Choosing the Right Metrics for Listerine Brand Management in Brazil Case Solution & Answer

Choosing the Right Metrics for Listerine Brand Management in Brazil Case Solution

About Case:

The first availability of Listerine to Brazilian consumers was in the year 1987. It later added in the J&J to its product portfolio across the world after the acquisition of the Consumer Healthcare Division of Pfizer in 2006. The products offered by Listerine in Brazil, only included mouthwash; whereas it offered toothpaste and other types of products in the United States. For the Listerine Brand in Brazil, J&J’s marketing manager – Ronald Art was hired as the product manager in 2010. Art was responsible to lead the efforts of Listerine to achieve overall growth, maintenance of leading position in the category of mouthwashes, and profitability of the brand in Brazil.

In Brazil, the oral care industry operated in four different categories including dental floss, mouthwashes, toothbrushes, and toothpaste. Around 80 percent of the industry value was accounted for by toothpaste and toothbrushes. From the year 2009-2014, the fastest-growing category of the oral care industry was antiseptic mouthwash with a CAGR value of around 14.1 percent. There were more growth opportunities in Brazil because of the low penetration rate of mouthwash in the market. This was despite the recommended usage of mouthwash two times a day i.e. 20 mL. (Paul W. Farris, 2016)

Purchase of any antiseptic mouthwash:

In the past year, I had purchased Colgate Peroxyl Antiseptic Mouth Sore Rinse. The reason why consider because it was alcohol-free and was expected to eliminate the probability of experiencing an alcohol burn. Similarly, it was cheaper as compared to the Antiseptic mouthwash of Listerine. I used that two times a day but did not find any effective results rather experienced burning sensation. Due to this reason, I tried Listerine as it is my favorite brand. Because Listerine had far better results than brushing and Colgate antiseptic rinse. It showed deep-clean effectiveness after the use of rinse twice a day.

Marketing metrics:

The marketing metrics represented in the case mainly include consumer awareness, customer retention rate, visibility of brand at POS, and market share.

  • Consumer awareness was followed by the launch of marketing campaigns, to bring an improvement in the oral care routine of the Brazillian people.
  • Customer engagement was mainly associated within increasing brand visibility at the point of sale,in terms of profitable growth.
  • An increase in the market share indicates towards the successful penetration of new products of Listerine in the oral care industry of Brazil. This was mainly aimed to compete against the unexpected growth of Colgate’s market share.
  • The customer retention rate was to be indicated by the repurchase of the mouthwash,because the use of mouthwash was below the level of suggested volume i.e. 876ml/year, however, annual usage was expected to be 14.6L.

CAGR for each category:

From the data given in Table 1 of the casep;the compound annual growth rate of each category was calculated. The calculation of each category CAGR was done by dividing the sales of 2014 with the sales of one particular category of 2009, with the power of 1 divided by n, i.e. the number of years which was 5. Then the whole value was subtracted by 1 and multiplied by 100 to determine CAGR in percentage. Thus, the calculated CAGR values for each category are as follows:

  • Dental Floss – 7.59%
  • Denture Care – 13.34%
  • Mouth fresheners – 4.94%
  • Mouthwashes/dental rinses – 14.16%
  • Toothbrushes – 11.0%
  • Toothpaste – 8.13%
  • Oral care – 9.86%.

Challenges as Listerine’s brand manager:

In 2010, if I was hired as the brand manager of Listerine, I would have highlighted many many challenges posed by the oral care industry, in Brazil. Such challenges would mainly include competition from Colgate. Although Listerine was ahead in the mouthwash category against Colgate. In 2013, this leading position was taken over by Colgate particularly in the poor regions of the market i.e. northeast 33 percent and north 32 percent. This was primarily based on the lower average price of the products offered. Thus, the key challenges mainly include the offering of products at low-price to match the price range of Colgate. However, the change in the preference of customers from Listerine was not based on price but the strong flavor and use of alcohol-based formula.

Thus, there was a need to create a less intensive mouthwash to bring new customers to the market. As doctors played an important role in promoting mouthwashes –the highly demand mouthwash was antiseptic. Similarly, there was a need to bring an improvement in the visibility of the mouthwash category andto increase the awareness. This was necessary to gain the market share, experience profitability and to obtain a long-term competitive advantage. Additionally, the consumption of antiseptic was quite concentrated,and the mouthwash category represented only 2 percent sales in Brazil. Due to this reason, it was essential to evaluate the consumer perspective and sales trend to compete with Colgate.

Actions against the rapid growth of Colgate:

The unexpected growth of Colgate changed from20.1 percent to around 26.9 percent in the years2009 and 2010, respectively,followed by the market penetration rate of 36 percent. The most probable actions against the rapid growth of Colgate would be the identification of ways to determine the target market. This would be mainly to evaluate the spending trend of customers on the types of products and the reasons behind the purchase of that particular product.

The strategic approach of Colgate was based on the use of a complete oral care portfolio for strengthening the product line of mouthwash. This was mainly done through more promotions at the retail stores than initiatives taken against the competition.One of the steps that would be followed, including the expansion of the distribution channel from the drug stores to retail stores to allow easy access to customers to purchase the products.

Pros and cons of targeting each marketing metric:

The marketing metrics which were highly emphasized by the brand manager in 2010 to gain an increased market share, mainly included:…………………

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