Rationale of not choosing Lang’s plan is based on calculations of expected sales and projected income. Comparison of two projection plans of unit sales for 2010 (Exhibit 1) shows that Lang’s market plan will result in 444,18 millions units, that exceeds Patel’s projection on 32,03 millions units. Along with planned increase of prices by 20% on every item due to inflation in India, Lang’s projected revenue will exceed Patel’s one on $16,88 millions. However, arrangement of projected plans of unit and revenue growth with costs (Exhibit 2) that Cottler India will have evidences that market plan that Michel Lang suggested will lead to a profit less than Patel’s on $0,47 millions. As long as the primary goal of Cottler Taylor is to offset U.S. losses by boosting emerging markets (India in particular) bottom lines, Brinda Patel’s marketing plan must be approved. Cottle India had a great potential to succeed in Indian market because awareness of dental health benefits was rising, as well as income. Also, Indians considered Cottle an authority on oral care and held their products in high regard. However, the right choice of target audience was crucial to achieve goals set by Cottle U.S. Logic of Michel Lang’s Market Plan
Despite the fact that financially Lang’s plan to increase mid-range and battery-operated toothbrushes is not favorable in current situation, it has its own positive factors that potentially might leverage Cottle’s sales. First of all, quite big population of urban areas (22% of Indians) lives in urban settings and it is growing due to migration. Also, for almost 20 years GDP grew almost by 146 times that evidences economic growth. Second, higher-income shoppers frequented supermarkets and Cottle India established good relationships with those. Cottle collaborated with largest supermarket chains to supply and display Cottle’s products in-store and to communicate store-specific sales incentives to owners that facilitated exposure of most of its mid-level and premium products to these outlets. Another potentially beneficial channel for Cottle’s toothbrushes was dental professionals who were the key influencers of lucrative group of urban population. Dentists were the only intermediaries who can deliver idea that battery-operated toothbrushes were more efficient in solving prevalent oral problems among Indian patients. As long as dentists were settled in the urban areas mostly, it would help boost sales of higher-end products among rich people.
Although there were several advantages in targeting urban residents, some factors could greatly hinder Cottle’s sales growth. First of all, only a small subset of wealthy consumers could afford battery-operated toothbrushes. Yet, vast majority of Indians (80%) lived on less than $2 per day, when the average price for low-end manual was $0,29, $0,75 for mid-range manual and $6,33 for battery-operated. That means that money infusion in forces to boost mid-range and battery-operated toothbrushes sales might be too hastily especially when Cottle was so cost-conscious. In the end, as Cottle’s general approach states, more profitable lines and more advanced products should be introduced when brand awareness will be established and distribution network will be in place. But before that, Brinda Patel’s plan is more favorable to be taken. Logic of Brinda Patel’s Market Plan
Unlike Lang, Brinda Patel went along with Cottle approach to enter market with basic models and competitive prices. She targeted rural population and focused on boosting low- and mid-range toothbrushes sales. First of all, great majority of Indians (78%) lived in rural towns and villages. Rapid economic and technological growth facilitated increase of rural exposure to global news and information that increase awareness of oral care importance. As a result, Indians wanted to upgrade from home-grown dental remedies to inexpensive modern oral products. Also, Joint Cottle/IDA’s health campaigns had good effect on rural consumers: those exposed to them were twice as likely to adopt toothbrushing within a year than those who had not been exposed.
Despite all these positive trends, there were still several problems to consider. First, rural consumers were very price-sensitive, they lacked access to credit, lived on inconsistent daily/weekly wages, and had limited or no savings. Second, consumers in rural areas were five times more likely to refrain from using modern oral care products than their urban counterparts because many of them didn’t associate dental problems with improper oral care, but instead attributed them to eating habits or genetics. Research showed that 50% of rural population didn’t use a toothbrush to clean teeth, but instead they used traditional nature products like Neem twigs or charcoal. Third, distribution system was weak. Many distributors handled multiple manufacturers and product lines and did not always understand the key selling points of Cottle’s toothbrushes. Also, distributors didn’t always speak the local dialect and can’t stock excess inventory. Conclusion
Brinda Patel’s plan must be approved as it based on local research, not on success of other country with distinctive culture. As long as 50% of rural population didn’t use toothbrush Cottle’s messages should concentrate on persuading consumers to brush for the first time. Also, great majority of Indians are price-sensitive, and 80% Indians live less than on $2, that means that Cottle’s should focused on the product lines that consumers will most likely buy.