Colgate Palmolive's topline grew faster than competitors in the FMCG category showed its recent quarter results. The growth was driven by successful marketing campaigns on various fronts which included launches of new products and re-launching of existing product lines, as indicated by recent quarterly and annual reports.
Oral care launched new product categories in the form of tooth brushes for children and the Plax mouth wash series that marked Colgate Palmolive's entry into mouth wash. Colgate toothpaste retains its position as market leader with its exiting campaign underlining its image as the best available protection against cavities.
Other drivers of growth included the new range of Palmolive shampoos that were launched nationwide. This has improved the brand recall of Palmolive bar soaps as well. Since the launch of the Palmolive shampoos, the soap range has seen double digit growth.
More than half the dish washing market of Pakistan is captured by Colgate Palmolive's Lemon Max brand. To convert bar soap users to liquid soap that has a higher price and hence margin, Colgate Palmolive has introduced a new SKU that offers liquid soap at an economical rate.
Home care is Colgate Palmolive's biggest category which includes fabric care and surface care. In fabric care, the Bonus brand is the market leader for the price conscious category of consumers. Since last year, it has faced competition from new entrants resulting in increased trade and media spends for this category. However, this has not significantly impacted its selling and distribution expenses as a percentage of sales as yet. Brite is Colgate Palmolive's premium brand but continues to lag behind competitors Surf and Ariel.
The company's marketing strategy is two pronged with 360-marketing campaigns paired with trade discounts. As a percentage of sales, trade discounts and S&D costs have remained constant. One of Colgate Palmolive's strengths is its distribution network which allows it to supply in remote areas and compete successfully with unbranded or lower-priced products. The company has not materially changed its marketing mix or invested further in its distribution network recently.
Though the company has been foreseeing an increase in commodity prices since 2016, it has maintained its margins at the current five year high. This seems indicative of the company's ability to pass down commodity price increases to consumers. Nevertheless, the strategy it has in place is to introduce new products in the premium ranges to combat this eventuality.
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