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History
In the late 1970s, Dr. Pedro’s Aluminum Containers, Inc. stood as the major supplier of aluminum collapsible toothpaste tubes to Colgate-Palmolive, Procter and Gamble and Philippine Refining Company (PRC) now Unilever. Aluminum Containers, Inc. enjoyed profit growth due to the increasing demand from the country’s leading toothpaste manufacturers.
However, in 1985, these companies began using plastic laminated tubes. Although this caused Dr. Pedro to close his factory, he realized his old equipment could still be put to good use by forging into the Philippines toothpaste market on his own. Two years later, he reopened his factory as Lamoiyan Corporation, now known as the manufacturer of toothpaste brands’ Hapee and Kutitap.
[pic]When Dr. Pedro entered the market in 1988, the big toothpaste makers controlled 99% of the market. Today, that figure has dropped down to 65%. The first step of Dr. Pedro's strategy was to target the multi-nationals' achilles' heel: price. While Dr. Pedro knew that he could not compete in areas such as promotion and distribution, his decision to cut price by 50% won an immediate response from consumers. However, when Colgate followed suit with a 20% price cut, Dr. Pedro turned to market diversification. Among other things, he developed multi-flavored toothpaste for children. It took Colgate three years to respond, but by that time, Lamoiyan had already successfully captured the new market.
With perseverance and effective advertising, and by selling his product at a price 30% lower than the leading brands, Dr. Pedro succeeded in making Hapee the No. 3 toothpaste brand in the country.
In addition, Dr. Pedro targeted specialized markets, by diver ...