulation will not
requires high technology knowledge made the business became an easy entrance. It
was quite command to see a brand on the retail shelves produces by unknown
producer. Additionally, with the attitude of customer towards brand switching
especially in the cosmetic segment made it even more attractive for new producers to
enter the market.
Colgate believes that they need to improve its shampoo in order to stay dominant in
the market. Thus, in January 1982, Colgate Family shampoo was revitalized. Few
changes in terms of packaging, brand name and variants are done. This improvement
would uplift the image of the shampoo and suit the customer demand.

4 SWOT ANALYSIS
Strength Weakness
Good quality with low price product
Halal in Malaysia
Strong market share i.e. toothpaste
captured 55% market share, Soflan
fabric softener captured 65% market
share.
Become a generate brand for
toothpaste.
Different variants for different
product positioning.
Difficult for Colgate to penetrate the
shampoo market due to the Colgate
generally which known more as
toothpaste.
Hard to control and maintain its
products in the market

Opportunities Threat
Fully utilize on Research and
Development center to produce more
demand products in order stay alive
in the market.
Opportunity to grow their business
Easy entrance business created more
competitors exist in the market i.e.
local & international brands.
A lot of substitute products in market.
Customer attitude toward brand

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globally. switching made fast changing and
advanced development of products.

5 RELATED ISSUE
Colgate Palmolive, the company started off in Malaysia as a manufacturing company
of toothpaste which brings it as its core product. When Colgate Palmolive introduced
its Colgate Family Shampoo in 1976 with the idea of producing a good quality and
low price product, the product was well accepted by the consumers. The company was
able to captured 13% of the total market share a year after launching and subsequent,
in 1978, the company becomes a leader in the market with 20% total share. However
their control of the market was not for very long. The sale began to drop in subsequent
year and continuously. Their shampoo brand was having difficulty to sustain in the
market share due to too many of competitors in the market. Besides, the shampoo
needs to be revitalization in every two years in order to maintain in the market.
Additionally, Colgate as the branch name preferred for toothpaste is making it more
difficult to penetrate the market of shampoo because the customer is associating
Colgate with only toothpaste.

6 PROBLEM STATEMENT
Cik Rose the Product Manager of Colgate-Palmolive Sdn. Bhd. informed that in order
to improve the performance of the shampoo line, the shampoo needs to be re-launched
in every two or three years in order to survive in the market. Hence, in January 1982,
Colgate Palmolive Shampoo was revitalized i.e. size packing, branding and various
products offered. In July 1987, Soft and Shiny Shampoo was launched, covered both
cosmetic and medicated segment. Nevertheless, the nature of shampoos line business
is that the competition is very tight that a brand seldom stays unchallenged. The brand
is having a tough time to compete in the market even there is re-launched in every two
or three years. Therefore, Cik Rose wondering on how to make Colgate-Palmolive Sdn
Bhd stay alive in this business.



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7 SEVERAL OPTIONS
There are few options need to be considered in order to rectify this problem.
Firstly, the company should be able to allocate some budget for engaging a Product
Ambassador such as famous artist, sportsman/sportswoman etc. By using such big
names, ultimately the customers may be inclined towards to the promotion materials
and advertisement. At the same time, they would be excited to use the shampoo
produce by the company. Therefore, the market share might be rectified and
eventually conquer the market share.
Secondly, the company should also allocate some budget in giving away a free sample
to the customers at the crowded place such as LRT, bus station, shopping mall etc. for
them to try before they could buy. By giving such a free sample, the customers may
evaluate the effectiveness of the shampoo. For winning the customer trust, the most
important thing is the good quality. If the company able to produce a quality products,
customer definitely will buy and maintain the product as their single used.
Finally, the re-branding of shampoo is crucial as the competitor will be doing the same
thing in order to compete. Hence, the company should be able to produce creative and
innovative advertising campaign and therefore this would be absolutely catches the
attention of the customer.

8 CONCLUSION
Nowadays, the marketing play a crucial role in the company especially for easy
entrance business. In order to sustain its market share, Colgate-Palmolive Sdn. Bhd. is
required to have strong marketing strategy for every new product that they produce. Or
else, if the products would not able to be sustained, the effort on producing these new
products is a wasted.
Based on the new era, whereby customers are easily being influence by their favorite
artist. Hence, it is recommended for Colgate-Palmolive Sdn. Bhd. to engage Product
Ambassador. Nevertheless, it is a crucial for the company to make a proper research
on who is the artist or sportsman that the most admire by the customers. Product
Ambassador with a very clean track record and good personality definitely is the best
traits for a product. The advertisers have begun attempting to quantify and qualify the
use of artist in their marketing campaigns by evaluating their awareness, appeal, and

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relevance to a brand's image and the celebrity's influence on consumer buying
behavior. Sometimes the influence of the Product Ambassador is not always positive.
If there is a time where the Product Ambassador is no longer relevant to the product, it
is time to change to a new Product Ambassador.
The free sample given to the customer must be provided with high quality. The
negative comment will definitely spread by words of mouth and may jeopardize the
business, After spending a large amount of money, the objective if the free sample will
not be materialize if the negative comment received by the customer.
Re-branding has become a real trend in the last decades. Some companies have re-
branding in several times. Same goes to Colgate-Palmolive, whereby after the second
generation of Soft N Shiny Shampoo launched, the performance is still below than
the target. Obviously, the risks of changing the established brand identity are high and
benefits are not guaranteed. Hence, Colgate-Palmolive should look into a proper
products market strategy to determine the best marketing for every rebranding
product.