Sales & Marketing Alignment: How to Synergize for Success
Colgate palmolive case study
1.
2. Glance at the case study
• Company Background
• U.S Toothbrush Market
• Competitors
• Product segments
• Consumer behaviour
• Distribution
• Advertisemnt and Promotion
• The precision Marketing Mix
3. Objectives of the case study
• Study of various competitor's profiles and their market
approach
• Study of their market share and their income levels
throughout the years.
• Observing consumer behaviour patterns in a aprticular
segment
4.
5. • Founded by William Colgate in 1806
• Headquatered in New York,USA.
• Listed as one of the most innovative
companies in the world.
• Led by Ian M. Cook since 2007
7. PEOPLE BEHIND THE SUCCESS
• Susan Steiberg-Product Manager
• Nigel Burton- Division General Manager
• Ruben Mark- C.E.O
8.
9. • U.S Toothbrush market is a dynamic
environment with constant innovations
available in the market ranging from
categories from basic to super-
premium.
12. • Entering into new geographical markets
• Introducing innovative products to the market
• More focus on core consumer products
• Improving effiency in both manufacturing and distribution.
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19. • A certain part of the society called the
“Baby Boom” generation is concerned
about their dental hygiene which gives a
reason for the consumer to upgrade in
buying the products in super premium
segment.
31. • The company primarly trusted two distribution
channels in order to reach to the masses and
establish credibility.
• In 1992, 22% of toothbrushes were offered to the
consumers through dentists.
• The margins through dentists are less compared to
mass retail in exchange for the credibility that they
can offer.
34. • In 1989, a task force was formed comprising of
• R&D and Marketing Executives
• Outside consultants
• Dental professionals
with an mission to “ develop a superior,technical,
plaque removing device”.
35.
36. Five Goals to be achieved
• 1. Analzying various techniques consumers use while
brushing their teeth.
• Learning : Brushing was always ineffective for removing
plaque from the gum linebetween the teeth.
• 2. Testing the between-teeth access of different
toothbrush designs
• Learning : Precion's design was far superior than the
Oral-B and Reach
37. • 3. Establishing an index to score clinical-plaque removal
efficacy at the gum line and between teeth.
• Learning : Measured presense of plaque on the tooth
areas
• 4. Creating design for maximum plaque-removal efficacy
• Learning : This design helps removal of plaque 35%
better than any of its competitors
• 5.Determining,through clinical and consumer research,
the efficacy and acceptance of new toothbrush design
38.
39. • Steinberg developed a marketing mix and financial
projections for both scenarios.
• Volumes: Steinberg believed that :
• With a niche positioning Precision retail sales would
represent 3% volume share of the toothbrush market in
year 1 and 5% in year 2.
• With a mainstream positioning, these volume shares
would be 10% in year 1 and 14.7% in year 2.
40. • Total category unit
volumes were estimated at
268 million in 1993 and
300 million in 1994.
41. • Capacity and Investment Costs: Three types
of equipment were required to manufacture
the Precision brush:
• Tufters
• handle molds
• packaging machinery.
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45. • Two tests carried out:
• CONSUMER CONCEPT TESTS
• NAME TESTS
OUTCOME:
• Under the mainstream and niche positioning scenarios –
• Cannibalization figures for Colgate Plus would increase by 20% if the Colgate
brand name was stressed.
• Remain unchanged if the Precision brand name was stressed.
47. • TEST 1:
• (69+68+66)/3 = 67.67 % Probably Would Buy
• (15+15+10)/3 = 11.67 % Definitely Would Buy
TEST 2:
• (80+71+74+68)/4 = 73.5% Probably Would Buy
• (19+19+18+14)/4 = 17.5% Definitely Would Buy
48. • TEST 3:
• (63+72+62+66)/4 = 65.75 % Probably Would Buy
• (13+16+11+14)/4 = 13.5 % Definitely Would Buy
TEST 4:
• (87+61)/2 = 74% Probably Would Buy
• (19+48)/2 = 24% Definitely Would Buy
49. • Consumer Research - including in-home
usage tests revealed
• 55% of test consumers found Precision to be
very different from their current toothbrushes.
• 77% claimed that Precision was much more
effective than their current toothbrush
50.
51. • Several consumer promotions to back the launch:
• a free 5 oz. tube of Colgate toothpaste (retail value
of $1.89) with the purchase of a Precision brush in
strong competitive markets;
• a 50%-off offer on any size of Colgate toothpaste
(up to a value of $1.00) in conjunction with a 50¢
coupon on the Precision brush in strong Colgate
markets.
52. • Precision- a technological breakthrough - more than a niche product
/simple line extension .
• • How Precision should be positioned, branded, and communicated to
consumers.
• • What the advertising and promotion budget should be and how it
should be broken down.
• • To develop a marketing mix and profit-and-loss pro forma to enable
Precision to reach its full potential.
• • It should be acceptable to Burton and other colleagues, particularly
the Colgate Plus product manager.
53. DISCLAIMER
• Created by Chanakya
Choudary, IBS Hyderabad
as a Marketing Intern
under Prof. Sameer
Mathur, IIM Lucknow