The document analyzes Colgate's launch of its Precision toothbrush in the 1990s. It summarizes Colgate's market position, the five-year plan to launch new products, and the Precision toothbrush innovation. It also analyzes consumer behavior, competitors, and provides a SWOT analysis. Two positioning strategies for Precision are considered: niche vs mainstream. The recommendation is to initially position Precision as a niche product at a high price to avoid cannibalizing existing Colgate products, and then later position it as mainstream.

2. COLGATE PALMOLIVE:THE PRECISION
TOOTHBRUSH CASE STUDY ANALYSIS (HARVARD
BUSINESS SCHOOL)
Objective :
● To analyse market competition faced by Colgate
● To consumer behaviour of that time period
● To analyse the profit/loss gained by the company
● At the end of this case study we will take a major
decision…!

3. HISTORY
❖ IN 1806, WILLIAM COLGATE STARTED THE FACTORY OF SOAPS AND
CANDLES IN NEW YORK
❖ IN 1857, SAMUEL COLGATE TOOK OVER THE CHARGE AFTER DEATH OF
HIS FATHER
❖ IN 1873, THE COMPANY INTRODUCED FIRST TOOTHPASTE AS AN
AROMATIC TOOTHPASTE IN JAR

4. COLGATE ORAL CARE BUSINESS
WORLD MARKET LEADER IN ORAL CARE BUSINESS
EXTENSIVE OVERSEAS RESEARCH
HELD 17% OF WORLD TOOTHBRUSH MARKET
HELD 43% OF GLOBAL SALES
IN 1991-1995 PLAN FOR LAUNCH OF NEW PRODUCTS

5. US TOOTHBRUSH MARKET

6. THE FIVE YEAR PLAN
1991 - 1995

7. THE FIVE YEAR PLAN
● TO LAUNCH NEW PRODUCTS
● TO ENTER INTO NEW GEOGRAPHIC MARKETS
● TO IMPROVE EFFICIENCY IN MANUFACTURING AND DISTRIBUTION
● TO FOCUS ON CORE CONSUMER PRODUCTS

8. PRECISION TOOTHBRUSH
● A TECHNICAL INNOVATION
● EFFECTIVE IN PLAQUE REMOVAL
● THREE DIFFERENT LENGTH
BRISTLE REACHING FAR END
TEETH
● EFFECTIVE IN GUM PROTECTION

10. CONSUMER ANALYSIS
THREE TYPES OF BRUSHERS
● THERAPEUTIC
● UNINVOLVED
● COSMETIC
EACH SEGMENT HAS ITS OWN
EXPECTATIONS

11. CONSUMER ANALYSIS
RESEARCH INDICATES THAT BABY
BOOM GENERATION CONCERNED
ABOUT HEALTH OF GUMS
WILLING TO PAY PREMIUM PRICE
WITH GOOD MARKETING AND
PRICING 33% INDIFFERENT USERS
CAN BE ATTRACTED

12. COMPETITOR ANALYSIS
● ORAL-B , JOHNSON & JOHNSON , PROCTER & GAMBLER WERE THE MAJOR
COMPETITORS IN SUPER PREMIUM SEGMENT
● OTHER LOCAL BRANDS OFFERING COUPONS, REFUNDS TO GET EDGE
● RELATIVE EXPENDITURE ON ADVERTISEMENTS IS MORE

13. COMPETITORS ANALYSIS

14. COLGATE STRATEGY
➢ GEOGRAPHIC SEGMENTATION STRATEGY
THE COMPANY HAS IMPLEMENTED THIS STRATEGY BY EXPANDING ITS BUSINESS
OVER 200 COUNTRIES. THIS COMPANY DOES NOT MARKET THE SAME PRODUCT IN
EVERY COUNTRY.
➢ DEMOGRAPHIC SEGMENTATION STRATEGY
COLGATE CATERS THE MARKET SEGMENT BASED IN DIFFERENT DEMOGRAPHICS
SUCH AS AGE,GENDER ETC. EVEN FOR KIDS FROM 8-10 THEY HAVE DIFFERENT
PRODUCTS.
➢ PSYCHOGRAPHIC SEGMENTATION STRATEGY
HERE THEY COLGATE SELLS THE PRODUCTS CONSIDERING THE LIFESTYLE AND
NEEDS IF THE CONSUMER. FOR PEOPLE WHO ARE SENSITIVE ABOUT THEIR TEETH,
THEY HAVE INTRODUCED SENSITIVE PRO-RELIEF TOOTHPASTE AND BRUSHED.

16. PRICE
● COLGATE PRICING IS BASED ON PRODUCTION COSTS
INCLUDING WAREHOUSING AND TRANSPORT COSTS
● SO THERE IS A RISK THAT IF COLGATE CONSIDERED
COLGATE PRECISION AS MAINSTREAM TOOTHBRUSH
THEN IT WOULD LEAD TO CANNIBALIZATION OF
COLGATE PLUS

17. PRODUCT
● IN URBAN POPULATION, COLGATE CONCENTRATES
MORE ON TECHNICAL PERFORMANCE AND OTHER
MARKETING IDEAS
● IT ALSO CONCENTRATES ON CHILDREN BY ADDING
SPARKLES TO THE HANDLE, GLOW IN THE DARK
HANDLES OR BUGS BUNNY SHAPED HANDLES TO
MAKE IT MORE ATTRACTIVE

18. PROMOTION
● ADVERTISEMENTS THROUGH NEWSPAPERS AND TELEVISION
● FM RADIOS
● HOARDINGS ON HIGHWAYS AND TRAFFIC SIGNALS
● HAVING CONTRACT WITH FILM STARS FOR PROMOTIONAL
EVENTS
● HAVING DEALS WITH DENTISTS FOR RECOMMENDATIONS
AS AT THE END OF THE DAY THE CONSUMER WILL HEAR IT
FROM DENTISTS FOR THE CARE

19. PLACE
● COLGATE WOULD TRY TO INCREASE PRODUCT
EXPANSION IN RURAL AND SEMI URBAN AREAS AS
THERE THE EXPOSURE IS LESS COMPARED TO CITIES
● ALSO WHOLESALERS AND RETAILERS BEING A STRONG
STRENGTH, THE COMPANY WILL TRY TO EXPAND THE
SAME IN THOSE AREAS.

21. STRENGTHS
● LEADER IN ORAL CARE PRODUCTS
● HUGE MARKET SHARE OF 22.2%
● EXTRAVAGANT OVERSEAS MARKET
● RIGOROUS R&D INVESTMENTS

22. WEAKNESS
● RELEASING OF PRECISION MAY
CANNIBALIZE THE SALES OF COLGATE
PLUS BY 22%
● LACK OF DENTAL ENDORSEMENTS
● RIVALS ALREADY HAVE HUGE DOLLAR
MARKET SHARE, SO PRECISION IS AT
STAKE OF RELEASE
● MEDIA INVESTMENTS ARE LESS
COMPARED TO RIVALS

23. OPPORTUNITIES
UPCOMING GENERATIONS ARE MORE HEALTH CONSCIOUS
GOOD ENDORSEMENTS WITH STARS AND DENTISTS WOULD INCREASE
MARKET
SUPER PREMIUM SEGMENT CAN HELP IN INCREASING MARKET SHARES

24. EXTENSIVE COMPETITION IN SUPER PREMIUM SEGMENT BECAUSE OF LOT OF
PRODUCTS IN THIS SEGMENT
COMPETITORS EXPANDING BUSINESS WITH MORE NO. OF PRODUCTS
INCENTIVES GIVEN BY OTHER BRAND TO CONSUMERS

25. MARKET POSITIONING
Steinberg developed a marketing mix and financial projections for two scenarios

26. MAINSTREAM POSITIONING
BENEFITS
HAS A BROADER APPEAL FOR BEST EFFECTIVE MARKET
CAN HAVE A MARKET SHARE INCREASE, ALSO IN SALES
THEREBY HUGE REVENUES
RISKS
WOULD BE DISADVANTAGEOUS FOR ITS OWN PRODUCT LIKE COLGATE PLUS
THEREBY COULD DECREASE THE MARKET SHARE OF COLGATE PLUS BY 20%
RESULTING IN IMPROPER SUPPLY FOR THE DEMAND AVAILABLE

27. NICHE POSITIONING
BENEFITS
COULD COMMAND MORE PRICE THAN ORAL-B
TARGET CONSUMERS MAY BE READY TO PAY HIGHER PRICES
CAN BE CONVERTED AS MAINSTREAM LATER IF REQUIRED
NOT MUCH LOSS IN MARKET SHARE
RISKS
CANNOT REACH CONSUMERS SO EFFICIENTLY
NOT MUCH INCREASE IN REVENUES
AS WELL AS LESS NET INCOME COMPARATIVELY

28. COMPARISON OF BOTH STRATEGIES

29. ADVERTISEMENTS AND PROMOTIONS

30. ADVERTISEMENTS AND PROMOTIONS
● COLGATE SHOULD SHOW THEIR RESULTS OF PLAQUE REMOVAL BY 35%
MORE IN FORM OF THEIR ADS
● PARTNERSHIPS WITH FAMOUS DENTISTS
● HIGH INVESTMENTS IN PROMOTIONS TO COMPETE RIVALS
● ASKING CONSUMERS FOR FEEDBACK, SERVING THEM GOOD, TAKING
SURVEYS

31. RECOMMENDATIONS
AT FIRST RELEASING IT AS NICHE POSITIONING TOOTHBRUSH.
SO THAT WOULD GIVE OPPORTUNITY TO SELL AT HIGH PRICE, CURIOSITY AND
PUBLIC DEMAND WILL INCREASE.
NO SKU’s DROP AND MOREOVER NO RISK TO COLGATE PLUS.
AND THEN CAN BE SHIFTED TO MAINSTREAM POSITION
THEREBY INCREASE IN PRODUCTION VALUES, INCREASE IN REVENUE,
GAIN RECOGNITION.

32. BRANDING - WHICH SHOULD COME FIRST???
COLGATE PRECISION
WILL BUILD BRAND EQUITY. WILL HAVE SUPPORT OF WELL ESTABLISHED
BRAND.
ESTIMATED 20% CANNIBALIZATION OF COLGATE PLUS
PRECISION BY COLGATE
PRODUCT COULD SUSTAIN ON ITS OWN
NO EFFECT TO COLGATE PLUS
I WOULD GO FOR THE SECOND OPTION PERSONALLY

34. DISCLAIMER