Building brand loyalty in Asia

...................Colgate-Palmolive has operated in Asia for decades, which has given it the opportunity to develop a deep knowledge of its customers and their tastes, according to John Hofheimer, director of consumer and market knowledge for Hills Pet Nutrition, a Colgate-Palmolive division. And while it's the leading premium toothpaste maker in many Asian markets, it has endured a number of challenges along the way.

In 2004, the company faced a marketing crisis in China when the local media linked its toothpastes with cancer. Some of Colgate's products and those of other companies include an anti-bacterial chemical called triclosan. Regulators in China and elsewhere had checked off on the chemical's use, but an academic study in the United States alleged that it could cause cancer when combined with fluoride. Colgate-Palmolive remained convinced that the products were safe.

"In China, the study got picked up and, because we're the leading brand of toothpaste, we were singled out," Hofheimer said. "All of the major newspapers led with stories saying, 'Colgate causes cancer.' At first our management said, 'This isn't true, so let's not overreact.' But within two weeks, our business in China had dropped by 25 percent. So we addressed it with an aggressive marketing campaign. We were surprised by the lack of government support. We were out there alone."

Colgate-Palmolive's plight was exacerbated by competitors' conduct, Hofheimer noted. "There is a marketing tactic in Asia called 'push girls.' Young women are paid to approach consumers in stores and suggest products to them. The push girls were telling people that our toothpaste causes cancer........................