colgate precise :a harvard case study

• The Colgate-Palmolive Company is an American worldwide consumer products company focused on the production, distribution and provision of household, health care and personal products.

• In 1992, Colgate-Palmolive was poised to launch a new toothbrush in the US, named Colgate Precision.

• Susan Steinberg Precision product manager, now had to recommend positioning, branding, and communication strategies for Precision toothbrush.

• Developing marketing mix for technologically superior toothbrush to faced a highly competitive market with substantial new product activity.

• What should be the marketing strategies(Positioning , Branding and Communication strategies) for the new toothbrush-Colgate Precision ?

Prior to finding solution we must first analyse the US toothbrush market to understand the market.

• In 1991, the U.S. Oral Care market was $2.9 billion in retail sales and had grown at an annual rate of 6.1% since 1986.

• Toothpaste accounted for 46% of this market, mouth rinses 24%, toothbrushes 15.5% , with dental floss and other products making up the remainder.

• Brand choice was based on features, comfort and professional recommendations.

• Consumers chose a brush to fit their individual needs: size and shape of the mouth, sensitivity of gums, and personal brushing style.

• The handle, bristles, and head shape were perceived to be the most important physical features of a toothbrush.

• Oral-B became market leader because of professional endorsements and was known as “the dentist’s toothbrush.”

• The Reach line by Johnson & Johnson (J&J) was positioned as the toothbrush that enabled consumers to brush in even the hardest-to-reach places, thereby increasing the efficiency of brushing.

• Procter & Gamble (P&G) entered with Crest Complete which claimed to have “the ability to reach between the teeth up to 37% farther than leading flat brushes.”

• As the pace of new product introductions quickened the advertising media expenditures rose.

• Growing competition also increased the frequency and value of consumer promotion events.

• The longer outer bristles cleaned around the gum line.

• The long inner bristles cleaned between the teeth.

• A superior ,technical, plaque removing device.

• The shorter bristles cleaned the teeth surface.

• The Brush achieved 35% increase in Plaque removal compared to other leading toothbrushes.

• When positioned as Niche product ,it would target at consumers concerned about gum diseases.

• As such ,it could command a 15% price premium over ORAL-B and would be expected to capture 3% of the U.S toothbrush market by the end of 1st year following its launch.

• No SKU’s Needed to be dropped!

• If Precision is positioned as a Mainstream brush, Precision would capture 10% of the market share at the end of 1st year following its launch.(Very high when compared with Niche positioning)

• The volume shares when positioned as mainstream would be 10% in 1 year when compared to 5% when positioned as Niche product!

• Mainstream was more appealing as it proclaimed larger market share & volume share at the end of 1 year after launch.

• Greater proportion of sales would occur through mass merchandisers and club stores.

• Raised concerns about ‘CANNIBALIZATION’ of Colgate plus and about pressure on Production Schedules that had been developed for Niche positioning.

• Production capacity increases required 10months lead-resulting in inadequate supply of product.

• Positioning Precision as a mainstream product with 7 SKU’s would probably require dropping one or more existing SKUs.

• Executives believed that Product should stand alone and the PRECISION brand name should be emphasized.

• Stressing Precision as opposed to Colgate would-limit the extent of Cannibalization of Colgate plus.

• The toothbrush’s feature of preventing Gum disease motivated the greatest purchase intent among test consumers.

• Additional consumer research revealed that 55% of test consumers found Precision to be very different from their current toothbrushes.

• The research also revealed that the more the consumers were told about Precision and how it worked, the greater the enthusiasm for the product.

• However, the clichéd look of the brush put the consumers in dilemma.

• Also it was difficult to translate the message of greater plaque removal with a broad consumer appeal, since few consumers acknowledged that they might have gum disease.

COLGATE-PALMOLIVE should select mass positioning for precision toothbrush. • Majority of consumers tend to focus on technical

characteristics over the aesthetic functional features which make Precision perfect choice for mass market.

• Positioning Precision as the best toothbrush on the market as super premium brush with strong promotion activities.

• Mainstream Product strategy will bring higher Net Profit of $ 31 and $ 69.7 millions in the first and second year respectively , which is $20 and $ 42 millions respectively.

• Investing a little more on Advertising and Promotion would not do much harm as it shall give a head start to this potential product.

• Since sampling would be critical to Precision’s success, it would be better to use Dentists to sample consumers since professional endorsements were more credible.

This presentation was created by Sudeepta Mohanta under the guidance of Prof. Sameer Mathur,IIM L .