Colgate-Palmolive Company is a global leader in household and personal care products. In 1991, it generated $2.76 billion in gross profits. CP launched a new technologically superior toothbrush called the Precision to target the growing super-premium toothbrush market. The Precision was designed to provide a more effective clean and protect gums. CP considered both niche and mainstream positioning strategies for the Precision. Its marketing mix for the Precision included product testing, branding, television and retail promotions, coupons, and expanded display systems to drive sales.

1. Colgate-Palmolive
Company: The
Precision
Toothbrush
Harvard Business School Cases

2. Problem Statement
• Introducing and defining the business of Colgate-Palmolive
Company.
• Defining Marketing strategies of Colgate Precision Toothbrush.

3. What is Colgate-
Palmolive
Company?

4. Colgate -
Palmolive
Company
• In 1991, CP was a global leader in
household and personal care
products with gross profit of
$2.76 billion.
• CP’s Oral Care division launched
technologically superior
toothbrush named Colgate
Precision

5. Key Position
Holders
•Rueben Mark
CP’s CEO
•Susan Steinberg
Precision product
manager
•Nigel Burton
Division general manager

6. Strategies
of CP

7. 5 Year Plan(1991-1995)
New Products
New
Geographic
Market
Efficient
Manufacturing
Improve
Distribution

8. CP’s Oral Care
Business

9. CP’s Business
Internationally
In 1991, CP held 43% of the world
toothpaste market and 16% of the
world toothbrush market. Other
oral care products included dental
floss and mouth rinses.

10. CP’s US Toothbrush Business
1989 1990 1991 1992
Unit sales 55,296 63,576 70,560 78,336
Net sales ($’000s) 43,854 (100%) 57,248 (100%) 77,001 (100%) 91,611 (100%)
Cost of sales 23,988 (55%) 28,190 (49%) 36,827 (48%) 44,846 (49%)
Total fixed overhead 4,429 (11%) 6,304 (11%) 10,007 (13%) 11,423 (12%)
Total fixed overhead
Media
Consumer promotions
Trade promotions
3,667 (8%) 6,988 (12%) 8,761 (11%) 9,623 (11%)
4,541 (10%) 5,893 (10%) 5,286 (7%) 6,978 (8%)
3,458 (8%) 4,134 (7%) 6,287 (8%) 7,457 (8%)
Operating profit 3,744 (9%) 5,739 (10%) 9,833 (13%) 11,284 (12%)

11. US Oral Care Market
Product Market occupancy
Toothpaste 46%
Mouth rinses 24%
Toothbrush 15.5%
Dental floss and other products 14.5%

12. US Toothbrush Market
In 1970’s, prices were the criteria of purchase but now, purchase is considered

13. Factors Affecting CP’s US
Toothbrush Market
• Introduction of 47 new products
• Line extensions
• Media support
• Consumer coupon circulation
• Promotions and advertisements

14. Product
Segmentation of CP
The late 1980s saw the
emergence of super-premium
brushes (priced above $2.00).
By 1992, super-premium
brushes, with retail prices
between $2.29 and $2.89,
accounted for 35% of unit volume
and 46% of dollar sales.
Product
Value Professional

15. New
Products in
the Super-
Premium
Toothbrush
Segment

16. The Precision Toothbrush
• Presently in introduction
stage
• Planned promotions for
entry in Super premium
segment

17. Consumer
Behavior

18. Market
Needs
• baby boom generation
• effective oral hygiene
• remove food particles
• plaque removal
• gum stimulation

19. Market
Misconceptions
• toothbrush purchases were
unplanned
• unfamiliar with toothbrush
prices
• purchase frequency lagged
replacement frequency

20. Competitors

21. Competitors
in the
International
Market
• Procter and Gamble
• Unilever
• Kao of Japan
• Henkel of Germany
• Nestle’s L’Oreal Division

22. Competition Analysis

23. Principal Toothbrush Brand Unit and Dollar
Market Shares by Class of Trade: 1991
Principal Toothbrush Brand Unit and
Dollar Market Shares: 1989-1992E

24. The Precision
Marketing Mix

25. Product Design and Testing(1/2)
The Precision
Toothbrush
• A technical innovation
• Triple action brushing effect
• More effective at plague
removal
• Provides gum protection

26. Product Design and Testing(2/2)
Identifying
techniques
consumers use
when brushing
Testing various
toothbrush designs
score clinical plaque-
removal efficacy
Creating a bristle
configuration and
handle design
Determining the
efficacy and
acceptance of the
new toothbrush
design

27. Positioning(1/3)
Precision was developed with
the objective of creating the
best brush possible and as
such, becoming a top-of-the
range, super-premium product
Positioning of
Precision Toothbrush
Niche Mainstream

28. Positioning(2/3)
Niche Positioning
Pros Cons
Niche could later be broadened to
mainstream position as additional
capacity came on line.
Less contribution to net profit in
future years
Less erosion of Colgate plus
CP would face less competition.

29. Positioning(3/3)
Mainstream Positioning
Pros Cons
Had broader appeal of being the
most effective brush available in the
market.
Raised concerns about possible
cannibalization of Colgate Plus.
CP would capture 10%of the market
by end of first year which is higher
than niche marketing.
Production capacity increases
required 10 month’s lead time and
switching to a mainstream
positioning will lead to inadequate

30. Branding
While naming the brand, the word “precision” was considered to
be the main highlight

31. Advertising
and
Promotion

32. Promotion
Techniques
• Television promotions
• Retail stores displays
• Coupons
• Offers

33. Copy Strategy of Colgate Plus’s Television Commercials

34. Advertising and Promotion Expenditures
for Colgate Toothbrushes

35. CP’s Display System
Floor
Stands
Counter
Tops
Sidekicks Waterfall
displays
Display
Systems

36. Summary
• Problem statement
• Introduction to Colgate Palmolive Company
• Business Analysis of CP
• Analysis of consumer behaviour
• Competition analysis
• Marketing mix

37. Disclaimer
Created by Nishtha
Sharma, UIT RGPV
Bhopal, during a Marketing
Internship by Prof. Sameer
Mathur, IIM Lucknow.