Risk Assessment: Toothpaste Tablets in India

Risk Assessment: Toothpaste Tablets in India

Risk Analysis

Introduction

Currently, toothpaste tubes cannot be recycled. Colgate, a well-known global giant in the production of toothpaste, has been developing a recyclable container for five years and is planning to unveil it in 2020 (Suja, 2007). But Lindsay McCormick, the creator and CEO of Bite finds this move as insufficient. Her company is committed to being the most sustainable oral care business in the world, revolutionizing the industry entirely. The Bite produces low-waste, tubing-free oral care bites, which aren100% gluten-free, vegan, and free of harmful chemicals. Try one before you brush, and you will realize that the minty pellet has the same effect as regular toothpaste while brushing your teeth to refresh your breath. The bites are encased inside supportable, recyclable packaging glass bottles, and refills are sold in compostable sachets. Brush by Bites. Another advantage is that the customer gets to receive their purchase on a zero-plastic packaging (Harish, 2009). However, in the case of India, most of these companies are offering online purchases and still earning the right amount of customer base.

With the focus placed on risk assessment, infiltrating the toothpaste market in India will take a lot of resources and efforts to convince the Indians natives of the need to adopt the use of toothpaste tablets instead of the regular brands they have been using. However, a descriptive study was carried out with focus principally on the understanding and decision-making processes of consumer products, including demographic, social, and product attributes and other external influencers.  Urban India itself is on the way to becoming a global market of great importance. Due to the increasing accessibility of diverse markets, many companies in India focus specifically on urban areas (Gupta, 1988) For many companies, the most significant measure for Indian consumer’s future chance is, therefore, urban consumption growth rather than overall growth. India’s aggregate urban consumption has grown by 6.2percent, outpacing GDP growth.

The risk to The Company

1. Transport

Since there exists no manufacturing company for Bite toothpaste tablets in India, unlike Colgate and other leading toothpaste producing companies, risking competitive investment in India might prove a hard task for Bite. However, the narrative of why the native Indians should switch to toothpaste tablets will be the leeway towards reaching a more significant number of consumers who will remain loyal for an extended period. Currently, they rely on shipping their orders, which comes with issues such as broken goods (considering they are packed in a glass bottle), unreceived products considering they will be delivered through air transport, and there stand risks for misplaced goods (Nitin, Xinlei, & Narasimhan, 2008). Finding long term solutions to such issues will ensure steady growth and adoption of the company plus its products in a short period.

1. Market price structure

Another challenge toothpaste tablet companies such as Bite will face includes adjusting to the current market price of toothpaste products. Since most Indian people are already used to regular toothpaste at lower prices, introducing a new option they are not used to, including the high price it comes with, makes it hard for the company to gain any success in marketing and selling their products in India (Vani, Babu, & Panchanatham, 2010). However, for Bite or any other toothpaste tablet producing company to gain market traction in India, coming up with a product such are teeth whitening toothpaste tablets among other to help manage dental issues they face daily will help the product sell and adjust the product pricing structure to the company’s advantage.

1. Raw materials

The risk for acquiring raw materials for entry-level toothpaste tablets to the Indian market is low, especially if the company produces its products from a central company and distribute globally. Building a manufacturing industry, just as Colgate and other major toothpaste companies have done, will reduce the burden and risks of exportation. However, importation of raw materials in cases they are not present in a country presents a challenge since policy restrictions, including catastrophes, may hinder the importation schedules, including the efficiency in production and delivery (Suja, 2007).

1. Production Process

Risk analysis based on how both local and importing toothpaste companies produce their products stands at a balance. Worker hazard exposure and accidents are likely to happen in both companies depending on the installed safety measures. However, retracing and finding solutions to products that are a health risk and issued a recall from shelves will be an easier process according to (Gupta, 1988), and less expensive for locally produced products as compared to imported products such as the toothpaste tablets from Bite. Lastly, international but locally producing toothpaste companies such as Colgate stand to gain more popularity as it offers more job opportunities to the local inclusive of the tax returns the local government gains for hosting the company.

1. Exporting a Product

Several risks are associated with the exportation of toothpaste or toothpaste tablets to other counties. First, the damage of goods due to unforeseen accidents can cost the companies a massive sum of money to replace the lost batch. Another issue with importation is the laws set in a country in terms of the introduction of a new product to the company. Some of the countries prefer specified companies to supply exported toothpaste to their country, and meeting both criteria and qualification standards may be expensive and time-consuming (Suja, 2007). Lastly, garnering projected profits might prove hard since there are expected hindrances when it comes to imported goods and the analysis to determine if they meet the health standards provided by both the local and international health regulatory bodies.

1. Selling

Risks likely to be faced by both companies include reaching target sales numbers since the customers are the ultimate choosers of the brands to use. The size of the sale is a risk-making factor. The higher the scale, the more money will be used, thus the higher the risk. When you sell a product at a high price, you have to understand that the risk is immediately included in the customer’s calculations. The number of persons affected by purchasing decisions is a risk factor contributing to risk perception (Assunçao, & Meyer, 1993). Nearly every complex purchasing decision has several people involved. Some people have to use products and services. Some people have to pay for services and goods. Individuals depend on the expected results of the products and services. This can only lead a person to put off a purchasing decision if they are susceptible to other people’s opinions.

One of the critical risk factors is that a company and its products and services are not familiar to the targeted customer base, India. A first-time purchaser who has not previously purchased or purchased the products or services from you is frequently nervous and requires a lot of handling. Any new or different thing makes the average customer tense and uncomfortable. Therefore, new products and services must be presented as a natural addition to what the customer already does to create or manage a new business relationship with your company.

1. Consumer competitors

In India, the market in oral care has great potential, as penetration of oral care products per capita is very low. Yet, increasing per capita income and consciousness of oral care products drive demand. Consumers have begun switching to high-value kinds of toothpaste, such as gels, washers of the mouth, and teeth. Consumers move from toothpowder to toothpaste in rural areas (Harish, 2009). The shift to natural products consisting of herbs, vitamins, and minerals is a significant industry trend. Below are risk factors to consider before infiltrating the India toothpaste industry.

Colgate is one of India’s best and most popular toothpaste. They produce a variety of products, ranging from Colgate Total Advanced Whitening Toothpaste to Colgate Active Salt, among others in their list of associated products. Many in India call a toothpaste ‘ Colgate.’ Indian Colgate products are available for children and senior citizens of all ages. They introduce every year a vast array of toothpaste and dental products (Vani, Babu, & Panchanatham, 2010). The IDA (Indian Dental Association) accepts all its products as they go a long way towards guaranteeing dental protection for the Indians.

1. Services

In India, the oral health market accounts for approximately 16% of the entire personal care market, with a fair share of national and regional players, growing. Particularly in urban areas, value-added products are becoming popular (Suja, 2007). Colgate has had the lion’s share of popularity and usage within the citizens of India. The introduction of a new form of dental hygiene that is more environmentally healthy can go a long way in service delivery and conservation altogether.

Future trend:

Dental specialty clinics and pharmacies designed explicitly for dental needs are set to become increasingly popular in the years to come. The market of oral care should be driven by added value products such as mouthwash, dental floss, teeth whiteners (Harish, 2009).

1. Disposal

Brush by Bite, a one-of-a-kind bamboo toothbrush made of naturally antibacterial bamboo pole for easy transport and the prospect of a waste-free tomorrow, was launched by the Bite company. With 50% less of packaging than most brush products, the toothbrush is manufactured to reduce waste. It is delivered to customers with no plastic packaging, as compared to Colgate that has been finding the solution towards the elimination of plastic tubes packaging (Suja, 2007).

1. Financial risks

The financial risks that toothpaste tablet companies like Bite may face as they infiltrate the Indian dental care market is no returns on investments made. Since the products meet all regulations set by both global and local dental care product regulators, the higher risk lies on the Indian people not buying their product. Without a loyal customer base, toothpaste tablets could lose investments worth millions (Nitin, Xinlei, & Narasimhan, 2008).  However, the use of online purchase and delivery minimizes the risks that come with such investments.

1. Strategies to Eliminate and Reduce Risk

To reduce risks, companies need to come up with an effective plan that encompasses individual risks, rate of risk and likelihood of impact, assessment of current control measures in place, and lastly, coming up with a plan of action. Also, it is crucial to determine the effectiveness of the actions to determine the way forward. Another essential strategy involves making decisions on how to handle each risk by either avoiding it, reducing transfer, or accepting the risks. Also, monitoring risks helps ensure that strategies employed are working, and if not, new strategies defined to meet expected containment (Assunçao, & Meyer, 1993). One of the best approaches is to make small changes to each item continuously as the changes occur and then to undertake a more comprehensive, but still regular, review of the document.

1. Consumer Consumption Risk

This is the chance of loss by accepting a batch from the manufacturer that was actually to be refused. The consumer is influenced better than other types of information, ranging from online to normal product sales, by custom information and word of mouth communication. Consumers rely on these two factors because they rely on consumer experience and are relevant to the purchase of products. However, the producer’s brand also plays a vital role in the risk perceived by consumers. The processing of information before purchase relates directly to reducing the risk perception of consumers (Nitin, Xinlei, & Narasimhan, 2008). In particular, product performance information processing plays a crucial role in reducing the perceived risk of consumers in online transactions. The results provide insights into the role of pre-purchase information in management and e-commerce for e-marketers and researchers.

Comparison with Local Companies

1. How local companies are winning

By providing newer and improved products with new product formulation, “innovations” and marketing campaigns, brand owners focus on how to stand out from the competition. Brand owners concentrate their efforts in developing markets on educating consumers about and supporting the benefits of traditional oral health (Vani, Babu, & Panchanatham, 2010). This leads to dramatic growth in places like India, where more rural customers trade from toothpowder to toothpaste and expand their oral treatment regimens to include mouthwash / dental rinses.

1. Technological competencies

The ability to serve their customers globally with their products, including the advances they have made in the production of these toothpaste tablets, shows the capability in related technical aspects of the company. Even with the competition rate standing high in India, toothpaste tablets companies still stand a chance to take over and thrive, only if they uniquely sell their product (Harish, 2009). Overall, the technological capabilities of most companies meet the standards under which their competitors operate.

1. Variants in products

Bite, as compared to the local Colgate, Sensodyne, Pepsodent, among other brands, will need a step-up in their advertising and product content to lure new customers from India if they decide to enter their market. Since most of the Indian residents are used to Colgate as a reliable toothpaste seller, analyzing their selling strengths will enable Bite as a company thrives in this market. First, there have been efforts to eliminate toothpaste tubes since they are non-biodegradable. The Bite has made efforts to phase off the use of toothpaste tubes and the adoption of tablets that are more organic and less harmful as compared to the regular toothpaste used. Also, for Bite to thrive, they need to have a range of products, just lie Colgate has in the market. Most people have a preference for the type of toothpaste to use since they are aware of their capabilities (Vani, Babu, & Panchanatham, 2010). By using this as a competitive strategy, Bite can take over the Indian market by storm.

The success of this dynamic also depends on consumer awareness and familiarity. Consumer awareness can be weighed on the amount and quality of content they have learned from a particular set of products (e.g., cars). This category of measurement is constant with subjective knowledge, i.e., consumer awareness of the level of expertise. Often provides a contrast to objective knowledge, well-known to consumers. According to (Suja, 2007), subjective knowledge is suggested as a way of improved thoughtfulness in consumer decision-making, since clients are confident about the way they search and make decisions regardless of their objective knowledge.

1. Advertising strategies

The customers are mainly influenced by two aspects: risk aversion and innovation. Risk aversion measures safety, and individual consumers are about what they purchase. Consumers with high-risk antagonistic effects are required to be extra confident about their purchases. Consumers with less risk can take certain risks and insecurities in buying them. The second variable, innovation, is a global measure that shows how consumers are prepared to take advantage of new ways of doing things (Harish, 2009). Change is a comprehensive measure.

Consumer knowledge includes the measure of consumer knowledge about a particular channel (e.g., catalog, Internet, and retailers of sand and mortar) consumers have had any experience using (Vani, Babu, & Panchanatham, 2010). Consumers should get used to using a channel frequently, to reduce the fear and anxiety in the purchase of products on the circuit.

1. Supply of raw materials of other competitors

To promote local trade and partnership, most of the leading toothpaste companies in India have manufacturing industries set up in the country. This reduces several risks in the importation of all manufacturing products in terms of revenue and guaranteed delivery as per the schedule. This projects a whole different competitor advantage between both companies, with local toothpaste companies having the upper hand. However, with the global demand for the ban of plastic production, including a change of toothpaste formulas to suit a customer’s need, companies that produce toothpaste tablets are on the verge of overtaking the current system.

1. Weather conditions

There is no significant effect on the change of weather conditions in India towards the production and distribution of toothpaste. Delivery of raw materials and final products can only be affected when severe weather conditions such as storms, earthquakes, and heavy rainfall are involved. This affects both industries since delivery becomes a hard hack for most companies since they cannot control how nature reacts.

1. Redistribution channel/inventory management

Since Colgate and other companies have production companies within India, redistribution and inventory management are more manageable in matters that involve tracing their products. Inventory can be easily managed in the storage areas that are provided after manufacturing is done. Accessibility, when there is a need for restocking, makes most of the toothpaste companies in India have an added advantage as compared to importing competitors such as Bite toothpaste tablets.

Summary

With a focus on risk assessments, a lot of effort and resources will be needed to persuade the Indians to use toothpaste tablets rather than the regular brands they used to and readily available in the market of India. For many companies, urban consumption growth instead of overall growth is, therefore, the essential measure for Indian consumers’ future chance. The total urban consumption in India has increased by 6.2% and is outperforming GDP growth. For a company like Bite and other toothpaste tablet producing companies that aim to invest in the Indian market, it is imperative to find a selling point that consumers are conversant with, and intend to deal with. This guarantees the best results in most companies, which, in our case, is Toothpaste tablet industries such as Bite.

Conclusion

Consumer behavior is tough to predict. This problem may be solved in some way by consumer research. Companies typically focus only on analyzing consumer requirements and retaining strategies. This study was done to understand consumer behavior and motives for the purchase of toothpaste in India.  In India, the market for oral care has had a massive breakthrough since the penetration of oral care products is extremely low per capita. With increased per capita earnings and increased awareness, the demand for oral care products is on the rise. Identity brands that support family values tend to be accessible and readily accepted on the Indian market. Therefore, toothpaste companies must analyze all of these factors and learn how to promote their toothpaste brands in India with the best tools and cultural guidelines.

References

Assunçao, J.L., and Meyer, J.R., (1993): The Rational Effect of Price Promotions on sales and Consumption, Management Science, 39(5): 517-535.

Gupta, Sunil. (1988): Impact of sales promotions on when what and how much to buy. Journal of Marketing Research, 25 (4): 342-355.

Harish, K. S. (2009): Consumer Motivation Perception. Marketing Mastermind, 9(12): 47-48.

Nitin Mehta, Xinlei (Jack) Chen, Om Narasimhan (2008): Informing, Transforming, and Persuading: Disentangling the Multiple Effects of Advertising on brand choice decision, Marketing Science 27(3):334

Suja N., R. (2007): “Consumer behavior in Indian perspective, Mumba.”: Himalaya Publishing House

Vani. G, Babu Ganesh. M, Panchanatham. M.  “Tooth Paste Brands A Study of Consumer Behavior in Bangalore City.” Journal of Economics and Behavioral Studies, Vol.1, No.1, December 2010, Pp 27-39