2. The Colgate-Palmolive Company is an
American worldwide consumer products
company focused on the production, distribution
and provision of household, health care and
personal care products.
3.
4. INFORMATION
It was founded in 1806 and it manufactures
personal care products. Their headquarters are
located in New York, United States. It has more
than 36,000 employees and it’s net revenue is
$15.3 billion.
5. BACKGROUND
In 1991, the company witnessed sales
of $6.06 billion with a gross profit of
$2.76 billion.
The five year plan 1991-1995 is to
focus on core consumer products with
improved efficiencies in manufacturing
and distribution. It has also entered
into new geographic markets mainly
emphasizing in new product launches.
With the development in Oral care
division, Precision product manager
Susan Steinberg had recommended
positioning, branding and
communication strategies to GM Nigel
Burton.
9. • In 1991, the U.S. Oral Care market was
$2.9 billion in retail sales with an annual
growth of 6.1% since 1986.
• Toothpaste accounted for 46% of thE
market, with mouth rinses 24%,
toothbrushes 15.5%, remaining with
dental floss and other products.
• Dollar sales had grown at a rate of 9.3%
per annum since 1987 but in 1992, they
increased 21% in value and 18% in
volume. This is accounted due to
introduction of 47 new products and line
extensions during 1991-1992.
THE U.S. ORAL
CARE MARKET
10.
11.
12. PRODUCT
SEGMENTS
• In the 1980s, the toothbrush category
was divided into two main segments:
• Value
• Professional
• In the late 1980s, many new
toothbrushes were introduced on
basis of aesthetics.
• A new segment of brushes emerged
with the name of “super-premium”
which were priced between $2.29 and
$2.89 and accounted for 46% of dollar
sales in 1992.
13.
14.
15. CONSUMER
RESEARCH
• Consumers of the baby boom
generation were becoming more
concerned about the health of their
gums.
• CP estimated that 82% of toothbrush
purchases were unplanned.
• Consumers were unfamiliar with
toothbrush prices and they replaced
their brushes on average only once
every 7.5 months back in 1991.
• Brand choice was based on features,
comfort and professional
recommendations.
16.
17. CONSUMER
RESEARCH
• 45% of consumers brushed before
breakfast, 57% after breakfast, 28%
after lunch, 24% after dinner and
71% before bed.
• The trigger to purchase a new brush
was when their toothbrush-bristles
became visibly worn.
• Consumers differed in the intensity
of their involvement in oral hygiene.
18.
19.
20. • Oral-B (owned by Gillette) had been the market leader since
the 1960s. With many heavy endorsements it was known as
the “dentist’s toothbrush”.
• Johnson & Johnson entered the U.S. toothbrush market in the
1970s with the Reach brand, which in 1991, comprised of18
SKUs.
• Procter & Gamble (P&G) had captured a 13% value share in
test markets with an extension of the company’s toothpaste
brand name, Crest.
• Smithkline Beecham entered the U.S. toothbrush market in
August 1991 allowing gentle brushing with its flexile handles.
• Other competitors included Lever, Pfizer, and Sunstar.
21.
22.
23.
24. ADVERTISING &
SALES
• As it was hard to increase primary
demand, new products steal sales from
existing products.
• Johnson & Johnson spent $8 million,
Oral-B spent $10 million and Procter &
Gamble spent $15 million in media
support to introduce its new product.
• A typical CP toothbrush display increased
sales by 90% over a normal shelf facing.
• For maximum retail sales, CP tried to
locate the Colgate line in the middle of
the category shelf space.
25.
26.
27.
28. DISTRIBUTION
• In 1987, traditional food stores sold
75% of oral care products.
• By 1992 they accounted for only 43%
of toothbrush sales and 47% of
toothpaste sales.
• Food stores began to expand shelf
space devoted to oral care products.
• Toothbrushes provided retailers with a
margin of 25-30%.
• With a dedicated sales force, Oral-B
dominated the toothbrush segment
by distributing to consumers by
dentists.
31. PRODUCT
• Understanding the varying techniques
consumers used while brushing their
teeth.
• Testing the superiority of CP over Oral-
B and Reach in accessing the teeth.
• Establishing an index to score clinical
plaque removal efficacy.
• Creating a bristle configuration and
handle design offering maximum
plaque removing efficacy.
• Determining the efficacy and
acceptance of the new toothbrush
design through research.
32. PLACE
• Targeting different geographic
locations leads to profits by
emphasizing on the cultural norms.
• By targeting the rural consumers
and increasing the wholesale
dealers.
33. PRICE
• Colgate pricing depends
on the production costs
including ware housing
costs and transport costs.
• Concerns about
mainstream toothbrush is
the possibility of
cannibalization of Colgate
plus.
34. PROMOTION
• Advertising through all means
of media like TV, newspapers,
radio broadcasting and social
media.
• Through billboards and
Hoardings at busy junctions in
cities and on highways.
• Conducting camps by hiring
dentists.
35.
36. • Precision was developed ad best super premium
toothbrush of top range.
• It can be Positioned as
Niche Product
Mainstream Product
• Both have their own advantages and disadvantages.
• With a niche positioning 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.
37.
38.
39. • The Colgate Precision name was consistently
viewed and deemed appropriate by 49% of
concept acceptors and 31% of them appealed.
• Stressing Precision as opposed to Colgate would
to limit the cannibalization of Colgate Plus.
• Colgate brand name was stressed but remain
unchanged if the Precision brand name was
stressed.
• Corporate strategy was to build on the Colgate
40.
41. • After establishing the basic
product design, CP conducted
four concept tests.
• 400 adults between 18-54 years
old who were professional brush
users of Colgate Plus, Reach, and
Oral-B.
42.
43.
44.
45. • Steinberg viewed Precision was more
than a simple line extension.
• Determined how precision should be
positioned following the path of
development, testing, pricing and
communication.
• The case briefly outlined about U.S. Oral
Care Market.
47. This presentation has been created by Sneharth Bhajani, SVNIT
Surat during the Marketing Management Internship under Prof.
Sameer Mathur, IIM Lucknow.