Singapore: Colgate Smile Whitening Care Business Strategy Executive Summary
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1 Singapore: Colgate Smile Whitening Care Business Strategy Executive Summary I. Singapore a. Highly developed, sophisticated and growing market b. Per Capita GDP of $62,100, an increase of 13% over previous year. c. Business-friendly; low corruption, low taxes, no tariffs on consumer goods d. But small; population only around 5 million inhabitants II. Market a. Colgate possesses incredibly strong brand image; 2nd favorite brand amongst Singaporeans b. Strong competition for oral care; Singapore is a world-leading recipient of FDI. i.procter and Gamble, Church and Dwight, Clorox Company competitors. c. However, not a developed market in teeth-whitening systems; opportunity d. Increasing spending on cosmetics and hygiene, and new retail space built; economic improvement and high growth means discretionary spending rising. e. Target market of young professionals (between 18-44), earning between S$63,000 and S$120,000 per year. III. Entry Strategy a. Colgate already possesses a market presence in Singapore; the headquarters of Colgate Singapore are located there. b. Thus no need to pursue a Greenfield FDI strategy; this has already been done. c. Our strategy is to use Colgate s existing resources to pursue a Global Standardization strategy in Singapore i.keep products similar throughout developed Asian markets, using Singapore as base. ii.singapore is very small, so tailoring our product specifically for this market would not be practical; instead create an economy of scale by producing for a greater Asian market. iii.try to keep costs low because of pressures from competition. iv.produce in Malaysia, which has larger labor force with cheaper wages than Singapore, and an agreement with Singapore to avoid double taxation. 1. Colgate already possesses production facilities in Malaysia. IV. Implementation Plan a. Highlight cosmetic benefits of product to well-to-do young professionals b. Our product, Colgate Smile, is a teeth-whitening system that consists of trays and gel that are worn in the mouth several times a week. c. Priced around S$60 (~$45 USD), which is similar to what such a product costs in the United States, so on par with future competition. d. Marketing Mix heavy on technology; Singapore is a very high-tech society with almost universal internet penetration; 75% of the population use Facebook.
2 i.thus heavy Facebook promotion; viral marketing, fanpages, tailored advertising e. Strategy of continuing to work in cooperation with dentists who recommend the product; capitalizing on Colgate s strength as the world s #1 dentistrecommended brand. f. Place targeted ads in airports and luxury shopping centers, where our core customer base will be located. i.also on public transportation; half of Singaporeans take public transport daily. g. Expect to break-even within 2-3 years i. Price = S$60 (assume 40% markup) ii. Cost thus S$36 per unit iii. Profit = S$24/unit iv. Market size of 1m, if 30% buy the product, revenues of S$ 7.2m/year in Singapore. v. Total costs of S$10.8m in first year, less every year after that due to improved marginal revenue
3 SINGAPORE COLGATE SMILE
4 PRODUCT Colgate Smile Whitening system of gel and trays Whitens teeth by up to 8 shades within 3 weeks Applied 4 times a week for half an hour Includes three weeks worth of gel Price: ~$60 SGD (~$45 USD)
5 COUNTRY INFORMATION Population: 4,740,737 Growth Rate: 0.817% GDP per Capita: $62,100 Increased 13.3% from last year Ranked 5 th in the world Exchange Rate: 1 USD = SGD Exports: $358.4 billion 14 th largest exporter in the world Imports: $310.4 billion 15 th largest importer in the world
6 COUNTRY INFORMATION Free Market Economy 99% of goods duty-free Open and Corruption-Free Environment Stable Prices Inflation = 2.8% Singapore attracts major investments in pharmaceuticals and medical technology production
7 MARKET ANALYSIS Colgate is second-most favorite brand amongst Singaporeans, after Google. Retail sales benefiting from rapid growth 6.9% in 2010 Many thousands of square feet of new retail property opened in 2012 Emphasis on luxury retail 58.6% increase in spending on recreation and culture Sell in specialized person good retailers Specialized personal goods retailers made $9.4 billion in sales last year Competitors: Oral B and Crest by P&G
8 MARKET ANALYSIS Singaporeans are increasingly health-conscious Spending on health related activities rose 7.9% in 2010 The World Health Organization ranks Singapore s healthcare system as 6 th overall in the world Offering some of the most advanced dental care in Asia Increased focus on cosmetic dentistry Ranked most globalized nation in 2006 The Economist Intelligence Unit in its Quality-of-Life Index ranks Singapore as having the best quality of life in Asia and eleventh overall in the world
9 MARKET ANALYSIS Young affluent consumers are most likely to try teeth whitening products: market, with those earning between $50k and $99.9k Therefore, our target market will be Young professionals years of age Income between ~SGD 63k and SGD 120k Total Market Size= ~1 million consumers
10 Strength Exceptional company leadership and reputation Specific stable customers High brand recognition 80% use Colgate Opportunity High growth potential Low competition Initial company penetrating market Room for added pricing Corner the market as niche marketer New market expansion Weakness Lacks initial niche establishment Price-setter Mainly focused on adults Threats Leveraged competitors P&G Adverse reaction fro customers Small market size SWOT
11 ENTRY STRATEGY Global standardization Strategy Provide same expected Colgate experience Advantage with current brand recognition Keep prices low Capitalize on economies of scale Singapore has less demand for local responsiveness because of educated, modern population Opportunity to add value with differentiation
12 ENTRY STRATEGY Colgate already has a fully-owned subsidiary in Singapore Thus no need to do a licensing/franchisee/m&a strategy Colgate Singapore handles marketing and sale of Colgate products Thus use Colgate s already-invested resources to market and distribute Colgate Smile Import inputs from Colgate Malaysia Effective strategy already being pursued, as evidenced by brand penetration
13 ENTRY STRATEGY Singapore is a small market, difficult to make profit? Combine with activities in similar markets to get economies of scale Hong Kong, Shanghai, Beijing, Taipei, Kuala Lumpur All advanced, developed cities with similar markets Set up headquarters in Singapore to expand throughout Asia Singapore ideal because of friendly business climate Take advantage of standardized product throughout these markets, tailor to local preferences only slightly
14 IMPLEMENTATION PLAN Technology-focused advertising campaign 74.8% of the population uses Facebook Facebook Viral Marketing Facebook Advertising Facebook Video LCD screens in retail locations Explain benefits of the product with in-store commercials Human resources Strategy: Train existing employees
15 IMPLEMENTATION PLAN Dentist recommendations no. 1 reputation with dentists world wide. Advertising at Singapore Changi Airport Advertising on public transportation vehicles such as busses, rails, and taxis Advertising Budget:
16 IMPLEMENTATION PLAN Place: Sell at Health and beauty retail stores Guardian and Watson: Upscale places that will appeal to target customers Break even point: likely in 2-3 years (similar amount of time to most ventures in Singapore) Break even when fixed costs match revenue from salevariable cost Price = S$60 (assume 40% markup) Cost thus S$36 per unit Profit = S$24/unit Market size of 1m, if 30% buy the product, revenues of S$ 7.2m/ year in Singapore. Total costs of S$10.8m in first year, less every year after that due to improved marginal revenue
17 CITATIONS All information from: CIA World Factbook Mintel Business Research Group story.html %2FSingapore-CUSTOMS-AND- DUTIES.html&sa=D&sntz=1&usg=AFQjCNHGh3GcaW0dIfcgEKYeOoPSv-7jTw display/id=545347/display/id=583491#hit1 %2Fpdfviewer%2Fpdfviewer%3Fvid%3D9%26hid%3D111%26sid%3De335fef0-93ef-47cc-8f8eead228fe67ae%2540sessionmgr114&sa=D&sntz=1&usg=AFQjCNFtleUb6qYcsgmj0PqU4vLfOBB_jA
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