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Colgate was founded in the United States in 1806 and for the first 100 years,

its business focus was only there. However, in the very early 1900’s, the

Company began a very aggressive expansion program that led to the establishment

of Colgate operations throughout the world. Today, Colgate-Palmolive is a $9

billion company, marketing its products in over 200 countries and territories

under such internationally recognized brand names as Colgate, Palmolive, Ajax,

Fab, and Mennen as well as Hill’s Science Diet and Hill’s Prescription Diet.

Colgate Total is considered the greatest evolution in toothpaste since the

introduction of fluoride. This highly effective formula, containing fluoride and

the antimicrobial ingredient, Triclosan, has been demonstrated clinically to

help prevent gingivitis, plaque, cavities and tartar. And, its unique patented

formula, containing the co-polymer, Gantrez, continues to be active between

brushings. It continues to work fighting plaque, gingivitis, tartar and cavities

after you stop brushing, even if you eat or drink. No other toothpaste

manufactured in the US contains Triclosan or has been cleared to make claims for

gingivitis and plaque reduction. Since the announcement of the FDA clearance of

Colgate Total on July 14, 1997, retailers have expressed unprecedented

enthusiasm and interest. Dr. Sigmund S. Socransky, Associate Professor of Oral

Biology, Harvard School of Dental Medicine, and Senior Member of the Staff and

Head, Departments of Microbiology and Periodontology, Forsyth Dental Center,

said, "Colgate Total represents one of the most remarkable oral therapeutic

achievements in the last 20 years." Colgate Total will benefit the oral

health of all users. The most common non-contagious diseases are periodontal

diseases such as gingivitis. In fact, 63% of Americans suffer from gingivitis.

As the only toothpaste with this formula, Colgate Total will help Americans take

greater care of their teeth and gums than ever before and will help younger

people prevent these dental problems. Since Colgate Total was introduced

internationally in 1992, over half a billion tubes have been purchased by

millions of consumers in 103 countries. However, before permitting it to be

marketed in the US, the FDA conducted an extensive review of data in Colgate?s

clinical tests. These included five major studies that supported the safety and

efficacy of the toothpaste. Independent dental associations in 30 countries,

including the American, Canadian and British Dental Associations, have awarded

seals of acceptance to Colgate Total. Colgate Total will begin shipping to food,

drug and mass merchandisers nationwide on December 15, 1997, and will have a

suggested retail price of $2.49, $2.99 and $3.49 for 4.2, 6.0 and 7.8 ounce

tubes, respectively. Colgate-Palmolive is a leading global consumer products

company tightly focused on Oral Care, Personal Care, Household Care, Fabric Care

and Pet Nutrition. In the U.S., Colgate sells its quality products under such

nationally recognized brand names as Colgate, Palmolive, Mennen, Ajax, Irish

Spring, Softsoap, Murphy Oil Soap, Ultra Brite, Baby Magic and Fab, as well as

Hill’s Science Diet and Hill’s Prescription Diet pet foods. Executive summary

Successful international marketers possess the ability to identify with and

adapt to different cultural environments. International marketing requires that

one actively anticipate the effects both foreign and domestic uncontrollable

environments exert over the marketing mix, and then adequately adjust the

marketing mix to minimize potential negative effects. Often times an

international marketer?s self-reference criterion impede his or her ability to

accurately assess and properly respond to foreign operating environments. Rather

than rely on their own self reliance criteria, international marketers must

conduct far-reaching, comprehensive cultural and economic analyses of potential

foreign markets in order to develop more effective and responsive marketing

mixes that improve the success potential of their market-development strategies.

Argentina certainly represents a viable market-development opportunity for

Colgate Total toothpaste. U.S. companies intending to export to Argentina should

consider economic, demographic, as well as cultural characteristics that

differentiate it from other Latin American countries. Having the highest per

capita gross domestic product and the second highest total gross domestic

product and life expectancy in Latin America, as well as low rates of population

increase and illiteracy rates, Argentina attracts many business opportunities.

The population and economic activity are highly concentrated in the Greater

Buenos Aires area. The population is largely of European descent and continues

to have strong ethnic, cultural, as well as business ties with Europe. Consumer

preferences tend to resemble more those of Europeans than those of other Latin

America nationals. However, revenues are highly dependent on MERCOSUR trade,

especially with Brazil, and the regional economic situation. In many sectors,

European competitors of U.S. firms are already present in the market, and may be

well entrenched. Nevertheless, the U.S. is Argentina?s single largest trade

and investment partner and many U.S. firms have been very successful. U.S.

lifestyle and consumption habits are increasingly influential. U.S. products

have a strong reputation for quality and technological innovation, but U.S.

firms are sometimes seen as lacking commitment to the market. It is important to

be prepared for a competitive market environment. As in many countries, personal

relationships are fundamental to doing business in Argentina. Success requires

taking the time to develop a close personal relationship with your

representative, agent or distributor. Marketing U.S. products and services in

Argentina requires the same level of research, preparation and involvement–if

not more–as domestic marketing. U.S. firms handicap themselves if their product

literature, labels, manuals and other written materials are not in Spanish. When

preparing Spanish-language materials, care should be taken to ensure the meaning

is consistent for all Spanish-speaking markets in which they will be used.

Argentine Spanish differs for example, from Mexican or Chilean Spanish, with

unintended – and sometimes embarrassing – meanings resulting when a translator

is not familiar with variations in the language from market to market. After

analyzing the product and its uses and establishing who the potential customers

are, U.S. companies intending to export to Argentina should identify the

geographical areas where the major users of the product are. It should be born

in mind that 80 percent of the Argentine population is concentrated in urban

areas, with over 35% living in Buenos Aires and its suburbs, and almost 10% in

three cities Cordoba, Rosario and Mendoza and their suburbs. Argentina

experienced a boom in economic growth in the early 1990s as a result of its

structural reform (privatizations, trade liberalization, etc) and monetary

stability. Real GDP growth averaged over 6% for the 1991-97 period. Since

October 1997, a series of international financial shocks coupled with a fall in

international commodity prices have translated into lower growth rates. After

growth of 8.4% in 1997, GDP percent in 1998 grew 4.3. In the second semester of

1998 Argentina entered into a recession. Most experts predict negative growth of

between -2.5 and -3.5 for 1999, with a possible return to positive growth in the

second half of the year 2000. Despite the current recession, Argentina — with a

track record of macroeconomic stability, a growing and sophisticated consumer

market, free capital flows, lucrative access to Mercosur and nondiscriminatory

foreign investment regime — remains an attractive emerging market for U.S.

trade and investment. Many U.S. and other foreign firms continue having strong

interest in taking advantage of opportunities in Argentina arising from Mercosur.

Major U.S. investors, including car manufacturers and food processors access

Mercosur markets through operations in Argentina. Mercosur has become a key

element of the business strategy of many foreign manufacturing and services

firms in Argentina. To avoid reliance on self-reference criterion during the

marketing plan development process, the international marketer carefully

researched Argentina?s unique cultural elements (i.e.: geographic setting,

social institutions, religion and aesthetics, living conditions and language)

and economic elements (i.e.: population, economic statistics and activity, and

developments in science and technology). The information gathered through these

analyses helped the international marketer to identify key strategic issues and

to formulate actionable strategies for the introduction of Colgate Total

toothpaste in Argentina. Furthermore, the unique cultural and economic elements

exhibited by Argentina guided the international marketer in making decisions

throughout the international marketing planning process, which consists of the

following four phases: preliminary analysis and screening adapting the marketing

mix developing the marketing mix control and evaluation. Preliminary Analysis

and Screening In the process of conducting a situation analysis, the marketer

must identify the strengths and weaknesses of Colgate-Palmolive and Colgate

Total toothpaste along with the opportunities and threats present in Argentina.

Smoking out key strategic issues naturally flows from drawing connections

between the strengths and opportunities, strengths and threats, weaknesses and

opportunities, and weaknesses and threats of Colgate-Palmolive and Argentina

respectively. The most relevant strategic issues related to the introduction of

Colgate Total toothpaste in Argentina are listed under the following

subheadings: Deep Capital Reservoirs Capable of Fueling Market Development

Colgate-Palmolive achieved a recorded-setting cash flow of $917 million for

1996, up 13 percent from 1995. Furthermore, on March 6, 1997, the Board of

Directors declared a 17 percent dividend increase and a two-for-one stock split

starting April 25, 1997. Undoubtedly, overcoming major barriers to market entry,

such as the high costs of educating the public about prevention of periodontal

disease, strengthening product distribution intensity, and gaining strategic

shelf positioning, would require Colgate-Palmolive to shell out huge amounts of

capital. In addition to already having a record supply of internal capital at

its disposal, Colgate-Palmolive, could capitalize on stockholder confidence to

raise the marginal capital it needs to aggressively introduce Colgate Total

toothpaste in Argentina. Experience Curve to Facilitate New Product Introduction

When applied to Colgate-Palmolive, the experience curve concept states that

product costs, corrected for inflation, decline with accumulated output.

Learning effects, technological improvements, and economies of scale are the

three sources for cost declines vis-?-vis increases in volume. With its

extensive expertise in research and development (introduced 602 new products

world-wide in 1996), manufacturing, distribution (Colgate Distribution 2000),

sales, and marketing its products on a global scale, Colgate-Palmolive would

benefit from these gains in worker skill and output with Colgate Total

toothpaste in Argentina. Furthermore, Colgate-Palmolive would likely call on

several of its factories located in South America to manufacture Colgate Total

for Argentina before purchasing domestic production facilities. Foreign-based

factories could realize short-term economies of scale until Colgate-Palmolive

decides it would like to make a long-term commitment with respect to production

in Argentina. Product R&D Capable of Meeting Evolving Consumer Needs Strong

global growth in unit volume for Colgate-Palmolive resulted from the

introduction of 602 new products by its research and development team. Similar

to other developing nations, as personal income grows in Argentina, consumer

needs will tend to evolve towards that of a higher order-based on Maslow?s

Hierarchy of Needs. Newly initiated members of the middle class in Argentina

will become more concerned with their health and capable of paying for related

products. Since Colgate-Palmolive already markets many oral and personal care

products, it could benefit from capitalizing on this growing market in

Argentina. Colgate Total toothpaste could serve as the lead product that would

leverage future line extensions in the form of oral care products. Gantrez Gives

Colgate Total a Sustainable Competitive Advantage A product must fulfill the

following criteria in order to possess a strategic competitive advantage: (1)

better than competing products with respect to a feature/advantage/benefit that

customers and competitors perceive as meaningful, (2) better by a significant

amount and not imitable, and (3) advantage must be perceived by customers and

competitors. First, Gantrez, a co-polymer additive and key ingredient in Colgate

Total toothpaste, prolongs the retention of fluoride, Tricloscan and other

active ingredients that help prevent plaque, gingivitis, cavities, tartar, and

bad breath on oral and soft tissues. Gantrez prolongs product benefits for up to

twelve hours after brushing, even after product users eat or drink something,

giving their teeth unparalleled protection against periodontal disease. Second,

performance of and benefits derived from comparably-priced products do not even

compare to that of Colgate Total toothpaste, and due to the patent on Gantrez,

competitors may not easily copy this product. Third, both consumers and

competitors perceive Colgate Total as one of the greatest achievements in oral

care over the last 20 years. Essentially, Gantrez provides Colgate Total with a

sustainable competitive advantage over competing products in Argentina, which

affords Colgate the opportunity to implement a niche-based differentiation

marketing strategy. After performing the situation analysis, the marketer must

then position Colgate Total Toothpaste to appeal to the needs of a customer



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