Slides prepared by Deepanshu Gupta

3. In August ’92, the company planned to launch a
Precision Toothbrush in the market.
The product faced a severe competition
Thus the problem was to establish strategies in:
Positioning
Branding
Communication

4. Company’s Background

5. An American worldwide consumer products company.
Focused on the production, distribution and provision of
household, health care and personal products
The company's corporate offices are on Park
Avenue in Midtown Manhattan, New York City.
• Colgate Precision- A niche product or simple line
extension and that the proven benefits to consumers
represented a technological breakthrough.
• Launched in August,1992.
• A global leader in households and personal care
products.
• Faced a highly competitive market with substantial
new product activity.
• Total worldwide research and development expenditures
for 1991 were $114 million, and media advertising
expenditures totaled $428 million.

6. Who are the players?
Susan Steinberg
(Precision Product Manager)
Reuhen Mark
(Colgate Palmolive CEO)
Nigel Burton
(Division General Manager)
John Phillips
(Colgate Plus Manager)

7. The U.S oral care market-1991
Toothpaste: 46%
Mouth rinses: 24%
Toothbrushes: 15.5%
Dental floss and oral hygiene products: 4.5%

8. PRODUCT SEGMENTS
VALUE
• More economic
• Average price : $1.29
PROFESSIONAL
• Better quality
• Average Price : $1.59 to $2.09
SUPER-PREMIUM
• Improved designs
• Average Price : $2.29 to $2.89

9. Consumer Behavior
Around ’92, people were concerned about their
oral hygiene.
Primarily, toothbrushes were for removing food
particles, then, for plaque removal and gum
stimulation
People chose a brand on the basis of:
oFeatures
oComfort
oProfessional Recommendation
oBrush that would fulfill their individual needs
Consumers differed on the intensity of their involvement in
oral hygiene.

10. • Three distinct consumer groups:
1) Therapeutic Brushers
2) Cosmetic Brushers
3) Uninvolved Brushers
Each having different expectations from toothbrushes

11. Competition
• Oral-B and Johnson & Johnson trying to
capture more market in super-premium
range
• Competitors offering coupons, refunds etc.
to get an edge
• Sizeable revenues spent on advertisement

12. Proctor & Gamble
1. Most recent entrant in the toothbrush market
with “Crest Complete”.
2. After performing sample tests, P&G is expected
to launch its “Crest Complete” in September ,92.
3. Relies on media for marketing.
4. Expected to capture 13% value share in the
market.
5. CP needs to critically look for “Crest Complete”
as both the companies are launching their
products during the same time.

13. ORAL B
1. Market leader since 1960s.
2. In 1991, held 23.1% volume market share and a 30.7%
value share of the market
3. Relies heavily on professional endorsements
4. Well known for its advanced and innovative products
ex:- The “indicator” toothbrush.
5. Perhaps the biggest competitor for CP due to the
dominant presence in the market sector and a strong
brand image.

14. JOHNSON & JOHNSON
Entered the U.S market in the 1970’s with its
Reach brand.
In 1991, it was ranked third in the U.S market
with a 19.4% volume share and a 21.8% value
share.
Relies heavily on television commercials.
New products were launched in the 1990 and
1991.
“Reach Between” is scheduled to be launched
in September’92.

15. SMITHKLINE BEECHAM
Entered the U.S toothbrush market in 1991
with “Aquafresh Flex”.
By the end of 1991, Aquafresh Flex had a 0.9%
share by volume and 1.1% by value of U.S
retail market.
In September 1992, the company expects to
expand its product line.
Smithkline is expected to make an operating
loss in 1992.

16. Precision Toothbrush
CP developed a unique brush with bristles of three different lengths
and orientations
• longer outer bristles cleaned around the gum line
• long inner bristles cleaned between teeth
• shorter bristles cleaned the teeth surface

17. STRENGTH
• CP precision toothbrush had achieved a 35% increase
in plague removal than other competitors
• Innovative product design
• Can capture oversea market
• Can reduce gum disease

18. WEAKNESS
• Introduction of Precision toothbrush may
cannibalize the sales of Colgate Plus and
Colgate Classic
• Media expenditure of the brand is limited
compared to its rivals
• Lack of dental endorsements for the brand

19. POSITIONING
• It could be positioned as a niche
product.
• Alternatively, Precision could be
positioned as a mainstream brush.
• The positioning decision had important
implications for the appropriate shelf
location of Precision.
• Steinberg believed that the best location
for Precision on the retail shelves would
be between the Colgate Plus and Oral-B
product lines.

20. POSITIONING

21. PROFITS NICHE VS MAINSTREAM
• The company had two options to launch Precision
either as a Niche product or as a Mainstream
product.
• I feel launching the product as a Mainstream product
is a better option as with help the product in having a
wider connect with the customers.
• The company should effectively communicate about
the technical advancement of the product in a rational
manner.
• The drawback of this is cannibalization of its other
products.

22. PRICING FOR PRECISION
• The company needs to work carefully on its pricing
strategy.
• The company first needs to stand firm as to whether it
wishes to sell Precision as a Niche or a Mainstream
product.
• This will play a critical role in deciding its price.
• The company should base its pricing having calculated
all its all expenses.
• The company should price its Precision product at a
relatively lower price compared to Oral-B. This will help
the company to gain dominance in the market.
• Even though the product is technically superior, too high
prices will not help the product in the long run.

23. BRANDING
• Name tests were also conducted.
• Alternative names included: Colgate
Precision, Colgate System III, Colgate
Advantage, Colgate 1.2.3, Colgate Contour,
Colgate Sensation, and Colgate Probe.
• The Colgate Precision name was
consistently viewed more favorably—it was
deemed appropriate by 49% of concept
acceptors and appealing by 31%.
• “Colgate Precision” or as “Precision by
Colgate.”
• CP’s stated corporate strategy was to build
on the Colgate brand equity.

24. COMMUNICATION AND PROMOTION
• Sampling proved be critical to
Precision’s success.
• Another important tactic was to
use dentists to sample
consumers since professional
endorsements were believed
important to establishing the
credibility of a new toothbrush

25. CONCLUSION
• Steinberg should adopt a mainstream
positioning strategy for the Precision
because it would lead to increased
performance as well as helps the company
in the long run.
• Also it enables Colgate Palmolive to
expand its markets through mass
merchandisers and club stores apart from
the food and drug stores.

26. Thanks for reading.
These slides were create by Deepanshu Gupta (IIT
Roorkee) under guidance of Prof. Sameer Mathur
(IIM Lucknow).