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Colgate Supply

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COLGATE-PALMOLIVE (INDIA) LIMITED
Background
Colgate-Palmolive India Ltd (CPIL) is a 51 per cent subsidiary of Colgate-Palmolive Company (CPC), USA. CPC’s main business is manufacturing and marketing of oral care products, toilet soap, and shaving products. With an employee strength of 1130, CPIL has grown to a US$ 230 million company with a wide distribution network in India. Colgate is a household name in India with one out of two consumers using Colgate toothpaste. Colgate has maintained its leadership and emerged as India’s No. 1 brand across all categories for eight out of nine years since 1992. • Launched a National Oral Health Program called “Bright Smiles, Bright Future” in association with the Indian Dental Association to spread awareness about oral care amongst children.

Market Share
CPIL is the market leader in the Indian oral care market with a market share of 51 per cent in the toothpaste segment, 48 per cent in toothpowder segment and 30 per cent in the toothbrush segment.

Creating demand in rural areas
In order to create new demand for oral care products, CPIL has increased their reach in rural areas. It is converting non-users to users through various sales promotion measures such as small volume low priced sachets, distribution of free toothbrushes, Rural Van Programmes, among other things, especially in rural areas. Rural areas contribute to 35 per cent of Colgate’s sales.

Major player in oral care segment
Colgate was voted the “Most Trusted Brand” in 2003 in India by the Economic Times and the AG Nielsen ORG MARG survey. Colgate was rated the No. 1 brand across all categories in A&M’s annual survey of India’s Top Brands conducted by Taylor Nelson Sofres-MODE in 2001. From a modest start in 1937, when hand-carts were used to distribute Colgate Dental Cream, ColgatePalmolive India today has one of the widest distribution networks in India - that spans 2.7 million retail outlets across the country, of which the company services 8,00,000 outlets directly.

Nurturing and retaining talent
Colgate Palmolive has successfully created a healthy and motivating work environment by taking measures like: • Talent Management The company has Management: developed talent in-house for critical resource positions in Marketing, Sales and Customer Marketing. 10 per cent of employees have been provided with international training in the last 5 years.

Factors for success
Strategic initiatives
CPIL has been able to increase the sales volume of the toothpaste and tooth powder segment by about 13 per cent using the following initiatives: • Adopted a strategy of new launches and a significant hike in marketing expenditure. • Targeting schools to create oral awareness among children.

US COMPANIES IN INDIA

• Communication The company is leveraging IT Communication: munication to reach out to all employees across the organisation using “Intranet Chats” as well as organising “Town Hall” meetings with corporate visitors.

• Colgate is planning to increase exports to Sri Lanka and Bangladesh. • Colgate plans to extend usage of e-auctions into new areas such as freight, insurance etc. The company conducted 19 e-auctions in 2003.

Using IT to enhance business processes
CPIL has made investments in information technology to enhance the speed and quality of financial systems and increase operational efficiency in supply chain, distribution and human resource management.

Supply chain simplification
CPIL is simplifying the supply chain system through Stock Keep Unit (SKU) reduction. From 480 SKUs in 2001, Colgate has reduced SKUs to 220 in 2003.

Colgate Palmolive (India) Ltd: AT A GLANCE
• 1130 employees. US$ 230 million revenues. 2.7 million retail outlets across India of which the company services 800,000 directly • Household name. One out of two consumers of toothpaste use Colgate • “Most trusted brand – 2003”: The Economic Times and AG Nielson ORG MARG survey. No. 1 brand across all categories in A&M’s annual survey of India’s top brands conducted by Taylor Nelson Sofres MODE, 2001 • Factors for success: Strategic initiatives. Creating demand in rural areas. Nurturing and retaining talent. Using IT to enhance business processes. Supply chain simplification • For Colgate Palmolive, India is: IT service source. A vast consumer base. A market with great potential • Future plans, India: Has made investment of US$ 10 million in a new manufacturing facility in Himachal Pradesh. Increase exports to Sri Lanka and Bangladesh. Extend usage of e-auctions into new areas such as freight, insurance etc.

Leveraging the India Advantage
Leveraging the IT advantage
CPIL has outsourced its IT related services to a local software company for various services including network provisioning, voice over IP (VoIP) implementation, IT infrastructure lifecycle management services, network audits, security, local area network (LAN) services and desktop management, thereby effectively reducing costs.

Vast consumer base in India
Colgate is leveraging India’s vast population and the increasing purchasing capacity of the Indian middle class. Colgate is tapping the large Indian consumer base to establish a strong presence in the country. The branded oral care penetration in India is only about 42 per cent. Clearly, the oral care market’s growth potential and opportunity are huge.

Future plans
• CPIL has made investments of over US$ 10 million in the new manufacturing facility in Himachal Pradesh to meet local demand.

US COMPANIES IN INDIA

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