Colgate palmolive the precision toothbrush


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Colgate palmolive the precision toothbrush

  1. 1. Colgate Palmolive The Precision Toothbrush <ul><ul><li>Abhishek Pangaria </li></ul></ul><ul><ul><li>Mandeepak Singh </li></ul></ul><ul><ul><li>Rajendra Inani </li></ul></ul><ul><ul><li>Saravanan Logu </li></ul></ul><ul><ul><li>Tarandeep Singh </li></ul></ul><ul><ul><li>Vivek Edlabadkar </li></ul></ul>
  2. 2. Contents <ul><li>Problem Statement </li></ul><ul><li>Demand & Market Analysis </li></ul><ul><li>Marketing Mix </li></ul><ul><li>Marketing Strategy / Programs </li></ul><ul><li>Recommendation </li></ul>
  3. 3. Problem Statement <ul><li>Defining the Marketing strategy (Positioning, Branding & Communication Strategies) for the New Toothbrush – Colgate Precision </li></ul>
  4. 4. Nature of Demand <ul><li>Tooth brush market is close to a century old, but last few decades have witnessed many changes </li></ul><ul><li>Now, there is a shift in demanded benefits </li></ul><ul><ul><li>Cavity Prevention </li></ul></ul><ul><ul><li>Healthier Gums </li></ul></ul><ul><ul><li>Young generation ready to pay for superior toothbrush </li></ul></ul><ul><li>Market is emerging from value and premium range to a third category of “Super Premium” range – Enhanced Oral Care </li></ul>
  5. 5. Extend of Demand <ul><li>Current US Toothbrush market – US $ 330 MN </li></ul><ul><li>CP’s share – US $ 77 MN </li></ul><ul><li>Market growth – 9.3% per annum since 1987 ($ sale) </li></ul><ul><li>Year 1992 – Market growth – 18% by volume, 21 % by $ sale </li></ul><ul><li>$ growth exceeded volume growth due to emerge of Super Premium Toothbrush </li></ul>
  6. 6. Environmental Climate <ul><li>Political - Relatively insignificant </li></ul><ul><li>Economic </li></ul><ul><ul><li>New entrants appeared in early 90s </li></ul></ul><ul><ul><li>Proctor & Gamble and Smithkline Beecham </li></ul></ul><ul><ul><li>Positioned in the super-premium segment </li></ul></ul><ul><li>Technological </li></ul><ul><ul><li>The new products in late 1980’s & early 1990’s </li></ul></ul><ul><ul><li>design of the handle and head of the tooth brush </li></ul></ul><ul><ul><li>  the action of the bristles  </li></ul></ul><ul><ul><li>Super premium toothbrushes - with an emphasis on greater plaque removal and gum care </li></ul></ul>
  7. 7. Environmental Climate – Cont.. <ul><li>Social </li></ul><ul><ul><li>Aesthetic appeal in the late 1980 </li></ul></ul><ul><ul><li>The children’s market </li></ul></ul><ul><ul><ul><li>Glow-in-the-dark handles </li></ul></ul></ul><ul><ul><ul><li>Cartoon characters </li></ul></ul></ul><ul><ul><li>New product - technological improvements </li></ul></ul><ul><ul><li>An additional social development - concern for gum health - the baby boom population </li></ul></ul><ul><ul><li>Cavity prevention was the previous concern - willing to pay more for products designed for gum care </li></ul></ul>
  8. 8. Environmental Climate – Cont.. <ul><li>Current status and future trend </li></ul><ul><ul><li>The most current technology is the action of the bristles </li></ul></ul><ul><ul><li>Concern for gum health is demonstrated by the current population </li></ul></ul><ul><ul><li>New product offerings to feature technological improvements of aesthetic improvements </li></ul></ul>
  9. 9. Colgate Precision <ul><li>Presently in Introduction stage </li></ul><ul><li>Planned promotion for entry into Super Premium segment </li></ul><ul><li>Expected ROI in few years </li></ul>Time
  10. 10. Product <ul><li>The Precision toothbrush is a technical innovation </li></ul><ul><li>Using infrared motion analysis, CP developed a unique brush with bristles of 3 different lengths and orientations </li></ul><ul><li>Three brush designs evolved with 35% more plaque removing efficiency </li></ul><ul><li>The brush is also shown to be more effective in reducing gum disease than the leading brushes, specifically Reach and Oral-B </li></ul>
  11. 11. Product
  12. 12. Product
  13. 13. Price * Greater discount may be given as reflected in the financial forecasts Retail Price Trade Price Manufacture Price Main Stream Strategy $ 2.49 $ 1.85 $ 1.76 Niche Market Strategy $ 2.89 $ 2.13 $ 2.02
  14. 14. Promotion <ul><li>Under the niche market </li></ul><ul><ul><li>Aggressive advertising campaign - demonstrate technical superiority of the toothbrush </li></ul></ul><ul><li>Under the mainstream position </li></ul><ul><ul><li>Through financial incentives </li></ul></ul><ul><ul><ul><li>Coupon , buy one get one free </li></ul></ul></ul><ul><li>Through professional channels – Dentists </li></ul><ul><li>Consumer promotions in strong CP market </li></ul><ul><ul><li>a free 5 oz. Tube of Colgate toothpaste with a Precision brush </li></ul></ul><ul><ul><li>a 50%-off offer on Colgate toothpaste </li></ul></ul><ul><ul><li>a 50 cent. coupon </li></ul></ul>
  15. 15. Financial Forecast <ul><li>A financial analysis indicates a profit over a two year time frame for both market positions </li></ul><ul><li>The Niche position generates a greater estimated net profit over two years ($12,527,333)  </li></ul><ul><li>The mainstream net profit over two years is estimated at $9,515,333  </li></ul><ul><li>In addition, some sales of the new product are anticipated to come at the expense of sales of other existing Colgate products </li></ul>
  16. 16. Financial Forecast – continued.. <ul><li>In the niche position, an estimated 35% of sales would come form other products decreasing Colgate’s overall toothbrush net profit by $2,507,400 in year one and $3,970,050 in year 2 </li></ul><ul><li>In the mainstream position, an estimated 60% of sales would come from exiting products decreasing Colgate’s overall toothbrush net profit by $15,044,400 in year one and $21,133,800 in year two. </li></ul><ul><li>Including cannibalization effect, only the niche market generates a profit over a two year period </li></ul>
  17. 17. Branding <ul><li>Emphasizing the Colgate name on the new Precision toothbrush would cause additional cannibalization of the existing Colgate toothbrushes - estimated at 20% </li></ul><ul><li>Using the Colgate name would be congruent with Colgate’s strategy to build the Colgate brand equity </li></ul>
  18. 18. Communication & Promotion <ul><li>Information that may contribute to success </li></ul><ul><ul><li>Four concept tests conducted among 400 adult professional brush users (Colgate Plus, Reach, and Oral B) </li></ul></ul><ul><ul><li>The results indicates - consumers were highly motivated by the Precision toothbrush claims </li></ul></ul><ul><ul><li>Additional in-home usage tests were conducted </li></ul></ul><ul><ul><ul><li>77% claimed that Precision was much more effective than their current toothbrush </li></ul></ul></ul><ul><ul><ul><li>Other consumer research revealed that the higher the exposure to the product the greater consumer acceptance </li></ul></ul></ul>
  19. 19. Skills and Financial Resources <ul><li>Colgate Palmolive has spent $243 million to upgrade 25 of its 91 manufacturing plants </li></ul><ul><li>Participated in several strategic acquisitions. E.g. Mennen, a men’s toiletry company </li></ul><ul><li>Manufacturing capabilities began in China and Eastern Europe </li></ul><ul><li>  If needed, some production can be re-directed to manufacturing sub-contractors which CP currently uses for other products. </li></ul>
  20. 20. Skills and Financial Resources – Continued .. <ul><li>CP holds 43 % of the global toothpaste market and 16% of the global toothbrush market   </li></ul><ul><li>Sales have increased 12% to $1.3 billion, accounting for 22% of CP’s total sales </li></ul><ul><li>Toothbrush sales amounted to $77 million with operating profit of $9.8 million </li></ul><ul><li>What does this mean? </li></ul><ul><ul><li>Colgate Palmolive, without any doubt, has the means and abilities to take on the endeavor </li></ul></ul>
  21. 21. Pros & Cons of Positioning <ul><li>Main Stream Strategy </li></ul>Pros Cons <ul><li>Unsatisfied demand could create the perception of a Hot product, which may increase sale </li></ul><ul><li>Possible increase in sales </li></ul><ul><li>Greater erosion of Colgate Plus </li></ul><ul><li>May require dropping one of the slow moving Children’s brush from the Plus line </li></ul><ul><li>Possible pressure on production schedules resulting in inadequate supply of product </li></ul><ul><li>More competition </li></ul>
  22. 22. Pros & Cons of Positioning <ul><li>Niche Market Strategy </li></ul>Pros Cons <ul><li>Niche could later be broadened to a mainstream position as additional capacity came on line. This would be an easy transition in the product life cycle </li></ul><ul><li>Less erosion of Colgate Plus. The products are more isolated </li></ul><ul><li>Entry into new superior toothbrush market which CP currently holds no position </li></ul><ul><li>CP would face less competition </li></ul><ul><li>Less contribution to net profit in future years </li></ul>
  23. 23. <ul><li>CP would have a strong position against competitors on the basis of product attributes </li></ul><ul><ul><li>a better product with better performance </li></ul></ul><ul><li>The new product development was specifically focused on a gum effectiveness brush </li></ul><ul><li>position the brush in the Super premium Segment specifically tailored to therapeutic brushers </li></ul><ul><li>R&D investment concludes Super premium Niche segment is more consistent than mainstream market for the advanced gum care </li></ul>Recommendation A B C D Performance Price
  24. 24. Implementation <ul><li>Professional endorsement from dentists </li></ul><ul><li>Pursue an aggressive advertising campaign </li></ul><ul><li>Match price-points with other super-premium brands </li></ul><ul><li>Associate a super-premium toothpaste with Precision </li></ul>Jan Feb Mar Apr May Jun July Sep Oct Nov Dec Task 2 Task 3 Task 4 Task 1 Milestone