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Colgate

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Colgate Palmolive - http://www.colgate.com/app/Colgate/US/Corp/LegalPrivacy.cvsp

General Description
Colgate-Palmolive is one of the leading consumer product companies in the world. It offers products in many categories including oral care, personal care, household surface, and fabric care, and pet nutrition. Colgate-Palmolive has market leadership around the world, primarily operating in North America, Latin America, Europe, and Greater Asia/Africa. The company has headquarters in New York, and employs around 40,000 people.

Owner: Ian Cook - Chairman, President, CEO (Colgate is a publicly held company)

Industry: Overall Health Care Products

Types of Brands offered:
Men's Speed Stick
Lady Speed Stick
Softsoap Body Wash/Hand Lotion
Irish Spring Body Wash
Afta After Shave
Skin Bracer After Shave
Palmolive Dishwasher Solutions
Suavitel Fabric Conditioners
Murphy Household Cleaning Solutions
Fabuloso Furniture Solutions
Colgate Toothpaste/Toothbrushes

History of the Business:

1806
William Colgate starts a starch, soap and candle business on Dutch Street in New York City.
1820
Colgate establishes a starch factory in Jersey City, New Jersey.
1857
Upon the death of founder William Colgate, the company is reorganized as Colgate & Company under the management of Samuel Colgate, his son.
1906
Colgate & Company celebrates its 100th anniversary. Product line includes over 800 different products.
1920s
Colgate begins establishing operations in Europe, Asia, Latin America and Africa.
1953
Colgate-Palmolive Company becomes company's official name.
1989
Annual Company sales surpass the $5 billion mark.
Today, with sales surpassing $15 billion, Colgate focuses on four core businesses: Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate now sells its products in over 200 countries and territories worldwide.//
Today, the Palmolive equity is sold in over 88 countries in 54 variants.

Channels of Distribution
Colgate Palmolive is so large of a company, it is impossible to specifically identify their particular distribution strategies. If one was to look at the type of market coverage or intensity for their distribution strategies, their types of products stated above would fall under the category of intensive distribution, or complete market coverage. However, there are some leads as to what the general channel of distribution Colgate Palmolive uses. In Puerto Rico, Colgate Palmolive has its own separate distribution company, called Colgate Palmolive Co Distributers, a subsidary of Colgate Palmolive. Being the company has market access to nearly the whole world, there isn't one single distributer for every market they sell to, those markets including some of the major continents in the world. That would lead to believe that this distribution center in Puerto Rico is Colgate Palmolive's wholesaler for its Western Hemisphere operations in North America and Latin America. It is also known that there are multiple Colgate Palmolive manufacturers in Europe, where products are shipped to a single distribution center in Denmark. From their, the various products are distributed to markets in Europe. The implication is that this distribution center in Denmark is a variation of the distribution company in Puerto Rico, as to say it is the same type of distribution company subsidary that applies for Colgate Palmolive's market coverage in Europe. As a result, Colgate Palmolive has a channel of distribution classified as starting from the manufacturer, then on to an intermediary distributer, and finally to the retailer.

The following chart displays a simplified visionary model of Colgate Palmolive's likely distribution channel for consumer products.

Being there is a mass amount of products distributed by Colgate Palmolive, there has to be a channel for the raw materials needed for the many products they sell. This channel being the distribution channel for industrial products, this process coming before the distribution channel for consumer products. With the knowledge that this a world wide company, that has operations in nearly every major continent, it wouldn't be very efficient to obtain all the necessary materials for their products from one single raw material producer. From this theory, Colgate Palmolive most likely uses their subsidary companies in this facet of business of well. For example, we will use their Puerto Rico operations. In Puerto Rico, as discussed in the consumer channel of distribution, Colgate Palmolive has a distribution center acting as a subsidary of itself called Colgate Palmolive Co Distributers. The assumption would be that a manufacturer of the raw materials sends them to the distribution center, where they are then transported to the product manufacturer. This is where the industrial side of the channel would end, and the consumer side of the channel would start, because from here the finished products are shipped back to the single mass distributing subsidary, and onto the retailers.

The following chart displays a simplified visionary model of Colgate Palmolive's likely distribution channel for industrial products. Notice how the second channel member for each channel is the same, because the subsidary distribution center is sending products two different ways to maximize efficiency (those two ways would be the raw materials from the raw material producer to the consumer product producer, and the finished product from the consumer product producer to the retailer). A key thing to know is that the distribution channel for industrial products comes before the distribution channel for consumer products.

Forms of Transportation

As it has been discussed precedingly, Colgate Palmolive is a worldwide manufacturer that has operations in several continents. That being, there isn't one single distributer for the whole business, but a few key important subsidaries for each region of operation. But just because the company has their channels of distribution set, there is still the dirty work of the actual transportation that also goes on. Colgate Palmolive cooperates with a global shipping company called Magellan Transport Logistics, obviously being named after the great Ferdinand Magellan. The name comes into play because the logistics company is indeed a worldwide one, that being very beneficial to Colgate Palmolive so they're using only one transport company for all of their operations. Now because the majority of the products Colgate Palmolive sells are non-perishable, that makes the amount of time available for transporting the goods longer than say a perishable food item, like milk. Because of this, the most common form of transportation the company partakes in would be trucking, for all transport of goods throughout their channels of distribution. Trucking is the most efficient form for this company because as they have operations split up in different continents, there isn't any water to go over, and trucking can go directly to basically all of the members of Colgate Palmolive's channels of distribution.

Main Points/Review Questions

1. Identify the proclaimed starting points of each channel of distribution of Colgate Palmolive.
2. Describe the likely progression of Colgate Palmolive's consumer product channel of distribution.
3. What type of transportation does Colgate Palmolive most commonly use?
4. How is that form of transportation discussed in #3 an advantage for Colgate Palmolive?
5. Thinking of the entire channel of distribution (the consumer and industrial channel together), how many intermediaries are there technically?

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