Professional Documents
Culture Documents
! Executive & Case Summaries ! Colgate-Palmolive Company ! Colgate Max Fresh/US Product Launch ! Mexico and China Launch ! Insights ! Recommendations ! Q&A
Executive Summary
! Organizational Restructuring ! Streamline Product Development ! Optimize Marketing Operations
Case Summary
! February 2005 ! Nigel Burton - President of Global Oral Care ! China and Mexico
CP Organizational Structure
Global Business Development Group Oral Care (Category Lines) ! STRATEGY ! Evaluated on Global Market Share ! Resource Allocation ! Report to COO
Geographic Division Asia/Latin America ! EXECUTION ! Responsible for all products in the region ! Supervised regional CIC ! P&L responsibility ! Report to COO
$
Consumer Innovation Center (CIC) Asia/Latin America Work on strategy with GBD Groups Marketers and product developers Involved in new product development (Global R&D) Report to Regional Division Marketing VP
! ! ! !
Country Subsidiary China/Mexico ! Develop and execute local marketing campaigns ! Report to Geographic Division
868
56.7%
82%
Mexico
China
2000
89.3
2000
84.7
2004
82.9
17.1
2004
87.3
12.7
Chinas preference to cosmetic benefit of toothpaste increased 6.4%; a reflection of changing purchase drivers.
Source: Exhibit 7A.
Mexicos preference to therapeutic benefit increased by 2.6%; a reflection of stronger traditional purchase drivers.
Source: Exhibit 14.
*In the US, therapeutic benefit decreased and cosmetic benefit increased.
New packaging is 20% variable cost premium/package. Packaging for existing tube in carton format is 40% of COGS
*An additional Therapeutic Benefit message would have possibly increased sales.
China adapted to their local market better than Mexico, according to concept and product tests. However, better test results do not necessarily mean that there will be better profits.
Mexico
! ! ! 2 million dollars 8 months duration 14.7% expected share of voice (SOV).
! ! ! ! In-store merchandising Sampling Advertising Public Relations will communicate single-minded benefit of:
Mexico
Net Sales (In millions) 10336 13487 4848 5458 5488 8029 1406 1834 1500 1400 2582 4795 Source: Exhibit 20
Contribution Margin
NonVariable Ovherhead
Marketing Expenses
Marketing Expenses
Operating profit
-165% 72%
-85% 242%
More marketing dollars spent does not necessarily lead to more sales & profits.
Mexico
20303 23773 Net Sales (In millions)
10336 13487
$0.64 : $1
10054 9745 10249 14028 4710 5515 China Year 1 China Year 2
$3.65 : $1
4848 5458 5488 8029 1406 1834 Mexico Year 1 Mexico Year 2
Contribution Margin
Contribution Margin
NonVariable Ovherhead
$1.40:$1
15880 10000 Source: Exhibit 13
NonVariable Ovherhead
$5.70: $1
1500 1400 2582 4795 Source: Exhibit 20
Operating profit
Recommendation 1
Organizational Restructuring
! Geographic Divisions, Global Business Development Units and the Consumer Innovation Center groups should have communication and reporting protocols in place. ! Everyone should have ROI accountability ! Control and allocation of marketing budget
Geographic Division Asia/Latin America ! EXECUTION ! Responsible for all products in the region ! Supervised regional CIC ! P&L responsibility ! Report to COO
$
Product launches evaluated by ROI
Consumer Innovation Center (CIC) Asia/Latin America Work on strategy with GBD Groups Marketers and product developers Involved in new product development (Global R&D) Report to Regional Division Marketing VP
! ! ! !
Country Subsidiary China/Mexico ! Develop and execute local marketing campaigns ! Report to Geographic Division
Recommendation 2
Streamline Product Development
! Develop product features and packaging with strict regulations in mind to avoid waste of R&D resources. ! Local market adaptations and added complexities should only be executed if it can contribute to the bottom line.
Recommendation 3
Optimize Marketing Operations
! Marketing dollars need to be spent with ROI in mind. ! Marketing campaigns should be executed by country subsidiaries because they have better knowledge of the market.
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