New York City and Palmolive Naturals free essay sample

Created in 1806 by William Colgate, Colgate-Palmolive Company is an American multinational consumer products company dedicated to the production, distribution and provision of household, health care and personal products, such as shampoos, and oral hygiene products. Economic Standing in 2011 , according to Ian Cook, Chairman, President and Chief Executive Officer of this company, the Companys 2011 global business net sales grew 7. 5 percent and global unit volume from continuing businesses grew 4. 0 percent. The company achieved its profit goals, with diluted earnings per share increasing 4%, and despite continuing increases in material costs, an intense competitive environment and volatile macroeconomic conditions worldwide they were able to remain stable (â€Å"Message from the CEO†). Colgate-Palmolive has been a leading brand in the dental care and household industry for many years. Colgate-Palmolive is currently reporting that their 3rd quarter profits have increased 1. 7 percent. Not to mention that the company’s stock has risen 15 percent from the start of 2012. The company is making a dramatic change; Colgate’s current financial situation is very stable. We will write a custom essay sample on New York City and Palmolive Naturals or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page They have been increasing their net sales every year from 2008 to 2012; they have gone from $15. 33 billion in 2008 to $17. 1 billion in 2012. Colgate had a 58. 4% gross profit margin in the fourth quarter of 2012. Colgate is constantly trying to find new ways to increase the sustainability profile of their products. Colgate- Palmolive stresses the idea of meeting customers’ expectations as their needs change. Colgate also has a strong commitment to safety and quality. Taxes- sales tax on purchase of supplies, employee taxes, and income taxes also represent part of their major fixed costs. During 2013- Colgate had a one-time after tax due to the re-measurement of balance sheet of Venezuela as a result of currency devaluation. This obviously contributed to the increase in fixed expenses reported on their latest financial report. COLGATE-PALMOLIVE COMPANY IN THE PHILIPPINES Arthur Brent, as the leader, started operating Palmolive Company in Baracca Street, Binondo, Manila in 1926. Only five people began selling imported products from the United States. The products sold during early days were Octagon Laundry Powder, Crystal White Laundry Bar and Pompeia cosmetics. In 1928, after the slow start, new vigor was added to the Palmolive Peet Company through another merger this time with Colgate Company, Colgate Ribbon Dental Cream and Cashmere Bouquet toiletries were added to the product range. The previous merging and adding Palmolive soap to their product increased the sales during the period of 1928-1930. In 1935, William M. Pearce succeeded W. T. Schraeder as manager of the Colgate-Palmolive Peet Company. In 1942, J. C. Rebaza, foreign sales and advertising manager of the parent company, visited Manila to conduct an extensive study of the Philippine market and distribution techniques. As a result of this visit, a decision was taken to introduce the direct selling system throughout the islands. When Japanese soldiers, during their occupation, sealed Binondo office and looted the nearby company warehouse on Dasmarinas Street, company operations were brought to a half. The officer in charged of the company, James Carpenter, was taken as a prisoner and upon his instruction, some of the employees managed to risk their lives to preserved the company records. War left the company in ruin and in economic depression as well as the country. In 1946, Colgate-Palmolive Peet Company resumed operations as Carpenter reestablished it after his release in 1945 in key areas such as Manila and the nearby provinces resulting a sales of 2 Million for the year. As fast growing demand for Colgate-Palmolive products, the company organized with a capitalization of 1. 5 Million and constructed modern manufacturing complex in Intramuros and Makati and all the products quickly became a great success. After the companys boost in the previous years, they had achieved the key objective of surpassing sales of P100 Million. This achievement was coupled with the second expansion-the Constitution of an additional 22,000 square feet of warehouse and modernized facilities. As each year went by, the company surpassed the expected sales and made them one of the five subsidiaries in the entire Colgate World with the most outstanding performance and won the prestigious Presidential Award. To date, Colgate-Palmolive Philippines, Inc. holds leadership position in the market. It continues to find new ways to innovate in production, marketing and sales as well as in being the best place to work. (www. ColgatePalmolive. com) 2. MISSION AND VISSION STATEMENTS VISSION STATEMENT As we plan our strategies to sustain growth for the years to come, our core values of Caring, Global Teamwork and Continuous Improvement will continue to drive our future initiatives. † (http://www. makingafortune. biz/list-of-companies-c/colgate-palmolive. htm) Caring The Company cares about people: Colgate people, customers, shareholders and business partners. Colgate is committed to act with compassion, integrity, honesty and high ethics in all situations, to listen with respect to others and to value differences. The Company is also committed to protect the global environment, to enhance the communities where Colgate people live and work, and to be compliant with government laws and regulations. Global Teamwork All Colgate people are part of a global team, committed to working together across countries and throughout the world. Only by sharing ideas, technologies and talents can the Company achieve and sustain profitable growth. Continuous Improvement Colgate is committed to getting better every day in all it does, as individuals and as teams. By better understanding consumers and customers expectations and continuously working to innovate and improve products, services and processes, Colgate will become the best. MSSION STATEMENT: As a Company that strives to be the best truly global consumer products company, we are committed to doing business with integrity and respect for all people and for the world around us. (http://www. makingafortune. biz/list-of-companies-c/colgate-palmolive. htm ) 3. CORPORATE OBJECTIVES Having a broad target and goal, the company would be laying out different objectives including: †¢ Increase in market share †¢ Increase market coverage †¢ Maintain marketing lead †¢ Instill brand loyalty †¢ Influence consumer behavior regarding shampoo consumption †¢ Increase satisfaction ratings †¢ Counter possible competitor’s attack strategies. In connection with the enumerated objectives and goals the company is also concerns in: * Engaging To Build Strong Brands: Engaging with consumers is at the heart of Colgates focused global strategy, which drives the Companys strong performance and market share gains worldwide. Stronger consumer engagement begins with better insights. We are obtaining deeper and more meaningful consumer insights and using them to strengthen product development, packaging and the communications we deliver through our integrated marketing campaigns. * Engaging to Build Our Brands with the Profession: Colgate is driving engagement and building our leadership with professionals to strengthen their endorsement of brands. This, in turn, builds market share and brand loyalty. * Engaging to Build Our Brands with Our Customers: Across retail environments, whether small rural stores or large global chains, Colgate is working closely with its retail partners to share expertise and provide shoppers with the best value and service. Colgate is engaging its customers worldwide by sharing unique shopper insights, providing innovative in-store marketing communications and merchandising techniques, and developing and executing joint business planning initiatives. * Innovation for Growth: At Colgate, developing innovative new products is a key driver of profitable growth. Colgates consumer innovation centers, in strategic locations throughout the world, are focused on developing insight-driven innovation that provides value-added new products across all price points. * Effectiveness and Efficiency: Integral to Colgates global strategy is the ability to generate funds to invest in business growth. Through both established efficiency programs applied to all aspects of our business and ongoing identification of new ways to find savings, the Company constantly strives to improve its organizational capabilities and speed, while reducing costs. Programs are wide-ranging and include many small initiatives amounting to millions in savings that fund new product development and marketing activities, as well as helping to deliver strong profitability. * Leading to Win: At Colgate, we have long believed that our values-based culture forms a strong foundation for good governance which leads to good results. Employees at all levels learn to take personal responsibility for being leaders, and they commit to conducting business with the highest integrity, incorporating Colgates values of Caring, Continuous Improvement and Global Teamwork into all business activities. Colgate also demonstrates leadership as a member of the global community. 1. GENERAL ENVIRONMENT ANALYSIS A. POLITICAL LEGAL FACTORS play a vital role for the business prevailing in the country. If the government is inactive then the company advances at a standard rate but the other way round , a drastic fall can be seen. (http://news. morningstar. com/) A number of laws regulating consumer products have a great impact on what type of products Colgate Palmolive is able to distribute, but also legal and regulatory forces serves as a tool to protect their products including shampoo from being stolen or imitated. Because Colgate Palmolive is a multinational corporation operating in more than 200 countries, the manufacturing, packaging, labeling, distribution, advertising and sale of shampoo products are subject to extensive regulation which could have negative effects on the success of the company. For example, there are several products that may contain ingredients considered hazard for human consumption, a new regulation prohibiting the use of a specific substances or ingredients that will affect the distribution of a particular product containing such components. This could also lead to negative reaction from consumers of Colgate Palmolive products. Consequently, Colgate Palmolive must meet requirements for labeling shampoo products accordingly with governmental regulations for each of the countries they operate in. Political forces are very important to a company like Colgate-Palmolive, especially when doing business internationally; it may constitute a disadvantage when trying to engage in international trade and dealing with other countries’ regulations and laws. If Colgate is linked to people getting sick by using their products, one can guarantee that government officials are going to intervene. Consequently, political forces of the marketing environment have a great potential to influence marketing decisions and strategies. B. ECONOMIC ENVIRONMENT FACTORS could directly affect decision making process. If the country experiences inflation then, it will have a negative impact on the running business. (http://news. morningstar. com/) Economic forces are one of the main evaluators of a business because it influences both customers and marketers. A little change in the economy can affect supply and demand, buying power, willingness to spend, and competitive behavior. Colgate-Palmolive company relies strongly on a customer’s buying power and willingness to spend, which will be affected by economic circumstances. C. SOCIO-CULTURAL FORCES are factors to be considered like religious and cultural key values which are relevant for the survival of the product in the industry because people will repel the product that there religion and culture do not prefer. (http://news. morningstar. com/) Understanding sociocultural forces is a prerequisite in order to successfully conducting business, especially in such a competitive market. In Colgate Palmolive this forces greatly influence the marketing mix. Hence, in an international market sociocultural forces have an enormous effect on how marketers design their marketing strategies and approaches to customers. Demographic and Diversity characteristics can lead to changes in how people live and ultimately influence their choices of products, brands, and spending behavior. When launching Ta new product or promoting existing ones, Colgate Palmolive have to take into account each one of them to successfully market its products and decrease its risk margin, population demographic focus on whether the product is gender neutral or not, how will it be promoted, does it appeal more to females or males? , what age group will be more interested in obtaining the product, and ways they can reach this market to let consumers know about the product. D. TECHNOLOGICAL FORCES are factors that on which values cannot be ignore. Technology vary in the passage of time. Techniques and methodologies must be up to date for keeping the product preferable in the market. (http://news. morningstar. com/) Technology can sometimes be a key tool in maintaining competitive advantage. Social media has change the ways we communicate and market our products especially shampoos, making it easier for marketers to introduce new products to consumers and get almost instant feedback on products or ideas marketers introduced or are planning to introduce to consumers. It can also represent a threat when the disclosure of negative information about the product rapidly spread through social media. For a company like Colgate Palmolive technological forces can mean new ways to distribute their product and advertising as well. Maintaining a positive image and consistency in the quality of products can minimize the risks of negative feedback. 2. TASK ENVIRONMENT ANALYSIS A. COMPETITORS. As customer prefer certain brands , switching cost in this industry are low. It does not cost anything for a customer to buy one brand of shampoo instead of another. (http://news. morningstar. com/) â€Å"Keep your friends close, and your enemies closer. † This quote is the perfect definition of describing Competitive forces. Almost every business has a rival, Pepsi vs. Coke, and many others. Colgate is no exception; it has to deal with other companies , which produce substitutes products like Pantene , sunsilk and others. With all these potential competitors Colgate needs to constantly develop new products and new marketing strategies to make their products stand out to the consumers. B. THREAT OF NEW ENTRANTS. Given the amount of capital investment needed to enter certain segments in household consumer products, we suspect the threat of new entrants in fairly low in the industry. (http://news. morningstar. com/) Along with intense rivalry from existing competitors, Colgate-Palmolive Company has to deal with new competitors. Today, the shampoo market is exploded with a dramatic increase in new entrants. These numbers reinforce the seriousness of the threat of new entrants that Colgate-Palmolive will have to contend with when they launch Colgate Palmolive Naturals Shampoo. C. THREAT OF SUBSTITUTE PRODUCTS. With in the consumer products industry ,brands succeed in helping to build a comparative advantage , but even the pricing power of brands can be eroded with substitutes such as store branded private label offerings. (http://news. morningstar. com/) The introduction of the new products and the high competition in advertisement promotions will be a big threat deals with substitute products. Products whose offering discounts would be a big threat in Palmolive naturals Shampoo. Naturally, consumers would prefer those substitute products offers discounts and low prices than products offers none and a high one. D. BARGAINING POWER OF SUPPLIERS. More than likely , consumer products company face some amount of supplier power ,simply because of the cost they incur when switching suppliers. (http://news. morningstar. com/) Colgate Palmolive company depends for its outsource manufacturing for the Palmolive naturals shampoo ingredients. Hence, Palmolive Naturals shampoo has decided supplier advantage in the relationship with the Colgate Palmolive Company. The company needs to maintain a healthy relationship with suppliers to reduce risk of a costly supplier switching process. E. BAGAINING POWER OF CUSTOMERS . Consumer products company face weak. Major consideration that we should take into account were the retailers rather than individuals. (http://news. morningstar. com/) One of the factors which can cause customers bargaining power to grow is when the switching costs for customer are low. Even if Colgate-Palmolive Company were to position Palmolive shampoo as the most expensive shampoo brand on the market, it is still a relatively inexpensive product, compared to many daily purchases . Therefore, buyers can easily switch between shampoo brands without giving the decision much thought. To combat this threat, Colgate-Palmolive could position Palmolive naturals shampoo as a superior shampoo brand that customers can not afford to be without. The Colgate-Palmolive Company culture, company values, the people, the diversity, the way the company respects all their employees, the opportunities to grow, the fairness in decisions, the transparency of doing business, the management that takes care of company performance and financial health to guarantee the business for shareholders and employees, and of course the products are what the company differ from others. 1. CORPORATE STRUCTURE Colgate-Palmolive Company, is a global leader in the area of oral care and personal care. It is a company serving hundreds of millions of consumers worldwide. The small soap and candle business that William Colgate began in New York City early in the 19th century and now for over 200 years, Colgate has focused on driving growth by continuously improving products and processes. History reflects the strength and innovation that Colgate people have used to constantly transform the Company and identify new opportunities. Governance is an ongoing commitment shared by Colgate’s Board of Directors,the management and all Colgate people. At Colgate, good corporate governance believes strongly accompanies and greatly aids long-term business success. This success has been the direct result of Colgates key business strategies, including its focus on core product categories and global brands, people development programs emphasizing pay for performance and the highest business standards. 2. CORPORATE CULTURE The Colgate culture is one that reflects values of caring, global teamwork and continuous improvement, as well as an unwavering commitment to integrity in everything that was done. Building skills and developing Colgate people is critical part of success. Colgate provides all employees worldwide with a series of training programs focused on building leadership skills. Valuing Colgate People, Managing With Respect and Fostering an Inclusive Work Environment are only a few of them. Fostering an Inclusive Work Environment provides a broad awareness of diversity and skills to work with diverse teams and to serve an increasingly diverse customer base. Colgate leaders take responsibility for valuing the contributions of all Colgate people and have the knowledge and skills necessary to transform the work environment into one where all employees can contribute fully to meet the business goals. Colgates success is created by Colgate people who work together as a worldwide team, using their individual strengths to achieve business results. This strong global teamwork requires a company culture in which everyone works well together and truly values one another. The company supports an environment where everyones ideas are shared and respected. Colgate Palmolive Company believes that culture and values afford opportunities for everyone to have an important impact on the building of business. The company is constantly striving toward a more diverse workplace, which benefits the Company and enables them to more successfully meet the needs of consumers around the world. 3. MARKETING Colgate is seen as a market leader and a company that cares. The company is involved in the community and have a non-typical corporate image. Colgate-Palmolive Company are selling internationally for a long time. Financial records show that the company’s net sales are increasing from:15564 (dollars in millions) in 2010 ,16734 (dollars in millions) in 2011, to17085 (dollars in millions) in 2012. Financial summary of the company shows: Net income attributable to Colgate-Palmolive Company and earnings per common share in 2012 include $70 (dollars in millions)of charges related to the 2012 (dollars in millions)Restructuring Program, $18 (dollars in millions)of aftertax costs related to the sale of land in Mexico and $14 of aftertax costs associated with the business realignment and other cost-saving initiatives. To date, Colgate-Palmolive Philippines, Inc. holds leadership position in the market. It continues to find new ways to innovate in production, marketing and sales as well as in being the best place to work. 4. RESEARCH AND DEVELOPMENT Colgate is a very well known Company. In Research and Development the company has the opportunity to create products that at the end will be used by millions of people. The company is concern most on product development and quality of the products produced. One should be responsible in communicating to each other to assists each others work. Research and development is a continuos process. Currently the company is still spending more in this department to assure long term goals and in the process of innovating products to cope up with economic changes and consumer expectations. 5. OPERATIONS AND LOGISTICS Colgate-Palmolive Company was a strong multinational company and has a real commitment in caring its people which is essential to the success of company,s operation. Also the company should value Consumer Marketing, Customer Development/Sales caused they are the primary source of income. Aside from that :Two key factors have played a role: The leadership that the company exhibits and the commitment and passion that has to put into achieving goals and leading change (innovation). 6. HUMAN RESOURCES Colgate company has a strong company values, focus on people development and long reputation as a company with high ethical standards. The company values its people most that s why the company should spent time ensure appropriate payment for performance and recruitment. 7. INFORMATION SYSTEM The company must have an information system especially for its operations internationally. Since Colgate-Palmolive Company is dealing with the local and international market ,it must use the internet for customer orders , marketing and promotions. With the aid of internet and information system ,the company can improve its performance better than usual. Information technology system can increase revenue by online promotion and advertisement. An inventory management system and accounting system could be an aid in inventory maintenance and assist managerial decision making process. STRENGTHS WEAKNESSES OPPORTUNITIES THREATS WOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. (HTTP://en. Wikipedia. org/) THE FOLLOWING ARE THE STRENGTHS , WEAKNESSES , OPPORTUNITIES , AND THREATS FACED BY THE COLGATE-PALMOLIVE COMPANY. 1. STRENGTHS: PALMOLIVE NATURALS is a well-known brand of shampoo produced by Colgate-Palmolive Company. It is the best brand market leader in the Philippines since 1996. COLGATE-PALMOLIVE COMPANY as the worlds leader in personal care sales which includes shampoos, toothbrushes, and toothpaste. It is globally recognized brands that provides a competitive advantage to the company and strengthens its dominant position in the market. The company’s good distribution system and strong relationship with wholesalers and big retailers can be used to create an extensive coverage for the brand. It can influence the way Filipinos see the benefits of using Palmolive Naturals as it claims to contain natural ingredients. Palmolive Naturals is the mass market shampoo of Colgate-Palmolive. It was positioned as a shampoo made from natural ingredients . (a). Palmolive Naturals Shampoo is a well-known brand of shampoo produced by Colgate-Palmolive Company. (b) It was positioned as a shampoo made from natural ingredients. (c)It belongs to a company with strong consumer research group ,that is good in pioneering products (d) The company’s promotion and good distribution system including strong relationship with wholesalers and big retailers can be used to create an extensive coverage for the brand. (e) An imported shampoo brand that offers low prices compared to other competitors. 2. WEAKNESSES Colgate-Palmolive Company Inc. does not have as many internal weaknesses as it does strength. (a)Packaging is capital intensive and can be too costly. (b)Company support for brand presence in the small sari sari stores was weak and some regions in Visayas and Mindanao have poor coverage. (c)Product life cycle for shampoos are becoming shorter due to weak promotional support. (d)Company’s failure to consider other cultures and lifestyles. 3. OPPORTUNITIES Opportunities can be identified in the environment. A high growth rate could project probable consumption in the future. High satisfaction rating would lessen the tendency for trying new brands. This situation can be targeted by quality products which can be satisfied thus creating such loyalty in the product brand. The increasing sales growth for sachets opens a greater market for the shampoo industry which could be targeted and considered through marketing. Opportunities in general environment include: (a)High demand of product consumption in some populated location such as Metro Manila. (b)High satisfaction ratings decrease the tendency to try new brands as a result consumer loyalty ends to increase. (c)Technological advancements which are relevant in management decision making process. (d)Rapid growth of demand in personal health care products including shampoos. (e)Preferences of customers toward Palmolive Naturals Shampoo other than some brands. 4. THREATS Aside from the opportunities that can be identified in the external environment, there are also threats that could have impacts on the company. There is intense competition, which is common in any industry. It could force the product brand to spend on defending and keeping its market lead. This is considered as a serious threat because if the brand is not able to compete, it may lose its current position which is being the market leader in the shampoo industry. Aside from intense competition, there is also a decrease in consumer loyalty. It is a threat because it leads to brand switching, which is very common in the current environment. The areas in which these brands are good are in distribution and therefore its availability, and its lower price relative to Palmolive Naturals. Some of these threats include: (a)Potential competitors exist in shampoo industry including competitors offering cheaper products with packaging advantage. (b)Growing competition from other domestic and international brands including branded and those unbranded ones. (e. g Pantene , Sunsilk) (c)Many fake and expired products are sold by some retailers. (d)Product development of substitute due to technological advancement. (e)Change in economic conditions. (eg. Deflation, inflation) Alternative 1: Intensified marketing and product developments in current markets. Luzon area is a good market in the present and contains much potential in the future. Though its growth rate is relatively slow compared to the national market, opportunities lie on the consumption which is double the national market. Thus, it creates the following advantages and disadvantages. ADVANTAGES: This alternative will enhance products through, 1. ) innovations and additions, 2. ) intensive product promotions, 3. ) creation of new products or new variants of the product 4. ) strengthen product positioning in the market, 5. ) increase in market share is possible, 6. ) consumer loyalty in goods can occur 7. ) market will arise DISADVANTAGES: 1. ) a high competition can drool this down. 2. ) the nature of frontal attacks from major competitors would be hard for the company to take again the lead in shares . 3. ) more costly cause of the marketing efforts. 4. ) intense changes, innovations, product development, packaging, promotions and advertisements will be too costly to the firm since these require technologies which are cost-generator. 5. ) high opportunity cost . Alternative 2: National market expansion and development (outside Metro Manila) and new Palmolive Naturals variant development . The Metro Manila market for shampoo is saturated and the competition within the area is quite intense. With more than hundred brands of shampoo available to the market, the slowing market growth and increase in shampoo consumption, chances for growth in Metro Manila seems to be small. The following are related advantages and disadvantages in this alternative. ADVANTAGES: 1. ) it adopts a mobile defensive strategy and a bypass attack strategy against its competitors. 2. ) gain boosts in market share by expanding the market itself, and by attacking holes in the shares of the competing markets. 3. ) the company will take advantage of the current high market growth rate capture as much of the market as possible. 4. ) could lead Palmolive Naturals to be a cash cow in the long run, in the future being a market leader in a slow growing national market. 5. ) it aims to increase sales and presence nationwide. DISADVANTAGES: 1. ) expansion and market development may be too costly. 2. ) strong relationships with sari-sari stores need to be established and distribution to these other places could be cost intensive. 3. ) cost intensive process would be in increasing consumption of shampoo and influencing their buying behavior. 4. ) the company needs to increase promotion and visibility in the form of commercials and advertisements. 5. ) research development would also need to be generously funded because of proposed new product developments that the department would have to work on. Alternative 3: Shift of Focus to brand. This alternative will shift the focus intensity to Palmolive Naturals brand. Since in the shampoo industry, cannibalism of products can highly occur, this strategy could be a way in further attaining higher market shares in the industry. Upon shifting to more promotions for the Palmolive Naturals better opportunities can be captured. Naturals will be now positioned premium and will be then used to attack other shampoo brands. If given much advertisements Palmolive now can acquire higher market shares. Furthermore, this creates the following advantages and disadvantages. ADVANTAGES: 1. ) could also make the company avoid cannibalism of products. Since it is also becoming too costly for the company to promote Palmolive Naturals. 2. ) investing the fund to its product line could possibly bring more cash inflows . DISADVANTAGES: 1. ) it would be hard for the consumers to have a repositioning change. It would confuse them of what really is which. 2. ) a shift upward in positioning would be harder compared to a shift downward. Alternative 4: Product promotions , positioning and strong consumer research group. This alternative will tackle more of innovations and appearance, and position of the product in the market. Being a market leader before in the area of Metro Manila, and being frontally attacked by Pantene and other brands through same strategies like salon penetration and same variants introduction, Palmolive Naturals in now a market challenger and is eager to capture again the lead in the Metro Manila market. Advantag