SWOT

Strengths Colgate-Palmolive is recognized as the world’s leader in personal care sales which included oral hygiene products like toothbrushes and toothpastes.  In 1991, its sales topped at $6 billion and profits at $2.76 billion as it cornered 43% of the world’s toothpaste market and 16% of the world’s toothbrush market.  In the United States, the world’s largest market, Colgate-Palmolive holds the number one spot in toothbrush sales with a market share of 23%.  From these statistics, one of Colgate-Palmolive’s main strengths is being the world market leader in oral care products.

            Colgate-Palmolive’s extensive overseas reach is another main strength.  Based on the data

in the case study, Colgate-Palmolive introduced 275 new products worldwide and setup

manufacturing facilities in China and Eastern Europe breaching the emerging economies of the

21st century.  On top of that, international sales accounted for 64% of total sales and 67% of the total

profits for Colgate-Palmolive.

            Colgate-Palmolive has an extensive Research and Development department boasting 170

employees worldwide.  Though having a large R&D department does not directly contribute to

increased profits, Colgate-Palmolive’s history of innovation[i] in the toothbrush market is linked to its

current position as the market leader in the toothbrush industry.  Therefore Colgate-Palmolive’s

strong commitment to innovation through investment in R&D is a prominent strength.

            With an energetic and visionary leader like Reuben Mark at the helm of Colgate-Palmolive,

the company has transformed itself into a lean and profitable machine, leading to increased profit

margins and volume growth.[ii]  Clearly, having a visionary CEO is a strength.

            Colgate-Palmolive’s positioning strategy for its toothbrush line in food stores has aided in

capturing their current dominant market share.  Its in-store displays, combining toothbrushes with

toothpaste packs and locating the Colgate-Palmolive line of toothbrushes in the middle of the stores’

shelves have contributed to this dominance.  This strategy has been successful, as sales through

food stores, drug stores and mass merchandising channels have produced the greatest volume and

dollar sales historically.[iii]

            Colgate-Palmolive has a large number of stock keeping units for their toothbrush line.[iv] 

Multitudes of SKUs indicate that Colgate-Palmolive is targeting a broad spectrum of market

segments in the toothbrush market, which spreads the risk inherent to carrying any product.  

Diversification of product types within the toothbrush market is another strength factor Colgate-

Palmolive holds.

            Colgate-Palmolive’s secret weapon in the war for supremacy in the super-premium market,

Colgate Precision, is proven to be very effective in removing plaque – 35% more effective than

existing brands – and in preventing gum disease.  This advantage can be attributed to the innovative

design, high-tech research using CAD and infrared scanning, consumer research and extensive

product testing.   Although this technology is a strong argument for positioning Precision in the

“super-premium” category, Colgate-Palmolive could also use its design aspects to improve Colgate-

Palmolive’s existing “professional” and “value” toothbrush lines to increase their respective market

shares.  Colgate-Palmolive’s patented[v] innovation for Precision also stands as a strength upon

which Colgate-Palmolive can lean for other market differentiating advancements.

            Colgate-Palmolive’s recent infusion of new capital into its manufacturing facilities will bode

well as it prepares to battle for market share in the new “super-premium” market segment.    Colgate-

Palmolive will be able to leverage its existing relationship with its manufacturing partner, Anchor

toothbrush, to quickly and cost-effectively product its newest product.

Weaknesses

            The impending release of Colgate-Palmolive’s  new toothbrush, Precision, may affect sales

of its existing toothbrush lines.  This may lead to a “cannibalization” of the Colgate Plus and Colgate

Classic market of up to 60%.[vi]   Since the existing toothbrush lines are the “cash cows”[vii] of the

company’s oral care division, a dismal performance by the new Colgate-Palmolive Precision might

drain the “cash cows” of their resources altogether. 

            Colgate-Palmolive’s media expenditure layout is very small compared to its rivals.[viii]  It

has spent only $7 million dollars on its Colgate-Palmolive Plus marketing efforts and has only 19% of

the share voice.  Since media exposure fuels consumer demand[ix] for a new product, this is one

area where Colgate-Palmolive needs to have its expenditures equivalent to that of its rivals.

Another marketing weakness that Colgate-Palmolive faces is its lack of professional dental

endorsements, with less than half that in market share and dollar sales than that of their largest

competitor, Oral-B.   Similar to Colgate-Palmolive’s lack of professional endorsement, the Precision

toothbrush does not have the fullest endorsement from the American Dental Associations (ADA). 

Although the ADA issued its seal to the product, the seal alone stands for little more than recognition

that the toothbrush works.  In fact, only when the ADA issues its seal and an official quote stating

that a product is superior to similar product types, does a product receive the fullest support

possible.  Not having the full backing of the ADA is a weakness which Colgate-Palmolive may have

to overcome to gain the professional endorsement they seek.[x]

Opportunities

Macroeconomic

            The emergence of the niche “super-premium” category presents a golden opportunity for

Colgate-Palmolive to increase market share for several reasons.  First, although its competitors, i.e.

Oral-B, Johnson & Johnson and Procter & Gamble, have gained a foot-hold in this niche market

already, Colgate-Palmolive can still make a dent with its new Precision toothbrush, thus enabling

them to enter a new and potentially highly profitable market segment.  Since the “super-premium”

category accounts for 35% of the volume and 46% of the dollar sales of toothbrushes [xi] this niche

category may in turn result in a substantial profit margin. 

            Secondly, with the baby boomers and younger generations becoming more concerned with

the health of their gums, they will be willing to pay the above mentioned premium for a

toothbrush[xii] which is optimized for better gum care.  Colgate-Palmolive can capitalize upon this

demographic segment to ensure a successful release of their “super-premium” Precision toothbrush.

            Finally, since 82% of toothbrush purchases are unplanned and many consumers are

unaware of the technological and cost variation among toothbrush brands,[xiii]Colgate-Palmolive

could establish a media blitz with educational ads depicting Precision toothbrushes as

technologically superior to its rivals at an equivalent cost.   The ads can also serve to educate

consumers about proper toothbrush replacement schedules to ensure effective plaque removal and

gum disease prevention.  Ultimately, Colgate-Palmolive could leverage their advertising campaign to

boost sales and revenues.

Microeconomic

            One of Colgate-Palmolive’s competitors, Johnson & Johnson,[xiv] ranked third in toothbrush

sales, was phasing out one of its toothbrush lines at the time of the Precision introduction.  As the

toothbrush market remains rather constant, courting customer from other brands, particularly ones

being phased out, is a tremendous opportunity to gain market share.[xv]    Another competitor,

Smithkline Beecham, was  predicting an operating loss in its toothbrush business. [xvi]  If the losses

are sustained, it  might cause Smithkline Beecham to move out of the toothbrush business all

together, yet again opening the door for further gain of market share.   Colgate-Palmolive’s constant

innovation also provides an opportunity to convert consumers away from less advanced

toothbrushes, such as those offered by Lever.

Threats

Threat of intense segment rivalry

            The super-premium toothbrush market is highly competitive, hosting many brands and

private label toothbrushes.  If any of these rivals creates a toothbrush which tops or even equals the

technology of Precision, specifically if done at a lower production cost, Colgate-Palmolive may lose

market share.

Threat of new entrants

                Along with intense rivalry from existing competitors, Colgate-Palmolive has to deal with

new competitors.  In 1991, the toothbrush market exploded with a dramatic increase in new

entrants.  Proctor and Gamble introduced Crest Complete, their first toothbrush[xvii]. Smithkline

Beecham entered the market with Aquafresh Flex and a 9% market share volume for 1991.  Levre,

Pfizer and Sunstar all entered the market in 1991 and earned a total 11% market share.  These

numbers reinforce the seriousness of the threat of new entrants that Colgate-Palmolive will have to

contend with when they launch Colgate Precision.

Threat of substitute products

               Similar to many industries, oral care technology has advanced tremendously since its

inception in approximately 3000 B.C.  The introduction of the nylon bristled toothbrush in

1938[xviii] represents one of the latest quantum improvements for the industry, however it was not

the last.  The introduction of electronic toothbrushes and water picks are threatening to usurp

traditional oral care product’s market share.  This is a threat which Colgate-Palmolive needs to heed,

despite its confidence in the technology of Precision.

Threat of suppliers’ growing bargaining power

            Colgate-Palmolive depends on Anchor toothbrush for its outsourced manufacturing.  Hence,

Anchor toothbrush has a decided supplier advantage in the relationship with Colgate-Palmolive.  If

Anchor toothbrush were to increase its supply cost, it would affect Colgate-Palmolive’s production

costs which in turn would impact Precision’s market share by potentially pricing it above even the

super-premium segment.  Colgate-Palmolive needs to maintain a healthy relationship with Anchor

toothbrush to reduce the risk of a costly supplier switching process.

Threat of buyers’ growing bargaining power

One of the factors which can cause buyers’ bargaining power to grow is when the switching

costs for buyers are low.  Even if Colgate-Palmolive were to position Precision as the most

expensive toothbrush on the market, it is still a relatively inexpensive product, compared to many

daily purchases (i.e. lunch in NYC or a cup of coffee at Starbucks).  Therefore, buyers can easily

switch between toothbrush brands without giving the decision much thought. To combat this threat,

Colgate-Palmolive could position Precision as a superior toothbrush that customers can not afford to

be without. 

PROBLEM STATEMENT            In 1992, after evaluating the current market condition and completing its research and

development, Colgate-Palmolive was ready to begin marketing its newest toothbrush, Colgate

Precision.  Of major concern to Colgate-Palmolive was how to position, brand and communicate this

new product to the general population.  Colgate-Palmolive also had to develop budget constraints

and generate a marketing mix that would maximize the sales and revenues of the new product.

            Colgate-Palmolive was faced with the decision of whether to promote the new product as a

high quality niche product marketed mainly towards individuals concerned about gum disease, or as

a mainstream toothbrush that would be marketed as the best toothbrush available.  If marketed as a

niche product, Colgate-Palmolive would target a smaller market segment without as many

competitors vying for market share.  A niche market segment would also be willing to pay a premium

for the new toothbrush.  If, however, the toothbrush were marketed as a high quality mainstream

toothbrush, Colgate-Palmolive would realize revenues from larger volumes of sales despite a lower

price and more competition.

            To reach its verdict, Colgate-Palmolive analyzed forecasted data with regard to potential

sales volumes and prices, advertising, packaging, and manufacturing costs, among other factors.  A

summary of this analysis, and a marketing strategy recommendation follows.

 

EVALUATION OF ALTERNATIVESIn August 1992, Colgate-Palmolive had two options regarding the positioning strategy for

their new toothbrush titled Colgate Precision.  Their choice was to position the product as a

mainstream offering or target the Precision toothbrush to a niche market. The positioning of the

product would have little to do with any modifications to the actual design of this toothbrush, but

would effect the perception of the toothbrush within the market.

Mainstream or mass marketing refers to the mass production, distribution and promotion of a

single product to all potential buyers.[xix]  Contrarily, niche marketing is a form of micro-marketing. 

It refers to a specifically defined group of consumers with a need that is not currently well served.  A

niche is created from a subdivision of a market segment.[xx]  Due to the diversity of these two

market types, the decision to market the Precision toothbrush as a mass-market product or as a

niche product involves analysis of the advantages and disadvantages for each.

Mainstream Marketing

Advantages

The primary reasons to use a mainstream marketing approach is that the product is made

accessible to a larger market.  Marketing to a more diverse audience would enable Colgate-

Palmolive to construct a more simple and direct campaign that would address the common concerns

of all toothbrush buyers.  Consequently, the use of television and radio would be more cost effective

as it would reach this larger audience.

The obvious goal of such a position would be to capture a greater return on the investment

Colgate-Palmolive made on this product’s research and development effort.  It is estimated that

within twelve months this product could secure 10% of the market and a volume share of 14.7% by

its second year.  This would equate to 27 million retail unit sales in year one and 44 million in the

second year, if positioned as a mainstream product.[xxi]

Disadvantages

There are also many problems with marketing Precision to the masses.  In the mainstream

market a higher price makes a product less attractive to the average consumer.  This means that

Colgate will have to price their product within reasonable alignment of other similar products in order

to be a serious competitor inside this market, ultimately diminishing their potential profit margin and

return on investment.

There is a variance amongst consumers in relation to oral hygiene.  They are classified into

three groups:

         Involved oral health consumers – Therapeutic brushers

         Involved oral health consumers – Cosmetic brushers

         Uninvolved oral health consumers

These segments are divided into relative percentages of adult toothbrush users.  They are 46%,

21% and 33% respectively.[xxii]  This illustrates that one third of the toothbrush using adult

population has only little interest in oral hygiene and are probably not a worthwhile audience to

which to pitch the Precision toothbrush.  The expense of including these consumers in the target

market would not be advisable.

In the design and testing phase of the Precision toothbrush, Colgate-Palmolive accrued

significant clinical data concerning the product.  This information would not be relevant to the

mainstream market that most likely would view it as too scientific.

The Precision toothbrush was originally conceived to be a “top-of the-range, super-premium

product”[xxiii] indicating that production schedules had been developed in line with a niche

marketing strategy.  Mainstream marketing would require a greater volume production of the

toothbrush with an estimated ten month lead time to achieve sufficient quantities of the product. 

This could result in an inadequate supply of the product at the outset.[xxiv]

The objective of the research and development group working on the product was to

“develop a superior, technical, plaque-removing device.”[xxv]  It was produced to be “the best

toothbrush possible” and become the “top-of the-range, super-premium product.”[xxvi] All of these

phrases are heavily skewed towards niche merchandising.  A mainstream product should aim to

serve all of the people, all the time.  This product clearly was created with niche-oriented goals.

The greatest issue facing Colgate-Palmolive if they were to promote this product in the

mainstream market is that it would be distributed through the same channels as an existing Colgate-

Palmolive toothbrush called Colgate Plus.[xxvii]  Colgate Classic was the company’s original entry

in the toothbrush sector and was positioned as a value segment.  The Colgate Plus came later and

was placed in the professional segment as a higher quality product.[xxviii]  Including Precision as a

high-end, mainstream product could potentially “cannibalize” Colgate Plus sales.

Finally, Susan Steinberg, the product manager of Precision, felt that incorporating the new

product into the mass market would require the company to delete one or more of the seven existing

SKUs (stock keeping units) that Colgate-Palmolive produced.[xxix]  This strategy could result in a

loss of market share in the value or high-end segments.

Niche Marketing

Advantages

Advertising companies have access to audience profiles through a wide variety of media

products, such as television, radio and print media.  This is the fundamental basis for successful

niche marketing.  A great advantage of offering any eligible product to a niche market is that it allows

for a concentrated, specific advertising campaign, targeted to a specific demographic,

psychographic, behavioral or geographic segment through whichever medium is most effective at

reaching the specific population.[xxx]  This allows efficient use of advertising budgets.  Precision

falls within the class of goods that could tender itself as a niche product. Developed to be the best

toothbrush possible and placed in the super-premium category, this toothbrush is inherently a niche

product. 

Members of the public most interested in this toothbrush would be those in the “Involved oral

health consumers” groups; therapeutic and cosmetic brushers.  Therapeutic brushers are interested

in functionally effective products and differentiate between brands.[xxxi]  Both segments of

customers would appreciate the scientific data Colgate-Palmolive has complied on this toothbrush. 

The facts that the initial clinical trials removed an average of 35% more plaque over that of Reach

and Oral-B, and that it assists in the reduction of the likelihood of gum disease, would be effective

information for this group.[xxxii]  Unlike the mass market, these are issues which a niche market

segment would comprehend and about which they would care.

Niche market participants are also more likely to pay a premium for this product due to the

fact that Precision caters to a distinct set of needs they have. With this type of positioning, a 15%

increase in price above Oral-B regular would be anticipated, bringing the cost to consumers to $2.13

per unit (more aligned with Oral-B Indicator).  A mainstream market could only be anticipated to pay

$1.85, in accordance with the Oral-B regular line.[xxxiii]

As Precision was conceived more as a niche-type product, initial production was set for the

lower demands of the smaller market segment. As discussed previously, to change the natural

emphasis of the toothbrush to mainstream distribution would require a major overhaul of projected

production schedule and costs due to the increase number of units required.

Additionally, to keep Precision as a specialized product means that the new product is less

likely to invade the market share of other Colgate-Palmolive products, like the Colgate Plus.   This

would also preserve the number of SKU that Colgate-Palmolive currently produces in the toothbrush

sector.

Niche markets historically attract fewer competitors.[xxxiv]  This gives time and room for a

new product such as Precision to establish itself and build up a market share before it may have to

fight against a new contender.

Disadvantages

Marketing the Precision product to a niche market would generate less revenue for Colgate-

Palmolive than a mainstream approach.  Working with the estimated figures for the first two years of

release generates the following table.

Niche marketing Mainstream marketing

Year 1 Year 2 Year 1 Year 2

No. units sold 8MM 15MM 27MM 44MM

Factory list price $2.13 $1.85

Total revenue generated

$17,040,000

$31,950,000 $49,950,000 $81,400,000

Obviously, the niche market revenue is significantly less than the mainstream market revenue,

despite the 13% higher price.

Conclusion

Developing and communicating a positioning strategy for a product is necessary and critical. 

Differentiating a product, and the degree to which that product is differentiated, can be guided by

quantifying the following criteria:

         Importance

         Distinctiveness

         Superiority

         Preemptiveness

         Affordability

         Profitability

Using these parameters, a company can provide the public with a reason to buy their product.

[xxxv] 

Another tool used in solving the marketing mix problem companies face when launching a

new product is a perceptual map.[xxxvi]  This is a graphic representation of two or more features

against which similar products can be ranked.  When graphed, the resulting map displays areas to

which the product types cater, revealing both areas of over population and areas of potential

opportunity.  Clusters of products exist when similar products appeal to the same consumer market

participants.  In these areas, competition is intense, therefore, they are not as attractive when

positioning a new product. An optimal plan is to create a space within the product market that is

relatively free of rivals and can enable a new product to develop and dominate.

A perceptual map for Precision was created from the following data:

Toothbrush Price Benefits Class

Colgate Precision 0.8 0.9 Super Premium

Oral-B Indicator 0.8 0.8 Super Premium

Oral-B Regular 0.7 0.6 Super Premium

Crest Complete 0.5 0.6 Super Premium

Reach Advanced 0.6 0.5 Super Premium

Aquafresh Flex 0.7 0.7 Super Premium

Colgate Plus 0.4 0.4 Professional

Reach Regular 0.3 0.4 Professional

Pepsodent Professional 0.2 0.4 Professional

Colgate Classic -0.4 -0.1 Value

Pepsodent Regular -0.3 -0.1 Value

Butter GUM Microtip 0.3 -0.1 Value

Butter GUM Supertip 0.4 0.1 Value

Menedent Pro-Core 0.7 0.7 Professional

Oral-B cross action 1 0.8 Super Premium

Generic Eckerd Interdental -0.5 -0.2 Value

Generic Eckerd Angle -0.7 -0.2 Value

Crest Advantage 1 0.8 Super Premium

Recommendation

Using these evaluative criteria in relation to the advantages and disadvantages of niche and

mainstream marketing, we believe that Colgate-Palmolive should position the Precision toothbrush

as a niche product.   This would establish Precision as the leading toothbrush on the market at a

competitive price. It would be a superior and distinctive oral care product. However, we believe this product would also work in the mainstream market and we envision it moving towards the mass market in the future.  Once the toothbrush has established itself as a high quality product with specialty features, we believe that Colgate-Palmolive could transition the product to a wider audience.  This will also allow time for Colgate to reconcile the position that the Colgate Plus product will hold relative to the Precision line.

Further, we anticipate no significantly negative issues will be encountered by initially

marketing Precision as a niche product and then moving it into the mainstream market.  We do not

believe the opposite would be true, as a niche market will most likely not accept a product that has

been offered to the masses as the best value, and then marketed as a specialty item.

The anticipated cyclical nature of the product on the market is well illustrated by the Boston

Consulting Group’s Growth-Share matrix.[xxxvii]  The Precision toothbrush will begin as a

“question mark.”  This means the company will spend money developing and establishing the

product in anticipation of increasing its market share.  Subsequently, the hope would be for Precision

to become a “star,” meaning it has been successful by obtaining a high market share and growth

rate.  If the product evolves into a mainstream offering by this time, the company will reap higher

rewards. 

Going even further into the future, the toothbrush will most likely decrease its market growth

rate while maintaining its high market share.  At this phase the product will be a “cash cow.” 

Revenues produced from Precision at this phase can be used to establish other “question marks”

and/or subsidize other “stars” if required.  The final phase in this product’s life cycle will be a decline

into “dog” status.  This refers to the product when it has weak market share and low growth.  At that

point, Precision would need to be removed from the company’s product line, allowed to decline

further or all together repositioned in the market. 

            At this point, the research and development phase for Precision has been completed, a thorough analysis has been performed on the current market situation, and a marketing strategy has been recommended.  The final aspects of launching a new product must now be investigated – product, price, place and promotion.

PRODUCTColgate-Palmolive has many important decisions to make regarding the new toothbrush

before it becomes available on store shelves for customers to purchase, including the positioning

strategy for the new toothbrush.  To reach a conclusion, the new toothbrush must be analyzed on

three product levels - the core product, the actual product, and the augmented product - so that

customer’s needs are fully understood and the Precision toothbrush is correctly marketed to meet

those needs.

Since we are recommending that Colgate-Palmolive choose a niche market for Precision, the

core benefit that the toothbrush will deliver to its users is plaque removal.  Less plaque in turn leads

to the added benefit of a reduction of the likelihood of gum disease.  This is the primary reason that

the target niche customers will purchase the toothbrush.  Colgate-Palmolive must therefore position

itself as the premiere benefit provider to these consumers.  To do so, the toothbrush must be

positioned and marketed with regard to the physical or actual product.  This incorporates the

products brand name, the products features and style, the packaging, and the quality of the product.

Colgate-Palmolive’s branding decision resulted from four concept tests used to evaluate the

effectiveness of potential names.  Ultimately, the name “Precision” emerged from the others as it

brought to mind connotations of an oral care product that cleans one’s teeth completely and

consistently.  Further, the word Precision exudes many of the qualities that are desirable in a brand

name, such as positive attributes, high quality and a name which is easy to pronounce, recognize,

and most importantly, remember.  Regardless of which name was chosen, however, the individual

product’s branding would also be able to take advantage of the brand recognition of Colgate-

Palmolive – a household name that the majority of the population associates with good dental care.  

Colgate-Palmolive could have also considered utilizing the line extension tactic of

“introducing additional items in the same product category under the same brand

name,”[xxxviii] thereby marketing the toothbrush as “Colgate Precision.”   This brand name, as with

other Colgate-Palmolive products, should come to signify Precision’s intentions to deliver features

that are synonymous with the consumers need for good dental health as offered by a well recognize

and trusted company.

As mentioned above, a brand name should bring certain attributes, benefits and values to

the minds of consumers.  Consumers should recognize the physical attributes of the Precision

toothbrush as an advantageous design that will work better than the majority of the toothbrushes on

the market.  The benefits that the consumer should associate with the Precision toothbrush should

include noticeably cleaner and healthier teeth and gums.  The values inherent to Precision should be

an effective tool for improved oral care.  Combining the attributes, benefits and values of Precision

into a readily recognizable product is a step towards Colgate-Palmolive’s ultimate goal  - brand

loyalty to Precision.  

            Precision has patented the design and features of the triple action bristles that work with one

another so that the short, long, and angled bristles remove 35% more plaque then a standard

toothbrush.[xxxix]  There are, however, some aspects of the toothbrush that still need to be

defined, such as the cosmetics. 

Most people undoubtedly associate toothbrushes and general oral hygiene with a dentist. 

To capitalize on this association, Colgate-Palmolive could make the Precision toothbrush a metallic,

silver color so that consumers immediately conjure images of the dental equipment that is known to

technically and thoroughly clean teeth.  To add a touch of flare, and for convenience, the

toothbrushes could also be designed with a bright streak of color within the silver background for

easy differentiation when multiple household members use Precision toothbrushes.  These bright

streaks should also be the palate upon which the name Precision should be set to serve as a

constant reminder of the brand name.  To maximize on these cosmetic suggestions, the new

toothbrush should be offered with a multitude of color stripes, full and compact heads, and with

sensitive, soft, and medium bristles.  The silver trade dress will eventually become known to

represent the Precision toothbrush and will signify a high quality item that consumers will know by

visual cue.

            Since packaging in and of itself is an effective marketing tool, the package of the Precision

toothbrush should be carefully designed. The toothbrush should be packaged so as to emphasize

the recommended trade dress of the silver toothbrush.  The toothbrush should be packaged in a

clear plastic tube.  The name Colgate Precision should be written in bold, silver lettering along the

length of the tube, but it should not cover the bristles since their unique design is also a

distinguishing mark.  This would place emphasis on the main features of the toothbrush, which are

the triple action bristles, and the silver, metallic color of the base of the toothbrush.  To distinguish

the product further, the packaging should be completely round and contoured to the toothbrush

itself.  Similar to the trade dress, this package would be beneficial to the Precision product because

the round tube would come to be recognized as the Precision packaging and consumers would

begin to shop for the product based on visual recognition.  The tube would also provide an extra

value to consumers as its innovative, reusable design could also serve as a travel container for the

toothbrush. 

This packaging will be more costly to produce then the generic cardboard backed, plastic

bubble wrapped toothbrush, however, since the toothbrush is a niche product and customers will be

willing to pay a premium (see Price section below), the cost involved with the pricier packaging will

be offset. 

The label on the tubing and on the product also represents an important branding

opportunity, as it will be viewed by consumers every day.  The label font should remain constant on

all printed material including the packaging, print advertisements and the toothbrush itself.  The

name “Precision” should be written in a unique font to further distinguish it, and the “Colgate” should

be written in Colgate-Palmolive’s traditional print font.  The labeling on the package itself should

mimic the bright, bold colors so as to off set the silver background.  Consistent, fluent branding is

key to the success of any new product – Precision is no exception.

            The product quality of the precision toothbrush should be extremely high.  The toothbrush

should live up to its claims of decreasing gum disease by removing 35% more plaque than a regular

toothbrush.  If the product quality is high and meets customer’s prior expectations, they will be

satisfied with the toothbrush.  Having satisfied customers is important for non-durable items such as

toothbrushes, which are purchased frequently, so as to ensure repeat purchases.  Ultimately,

customer’s brand loyalty will increase with product satisfaction.

The final level of analysis for Precision - the augmented product - includes post-purchase

services offered for the product.  Precision should offer a warranty on its products so that customers

who are unhappy with the product can return it.  Since we anticipate that most people who purchase

the toothbrush will not be dissatisfied with the product, the warranty will pose a minimal financial

strain on Colgate-Palmolive.  Precision should also be accompanied by a toll-free phone number

which customers could call should they have questions or concerns about the product.

 

PRICE

            Despite Colgate-Palmolive’s dominance in the toothbrush market, Precision represents its

first endeavor into the super-premium category – a segment filled with intense competition.  Hence,

pricing Precision so that it will have an extensive life cycle, as established above, is yet another

critical step towards ensuring its survival.  Of the four pricing theories offered by today’s market,

rapid skimming is by far the most appropriate for Precision.[xl]

            First, as a niche market product, Precision will be offered at a cost equivalent to that of the

highest priced toothbrush currently available, $2.13 per unit.[xli]  This immediately eliminates both

penetration pricing theories, as offering Precision at a value based cost level would all but bankrupt

the product line.  Additionally, although the $2.13 per unit cost may be high relative to all

toothbrushes, Precision is being targeted towards a specific group of consumers who have a

demand for a superior oral care product.  Thus, relative to the super-premium segment, Precision is

actually the best purchase available, as it offers superior technology and improved oral health care

for no additional cost.

            Secondly, Precision’s unique and innovative design has created its own category of

toothbrush within the super-premium segment, as it is distinctly different from the other currently

available toothbrushes.  Consequently, the public must be educated about the attributes, benefits

and values of this new product.  Educating the public is a costly endeavor unto itself regardless of

the product, but Colgate-Palmolive has the added force of keeping pace with the increased

promotional expenditures of its competitors as well.  We are therefore also recommending that

Colgate-Palmolive spend approximately 8% of the advertising budget on product promotions such as

two-for-one purchases and discount coupons to attract attention to Precision in non-mass-media

ways.

            Finally, as mentioned above, Colgate-Palmolive’s ultimate goal is to create total brand loyalty

among the niche market participants.  Such loyalty is hard to come by and fragile at best given the

non-durable nature of a toothbrush.  However, promoting and pricing precision accurately will

nurture customers into repeat purchasers.

PLACE 

Choosing the appropriate place to sell Precision is, relatively, the least complicated matter

which Colgate-Palmolive will undertake in the process of launching the new product.  After all of the

painstaking research, in-depth analysis, evaluations, and endless financial and production planning,

one statement rings true throughout – it’s a toothbrush.  No one will ever, specifically go out of their

way to purchase a toothbrush as it ultimately holds no inherent moral, financial or social value.

Colgate-Palmolive should not try to create an exclusive clique of Precision toothbrush

owners (such a Ferrari does with its super-premium race cars) by choosing an exclusive or selective

distribution channel.  Precision is a toiletry, and it needs to be available through intensive distribution

in every possible place that toiletries are sold, otherwise the risk of losing – or more to the point,

never gaining – market share due to simple inconvenience is monumental.

Additionally, negotiating exclusive or selective distribution agreements with vendors would be

prohibitively costly for both Colgate-Palmolive and the vendor.  Instead, Colgate-Palmolive should

focus their efforts on intensive distribution, maintaining and increasing the strength they have in their

current shelf positioning, display models and vendor relationships.

PROMOTIONPromoting Colgate Precision requires effectively communicating the proper message to the right

audience through the appropriate channels. There are eight essential steps to which Colgate-

Palmolive must adhere to achieve an effective promotion campaign.[xlii]  The first step in the

campaign is to determine the audience to which the promotion will be directed.  As concluded from

the analysis above, we recommend that Colgate-Palmolive target both involved oral health

consumer groups.  Defining these two groups more thoroughly, and thereby fine tuning the

promotion message, requires determining that the core benefits Precision offers are indeed a

concern for the target audience.   Research indicates that there is a change in oral care concerns

among baby boomers.  Those born in the 1940’s, 50’s and early 60’s  tend to place more importance

on gum disease prevention as opposed to cavity prevention.[xliii]  Further research also indicates

that today’s younger generations are even more concerned about their oral care routines than

previous generations.[xliv]  Even with the trend towards better oral care, recent segmentation of

toothbrush users shows that only 67% of adults are  “Involved oral health consumers”.[xlv] Although

this  67%  comprises the niche to which we recommend Colgate-Palmolive market their new

Precision toothbrush, there remains one third of the total population of toothbrush users to which

Precision would not be appealing. 

From reviewing Simmons research data, we can also make some additional target

assumptions.  By assessing the index figures for the Aqua-Fresh Flex, another super-premium

product, we can speculate which demographics would be suitable for Colgate Precision:  single,

college-educated professional women and men, 18-34 years, earning over $40,000, living in New

England[xlvi] (just to name one possible set of target criteria).  Having now identified our target

audience, we can move on to the next step in the promotion campaign – determining the

communication objectives.

Buying a toothbrush is a fairly easy process and rarely a high involvement purchase for

consumers.  Therefore, although we recommend that Colgate-Palmolive’s promotion of Precision

follow the AIDA response hierarchy model so as to include all  three stages of responses - cognitive,

affective and behavior – we believe that the emphasis should be placed on getting the customer’s

attention and quickly moving them through the interest and desire stages, straight to action:

purchasing the toothbrush.  The communication objective for the new product becomes to convince

therapeutic and cosmetic brushers that they should purchase and use Colgate Precision because

Precision is designed to be the best toothbrush for  removing plaque and preventing gum disease. 

The next step to developing effective communications for the Colgate Precision promotion is

designing the message.  Factors to consider include message content and message structure. 

Message content should align with the communication objectives for the target audience – Precision

removes plaque better and prevents gum disease.  It will be important to place certain message

emphasis on the prevention of gum disease, as this is a differentiator not only against the ad

campaign for Colgate Plus – “In the fight against plaque, it’s a Plus.”[xlvii], but also against all the

other toothbrushes in the super-premium category.  Precision will be the first toothbrush to use such

a strong oral care message in its positioning.  

Two appropriate approaches to communicate Precision’s core values would be messages

appealing to either the rational or emotional side of consumers.  A rational appeal centers around

how the product will benefit consumers, whereas an emotional appeal tries to affect purchasing

behavior by stimulating emotions such as fear, shame, guilt, humor, love or joy.  Exhibit A is a print

ad demonstrating a rational appeal to consumers.  The ad clearly identifies the most important value

of using Colgate Precision.  It rationally promises consumers results if they use Precision instead of

another toothbrush.  Exhibit C also clearly states the benefits, yet does so using a humorous

message and image.

Message structure helps to determine an advertisement’s effectiveness.   “Research

indicates that the best ads ask questions and allow readers and viewers to form their own

conclusions.”[xlviii] Exhibit A depicts this technique by asking the audience “Why do none of these

stand out from the crowd?”  The ad encourages the audience to consider the alternatives, and then

provides an answer in support of Colgate Precision.  Although this may be effective, Exhibit B shows

the same ad, with a shorter headline, “Lost in the crowd”.  The shorter headline allows the audience

to scan the ad and get to the message of the core benefits more quickly. Of the five print ads

presented in the Appendix, we believe Exhibit B would be the most effective.

The next step in developing effective communications is to  determine which communication

channels to use to promote Precision.  One option, personal communication channels, center

around people communicating face-to-face, or by word-of-mouth.  Compared to purchasing a car or

a pair of jeans where others’ opinions are very influential, purchasing a toothbrush typically does not

require high involvement purchase decisions. Therefore, word-of-mouth buzz around any specific

toothbrush is all but non-existent, and consequently would not be an effective promotion channel. 

The only people who could potentially influence consumers’ toothbrush-making decisions are

dentists.  In 1992, Oral B had 34% of the market share of sales to dentists, dominating the market

and outperforming Colgate-Palmolive by $14.3MM to $6.7MM.  To acquire more market share,

Colgate Palmolive would have to invest millions of dollars more into their sales force, and even then

there would be no guarantee that they would succeed in increasing their sales to dental

professionals.  According to our research, toothbrush promotions through professionals have little to

do with the effectiveness of the toothbrush itself, and more to do with whom you know, who takes

you to lunch, and which company takes you to the golf course.[xlix]  Therefore, we recommend that

Colgate-Palmolive continue their focus on consumer sales through non-personal communication

channels, such as print media and broadcast media (to be discussed in more detail in step six,

deciding the marketing communications mix).

Step five is to establish the total marketing communications budget and allocate it amongst

the different communication channels.   Colgate Precision is a new product launch, and as such we

recommend it have enough budgetary support to help it succeed.  In 1991, Oral-B spent $10 million,

Reach $15.5 million, and Procter and Gamble was expected to spend $15 million to support Crest

Complete.  While it is helpful to understand competitors’ budgets, we do not subscribe to the

comparative-parity method of developing promotion budgets. There are too many factors and

objectives involved in developing a budget to base decisions solely on what the competition is

doing.  Analysis indicates that a total of $11.2 million, split between advertising, consumer

promotions and trade promotions[l]will be sufficient to support Precision in reaching its sales goals. 

Although Colgate-Palmolive’s own evaluation determined that the budget for Precision as a niche

product should be split as  follows: advertising, $5 million; consumer promotions, $4.6 million; and

trade promotions, $1.6 million, we recommend Colgate-Palmolive spend less money on consumer’s

promotions. 

One of the key insights we have into the target audience is that they will pay a premium for a

toothbrush if they feel it is a superior product that will keep their gums and teeth healthy.  Therefore,

Colgate-Palmolive will have less need to spend millions on consumer coupons, 2-for-1 deals, and

rebates.  However, as discussed above, Colgate-Palmolive still needs to maintain industry standard

levels of consumer promotion expenditures as they are an effective method of introducing a new

product.  Additionally, we recommend Colgate spend only $0.9 million in their first year on consumer

promotions because the niche market will be willing to pay a premium for the values and benefits

Precision offers.  Therefore, they do not need as many free or discounted product promotions.  Also,

consider the prices of super-premium toothbrushes: they range from $1.67 to $2.13.  The cost

differential of $.46 is less than the price of making a call from a  payphone (now $.50).  We anticipate

that consumers in the therapeutic and cosmetic brusher segments will not consider $.46 as a cost

barrier and will pay the premium $2.13 without hesitation.  Conversely, Colgate-Palmolive should

spend more money on trade promotions.  Colgate-Palmolive has had much success to date with

trade promotions and we feel they should capitalize on their existing trade relationships to get the

product effectively placed on shelves and featured prominently.  We recommend a split of $5.75 ,

$0.9  and $4.55  million for advertising, consumer promotions and trade promotions, respectively, for

a total of $11.2 million.

Step six is deciding on the marketing communications mix -  allocating the budget of $11.2

million in the most advantageous method possible considering the full range of possibilities. The

recommended budget for advertising is $5.75  million, which we recommend splitting among print

media (newspaper and magazines) and broadcast media (radio and television ads).  Both print and

broadcast media can serve to build awareness and understanding of the new Precision product at

the introduction phase of its lifecycle.  Further, print media can be targeted to the niche market

participants to a certain extent.  The media plan should include several demographically appropriate

newspapers, such as The New York Times and The Boston Globe (read by college-educated men

and women in New England, one of our hypothetical markets). Magazines can target segments to an

even greater extent.  Self, Shape and Outdoorswould all reach therapeutic and cosmetic brushers. 

Broadcast media, although it is more suited to mainstream targeting as there is no way to

control who hears the broadcasts, can still serve as a very effective and cost conscience

communication channel as the niche market is compiled of two-thirds of the toothbrush-using

population. 

For the Precision launch, we recommend Colgate spend $4.55 million on trade promotions. 

The “Colgate Palmolive toothbrush line [holds] 25% to 40% of category shelf space in most

stores.”[li]  These figures are not coincidental.  As Colgate Precision is a new product launch,

retailers will have to be persuaded to even carry the new toothbrush, or in some cases, to carry

more units than they normally would.  When retail stores feature Colgate-Palmolive toothbrushes

through in-store displays, sales increase by 90%.  Trade promotions dollars would work to ensure

that these displays get featured prominently in retail stores, leveraging Colgate-Palmolive’s existing

dominance in this area.

The second to last stage is measuring the results of the communications’ effectiveness.  As

the recommended marketing mix is not immediately measurable (unlike using direct marketing),

Colgate-Palmolive would have to undertake additional research to evaluate the promotion’s impact

on the target audience, therapeutic and cosmetic brushers.  Colgate-Palmolive should conduct

focus-group research to explore responses and evaluate creative.

The last step to developing effective communications is organizing integrated marketing

communications.  As mentioned above, consistent and fluent communication is a vital component of

any marketing plan:

         Making sure all communications have compatible themes and are speaking to customers in one

voice

o   Colgate-Palmolive can accomplish this by either using one agency for all marketing needs, or by

creating an inter-agency task force whose responsibility is to ensure communications are developed

along the same theme

         Understanding the customers and their needs

o   Colgate-Palmolive can continue to conduct customer-focused research to learn how to better market

to their customers

         Ensuring that customers have positive experiences with the company across all points of contact

o   Colgate-Palmolive could use “mystery callers” to test the Customer Service Representatives on their

800#, which would give them important feedback about their ITM channel

CONCLUSION

            In summation, we recommend that Colgate-Palmolive position the Precision toothbrush as a

niche market product during its introductory and growth life cycle stages.  Thereafter, during the

products’ maturity, Precision should be repositioned to the mainstream market.  Our analysis has

conclusivly explained that the attributes, benefits and values of the product are best suited for niche

consumers and would therefore enjoy the greatest success in such a market.  To ensure the

success of Precision, Colgate-Palmolive should:

         Ensure the product does, and continues to, address the specific needs of the stated consumer

segments;

         Price Precision at competitive levels within the super-premium segment so as to offer more value

than competitors, for an equivalent cost;

         Leverage their existing intensive distribution channel relationships to ensure that Precision receives

the most effective placement;

         And, invest industry-standard amounts of capital into the promotion of the new toothbrush.

Bibliography

Kerr DDS, Matthew.   Telephone interview. 26 March 2002.

Kotler, Philip.   Marketing Management: The Millennium Edition. Upper Saddle River,New Jersey: Prentice Hall, 2000.

Laidler, Nathalie. “Colgate-Palmolive Company: The Precision Toothbrush.” HarvardBusiness School Case Study (1993): 1-24.

Mediamark Research. 1997 Print Volumes: 32.

United States Patent and Trademark Office, 2002 Online.  Available:http://www.uspto.gov/patft/index.html   2002.

[i] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993): 38.[ii]  Ibid 25.[iii]  Ibid 45[iv]  Ibid 40[v]  United States Patent and Trademark Office, http://www.uspto.gov/patft/index.html(2002)[vi]  Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993): 34.[vii]  Ibid 40.[viii]  Ibid 41.[ix]  Ibid 30.[x] Dr. Matthew Kerr, DDS, personal interview, 26 March 2002.[xi]  Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993): 26.[xii]  Ibid 28.[xiii]  Ibid 28.[xiv]  Ibid 29.[xv] Ibid 5-6.[xvi]  Ibid 30.[xvii]  Ibid 30.[xviii]  Ibid 26.[xix] Philip Kotler. Marketing Management: The Millennium Edition. (New Jersey: Prentice Hall, 2000)  256[xx] Ibid  257

[xxi] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993):  33.[xxii]  Ibid 29.[xxiii]  Ibid 33.[xxiv]  Ibid 34.[xxv]  Ibid 32.[xxvi]  Ibid 33.[xxvii]  Ibid 32-33.[xxviii]  Ibid 26.[xxix]  Ibid 34.[xxx] Philip Kotler. Marketing Management: The Millennium Edition. (New Jersey: Prentice Hall, 2000)  263-267[xxxi] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993):  29[xxxii]  Ibid 32.[xxxiii]  Ibid 34.[xxxiv] Philip Kotler. Marketing Management: The Millennium Edition. (New Jersey: Prentice Hall, 2000) 257[xxxv]  Ibid 298.[xxxvi]   Ibid 301.[xxxvii]   Ibid 68-69.[xxxviii] Ibid 414.[xxxix] United States Patent and Trademark Office, http://www.uspto.gov/patft/index.html(2002)[xl] Kotler, 307.[xli] Case study 10.[xlii] Philip Kotler. Marketing Management: The Millennium Edition. (New Jersey: Prentice Hall, 2000) 552.[xliii] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993):  28.[xliv] Dr. Matthew Kerr, DDS, personal interview, 26 March 2002.[xlv] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993):  29.[xlvi]  Mediamark Research.  1997 Print Volumes: 32.[xlvii]  Ibid 42.[xlviii] Philip Kotler. Marketing Management: The Millennium Edition. (New Jersey: Prentice Hall, 2000) 557.[xlix] Dr. Matthew Kerr, DDS, personal interview, 26 March 2002.[l] Laidler, N., “Colgate-Palmolive Company: The Precision Toothbrush,” Harvard Business School Case Study (1993):  35.[li] Ibid 31.