Marketing strategy for anti-snoring toothpaste product launch

Marketing Plan for Toothpaste

The essence of any effective marketing plan is to seek out opportunities for a unique, defensible, differentiated market position (Bronnenberg, 2008). Toothpaste that through its unique chemical properties can also alleviate snoring is highly differentiated beyond just the factor of taste (MarketWatch, 2008) or packaging (Hartman, 2009). The intent of this marketing plan is to ascertain the market potential for toothpaste alleviate snoring by firming up the soft palate and airway walls for up to eight hours through a harmless chemical reaction of applying water to the toothpaste. As snoring is often treated with over-the-counter (OTC) medications globally, an aspect of this marketing plan is the competitive dynamics pharmaceutical drugs that may be prescribed by a physician. In this regard the benefits of alleviating snoring through the use of toothpaste which can be purchased without a prescription will serve to expand the market. Toothpastes are by nature mature products (Arora, 2007) and have often been critically reviewed for their claims of whitening teeth (Consumer Reports, 2006) and use as sprays or other forms of application (Harvey, 2002). As the Consumer Packaged Goods (CPG) industry in general and toothpaste specifically at times suffer from a lack of credibility between their claims on the one hand and performance on the other, it is critically important this marketing plan concentrate on generating a high level of trust with consumers. Providing 3rd party validation of claims of the toothpaste alleviate snoring is critically important for the credibility of not only the product but the entire marketing strategy.

Situation Analysis

The intent of this section is to provide an environmental scan of the dental hygiene market globally including a market analysis of those segments of the population that would be the primary target audience for the toothpaste. The use of demographic profile data to complete the market analysis is provided in this section as well.

Environment Scan

Dental Hygiene products including toothpaste are aggregated in global toiletries and cosmetic manufacturing industry forecasts, with the latest DataMonitor forecast being $185.7B in size with a compound annual growth rate of 4% per year (Barbalova, 2009). Figure 1, Distribution of Global Toiletries and Cosmetic Manufacturing by Category illustrates the relative size of the market globally.

Figure 1:

Distribution of Global Toiletries and Cosmetic Manufacturing by Category, 2008

Product/Services

Share

Skin Care

30.0%

Hair Care

25.0%

Cosmetics

15.0%

Fragrances

10.0%

Deodorants

5.0%

Male grooming

5.0%

Bath & Shower

3.0%

Oral Hygiene

2.0%

Other

2.0%

Sun Care

1.0%

Nail Care

1.0%

Baby Care

1.0%

Source: (Barbalova, 2009)

The global toiletries and cosmetic manufacturing industry sales by distribution channel illustrate how critically important it is as part of this market plan to define strategies for gaining shelf space on grocery shelves and end-caps, or the end-of-aisle displays in this class of larger store. Note also that for the toothpaste to achieve its broader market potential there must be specific distribution strategies for each of the channels listed below. When the global implications of channel strategies are taken into account, significantly different information needs emerge for each of these channels. For example in Japan the quantification of the toothpastes' performance will be critically important if the toothpaste is to be accepted by that nation, which is strongly nationalistic in the area of personal hygiene products, often requiring Material Safety Data Sheets (MSDS) to evaluate performance (Toll, 1994). Where in westernized nations who rely on these channels of distribution the value propositions based on claims of the toothpaste solving snoring problems may rely on a balance of adjectives and quantified performance, globally given the wide divergence in cultures the quantification and auditability of claims is going to be critical.

Figure 2: Sales by Distribution Channel, 2008

Market Segment

Share

Grocery/Supermarkets

30.0%

Pharmacies

20.0%

Specialty Cosmetic and Personal Care Stores

18.0%

Department Stores

15.0%

Direct Sellers

10.0%

Hair & Beauty Salons

7.0%

Clearly Europe dominates the sales of global toiletries and cosmetic manufacturing industry sales, followed by North America and Asia. Each of these three global centers has radically different requirements as it relates to cultural dimensions and the development of strategies. The five dimensions in the Cultural Dimensions Model (Hofstede, 1998) need to be used in devising the global launch of the toothpaste across these various geographies. The following figure provides an analysis of the distribution of sales by region in 2008. Figure 4 shows Global Competitive Market Shares for 2008.

Figure 3: 2008 Sales by Geographic Region

Region

Percentage

Europe

40.0

North America

28.0

North Asia

17.0

India & Central Asia

5.0

South America

5.0

Oceania

2.0

South East Asia

2.0

Africa & Middle East

1.0

Figure 4: Global Competitive Market Share, 2008

Major Player

Market Shares

Procter & Gamble Company, The

10.0%

Unilever PLC

7.0%

Colgate-Palmolive Company

5.0%

Shiseido Company, Limited

3.5%

Other

74.5%

Marketing Strategy

Beginning with the media planning considerations, the framework of an Integrated Marketing Communications strategy needs to be used. Presuming the initial product introduction is in Europe with subsequent product introductions in the U.S. And throughout other regions of the world, the Integrated Marketing Communications strategy needs to accomplish the product positioning objective of making the snore-reducing tooth paste aligned with a new brand that can significantly reduce the threat of bacteria. From the hierarchy shown in Figure 6: Perceptual Analysis and Assignment of Segment Percentages, it is evident that the snore-reducing toothpaste will only be successful if it can translate the tightening of the upper airway walls and soft palette with enhanced hygiene and immunity from bacteria. Figure 6 resoundingly illustrates how critical reassurance of cleanliness and quality are to anyone who purchases toothpaste.

Integrated Marketing Communications Objectives

First, to conclusively align the snore reduction aspects of the tooth paste with accentuated health through immunity from bacteria and a feeling of cleanliness from using the toothpaste periodically.

Second, to define a unique and defensible marketing position for the snore reduction tooth paste including a unique value proposition that will make it a substitute for snore medications sold by prescription or over-the-counter (OTC). This necessitates creating the snore reduction tooth paste product position as being one of a low-cost substitute for more expensive snore reduction medicines and treatments.

Media and Market Planning Recommendations

The following table provides the media planning for the launch and continued support of the snore reduction tooth paste. As can be seen from the media and marketing strategy the reliance on online spending is where 37% of the total budget is allocated. This is in response to the growing importance of social networking and the groundswell effect (Bernoff, Li, 2008) on branding and messaging strategies globally. For the snore reduction toothpaste to be effective it will need to generate high levels of awareness and trial entirely online.

Media and Marketing Strategy

Frequency/month

Cost/month

Total Cost

Online - Google AdWords Program

£150.00

£15,000.00

Online - Yahoo Overture

20

£35.00

£700.00

Online - Sponsorship of social networking sites

1

£1,000.00

£1,000.00

Online - Microsite

1

£5,000.00

£5,000.00

Online - E-mail Marketing & Mgmt

1

£3,000.00

£3,000.00

Online - CRM System

1

£3,000.00

£3,000.00

Subtotal:

£27,700.00

Offline - Product Brochures

4

£200.00

£800.00

Offline - Sponsored Events

2

£10,000.00

£20,000.00

Offline - Medical Trade Shows

3

£7,000.00

£21,000.00

Offline - In-store displays and detailing

15

£400.00

£6,000.00

Subtotal:

£47,800.00

Totals:

£75,500.00

Marketing Mix

With the two main Integrated Marketing Communications Strategies defined as first positioning the snore reduction tooth paste as a preventative healthcare strategy to alleviate bacteria, and second as a cost-effective alterative to over-the-counter and prescription medications, the marketing mix must seek to maximize these messages through coordinated execution strategies. The coordination and synchronization of each aspect of the marketing mix must be intertwined to create an effective umbrella strategy (Erdem, 1998). This strategy of coordinating all aspects of the marketing mix, in the case of consumer goods including consumables, has shown to have a supportive effect on pricing overall in terms of stabilizing it (Erdem, Keane, Sun, 2008).

Product considerations for the snoring reduction toothpaste must first begin with the approach of how credibility is shown, earned and trust generated for the toothpastes' ability to also resolve bacterial issues as well. This tooth paste will only be successful from a sales standpoint to the extent it can be shown to alleviate bacteria. Aligning with a clean taste and quality is critical as well. The name of the product will also be critically important in either leading to greater trust and credibility or making the product appear to be "clean washed" into the market (Fox, 2002). Clearly the challenges of the product composition and the need for creating a very strong integration between the development teams and the marketing team, as Crest does (Martin, 1989) will also be essential for the products' success in this aspect of the marketing mix. The product will also need to concentrate on its substitute value aspects relative to more expensive solutions for snoring. The potential of showing there is no significant side-effects of using the snore reduction tooth paste will also be invaluable, as more potent and more expensive treatments for snoring often do.

In terms of pricing, the following table, pricing analysis of the 100g and 250g tubes are presented. The following table shows an assessment of the pricing scenarios for the 100g tube, 250g tube and the 250g tube with the pump. The assumptions regarding cost components are provided based on analysis of comparable tooth pastes (Chu, Chintagunta, Cebollada, 2008). The following table also assumes that distribution channel partners will be provided with 20% gross margin to stock the product and resell it. This is considered to be industry-average for distribution of retail products (Steenkamp, Gielens, 2003). This costing structure also assumes that the company continually seeks to create cost efficiencies in raw material sourcing and look to external packaging as part of its branding. The net contribution margin per unit of £.30 for the 100g tube, of £.71 of the 250g tube and £.78 of the 250g tube with pump which provides funding for future supply chain optimization, sourcing, quality management and marketing.

100g tube

250g tube

250g tube, pump

Pricing

£1.10

£2.20

£2.42

Cost Components:

Raw Materials

£0.12

£0.24

£0.26

Tube Packaging

£0.34

£0.44

£0.48

External Packaging

£0.12

£0.15

£0.17

Total Costs:

£0.58

£0.83

£0.91

Net Profit Per Unit

£0.52

£1.37

£1.51

Margin to Distribution Channel (.2)

£0.22

£0.66

£0.73

Net Contribution Margin Per Unit

£0.30

£0.71

£0.78

The promotional strategy will center primarily on the use of social networking to drive up awareness including the use of blogs, Facebook, Twitter, Friendfeed and LinkedIn. In conjunction with the social networking strategy will be on focusing on search engine optimization (SEO) using the microsite with keywords embedded within it. This strategy will allow for the site to be picked up by search engines as they scour the web for new links. Second, the use of Google AdWords will also assist in the development of sales leads and driving traffic to the website to be created for the product launch. The AdWords campaigns are easily created within Google AdWords and be quickly used to generate new sales opportunities for resellers as well. The use of these social networking platforms can also be used to support the channel management strategies of the company. In fact social networking is becoming a prevalent form of support for channel partners globally (Bernoff, Li, 2008). A social media strategy must be coordinated and in synchronization with the broader Integrated Marketing Communications strategy as well (Mangold, Faulds, 2009). Taken together these two aspects of the promotional strategy, when combined with supporting and funding events, will be highly significant in terms of generating awareness and sales leads, and leading to continual strength for marketing and selling efforts.

The last aspects of the marketing strategy, which are the distribution aspects, are critically important. Relationships with channel partners and resellers must be created rapidly and solidified not only with the 20% gross margin offered but also with the offer of continual learning and education, and the use of an online Partner Relationship Management (PRM) system as well. The distribution strategy must also be segmented by big box retailers including Wal-Mart, Costco and Sam's Club in the U.S., Carrefour in France, and Tesco throughout the UK. The second tier of retailers needs to be local and regional grocery chains. A third tier is the drug stores and other dispensaries throughout the UK and U.S.. Distribution must be accentuated with the development of an online support and knowledge management system to give resellers the opportunity to gain as much insight as possible while selling the snore reduction tooth paste.

Internal Marketing Coordination

With such a unique value proposition and one that critically needs to show bacterial control and cleanliness as core concepts followed by the ability to create a viable substitute to more traditional forms of snoring reduction, the proposed product needs to have tight integration of product development and marketing. There also needs to be real-time communication between the supply chain, strategic sourcing and development teams as well, as these teams may be able to find cost reductions in sourcing products over time. Sales needs to be continually kept up to speed with the product development, supply chain implications to pricing and marketing strategies so they can effectively sell into the three tiers of distribution channels mentioned. Beyond merely a cross-functional team, the company needs to embrace a more customer-driven focus on how to transform this unique product into a viable substitute for more expensive and often subscription-based solutions to snoring. Above all of these factors the company must seek to be the trusted advisor to consumers.