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C570: Strategic Marketing Management Cleopatra – Marketing Strategy Changes Team 3: 1. What are the most important possibilities for improving the results for the Cleopatra product in Canada? If Colgate-Palmolive wants Cleopatra to be successful in Canada, they need to make a few major changes to their strategy. As seen from the first assignment on segment attractiveness, the Canadian soap market has matured and the only way to grow is by drawing more market share from competitors.
Although they targeted the correct segment by focusing on Skin Care, they made several mistakes by making assumptions and conducting incomplete research before product launch. Colgate-Palmolive should hit all of the 4Ps – Product, Price, Place and Promotion – to improve their chances of success. First, Colgate Palmolive needs to increase market research into potential customers for Cleopatra in the precise target market (Quebec, not Toronto). This would create a better picture of the market and show where success potentials could be hiding in the form of missing qualities of existing products or price potential.
It is obvious that the high price is a deterrent to many purchases. However, only 20 percent say that high price is a deterrent for Cleopatra. There are indications that certain qualities of the soap, such as degrading too quickly or becoming too lathery, having a strong perfume, etcetera, could be undesirable for the Canadian market while they are totally acceptable traits to the fashion conscious French market. In short, more sound information could help implement changes to the formula that would improve the rate of customer return by matching expectations for premium quality soap with the properties of Cleopatra.
Secondly, Colgate-Palmolive must cater to retailers. They tried to shift the balance of power from retailers to manufacturers by creating a unique product in Cleopatra for the Canadian market. This is the largest and most important possibility for Cleopatra to improve their results in Canada. Due to the maturity in the Canadian soap market, growth must be taken from competitors and the gatekeepers to that growth are retailers. Colgate-Palmolive attempted to circumvent the retailers with marketing to generate a customer demand that retailers would be forced to pay attention to.
They failed in this endeavor partly because they were overambitious (100 percent distribution in first year), and because this was supposed to be driven by customer demand. They were unable to get their product on the shelves in many places. Twenty-nine percent of customers responded with “non-availability where they shopped” as being the prime reason to “why they hadn’t tried Cleopatra. ” Prior research among retailers about their willingness to stock Cleopatra based on customer demand alone and without any concessions from Colgate-Palmolive would have given the company a better picture of retailer strengths.
Retailers punished Colgate-Palmolive for not giving them discounts by either ignoring them or sidelining them to the bottom shelves. This must be reversed in order for Cleopatra to achieve any success. It was too much to break into a competitive market with a new product that costs more than its competitors and work against the retailers. If Cleopatra becomes wildly successful, they may be able to eliminate or reduce the amount of discounts they are giving to retailers, but initially Cleopatra will have to pay to play, as part of product promotion.
If Colgate-Palmolive works with retailers, they have encouraging initial data to suggest it could be a successful product to compete in an attractive segment, skin care. The opportunities for revenue growth in this sector are greater due to the high margins and the protections from competitors who won’t want to decrease their margins as Cleopatra makes inroads. In the skin care segment, it is not a race to the bottom like the utility or the refreshment segment.
Cleopatra has shown there is an opening in the skin care segment for a major competitor to Dove; they just need to work with retailers to take advantage of it before someone else does. Thirdly, history from previous marketing attempts could have been greatly leveraged. For example, why did only 1,500 people enter the jewelry sweepstakes, and how did those sweepstakes actually benefit the brand? Did those whom entered the sweepstakes buy Cleopatra again? Why were only 21 percent of the free coupons redeemed? Market awareness was high at 63 percent, due to the marketing blitz.
Then, why were customers not trying the brand after they knew about it? More information and research must be acquired and correct questions must be asked to determine what customers want and what they know about Cleopatra and why they are not trying it or repurchasing it in large numbers. Finally, Colgate-Palmolive also needs to determine the precise factors that made Cleopatra a success in France (product or price or promotion or place) and leverage these advantages to customize their strategy to address the local market in Quebec.
Colgate-Palmolive also needs to thoroughly evaluate the factors determining them to incorporate global or local marketing strategy like costs involved, distribution network, etcetera. A possibility for the increased success of Cleopatra lies in greater market research to answer crucial questions to loyal customers of Cleopatra, and more importantly, why they are loyal. 2. What would you recommend to Colgate-Palmolive? Justify your recommendation using clear logic supported by case data and/or explicitly stated assumptions. For any assumptions you make, explain what information would be necessary to establish their accuracy.
Colgate-Palmolive had taken a right step in targeting the most appropriate market segment available for product expansion, Skin Care. However, based on the results thus far, the company failed to meet its targets. It would not be advisable to withdraw immaturely. The marketing campaign did indicate positive results in increasing brand awareness. Customers who tried Cleopatra have consistently showed improved perceptions after the initial trials as indicated by Exhibit 10, while the main competitor’s (Dove) perception value has dropped consistently across all value propositions.
There are certain areas Cleopatra could target for improved market performance. Primarily, Colgate-Palmolive needs to conduct an extensive research in Quebec as well as France to determine its strong points and base their marketing strategy highlighting these strong points as much as they can. At the same time, they need to delicately balance the market differences between Quebec and France, to make sure the local tastes are differentiated as needed. Secondly, as Colgate-Palmolive was strategizing to reduce the retailer power and draw more sales through demand, it needs to get consumers to try the product without involving retailers.
Brand awareness was 73. 5 percent from their consumer research, but in that same research, only 14. 2 percent had actually tried Cleopatra. One way to get consumers to try this product is to mail samples. This would require the samples to be smaller like travel sized soap. Providing samples would get consumers to try the product right away without having to funnel customers to a store that carries the product. It would also have the added benefit of having customers asking stores if they carry Cleopatra when they make their first purchase after trying the free sample, creating a customer demand.
In the case of insufficient demand generated by the trial-mail program, Colgate-Palmolive would work with the retailers. They would either offer trade allowances or discounts as incentives or use personal selling to convince retailers that Cleopatra deserves premium shelf space. By achieving the ultimate mix of advertising, promotions, trade discounts, and personal selling, Colgate-Palmolive can greatly increase the visibility and availability of their product, and achieve greater profits. Coupon distribution is another area that Colgate Palmolive could improve upon.
Only 21 percent of the “Free Bar Coupons” were actually redeemed, suggesting that the coupons could have been distributed in a more effective way to induce trial. Instead of sending coupons in the mail (which many people would just throw away as junk mail), Colgate-Palmolive should have given coupons away right in the store. This way people have the product right in front of them, increasing their awareness, and making them more likely to redeem their coupons. Advertising is another facet of the product launch that Colgate-Palmolive needs to revisit.
Their commercial created an awareness of 63 percent with 41 percent being a positive reaction and 13 percent being a negative reaction, but 46 percent of people had no reaction. A sixty-three percent awareness is pretty good, but only 37 percent of people said that they intended to try Cleopatra after seeing the commercial. Clearly the commercial was not creating the drive that they had hoped. Colgate-Palmolive cannot continue using the same commercial if they want better results. They should continue to innovate their advertising campaign with commercials and test them with Quebec focused market study groups of consumers first.
Another option for Colgate-Palmolive would be branding. In the refreshment category, they had Irish Spring which was very popular. It was viewed as being made for men and had a strong refreshing scent. Colgate-Palmolive could try to market Cleopatra as the female Irish Spring. Cleopatra has its own female scent that could compare to the male scent of Irish spring. If they used the Irish Spring brand to market Cleopatra, it might help people relate better to Cleopatra. Lastly, Colgate-Palmolive also needs to revisit the pricing of Cleopatra.
In order to encourage initial product trials, Colgate-Palmolive could consider discounting to establish the brand. After the brand is established and a loyal customer base is formed, they could slowly eliminate discounts. Alternatively, Colgate Palmolive management could set the price of Cleopatra comparable to Dove’s competing products to compete in this highly competitive and price sensitive market. In summary, Colgate-Palmolive should continue its launch efforts for Cleopatra, but they need to address several factors in their marketing strategy to be successful in the Canadian soap market.