I. Introduction

Cecillio Kwok Pedro recognized an opportunity in producing aluminum toothpaste tubes for Colgate and Unilever and by 1977; he invested and opened Aluminum Container Inc. It was the start of his battle against entrenched giants to becoming the number one toothpaste producer in the Philippines.

However, in 1986, a new packaging arrived and the two multinational companies (MNC) decided to switch to plastic tubing. Instead of closing down, Pedro decided to use his machinery and make and offer his own toothpaste.

Knowing little about toothpaste, he had technical tie-up with a Japanese company and Lamoiyan Corporation was formally launched in 1988 and produced the first tube of Hapee. Sales have been thwarted by three significant barriers: consumer fears that locally produced goods were inferior, their preference for Colgate’s taste and the lack of awareness of the Hapee brand. Pedro and Lamoiyan Corporation counteracted these obstacles by capitalizing on their tie-up with a Japanese company, imitating Colgate’s taste and doing aggressive promotional strategies like sponsoring the Philippine Olympic team. Pedro also signed an exclusive contract with Sesame Street and featured the characters. Hapee created a niche in the kids market.

Hapee toothpaste entered the market at a 50% discount and the multinationals made no move to combat the band. Hapee then dropped to 30% discount and soon, captured 20% market share.

The entry of Hapee to the market didn’t only force Colgate to counteract Hapee’s pricing and broad product line. Its entry also attracted other rivals, selling their product at a price lower than Hapee’s. To achieve low-price status and higher margins for Hapee, Lamoiyan countered these products with Kutitap, a separate “blocking brand”. He likewise expanded to making dishwashing paste, Dazz, which resulted from a brainstorming