Colgate in Spain's Markets

When companies market their product, they must also consider the various places they would like to sell it, but different places means different strategies.  This is trade marketing.  According to Wikipedia, trade marketing is defined as "a discipline of marketing that relates to increasing the demand at wholesaler, retailer, or distributor level rather than at the consumer level. " This means that companies have to provide a different assortment, price, and promotion on their product to different retailers depending on the market it is being sold in. 

In Spain, there are discount, super-, and hyper- markets. I will be analyzing Colgate’s marketing strategies for toothpaste varies in these three markets.

For the discount market, I took a look at Colgate’s aisle in Lidl. Lidl is supermarket chain headquartered in Germany. Offering mostly private label brands, Lidl displays their products on the pallets they come in and focus on offering low prices. An example of a private label brand is Colgate.  In Lidl, there is a small assortment of Colgate, but a there is a wider assortment of the brand Dentalux.

In terms of price, Colgate is priced at 2 different price points.  In the picture on the right above, Colgate Herbal, Cavity Protection, and Triple Action are being priced at 1.75 euros for 100 ml and Colgate Total at 2.25 euros for 100 ml. At Lidl, Colgate was priced lower than Dentalux but higher than the cheapest option, Binanca (1.49 euros)

There aren't any promotion available for Colgate.  The only ones available were for Dentalux, which seems to be the preferred brand by customers at Lidl. Discount stores don't really need to provide promotions because they already offer the lowest prices for their customers.

Supermarkets have the majority of market share of all grocery stores in Spain. Mercadona is the largest grocery store market share.  It’s considered a supermarket along with Al Campo and Supercor. Supermarkets gain customer attraction due to their proximity. In Spain, supermarkets are the most convenient because they are all located within the city. There's almost one on every block. Proximity makes it easier for customers to walk home with groceries. Also, they can easily go to the store as often they need to since these stores are the ones most people go to for any quick trip.  

The assortment for Colgate was greater in Mercadona than in Lidl. There was a greater variety of toothpastes in general and a wider variety of Colgate specifically. There was Triple Action, Herbal, Total, Max Fresh, Cavity Protection, Maximum Cavity Protection, Whitening, and Max White One all seen in the picture above.

In relation to the other toothpastes, the price of Colgate was higher, but not too much. The prices for Colgate ranged from 1.55 to 2.70 euros.  This makes sense because supermarkets tend to offer a small range of prices for a each category of goods. For toothpaste, it seems to be about 1-3 euros. The key to keeping this small range is to reduce the size of the toothpaste. Keeping a small range, makes customers believe they are getting a good deal on Colgate since it ends up being priced about the same as less popular brands.  In Mercadona, the size offered is 75 ml, so when compared to Lidl, Mercadona offers 0.0293 euros per ml of Colgate Total while Lidl offers 0.0225 euros. Customers don't usually realize the per ml price difference. Most just see that the cheaper option is 2.20 euros at Mercadona. 

Promotions in Mercadona were absent, which makes sense because supermarkets' aren't trying to offer everyday low prices.  Instead, supermarkets aim to provide convenience at a reasonable price by offering a wide variety of products within a small range of prices.

Last, hypermarkets are huge stores, almost like Walmart and Sam’s Club in the United States.  Hypermarkets are for those customers who plan to buy in bulk, usually families. These stores are usually located outside of the city center.  Carrefour and Hipercor are considered hypermarkets.  I took a look at Carrefour.

The assortment in Carrefour was incredible.  There were so many brands and types of toothpastes to choose from.  Looking specifically at Colgate, there was Colgate Sensitive, Triple Action, Whitening, Family Action, Herbal, Cavity Protection, Total, Maximum Cavity Protection, Total Pro Gum Health, Max White One, and Fresh Gel.  There were definitely kinds of Colgate toothpastes that were only available in this type of market, and it's because Colgate knows that customers have more time to shop and are more willing to try a new kind, depending on need, price, and promotion.

Prices at hypermarkets usually turn out lower than at supermarkets because customers buy in bulk. Price for Colgate at Carrefour ranges from 1 to 4 euros.  Hypermarkets are able to have a wider range of prices since they offer almost all kinds of Colgate available at the 75 ml size. Here, it costs 0.0289 per ml for a 75 ml tube priced at 2.15 euros, which is lower than the 0.0293 that Mercadona offers.

Promotions are most important in hypermarkets.  At Carrefour, there are 10-20 cent discounts, 2-for-1 packs, and buy get one at a percent discount. 2-for-1 packs are most popular for Colgate since they know customers are looking to buy some products in bulk.  In the image below, the 2-for-1 packs are at a 70% discount when a customer buys a 2nd unit, which promotes bulk buying even more.

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Distinguishing between discount, super-, and hyper-markets is important in Spain because it determines what sizes, kinds, and prices to provide to that particular market.  Each market has a different target group and goal in what they offer to the customer. Discount markets offer low price and low variety, supermarkets offer medium variety within a small range of prices, and hypermarkets offer a large variety and large price range with promotions available to customers who buy in bulk. Companies seeks to market their products to these retailers must already know the market and target customer group in order to effectively create their own marketing strategy.