Introduction Cottle was founded in 1815 as a hand soap manufacture in Philadelphia. In 2009, The company produced over 200 products to serve the oral care, personal care and home consumer­product categories. Revenues were $11.5 billion over a span of 200 countries. Cottle viewed geographic expansion and new product development as key drivers of growth in foreign markets and divided its global operations into four geographic divisions: North America, Europe, Latin America, and Great Asia and Africa. Between 2004 and 2009, Cottles sales grew by 8% annually, net income by 12% and earnings per share by 14%, while personal and homecare products generated strong sales in the United States and Europe, oral care anchored the companys success in emerging markets. In 2009, roughly 50% of the company’s revenues of $5.7 billion, came from emerging markets. Cottle maintained manufacturing and business operations in 75 countries to serve its customer base. Cottle believed in providing quality products all over the world, Cottle employed a predominantly international workforce and invested heavily in foreign communities, unlike some of its competitors. Cottle focused on its ability to increase its earnings in India. Brinda Patel, the oral care director of the India marketing division believed that India had a projected growth. From the information Brinda was able to obtain, she created a marketing plan that would support a 20% increase for toothbrush unit sales in 2010. Ms. Patel presented her findings to her manager Michael Lang (VP Manager for Asia and Africa). Mr. Lang felt that Ms.Patel was conservative in her numbers and felt the need to create a marketing strategy that would give the company an overall increase of 25% to 30% in toothbrush sales for 2010 was possible. Mr. Lang was under pressure to deliver results from his declining U.S. revenues and looked at India as an opportunity to boost his regions bottom line. Although India is one of the poorest countries, Lang seen this as an opportunity to engage over 500 million customers What factors determine demand for toothbrushes? The factors that determine the demand for toothbrushes are: 1. Awareness of dental health: People are not aware about the importance of dental hygiene. Indians practised dental hygiene by chewing twigs from the Neem tree, which was referred to as Nature’s Drugstore, by using charcoal, tobacco, black salt and ash to clean their teeth. Many Indians, especially the ones in rural areas, did not see having dental problems such as bleeding gums or cavities as having improper dental care, they regarded them to be as a result of bad eating habits or genetics. A study in 2007 showed that 50% of Indians were not concerned with preventing or curing dental problems. The Indian Dental Association (IDA) and Cottle designed a campaign to educate citizens on oral health issues by providing free dental checkups, providing free product samples and also giving necessary guidelines for proper dental care and this campaign encouraged Indians to adopt the method of using toothbrushes and made them abandon their traditional way of cleaning their teeth. 2. Income of Households: The income of consumers affects the demand for toothbrushes. Indians who lived in rural areas were more likely to avoid using modern

oral care products than those who lived in urban areas. They were price­sensitive and this was because they lived on inconsistent wages. 3. Penetration of dental professionals: In 2005, just 2% of Indians visited the Dentist regularly, majority of them had never visited a Dentist. The overall penetration of Dentists in India was low and this was as a result of the Indian Dentists migrating to foreign countries for higher income, there was a limited number of qualified Dental educators, there was just one Dentistry personnel for every 10,000 people, most of them gathered in Urban areas serving patients with higher incomes. 4. Competitive Market: Cottle held 46% of market share. Cottle had two manual toothbrush competitors in India, Hinda­Daltan, a french consumer product company, had 21% market share, and SarIndia, an Indian consumer product company, held 11% market share. The remaining 22% were companies with little brand recognition from China and Vietnam, who imported low quality and low­priced products. 5. Price and availability of Complementary Products: The price and availability of toothpaste and tooth powder also affects the demand for toothpaste. Ingredients for toothpaste and tooth powder, and blending equipment were not expensive and were locally available. Cottle reduced its price of toothpaste and tooth powder in order to remain competitive because companies from China entered the Indian market with cheaper toothpaste and tooth powder. How can demand be increased? Demand for toothbrushes can be increased through the following ways: 1. Awareness and Advertisement: The demand for toothbrushes can be increased through advertisements, promotion and awareness. Cottle collaborated with The Indian Dental Association(IDA) to design a campaign to educate Indians on oral health by providing free dental checkups, providing free product samples and also giving necessary guidelines for proper dental care. 2. Increase in disposable income: The income of the consumers affects the demand for toothbrushes. In Exhibit 4 and 5, we observed that the disposable income of the Indian households increased and correspondingly the revenue generated through the sale of toothbrushes also improved by 44.2%. As the disposable income of households increased, Indians were ready to invest in proper dental care and this drove the demand of toothbrushes in India. 3. Price of the Product: The lower the price of toothbrushes, the more people would buy. Rural consumers in India were price sensitive. Cottle reduced its price of toothpaste and tooth powder in order to attain competitive advantage. 4. Price of complementary products: A decrease in price of complementary products will lead to an increase in demand. Cottle reduced its prices on toothpaste and tooth powder in other to remain competitve.

 How is Cottle doing in India? Cottle is doing great in India with the sales of their product, it is one of the largest players in the Dental care market sector. Between year 2004­2009, Cottle’s sale grew by 8 % annually, net income by 12 % and earnings per share by 14 %. In 2008, Cottle had a share of 41.4%. It recorded 6.2% growth in the market share in terms of sales revenues. In 2009, Cottle toothbrushes accounted for 46% of total toothbrush units sold in India compared to its competitors. Cottle had a market share of approximately 44% which was far ahead of other players in the market. In terms of revenue, Cottle’s toothbrush product earned 57.4% of total toothbrush market revenue. Has Cottle enjoyed a first­mover advantage? Cottle has enjoyed a first­mover advantage because it created brand awareness and created a vast distribution network before its competitors. Cottle serves wholesalers and retailers in both Urban and semi­urban areas through its widespread channel and also services more than 300,000 outlets in small villages across the company making it a tough competitive market for its competitors. How should Cottle accelerate the development of the toothbrush market in India? What are Cottle's target market segments? By focusing on toothbrush market, Cottle targeted low and mid range products, being first to secure the market initially by creating brand awareness. Cottle had three types of toothbrushes: The low­end toothbrushes, The middle­end toothbrushes and the battery­operated toothbrushes. The low­end toothbrushes are for Rural and semi urban consumers who do not use toothbrushes, have low income and would not spend their income buying sophisticated products, The middle­end toothbrushes are for Semi urban and urban consumers who currently use low end toothbrush and the battery­operated toothbrushes are for Very Few price­insensitive urban consumers who are aware of proper dental care and would not mind spending their income on sophisticated products. Which of these segments makes the most sense for Cottle to reach? Cottle should target the low­end and middle­end segments rather than targeting battery operated because considering the high price of the battery­operated toothbrushes, the sales are low. Considering the huge semi urban and rural market, which can be the potential target,

low­end manual and mid­range manual would be ideal for such markets considering their less costs because they are highly populated with low income users who are ignorant about modern dental care. Should Cottle spend advertising dollars promoting battery­operated toothbrushes? Why or why not? Cottle shouldn’t spend advertising dollars promoting battery­operated toothbrushes because its only the Indians living in the urban setting that can afford the battery­operated toothbrushes, only 0.5% of the sales of Cottle India came from battery­operated brushes. Will an increase in advertising necessarily lead to higher revenues and/ or profitability? yes, an increase in advertising leads to higher revenues because Advertising creates awareness. The unit and sales growth increased by 3% in Thailand due to advertising. Explain at what point an increase in advertising stops making sense? Cottle only spent 5% of the advertising budget on Radio advertisement, which is the only source of entertainment of the rural population and around 78% (905 Million) people lived in rural areas. Thus, the advertising in rural India by the company was not adequate.

References Quelch, J & Zalosh, A (2012). Cottle­Taylor: Expanding the Oral Care Group In India. retrieved from: https://cb.hbsp.harvard.edu/cbmp/context/coursepacks/28367023