1. Colgate Market Landscape Analysis
& New Product Launch Assessment
Peng Lai
peng.lai.personal@gmail.com
1

2. Concept review
• 1992 the total toothbrushes market increased by 22% due to soar of “Super-
Premium” category
• Professional and value are decreasing
• 4 main competitors launched their Super-Premium brands in 1991 and 1992
• Colgate must have its own Super-Premium brand, which is named Precision and
prepared to launch in 1993
2
Brand Sub-brand Launch Time
Oral-B Indicator July 1991
Reach Advanced Design 1991
Crest Complete Sept 1992
Aquafresh Flex August 1991

3. Super-premium has been increasing to 1/3 of market share
in unit and will keep growing in the next several years
3
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
1993E
(MM)
1994E
(MM)
Total Market
Unit Volume 243 242 261 307 250 255
Unit Volume
Change
-0.41% 7.85% 17.62% -18.49% 1.91%
Super-premium Unit Volume 73.20 74.41 80.91 107.45 95.09 99.45
Unit Volume-
Change
2% 9% 45%
-12% 5%
Unit Mrk Share 28% 29% 31% 35% 38% 39%
Professional Unit Volume 99.32 101.49 112.23 125.87 97.59 96.90
Unit Volume-
Change
2% 11% 13%
-22% -1%
Unit Mrk Share 45% 44% 43% 41% 39.00% 38.00%
Value Unit Volume 45.63 42.75 67.86 73.68 57.55 58.65
Unit Volume-
Change
-6% 59% 3%
-22% 2%
Unit Mrk Share 27% 27% 26% 24% 23% 23%
Total 100% 100% 100% 100% 100% 100%
• The total market has soared in 1991-1992 due to a number of new Super-Premium products launched
• Professional market share kept a slowly down
• Value market share was also going down as the buying trend is slowly moving toward to higher price
products

4. Oral B is leading the Super-Premium category while Reach Advanced
will be a strong competitor in this category since 1993
4
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
Super-premium
Unit Volume 68.04 70.18 80.91 107.45
Unit Mrk Share 28.00% 29.00% 31.00% 35.00%
Oral-B Regular
Unit Volume 58.32 59.29 57.68 49.43
Unit Mrk Share 24.00% 24.50% 22.10% 16.10%
Oral-B Indicator
Unit Volume 0 0 2.61 11.36
Unit Mrk Share 0.00% 0.00% 1.00% 3.70%
Crest Complete
Unit Volume 0 0 0 6.14
Unit Mrk Share 0.00% 0.00% 0.00% 2.00%
Reach Advanced
Unit Volume 0 0 1.83 12.28
Unit Mrk Share 0.00% 0.00% 0.70% 4.00%
Aquafresh Flex
0 0 2.35 14.12
Unit Mrk Share 0.00% 0.00% 0.90% 4.60%
Other
Unit Volume 9.72 10.89 16.44 14.12
Unit Mrk Share 4.00% 4.50% 6.30% 4.60%
Total
Unit Volume 68.04 70.18 80.91 107.45
Unit Mrk Share 28% 29% 31% 35%
• Oral-B had decreased its Regular market but gained same amount of market share in its superior Indicator brand
• As a new entrant, Crest was expected to get a high market share (10%) due to its relatively low price
• Reach Advanced and Aquafresh launched in 1991 with prices that are lower than Oral B and higher than Crest

5. Professional category was facing a low increase rate which would affect
Colgate’s major business with Plus
5
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
Professional Unit Mrk Share 45% 44% 43% 41%
Colgate Plus Unit Mrk Share 12.0% 13.7% 16.9% 17.3%
Reach Unit Mrk Share 18.1% 18.2% 17.8% 15.2%
Prevent Unit Mrk Share 2.5% 1.6% 0.7% 0.2%
Pepsodent Prof. Unit Mrk Share 2.1% 2.0% 1.4% 1.0%
Other Unit Mrk Share 10.3% 8.5% 6.2% 7.3%
Total 45.0% 44.0% 43.0% 41.0%
• Plus was leading in Professional but didn’t gain large increase in 1992
• All other Professional products was declining since 1989

6. Value was declining rapidly even though the growth in sales of
Private Label. Private Label was a big challenge for Colgate
Classic
6
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
Value Unit Mkt Share 27% 27% 26% 24%
Colgate Classic Unit Mkt Share 8.5% 8.1% 6.4% 4.9%
Pepsodent Regular Unit Mkt Share 8.4% 7.8% 5.8% 4.0%
Private Label Unit Mkt Share N/A N/A 11.2% 11.5%
Other Unit Mkt Share 10.1% 11.1% 2.6% 3.6%
Total Unit Mkt Share 27% 27% 26% 24%
• Classic decreased 3% in market share since 1990 due to private label growth and new super premium products
launched
• Private label took half of the market share

7. Without launching Precision, total market size would decline 60 MM from 1992 due
to demand decreases. Crest would seize market shares from other Super- Premium
brands such as Oral B
7
(Without
Precision)
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
1993E
(MM)
1994E
(MM)
BRAND MM Share MM Share MM Share MM Share MM Share MM Share
Total Market
Unit Volume 243 100% 242 100% 261 100% 307 100% 250 100% 255 100%
Unit Volume Change -0.41% 7.85% 17.62% -18.49% 2.00%
Unit Volume with
regular increase rate
243 242 257 272 289 307
COLGATE
TOTAL
Unit Volume 49.82 21% 52.76 22% 60.81 23% 68.15 22% 55.05 22% 51.05 20%
Unit Volume Change 6% 15% 12% -19% -7%
Plus Unit Volume 29.16 12% 33.15 14% 44.11 17% 53.11 17% 42.54 17% 40.84 16%
Unit Volume Change 14% 33% 20% -20% -4%
Classic Unit Volume 20.66 9% 19.60 8% 16.70 6% 15.04 5% 12.51 5% 10.21 4%
Unit Volume Change -5% -15% -10% -17% -18%
ORAL-B
TOTAL
Unit Volume 58.32 24% 59.29 25% 60.29 23% 60.79 20% 42.54 17% 40.84 16%
Unit Volume Change 2% 2% 1% -30% -4%
Oral-B
Indicator
Unit Volume 0 0% 0 0% 2.61 1% 11.36 4% 7.51 3% 7.66 3%
Unit Volume Change 0% NA 335% -34% 2%
Oral-B
Regular
Unit Volume 58.32 24% 59.29 25% 57.68 22% 49.43 16% 35.03 14% 33.18 13%
Unit Volume Change 2% -3% -14% -29% -5%
J & J TOTAL Unit Volume 50.06 21% 47.92 20% 50.11 19% 59.56 19% 42.54 17% 40.84 16%
Unit Volume Change -4% 5% 19% -29% -4%
Reach Unit Volume 43.98 18% 44.04 18% 46.46 18% 46.66 15% 35.03 14% 33.18 13%
Unit Volume Change 0% 5% 0% -25% -5%
• Total market size of
1993 and 1994 were
expected to go down
due to over purchase
in 1991 and 1992
• Crest would gain 10%
of market share, which
would be from Oral B,
Reach, Reach
Advanced and AQUA-
FRESH
• Plus and Classic may
keep constant in 1993
and a little decline in
1994 due to increase
of private label and
super premium
category

8. Without launching Precision, total market size would decline 60 MM from 1992 due
to demand decreases. Crest would seize market shares from other Super- Premium
brands such as Oral B
8
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
1993E
(MM)
1994E
(MM)
Reach
Advanced
Design
Unit Volume 0 0% 0 0% 1.827 1% 12.28 4% 7.51 3% 7.66 3%
Unit Volume
Change
0% NA 572% -39% 2%
Prevent Unit Volume 6.08 3% 3.87 2% 1.83 1% 0.6 0% 0.00 0% 0.00 0%
Unit Volume
Change
-36% -53% -66% -100% 0%
LEVER Unit Volume 25.52 11% 23.72 10% 18.79 7% 15.35 5% 10.01 4% 7.66 3%
Unit Volume
Change
-7% -21% -18% -35% -24%
CREST Unit Volume 0 0% 0 0% 0 0% 6.14 2% 25.02 10% 28.08 11%
Unit Volume
Change
0% 0% NA 308% 12%
AQUA-
FRESH
Unit Volume 0 0% 0 0% 2.35 1% 14.12 5% 7.51 3% 10.21 4%
Unit Volume
Change
0% NA 501% -47% 36%
BUTLER Unit Volume N/A N/A N/A NA 5.22 2% 6.14 2% 5.00 2% 5.10 2%
Unit Volume
Change
NA NA 18% -18% 2%
PRIVATE
LABEL
Unit Volume N/A N/A N/A NA 29.23 11% 35.31 12% 32.53 13% 35.73 14%
Unit Volume
Change
NA NA 21% -8% 10%
Other Unit Volume 59.29 24% 58.32 24% 34.19 13% 41.45 14% 30.03 12% 35.73 14%
Unit Volume
Change
-2% -41% 21% -28% 19%
Total 100% 100% 100% 100% 100% 100%
• Private label
would grow in
the next two
years
according to
the trend and
other Value
brands such as
Lever thus
would decline

9. If launching Precision, total market size would be larger due to Colgate brand
influence. 35% of Precision market share was expected to get from Colgate and 65%
from Super-Premium competitors
(Without
Precision)
Year
1989
(MM)
1990
(MM)
1991
(MM)
1992E
(MM)
1993E
(MM)
1994E
($ MM)
BRAND MM Share MM Share MM Share MM Share MM Share MM Share
Total Market
Unit Volume 243 100% 242 100% 261 100% 307 100% 255 100% 260 100%
Unit Volume
Change
-0.41% 7.85% 17.62% -16.86% 1.96%
Unit Volume
with regular
increase
rate
243 242 257 272 289 307
COLGATE
TOTAL
Unit Volume 49.82 21% 52.76 22% 60.81 23% 68.15 22% 64.96 25% 72.08 28%
Unit Volume
Change
6% 15% 12% -5% 11%
Precision Unit Volume 0 0% 0 0% 0 0% 0 0% 5% 10%
Unit Volume
Change
Plus Unit Volume 29.16 12% 33.15 14% 44.11 17% 53.11 17% 41.12 15.8% 37.21 14.3%
Unit Volume
Change
14% 33% 20% -23% -9%
Classic Unit Volume 20.66 9% 19.60 8% 16.70 6% 15.04 5% 12.10 4.7% 8.85 3.4%
Unit Volume
Change
-5% -15% -10% -20% -27%
ORAL-B
TOTAL
Unit Volume 58.32 24% 59.29 25% 60.29 23% 60.79 20% 37.21 14% 33.83 13%
Unit Volume
Change
2% 2% 1% -39% -9%
1993 (MM) 1994 (MM)
Total Shares from
Competitors and
Colgate
5% 10%
Cannibaalization 35%
Precision Shares
from Colgate
1.75% 3.50%
Plus 1.50% 3.00%
Classic 0.25% 0.50%
Total 1.75% 3.50%
Precision Shares
from Competitors
3.25% 6.5%
Reach Advanced 0.50% 1.00%
Oral B Indicator 1.00% 1.50%
Oral B Regular 0.50% 1.30%
Crest 0.50% 1.00%
AQUA-FRESH 0.55% 1.50%
Total 3.25% 6.50%
• Assume that cannibalization is 35% of Colgate traditional market based on price difference between Precision ($1.76)
and Plus ($1.42). Also Precision’s market share should take from other Super-Premium competitors

10. Without launching Precision, total market size would decline 60 MM
from 1992 due to demand decreases. Crest would seize market
shares from other Super- Premium brands such as Oral B
Oral-B Indicator Unit Volume 0 0% 0 0% 2.61 1% 11.36 4% 4.42 1.7% 3.12 1.2%
Unit Volume Change 0% NA 335% -61% -29%
Oral-B Regular Unit Volume 58.32 24% 59.29 25% 57.68 22% 49.43 16% 32.79 12.6% 30.71 11.8%
Unit Volume Change 2% -3% -14% -34% -6%
J & J TOTAL Unit Volume 50.06 21% 47.92 20% 50.11 19% 59.56 19% 42.94 17% 41.64 16%
Unit Volume Change -4% 5% 19% -28% -3%
Reach Unit Volume 43.98 18% 44.04 18% 46.46 18% 46.66 15% 36.43 14% 36.43 14%
Unit Volume Change 0% 5% 0% -22% 0%
Reach Advanced
Design
Unit Volume 0 0% 0 0% 1.827 1% 12.28 4% 6.51 2.5% 5.20 2.0%
Unit Volume Change 0% NA 572% -47% -20%
Prevent Unit Volume 6.08 3% 3.87 2% 1.83 1% 0.6 0% 0.00 0% 0.00 0%
Unit Volume Change -36% -53% -66% -100% 0%
LEVER Unit Volume 25.52 11% 23.72 10% 18.79 7% 15.35 5% 10.41 4% 10.41 4%
Unit Volume Change -7% -21% -18% -32% 0%
CREST Unit Volume 0 0% 0 0% 0 0% 6.14 2% 24.72 9.5% 23.42 9.0%
Unit Volume Change 0% 0% NA 303% -5%
AQUA-FRESH Unit Volume 0 0% 0 0% 2.35 1% 14.12 5% 5.33 2.1% 2.86 1.1%
Unit Volume Change 0% NA 501% -62% -46%
BUTLER Unit Volume N/A N/A N/A NA 5.22 2% 6.14 2% 5.20 2% 5.20 2%
Unit Volume Change NA! NA 18% -15% 0%
PRIVATE LABEL Unit Volume N/A N/A N/A NA 29.23 11% 35.31 12% 33.83 13% 39.03 15%
Unit Volume Change NA NA 21% -4% 15%
Other Unit Volume 59.29 24% 58.32 24% 34.19 13% 41.45 14% 34.35 13% 31.75 12%
Unit Volume Change -2% -41% 21% -17% -8%
Total 100% 100% 100% 100% 100% 100%
10

11. Income statement of Precision in 93/94 if we set price at
$1.76. Colgate will gain $9 MM net profit by its own in 94
Income Statement of Precision
Year 1992 (MM) 1993 (MM) 1993 O/O 1994 (MM) 1994 O/O
Market Size - Units 255 260
Market Share 5.00% 10.00%
Units Sold 13 26
Selling Price Per Unit $1.76 $1.76
Revenue / Sales $22 $46
Total Variable Costs $8 36.36% $19 41.95%
Contribution Margin $14 63.64% $27 58.05%
Total Fixed Costs $17.0 $18.0
Cash Flow / Net
Income
-$3 $9
11
• Market size will be 5 MM larger than without Precision due to huge brand impact of Colgate on the
market
• Market share was expected to increase to 10% by 1994 as the total super premium will increase, the
price of Precision is lower and declining of other brands
• Net income would grow dramatically to more units sold and lower fixed cost

12. With 35% cannibalization of Plus and Classic, Colgate
traditional market would marginally decrease
Income Statement of Total Plus and Classic
Year 1992 (MM) 1993 (MM) 1993 O/O 1994 (MM) 1994 O/O
Market Size - Units 255 260
Market Share 22% 20.45% 18.70%
Units Sold 52 49
Selling Price Per Unit $1.23 $1.28
Revenue / Sales $64 $62
Total Variable Costs $32 50.35% $32 50.84%
Contribution Margin $32 49.65% $31 49.16%
Total Fixed Costs $30.1 $37.8
Cash Flow / Net Income $2 -$9
12
• Market share of Plus and Classic would decrease due to the impact of Precision and private label
• Total variable costs would keep constant when units sold declines and unit variable cost slight increases every year
• Net income would be negative in 1994 as fixed cost also increases (adv, consumer and trade promotions)

13. Colgate would gain market share and generate higher
contribution margin and net income if launch Precision
Income Statement of Total Colgate with Precision
Year 1993 (MM) 1994 (MM)
Market Size - Units 255 260
Market Share 25.45% 27.70%
Units Sold 65 72
Selling Price Per Unit $1.33 $1.45
Revenue / Sales $87 $105
Variable Manufacturing
Cost Per Unit
$0.62 $0.68
Total Variable Costs $40 $49
Contribution Margin $46 $56
Contribution Margin per
Unit
$0.71 $0.77
Advertising Cost $16 $20
Consumer Promotions $10 $12
Trade Promotions $9 $10
Fixed Headover $13 $14
Total Fixed Costs $47 $56
Cash Flow / Net Income -$1 $0
Cash Flow / Net Income
per Unit
-$0.01 $0.00
13
Income Statement of Total Colgate without Precision
Year 1993 (MM) 1994 (MM)
Market Size - Units 250 255
Market Share 22.00% 20.00%
Units Sold 55 51
Selling Price Per Unit $1.23 $1.28
Revenue / Sales $68 $65
Variable Manufacturing
Cost Per Unit
$0.62 $0.65
Total Variable Costs $34 $36
Contribution Margin $34 $29
Contribution Margin per
Unit
$0.61 $0.58
Advertising Cost $10.3 $10.8
Consumer Promotions $6.6 $7.0
Trade Promotions $7.8 $8.2
Fixed Headover $12.6 $13.8
Total Fixed Costs $37.3 $39.8
Cash Flow / Net Income -$4 -$10
Cash Flow / Net Income per
Unit
-$0.07 -$0.20
• With Precision, the
units will grow in the
next two years while
without Precision,
Colgate would lose its
units growth.
• Contribution margin
and net income
would suffer if don’t
launch Precision due
to increasing fixed
costs.

14. Advertisement expenditure should be spent 8 MM on Precision
to reach 5% market share in the first year and keep the same
level for Plus and Classic
Without Precision With Precision
1989 1990 1991 1992E 1993 1994 1993 1994
Total fixed
overhead
$ 4.43 $ 6.30 $ 10.01 $ 11.42 $ 12.57 $ 13.82 $ 12.57 $ 13.82
Media $ 3.67 $ 6.99 $ 8.76 $ 9.62 $ 10.30 $ 10.81 $ 16.00 $ 20.00
Consumer
promotions
$ 4.54 $ 5.89 $ 5.29 $ 6.98 $ 6.63 $ 6.96 $ 10.00 $ 12.00
Trade promotions $ 3.46 $ 4.13 $ 6.29 $ 7.46 $ 7.83 $ 8.22 $ 8.50 $ 10.00
14
Without Precision
1993 1994
Plus+Classic Precision Plus+Classic Precision
Media $10.3 $0.0 $10.8 $0.0
Consumer
promotions
$6.6 $0.0 $7.0 $0.0
Trade
promotions
$7.8 $0.0 $8.2 $0.0
With Precision
1993 1994
Plus+Classic Precision Plus+Classic Precision
Media $8.0 $8.0 $10.0 $10.0
Consumer
promotions
$4.0 $6.0 $5.0 $7.0
Trade
promotions
$5.5 $3.0 $6.0 $4.0
• Media should be spent on
Precision at least 8MM to reach
5% and 10MM in the second year
to reach 10%
• To keep the traditional market,
Colgate should spend the same
amount of advertising on Plus and
Classic
• There will be more consumer
promotions on Precision than
traditional market
• Trade promotions should be given
more to traditional market due to
it’s limited resources

15. Same amount of investment costs will occur in the
second year due to increased Precision units sold
1st Year Investment
Cost
2nd Year Investment
Cost
Tufters $2.17 $2.17
Handle Molds $0.56 $0.56
Packaging $0.15 $0.05
Total $2.87 $2.77
15
1
st
Year 2
nd
Year
Capacity 13 13
Units Sold for
Precision
13 26

16. Net Cash Flow for Colgate with Precision would reach 10.5 MM
and NPV $5MM in 2014. IRR would reach 87.6% which indicates
a very optimistic return for launching Precision
Year 1992 1993 1993 1994
(MM) (MM) O/O (MM)
Cash Flow / Net
Income
-$2.9 $3 -$2.8 $10
Cash Flow / Net
Income per Unit
$0.28 $0.48
Cash Flow / Net
Income % of Sales
14.81% 25.47%
Net Cash Flow -$2.9 $0.0 10.05
Hurdle Rate 10%
NPV $5
Internal Rate of
Return
87.6%
16

17. Recommendations
• With optimistic IRR and NPV, launching Precision with mainstream strategy (Price with $1.76) in Super-Premium category is strongly
suggested
• Even though Super-Premium category will be facing increasingly fierce competition, its total market is still growing. Thus Precision
would generate a good amount of revenue and market share from Oral B, Reach Advanced, AQUA-FRESH and Crest
• The first year of launch of Precision, 8MM adv cost should be spent on Precision to make sure the expected 5% market share gained
• To keep the competitive advantage of Colgate traditional market, Colgate should invest the same amount of adv expenditures on
Plus and Classic
• In the second year Colgate should keep investing in adv and promotions to reach the target of 10% market share for Precision and
18% for traditional market
• The prices of Plus and Classic would increase at a constant level due to the market trend. However due to the price sensitive, more
consumer promotions are suggested
17