Colgate's Total Integrated Marketing

John Simone knows how to incorporate P-O-P into an integrated marketing program. He should. As a former product manager and current director of marketing communication services at the Colgate-Palmolive Co., he oversees the marketing efforts for the company's brands including advertising, packaging design, consumer promotion and P-O-P.With an increasingly competitive business environment and the colossal launch of Colgate Total toothpaste 13 months ago, integrated marketing and effective in-store merchandising has never been more important to the New York-based company. In fact, Colgate spent more than $100 million in support of the Total introduction, vaulting the new item to the very top of the toothpaste category. And P-O-P, on the front line of the brand war zone, played a major role in the success of the launch, according to Simone."There's a greater demand now for displays because the battle takes place in stores with the brands," says Simone. "Advertising may set the pace for the brand, but consumer promotion and in-store activity is where the battle happens. We try to make sure that we manage the in-store to maximize our business. We're doing a tremendous number of displays to drive consumer consumption. P-O-P is another marketing vehicle for us to utilize."A Look BackColgate & Co. was founded in 1806 by William Colgate, a businessman who sold starch, soap and candles in New York City. The company's success was driven by new product introductions throughout the years. Colgate began selling perfumes and perfumed soap in 1866. In 1872, the first milled perfumed toilet soap, Cashmere Bouquet, was introduced. The company started selling an aromatic toothpaste in jars in 1873. In 1896, it introduced Colgate Dental Cream, the first toothpaste packaged in collapsible tubes that are similar to those used today. By the 100th anniversary of the founding of Colgate & Co., its product line included 625 varieties of perfume, 160 different types of toilet soap and an assortment of laundry detergents.Meanwhile, the B. J. Johnson Soap Co. began manufacturing Palmolive soap in 1898. In 1916, the company incorporated and changed its name to Palmolive Co., due to the immense success of Palmolive toilet soap. Palmolive merged with a company called Peet Brothers in 1926 to form the Palmolive-Peet Co.In 1928, Colgate & Co. merged with the Palmolive-Peet Co. and by 1939 its annual sales soared to $100 million. The present corporate name of Colgate-Palmolive Co. was adopted in 1953. By 1967, annual sales surpassed the $1 billion milestone.Today, the Colgate-Palmolive Co. generates $9 billion in sales annually and markets a variety of household products including Ajax, Softsoap, Fab, Irish Spring, Ultra Brite, Baby Magic, Mennen and Murphy's Oil Soap. In addition, the company owns the Hill's Science Diet and Hill's Prescription Diet pet food brands.The Total ChallengeIn December 1997, the company put its P-O-P and marketing initiatives to the test with the launch of Colgate Total toothpaste, the largest ever in terms of dollars for a new toothpaste. Execution was the buzz word for the new product launch, as each of Colgate's internal departments worked together to ensure a smooth introduction."P-O-P played a major role because we wanted to get a fast start -- we wanted to get out there and drive consumption," says Simone. "We wanted to stimulate trial and P-O-P is a major aspect of getting trial. Our P-O-P is integrated within the marketing mix, just like advertising, consumer promotion, packaging and the price."The catalyst for new P-O-P comes primarily from two directions within Colgate's corporate structure. Often, salespeople will approach the brand manager and the marketing department to request a display for a specific account. Other times, inspiration for displays comes from the marketing department's efforts to introduce a new product or run a new promotion. In addition, seasonal selling periods, such as the back-to-school season, spur new displays.Once the need for P-O-P has been established, a variety of company personnel come together to provide their input and expertise to create a display. "The promotion people, along with other groups, work together to make sure that the P-O-P happens," says Simone. "It usually gets done with the guidance of marketing, but it's really a group that puts all this stuff together."The team that comes together to create the P-O-P generally includes a conglomeration of departments including marketing, packaging design, engineering, sales, materials sourcing and graphic design. The group is headed by the brand manager, who makes the final decisions on P-O-P.Once the group is assembled, it sets up specific objectives for the display in terms of strategy and product positioning. After that, the group brainstorms to come up with innovative, consumer-friendly displays that are cost-efficient and will drive consumer consumption."My design group will design a display and work with the material sourcing group to make sure that the costs are in line," says Simone. "Then they show it to the marketing group. The brand people are the ones that approve the P-O-P. They're really looking at it from both a cost perspective and a communication perspective."Executing the StrategyMuch of the success that Colgate has achieved through its P-O-P and merchandising programs can be directly attributed to execution, says Simone. Communication is a significant element in a program's execution, which means making sure that all departments are aware of the promotion, its strategy and all associated elements. "Our salesforce sets up our displays in stores," says Simone. "So we tell them months in advance what will be happening down to the last detail, giving them all the information they need to make it happen. We want to make sure that all the execution elements happen on time and in sync, so that when we finally have execution in the store, it's flawless."Simone learned early on in his career how important planning and execution can be. He tells the story of a failed attempt at creating a P-O-P piece. "When I was a product manager, I put a display together and worked on the piece," he says. "Then I went to a sales meeting and I had to put the display together at the meeting and I couldn't do it. Ever since then, I've said that we have to make sure that the displays are very easy to put together and set up."Geared for SpeedAll of the P-O-P produced by the company is temporary and is intended to last in stores from two weeks to two months, depending on the specific promotion. Over the years, Colgate has streamlined its operations to produce P-O-P at breakneck speed. From the initial planning meeting to shipping takes about eight weeks. "We really focus on execution to make sure we can do these things rapidly," says Simone.Though Colgate designs all of its P-O-P in-house, it uses three suppliers for structural engineering and production: Chesapeake Display & Packaging Co., Winston-Salem, N.C.; Promotional Packaging, Louisville, Ky.; and Love Box/Display America, Independence, Mo.Production runs for a typical display can range from 1,000 to 20,000 units, says Simone. However, the display run for the Total launch far exceeded this range."The P-O-P that works generally follows the brand strategy and objectives really close to the tee," says Simone. "For example, if we look at the Colgate Total display, which worked tremendously well, you can see that it really falls in line with the product. We put up a functional display that introduced the product and gave a lot of information about the product. The retailer really wants to make sure they're setting up something to benefit the consumer. In the end, we don't want to put up a piece of paper or a cardboard box -- we want to make sure that it's something that will help the consumer and provide a value-added benefit."Typically, the sell-in process for a display is negotiated as a package deal. As a new product is introduced, it is presented to retailers with a complete integrated marketing plan including P-O-P, promotions, couponing, etc. "We basically come out with a marketing package and say 'Here are the various pieces to support the new product,'" says Simone. "On top of that, we work with the accounts to make sure that the right display is there for them. One of our objectives is to be flexible. We don't like to force-fit a display into a store. We want to make sure that it's the right display for that store."Colgate generally gears its P-O-P for the supermarket, mass merchant and drugstore channels. In doing so, the size and weight of the display are primary considerations. "Mass tends to look for larger display pieces," says Simone. "Supermarkets want mid-size pieces and drugstores want small displays, so you've got to make sure you have a display piece that's geared toward the right type of trade partner."Sometimes, that means customizing displays for specific retailers. Colgate generally tries to meet retailers' requests for account-specific P-O-P, though the situation has to warrant a customized display. "We try to work with the account to make sure we're doing what they need," says Simone. "But you have to do that within parameters because you don't want to have 100 different displays out there. You try to customize it but you need the right amount of volume and activity to make sure it's cost-effective for everyone to do."Simone says that P-O-P is rarely measured as an individual component at Colgate, though the entire marketing campaign gets reviewed by the brand associates. In addition, the company collects scanner data to evaluate the success of its programs. Colgate has an analysis group in-house to study the scanner information and provide meaningful data."We're continually raising the bar to make sure that we can create things to better drive consumption," says Simone. "The philosophy from within this organization is to make sure we can execute our strategies. After all, a lot of what P-O-P is, is execution."

Colgate's Total Integrated Marketing

P2PI MEMBERS

JOIN P2PI

Related Images

Business Topic

Company

Market Segment