COLGATE-PALMOLIVE: With local Purchasing Power shrinking, the company
sees an opportunity to sharpen its focus on quality and value
With a mission of delivering superior quality products that meet
the needs of consumers and make their daily lives healthier and
more enjoyable, Colgate-Palmolive(Thailand) is celebrating its 40th
anniversary in one of Asia's most lively markets.
‘We
are focusing on our core business only, and with the backing of
our global offices, having a focus on technology and innovation
to better meet consumer needs within those four areas’
STEVEN ELLIOTT
Vice-president
The New York-based consumer products giant, with a presence in
more than 200 countries, has no shortage of experience in adjusting
to recessions. In good times and bad, it tries to remain focused
on leading the various markets in which it competes.
Today, Colgate-Palmolive(Thailand) is the market leader in the
oral-care and baby-care businesses. It ranks among the top three
in other sectors such as personal care, fabric care and household
care.
In a highly competitive local market where other giants such as
Procter & Gamble also have considerable resources to pour into
marketing, Colgate Palmolive has set an ambitious company-wide goal,
with staff adopting the theme "Market Leader Year 2000".
The recession may sideline some plans, but room still exists for
the company to gain a few more all important market-share points
for selected products, according to Steven Elliott, vice-president
and managing director of Colgate-Palmolive (Thailand).
"The success of our business is measured by how well Thai
consumers respond," he said.
"Fortunately, with the products that we continue to deliver,
Thai consumers have voted that we deliver on our promise."
The
company's lines include household names such as Colgate, Care, Protex,
Palmolive, Fab, Puff, Paic and Fabuloso. Where one product might
slip, another one might surge forward, leaving the company in good
shape to ride out the economic downturn without any trouble, according
to Mr Elliott.
"As part of its global presence, Colgate-Palmolive believes
in the long-term potential of
Thailand, and in the potential of all Asian countries," he
said.
With operations in nearly every country in the world, Colgate-Palmolive
has adapted to the challenges of marketing to consumers in countries
at varying stages of economic development.
New products can be introduced into a market even when the economy
is slumping, if consumer needs are clearly identified and the products
are perceived as worthwhile.
"We are continuously looking for products that meet and exceed
consumers' expectations, and this is part of our fundamental strategy."
The strong shift among Thai consumers to looking for quality products
at affordable prices fits the company's mission, Mr Elliott said.
"Colgate-Palmolive's fundamental strategy has been consistency
at all times, and that is to build market leadership within the
core principal categories."
To meet these goals, the company is continuing to make changes
in both supply management and in demand management, supported by
appropriate technologies.
As part of its supply-chain restructuring, Colgate-Palmolive is
carrying out what has come to be a widely-used industry standard
for managing inventories, known as ECR or Efficient Consumer Response.
ECR focuses on efficient replenishment, efficient assortment, efficient
new product introductions and a host of other issues. The company
works with all its partners to improve the effectiveness of the
supply chain.
Locally, 20 of the country's largest consumer goods manufacturers,
distributors and retailers are involved in an ambitious ECR programme
that aims to standardise bar-coding and make better use of electronic
data interchange to track supply and demand. Colgate-Palmolive is
a member along with Unilever, Procter&Gamble, Saha Pattanapibul,
The Mall, Nestle and several other heavyweights.
While there has been widespread industry cooperation, Colgate-Palmolive
hopes that its own ECR campaign will allow it to move ahead of its
competitors. Among the advantages the company hopes to get from
implementing ECR is cost saving, which would eventually lead to
lower prices for consumers.
As well, more efficiency in stock management is expected to save
the industry billions of baht a year.
Along with ECP,, the company is introducing SAP, a company-specific
software system that will supply the entire organisation with real-time
information about the company's products and processes.
By allowing everyone to work with the same information, efficiency
can be increased throughout the whole company, Mr Elliott said.
"Understanding consumer needs and wants, and meeting these
needs with innovative products, have been the fundamental ways in
which we have tried to gain market share.
"We are focusing on our core businesses only, and with the
backing of our global offices, having a focus on technology and
innovation to better meet consumer needs within those four areas.
Much of our success is due to the focused specialisation of the
company."
The continued support from corporate headquarters in New York has
also been invaluable, he said.
"Support from the global team of world-class professionals
in marketing, research and development allows us to introduce the
best products in the Thai market.
"In addition to this, the wide range of the company's global
experiences allows the Thai operation to introduce the best practices
in management techniques."
Experience in managing one's way out of a recession is not in short
supply at an organisation as large as Colgate-Palmolive. According
to Mr Elliott, the situation Thailand was facing was very similar
to ones faced in South America a decade or so ago.
"Colgate-Palmolive has gone through these types of periods
and therefore it knows how to deal with these situations. That's
the way we are, dealing with them in Thailand, which is to stay
focused and concentrate on running the business."
Despite the company's wide presence in the. region, Colgate-Palmolive
Thailand is considered to be a major plant for the region along
with Malaysia and the Philippines. The Thai plant produces goods
for countries in Indochina, for example.
Locally, the company has plants in Klong Toei, for manufacturing
and distribution, and at Bang Pakong Industrial Estate. The latter
is a production facility for liquid products, also with a nationwide
distribution centre. All the plants have been awarded ISO 9002 international
quality system certification.
The Thai operations have also received three awards from Colgate-Palmolive
world headquarters for encouraging innovative thinking and recognition
of staff achievements.
The manufacturing operations are complemented by a research centre
where extensive consumer market research is carried out in order
to understand local tastes and trends. Consumer habits and usage
studies are done, along with work on new product concepts and testing.
Mr Elliott admitted that, as with almost every other company in
his field, Colgate-Palmolive had suffered from the effects of declining
consumption, but he was convinced that it would be a short-term
phenomenon.
In the meantime, his focus is to prepare the company to meet the
forecast revival in demand. The downturn has been a good opportunity
to introduce new mechanisms for marketing, new technology and new
ways of managing.
According to Mr Elliott, the company offers training for every
employee at the lower level of the workforce. As staff move up the
ladder, each one in middle management is provided with training
according to his or her needs. The fact that they work with a global
corporation gives them extensive opportunities to advance their
careers, he said.
He said he also took pride in the fact that 90% of the top managers
at the company were Thai, and that two of them were women.
Colgate-Palmolive (Thailand) Ltd
Established: 1958
Major shareholders: Colgate-Palmolive
Co
Main businesses: Production
and distribution of consumer products
Number of employees: 1,500
Assets at end-1997: 3,636 million
baht
Gross revenue, January to September 1998: 4,437 million baht
Net profit, January to September 1998:
362 million baht
Worldwide
Headquarters: New York
Number of countries: 212
Number of employees: 37,800
1997 gross revenue: US$9,056.7
million
1997 net profit: $740.40 million
