The product protocol


In this assignment, I have analyzed a company that has overcome a David vs Goliath situation - through cleverness, creativity, differentiation but most of all 'new relevance' backed by a determined long-term perspective. Real innovation should be backed by high levels of investment over a sustained period..Only then is it possible to build big brands. The Product Protocol of Anthos Industries and its groundbreaking move of introducing a New to the market Herbal toothpaste product, taking on a Multinational company is described in more detail in the following paragraphs.


Unilever has dominated the Sri Lankan toothpaste market with a 60% share. The Signal brand had built an authoritative image based on rational benefits: 'Stops Bad Breath, Fights Tooth Decay'. Signal is synonymous with family dental care in Sri Lanka. Eight new toothpastes were introduced between 2000 and 2010. Only two brands had passed a 4% share due to Signal, keeping margins low and leveraging dominance in the media.

"C2U" coined from the words Close to You, is a Herbal toothpaste introduced in the year 2008 by Anthos Industries (AI). A concern set up by a group of young MBA graduates along with one of their former lecturers to take on the FMCG sector, hitherto, dominated by the multinational giant Unilever, was one of them with a 4% share of the market.

Consumer awareness about dental care had grown considerably in urban areas since the 1970s, helped by Unilever's educational advertising. However, the market is still under-exploited and growth opportunities are likely to arise from increasing brushing frequency and trading up from finger-use powders and unbranded products. Penetration in rural areas was still low, as was media reach. Sri Lanka will have twenty million people by the year by 2012. Crucially, most of them are young. All have the basic human needs, which drive Personal Products consumption. Not many have money but incomes are rising. If Anthos Industries brand C2U could be first to gain their favour, a major profit source could be created for the Concern.


Sri Lanka Research Laboratories (SRL) market research indicates that Dental care accounted for 75% of Personal Products market value in 2009. If Anthos Industries was to grow the hair and skin markets, it needed a volume base to support distribution and a profit base to allow sustainable investment. Unilever's profitability was awesome; they are fourth largest dollar-earner worldwide. If Anthos Industries wanted, a Personal Products business in Sr Lanka there was no way to avoid 'Total Oral Care', as Unilever called their dental cream.

Anthos Industries saw the opportunity to grow, by:

  • Differentiating "C2U" from the market leader, satisfying the basic commodity benefits of giving clean teeth and fresh breath but presenting them in the context of a relevant social pay-off for a redefined and appealing to the trendy health conscious youth target group.
  • Engineering the formulation and packaging cost down while improving quality and consumer acceptance.
  • Using the strength of Government Co-operative Wholesale Network of grocery outlets and the services of Srilanka's largest Distributor Darley Butler, to reach small, rural villages where toothpaste penetration was still relatively low. Research showed that fresh breath and white teeth were important benefits expected by consumers looking for social confidence in a fast-opening society


Innovative Functions / Features Mix

It took two years of exhaustive research and experimentation conducted by the concern working in conjunction with the local regulatory Technical Research Institute to come up with the ingredients that constituted "C2U", primary in its make up were 14 Herbs used in ancient time by indigenous Ayurvedic practitioners for the preservation of gums and teeth.

Anthos Industries decided to position C2U for young people who were moving out of their parents' home to seek employment or education. Among them social confidence and acceptance were critical needs. This positioning not only differed in functional terms from Signal's, but also offered the more positive emotional benefit of 'social confidence' versus Signal's negative advertising of 'overcoming social rejection'.

Differentiating catch phrases were built into the entire marketing mix to support this new positioning. Although the existing gel appearance of the "C2U" product was already differentiated, a new flavour was needed which could cue its mouthwash functionality and broaden market appeal? A new flavour was developed and tested against Signal. It was significantly preferred and perceived to be different.

To further sharpen the distinctiveness of the brand, the packaging had to be different and advanced in the eyes of consumers. A laminated soft squeeze tube was chosen when all other brands were still packed in old-fashioned aluminum tubes. This demanded close partnership with a new entrepreneurial supplier and integrating him into a Just In Time supply chain. The new packaging was seen to be modern, hygienic and better value (no waste). In addition, a low unit price sachet was introduced to enable non-users of toothpaste to enter the category and try the brand.


Advertising had to be different and have more aspiration than Signal. The key tasks of the launch communication were to:

Clearly contrast the colourful, vibrant and youthful world of "C2U" with the dull and serious world of Signal. Improve the value perception of the brand by emphasizing functionality (in the commercial this was shown by pouring mouthwash into the toothpaste) Show the positive experience of social confidence, with the user getting close to someone of the opposite sex in a socially active yet 'sanitized' environment.

The launch commercial portrayed these elements, closing on a young man, his attractive "C2U" smile and his fresh breath confidence in unforced proximity with the prettiest member of his group of friends. He was clearly welcome and secure. Adolescent fears of social rejection instantly evaporated to be replaced by the positive anticipation of "C2U" confidence.

However, tactical head-on contrasts with 'your usual toothpaste's taste' were needed to tempt trial. In one of the biggest sampling operations in Sri Lanka, the excellent-tasting product was sampled to Signal households and children in schools. "C2U" also pursued the youth route by sponsoring popular rock festivals and music programmes on radio and TV. The Board of Directors decided to price "C2U" at a 10% premium over Signal and support it, at five times its market share for the first two years post-launch.


The entire funding for the Development / Launch phase / Manufacture / Marketing and Sales / Distribution costs for its first two years of operation was raised by virtue of an Initial Public Offering (IPO) in June 2007 that netted a sum of Rs 150mn. The IPO was oversubscribed by over 5 times. The project prospectus stated that the concern would achieve a two-year net present value of zero, based on 15% cost of capital


The original plan of the Directors was to outsource the filling and packing operations to a company that had recently imported a filling machine capable of packing a gel or paste product into a laminated soft squeeze tube. However, following the success of the IPO, the concern bought over the machine from the 3rd party along with their packing infrastructure facility. Thereby, ensuring greater control of the production process in meeting regulatory requirement of Safety Health and Environment etc.,


In the case of "C2U" Market Share grew to 15% in only two years despite massive counter-attacks from Unilever who even introduced a gel variant (which largely substituted sales from its parent brand). Today, "C2U" holds more than a fifth of the market and Anthos Industries has its own Innovation Centre that attracts the countries most creative people.

Anthos Industries has issued a 10% dividend to its shareholders in 2010 in only its second year of operations and is planning a further placement in the Colombo Stock Exchange to raise a further, Rs 200Mn for its production expansion to cater to the exponential growth in sales of the concerns FMCG product portfolio.

The Credence of Anthos Industries is that its brand's positioning and its execution must be in line with the values and belief structure of the society. It may be Aspirational but not Un-relatable. It also believes that some problems can only be solved by getting outside the square, by breaking out of the circle of known or anticipated consumer needs. The innovator needs to look at needs that are unconnected to the product category, to challenge existing assumptions and to look for alternative lines of enquiry. Beyond the identification of new needs and the development of new solutions there is, however, frequently the need to drive consumer change. Operating in this third category you cannot assume that new ideas will automatically and easily be accepted. Often such 'out of the square' solutions to problems need powerful communication to drive home the message of change. Many markets have a series of established 'rules'. These can cover all elements of the marketing mix - eg packing colours, product benefits, advertising etc., systematically identify the benefits of breaking these rules for you and the consumer. Do not just break the rules for the sake of it.

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