When he retired from Johnson & Johnson four years ago, Diosdado C. Salvador Jr. was just 57 and he was more than ready to for another stint in business. So attractive was he, that Salvador immediately received offers right and left. A guru of salesmanship cannot just simply have his talents go to waste because of retirement.
Salvador had the luxury of choices. Being former president of Johnson & Johnson Asean, a position wherein it was his responsibility for the development, control, profitability, growth and efficient management of 10 markets.
At one point, Salvador accepted an offer from a huge local beauty products company but then when he told Cecilio Pedro, the founder of Lamoiyan Corp., manufacturers of Hapee toothpaste, that he was scheduled to join the beauty products firm. Pedro persuaded Salvador to join Lamoiyan.
At that time, Salvador and Pedro had an informal arrangement where the former executive of a multi national company (MNC) would work as sales and marketing consultant for Lamoiyan three days a week.
Although the offers of other firms were more tempting, Salvador's family decided for him.
"My wife said that Pedro is a walking statement of my want to serve the country," Salvador said. "Since I worked for 35 years in a foreign company, it is only proper to help a Filipino company fight it out with foreign multinational companies."
Lamoiyan ranks third in toothpaste market in the Philippines. The two other familiar brands are Colgate-Palmolive, makers of Colgate, and Unilever, manufacturers of Close-up. These are the two popular brands in the country for toothpaste.
Hapee toothpaste was not taken a serious competitor by these multinationals when it started out in 1988.
The management handling Hapee toothpaste only managed to inch a dint in the toothpaste industry when they spent for the Philippine teaming the 1988 Olympics.
The multinationals srowded the market for many years, and it was a decided fact that it would take a lot of capital and efforts to compete with the market Colgate is like Kodak or Exerox as it is synonymous to toothpaste; and Close-up was decidedly second place.
Salvador faced this challenge when he joined Pedro to share a bigger share of the toothpaste market for Hapee.
Initially, Pedro discovered that Hapee was not improving its share in the market and innovated to improve the market share. By improving marketing techniques and product development.
To buttress product development, the company hired a retiring Colgate Palmolive executive Zeny Soriano who readily agreed to join Lamoiyan.
Salvador then proceeded to form a new marketing team with a rather ambitious aims. Sales then improved four times when compared to the past five years. New products, more advertising and improvements in the plant helped the firm's success.
Among the major steps taken was advertising. In late 2004, Campaigns and Grey was tapped to handle Hapee.
Salvador says Lamoiyan came up with new toothpaste variants, like Extreme Clean which targets the young.
Also, the Night and Day variant, which claims to provide the user with fresher breath in the morning. Then there is Complete, Lamoiyan's answer to Colgate's Total.
To make it more attractive, Salvador changed the packaging of the toothpaste.
Salvador also pursued the lower-end market. Lamoiyan has gained tremendous strength in the toothpaste sachet market. He explains that the toothpaste market is divided between users of tubes and sachets. In the past, only 25 percent of the market used sachets. In 2006, this has grown to 35 percent and is expected to further grow as people downsize their purchases in view of rising commodity prices.
The sachet market was initially dominated by the two MNCs. This, Salvador says, despite the fact that Lamoiyan was selling its 10 ml. sachets for only P2.50, while the two were selling their 10 ml. for P7.
He realized that the Lamoiyan packaging was smaller than the others. But the truth was, the Hapee sachets contained more toothpaste than what Lamoiyan's competitors had in their respective packets.
To address the issue, Salvador says they made twin packs which they then sold for P5. From 200 cases a month in 2004, he says sales increased to 60,000 cases a month last year and is expected to hit 100,000 this year.
Salvador emphasized the sachet market is very crucial. "This is the way to reach the poor."
He also cites a Department of Education study that showed how half the time, children from kindergarten to Grade 3 tend to miss class due to dental caries or cavities.
Studies showed that if the children were to brush their teeth once a day the incidence of cavities would drop to 27 percent but it could be still reduced by half if they were to brush their teeth twice a day. And obviously more sales for Hapee. Salvador says the margins in sachets are very minimal, but "it is Cecilio Pedro's social marketing."
"He told me, you make more money in tubes. For as long as we do not lose, we will continue with this."
The struggle to slug it out with MNCs is not just difficult in terms of the brand power the bigger firms enjoy, nor the capital backing them up. There is also the efficiency in operations to consider. With an efficiently run operation, costs may be brought down. The MNCs set up production facilities where it is cheapest and most efficient for them.
"We can easily bring manufacturing to Vietnam or China, as we did with J&J and save a lot, but Cecilio does not want this," Salvador points out. "We have to help provide employment."
Lamoiyan is one of the few firms that employs disabled individuals. Lamoiyan mostly employs deaf and mute workers. Salvador, who is used to the rigid systems of MNCs, is the first to admit that lack of communication can be a major stumbling block.
But he says Pedro's policy cannot be changed.
Today, Salvador is proud that people are now talking of three toothpaste brands, unlike in the past where they used to only consider two.
The goal is to achieve a 25-percent market share by 2010. But Salvador is confident that the firm will exceed its goal.
One of the factors that helped the firm achieve growth so fast is that it is a small company, and decision making is quicker.
"It takes 18 to 24 months for MNCs to move."
Salvador had the luxury of choices. Being former president of Johnson & Johnson Asean, a position wherein it was his responsibility for the development, control, profitability, growth and efficient management of 10 markets.
At one point, Salvador accepted an offer from a huge local beauty products company but then when he told Cecilio Pedro, the founder of Lamoiyan Corp., manufacturers of Hapee toothpaste, that he was scheduled to join the beauty products firm. Pedro persuaded Salvador to join Lamoiyan.
At that time, Salvador and Pedro had an informal arrangement where the former executive of a multi national company (MNC) would work as sales and marketing consultant for Lamoiyan three days a week.
Although the offers of other firms were more tempting, Salvador's family decided for him.
"My wife said that Pedro is a walking statement of my want to serve the country," Salvador said. "Since I worked for 35 years in a foreign company, it is only proper to help a Filipino company fight it out with foreign multinational companies."
Lamoiyan ranks third in toothpaste market in the Philippines. The two other familiar brands are Colgate-Palmolive, makers of Colgate, and Unilever, manufacturers of Close-up. These are the two popular brands in the country for toothpaste.
Hapee toothpaste was not taken a serious competitor by these multinationals when it started out in 1988.
The management handling Hapee toothpaste only managed to inch a dint in the toothpaste industry when they spent for the Philippine teaming the 1988 Olympics.
The multinationals srowded the market for many years, and it was a decided fact that it would take a lot of capital and efforts to compete with the market Colgate is like Kodak or Exerox as it is synonymous to toothpaste; and Close-up was decidedly second place.
Salvador faced this challenge when he joined Pedro to share a bigger share of the toothpaste market for Hapee.
Initially, Pedro discovered that Hapee was not improving its share in the market and innovated to improve the market share. By improving marketing techniques and product development.
To buttress product development, the company hired a retiring Colgate Palmolive executive Zeny Soriano who readily agreed to join Lamoiyan.
Salvador then proceeded to form a new marketing team with a rather ambitious aims. Sales then improved four times when compared to the past five years. New products, more advertising and improvements in the plant helped the firm's success.
Among the major steps taken was advertising. In late 2004, Campaigns and Grey was tapped to handle Hapee.
Salvador says Lamoiyan came up with new toothpaste variants, like Extreme Clean which targets the young.
Also, the Night and Day variant, which claims to provide the user with fresher breath in the morning. Then there is Complete, Lamoiyan's answer to Colgate's Total.
To make it more attractive, Salvador changed the packaging of the toothpaste.
Salvador also pursued the lower-end market. Lamoiyan has gained tremendous strength in the toothpaste sachet market. He explains that the toothpaste market is divided between users of tubes and sachets. In the past, only 25 percent of the market used sachets. In 2006, this has grown to 35 percent and is expected to further grow as people downsize their purchases in view of rising commodity prices.
The sachet market was initially dominated by the two MNCs. This, Salvador says, despite the fact that Lamoiyan was selling its 10 ml. sachets for only P2.50, while the two were selling their 10 ml. for P7.
He realized that the Lamoiyan packaging was smaller than the others. But the truth was, the Hapee sachets contained more toothpaste than what Lamoiyan's competitors had in their respective packets.
To address the issue, Salvador says they made twin packs which they then sold for P5. From 200 cases a month in 2004, he says sales increased to 60,000 cases a month last year and is expected to hit 100,000 this year.
Salvador emphasized the sachet market is very crucial. "This is the way to reach the poor."
He also cites a Department of Education study that showed how half the time, children from kindergarten to Grade 3 tend to miss class due to dental caries or cavities.
Studies showed that if the children were to brush their teeth once a day the incidence of cavities would drop to 27 percent but it could be still reduced by half if they were to brush their teeth twice a day. And obviously more sales for Hapee. Salvador says the margins in sachets are very minimal, but "it is Cecilio Pedro's social marketing."
"He told me, you make more money in tubes. For as long as we do not lose, we will continue with this."
The struggle to slug it out with MNCs is not just difficult in terms of the brand power the bigger firms enjoy, nor the capital backing them up. There is also the efficiency in operations to consider. With an efficiently run operation, costs may be brought down. The MNCs set up production facilities where it is cheapest and most efficient for them.
"We can easily bring manufacturing to Vietnam or China, as we did with J&J and save a lot, but Cecilio does not want this," Salvador points out. "We have to help provide employment."
Lamoiyan is one of the few firms that employs disabled individuals. Lamoiyan mostly employs deaf and mute workers. Salvador, who is used to the rigid systems of MNCs, is the first to admit that lack of communication can be a major stumbling block.
But he says Pedro's policy cannot be changed.
Today, Salvador is proud that people are now talking of three toothpaste brands, unlike in the past where they used to only consider two.
The goal is to achieve a 25-percent market share by 2010. But Salvador is confident that the firm will exceed its goal.
One of the factors that helped the firm achieve growth so fast is that it is a small company, and decision making is quicker.
"It takes 18 to 24 months for MNCs to move."
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