Clogard Strategic Marketing Plan for12018

1. Situation Analysis.

1.1. Hemas Holdings PLC.

a) History and background of Hemas Holdings PLC.

Founded by Mr. Sheikh Esufally in 1948, Hemas Holdings PLC is one of Sri Lanka’s
largest diversified businesses. Today it is a public listed company with over 2000
employees, with a focus on FMCG, Healthcare, Transportation, Leisure and Strategic
investment sectors.
“To passionately deliver outstanding products and services thus enriching the lives of
customer and creating superior value to shareholders” is the motto of Hemas.
The largest sector within Hemas Holdings is FMCG and it includes household brands
like Clogard, Baby-Cheramy, Diva and Kumarika. Clogard is the second largest brand
within Hemas FMCG and was launched in 1992, it was the first toothpaste brand to get
SLS certification and now also has SLDA endorsement. Clogard provide a total oral care
solution for the whole family with Toothpaste, Toothbrush and Mouthwash.
Clogard has been in market for 25 year and is the second largest oral care brand in Sri
Lanka. It is at the maturity stage of the product life cycle.

Product life cycle stage.

Sales/Revenue
Introduction Growth Maturity Decline

Time

Clogard USP is the double action of clove oil and fluoride.

b/c) Clogard sales, revenue and its growth.

Clogard sales has been continuously growing in the last years, 2015/16 financial year
Clogard achieved a sales volume of 1,820 metric tons and a sales value of 1,721Mn.
rupees, Last five year sales volumes and values are as follows,
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Clogard 11/12 12/13 13/14 14/15 15/16

Toothpaste

Volume (tons) 1, 1, 1, 1, 1,
581 645 625 733 820

Value Rs. (Mn) 1, 1, 1, 1, 1,

159 378 442 613 721

Clogard volume and value growth.

2,000 1,820
1,800 1,733 1,721
1,581 1,645 1,625 1,613
1,600
1,378 1,442
1,400
1,159
1,200
1,000
800
600
400
200
-
Volume (tons) Value Rs. (Mn)
11/12 12/13 13/14 14/15 15/16

Source: Hemas Holdings PLC.

d) Market share.
Clogard is the second largest toothpaste
8%
brand in Sri Lanka with a market share of
17% 30%, market leader Signal has a market
45%
share of 45% and the third player is
Sudantha with a market share of 17%,
30% together these three brands control 92% of
the toothpaste market.
Signal Clogard Sudantha

e) Distribution system.
Clogard uses intensive distribution strategy and has island wide coverage, from high
end supermarkets to village corner shops with,
 150 distributors.
 Clogard Strategic Marketing Plan for32018

 130,000 outlets.

f) Pricing method.
Clogard is using the competitor parity price strategy and set its prices equally or
slightly less than market leader Signal.

g) Last two year promotional activities.

 Continues advertising (TV, Radio, Print, In-store and Outdoor) campaigns using
three generations (grandmother, mother and grandson) creating the image of long
history of the brand.
 Consumer promotions (price discounts, free gifts ex: toothbrush with toothpaste
pack, “brush, pledge, win” campaign giving prizes)
 Events and activations (school and public dental camps, town storming, activation
truck team activities)
 Digital activations, FB page contests offering movie tickets.
 Personal selling (promotions for Dentists and free samples and merchandise like
pen, mug for them)
 PR & Publicity (TV, radio and print articles about dental camps, town storming,
activations and CSR projects)

h) Positioning and brand strategy.

Clogard is positioned as a moderately priced toothpaste with moderate perceivable
benefits just as Signal. But Clogard has differentiated itself with the USP of clove oil and
fluoride double action.
Clogard brand strategy is to present a value for money, traditional, wholesome product
but in a modern updated context. Something like “fjouy;a;hdf.a fodia;r mq;d”
 Clogard Strategic Marketing Plan for42018

1.2. Identifying Clogard Customer.

a) Clogard target customer characteristics.

Clogard target customers are both males and females living in urban, rural and estates
belonging to SEC – A, B, C and D.

b) What do they buy?

They want a high quality, local, and herbal based toothpaste.
c) Why do they buy Clogard?
Because Clogard offer quality and value for money.

d) When do they buy Clogard?

In todays market, toothpaste is an essential product, so there are no special situations
or movements for purchase.

e) How do they buy?

As Clogard is available all island from supermarkets to corner shops, customers can by
at any time or place.

f) Buying decision process.

The cost/benefit analyzing the customers do in presence of multiple choices, leading
the customers through,

Ending in a market share growth for Clogard.

 Clogard Strategic Marketing Plan for52018

1.3. PESTEEL Analysis.

The macro environment is made up by PESTEL factors, these are major influences that
affect not only Clogard but the market as a whole. These are harder to influence or
control, and they are as follows,

Political factors.
 CES and VAT increase drives up raw material import costs.
 Falling rupee value increase raw material import costs.

Economic factors.
 Consumer low spending power due to high inflation.
 High interest rates due to high inflation.

Socio cultural factors.

 All Clogard marketing campaigns are designed to be in line with family oriented
local social and cultural values.
 Customers are more aware about market trends and therefore, Clogard caters to
each market segment keeping in mind the current trend is towards fashionable, hip
society, reflecting the youth and their needs/wants.
 Local herbal based product, has increased appeal due to organic and health
conscious life style trend.

Technological factors.
 High-tech manufacturing, packing and labeling facilities.
 Using the latest technology reduce costs and increase product quality, increasing
profit margins.
 Research and development department of Hemas is committed to improve oral
health through the advanced leading-edge technologies.

Ecological factors.
 Strict environmental regulations are followed in every step from manufacturing to
delivery.

Ethical factors.
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 Clogard used part of profit for “mula denagena mula rakagamu” as social ethics
CSR.
 Clogard always respect social norms and values of all ethnicities of the country
when doing add campaigns.

Legal factors.
 Product quality regulated by the Sri Lanka Dental association, SLS and
Cosmetics, Devices and Drugs Act (CDDA).
 Advertising was regulated by CDDA in the past, but after government changed no
more advertising regulations.
 Labor protection and workers safety laws, EPF and ETF regulations.

1.4. Market Analysis.

a) Industry sales and revenue growth.
The highly competitive oral care market has a 99% penetration level and the total
volume was 6,065 metric tons while value was Rs.5.74Bn in the year of 2015/16. Market
shows low volume growth due to market saturation but shows some value growth due to
high value products like Sensodyne, Signal Pro Sensitive, Close Up and Clogard Gel.

Oral care market, volume and value size.

7,000
1% 3%
3% 2% 5%
6,000 6%
8%
5,000 18%

4,000

3,000 6,065
5,488 5,673 5,802 5,876 5,151 5,467
5,735
4,752
2,000 4,022

1,000

-
Volume (tons) Value Rs. (Mn)
11/12 12/13 13/14 14/15 15/16

Source: LMRB household panel - market value 2015/16

b) Market trends.
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 Increased focus on customer experience and personalization, companies have

embraced a customer-centric approach and work to personalize everything.
 Growing power of new media, in a country with 122% mobile penetration with
40% using smart phones, 29.3% internet penetration and 4.5+ Mn. Facebook
profiles, social media can quickly enhance or damage a brand image.
 Growing spending power of youth, these are addicted to digital screens and hardly
watch TV. Social content, reviews, blogs and videos on Facebook and Instagram
are the way to engage them with brands.
 Growing elderly population, these people will need special benefit toothpastes.

c) Opportunities and threats for Clogard.

Opportunities.
 High brand image and local heritage of Clogard.
 Large distribution network covering whole country.
 High-tech manufacturing facilities, SLS and SLDA certification.
 Growing new media, become more interactive in social platforms.
 Growing spending power of youth, opportunity for special benefit “whitening”
toothpastes.
 Growing elderly population, opportunity for “sensitive” and “gum benefit”
toothpastes.
 Growing mouthwash market.
 International market expansion.

Threats.
 High competition and the market is saturated at 99% penetration.
 Signal introducing mint flavored toothpaste.
 Increasing availability of international brands like Colgate.
 Unstable political situation, changes in tax rate and exchange rate increasing
imported raw material costs.
 Frequent brand switching by consumers to break monotony. (estimated to be 50%)
 Resent fundamentalist demands for boycotting companies of other ethnic groups.
 Adverse social media campaigns.
1.5. Competitor Analysis.
a) Primary competitors.
 Clogard Strategic Marketing Plan for82018

Signal Regular and Sudantha toothpastes are the primary competitors of Clogard
toothpaste.

b) Secondary competitors.
Supiriviki, Signal Herbal, T&G, Close Up, Colgate and Sensodyne are secondary
competitors.

c) Possible new competitors.

Signal’s new “Mint flavored toothpaste”

d) Competitor Background.

Signal buy Unilever Sudantha by Link Natural

Company profile
Unilever is a multinational company, Link Natural is a local company
operating in Sri Lanka since 1982. established in 1982 offering herbal
Offering foods, beverages, home care health care, Ayurvedic pharmaceuticals
and personal care products. Currently and personal care products. Currently
operating worldwide. exporting products to 30 countries.
Competitor products
 Signal Strong teeth.  Sudantha toothpaste.
 Signal Herbal.
 Signal Whitening.
 Signal Mint flavor.
Unique selling propositions
 Scientific expert. (Calcium + Fluoride)  Ayurvedic expert.
Product life cycle stage
 Maturity stage.  Maturity stage.
Market Share (2015/16)
45% 17%

Distribution

 Intensive distribution strategy, available  Intensive distribution strategy, available

island wide. island wide.
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Pricing
 Competitor parity : Against Clogard.  High pricing higher perceived benefits.
Last two year promotional activities
 Signal Sina Boo Wewa School Dental  Sudantha School Dental Clinics.
Clinic Activations  Trader drives and incentives and trader
 Heavy media spends on ATL conferences.
promoting new Signal Mint flavor.  Testimonial ATL advertising.
 High level of branded offers and
consumer promotions.
Positioning
 Signal is positioned as the leader  Sudantha is positioned as the local
established in the market for years and traditional and old brand who is
has scientific expertise in the oral care. specialized in an Ayurvedic offering.
Branding
 Signal brand strategy is to project a  Sudantha brand strategy is to project a
value for money, scientific product. traditional, wholesome product at a
 A protection image. high price reflecting its therapeutic
value.
 Ayurvedic heritage image.
Mind share – the first brand customers would think of in the relevant industry,
association or brand recall, mostly influenced by brand promotions.
Hart share – the first brand customers would prefer to buy over other brands in the
relevant category, mostly influenced by personal experience.
Market share shows the combined effect of Mind share + Hart share.
 Signal having a 45% market share, it  Sudantha having a 17% market share, it
can be assumed Signal has a higher can be assumed Sudantha has a lower
Mind and Hart share than Clogard. Mind and Hart share than Clogard.
Technological leadership
 Latest international high-tech in  Up to date technology.
manufacturing.  Research and development to enhance
 Ongoing research and development. product quality.
SWOT Analysis.
Analyzing the internal strengths and weaknesses, and the external opportunities and
threats Clogard may face in the current market will help the company to focus on the
 Clogard Strategic Marketing Plan for10
2018

strengths, minimize threats and weaknesses, and take the best advantage of opportunities
presented.

Strengths Weaknesses
High brand image and local heritage. Compared to Signal, not many variety for
Large distribution network covering whole customers to choose from.
country. Tax and exchange rate resulting in high
Second largest brand with market share of prices.
30%. Frequent brand switching by consumers to
High-tech manufacturing facilities, SLS break monotony. (Estimated to be 50%)
and SLDA certification.
Highly skilled employees.
Performance based company culture.
Strong financial stability of the company.

Opportunities Threats
Growing new media, more interactive High competition and saturated market at
social platforms. 99% penetration.
Growing spending power of youth, Signal introducing mint flavored
opportunity for special benefit toothpaste.
“whitening” toothpastes. Increasing availability of other
Growing elderly population, opportunity international brands like Colgate.
for “sensitive” and “gum benefit” Unstable political situation, changes in tax
toothpastes. rate and exchange rate increasing
Growing mouthwash market. imported raw material costs.
International market expansion. Resent fundamentalist demands for
boycotting companies of other ethnic
groups.
Adverse social media campaigns.