Submitted by Group 9 - G12073 (Ayan Kumar Samanta), G12076 (Chiranjib Bhattacharjee), G12085 (Kaustuv Dasgupta) and G12111(Sujay Dixit)

Defining the product/competitor: Closeup was the first gel launched by HUL way back in 1985 when toothpaste market was only about white paste. The differentiated product offering coupled with sharp positioning helped Closeup find traction with the youth and continues to do so. Today, Closeup is the market leader in freshness segment of toothpaste category (16% Value share of entire toothpaste market) offering the differentiated enhancement benefits of fresh breath and white teeth Closeup has the strength to grow through sharp product and proposition differentiation. Colgate with approx 50% market share is the biggest competition. In the year 1991, the company launched Colgate Gel Toothpaste, which was re-launched as Colgate Fresh Energy Gel in 2001

Analyzing the category Toothpaste market is Approximate Rs 2800 Cr and is growing at a CAGR of about 10%

Others, 20% HUL, 30%

Colgate, 50%

Market Share (Value) Closeup is presently in growth stage and is consistently growing (approx. 12% CAGR) above category growth rate The nature of product being that of daily consumption, there is no seasonal impact on sales. Closeup operates at a price index of 120% as compared to toothpaste category average, profitability, therefore is in-line with category profitability (approx. 30% GM). Evaluating category factors Threats of new entrants Strong Category is full of global players and bringing in new innovation or launches is not difficult, e.g. P&G launching Crest toothpaste in India. More ever the third party manufacturing is not difficult and hence local players are venturing in to it e.g. Himalaya (dental Cream), Food Bazar (Sach) etc.

Bargaining power of buyers Strong - Consumers are now connected with world, understand the benefits more and trend is they are now shifting from Involved to Evolved e.g. the exceptional growth of sensitive segment exploded by Sensodyne Bargaining power of suppliers Low - All global players have in house manufacturing. Third party manufacturing very less. Only suppliers are cartons and tubes Pressures from substitutes Low - There is no substitution for morning brushing at least in India. Category Capacity With low penetration (approx. 80%) of the toothpaste segment, it has potential to grow beyond current average. Current rivalry in category Top 3 players: Colgate, Closeup and Pepsodent.

Environmental Factors Toothpaste manufacturing is not a very complex technological process and therefore the impact of technological factors is low. The global nature of the players makes sourcing etc. easier and economies of scale helps them to nullify the impact of economic factors to a large extent. Apart from fluoride capacities the product does not involve any complex controversial aspect. Also the behavior of brushing does not directly depend on growing disposable income of the consumers. These factors minimize the impact of social factors. Political and Legal factors have little or no impact on the category Company and competitor analysis Feature Cavity/Decay protection Gum care Fresh breath White teeth Sensitivity Enamel building Description

Closeup

Gel toothpaste based on the proposition of fresh breath and white teeth as functional benefit and confidence as emotional benefits

Colgate Dental Cream

Decay protection as main function with Expert & authority through dentists association

Closeup is underpenetrated in the toothpaste category (30%). The primary objective for it therefore, is to drive penetration (150 bps). The strategy for Closeup is to upgrade consumers from white paste usage to gel usage and thus drive profitability through re launch of its core Red Hot gel.

Marketing Mix: Product: Coloured Gel format toothpaste Price: Commands premium to markets. Is currently priced at 20% premium to the Colgate CDC - Place: Low penetration (approx. 30% for Closeup), huge opportunity to tap market. The primary channels would be both general & modern trade in urban and general trade in rural. - Promotion: Youthful communication in the space of romance and confidence to get close. Proposition would be - Functional Fresh breath and white teeth, - Emotional Confidence to get closer Different advantages for each company Parameter Ability to design new products Ability to deliver service Close up 5 5 Colgate 5 3 Reasoning Both are equally adept Closeup has the advantage of rural infrastructure for penetration Colgate has advantage and strength to spend in market Colgate has advantage with its base and size Both are equally adept Better innovations expected from both -

Ability to market

Ability to finance Ability to manage Expected future strategies Total Customer Analysis Parameter Segmentation

4 5 5 28

5 5 5 28

Consumer Behavior

Reasoning Consumers who are seeking the enhancement benefits (fresh breath and white teeth) for their social needs Seeking fresh breath and white teeth benefits, but currently using family white toothpaste

Targeting Positioning

Targeted at youth (18-24 yrs.) Confident oral care brand

Assumptions for re launch of Closeup The consumer behavior (brushing habits and therefore the market potential) will not change drastically Channel mix would not change drastically Due to new launches within the category, the category would continue to witness accelerated growth this year as well

Objectives Marketing Objective Drive penetration of Close up Red Hot gel by 150 bps in the year 1 Communication Objective Increase awareness by 3% Market Share Objective Increase overall brand market share (value) by 1.5% Double the modern trade shares Financial Objective To improve the gross margin by 100 bps Strategy - Product 1. Customer targets

The new launch / re-launch should add value to the customers (trade) and should have compelling customer story to attract maximum support from the trade. Customer proposition: a. b. c. GM With the new technology, re-launch will further build the gel toothpaste Increase in the price in line with the upgradation of technology will Increase in price will result in increase in GM and thus increasing category market and strengthen the credentials for the brand therefore result in adding in the category value creation

d.

New News for the re-launch will increase the consumer acceptability and

pull for the product Overall the relaunch will result in good customer value creation 2. Competitor targets

The new launch will strengthen the credentials through strong claims, pack appeal and effective communication. This is bound to have some reaction from the big players in the markets. 3. Product/Service features

Product: Better product delivery with new Fluoride molecule; effective in delivering freshest breath credibility Claims: Compelling consumer and customer claims through the change in formulation; stronger delivery of fresh breath and white teeth Pack: New pack design that is appealing to the youth and with clear Call To Action Price: Will be charged premium to the current offering (5-10%) Place: Increase the distribution in GT and Rural with small packs; increase visibility in MT to get more than fair share in this channel Promotion: Effective and compelling communication demonstrating the product differentiation and bringing out new NEWS to the consumers 4. Core Strategy

i) Value Proposition:- Grow business and gain share in the market (1.5% value) and thus creating value for the category (through up-gradation to higher Price Index). Creating differentiation for the product, through breakthrough product innovation. ii) Product Positioning:- New Closeup Red Hot delivers to you 5X more fresher breath. It has active fluoride mouthwash, which reaches to the deepest corners of your mouth to remove the bad breath causing bacteria, thus giving you freshest breath and strongest teeth.

Strategy Marketing Programmes I. Integrated marketing communications programs The re-launch is the biggest event for the brand in the market. The aim is to build penetration amongst the TG by building credibility for the brand. Marketing Task: To Drive the relevance for Extra Freshness with the new product efficacy news. This will be supported through 360-degree campaign execution. Pricing Strategy The core Closeup is strategically priced premium to category average (as a gel toothpaste the job for the category is to upgrade) With new re-launch the brand will be commanding a price premium of 5% (this is to offset the RM and PM costs incurred and to make the GM improvement, as committed) Channel Strategy GT is the largest contributor for the business and hence will be targeting to target 100% width as the existing mix in market. In addition with this re-launch focus will be to drive the business in chemists and modern trade. Innovative ways to target youth at MT Gain the fair share of visibility in the stores Focus on visibility drive / shelf blocking strategy in MT Focus on penetration of the small pack in rural and small towns (which will yield maximum growth) Effective use of small sachets for building trails (sampling plans) Research The following are the consumer validation studies have been conducted to prove the efficacy of the mix: 1. Idea screening and concept testing 2. Product testing 3. Pricing testing 4. Communication testing The mix development has progressed ahead with consumer evaluation at every stage of the mix development.

II.

III.

IV.

Additionally, a price benefit analysis is done to identify consumer surplus for Closeup. The findings are summarized below. It is worthwhile to note here that the consumer surplus for Closeup is negative. This is an indicator that consumer perceives that he is getting less value for the price he is paying. This is an important indicator since it strengthens the case to further reinforce the Closeup proposition through both product efficacy and compelling communication. The re-launch of Closeup Red Hot gel will therefore focus on delivering a winning mix aimed at delivering enhanced value to the consumer

Closeup
Benefits
Healthy Teeth and gums Long Lasting Freshness Prevention of tooth decay Whiteness of teeth Foam Sensitivity of Teeth Taste Total

Average Score
3.30 3.20 3.18 3.01 3.03 2.86 3.08

Worth
1.436864289 0.957909526 0.718432145 0.718432145 0.239477382 0.239477382 0.478954763 4.789547631

Performance 3.00 4.26 2.87 3.22 3.61 2.83 4.26

Worth Difference -0.44 1.01 -0.22 0.15 0.14 -0.01 0.56 1.20

Average toothpaste price Closeup Implied Worth Closeup Price Consumer Surplus

63.33 64.53 80.00 -15.47

c) Controls I. Financial Budgets Product development cost 6% increase on the existing mix Packaging cost 0% increase on existing mix Advertising cost 15% higher than current mix II. Marketing Metrics Drive penetration of Close up Red Hot gel by 150 bps in the year 1

d) Contingency Plans

1. The mix is being developed with well-mitigated risk plan at every stage. 2. The validations of all the mix elements with consumers and convincing wins have ensured minimization of risks 3. Rest of the risk factors, beyond the control of organization and project team are assumed and accepted to move forward for the launch