Arctic Power

Executive Summary:

Colgate-Palmolive Canada was subsidiary of Colgate-Palmolive, a large multinational with divisions in 58 countries. The Canadian subsidiary sales exceeded $250 million every year. It manufactures a range of household, health and personal care products. Among CPC various brands Arctic power and fab are laundry detergents. Product managers are assigned responsibility for specific brands, like Arctic power. Their overall goal was to increase profitability and sales. CPC now moved to regional brand strategy. For example Arctic power have strong market share in Quebec and the Maritimes. Where proportion of consumer using cold water to wash clothes where higher than national average. By the end of 1985, Arctic power market share had increased in both Quebec and Maritimes. With the increase in profitability and sales it was decided to go for British Colombia and Alberta.

Market Overview:

Trends Overview:

o The detergent market was mature, with unit sales increase by app 1 percent annually and dollar sales by 5 percent.

o Three large consumer packaged goods companies where there in market Procter and Gamble, Lever detergents and CPC.

o Procter and Gamble Canada have sales exceeding $1 billion and have major brands like Crest, Ivory and zest, Secret e.t.c. It has 44 percent market share and major product Tide.

o Lever detergents with annual sales of $400 million having major brand like Close-up, dove and Lux. It has market share of 24 percent.

o CPC was only one of these to make market share in detergent market and have total share of 23 percent.

o By looking at exhibit 1 it can be easily examined that there is continuous increasing trend of market share of CPC while it is decreased for other two competitors.

o By looking at exhibit 3 we can conclude separately the positive and negative trends of usage of Arctic power by households. It has positive trend in every region rather than B.C.

Market Segmentation:

o Arctic power is basically detergent which wash clothes in cold water. As cold water usage is growing in Canada market share also increasing.

o So, segmentation is done on basis of cold water usage by increasing perception of consumers by identifying defects and problems faced by household while washing with hot water.

o By looking at exhibit 4 we can understand benefits which Arctic power is providing in term of different attributes.

Target Market:

o Basic target market for Arctic power is people who wash with cold water.

o It is already described that Arctic power had done well in Quebec and Maritimes and now it was decided to go for British Colombia and Alberta.

Competitive Review:

There is intense competition in the market as all three firms are highly talented and experienced and they compete in low growth segment so in such case the gain in sales could be achieved by taking share from competitor's brand. This was actually done by CPC as showed by exhibit 1.

Product Type of Competitor *Market Share- % Price/liter Rs. Placement Ingredients

Arctic power

Direct

6.5

0.97 Quebec ,Maritimes

British Colombia

Alberta. Active ingredients

Tide Direct 34.1 0.97 Nationwide Active

Sunlight Direct 13.4 N/A Nationwide Moderate

Problem Definition:

Linda Barton and Gary Parsons face two problems:-

They must determine whether to continue developing the brand in their already strong regional markets of Quebec, the Maritimes and British Colombia or go national with marketing efforts.

They must decide whether to use a single positioning strategy (as was successfully implemented in Quebec) or continue to use a dual positioning strategy.

Product and Business Review:

Colgate-Palmolive Canada is a wholly owned subsidiary of the multinational corporation Colgate Palmolive.

In 1986 Colgate-Palmolive had worldwide sales of $4.9 billion with profits of $178 million, with Colgate-Palmolive Canada having sales of $250 million.

Colgate-Palmolive Canada (CPC) has a wide variety of household and personal care products. Among the most popular CPC brands are ABC, Arctic Power, and Fab laundry detergents, Palmolive dish soap, Ajax and Irish Spring body soaps, Ultra Brite and Colgate toothpaste, and Baggies storage bags.

The Canadian laundry detergent market is very mature and competitive.

Arctic power is one of Colgate Palmolive Canada's leading laundry detergents.

Arctic Power is specially formulated for washing in cold water.

The detergent has risen in market share from 4% in 1981 to 6.5% in 1986.

When it comes to laundry detergents, Canadians primarily think of one name, Tide. Procter and Gamble's Tide detergent has captured over one-third of the market.

While Tide and Arctic Power are equivalent brands in terms of cleaning power, Tide outsold Arctic Power by a 5 to 1 ratio in 1986.

Costs and profit structures for leading detergent brands were similar.

Arctic Power holds a strong share of the market in three regions: Quebec

(17.5%), Maritimes (6.3%) and British Columbia (5.5%). These three regions comprise 44% of the total volume of detergent sales for the country.

SWOT Analysis:

Strengths:

Arctic power is a superior detergent for cold water cleaning.

Arctic Power has enjoyed a market share increase from 4% to 6.5% so it has a firm, growing market share.

The product is supported by a strong and renowned company background. Arctic Power has the skill and resources of an international conglomerate