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Colgate palmolive the precision toothbrush
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Colgate palmolive the precision toothbrush

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Colgate palmolive the precision toothbrush Colgate palmolive the precision toothbrush Presentation Transcript

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