This document discusses Colgate Palmolive's strategy for launching a new precision toothbrush. It considers positioning the product as either a niche market product or mainstream product. The document analyzes market research data on oral care spending, consumer preferences, and competitive offerings. It finds that positioning as a niche product targeting gum health concerns would generate the greatest estimated profit over two years, despite lower projected revenue, as it would cannibalize fewer existing Colgate product sales. The document recommends an initial niche market positioning for the precision toothbrush.

1. Vinit Vaibhav

2. Defining the marketing
strategy – Positioning ,
Branding &
Communication for new
precision Toothbrush .

3. Susan Steinberg
 Precision Product Manager
Nigel Burton
 Division General Manager

4.  U.S. Oral Care Market - $2.9 billion
 U.S. Toothbrush Market - $453 million
 U.S. Market (CP - Toothbrush) - $77 million
 Dollar Sales Growth - 9.3% per annum (since 1987)
 1992 - Market Growth - 18% by volume & 21% by value
 Dollar growth exceeded volume growth due to emergence of
super premium
 category.
 1993 - Lower projected sales growth – build-up of household
inventory in 1992.

6.  48% consumers claimed to change their brushes in at least
every three months .
 Consumers choose their brand based on features , comforts
and professional recommendations .
 Consumers ready to pay premium for product addressing
Gum Health issue.

8. CP is global leader in personal and
household products.
Strong Brand Image Worldwide.
Technical Innovation - Triple Action
Brushing Effect.
Concepts tests - 77% found Colgate
Precision more effective.

9. 33% adults - Uninvolved Oral Health Consumers -
Difficult to educate about the technical innovation.
CP is not yet into the super-premium market while
CP’s main competitor Oral-B has professional
endorsement as dentist’s toothbrush.

10. CP’s customer research revealed that 46% of
adult are concerned about health of their gums.
Customers are willing to pay a premium for
new products addressing this issue.
Willingness of customers to try new products.

11. Competitors are offering incentive
program to attract customers.
Innovation and additional features
in competitors product
Threat of buyer/supplier growing bargaining power .
Threat of New Entrants - In 1991, the toothbrush
market exploded with a dramatic increase in new
entrants .

17. Emphasizing Colgate name on new
precision toothbrush would cause
additional Cannibalization of existing
Colgate toothbrush–Estimated at 20 %
Using Colgate name would be
congruent with Colgate’s Branding
strategy .

19. Four concept tests conducted among 400 adult
professional brush users .
Results indicate consumers were highly motivated
by precision toothbrush claims .
Additional in-home usage test were conducted .
 77% claimed that Precision was much more
effective than their current toothbrush .
Other consumer research revealed that the higher
the exposure to the product the greater consumer
acceptance .

21. Aggressive advertising campaign –
demonstrated technical superiority of the
toothbrush .
Financial incentives – coupon – Buy 1 Get 1
Free
Professional channels – Dentists
Consumer Promotion -:-
- A 50 Cent coupon .
- A 50% off offer on Colgate Toothpaste .
- A 5 oz. tube of Colgate toothpaste with a
precision brush .

23. A financial analysis indicates a profit over a two year time frame
for both market positions.
The niche position generates a greater estimated net profit over
the two years ( $12,527,333).
Some sales of the new product are anticipated to come at the
expense of sales of other existing Colgate products.
In the niche position, an estimated 35% of sales would come
form other products decreasing Colgate’s overall toothbrush net
profit by $ 2,507,400 in year one and $ 3,970,050 in year two .
In the mainstream position, an estimated 60% of sales would
come from exiting products decreasing Colgate’s overall
toothbrush net profit by $ 15,044,400 in year one and $
21,133,800 in year two .
Including cannibalization effect, only the niche market generates
a profit over a two year period .

26.  No SKU’s needed to be dropped .
 As such it could command a 15% price
premium over ORAL-B and would be
expected to capture 3% of the U.S.
Toothbrush by the end of 1st year of its
launch .
 Niche market participants are also
more likely to pay a premium for this
product due to the fact that Precision
caters to a distinct set of needs they
have.
 Including CANNIBALIZATION EFFECT,
only the niche market generates a
profit over a two year period.
 Majority through retail outlets
specifically drug stores where people
will be searching for best protection
against gum disease.
 Marketing the Precision product to a
niche market would generate less
revenue for Colgate-Palmolive than a
mainstream approach.
 Volume shares when positioned as
mainstream would be 10% in 1 year
when compared to 5% when
positioned as niche product .

28.  Product is accessible to a larger
market .
 Marketing to more diverse
audience - simple and direct
campaign - address all common
concerns of all toothbrush buyers.
 In the mainstream position, an
estimated 60% of sales would
come from exiting products
decreasing Colgate’s overall
toothbrush net profit.
 In the mainstream market a
higher price makes a product
less attractive to the average
consumer.
 Positioning Precision as a
mainstream product with 7
SKU’s would probably require
dropping one or more SKU’s .
 Including Precision as a high
end, mainstream product could
potentially “cannibalize” Colgate
Plus sales.

30. Colgate Palmolive should position the precision toothbrush
as a niche market product during introductory and growth
life cycle.
R&D investments suggest that Super Premium Niche
segment is more consistent than mainstream market for
advanced gum care.
Broadening into mainstream positioning would enhance
greater proportion of sales which would now also occur
through mass merchandisers and club stores apart from the
food and drug store .

31. Created by Vinit Vaibhav , NIT Jamshedpur during a marketing
internship under Prof. Sameer Mathur , IIM Lucknow .