3. U.S Tooth brush Market
In U.S Oral care Market:
• Retail sales were $2.9 Bn which grew at 6.1% since 1986
• Toothpaste accounted for 46%
• Mouth rinses accounted for 24%
• Tooth brush accounted for 15.5%
• Dental floss and other products for 14.5%
4. Product Segments
Super Premium Brushes
• Price Range – $2.29 - $2.8
• Accounted for 35% of Unit volume
• Accounted for 45% of dollar sales
Profession
• Price Range - $1.59 – $2.09
• Accounted for 41% of Unit volume
• Accounted for 42% of dollar sales
Value
• Price Range - $1.29 (avg)
• Accounted for 24% of Unit volume
• Accounted for 12% of dollar sales
5. Position
In 1991, Colgate Palmolive(CP):
• Held 43% of world toothpaste market
• Held 16% of world toothbrush market
• World wide sales increased 12% accounting for 22% of CP’s total sales
In U.S oral care market:
• Held No.1 position with 23.3% market share.
• Toothbrushes were 19% of markets sales and profits
6. CP’s offering
• In the tooth brush market it offered two products:
1) Colgate Classic – value Segment
2) Colgate Plus – Professional segment
7. Consumer Behavior
• Baby Boom generation was growing concerned with health of their
gums and were willing to pay a premium.
Buying behavior:
• Therapeutic Brushers – Differentiate among products (46% of adults)
• Cosmetic Brushers - Search for products that effectively deliver
cosmetic benefits (21% of adults)
• Uninvolved Brushers – View products as the same (33% of adults)
9. Oral - B
• Owned by Gillette
In 1991
• Held 23.1% volume market share
• Held 30.7% value market share of U.S retail sales
Product
Indicator Brush – Had Blue bristles patch which faded to white when it
was time for replacement
10. Johnson & Johnson
• Entered With Reach Brand.
In 1991:
• Ranked 3rd
• Held 19.4% volume share
• Held 21.8% value share
Product:
• Reach product line – this toothbrush enabled consumers to brush in
even the hardest to reach places which increased the brushing
efficiency
11. Procter & Gamble
• Entered with Crest Product line
In 1991
• Held 13% value share in Test market
• Was expected to reach the same in total market share
Product
• Crest Complete – The ability to reach between the teeth up to 37%
farther than leading flat brushes.
12. Smith Kline Beecham
• Entered with Aqua fresh product line
In 1991
• Held 0.95% volume share
• Held 1.1% value share
Product
• Aqua fresh Flex – Had flexible handles that allowed for gentle
brushing.
13. Other competitors
Lever – offers Aim, Pepsodent professional, Pepsodent Regular
• Held 7.2% volume share
• Held 6.6% value share
Pfizer – Plax Brush
• Held 1.8% of retail market
Sunstar – Butler Brand
• Held 2% retail market
15. PRODUCT
• CP developed a unique brush with bristles of three different lengths
and orientations
• The longer outer bristles cleaned around the gum line, the long inner
bristles cleaned between teeth, and the shorter bristles cleaned the
teeth surface.
• The result was a triple-action brushing effect. In initial clinical tests,
the brush achieved an average 35% increase in plaque removal
16. Place
• 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.
• Or Precision could be positioned as a mainstream brush, with the
broader appeal of being the most effective brush available on the
market
17. Price
• Under a niche positioning strategy Price would be $2.13
• The mainstream strategy price would be $1.85
• 80% of Sales through dental professionals would be priced at $0.79
per unit
• The remainder 20% would be sold at $0.95.
• The trade sales were made at 5% discount.
18. Promotion
• A free 5 oz. tube of Colgate toothpaste (retail value of $1.89) with the
purchase of a Precision brush in strong competitive markets
• A 50%-off offer on any size of Colgate toothpaste (up to a value of
$1.00) in conjunction with a 50¢ coupon on the Precision brush in
strong Colgate markets.
Professional endorsements: Through Dentists
• Niche Strategy – 3 million Brushes
• Mainstream Strategy – 8 million Brushes
20. Niche Vs. Mainstream
Niche:
• 3% volume share – In year 1
• 5% volume share – In year 2
Mainstream
• 10 % volume share – In year 1
• 14.7% volume share – In year 2
21. Pro-forma
Niche Strategy (For 2 years)
• Revenue = $ 53.18 million
• Costs = $ 44.39 million
Mainstream Strategy (For 2 years)
Revenue = $143.6 million
Costs = $ 126.7 million
22. • The Result should be obvious i.e. $8.79 million vs. $16.85 million
• To go with Main stream strategy but considering cannibalism due to
Colgate plus and classic which will account for an average of 47.5% in
mainstream category.
• The result will be a loss of $75.39 million.
• And Hence we need to opt for Niche positioning.
23. Branding
• Alternative names tested 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%.
• It was estimated, both 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.
• So, Precision would be the best choice.
24. Disclaimer
• Created by Rishikesh.M, Mahindra Ecole Centrale Hyderabad.
• During a Marketing Internship Under Prof. Sameer Mathur, IIM
Lucknow.
