Wednesday, June 25, 2008

Colgate drops in rankings across board

In a glorious coming together of the unimaginable and the inevitable, Colgate - the No 1 in the survey over the last four years - has ceded the top slot to Nokia this time. The toothpaste brand, which commands a 48.5% share in the Rs 2,500-crore toothpastes market, still leads among FMCG brands and is the overall No 2. But Nokia overtaking Colgate signifies a subtle change in the trust equilibrium. "The change does indicate a shift in the way consumers look at brands. A much more happening category like mobile has scored over an old FMCG player," says one former Colgate official.

Colgate, in the last four quarters, has been aggressive with the launch of Colgate Active Salt and Colgate MaxFresh to widen the gap between itself and the competition. But as Sameer Deshmukh, analyst at IL&FS, believes, with such a huge market share in a heavily penetrated category, the company can only look at sustaining market share.

Colgate's ranking across categories

Even that might prove to be a hard task, going by the survey results from this year and the last. Take the zonal rankings: in the north, Colgate was the No 1 brand last year, while Pepsodent figured at No 8. This year, Pepsodent has moved up to No 3, while Colgate has plunged to No 10. In the west, Colgate has retained its ranking from last year (No 3), even as Pepsodent has slipped one place to No 6. However, Closeup, which ranked No 31 last year in the west, has jumped to No 9. In the east and south, Colgate ranks No 12 and No 8, respectively - last year, Colgate was No 2 and No 1 in the two regions. And this year, Close-up has managed to retain its position at No 6 in the south.

In the top four metros, Colgate has managed to retain its No 3 ranking in Mumbai, while Pepsodent has dropped to No 14. But in Delhi, Colgate which was No 4 last year, has dropped to No 15, while Pepsodent has improved from No 32 to No 17. In Kolkata and Chennai as well, Colgate has seen fall in rank - from No 8 to No 25 in Kolkata, and from No 18 to No 23 in Chennai. The news isn't good in the respondent-wise breakup either. Among young adult males, last year Colgate was No 2, but this year it has slipped to No 7 - with Pepsodent taking the No 2 position. Among young adult females, Colgate was No 1 last year, but is down to No 5 now, while Pepsodent has improved its standing from No 11 to No 7.

The rural market has been one of the main thrust areas for Colgate - for instance, initiatives like Project Jagruti and recently Project Disha have been undertaken. "While project Disha is aimed at establishing Colgate as a brand against lookalikes and regional players, HUL through its Project Shakti is also looking to push Pepsodent in the rural markets," says Vivek Dwivedi, founder, Rural Connect.

While the projects helped Colgate create a distribution setup to reach remote corners, analysts feel that pushing Cibaca would fetch more dividends than pushing Colgate Dental Cream (CDC). "The margins in CDC are better than in Cibaca, so Colgate pushed CDC more in the rural markets," says Deshmukh of IL&FS. Shirish Pardeshi, senior analyst of Anand Rathi, says that Colgate is now pushing Cibaca, but with CDC also in the fray, there is a chance of brand Colgate getting diluted.

The survey indicates that Colgate is feeling the heat even in semi-urban markets. In the less-than-Rs 2,500 income group, Colgate, which was No 1 last year, now stands at No 12. In the Rs, 2,501-Rs 5,000 bracket, the brand is No 3. Among town class segments, in Class 1 towns, Colgate is No 2, but in Class 2 towns, it has fallen to No 10 position - from No 1 last year.

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