The Case of Cleopatra Soap

In 1986 Colgate-Palmolive attempted to introduce a premium soap product to the Canadian market in Quebec.  The soap, Cleopatra, was such a huge hit in France that they had difficulty keeping up with demand.  With such a success on their hands, Colgate-Palmolive decided to replicate the accomplishment in another market.  They chose Quebec, because 80% of the population spoke French.

After 14 months, the soap failed to sell and Cleopatra had lost a significant amount of money.  The idea to take a popular product and try to sell it elsewhere seems quite logical on the surface.  After all, many multi-national companies do this all the time.  For example, there is hardly a place on the planet where you can’t get a Coca-Cola.  However, just because a product is popular in one place doesn’t mean that it will be equally sought after in another location.

In introducing Cleopatra to Quebec, Colgate-Palmolive made several errors.  The first, and most obvious, was assuming that a common language and ancestry means similar tastes and attitudes.  Failing to realize that people who live on different continents and in different environments may have a different perception about the products they choose was a mistake of vast proportion.  It turns out Canadians have a dissimilar view of perfumed soaps than the French.  It may not have been invented in there, but France has been the center of European perfume since the 14^th century.  Canadians, on the other hand, view the level of perfume to vary directly with the harshness of the product.  Abrasive chemicals and cleansing strength, whether accurate or not, isn’t the image you want to portray when going after the higher margin skin care segment.

Of course we don’t know what other differences in the markets may have existed at that time.  Maybe there was less competition in France.  The Canadian market was highly competitive with 15 main brands and 20-25 minor brands of soap.  Perhaps Cleopatra wasn’t the highest priced soap in France as it was in Quebec.  It could be that the French prefer baths while Canadians take showers four times as often as they bathe.  Possibly the French have a different view of Egypt since it was conquered by Napoleon and he lived for a time in Cairo. 

Colgate-Palmolive chose Quebec to sell Cleopatra because of its supposed similarity to France. Inexplicably, what little market research they did was conducted in Toronto.  This is probably the American equivalent of doing research in Philly to sell products to customers in Tucson.  Additionally, the market research that was done seemed to be poorly thought out and executed sloppily.  For example, simply asking someone if they would buy your product without bothering to mention it will be the highest cost soap on the market won’t lead to a very good data point.

The second biggest mistake Colgate-Palmolive made was in pricing.  Their goal was to compete against Dove, the most popular soap, in the skin care and high end soap market.  While it is true that having a higher priced product can signal higher quality, for an unknown brand selling a mostly elastic commodity type product a higher price can also signal that it is merely expensive.  By trying to out-Dove Dove, Cleopatra priced themselves out of the market.  In the market research, people liked Cleopatra and agreed they would buy the product; but they didn’t agree to buy it any price.

The third error made by Colgate-Palmolive was in the product launch method.  Their goal was to build such customer demand that retailers would be forced to offer the product.  Part of this plan involved heavy television advertising using the same commercial that ran in France.  While the commercial was entertaining, it didn’t have the same effect on sales that was experienced in France.  Again, poor market research.  More importantly, Colgate-Palmolive attempted to circumvent the normal method of offering allowances and discounts to retailers in an effort to maintain high margins.  Without the support of the retailers, they were putting all their eggs in the customer demand basket without truly understanding if the demand would actually materialize.

There were several other issues that Colgate-Palmolive ran into or failed to consider.  Their promotional campaign involving coupons for free soap failed.  Only 21% of the coupons were ever redeemed.  By only selling Cleopatra one bar at a time, they didn’t take advantage of the new trend, used by Dove and most others, of bundling several bars together.  Also, liquid soap was new to the market at that time and created even more competition in an already competitive market.  Finally, the organizational manner, in which some of the product managers didn’t fully buy into the soap for the Canadian market, didn’t facilitate a successful product launch.

Despite all these problems, there seemed to be a segment that really liked the product.  When tested head to head against other soaps by people who actually used it, Cleopatra did extremely well.  This isn’t surprising given the high quality of ingredients used.  It certainly seems reasonable that with a few minor changes to both product and marketing, Cleopatra could have been mostly successful in the premium quality soap business.

So what should Colgate-Palmolive have done to fix the problems associated with Cleopatra?  The German mathematician Carl Jacobi believed many problems could be solved by looking at them in the inverse.  His maxim was, “Invert, always invert.”  With that framework in mind, it’s easy to see what needed to happen to make Cleopatra a top selling brand.  In no particular order, the price needed to be lower so that it was at least as cheap as Dove, some of the perfume scent needed be reduced, the retailers needed to be brought in to help push the product, and the TV and coupon campaign needed to be reworked to be more effective.

I’m sure Colgate-Palmolive wasn’t the first company to assume they could take a wildly successful brand and simply market and sell it in the same way in another country.  They certainly weren’t the last.  Kraft did the same thing with the hugely popular Oreo when they introduced them to China.  The cookie, so much a part of Americana, wasn’t much of a hit.  By rethinking what tastes and sensations appealed to the Chinese, they completely altered what we think of as an Oreo… but now it sells.

Rethinking the Oreo for Chinese Consumers