First Movers Take on Fast Movers

Challenger brands upset global stars’ launch plans

Last week, oral care giant Colgate announced the launch of Colgate Sensitive Pro-Relief toothpaste for tooth sensitivity. Did that mark the opening up of a new category of business? Not quite.

Early in the year, an associate company of GlaxoSmithKline Consumer Healthcare (GSKCH) had launched Sensodyne toothpaste in the same space of pain relief and is today in the process of taking the $750-million brand national.
Two months before Cadbury Kraft India launched its global best-selling Oreo biscuits in March, rival Britannia Industries stole its thunder by launching an exact me-too product called Treat-O. Although Kraft immediately sued Britannia for ‘trademark and copyright infringement of intellectual property rights,’ Treat-O has managed to take away category exclusivity and is selling as much as, if not more than, Oreo. Both are chocolate-flavoured sandwich cookies at similar price points and the advertising for both products is similar.
Globally Oreo may be generating revenues of over $1 billion annually but, in India consumers are confusing it with Treat-O. The world’s No 1 biscuits brand had just been ambushed.
Hitting Below the Belt

• January 2011: Kraft Foods sues Britannia for trademark & copyright violation of Oreo cookies. Says latter’s Treat-O is a copy

• June 2011: Colgate-Palmolive launches Colgate Sensitive Pro-Relief toothpaste GlaxoSmithKline, which launched Sensodyne toothpaste a few months ago, starts offering ‘chill tests’ to users at modern trade stores Colgate retaliates with 1+1 free offer

• Early 2010: GSK rolls out Horlicks Foodles. HUL follows with Knorr Soupy noodles. Nestle launches Maggi’s multi-grain variant Pressure on the Leader
A clutch of brands across categories like biscuits, noodles, toothpaste and soaps is upsetting the applecart of established ones by getting to market first. “The first-mover advantage is an awesome weapon; it’s perfectly legitimate and at times can work really well for challenger brands,” says Shashi Kalathil, who runs management advisory YFactor Marketing, which consults various consumer products firms. Kalathil should know –he has been former marketing director at cola maker PepsiCo at a time when the war with Coca Cola in India was at its peak in the early 2000s.
Ambush marketing isn’t a new arrow in a marketer’s quiver. A year ago, Hindustan Unilever Ltd (HUL) pulled the rug from under bitter rival Procter & Gamble’s (P&G’s) feet by gate-crashing a carefully-crafted campaign to launch a new version of shampoo brand Pantene. A few days after P&G splashed Mumbai with hoardings that promised the launch of a “mystery shampoo,” HUL stole the limelight with a campaign that countered: “There is no mystery. Dove is the No 1 shampoo.” P&G had presented HUL with an opportunity on a platter to promote the shampoo it had launched in 2007. Ambushing with an ad campaign is one thing, but doing the same by launching a brand itself is quite another matter. GSKCH and Britannia might have anticipated – by doing its bit of market espionage – the impending launch of Colgate Sensitive Pro-relief and Oreo, respectively. But it’s not always that a marketer gets a chance to react so fast. Often, the reaction comes after the launch. But the reaction more often than not does come.
When Horlicks maker GSKCH rolled out instant noodles nationally under the Horlicks Foodles brand early last year, HUL followed suit by launching Knorr Soupy noodles. Pioneer and leader in the category for decades, Nestle with Maggi, had little choice but to attempt to play spoiler – it did so by launching a multigrain variant of Maggi backed by high-decibel advertising. The pressure is always on the leader to protect its turf. Without getting into specific examples, GSKCH vice-president (marketing) Shubhajit Sen says: “In such cases, consumers suddenly have two choices instead of one; it’s one brand versus the other; and a lot depends to what extent the leader is willing to up the ante.” Sen adds that such battles are especially intense in the first six months; after that, he says, the brands settle down and find their own spaces.
GSKCH and Colgate are currently still slugging it out. However, even as the launch strategies of Colgate Sensitive were being fine-tuned in Colgate’s boardrooms, GSKCH was already running ‘chill tests’ in modern trade stores across the country and giving consumers a chance to get themselves tested for dental sensitivity.
The counter of the country’s leading oral care maker is that its newest launch is the ‘first and only toothpaste clinically proven to provide instant and effective long-lasting relief from sensitivity.’
Sensitivity is a condition of a sharp pain experienced on consumption of hot or cold foods and liquids. Says Colgate-Palmolive MD Mukul Deoras: “Tooth sensitivity is an oral condition that affects up to 57% consumers worldwide and Colgate Sensitive Pro-Relief is a one-of-its kind remedy that can provide instant relief.”
GSKCH’s advantage is that not only did it arrive first, it can now ride on the marketing muscle of Colgate and shift most of the burden of category creation on the leader in toothpastes. After all, for GSKCH, Sensodyne is just one of the many brands in its portfolio, and toothpastes just one of its many categories.
Such ambush gambits can also result in market leaders having to up spends on advertising & promotions, thereby eating into their margins. “The other effect plays out in the trade – dealer margins have to be increased if the leader wants to protect its share,” says GSKCH’s Sen.

- Economics Times(13/06/2011)