Cottle India

MEMORANDUM

TO: MS BRINDA PATEL

FROM: SUBJECT: 2010 MARKETING PLAN

DATE:

We have studied Cottle-Taylor’s situation in India and we believe that the 2010 Marketing plan should focus primarily on the urban population in order to quickly increase toothbrush unit sales. We feel that increasing the marketing allowance to 15% of sales revenue (12% in advertising and 3% in promotion) will raise awareness and increase unit sales growth to the goal of 30%.

Segmentation

The Indian Market can be segmented according to income and where people earning these income levels tend to live. We have identified three segments: Urban, Semi-Urban, and Rural to represent the Indian market. Using the market knowledge available, we believe that the Urban Population should be the immediate priority. In 2009, 30% of total GDP came from 3 of the 37 states and territories of the country: Uttar Pradesh, Maharashtra and Andra Pradesh. These states house large cities and are also the number 1, 2 and 5 most populous states. In India, around 20% of the population lives on more than $2.00 per day, the population more likely to consider spending money on oral care products. In addition, around 22% of the population lives in urban areas. This segment is less price-sensitive and tends to shop in retail outlets such as department stores and supermarkets, with which Cottle-Taylor has already invested in relationships. These outlets also provide more opportunities for western influence, which would include an interest in health and beauty products such as oral care. This urban population is also the most likely segment to visit dentists, who have the potential to be key advocates/distributors for the company.

But the long-term priority for Cottle is to focus on the rural segment of the population, which makes up 78% of the population or 905 million people, constituting a huge market opportunity. By reaching this segment, Cottle can build lasting relationships that will grow their share of the oral care industry.

Demand Stimulation

Cottle needs to focus on demand stimulation rather than stealing shares, in order to grow its Indian business. Indeed, the benefits of oral care are still vastly unknown in India where people still prefer to use traditional remedies such as chewing Neem twigs and using charcoal, tobacco and black salt. The problem is that Indians attributed dental problems to other factors such as bad diet and genetics, rather than the lack of oral care. A 2007 survey even concluded that 50% of the total population had no interest in preventing or treating dental problems. Indians also did not follow the IDA’s suggestions of brushing twice daily and replacing toothbrushes every 3 months. In fact, 80% of users kept their toothbrushes