)
Actor Madhuri Dixit has been putting her best smile on these days in ads for Oral-B toothpaste. Procter & Gamble (P&G) in the last few months has increased advertising in a bid to improve sales.
But the ride is hardly turning out to be smooth. Market leader Colgate-Palmolive in the last seven months since Oral-B's launch has mounted a counter offensive by blocking retail space as well as challenging Oral-B's advertising.
For now, the world's largest consumer goods company is yet to make a dent in the Rs 6,000-crore toothpaste market in India. In contrast, arch rival Colgate is adding share every quarter. The company said, "We have further enhanced our leadership position by registering a 56 per cent volume market share for January-December 2013 versus 54.5 per cent in Jan-Dec 2012. Colgate Dental Cream, Active Salt, Max Fresh, Colgate Total and the recently launched Visible White have contributed to this growth."
Oral-B toothpaste, say sector analysts, has a market share of about 1-1.2 per cent since its July launch. In a recent communique, P&G said, "The response to Oral-B toothpaste has been encouraging. We are confident of meeting our targets and delivering results in line with expectations." The company did not specify market share numbers.
The oral care business including brushes and toothpastes are part of P&G's subsidiary, Gillette. For the December 2013 quarter, oral care contributed nearly a quarter of Gillette's revenues of Rs 427 crore, but this say analysts was largely led by brushes than toothpastes. Oral-B is a strong number two in the brushing segment, with an estimated market share of 28 per cent. Colgate has a volume market share of 41.5 per cent in the Rs 1,000-crore brushing category. Like toothpastes, Colgate has upped the ante in toothbrushes too with launches such as SlimSoft in recent months. But P&G has withstood this pressure, holding its ground against the onslaught of Colgate. In toothpastes that hasn't been the case.
No product differentiation
Abneesh Roy, associate director, institutional equities, Edelweiss, says that the lukewarm response to Oral-B toothpaste is partly because the product hardly stands out in the clutter. "The oral care market is evolving where consumers are beginning to appreciate products that target specific needs as opposed to a product that attempts to target multiple problems. In my view, it is the lack of a strong product differentiator that has not quite helped Oral-B make a mark in the marketplace."
Oral-B advertising for its Pro-Health toothpaste, the highest priced of the three variants launched by the company, speaks of protection against eight common dental problems such as tooth decay, sensitivity, bad breath, plaque etc. The advertising claims that the toothpaste, which is priced at Rs 98 for a 140-gram tube and Rs 59 for a 75-gram pack, gives all-round protection to consumers and their families.
At a time, when rivals such as GSK and Colgate are targeting specific dental problems such as sensitivity (Sensodyne, Colgate Pro Relief), bleeding gums (Parodontax from GSK) and whitening (Visibly White from Colgate) with niche products, experts say that a multi-benefit paste can be limited in its appeal. "The danger is that the consumer may perceive a multi-benefit paste as being merely cosmetic since a single product cannot target all problems," says Nitin Mathur, analyst, retail and consumer, Espirito Santo Securities.
But P&G says that Oral-B Pro-Health has a patented ingredient, stabilised stannous-fluoride complex, which helps in providing all-round mouth protection. Most toothpastes contain sodium fluoride for dental or mouth protection. Experts say that breaking habits may take time, which is partly why consumers have not taken to Oral-B toothpaste just yet.
Supply issues
P&G has been struggling with supplies of Oral-B toothpaste having to rely on costly imports following a fallout with contract manufacturer JHS Svendgaard. The latter dragged P&G to the Competition Commission of India last year when the consumer goods company did not renew an agreement with the contract manufacturer to make detergent brand Tide. An FIR has also been filed in Himachal Pradesh by JHS against 19 P&G officials. The latter declined comment on the matter saying it was sub-judice and under arbitration.
But supply issues coupled with Colgate's efforts to block Oral-B's presence on retail shelves both in modern and traditional trade has meant that visibility of the brand has been poor in key cities such as Mumbai and Delhi, where the brand has been rolled out as part of its phased launch.
The first part of the launch involved taking Oral-B to the metros before gradually taking it to mini-metros and other cities. P&G is expected to fix its supply issues in the near to medium term, targeting domestic production of the brand to bring down costs.
The company is setting up a multi-product manufacturing unit in Hyderabad, the first phase of which will go on-stream this April. The plant, one of P&G's biggest in Asia, will manufacture products in fabric and home care, oral care, and baby care, among others.
