1. What are the major issues in the Cleo Case from the perspective of the product, and pricing?
Other than language there are not a lot of similarities between France and Quebec. Colgate Palmolive Canada team made the first mistake in assuming commonalities between France and Quebec for success of Cleopatra soap in Quebec. Success of a product in one region does not guarantee success in another region unless the markets are identical. Launching a product as an exclusive top of the line product without understanding the market needs was the company’s next mistake. The state of the Canadian soap market was fierce with competition and consumers had well established loyalties towards select few brands. Competition was based primarily on price. Given this market situation, launching a high priced soap without an understanding on consumer needs appears to be a flawed marketing strategy. The company got blinded by its success in France and ignored some obvious marketing checks prior to launching the product in Quebec.
For example, research was conducted in Toronto while product was being launched in Quebec. Product stakeholders in Colgate Palmolive Canada division were not all convinced towards the Cleopatra soap launch in their country. The market research data showed positive results towards Cleopatra soap, but what was not learnt was whether the consumers would buy the product at the price that Colgate Palmolive was planning to sell?
2. Are there issues with the market research?
Market research from Toronto is relied on solely for product launch in a different region, Quebec. Market success from France is used to establish marketing strategy for product launch in Quebec, when the two regions are very different from one another. Red flags from the market research are ignored. For example, consumers are very sensitive to price when buying soap in Canada, still Cleopatra is introduced as a high priced soap without understanding consumer appetite for high priced soaps. Colgate Palmolive product managers in Canada are not in agreement with the Cleopatra marketing test plan, but the decision is taken to storm ahead. Incomplete market research work is done; consumers show positive reaction to Cleopatra soap but more in depth analysis is not carried out to understand consumer reaction to the high price product plan.
3. What organizational issues come in to play in the case? Who are the players and how do their positions in the company impact the market entry?
Lack of consensus and buy in from the stakeholders involved in Cleopatra launch in Canada, namely, product managers, Colgate Palmolive executives and consumers. Few parties that are keen on the product launch are pushing their agenda without taking due note of the concerns of the other parties. Colgate Palmolive executive team keen to conquer the Canadian soap market, falls short on performing due diligence to understand the new turf and blindly falls for a sub-par launch plan.
Bill Graham, Divisional VP Marketing for Canada and Steve Boyd, Group Product Manager for Canada are key players in devising the Cleopatra Canada launch plan. Stan House, Assistant Product Manager, is in awe of Steve Boyd’s enthusiasm of success. Ken Johnson, Manager, resents the brand thrust of Cleopatra but is unable to stop the crusade of Cleopatra product launch.
4. Did they make the right choice? Why or Why not?
Given the mature nature of Canadian soap market and consumers sensitivity towards price, Cleopatra launch in Canada was not the right choice. Instead of a high price product launch, Colgate Palmolive needed to understand what is it that the consumers are looking for if anything at all in the soap category. Is there room for a new soap launch, if so, what are the areas of gap that the new soap maybe able to fill in and compete on, is price the only factor to compete on, are there existing Colgate Palmolive brands that can be re-positioned to increase market share?
5. Are companies today any better than Colgate 20 years ago or do they still make some of the same mistakes?
This is an interesting but relatively tough question to answer. I do not have adequate data to say that companies today are better off than 20 years back. I’d like to think that some good lessons have been learnt from failures of the past. But product failures of recent times suggest that companies still continue to make similar faults. Failure of Eurodisney comes to mind to highlight mistakes or rather incorrect assumptions companies make when deciding on a new product launch. The confidence of Disney was partly based on the number of Europeans visiting US Disney parks. Europeans would be visiting the US parks because they were in America however, not visiting America specifically to go to the parks. All attendance predictions were based on parks in the US which is an Americanized assumption not valid for Europe. Furthermore, all calculations treated Europe as a general mass of people rather than many individual countries. There were several other issues with this product launch, but the key to highlight is success from one region cannot be assumed to be the ticket for success in another region.
Even the Mickey’s could not save Eurodisney from its ill fate.
No comments:
Post a Comment