Colgate-Palmolive : Precision Toothbrush

1. Harvard Business Case Study

2. History
● In 1806, William Colgate established starch, soap, and candle factory under the name
“William Colgate & Company”
● IN 1873, the firm introduced its first aromatic colgate toothpaste sold in jars
● In 1928, Palmolive-Peet bought the Colgate company to create
Colgate-Palmolive-Peet however Peet was later dropped from the title
● CP is now an American company focused on
○ Production
○ Distribution
○ Provision
Of household, healthcare and personal care products

3. Colgate-Palmolive in 1991
● With an annual sale of $6.06 billion and gross profit o $2.76 million CP was a global
leader in household and personal care products
● Company’s five year plan for 1991-1995 focused on new product launched and
geographical expansion along with improved efficiencies
● In August 1992, CP was poised to launch new toothbrush in the US tentatively
named, Colgate Precision

4. US Toothbrush Market
● Until late 1970s, consumers viewed toothbrushes as a commodity
● New product launches added product performance as purchasing criteria
● U.S. Oral Care market was $ 2.9 billion in retail sales in 1991
● Dollar sales of toothbrush had increased by 21% due to 47 new product launches
● The trade responded to new product launch by increasing in-store promotional
support and advertising features
● Introduction of new product segment : Super-Premium

5. Product Segments
Value Professional Super-Premium
Price $ 1.29 $ 1.59 - $ 2.09 < $ 2
Volume Share 24% 41% 35%
Dollar Sales
Share
12% 42% 46%
Brand Product
Placement
Colgate-Palmolive
Johnsons & Johnsons
Oral-B,
Procter & Gamble
Smithkline Beecham

6. Consumer Behaviour
● Consumers made brand choice is based on features, comfort and professional
recommendation
● Consumers born between 1940s-1960s were concerned about their gums as opposed
to cavity prevention
● Willingness to pay more for new products addressing gum issues
● Consumers agreed that toothbrushes were as important as toothpastes to effective oral
hygiene
Therapeutic Brushers
Aim to avoid oral care
problems
Cosmetic Brushers
Emphasize preventing
bad breath
Uninvolved Brushers
Adjust behavior when
confronted by oral
hygiene problems

7. Competition
Competitor
Year of
Entry
Competitor
Product
Promotion Plan
Expenditures
1991
Toothpaste
(Crest)
$ 6.4 million
1991
Toothpaste
(Aquafresh
Flex)
$ 4.6 million
1970s
Brush
(Prevent)
$ 4.6 million
1960s
Indicator
Brush
$ 11.2 million

8. Advertising & Promotions
● CP toothbrush line held 25% - 40% of the category shelf space in
stores
● Colgate toothbrush combined with colgate toothpaste increased the
toothbrush sales by 170%
● Growing competition increased the frequency & value of consumer
promotion events
● Toothbrush display increased sales by 90% over normal shelf facing
● To maximize retail sale, salespeople located Colgate line in middle
of shelf space between Reach and Oral-B products
● Growing competition increased the frequency & value of consumer
promotion events

9. Distribution
● By 1992, oral care products consisted of 43% toothbrush and 47% of the toothpaste
sales
● Mass merchandisers gained share due to in-store promotional support
● Toothbrushes provided retailers with an average margin twice that of toothpastes

11. Product Design & Testing
● CP aimed to develop a superior, technical and plaque-removing device
● Product usage methods by customer were studied
● Product was designed to offer maximum plaque-removal efficacy
● Tested different designs for between-tooth access
● Through consumer research, determined acceptance of new product

12. Positioning
Dilemma of positioning strategies : Niche & Mainstream
Niche Positioning Mainstream Positioning
Market selling point Target gum issues
Appeal of most effective brush in
market
Market volume share
in year 1
1% 10%
Market volume share in
year 2
5% 14.7%
Price of the product $ 2.13 $ 1.85
Drawbacks Lesser categories of stores
Cannibalization of other products
Inadequate supply of product

13. Branding
● The product name was deemed appropriate by 49% of concept acceptors and
appealing by 31%
● Debated brush names : Colgate Precision & Precision by Colgate
● Use of “Precision” as opposed to Colgate was argued to limit cannibalization
● If Colgate brand named was used, 20% cannibalization was expected in any
positioning strategy
● However, corporate strategy was to build Colgate brand equity

14. Communications
● 55% consumers found Precision better than other toothbrushes
● 77% claimed Precision was much effective than other toothbrushes
● More the consumers knew about Precision, more was their enthusiasm
● Debates arose for expenditures in promotion plan whether it should be a ratio of sales
or the sufficient amount
● Consumer promotions were planned to induce trial
● Entire promotion of Precision was estimated to cost about $ 4 million

16. Strengths
● Strong financial planning and profits
● Innovation in product technology
● Research in product design

17. Weakness
● Product looked unusual and created mixed
impressions in minds of consumers
● Plaque-removal as a message was difficult to
translate to broad consumers since few were
concerned about gum disease

18. Opportunities
● Technological advancements
● Growing population

19. Threat
● Entry of new products from competitor private label
● Increasing prices

20. Thank you !

21. Disclaimer
This presentation was made by Shruti Madavi, IIT
Bombay under the guidance of Prof. Sameer Mathur,
IIM Lucknow