Colgate palmolive company: Precision Toothbrush

1. Colgate-Palmolive
Company:
The Precision Toothbrush
HARVARD BUSINESS SCHOOL
CASE

2. What is Colgate
Precision?

3. • A new product, toothbrush
launched by CP in August
1992
• Developed over a period of
3 years

4. Who is Susan
Steinberg?

5. • Precision Product Manager
• The person who managed the
entire product development
process
• Responsible for recommending
the POSITIONING , BRANDING
and COMMUNICATION
strategies

6. The U.S. Toothbrush Market

7. Product Segments
•Value
•Professional
•Super-Premium

8. Consumer Behaviour
• CP’s Consumer Research indicated that the
Baby Boom Generation were now
becoming more CONCERNED about the
HEALTH OF THEIR GUMS AS OPPOSED
TO CAVITY PREVENTION and,
• were WILLING TO PAYA PREMIUM
FOR NEW PRODUCTS ADRESSING
THIS ISSUE.

9. Consumer Segmentation
of Toothbrush Users

10. Brand Decision Factors
for Consumers

11. Competition

12. Principal Toothbrush Brand
Product Lines : August 1992

13. Advertising and Promotion

14. Media Expenditures

15. TELEVISION & ADVERTISING
COPY STRATEGIES &
EXECUTIONS

16. CP TELEVISION ADVERTISING

17. ADVERTISING EXPENDITURE
FOR CP TOOTHBRUSHES:

18. Distribution
• In 1992, 22% of all toothbrushes were
expected to be distributed to consumers by
dentists.
• Manufacturer margins on toothbrush sales
through dentists were less than half those
achieved through normal retail distribution

19. The Precision Marketing Mix

20. Product Design and
Testing

21. In 1989, CP had
established a task force
comprising executives
from:
• R&D and Marketing
•Dental professionals, and
•Outside consultants

22. s:

23. • Understanding the varying
techniques consumers used
when brushing their teeth.
• Testing the between-teeth
access of different toothbrush
designs.

24. • Establishing an index to score
clinical plaque-removal efficacy at
the gum line and between teeth.
• Creating a bristle configuration
and handle design offering
maximum plaque- removing
efficacy.

25. •Determining, through
clinical and consumer
research, the efficacy and
acceptance of the new
toothbrush design.

26. Positioning
• Precision was developed with the objective of
creating the best brush possible and as such,
becoming a top-of-the range, super-premium
product.
• It could be positioned as a niche product to be
targeted at consumers concerned about gum
disease.

27. Volumes
• 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.
• Total category unit volumes were estimated at
268 million in 1993 and 300 million in 1994.

28. Capacity and Investment
Costs
Three types of equipment were required to
manufacture the Precision brush:
1. Tufters
2. handle molds
3. packaging machinery

29. Production Costs and Pricing

30. Production costs
included:
•warehousing costs
• Transport costs

31. Breakeven Analysis
• Total Manufacturing Costs + Total Advertising
Costs = Input Cost( Variable + Fixed costs)
• Total Profit = Retail Price * number of brushes
– Input Cost
• For Breakeven , Input Cost = Total revenue
generated by selling the Precision brushes

33. Two tests carried out:
• CONSUMER CONCEPT
TESTS
• NAME TESTS

34. Outcome
Under the mainstream and niche positioning
scenarios –
• 1. Cannibalization figures for Colgate Plus
would increase by 20% if the Colgate brand
name was stressed.
• 2. Remain unchanged if the Precision brand
name was stressed.

35. Communication and Promotion

36. Four Tests

37. 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.

38. Conclusion
Steinberg believed that Precision was more
than a niche product line extension and that the
proven benefits to consumers represented a
technological breakthrough. Precision was
positioned , branded, and communicated to
consumers after proper analysis. Market mix
was developed that enabled Precision to reach
its full potential.

39. Disclaimer
Created by Nikhil Chaudhary, NIT
Goa, during a marketing internship by
Prof. Sameer Mathur, IIM Lucknow.
: