Marketing Strategy : Toothpaste majors fights challengers effectively

A recent article in ET mentions that the challengers in the Rs 7000 crore toothpaste market like Anchor,Ajanta Babool and Vicco were wiped out by the major brands like Colgate, HUL etc. A few years ago the major toothpaste brands like Colgate and Pepsodent were shocked by the huge challenge from brands like Anchor ,Babool etc . The challenger brand used price as the major USP and gained more than 15% share in the market.

Its interesting to understand how the majors fought these challengers. The following are the strategies used by the major brands to fight the price competition -

• React aggressively : The assault from the challenger brand was faced by the major brands aggressively. Brands like Colgate, Pepsodent etc reacted sharply to the competitor first by reducing the price to arrest the severe market share loss.
• Flanker brands : The major part of the success of market leader was the use of flanker brands to ward off price competition. Colgate effectively used Cibaca as the flanker brand to fight the price competition thus preserving the price premium of the market leading brands.
• Use smart SKUs : The toothpaste market leaders also used less prices SKUs to neutralize the price competition. The availability of big brands in affordable packs in a way prevented the consumers from switching to a less priced local brand.
• Advantage in differentiation : The age old concept of Positioning and Differentiation helped the leading brands to effectively fight the price competition. The low priced brands failed to counter the brand-equity with price alone. 
• Deep pockets : The deep pockets of the likes of Colgate and HUL enabled a large aggressive and sustained offensive against the challengers. Regional brands didn't had a chance fighting the deep pockets.

The lesson for the challenger brand is not to fight the big players without credible differentiation. 

Brand Wars : Pepsodent Vs Colgate

The August of 2013 saw the beginning of another war in the toothpaste market. Pepsodent, the challenger brand from HUL directly attacked the market leader Colgate with a high profile comparative advertisement. The ads directly compared  Pepsodent Germicheck with Colgate Strong Teeth with claim that Pepsodent Germicheck is 130% better in fighting germs than Colgate Strong Teeth.

Watch the ad here : Pepsodent vs Colgate

While this is not the first time that Pepsodent has frontally attacked Colgate. 

Pepsodent is a small brand compared to Colgate. According to ET, Pepsodent Germicheck has a market share of 6.4% while Colgate strong teeth has a market share of over 29.4%. For a challenger brand like Pepsodent, fighting the leader directly certainly puts the brand in limelight.

In India, brands do engage in such direct attacks. Law does  allow certain level of comparative advertising provided it does not disparage the other brands. Usually the challenged brands take the matter to either ASCI or to the court. But since these take time to settle, the comparative ads may have achieved its objectives.

Most of the time, the challenger brand uses research evidence to support their claims of superiority. In this case, Pepsodent claims that it has 130% more germ attack power than Colgate. The fine print says that Colgate is indexed to 100 %. So is Pepsodent in a sense puffed up the numbers to make it seem extraordinarily superior to Colgate.

It is interesting to note that Pepsodent Germicheck chose to attack Colgate Strong Teeth rather than Colgate Total. Colgate Strong Teeth is the largest brand in the Colgate portfolio but this brand is not claiming any germ killing attribute. Colgate Total is the brand which claims the germ killing attribute. So rather than fighting the Colgate Total, Pepsodent Germicheck decided to launch the attack on Colgate Strong Teeth.

Direct comparative ads, that too against an established market leader most often works for the challenger brand. It has the shock value and the ensuing marketing war gets the challenger brand eyeballs and media spaces especially in social media. Frontal attack using such tactics has its fair share of risks. The market leader often will react with full might which may destroy the challenger brand. In this case , it is the fight between the titans and if there is a war, both will bleed.  

Parodontax : For people who see blood when they brush

Brand : Parodontax
Company : GSK Consumer Healthcare

Brand Analysis Count : # 521

After the success of Sensodyne, GSK has launched another specialist toothpaste in the Rs 6000 crore Indian toothpaste market. While Sensodyne was a specialist for sensitive teeth, the new launch is in the gum-care category. GSK launched its global niche brand Parodontax recently in the Indian market.

The emergence of the niche products like sensitive , gum-care shows the new phase of the evolution of  Indian toothpaste market. According to ET, Sensodyne which was launched two years back is already a Rs 100 crore brand in India. The niche segments are growing at a faster pace than the core segment and marketers are rushing to cash in on this evolution.

Parodontax is a gum-care specialist. The brand is targeting those who are already suffering from bleeding gums. According to newspaper reports, the incidents of gum-related issues is as high as 33% which itself is a huge market waiting to be tapped.
The brand is now promoting awareness about the gum-related issues and advising customers to take bleeding gums seriously. The brand is now running its standard global TVC in the Indian market.

Not to be left behind , the market leader- Colgate has already launched its Pro-gum variant -Colgate Total Pro-gum health . The leader was quick to spot the threat of this GSK to its stronghold in the Indian market. Sensodyn has infact created a dent in the market position of Colgate. Pepsodent also has Pepsodent Sensitive and Pepsodent -G for the sensitive and gum-care segment respectively. Bu the share of noise of Pepsodent is abysmally low in these segments and I feel that Pepsodent has lost out in the race atleast for now.
Alries and Jack Trout had argued that line-extensions tend to be less effective when fighting specialist brands. Here the market leaders are fighting the specialist brands using variants. It remains to be seen how effective these defense would be .