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WHAT IS COLGATE PALMOLIVE ?
• Global leader in household and personal care
products
SLEEPY AND INEFFICIENT
LEAN AND PROFITABLE
COMPANYBACKGROUND
COMPANY BACKGROUND
CP WAS A GLOBAL LEADER IN HOUSEHOLD AND PERSONAL CARE PRODUCTS.
CP’S 5-YEAR PLAN FOR1990 TO1995 EMPHASIZED NEW PRODUCT
LAUNCHES AND ENTRY INTO NEW GEOGRAPHIC MARKETS.
What is the case about ?
In August 1922, Colgate
Palmolive (CP) was poised to
launch a toothbrush in the
United States, tentatively
named Colgate Precision.
CP’s oral care division has been
developing this technologically
superior toothbrush for over
three years but now faced a
highly competitive market.
OBJECTIVES
1.To study the market competition faced by the Colgate Precision
Toothbrush.
2.To study the consumer behaviour towards the toothbrush market.
3.To study the strategies that can be used to position the Precision
toothbrush.
4.To analyse the profits gained by adopting the given strategies.
 Precision Product Manager- Susan Steinberg
 Division General Manager- Nigel Burton
 CP’s C.E.O. - Ruben Mark
INCOME STATEMENT FORCOLGATE PALMOLIVE
TOOTHBRUSHES 1989-1992
MAIN ASPECTS
Analyzing consumer behaviour
• CP’s consumer research indicated that consumers
were becoming more concerned about the health of
their gums and were willing to pay a premium for
new products addressing this issue.
• Most consumers agreed that toothbrushes were as
important as toothpaste to effective oral hygiene.
• They believed that the primary role of a toothbrush
was to remove food particles and gum stimulation
were considered secondary.
BRAND DECISION FACTORS
• Until 1980, the toothbrush category consisted of
two segments:
1. Value
2. professional.
• The late 1980s saw the introduction of another
category of toothbrushes called super premium
brushes.
• By 1992, super-premium brushes accounted for
35% of unit volume and 46% of dollar sales.
Professional brushes accounted for a
corresponding 41% and 42%, and value brushes
accounted for 24% and 12%.
• This shows that that super-premium brushes had
an amazing impact on the market.
PRICES OF VARIOUS BRANDS
The Table shows the number and type of
stock keeping units (SKUs) for each
major brand.
MARKET SHARES
ADVERTISING &
PROMOTION
•In the case of toothbrushes, increased advertising and promotion
enhanced the category’s visibility which, in turn, seemed to fuel
consumer demand.
• Retail advertising features and in-store displays increased toothbrush
sales. A typical CP toothbrush display increased sales by 90% over a
normal shelf facing.
• When Colgate toothbrushes were combined with Colgate toothpaste
in a single display, toothbrush sales increased by 170%
Colgate Precision Toothbrush Advertisement
Link to the advertisement:- https://youtu.be/rMtCs6IhCMk
Retail advertising features and
in-store displays increased
toothbrush sales.
CP had four display systems
Counter Tops, containing 24 to
36 brushes; Floor Stands, 72
brushes; Sidekicks , 144 to 288
brushes; and Waterfall displays,
288 to 576 brushes.
The picture illustrates these
display racks.
To maximize retail sales, CP
salespeople tried to locate the
Colgate line in the middle of the
category shelf space,
between the Reach and the Oral-
B product lines.
DISTRIBUTION
• In 1987, traditional food stores sold 75% of oral care
products, but by 1992 they accounted for only 43% of
toothbrush sales and 47% of toothpaste sales.
• Mass merchandisers gained share due to increased in
store promotional support.
• Partly in response and partly because of the increasing
number of SKUs (Stock Keeping Unit), food stores
began to expand shelf space devoted to oral care
products.
PRECISION MARKETING MIX
PRODUCT DESIGNING & TESTING
• The Precision toothbrush was a
technical innovation.
• In laboratory experiments,
researchers used infrared motion
analysis to track consumers’
brushing movements and
consequent levels of plaque
removal.
• With this knowledge and through
computer aided design, CP
developed a unique brush with
bristles of three different lengths
and orientations.
5 Goals of the Task Force
In 1989, CP had established a task force comprising executives from R&D
and Marketing, dental professionals, and outside consultants. Its
mission was to “develop a superior, technical, plaque removing
device.”
1. Understanding the varying techniques consumers used when brushing
their
teeth.
2.Testing the between teeth access of different toothbrush designs.
3.Establishing an index to score clinical plaque removal efficacy at the gum
line and between teeth.
4. Creating a bristle configuration and handle design offering maximum
plaque removing efficacy.
5.Determining, through clinical and consumer research, the efficacy and
acceptance of the new toothbrush design.
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.
Alternatively, Precision could be positioned as a mainstream brush, with
the broader appeal of being the most effective brush available on the
Market.
Niche positioning strategy
Mainstream Positioning
strategy
Production Costs & Pricing
Precision, positioned as a niche product, would be carried by food and drug stores. Under
a mainstream launch scenario, a relatively greater proportion of sales would occur
through mass merchandisers and club stores.
At the time consumer concept tests were carried out by the task force, name tests
were also conducted among those consumers positively disposed towards the
concept.
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 Favourably 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.
Once the basic product design was established, four concept tests, conducted among 400 adult
professional brush users (Colgate Plus, Reach, and Oral B users) 18 to 54 years of age, were run
during 1990-1991.
Consumers were exposed to various product claims in prototype print advertisements and then
asked about the likelihood that they would purchase the product.
ANALYSIS OF CONCEPT TESTS
• Results indicate that a claim that the toothbrush would
prevent gum disease motivated the greatest purchase
intent among test consumers.
• Additional consumer research, including in home usage
tests, revealed that 55% of test consumers found
Precision to be very different from their current
toothbrushes, and 77% claimed that Precision was
much more effective than their current toothbrush
• Consumer research revealed that the more test
consumers were told about Precision and how it
worked, the greater their enthusiasm for the product.
PROBLEMS WITH PRECISION
• The brush looked unusual and test participants
sometimes had mixed first impressions.
• A further problem was that the benefit of reduced gum
disease from extra plaque removal was difficult to
translate into a message with broad consumer appeal,
since few consumers acknowledged that they might
have gum disease.
CONSUMER PROMOTIONS
CONCLUSION
• Launching the Precision Toothbrush as a Niche market product is a better
choice than launching it as a mainstream market product.
• Launching Precision as a mainstream market product may cannibalize
Colgate Plus and may put pressure on production schedules that had been
developed for a niche positioning.
• Initial niche positioning, which could later be broadened to a mainstream
positioning as additional capacity came on line, may prove as a better
alternative.
• The brush should be given a unique identity and “Precision” brand name
should be emphasized. This may limit the extent of cannibalization of
Colgate Plus.
• It was claimed that Precision toothbrush removes plaque better than any
other toothbrush. It was also claimed that Precision toothbrush reduces
gum diseases that may arise due to excess plaque.
• CP should make sure that it is delivering the promises that it made during
the promotions and remove those that are exaggerated or are lies. This will
earn customers’ loyalty and will promote the brand name.
DISCLAIMER
Created by Jyoti Chadha,
JDMC, DU, during a Marketing
Internship by Prof. Sameer Mathur,
IIM Lucknow

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Colgate-Palmolive Company: The Precision Toothbrush

  • 1.
  • 2. WHAT IS COLGATE PALMOLIVE ?
  • 3. • Global leader in household and personal care products SLEEPY AND INEFFICIENT LEAN AND PROFITABLE
  • 4. COMPANYBACKGROUND COMPANY BACKGROUND CP WAS A GLOBAL LEADER IN HOUSEHOLD AND PERSONAL CARE PRODUCTS. CP’S 5-YEAR PLAN FOR1990 TO1995 EMPHASIZED NEW PRODUCT LAUNCHES AND ENTRY INTO NEW GEOGRAPHIC MARKETS.
  • 5. What is the case about ? In August 1922, Colgate Palmolive (CP) was poised to launch a toothbrush in the United States, tentatively named Colgate Precision. CP’s oral care division has been developing this technologically superior toothbrush for over three years but now faced a highly competitive market.
  • 6. OBJECTIVES 1.To study the market competition faced by the Colgate Precision Toothbrush. 2.To study the consumer behaviour towards the toothbrush market. 3.To study the strategies that can be used to position the Precision toothbrush. 4.To analyse the profits gained by adopting the given strategies.
  • 7.  Precision Product Manager- Susan Steinberg  Division General Manager- Nigel Burton  CP’s C.E.O. - Ruben Mark
  • 8.
  • 9. INCOME STATEMENT FORCOLGATE PALMOLIVE TOOTHBRUSHES 1989-1992
  • 11.
  • 12.
  • 13. Analyzing consumer behaviour • CP’s consumer research indicated that consumers were becoming more concerned about the health of their gums and were willing to pay a premium for new products addressing this issue. • Most consumers agreed that toothbrushes were as important as toothpaste to effective oral hygiene. • They believed that the primary role of a toothbrush was to remove food particles and gum stimulation were considered secondary.
  • 14.
  • 16.
  • 17. • Until 1980, the toothbrush category consisted of two segments: 1. Value 2. professional. • The late 1980s saw the introduction of another category of toothbrushes called super premium brushes. • By 1992, super-premium brushes accounted for 35% of unit volume and 46% of dollar sales. Professional brushes accounted for a corresponding 41% and 42%, and value brushes accounted for 24% and 12%. • This shows that that super-premium brushes had an amazing impact on the market.
  • 18.
  • 20. The Table shows the number and type of stock keeping units (SKUs) for each major brand.
  • 22.
  • 23. ADVERTISING & PROMOTION •In the case of toothbrushes, increased advertising and promotion enhanced the category’s visibility which, in turn, seemed to fuel consumer demand. • Retail advertising features and in-store displays increased toothbrush sales. A typical CP toothbrush display increased sales by 90% over a normal shelf facing. • When Colgate toothbrushes were combined with Colgate toothpaste in a single display, toothbrush sales increased by 170%
  • 24. Colgate Precision Toothbrush Advertisement Link to the advertisement:- https://youtu.be/rMtCs6IhCMk
  • 25. Retail advertising features and in-store displays increased toothbrush sales. CP had four display systems Counter Tops, containing 24 to 36 brushes; Floor Stands, 72 brushes; Sidekicks , 144 to 288 brushes; and Waterfall displays, 288 to 576 brushes. The picture illustrates these display racks. To maximize retail sales, CP salespeople tried to locate the Colgate line in the middle of the category shelf space, between the Reach and the Oral- B product lines.
  • 26. DISTRIBUTION • In 1987, traditional food stores sold 75% of oral care products, but by 1992 they accounted for only 43% of toothbrush sales and 47% of toothpaste sales. • Mass merchandisers gained share due to increased in store promotional support. • Partly in response and partly because of the increasing number of SKUs (Stock Keeping Unit), food stores began to expand shelf space devoted to oral care products.
  • 27.
  • 29. PRODUCT DESIGNING & TESTING • The Precision toothbrush was a technical innovation. • In laboratory experiments, researchers used infrared motion analysis to track consumers’ brushing movements and consequent levels of plaque removal. • With this knowledge and through computer aided design, CP developed a unique brush with bristles of three different lengths and orientations.
  • 30. 5 Goals of the Task Force In 1989, CP had established a task force comprising executives from R&D and Marketing, dental professionals, and outside consultants. Its mission was to “develop a superior, technical, plaque removing device.” 1. Understanding the varying techniques consumers used when brushing their teeth. 2.Testing the between teeth access of different toothbrush designs. 3.Establishing an index to score clinical plaque removal efficacy at the gum line and between teeth. 4. Creating a bristle configuration and handle design offering maximum plaque removing efficacy. 5.Determining, through clinical and consumer research, the efficacy and acceptance of the new toothbrush design.
  • 31.
  • 32. 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. Alternatively, Precision could be positioned as a mainstream brush, with the broader appeal of being the most effective brush available on the Market.
  • 35.
  • 36. Production Costs & Pricing Precision, positioned as a niche product, would be carried by food and drug stores. Under a mainstream launch scenario, a relatively greater proportion of sales would occur through mass merchandisers and club stores.
  • 37.
  • 38. At the time consumer concept tests were carried out by the task force, name tests were also conducted among those consumers positively disposed towards the concept. 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 Favourably 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.
  • 39. Once the basic product design was established, four concept tests, conducted among 400 adult professional brush users (Colgate Plus, Reach, and Oral B users) 18 to 54 years of age, were run during 1990-1991. Consumers were exposed to various product claims in prototype print advertisements and then asked about the likelihood that they would purchase the product.
  • 40.
  • 41. ANALYSIS OF CONCEPT TESTS • Results indicate that a claim that the toothbrush would prevent gum disease motivated the greatest purchase intent among test consumers. • Additional consumer research, including in home usage tests, revealed that 55% of test consumers found Precision to be very different from their current toothbrushes, and 77% claimed that Precision was much more effective than their current toothbrush • Consumer research revealed that the more test consumers were told about Precision and how it worked, the greater their enthusiasm for the product.
  • 42. PROBLEMS WITH PRECISION • The brush looked unusual and test participants sometimes had mixed first impressions. • A further problem was that the benefit of reduced gum disease from extra plaque removal was difficult to translate into a message with broad consumer appeal, since few consumers acknowledged that they might have gum disease.
  • 44. CONCLUSION • Launching the Precision Toothbrush as a Niche market product is a better choice than launching it as a mainstream market product. • Launching Precision as a mainstream market product may cannibalize Colgate Plus and may put pressure on production schedules that had been developed for a niche positioning. • Initial niche positioning, which could later be broadened to a mainstream positioning as additional capacity came on line, may prove as a better alternative. • The brush should be given a unique identity and “Precision” brand name should be emphasized. This may limit the extent of cannibalization of Colgate Plus. • It was claimed that Precision toothbrush removes plaque better than any other toothbrush. It was also claimed that Precision toothbrush reduces gum diseases that may arise due to excess plaque. • CP should make sure that it is delivering the promises that it made during the promotions and remove those that are exaggerated or are lies. This will earn customers’ loyalty and will promote the brand name.
  • 45.
  • 46. DISCLAIMER Created by Jyoti Chadha, JDMC, DU, during a Marketing Internship by Prof. Sameer Mathur, IIM Lucknow