Colgate Total Ad Campaign Aims To Counter Crest Pro-Health Claims

Colgate will launch new advertisements for Colgate Total toothpaste to respond to direct competition from Procter & Gamble's new Crest Pro-Health toothpaste, according to Colgate-Palmolive President and COO Ian Cook.

The company plans to reposition the brand through advertising underscoring the toothpaste's effectiveness against gum and tooth diseases through testimonials from dental professionals, Cook explained during a May 10 analyst call.

Colgate Total is the only toothpaste to be FDA-approved and accepted by the American Dental Association for fighting plaque and gingivitis, the company claims.

Launched in 1997, the toothpaste now commands 13%-14% market share, Cook said.

Previous advertisements for the toothpaste focused on warnings regarding the dangers of gingivitis and other diseases and Colgate Total's ability to address those concerns. However, the strategy was not effective in promoting the formula, Cook acknowledged.

"Hitting [consumers] on the head with a disease message...did not reach them because they didn't want to hear the message," the exec said.

Consumers responded more positively to ads featuring an endorsement by dentists stating the toothpaste would provide 12 hours of protection against teeth and gum problems, he maintained.

The new advertisements will "talk more about a disease condition in consumer-friendly and non-threatening language," he said.

Colgate reported first-quarter results the same day. Net income was $383.4 mil., up 11%. Worldwide sales and unit volume grew 7%, or 4.5% including divestments.

Sales in North America rose 7%, fueled by strong growth of Colgate Luminous and Colgate Max Fresh toothpaste. The new Colgate 360 manual toothbrush has helped the company gain share in the oral care market, Cook added.

Colgate's share of the U.S. toothpaste market is currently 36%, the company noted.

In the first quarter, the firm incurred $46.8 mil. in after-tax charges related to its restructuring program. The initiative, aimed at improving the company's bottom line, was announced in 2004 (¹ (Also see "Colgate Strategic Restructuring Aimed At Boosting Ad Spend, Earnings" - Pink Sheet, 13 Dec, 2004.), p. 11).

The firm spent a record amount on advertising in 2005, and placed $297.1 mil. behind its global brands in the first quarter, Cook said. Expansion of gross profit has allowed the company to reinvest in advertising, he noted, adding that increased support is driving worldwide market share gains for the manufacturer.

Cook additionally commented on Colgate's plans to use its most recent acquisition, natural toothpaste manufacturer Tom's of Maine, to lead its entry into the organics and natural products category. The firm completed its 84% acquisition of the company earlier this month for approximately $100 mil. (² 'The Tan Sheet' May 8, 2006, In Brief).

Tom's of Maine has 1% market share in the toothpaste segment, but controls a 60% share in specialty natural products retailers such as Whole Foods Market and Trader Joe's, a presence unmatched by any other major multinational personal care company, the exec maintained.

Colgate will expand its reach into the organics sector by offering Tom's to U.S. retailers outside of the specialty channel, he explained. The company will use that experience to help launch the brand into the western European and Australian markets, Cook said.

The firm also has implemented a pilot program to analyze which product promotions are most effective, Cook stated.

The project, first introduced in the Mexican market, reviewed a variety of promotions at retailers with different types of consumers, and then planned a follow up promotion based on customers' responses. Full implementation of this program will begin in Mexico in the second half of the year, according to Cook.

[Editor's note: This story was contributed by " ³ The Rose Sheet ," your source for cosmetics news. For more information call 1-800-332-2181.]