Colgate-Palmolive The Precision Toothbrush Case Study

1. The Precision Toothbrush:
Case Study

2. HISTORY

3. In 1806, Colgate was founded by
William Colgate. The brand started
with a small soap and candle
business

4. In 1991,
CP was a global leader in household and personal
care products, with sales of $6.06 bn and gross
profit of $2.76 bn

5. In 1992
CP was poised to launch a new
toothbrush in the US, tentatively named
Colgate Precision.

6. Colgate Precision
CP’s oral care division has been developing
this technological superior toothbrush for over
3 years but now faces a highly competitive
market with substantial new product activity

7. Susan Steinberg, Precision product manager, had
to recommend positioning, branding and
communication strategies

8. The main challenge was decide to position the new
toothbrush in the niche market or the mainstream
market, both had their perks and their drawbacks.

9. So, let us first study the US toothbrush
market

10. In 1991, the U.S. Oral Care market was $2.9
billion in retail sales and had grown at an
annual rate of 6.1% since 1986.
Toothpaste accounted for 46% of this
market, mouth rinses 24%, toothbrushes
15.5% , with dental floss and other products
making up the remainder.

11. PRODUCT SEGMENTS:
1. Value($1.29)
2. Professional($1.59 to $2.09)
3. Super Premium ($2.29 to $2.89)

12. Consumer
Segmentation

14. Consumers chose a brush to fit
their individual needs: size and
shape of the mouth, sensitivity of
gums, and personal brushing
style. The handle, bristles, and
head shape were perceived to be
the most important physical
features of a toothbrush.

15. COMPETITION

18. As product innovations
increases, advertising media
expenditures also rose along
with the frequency and value
of consumer promotion
events.
CP toothbrush display
increased sales by 90%
compared to normal shelves

19. DISTRIBUTION

20. From 1989-1992, distributions were through
1. Food Store (45%)
2. Drug Stores (32%)
3. Mass Merchandisers (17%)
Retailers made a margin between 25 to 35%, twice
that of toothpaste.
In 1992, 22% of all toothbrushes were expected to be
distributed by dentists (Oral-B dominated this
segment

21. The Precision
Marketing Mix

22. Product Design
Had 3 types of bristles cleaning around
the gum between the teeth and the teeth
surface The Brush achieved 35%
increase in Plaque removal compared to
other leading toothbrushes

24. Precision was developed with the objective of
creating best brush possible and as such
becoming a top-of-the range product, now
Steinberg had two choices
Niche Product
Positioning
Mainstream Product
Positioning
OR

25. Niche Positioning
• Target specific gum disease concerned demographic
• Command a 15% price premium over ORAL-B and
would be expected to capture 3% of the U.S toothbrush
market by the end of 1st year
• Avoid cannibalization

26. Mainstream Positioning
• Capture 10% market share & 10% volume share, greater
proportion of sales through mass merchandisers and
club stores
• Production capacity increases required 10months lead-
resulting in inadequate supply of product

28. t was estimated, both
‘Colgate Precision’ and
‘Precision
by Colgate’ under the
mainstream and niche
positioning scenarios, that
cannibalization figures for
Colgate Plus would
increase by 20% if the
Colgate
brand name was stressed
but remain unchanged if
the
Precision brand name was
stressed. On the other
hand
Colgate Palmolive’s stated
corporate strategy was to
build on the Colgate brand
equity.
‘Colgate Precision’ (under mainstream) and ‘Precision by
Colgate’ (under niche), showed that cannibalization figures
for Colgate Plus would increase by 20% if the Colgate brand
name was stressed but remain unchanged if the Precision
brand name was stressed.
Testing showed consumers felt “Colgate Precision” suits
more.
Colgate Palmolive’s corporate strategy was to build on the
Colgate brand equity.

29. CP should select mass positioning for precision toothbrush,
it can make use of its existing intensive distribution channel.
Mainstream positioning would be more profitable in the
long-term.
CP’s brand equity would increase.

31. Created by
Rajas Pawar,
IIT BOMBAY,
during a Marketing
Internship by Prof
Sameer Mathur,
IIM Lucknow
DISCLAIMER