Toothpaste Industry in India Essay Example for Free

Toothpaste Industry in India EssayThe toothpaste market in India is estimated at 7000 crores with a CAGR of approximately 12% between the 2008-2013 timeframe. The toothpaste (or in general, the oral c ar) industry is marked by Low Bargaining Power of Suppliers owing to commoditized raw materials High Bargaining Powers of Customers owing to impression switching cost and high number of options. High Rivalry amongst players owing to multi-player nature of the industry with frequent product launches. Medium Threat of New Entrants owing to high barriers of statistical distribution network slewup costs countered by large number of FMCG players. Low Threat of Substitutes since toothpastes are marked from completion from tree barks system and toothpowder usage which have steadily declined in the new millennium. Given the above industry structure, the toothpaste industry is marked by steady and comfortable margins. Analyzing the demand drivers, the customers purchase toothpastes that are easily available and those they can trust for oral care solutions. Therefore, the key success drivers for the industry are marked by competencies in Branding, Distribution, and Dental research. In this industry, 4 companies occupy more than 80% of the market share. These are Colgate-Palmolive India (48% market by value distribution reach to 4.64 one million million retail outlets) Hindustan Unilever (20% market by valueDabur India (11% market by value FMCG distribution reach to 5.8 million retail outlets) GlaxoSmithKline (4.3% market by value distribution reach to approx. 1 million retail outlets) The toothpaste industry is further sub-categorized into 6 segments comprising Regular, Whitening, Gel, Salt, Herbal, and Sensitive. The market share occupied by the 6 sub-categories is provided in Figure 1 as below. Due to low switching costs involved in purchase of toothpaste, the success factors in positioning follow the Hoteling Model/Median Voter Theoremwherein the regular toothpa stes that offer benefits for the largest set of customers attain the highest market share and usage.