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Anchor's discount may herald price churn in toothpastes

09-October-2004
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Anchor's discount may herald price churn in toothpastes

Looks like the toothpaste market is getting ready for a pricing churn. After sales slumped 12.5 per cent last fiscal, players in this category have been mulling ways to stem the slide and it appears that Anchor Health and Beauty Care Pvt Ltd (AHBC) has taken the lead in terms of price correction.

AHBC has come up with a promotional offer of over 60 per cent discount on the MRP for a combipack of Anchor White toothpaste together with an Achor Premium toothbrush. While the MRP for 200-gram Anchor White toothpaste and toothbrush is Rs 54 and Rs 15 respectively, the combipack is now being offered at only Rs 25.

When contacted, the Managing Director of AHBC, Mr Sanjay Shah, told Business Line, "the offer has been launched to ensure mass trials of Anchor White toothpaste. While this offer is particularly for the Delhi market, we are also offering a price discount in several other markets."

Asked whether the company has announced a price discount due to falling market share over the last couple of months, Mr Shah acknowledged the loss but declined to quantify it.

He claimed that while market research agency ORG puts Anchor White toothpaste share at about 7.8 per cent of the Rs 2,500-crore toothpaste market, "our internal estimates peg it between 14-15 per cent".

According to company officials, the offer has been launched in Uttar Pradesh, Rajasthan, Mumbai and the South albeit at prices higher than Delhi. They also said that the promotion could be extended, depending upon the sales response it generates over the next few months.

But while AHBC has taken the lead in initiating a price correction, the market is expected to witness a flurry of activity in terms of new product launches as well. Amid talk of Procter & Gamble toying with the idea of launching its international brand Crest here, watchmaker Ajanta has already forayed into low-priced toothpastes.

Industry sources said AHBC's price cut initiative could well be the result of multinationals - Hindustan Lever Ltd (HLL) and Colgate-Palmolive - having managed to stem the onslaught of small manufacturers over the last one year through price cuts and new product launches. They said that while HLL commands about 33 per cent of this Rs 2,500-crore market with Pepsodent and Close Up, Colgate is the leader with close to half of the total market.

While the HLL spokesperson could not be reached, a P&G spokesperson declined to comment on whether the company would bring Crest to India.

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