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Sensodyne Market Analysis

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A Category Leader Comeback – Egypt Presentation August 2005
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Page 1: Sensodyne Market Analysis

A Category Leader Comeback – EgyptPresentationAugust 2005

Page 2: Sensodyne Market Analysis

Introduction – Meeting Objectives

Overall Objective: To re-introduce the original Sensodyne brand in Egypt through a well integrated marketing plan

Meeting Objectives

•Introduction: To introduce Eva’s manufacturing strength and distribution muscle

•To familiarize audience with Egypt and its toothpaste market dynamics

•To address the counterfeit issue and agree a joint course of action to protect the GSK/ Eva territory

•To present Sensodyne’s relaunch plan and seek input and support regarding various elements

•To agree next steps and confirm timings

Page 3: Sensodyne Market Analysis

Ultimate Ethical product Distribution

Page 4: Sensodyne Market Analysis

Introduction - Overview

In Egypt, Eva is an established powerful personal care products manufacturer and distributor

Eva currently manufactures a wide portfolio (close to 200 SKU’s ) across skin, hair and dental care

Due to its outstanding quality standards, Eva has been selected as sole manufacturer for Sensodyne as well as a number of local quality- focussed companies

In 2003, Glaxo-SmithKline acquired Stafford Miller internationally resulting in a change of management

During 2004, the market was flooded with a poor quality counterfeit product manufactured in China, in addition to competitive brands such as Signal Sensitive, Emoform & Deprudent

This presentation will provide an overview of the market and proposed relaunch plan instigating a dialogue to agree a mutual action plan to support Sensodyne’s re-introduction

in Egypt

Page 5: Sensodyne Market Analysis

Eva Distribution Network – National Representation

Eva’s Distribution Muscle – Spreading across Egypt

Map Source: "The Financial Times World Desk Reference" © Dorling Kindersley 2004

Eva Cosmetics Office

Distribution Depot

Page 6: Sensodyne Market Analysis

Eva Cosmetics Labs – Covering Egypt Nationally

Eva’s Distribution Network consists of:

An extending number of offices – A total of 8 offices at national level

A powerful & modern distribution fleet – 40 Vehicles

322 dedicated employees working to grow and establish brands

A powerful sales operation consisting of 155 employees (sector managers, supervisors, sales reps & merchandisers)

Pharmacy coverage equivalent to the universe shown in AC Nielsen’s database – 23,000 pharmacies in total

Eva’s manufacturing facilities:

Pharmaceutical standards used in the manufacturing of consumer products

In –house R&D department

Eva Cosmetics Labs are committed to consumer health, satisfaction & safety

Page 7: Sensodyne Market Analysis

Profile of Egypt

Page 8: Sensodyne Market Analysis

Egypt Demographics - Basic Economic Indicators

Egypt/ Profile: Basic Economic Indicators Egypt: Developing Economy

Egypt - Map

Strengths

Oil and gas revenues

Well-developed tourist infrastructure

Remittances from Egyptians working throughout the region

Suez Canal tolls. Agricultural produce, especially cotton. Light industry and manufacturing. Planned gas pipeline to Lebanon..

Weaknesses

Tourism hit by "war on terrorism."

Dependence on imported technology

High birthrate

Rural poverty

Egypt’s Scorecard

World GNP Ranking: 37

Per Capita GNP: US$ 1,530

GDP: $99.6 bn

Economic Growth: 4.5% p.a.

Inflation Rate: 7.2%

Unemployment Rate: 12.0%

Source: "The Financial Times World Desk Reference" © Dorling Kindersley 2004

Page 9: Sensodyne Market Analysis

Egypt Demographics - Population Split Urban vs.. Rural

Demographic Profile of Egyptian Population

Population Distribution

In spite of the even split between urban and rural dwellers, 93% of the population is

concentrated in settlements along the River Nile

Cairo and Alex alone claim more than one third of the total population, leading to crowding and

continuous need for improvements in infrastructure

Rural dwellers often leave home to seek employment in urban areas

In an attempt to alleviate population pressure on traditional cities, the government has initiated

the Toshki project, aimed at creating a second valley parallel to the Nile Valley

Uneven distribution of Population

Egypt - Population split Urban vs.. Rural (%)

Urban42%

Rural58%

Egypt - Population split by Region (000s)and corresponding percentages

Population (2001) Population (%) Urban 29,193 42% Rural 39,455 58%

68,648

Source: CAPMAS 2004 population census

Page 10: Sensodyne Market Analysis

Egypt Demographics - Population Split by Region

Demographic Profile of Egyptian Population

The Delta valley is the area most dense in population. Largely rural it has through the

efforts of multinationals only recently become adequately covered

Greater Cairo and Alexandria represent the major city centres of Egypt. Government

authorities, universities and commerce was traditionally located

Upper Egypt (which represents 70% of Egypt’s territory) is under-populated and suffers from

poor road infrastructure

Sinai and the Red Sea have a thriving tourism and resort industry, which was badly hit in July ’05 by terrorist attacks.Population is involved in

activities directly related to tourism and/or related services

Population concentrated along the Nile

Egypt - Population split by Region (%)

Egypt - Population split by Region (000s)and corresponding percentages

Population (2004) Population (%) Greater Cairo 14,230 21 Alexandria 3,750 5.5 Delta 31,057 45 U/E 19,360 28 Sinai & Red Sea

244 2

68,648

Source: CAPMAS 2004 Population Census

Cairo21%

Alex5%

Delta44%

U/E28%

Other2%

Page 11: Sensodyne Market Analysis

Egypt Demographics - Population Split by SEC

Demographic Profile of Egyptian Population Egypt: Predominantly Poor

Egypt - Population split by SEC (%)

A Class3%

B Class4% C1 Class

14%

C2 Class18%

D Class28%

E Class33%

Population (2004 est.)

HH Income/m.

Class A : 2,059 (3%) 7000 Class B : 3,432 (4%) 3000

Class C1 : 9,611 (14%) 1500 Class C2 : 12,357 (18%) 700

Class D : 19,221 (28%) 500 Class E : 22,654 (33%) 150

Total : 68,648 Egypt - Population split by SEC (000s))

and corresponding income levels

Egypt is a developing country with a significant middle class (32%) while 61% of the population below the poverty line

Upper SEC’s (A&B) have access to imported products and satellite advertising while C1 SEC downwards have access to

local products

The government is undertaking a variety of programs to subsidise food, education, lodging and health services for limited-

income families

The economic gap between rich and poor is widening translated into a gradually

eroding middle class

Source: CAPMAS 2004 Population Census & Ac Nielsen HH income estimates

Page 12: Sensodyne Market Analysis

Egypt Demographics - Population Split by Age

Demographic Profile of Egyptian Population Egypt: Young population

Egypt - Population split by Age (%)

0-510%

'5-1012%

'10-1512%

'15-2011%

'20-3016%

'30-4018%

'40-5010%

50+11%

Egypt - Population split by Age (millions) and corresponding percentages

Source: estimate based on 96 CAPMAS population census & projected growth rates

Population (2001) Population (%) 0-6 7,879 11 6-10 8,801 13 10-15 9,047 13 15-20 8,051 12 20-30 10,961 16 30-40 9,036 13 40-50 6,772 10 50+ 8,100 12 Total 68,648

Population is growing at around 2% p.a

Birth rate is 26 per thousand

2025 Pop est.: 95.8 Million

An even Male/ female split

A young population is characteristic of Egypt - children & teenagers (45%) - due

to high birth and improved child mortality rates

Children are the single largest target group of the population, followed by young adults who constitute the second most important

target group

Page 13: Sensodyne Market Analysis

Egypt Geography - Retail Profile

Retail profile of Egypt

Pharmacies play a key role in the distribution of toothpaste especially specialized brands such

as Sensodyne. Eva covers 23,000 (95.8% of the total universe of pharmacies)

International supermarket chains started operating in Egypt at the end of 1999: Metro was closely followed by Sainsbury’s (Now

exited) and more recently Shop rite, Carrefour, Hyper One and soon Spinney’s.

Key accounts include discounter stores & semi-wholesalers - an important channel of

trade having traditionally offered the alternative to the expensive supermarkets

Haberdasheries are convenience stores carrying a small variety of food items as well as

stationery, gift items and personal products

The retail environment in Egypt is concentrated in Cairo/ Alex & the Delta

Retail: Varied in types and concentrated in regions

CAIRO ALEX DELTA UPPER RURAL

Key Acc. 501SQM+ 51 9 0 19 0 Pharmacies 8,700 2,500 9,500 3,100 24,000 S/M 101-500SQM 287 49 39 17 14 L Groc. 41-100SQM 877 267 203 33 61 M Groc. 21-40 SQM 3,487 1,108 1,181 743 1,340 S Groc. <20SQM 19,500 5,040 12,154 8,216 54,059 Kiosk 3,129 606 1,777 1,987 5,540 Haberdashery 4,796 2,697 1,637 1,159 2,921

TOTAL Key Acc. 501SQM+ 79 Pharmacies 24,000 S/M 101-500SQM 406 L Groc. 41-100SQM 1441 M Groc. 21-40 SQM 7850 S Groc. <20SQM 98,968 Kiosk 13,039 Haberdashery 13,210

Retail Outlets - Split by Outlet Type

Retail Outlets - Split by Region

Source: Amer/ AC Nielsen Retail Audit

Page 14: Sensodyne Market Analysis

The Toothpaste Market in Egypt

Page 15: Sensodyne Market Analysis

The Toothpaste Market in Egypt – Market Shares (Vol. & Val.)

Toothpaste Market Volume & Value Shares

*Egypt – Toothpaste Market Shares Volume & Value(%)

*Egypt – Toothpaste Volume & Value MAT J/F 2004

Source: AC Nielsen Retail Audit

MAT J/F 04 Volume 1000

MAT J/F 04 Value LE100’000

Toothpaste 1,459 828 Signal 815 440 Signal Sensitive

4 7

Close Up 271 151 Colgate 267 145 Sensodyne 17 37

55.9

0.3

18.6 18.3

1.2

53.1

0.818

.2 17.5

4.5

0

10

20

30

40

50

60

Volume

Signal T Signal S Close-Up Colgate Sensodyne

The toothpaste market is worth LE 82.8M

Signal Toothpaste is the clear market leader covering generic benefits as well as specific dental care needs (e.g. whitening,

sensitive teeth) Close Up is second followed closely by Colgate in 3rd position

The top 3 brands represent close to 90% of the market volume

With Signal and Close-Up, Unilever dominates the toothpaste market

The sensitive teeth segment represents less than 2% of the market share in volume shares but due to the high

premium pricing represents more than 5% of the market value

*Note: Data is shown in slide represents market status for the year ending 2003

(MAT J/F ’04). Retail audit subscription will be resumed shortly

Unilever dominates the toothpaste market

Value

Page 16: Sensodyne Market Analysis

The Toothpaste Market in Egypt – Signal Sensitive vs.. Sensodyne

Toothpaste Market Volume & Value Shares

*Egypt – Sensodyne vs. Signal Sensitive shares (Vol & Val %)

*Egypt – Sensodyne vs. Signal Sensitive shares (Vol & Val %)

Source: AC Nielsen Retail Audit

MAT J/F 04 Volume 1000

MAT J/F 04 Value LE100’000

Toothpaste 1,459 828 Signal Sensitive

4 7

Sensodyne 17 37

0.3

1.2

0.8

4.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Volume

Signal S Sensodyne

Sensodyne continued to be the market leader of the Sensitive teeth segment

especially in value terms

There is a wide price share gap between Signal Sensitive and Sensodyne. Signal Sensitive large pack in particular offers

excellent VFM

Signal Sensitive media spend was LE 2.7MM Q1 ’05 (local TV & MBC2)

Sensodyne is at a significant premium to Signal Sensitive on a per ml basis

Sensodyne O/ M/ F/ BG 50ml: LE12.00 Sensodyne BS/ TC 50ml: LE 13.25

Signal Sensitive 50ml: LE 8.00

Sensodyne 75ml O/M/F/BG: LE 16.50 Sensodyne BS/TC 75ml: LE 18.00

Signal Sensitive 100ml: LE 15.00

Sensitive Teeth: a small premium sub-segment

Value

Page 17: Sensodyne Market Analysis

Sensodyne Historical Sales & Sales breakdown by SKU

Sensodyne Historical Sales & Pack split

Sensodyne Sales Volumes 2002-2004 (# Packs Sold)

Original, Mint and Sensodyne F 50ml are traditionally the highest selling SKU’s

Starting 2003, brand sales showed a 25% decline followed by a very poor sales

performance in 2004

2004 witnessed the complete withdrawal of Sensodyne from the Egyptian market

with figures shown reflecting 5-6 months of sales

Sensodyne’s historical monthly sales do not show seasonality

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2002 2003 2004

Original 50Original 75Mint 50Mint 75F 50F 75Baking Soda 50Baking Soda 75Barby 50Tartar Control 50Tartar Control 75Blue Gel 50Blue Gel 75

2002 2003 2004Original 50 76784 59836 5896Original 75 24712 21319 16619Mint 50 80774 56352 2541Mint 75 29422 25861 1200F 50 76273 37490 8655F 75 26963 19621 17972Baking Soda 50 38378 25759 38154Baking Soda 75 16107 13814 671Barby 50 7598 9096 7748Tartar Control 50 14748 16144 13584Tartar Control 75 9671 5827 1266Blue Gel 50 29646 24912 528Blue Gel 75 14495 11117 2666

Small Pack size, O/M/F fastest selling

Page 18: Sensodyne Market Analysis

Short Term Plans - Counterfeit Attack Plan

Page 19: Sensodyne Market Analysis

Counterfeit Status in Cairo & Alex

Updated Counterfeit Status

Counterfeit Stock take in 50 top selling outlets by branch Aug 2005 (# Packs)

The trade has been alerted and there are strong indicators of a positive response not to

purchase or stock counterfeit Sensodyne

Updated volumes of counterfeit product found in the 50 top Sensodyne selling outlets

each in Cairo, Alex, the Delta and U/E are equivalent to 2-3 months worth of sales taking

Sensodyne’s 2003 sales levels as a benchmark

Wholesalers (e.g. Moski downtown) have been traced as major traders in Counterfeit

Sensodyne

A recent trade check showed decreased stock volumes of counterfeit Sensodyne with the

Moski wholesalers

2-3 months worth of sales still in the market

Counterfeit Sensodyne (Units)

Cairo 14683Alex 2517

Sharkeyya 250Tanta 84Mansoura 1834Port Said 2984Asyut 555Luxor 234

0

2000

4000

6000

8000

10000

12000

14000

16000

No. of Units

Cairo

Alex

Delta

U/E

Counterfeit Stock take in 50 top selling outlets by region Aug 2005 (# Packs)

Page 20: Sensodyne Market Analysis

Counterfeit Attack Plan – Strategic Approach

Anti- Counterfeit Approach

Shortly before the launch, press and PR will be used to announce the cooperation of GSK &

Eva in re-introducing Sensodyne in Egypt

The press & PR campaign will fulfill 2 main roles:

1- Identify Eva as the manufacturer of original Sensodyne in Egypt to the consumer

2- Discourage the trade from stocking counterfeit Sensodyne

GSK:

Wholesale Trade Legal Action taken via the MOH & MOS against traders stocking the

counterfeit product will discourage counterfeit stocking

Controlling the influx of counterfeits at source will help clean up the market in preparation for

the re-introduction of Original Sensodyne

An integrated Marketing Relaunch Plan

Sensodyne

Counterfeit Attack Plan

Trade PR

Source

Page 21: Sensodyne Market Analysis

Medium Term Plans - Relaunch Plan

Page 22: Sensodyne Market Analysis

Sensodyne Relaunch Plan – Strategic Approach

Relaunch Strategy

To re-introduce Sensodyne strongly into the Egyptian Market, the relaunch plan will use a

three pronged approach

Communication arm targeted to the dentist whose confidence in the brand needs to be

restored via ethical detailing

Communication and incentives aimed at the pharmacist to recommend Sensodyne as the

solution for sensitive teeth

Communication aimed at the consumer to refresh existing/ create increased awareness to

generate trial for the original Sensodyne

The marketing plan should be integrated with appropriate phasing to generate the overall effect of re-establishing the brand as market

leader of the sensitive teeth segment

An integrated Marketing Relaunch Plan

Pharmacist

Consumer

Dentist

Sensodyne Marketing

Relaunch Strategy

Page 23: Sensodyne Market Analysis

Sensodyne Relaunch Plan – Dentists

Relaunch Strategy - Dentists

A plan of detailing visits to opinion leading dentists will be conducted to announce the re-

introduction of original Sensodyne to the Egyptian market

Targeted marketing materials will be developed for the dentist such as prescription pads,

branded yearly calendars, branded pens as well as product samples

To re-establish Sensodyne, a participation in upcoming dental conferences will be initiated

(1st upcoming conference: Nov 2005)

A rotation of visits for each dentist will be used to continuously sustain a top of mind position

GSK: Ethical detailing material containing medical updates in the field of sensitive teeth will be used a leave-behind for the dentists

Sensodyne’s Dentists Relaunch Program

Pharmacist

Consumer

Dentist

Dentist Ethical

Detailing

Page 24: Sensodyne Market Analysis

Sensodyne Relaunch Plan – Pharmacists

Relaunch Strategy

POS material (Posters,& danglers) designed specifically for the Pharmacies will be used &

distributed along with the relaunch sales volumes

Branded stands will be given to key pharmacies based on size of relaunch order for increased

in-store visibility

For small size pharmacies with limited floor space, shelf counter stands will be used to

attract consumer attention upon entering the pharmacy

An initial one shot trade loading promotion will prepare the trade for the onset of the consumer

pull to be generated through TV advertising

GSK: Key visuals taken from existing ad campaigns can be used for the production of

POS material

Sensodyne’s pharmacists’ relaunch plan

Pharmacist

Consumer

Dentist

Pharmacists Retail

Program

Page 25: Sensodyne Market Analysis

Sensodyne Relaunch Plan – Consumers

Relaunch Strategy

To re-introduce Sensodyne strongly into the Egyptian Market, 3 bursts (annually) of TV

advertising will be used to announce the return of original Sensodyne

FM Radio will also be used as it is becoming a highly effective and well targeted AB SEC

medium

Shelf visibility in key accounts with eye level positioning & POS material will complement the

integrated plan

GSK: If available, new ATL TV & Radio content will help generate increased interest,

memorability and trial

Sensodyne’s Consumer relaunch plan

Pharmacist

Consumer

Dentist

Sensodyne Marketing

Relaunch Strategy

Page 26: Sensodyne Market Analysis

Sensodyne Integrated Marketing Plan

Month 1 2 3 4 5 6 7 8 9 10 11 12 Total

A (&20% of B) Class Dentist Program/

Coverage

200 200 200 200 100N 100 N 100 N 100 N 100N 100 N 100N 100 N 1600

Repeat Visits 100R 100 R 100 R 100R 100R 100 R 100R 100R 800

Materials

Giveaway Kit (Pads, Pens, Calendars)

200 200 200 200 100 100 100 100 100 100 100 100 1600

Medical Updates (Issue No.1)

200 200 200 200 100 100 100 100 100 100 100 100 1600

Medical Updates (Issue No.2+) + Pads

100 100 100 100 100 100 100 100 800

Pharmacies Program/ Coverage

2000 2000 1000 1000 1000 1000 1000 1000 1000 1000 1000 13,000

Floor Stands 200 200 200 600

Counter Top Units 1000 1000 1000 500 500 500 500 500 500 500 6500

POS (Posters/ Danglers 2000 2000 2000 1000 1000 1000 1000 1000 1000 1000 13000

Consumer Program

TV Advertising

Radio Advertising

Key Acc Visibility 60 20 80

Activity

: Launch

Page 27: Sensodyne Market Analysis

Next Steps

Let’s now discuss what our next steps should be in terms of:

Short term plans & Actions Q3/ 2005

Medium term plans & Actions Q4- Q1/ 2006

Long term plans & Actions > Q2 2006


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