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COLGATE-PAMOLIVE (INDIA) LTD.
Executive Summary
INTRODUCTION
Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 200 countries and territories around the world under such internationally recognized brand names as Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Ajax, Axion, Soupline, Suavitel and Fab, as well as Hill's Science Diet and Hill's Prescription Diet pet foods.
Their production data center utilizes 30 Oracle Databases with 16 TB of mission critical data supporting their SAP enterprise modules including Supply Chain Management, Customer Relations Management, Finance and Human Resources. A second data center is responsible for managing over 60 test and development databases with approximately 33 TB of data. This facility provides disaster recovery protection for their production data center located 800 miles away.
Both data centers work cohesively to maintain data protection, 24x7 availability and disaster protection for over 49TB of data residing in Oracle Databases.
History of the Company
Colgate-Palmolive Company, American diversified company that manufactures and distributes household and commercial cleaning products, dental and other personal-care products, and pet foods in the united states and in more than 200 other countries and territories worldwide. Headquarters are NEW YORK CITY.
Colgate-Palmolive's history traces back to the early 19th century when William Colgate, a soap and candle maker, began selling his wares in New York City under the name William Colgate & Company. After his death in 1857, the company was run by his son, Samuel Colgate, under the new name Colgate & Company. In 1890 Madison University in Hamilton, N.Y., was renamed colgate university in recognition of the Colgate family's longtime financial support. The current corporate name was adopted in 1953.
Colgate & Company sold the first toothpaste in a tube, Colgate's Ribbon Dental Cream, in 1896. In 1928 the firm was bought by Palmolive-Peet Company, whose founder, B.J. Johnson, had developed the formula for Palmolive soap in 1898. At the turn of the 20th century, Palmolive—which contained both palm and olive oils—was the world's best-selling soap.
In 1955 Colgate-Palmolive lost its number-one ranking in the toothpaste market when the rival consumer-goods manufacturer Procter & Gamble Co. began selling Crest, the first toothpaste with fluoride. Colgate-Palmolive added MFP fluoride (sodium monofluorophosphate), an enamel strengthener and cavity reducer, to its toothpaste in 1968. Colgate Total, a line of toothpaste designed to protect against a number of conditions including gingivitis, was introduced in Europe in 1992 and in the United States in 1997.
In addition to toothpaste, Colgate-Palmolive manufactured a number of successful personal-care and household products in the United States and other countries, including Palmolive dishwashing liquid and Irish Spring bar soap. The firm's acquisition of a variety of companies from the 1960s onward enabled it to expand both its market share and its product lines in the United States, Latin America, Europe, and East Asia. After years of criticism and boycotts by animal-rights groups, Colgate-Palmolive established a moratorium on animal testing for its adult personal-care products in 1999. Major product categories remain toothpastes and mouthwashes, toothbrushes, deodorants, bar soaps and liquid soaps, dish soaps and dishwasher detergents, floor- and surface-cleaning products, and pet food.
Company Profile
Founded in 1806, Colgate-Palmolive is a $17.1 billion consumer products company that serves people around the world with well-known brands that make their lives healthier and more enjoyable.
Colgate Brands
Colgate provides oral care, personal care, home care and pet nutrition products under trusted brands such as: Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex, Tom's of Maine, Ajax, Axion, Soupline, Suavitel, Hill's Science Diet and Hill's Prescription Diet.
Operations
Colgate operates in over 75 countries and sells products in over 200 countries and territories. Approximately 75 percent of sales come from operations outside of the United States.
37,700 Colgate employees drive our success.
Headquartered in New York City, Colgate operates through five divisions around the world:
The Company has over 60 manufacturing and research facilities globally. The vast majority of Colgate products are manufactured in Colgate-owned facilities.
Colgate Values
success is linked to the Company's values of Caring, Global Teamwork and Continuous Improvement.
Caring
The Company cares about people: Colgate people, customers, shareholders and business partners. Colgate is committed to act with compassion, integrity, honesty and high ethics in all situations, to listen with respect to others and to value differences.
The Company is also committed to protect the global environment, to enhance the communities where Colgate people live and work, and to be
compliant with government laws and regulations.
Global Teamwork
All Colgate people are part of a global team, committed to working together across countries and throughout the world. Only by sharing ideas, technologies and talents can the Company achieve and sustain profitable growth.
Continuous Improvement
Colgate is committed to getting better every day in all it does, as individuals and as teams. By better understanding consumers' and customers' expectations and continuously working to innovate and improve products, services and processes, Colgate will become the best.
Colgate Policy Statements
Environmental, Occupational Health & Safety Policy Statement
Code of Conduct
Business Practices Guidelines
Supplier Code of Conduct
FCPA and Anti-bribery Policy
Product Safety Research Policy
State of California Disclosure: Supply Chain Transparency
Material Safety Data Sheets (U.S.)
Global HIV/AIDS Policy Statement
Company overview
Key Dates:
1806:
Company is founded by William Colgate in New York to make starch, soap, and candles.
1857:
After founder's death, company becomes known as Colgate & Company.
1873:
Toothpaste is first marketed.
1896:
Collapsible tubes for toothpaste are introduced.
1898:
B.J. Johnson Soap Company (later renamed Palmolive Company) introduces Palmolive soap.
1910:
Colgate moves from original location to Jersey City, New Jersey.
1926:
Palmolive merges with Peet Brothers, creating Palmolive-Peet Company.
1928:
Colgate and Palmolive-Peet merge, forming Colgate-Palmolive-Peet Company.
1947:
Fab detergent and Ajax cleanser are introduced.
1953:
Company changes its name to Colgate-Palmolive Company.
1956:
Corporate headquarters shifts back to New York.
1966:
Palmolive dishwashing liquid is introduced.
1967:
Sales top $1 billion.
1968:
Colgate toothpaste is reformulated with fluoride; Ultra Brite is introduced.
1976:
Hill's Pet Products is purchased.
1987:
The Softsoap brand of liquid soap is acquired.
1992:
The Mennen Company is acquired; Total toothpaste is introduced overseas.
1995:
Latin American firm Kolynos Oral Care is acquired; Colgate-Palmolive undergoes major restructuring.
1997:
Total toothpaste is launched in the United States; Colgate takes lead in domestic toothpaste market.
2004:
Company acquires European oral care firm GABA Holding AG; major restructuring is launched.
2005:
Colgate emerges top brands.
2006:
The market leader in toothpaste in Indian.
2009:
Appointed mr. mukul deoral as MD of the company.
2010:
Appointed mr. Pual alton as the whole time director on September 1 .
2011:
Mr. Niket s. Ghate has been appointed as vice-president-legal company secretary and compliance officer of the company.
2012:
Colgate retains top spot as most trusted brand.
Dr. Mrs. Indhu shahani is been appointed as an additional director (non-executive director) of the company.
2013:
Colgate recognised as most social company.
2014:
The ethical brand in FMCG sector was awarded to colgate.
awarded the best supplier of the year in 2013
Colgate ranked the no.1 most chosen consumer brand.
The Products of Colgate Palmolive
Colgate Palmolive manages its business in two product segments: Oral, Personal and Home Care; and Pet Nutrition. Colgate Palmolive is a global leader in Oral Care with the leading toothpaste and manual toothbrush brands throughout many parts of the world according to value share data provided by AC Nielsen. Colgate's Oral Care products include Colgate Total and Colgate Max Fresh toothpastes, Colgate 360° manual toothbrushes and Colgate and Colgate Plax oral rinses. Colgate's Oral Care business also includes dental floss and pharmaceutical products for dentists and other oral health professionals.
Product Overview
Toothpaste works with tooth brushing to clean teeth and fight plaque and bacteria.
Specifically:
Toothpaste contains abrasive materials that physically scrub away plaque. In addition, toothpaste abrasives help remove food stains from teeth and polish tooth surfaces.
Toothpaste delivers fluoride to the teeth. Fluoride incorporates itself into tooth enamel weakened by acid attack, making it more resistant to future acid attack from plaque bacteria and food.
Technological improvements in some toothpaste contain ingredients that chemically hinder the growth of plaque.
Colgate's brands consists of a multitude of unique toothpastes lines, specializing in the preservation and treatment of oral hygiene. Colgate has created an array of 40 different patented toothpastes keeping Colgate competitive in the market place. There are 13 different classifications and varieties of Colgate toothpastes. Colgate's toothpastes feature; cavity protection, plaque & gingivitis prevention, long lasting fresh breath, tartar
control toothpastes, tooth whitening, baking soda and peroxide, enamel strengthening, sensitivity relief and toothpaste designed for children.
Product Integrity
Colgate's internal business integrity extends to the integrity of our products – their safety, efficacy, quality and sustainability. We are committed to finding ways to improve the sustainability profile of our product portfolio. We're also committed to bringing products to consumers that meet their needs and expectations, and are continuously working to develop products that have a reduced impact on the planet. Product integrity also includes a commitment to providing affordable products to consumers at lower income levels, and linking our products to bettering communities, through programs such as our "Bright Smiles, Bright Futures" oral health education initiative and our global hand washing education programs.
Products profile of colgate Palmolive
a.Oral care
1.Toothpastes
Colgate dental cream
Colgate max fresh
Colgate total 12
Colgate sensitive
Colgate kids
Colgate advanced whitening
Colgate herbal
Clogate cibaca
Colgate fresh energy gel
2.Toothbrushes
Colgate massager
Colgate navigater plus
Colgate extra clean
Colgate sensitive toothbrush
Colgate 360 toothbrush
Colgate zig zag
3.Tooth powder
Colgate super rakshak
4.Whitening products
Colgate advanced whitening
5.Mouth wash
Colgate plax
b. Personal care
1.Baby wash
Palmolive aroma body wash relaxing
Palmolive thermal spa body wash firming
Palmolive aroma body wash vitality
Palmolive thermal spa body wash massage
Palmolive naturals moisturizing body wash milk & honey.
2. Liquid hand wash
Palmolive natural milk & honey
Palmolive aroma liquid hand wash
Palmolive naturals liquid hand wash family healthy
3.Haire care
Palmolive halo shampoo
4.Skin care
Palmolive charmis cream
5.Shave care
Shave cream
c. Home care
Axion-dish washing paste.
Brand image of colgate
Innovation is a process in which a company always tries to produce and introduces a new and unique product in the market. Colgate Palmolive has a such kind of nature . it is in a habit of introducing stunning products in the market and try to have an edge from its competitors.
Colgate always tries to create it`s image as innovators by introducing new products in a product line colgate try to defend it`s market and create it`s image as innovator`s the adoption is a set of successive decisions an individual person or an organization make before accepting a new product.
Here we are talking about colgate(toothpaste) as well as know that people are well informed about the brand of colgate. Colgate Palmolive always introduces toothpastes which are new as quality but it use to have a flavour which is easily adaptable customer never compromises on quality. Due to this behaviour of customers, it is easy for colgate customer to adopt any new product without fear or hesitation. For the customer , colgate is a reliable brand. That's why when ever colgate introduces any new product (toothpaste) it easily spread throughout the social system in a short period.
Brand mantra
EMOTIONAL MODIFIER
Reliable
It has maintain its performance throughout, hence that is the most reliable toothpaste of the time and colgate still a threat to the competitor.
DESCRIPTIVE MODIFIER
Family
Colgate's image in India is that of a family brand with multidimensional advantages. Consistence quality and continuous innovation its advertisement also portray the same image of colgate.
FUNCTIONAL MODIFIER
Oral protection
Colgate is always recommended for providing oral protection for longer hours. Hence it proves its consistency in oral care.
Business Integrity
Integrity in the way Colgate conducts business is vital to the Company's reputation and success. With governance principles that guide business management and oversight, and a Code of Conduct and ethics policy embedded into Company culture, Colgate
ensures its business success goes hand in hand with business integrity. Formalized in 1996, Colgate's "Guidelines on Significant Corporate Governance Issues," updated periodically, include formal charters defining the duties of each Board committee and guiding their execution. The Board of Directors is composed entirely of outside independent directors except for the CEO, and all directors who serve on the committees overseeing audit, compensation and governance matters are independent.
Company Analysis
Goals: On May, 2014, the Colgate Company announced that it will try to meet the sustainable goal by making products using recyclable materials. The company revealed that it will develop 100% recyclable packaging for 3 or 4 products which includes home, pet and personal care packaging.
Focus: The Colgate –Palmolive is an American Multinational Company that focuses mainly on production, distribution and provision of household, healthcare and personal products like soaps, detergents, toothpastes and tooth brushes (oral hygiene products).
Culture: The Company has been known to provide its workforce with a balanced professional and personal life structure. The employees and management are able to communicate effectively and promotes time-management skills. The company's culture reflects the importance of culture, global teamwork and constant improvement.
Strength: One of the biggest brands in the personal consumer products industry.
Weakness: Fake brands are publicized under their name.
Market share: The Company achieved sales growth of 4% driven by 2.5% sales volume growth with 1.5% increase in price.
Sales and Marketing
Colgate-Palmolive markets its products through advertising, including TV and print, and other promotional activities. It has a direct sales force at individual operating subsidiaries or business units and also uses distributors or brokers.
The company's advertising investment was $1.8 billion in 2014, compared to $1.9 billion in 2013, and $1.8 billion and 2012.
In 2014 the company announced a partnership with American stock car driver Cole Whitt to market its Speed Stick GEAR product. As part of the arrangement, Colgate-Palmolive will film a documentary series chronicling Whitt's participation in the Daytona 500
Financial Performance
Company revenues dipped by 1% in 2014 (after several years of growth) due the decrease in revenues in the oral, personal, and home care segment and lower sales in Latin America. Volume growth and net selling price increases were more than offset by a negative foreign exchange. Driven by growth in the prescription diet segment, organic sales in the oral, personal, and home care product segment increased by 5% that year.
In 2014, Colgate-Palmolive's net income decreased by 3% due to the decrease in revenues and increased interest expense as the result of higher debt levels and lower interest income on investments held outside of the US.
Cash provided by operations increased that year mainly due to a growth in accounts receivable
Strategy
Colgate-Palmolive's strategy is to increase its market share in key product categories; the company is organized to achieve this goal. Its management teams func
tion along geographic lines and are accountable for each region's business and financial results. Colgate-Palmolive points to its geographic diversity as a way to reduce its risk in any one part of its business.
Colgate-Palmolive's management focuses on a variety of key indicators to monitor business health and performance like market share, net sales, organic sales growth, gross profit margin, operating profit, net income and earnings per share, as well as measures used to optimize the management of working capital, capital expenditures, cash flow and return on capital.
A major restructuring helped tighten Colgate-Palmolive's global supply chain and realign its sales, marketing, and new product organizations to serve both mature and developing markets. This and other cost-saving initiatives have freed up additional funds to invest in product research and support. (The company's growth is reliant on the success of its existing product line, as well as the successful development and launch of new products.)
In 2014, the company announced a plan to expand its 2012 restructuring program in the areas of expanding commercial hubs extending shared business services; streamlining global functions; and optimizing global supply chain and facilities.
Colgate's Governance Principles
Colgate's Board of Directors is independent, experienced and diverse.
Colgate's Board focuses on key business priorities and leadership development.
Open communication between and among directors and management fosters effective oversight.
Established policies guide governance and business integrity.
Colgate's Board plays an active role overseeing the integrity of the financial statements of the Company.
Colgate's annual Code of Conduct certification and training process reinforces the Company's expectations regarding acceptable and appropriate employee behavior.
Board of directors
Lan Cook
Chairman, President and Chief Executive Officer
Mr. Cook joined Colgate in the United Kingdom in 1976 and progressed through a series of senior management roles around the world. He became Chief Operating Officer in 2004, with responsibility for operations in North America, Europe, Central Europe, Asia and Africa. In 2005, Mr. Cook was promoted to President and Chief Operating Officer, responsible for all Colgate operations worldwide, and was promoted to Chief Executive Officer in 2007. Elected director in 2007 and Chairman in 2009.
John P. Bilbrey
President and Chief Executive Officer of The Hershey Company
Mr. Bilbrey has been President and Chief Executive Officer of Hershey since 2011. Mr. Bilbrey joined the management team of Hershey as Senior Vice President, President Hershey International in 2003, serving as Executive Vice President and Chief Operating Officer from 2010 to 2011. He previously spent 22 years at The Procter & Gamble Company. Independent Director - Elected director in 2015.
John T. Cahill
Chairman and Chief Executive Officer of Kraft Foods Group, Inc.
Mr. Cahill has been Chairman and Chief Executive Officer of Kraft Foods Group since 2014 and Chairman since 2012. Prior to joining Kraft Foods, Mr. Cahill was an industrial partner at Ripplewood Holdings LLC from 2008 to 2011. Mr. Cahill was CEO of The Pepsi Bottling Group, Inc. from 2001 to 2003, Chairman and CEO from 2003 to 2006, and Executive Chairman from 2006 to 2007. Prior to that, he held multiple senior financial and operating leadership positions at PepsiCo Inc. Independent Director – Elected director in 2005.
Helene D. Gayle
President and Chief Executive Officer of CARE USA
Prior to joining CARE in 2006, Dr. Gayle was an executive in the Global Health program at the Bill and Melinda Gates Foundation from 2001 to 2006. She previously held multiple key positions at the U.S. Centers for Disease Control. Independent Director - Elected director in 2010.
Ellen M. Hancock
Former President of Jazz Technologies, Inc.
(formerly Acquicor Technology), 2005-2007
Mrs. Hancock previously was Chairman and Chief Executive Officer of Exodus Communications Inc., Executive Vice President of Research and Development and Chief Technology Officer at Apple Computer Inc., Executive Vice President and Chief Operating Officer at National Semiconductor, and Senior Vice President at IBM. Independent Director - Elected director in 1988.
Richard J. Kogan
Former President and Chief Executive Officer of
Schering-Plough Corporation, 1996-2003
Mr. Kogan was also Chairman of Schering-Plough Corporation from 1998 to 2002. Mr. Kogan joined Schering-Plough as Executive Vice President, Pharmaceutical Operations, in 1982 and became President and Chief Operating Officer in 1986. Independent Director - Elected director in 1996.
Delano E. Lewis
Former Senior Fellow of New Mexico State University,
2006-2010
Mr. Lewis served as U.S. Ambassador to South Africa from December 1999 to July 2001, Chief Executive Officer and President of National Public Radio from 1994 to 1998, and President and Chief Executive Officer of Chesapeake & Potomac Telephone Company from 1988 to 1993, which he joined in 1973. Independent Director - Director from 1991 to 1999 and since 2001.
Michael B. Polk
President and Chief Executive Officer, Newell Rubbermaid Inc.
Prior to joining Newell Rubbermaid in 2011, Mr. Polk held a series of key positions at Unilever from 2003 to 2011, including President, Global Foods, Home and Personal Care from 2010 to 2011. He previously spent sixteen years at Kraft Foods. Independent Director – Elected director in 2014.
J. Pedro Reinhard
Former Executive Vice President and Chief Financial Officer
of The Dow Chemical Company, 1996-2005
Mr. Reinhard served as Chief Financial Officer of The Dow Chemical Company and Executive Vice President from 1996 to 2005. He previously held a series of senior international financial and operating positions at The Dow Chemical Company. Mr. Reinhard was a Director of The Dow Chemical Company from 1995 to 2007. Independent Director - Elected director in 2006.
Stephen I. Sadove
Former Chief Executive Officer of Saks Incorporated, 2006-2013
Mr. Sadove was also Chairman of Saks Incorporated from 2007 to 2013. Mr. Sadove joined the management team of Saks as Vice Chairman in 2002, serving as Chief Operating Officer from 2004 to 2006. He previously held a series of key positions at Bristol-Meyers Squibb. Independent Director – Elected in director in 2007.
Committees
Audit Committee
John T. Cahill, Chair
Ellen M. Hancock
Richard J. Kogan
Stephen I. Sadove
Finance Committee
Ellen M. Hancock, Chair
Richard J. Kogan
Delano E. Lewis
J. Pedro Reinhard
Nominating and Corporate Governance Committee
Delano E. Lewis, Chair
Helene D. Gayle
Ellen M. Hancock
Personnel and Organization Committee
Richard J. Kogan, Chair
John T. Cahill
Helene D. Gayle
Delano E. Lewis
J. Pedro Reinhard
Stephen I. Sadove
Customer Analysis
Despite of facing a tough competitive market, the company always aims to deliver maximum customer value to the market through its multi product segment strategy. Colgate has catered all it segments that starts from baby boomer generation. They have retained its customers by constantly launching new innovative products to remain competitive in the market.
Competitive Analysis
P&G as Competitors: Both Colgate and Procter and Gamble were established in 1800s as a small family run business. And now both not just have sustained them but transformed as the 21st century personal care products multi-nationals with several household name brands.
However, Colgate –Palmolive is less diversified as compared to its competitors like P&G and Unilever. The company's biggest source of sales is in oral care business.
The current market cap of Colgate-Palmolive is $58,835mil while P&G has $225,032 million.
Collaborators
Joint ventures: Hawley and Hazel Chemical Co. (Taiwan) with Colgate-Palmolive formed a joint venture since 1985.
Distributers: In Pakistan, The Company has products in four categories: Oral care, Fabric Care, Household and Personal Care. The company has divided it's distributions in eight zones i.e. Karachi, Lahore, Multan, Rawalpindi etc.
Climate: Pest Analysis
Political And Legal Environment: Every government is willing to impose more taxes in order to gain more profit. Moreover, the instable political conditions in the country disrupt the business to operate the ongoing activities.
Economic Environment: The overall economic growth has remained stable so far but at the time of inflation, the change in the interest rate affects the company.
Social and Cultural Environment: The massive social interactions via communication channels make a huge contribution to the company's productivity. Consumers are now more aware about the market trends and therefore, Colgate caters each market segment keeping in mind the cultural/societal trends of the consumers.
Technological Environment: The Research and Development department of the company are committed to improve oral health through the advanced leading –edge technologies. The technologies are updated based on the prevention and treatment of oral diseases,
Market Segmentation
The Company has divided its market into two product segments: Oral, Personal, Household Surface and Fabric Care. Colgate is considered to be the global leader in the Oral care Products such as toothpaste, Toothbrushes and many other pharmaceutical products. Colgate also possesses a strong market in the Personal Care segment that includes products like bar, liquid hand soaps, shower gels, shampoos etc.
Marketing Strategies
Geographic Segmentation Strategy: The Colgate Company has implemented this strategy by expanding its business in over 200 countries. The company does not market the same product in every country. For instance, in United States they are selling sixteen different types of toothpastes while in UK; they are selling twenty two different types of varieties.
Demographic Segmentation Strategy: The Company caters the market segment based on different demographics such as age, gender, social class etc. For kids aged 8-10, they have products like transitional toothpastes. They have a separate section for infants, children, teenagers and adults.
Psychographic Segmentation Strategy: Here the company sells the products considering the lifestyle and needs of the consumers. For people who are sensitive about their teeth, they have introduced Sensitive pro-relief toothpaste and brushes which are made to decrease tooth sensitivity issues.
Marketing Mix 4'Ps
Product
Product
Price
Price
PromotionMarketing mix
Promotion
Marketing mix
Place
Place
Product: In India, Colgate's Herbal White toothpaste is widely used. The product has a unique blend of herbs and ensures a good oral health to the consumers.
Price: Market penetration pricing strategy is adopted by Colgate in order to gain market dominance. Most of the personal consumer products and oral care products are priced at a cheaper rate so that a massive amount of consumers could be persuaded towards the brand.
Place: The products are made available via direct distribution channel where the majority of the consumers can easily get an access to the Colgate's products.
Promotions: Colgate promotes all its products through personal selling, advertising, publicity and public relations.
Product life cycle
Description on PLC curves
INTRODUCTION
Colgate has introduced first product as colgate's ribbon dental cream in the year 1896 year later this dental cream was disappeared by replacing other formulas in introduction of new creams in colgate.
GROWTH
In 1997 colgate total toothpaste is introduced in the U.S. and quickly becomes the market leader. Only colgate total with its 12-hour protection , fights a complete range of oral health problems and quickly becomes the market leader.
MATURITY
The maturity stage is divided into three stages;
In the beginning sales increase but a declining rate.
In the second stage sales rate remain stable.
In third stage sales begin to decline.
DECLINE
Today colgate's toothpowder is not much popular. People have stopped using toothpowder and shifted themselves by dental creams and mouthwash.
Succeeding With consumers
Strengthening Colgate's connection with consumers is a key part of the Company's growth strategy.
To better understand consumers in rural India, for example, Colgate researchers immersed themselves in the lives of villagers for two days, observing and discussing their oral care habits, how they clean their homes and other daily routines. A key learning was that mothers hope for a better life for their children through education. Based on this insight, Colgate implemented a special promotion that helped build awareness for good oral care habits and offered scholarships to children.
Another way Colgate connects with today's consumers globally is by utilizing integrated marketing communications that include a mix of traditional and non-traditional media. The launch of Colgate Sensitive Pro-Relief toothpaste leveraged multiple digital touch points, including informative product web sites and online media featuring powerful consumer testimonials. These activities, combined with more traditional media and promotional events, are contributing to market share gains worldwide.
Succeeding With The Profession
Colgate's strong relationships with professionals have contributed to making Colgate and Hill's the most recommended brands by dentists and veterinarians worldwide. Professional endorsements build credibility for Colgate's brands and drive product trial.
In the United States, Colgate's new Oral Health Advisor program is building partnerships with dental hygienists to further drive professional recommendations for Colgate products and increase patient usage. The program includes comprehensive oral health educational tools, presence at major dental conventions and an Oral Health Advisory Board comprised of select hygienists. The Board is given the opportunity to consult on key issues in dental hygiene and participate in product evaluation.
Partnerships with veterinary associations are equally important at Hill's. Hill's alliance with the American Animal Hospital Association is raising awareness among veterinary professionals about the importance of good nutrition for pets. The AAHA worked with Hill's to develop the first ever pet nutritional assessment guidelines for veterinarians to use during checkups, in addition to evaluating such vital signs as temperature and pulse rate.
Succeeding With Our Customers
Working closely with the Company's retail customers to share expertise and grow category sales has long been a cornerstone of Colgate's business strategy.
In the United States, Colgate collaborated with supermarket chain Kroger to reorganize the oral care aisle. Based on a variety of shopper insights and customer data, Colgate's cross-functional commercial team worked closely with the retailer to implement a more shopper-friendly aisle. The new design attracted more shoppers and increased category sales.
Reinforcing the importance of customer service, Colgate has created an innovative, activity-based training course that focuses on the key role that supply chain collaboration plays in delivering against customer expectations. Participants, who include customer development, customer service and supply chain personnel, learn through team exercises how to address supply chain and other commercial challenges and still deliver best-in-class service to Colgate's retail partners at the lowest cost.
Distribution; Raw Materials; Competition; Trademarks and Patents
The Company's products are generally marketed by a direct sales force at individual operating subsidiaries or business units. In some instances, distributors or brokers are used. No single customer accounts for 10% or more of the Company's sales. Most raw and packaging materials are purchased from other companies and are available from several sources. No single raw or packaging material represents, and no single supplier provides, a significant portion of the Company's total material requirements. For certain materials, however, new suppliers may have to be qualified under industry, government and Colgate standards, which can require additional investment and take some period of time. Raw and packaging material commodities such as resins, tallow, essential oils, tropical oils, corn and soybeans are subject to market price variations.
The Company's products are sold in a highly competitive global marketplace, which has experienced increased trade concentration and the growing presence of large-format retailers and discounters. Products similar to those produced and sold by the Company are available from competitors in the U.S. and overseas. Certain of the Company's competitors are larger and have greater resources than the Company. In addition, private label brands sold by retail trade chains are a source of competition for certain product lines of the Company. Product quality and innovation, brand recognition, marketing capability and acceptance of new products largely determine success in the Company's business segments. Trademarks are considered to be of material importance to the Company's business. The Company follows a practice of seeking trademark protection in the U.S. and throughout the world where the Company's products are sold. Principal global and regional trademarks include Colgate, Palmolive, Mennen, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex, Tom's of Maine, Ajax, Axion, Fabuloso, Soupline, Suavitel, Hill's Science Diet and Hill's Prescription Diet. The Company's rights in these trademarks endure for as long as they are used and registered. Although the Company actively develops and maintains a portfolio of patents, no single patent is considered significant to the business as a whole.
Segment Information
The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations of the Oral, Personal and Home Care product segment are managed geographically in five reportable operating segments: North America, Latin America, Europe/South Pacific, Asia and Africa/Eurasia. During 2013, the Company made certain changes in
its segment reporting affecting several of the geographic operating segments within its Oral, Personal and Home Care product
segment. These changes have no impact on the Company's historical consolidated financial position, results of operations or
cash flows.
Effective January 1, 2013, the Company realigned the geographic structure of its North America and Latin America
reportable operating segments. In order to better leverage Latin America management's knowledge of emerging market
consumers to accelerate growth in the region, management responsibility for the Puerto Rico and CARICOM operations was
transferred from North America to Latin America management. Accordingly, commencing with the Company's financial
reporting for the quarter ended March 31, 2013, the results of the Puerto Rico and CARICOM operations, which represent less
than 1% of the Company's global business, are reported in the Latin America reportable operating segment. Previously, Puerto
Rico and CARICOM represented approximately 4% of Net sales of North America and now represent approximately 3% of Net
sales of Latin America.
Given the growing importance of the Company's operations in emerging markets, effective with the quarter ended
September 30 2013, the Company began to separately report financial information for its Asia and Africa/Eurasia operating
segments. Previously, the financial information for these operating segments was aggregated into the Greater Asia/Africa
reportable operating segment.
The Company has recast its historical geographic segment information to conform to the new reporting structure which
results in modification to the geographic components of the Oral, Personal and Home Care segment, with no impact on
historical Company results overall.
Colgate's Sustainability Journey
Colgate-Palmolive Company ("Colgate") has long focused on the principles of sustainability. We've always been dedicated to providing quality products that delight consumers, and we've had programs in place to promote oral health in communities and to reduce our energy use and increase efficiency for years.
Colgate's values of Caring, Global Teamwork and Continuous Improvement go hand-in-hand with the idea of sustaining both our business and the planet for generations to come.
In 2008, we organized our sustainability efforts under the three pillars of People, Performance and Planet. A global Sustainability Council and a network of Sustainability Sponsors and Champions worked with others to implement the goals under each pillar.
In 2010, a global team of Sustainability Leaders representing each functional unit at Colgate helped develop a 2011 to 2015 Sustainability Strategy with focused measurable goals that align with our business objectives. Our commitments reflect the global challenges and opportunities that are material to both Colgate and our stakeholders.
Colgate's 2011 to 2015 strategy maintains its emphasis on People, Performance and Planet, with focused, measurable goals that align with the Company's business objectives.
Global Sustainability Strategy
Improving Sustainability
As part of our 2011 to 2015 Sustainability Strategy, we've committed to increase the sustainability profile in all new products we produce and in the balance of our portfolio.1 We have also committed to reduce the environmental impact of our products and packages by 20 percent, by increasing the use of sustainable materials and recycled content.
In 2012, Colgate began evaluating new products using a Product Sustainability Scorecard to drive improvement across the product life cycle. The scorecard rates products with 35 parameters across eight focus areas: responsible sourcing, materials, energy and greenhouse gases, waste, water, ingredient profile, packaging and social impact. So far, we have improved the sustainability profile in 24 percent of our products.
Focus on Packaging
Colgate's goal by 2015 is to increase the amount of recycled content in our packaging by 5 percent per year, including post-consumer materials, materials from renewable resources and recyclable materials. Additionally, we are committed to responsible package design and are researching and testing bio-plastic options made from renewable resources.
Approximately 35 percent of our packaging materials globally are from recycled sources, and we're working to expand the use in all Colgate regions by identifying new technologies and sources of supply.
Moving Products to Consumers
In 2012, Colgate undertook an aggressive initiative to increase the reporting and analysis of CO2 associated with the distribution of our products (logistics). We now calculate the carbon impact for over 80 percent of our global production volume. In both the U.S. and Europe, we have reduced our logistics CO2 emissions by over 20 percent per ton of finished goods moved.
We're also working to increase the amount of intermodal transportation — in which goods are shipped in an intermodal container or vehicle that can move through different modes of transportation, such as by sea and rail. When compared with using trucks and aircraft, intermodal transportation reduces greenhouse gas emissions and saves cost.
Reducing Waste
Colgate's 2011 to 2015 goal is to reduce waste sent to landfills per unit of production from our operations by 15 percent. So far, we've reduced waste by 10 percent in the past two years.
Our sites have been working on this initiative for many years, but in 2012 Colgate formalized our approach to driving reduction. We are piloting a simplification program aimed at reducing the number and complexity associated with our waste vendors, bringing both cost reductions and improved alternatives to landfill disposal. We are also developing standardized Waste Scorecards to help increase the visibility and understanding of our waste reduction opportunities.
Paper and Board
Much of Colgate's packaging material is derived from wood-derived or paper-based products. Colgate strives to purchase paper packaging from well-managed forests or from recycled material when available. We understand the priority of purchasing certified wood-derived products in order to prevent illegal logging, deforestation and conversion of old-growth forests to monoculture plantations.
Our procurement teams are now asking companies that sell paper products a series of sustainability questions. In 2011, we undertook an internal mapping to understand how much of our purchases come from suppliers that had been certified by reputable organizations: approximately 70 percent of our spend came from suppliers certified by groups such as the Forest Stewardship Council (FSC), the Programme for Endorsement of Forest Certification Schemes (PEFC) and the Sustainable Forestry Initiative (SFI). We also have a goal to increase the recycled content in our packaging by 20 percent by 2015, and thus avoid the use of new paper and board. Today, approximately 35 percent of our packaging materials globally come from recycled sources (includes both paper and other recycled materials).
Ensuring Future Performance
Innovation
Colgate will continue to look for opportunities to grow the business by excelling in areas. where the Company already does business and where logical, synergistic expansion opportunities exist. At the same time, the Company will continue to drive for excellence
through innovation and execution. This will include innovation in all areas, with sustainability as a key focus.
Succeeding in Emerging Markets
Colgate has built brand loyalty by maintaining a deep understanding of local tastes and habits across categories. The Company's nine consumer innovation centers, which are located close to consumers in different parts of the world, develop insightdriven innovation.
To better understand consumers in rural India, Colgate researchers immersed themselves in the lives of villagers for two days, observing and discussing their oral care habits, how they clean their homes and other daily routines. A key learning was that mothers hope for a better life for their children through education. Based on this insight, Colgate implemented a special promotion that helped build awareness of good oral care habits and offered scholarships to children.
In Latin America, based on consumer expectations for a
dishwashing detergent that is tough on grease, but leaves
hands feeling soft, Colgate successfully launched Axion
Aloe and Axion Oats and Vitamin E.
As part of its global strategy, Colgate has developed
strong relationships with dental professionals around the
world. This strategy has contributed greatly to increasing
professional recommendations for Colgate brands.
Colgate-Palmolive's Supplier Code of Conduct
Over time, Colgate has built its reputation as an organization that has utilized ethical business practices and high levels of integrity as a vital business asset. The strength of Colgate's reputation is based not only on its own conduct, but also on the behavior of its business partners. For that reason, Colgate aspires to work only with those suppliers that share its values.
Colgate's Board of Directors, senior management and all Colgate people are committed to the highest standards of integrity and full compliance with the Company's Code of Conduct, as well as the regulations and policies affecting the business. As such, it is Colgate's goal to ensure that its relationships with supplier partners reflect and support the same high ethical standards.
Colgate's Global Procurement professionals work directly with suppliers, negotiating contracts for materials needed to produce and market Colgate products. Purchasing decisions are based on many factors; Colgate prefers to buy from suppliers that share the Company's values and commitment to sustainability and social responsibility. Global Procurement personnel follow guidelines in the Global Procurement Policy Manual. Colgate's Supplier Code of Conduct is provided to suppliers, and Colgate's contracts and purchase orders require suppliers to abide by applicable labor and equal-employment laws and Colgate standards, as well as the Environmental, Occupational Health and Safety Policy Statement, Foreign Corrupt Practices Act and Anti-Bribery Policy. The Company's Supplier Code of Conduct sets the Company's expectations for suppliers in a number of critical areas, including:
labor practices
protecting the environment
health and safety
universal human rights
ethical dealings
management systems.
Commitment to Safety and Quality
Consumers buy products from brands and companies they trust. The Company is committed to ensuring consumers can trust Colgate products for their reliability, quality and superior performance. Colgate's robust Research and Development program is designed to provide effective and safe consumer-preferred products. The Company also has the following policies and publications:
Product Safety Research Policy
Environmental, Occupational Health and Safety Policy and Standards
Global Quality Policy and Standards
Supply Chain Factory Performance and Reliability Standards
Material Safety Data Sheets
List of products that are free of animal-derived ingredients (U.S. and Canada)
Colgate complies with all aspects of the European Union's REACH regulation (Registration, Evaluation, Authorization and Restriction of Chemical substances). Currently, Colgate does not use any chemicals in its products classified as Substances of Very High Concern by REACH.
Delivering Innovative Sustainable Products
Colgate provides responsible products that delight consumers around the world, while helping to protect the planet. The Company's initial focus has been in its Home Care category, where innovative products help consumers make a difference. Such products may have recycled and recyclable packaging, require less water and energy for effective use, and contain environmentally preferable materials. Colgate will continue to focus on concentrated products, including dish detergent, household cleaners and fabric softeners. Concentrated products have a decreased environmental impact because they require less packaging, less water and less transportation energy. Today, 38 percent of Colgate's fabric conditioners and 27 percent of the
Company's dish detergents are concentrated. Concentrated formulas include Fleecy 2x fabric conditioner in Canada, Suavitel fabric conditioner in North America, South Africa and Latin America, Dynamo laundry detergent in South Pacific, and Palmolive Ultra concentrated dish detergent in North America. Sustainable products mean more than "green" at Colgate: Access to Colgate products such as toothpaste, soap and household cleaners can contribute to the health and well-being of consumers throughout the world, and Colgate works to ensure innovative products are available at all price points to deliver a positive impact on society.
Contributing in Times of Need
Colgate provides emergency financial aid, donates products and sponsors matching gift programs in times of natural disaster.
After the 2011 Japan earthquake and tsunami, Colgate donated funds and matched employee contributions to the American Red Cross and Save the Children, totalling $350,000. The Company also donated products such as soap and hand sanitizer worth $250,000, as well as pet food for dogs and cats affected by the disaster.
In 2010, Colgate and its employees donated over $750,000 in monetary and in-kind donations after the earthquake in Haiti.
Promoting Oral Health
Colgate's most comprehensive oral health initiative, "Bright Smiles, Bright Futures," promotes oral health education and prevention in communities worldwide. The Company distributes toothpaste, toothbrushes, videos, books, software and interactive activities in over 30 languages for use in the classroom or at home.
Volunteer dentists visit local communities to conduct free dental screenings, distribute educational materials and educate children and their families about the importance of maintaining good oral health. "Bright Smiles, Bright Futures" has reached 650 million children in 80 countries since 1991, 50 million in 2010 alone, and seeks to reach a billion children by 2020.
Colgate is a founding and principal sponsor of the Global Child Dental Fund. The group builds on the achievements of the Global Child Dental Health Taskforce, which Colgate established in partnership with the World Health Organization with a goal to
eradicate dental cavities in children globally by 2026. Since 2006, the Taskforce has benefited over 20 million children in 13 countries, including one million children in China and 1.3 million in Brazil.
Promoting Well-Being in Communities
Colgate employees, as well as some customers and community organizations, are working together for the good of the communities the Company serves. Colgate uses its expertise in oral health, personal hygiene and pet nutrition to promote well-being
and health in communities, and to support charitable organizations with similar goals.
Colgate's programs respond to some of the most pressing health issues of our time, from lack of access to oral care to the spread of preventable disease. The programs are a natural extension of the Company's business in oral care, personal care, home care and pet nutrition, and are a reflection of its values of Caring, Global Teamwork and Continuous Improvement.
Partnering with Customers
Colgate partners with hundreds of thousands of retail stores, large and small, to sell products around the world. Treating all retail customers with fairness and integrity is a priority at Colgate, and working closely with the Company's customers to share expertise and grow category sales has long been a cornerstone of Colgate's business strategy. In order to continue to succeed with customers, the Company has an activity-based training course on supply chain collaboration in which customer development, customer service and supply chain personnel focus on how to address commercial challenges and deliver best-in-class service to Colgate's retail partners.
Colgate's Customer Development Organization's goal is to be viewed by customers as the No.1 supplier compared to competitors, and the Company continues to improve in a survey conducted every three years to measure retailer satisfaction.
In the United States, Colgate collaborated with supermarket chain Kroger to reorganize the oral care aisle. Based on a variety of shopper insights and customer data, Colgate's cross-functional commercial team worked closely with the retailer to implement a more shopper-friendly aisle. The new design attracted more shoppers and increased category sales.
Identifying the right assortment of products is especially important in small stores, where space is limited. Colgate works closely with small shop owners to help them select the best combination of products for their store.
Diversity and Inclusion
Colgate's commitment to diversity and inclusion revolves around employee network groups, community support, support for local educational institutions and recruitment. Colgate supports network and affinity groups representing many different perspectives
and ways of life. Each group contributes to Colgate's inclusive work environment by developing and implementing activities and programs to promote community involvement and cultural awareness, from events to celebrate Black History Month and Hispanic Heritage Month, to high school mentoring, networking and "women supporting women" programs.
Select Colgate Network Groups
Asian Action Network
Black Action Committee Network
Colgate Women's Network
Colgate Gay, Lesbian, BisexualTransgender (GLBT) Network
Hill's 4 Generation Network
Hill's Diversity Council
Hill's Women Empowerment
Hispanic Action Network
New Employee Organization
Colgate Parents' Network.
SWOT Analysis
Strengths
Geographically diversified industry.
Strong brand image.
Strong market share.
Appealing advertisements.
Huge sales growth.
Skilled workforce.
Strong promotional strategies.
Weaknesses
Product expansion is restricted.
Saturated market.
Market share is lower than its competitors.
Opportunities
International Market Expansion.
Emerging markets may attract business
Differentiation strategy is required.
Threats
Increase in commodity prices.
Fierce competition.
New entrants in the market can be a threat to Colgate.
Conclusions
The Colgate-Palmolive is a consumer oriented company which is currently operating in more than 100 countries. They provide many employee oriented programs and managing their international business quite well. The way they have established in the business and international market, they still have a higher chance to remain competitive in the years ahead.
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