Colgate is launching a new toothpaste, CMCP+SAN, in Brazil to address ongoing dental caries issues. CMCP+SAN contains arginine and calcium compounds that are clinically proven to prevent 20% more cavities than fluoride alone. Brazil represents an opportunity as the world's third largest oral care market with high caries rates and poverty levels reducing access to dental care. However, Colgate must consider pricing strategies and potential cannibalization of existing products to maximize the launch of CMCP+SAN in Brazil.

1. Colgate-Palmolive Company: Marketing
Anti-Cavity Toothpaste
ADV 388K
Integrated Communication Management
Group 6
Zachary Bodner (bodnerzd)
Alex Hart (amh6375)
Xing Liu (xl5525)
Darya Procopovich (dp28353)
Emma Szyller (es34345)
The University of Texas at Austin

2. 1
Situation Analysis
In October 2013, Suzan Harrison, Colgate’s president of Oral Care, prepared to launch its new
Colgate® Maximum Cavity Protection™ plus Sugar Acid Neutralizer™ toothpaste
(CMCP+SAN) in Brazil, but first, her executive team needed to consider the product’s
positioning and pricing.
Demographic Environment
The company has no specific target audience. Brazil is the world’s third-largest oral care market.
Consumption of toothpaste in Brazil is high, with 99% usage and 90% of people brushing twice
or more times per day. According to estimates from the WHO, 60% to 90% of school-aged
children, and nearly all adults suffer from caries. Colgate estimates that 5.4 billion people suffer
from active caries at some point in their lives. That means that almost every person has the
potential to be a customer.
Consumer demand is highly sensitive to price which might be the result of several factors. First,
a high competition rate in the given category makes it easier to switch to another less expensive
toothpaste. Second, roughly 21% of Brazil’s population lives in poverty, and the expected GDP
per capita shows that the situation is unlikely to change in the near future.
Economic Environment
Colgate is a $17.4 billion consumer products company with an operating profit of over $3.5
billion. Their products are marketed in over 200 countries, and they employ more than 37,000
people. Forty-six percent of Colgate’s sales worldwide come from the oral care category, with
80% of Colgate’s revenue being generated from outside the U.S.; more than 50% of which
comes from emerging markets. Overall, oral health is a significant concern in high income
countries, accounting for 5-10% of total public health spending (pg.3).
By launching a new product in Brazil, Colgate will face the challenges that come with their
difficult economic situation. Brazil has the 7th largest economy in the world ranked by total
gross domestic product, but is 95th in GDP per capita. Roundly 21% of Brazil’s population lived
in poverty in 2012. To change the situation and reduce the population living in poverty, or at-risk
of poverty, by half, the growth of Brazil’s GDP per capita should be higher than 4.2%, but
annual growth was only 1.2%.
Natural Environment
Colgate puts immense effort into its sustainability programs. Particularly, they established an
approach to improve outcomes in three pillars: “People,” “Performance,” and “Planet” (pg. 4).
Their sustainability strategy sets targets to “improve the health of its employees around the
world, improve the sustainability profile of its products, and reduce its manufacturing
environmental footprint (including specific goals related to reduction of water usage, greenhouse

3. 2
gases, and waste production), as well as contribute to the communities in which it operated,
including expanding the company’s flagship Bright Smiles™, Bright Futures oral health
education program” (pg. 4).
Technological Environment
Crest toothpaste led the shift from marketing based on therapeutic benefits to preventing caries
(pg.2). In 1955, Procter & Gamble (P&G) launched Crest toothpaste with its patented fluoride,
which resulted in 20% fewer cavities (pg.2). In 1983, Colgate’s first toothpaste, Colgate Dental
Cream served as both cosmetic and oral cleaning purposes (pg. 2).
Colgate’s CMCP+SAN toothpaste relies on the anti-caries properties of arginine in combination
with an insoluble calcium compound and fluoride. A product that incorporates arginine with an
insoluble calcium compound is as effective as 1,000 parts per million (ppm) fluoride. Pro-
Argin™ technology, which Colgate acquired the rights to in 2005, helps prevent the drop of pH
levels caused by the acids derived from the carbohydrates found in many foods and beverages,
which Colgate refers to as “sugar acids.”
Clinical trials proved that the combination of 1.5% arginine, an insoluble calcium compound,
and 1,450 ppm fluoride in CMCP+SAN prevents 20% more new cavities over a two-year period
compared to toothpaste with 1,450 ppm fluoride alone. CMCP+SAN is proven to combat the
effect of sugar acids on plaque pH levels and to strengthen the tooth enamel to prevent damage
from demineralization and to remineralize four times more effectively versus toothpaste with the
same level of fluoride alone.
Competitive Environment
Internal
Within the Colgate family, the Big Red and Colgate Triple Action make up their base product
offering. Colgate needs to consider the possibility that CMCP+SAN may replace its base
products and determine if that is the intended effect or if it will erode the success of its current
product offerings. Colgate Total is the brand’s premium product. If Colgate positions
CMCP+SAN in the same premium tier but at a slightly discounted price compared to Colgate
Total, customers might trade down from Colgate Total due to the lower price.
External
Crest® toothpaste led the shift to marketing toothpaste based upon therapeutic benefits by
obtaining the endorsement of the American Dental Association in 1960. As a consequence of
P&G’s patents on Crest® toothpaste, competitors, including Colgate, were unable to launch their
own fluoride toothpaste products until seven years later. By the time Colgate added fluoride to its
toothpaste, many consumers considered Crest® to be the leading therapeutic toothpaste.
In 1997, Colgate offered Colgate Total which was designed to handle all aspects of oral care in
one toothpaste; it has subsequently become the leading toothpaste in the U.S. In 2013, Colgate
held 45% value share of the worldwide toothpaste category. Today, all major industry players,

4. 3
including Procter & Gamble, GlaxoSmithKline, and Colgate itself have launched products with
the maximum amount of fluoride allowed by health authorities (pg.1).
Presently, Colgate holds strong positions in both the world and Brazilian toothpaste markets.
Colgate’s worldwide share is 44.6% with the closest competitor trailing at 14.4%. Colgate holds
approximately 70% of the Brazilian market of toothpaste upon retail price and 62% of the market
upon amount of selling toothpaste.
Product Environment
Many customers consider Crest to be the leading therapeutic toothpaste, because it was the first
toothpaste company to introduce fluoride as an ingredient. However, by the 1990s, almost all
U.S. toothpaste products contained fluoride. Thus, marketing toothpaste on the basis of caries
prevention is no longer a basis for differentiation; consumers instead seek solutions for halitosis,
tooth discoloration, and sensitive teeth. Most toothpaste category growth is driven by innovation
in the premium tier, which aims to trade up consumers to higher-value products.
Company Analysis
Colgate-Palmolive Company is the world’s leading oral care company. It has four core
businesses: oral care, personal care, home care, and pet nutrition. Colgate’s oral care category
includes toothpaste, toothbrushes, mouthwash, and interdental devices.
Table X. Distribution of Company Net Sales, by Business Segment
2013 2012 2011
Oral Care 46% 44% 43%
Personal Care 21% 22% 22%
Home Care 20% 21% 22%
Pet Nutrition 13% 13% 13%
In 2013, Colgate’s net sales was more than $17 billion and there was constant increase in net
sales and gross profit during 2011-2013. There was a small decrease in net income in 2013
compared to 2012.

5. 4
Table X. Colgate-Palmolive Summary Financials (millions), 2011-2013
2013 2012 2011
Net Sales 17,420 17,085 16,734
Cost of Sales 7,219 7,153 7,144
Gross Profit 10,201 9,932 9,590
Selling, general and administrative expenses (SG&A) 6,223 5,930 5,758
Operating profit 3,556 3,889 3,841
Net Income 2,241 2,472 2,431
Colgate’s sub-brands include Colgate® Sensitive Pro-Relief™, Colgate® Maximum Cavity
Protection™ (also known as “Big Red”), Colgate® Max Fresh™, Colgate® Optic White™,
Colgate® Luminous White™, and Colgate Total®. Colgate Total® is Colgate’s leading
toothpaste brand.
Key indicators for success include: market share, net sales, earnings per share, metrics on
working capital, capital expenditures, cash flow and return on capital.
Why Colgate needs to launch a new toothpaste (CMCP+SAN) in Brazil
Before launching a new product, it is vital for Colgate to weigh the pros and cons of adding a
new product to their existing offering. It is also crucial to consider the overall strategy of
positioning and target markets. Before launching CMCP+SAN in Brazil, the world’s third-
largest oral care market, Colgate needs to weigh their public health and sustainability goals
alongside maximizing the economic value to Colgate’s shareholders (pg. 1). Overall, the
company’s entire growth agenda is driven by its four strategic initiatives: “engaging to build our
brands”; “innovation for growth”; “effectiveness and efficiency”; and “leading to win” (pg. 2). In
the past, Colgate’s frequent product innovations and effective marketing helped achieve strong

6. 5
brand penetration and distribution worldwide (pg. 2). Despite the perception that the issue of
caries has been solved by the previous technological advancements within the oral care industry,
caries remain a significant threat to public health in many countries, both developing and
developed. Moreover, people living in areas with poor access to oral health facilities, with aging
populations, or with high consumption of sugary foods and beverages are most likely to suffer
from caries (pg. 4).
Approximately 25% of the worldwide toothpaste market by value is in ‘mainstream anti-caries
products,’ such as Colgate® Big Red and Colgate® Triple Action toothpastes and the largest
share of Colgate’s volume sales came from this segment, however, it is growing at a slow rate.
By introducing CMCP+SAN, Colgate is addressing its need to stay relevant by continuously
innovating and meeting a continuing need within the oral care industry. Moreover, by choosing
to enter a market like Brazil, Colgate is recognizing two factors: first, that Brazil is one of their
largest consumer segments - Latin America has the biggest net sales by region for Colgate and
the second in organic sales growth (pg. 14). Secondly, that it is their largest consumer segment
with a high proportion of its population below the poverty line - roughly 21% of Brazil’s
population of over 200 million lived in poverty in 2012 (pg. 9). Due to this fact and the fact that
people living in areas with poor access to oral health facilities, with aging populations, or with
high consumption of sugary foods and beverages are most likely to suffer from caries (pg.4) this
is a significant target market for Colgate. Thus by introducing a product like CMCP+SAN,
Colgate is recognizing the need for preventative oral health care practices due to the lack access
to oral health facilities within the Brazilian market.

7. 6
SWOT Analysis
Strengths Weaknesses
Colgate-Palmolive brand
● Colgate-Palmolive Company is the
world’s leading oral care company
with 44.6% of the world’s market
share.
● Colgate is a $17.4 billion consumer
products company with an operating
profit of over $3.5 billion.
● Colgate’s products are marketed in
over 200 countries, and it employs
more than 37,000 people.
● Colgate’s frequent product innovations
and effective marketing helped
achieve strong brand penetration and
distribution worldwide.
● Colgate tracks the purchasing power
of low-income consumers in all
emerging markets to ensure its
products are priced affordably (pg. 3).
● In 2013, Colgate’s toothpaste market
shares had increased in Europe/South
Pacific, Asia and Africa/Eurasia (pg.
3).
● Diverse product line
CMCP+SAN technology
● The new CMCP+SAN toothpaste
contains 1.5% arginine, an insoluble
calcium compound, and fluoride,
which is clinically proven to reduce
and prevent cavities more effectively
than toothpaste with the same level of
fluoride alone.
● Dr. Israel Kleinberg worked for
decades to understand arginine’s
caries-prevention properties before
achieving clinical results showing that
a product that incorporates arginine
with insoluble calcium compound is as
effective as 1,000 parts per million
fluoride.
● Colgate acquired the rights to the
Colgate-Palmolive brand
● In 2013, Colgate’s toothpaste market
shares had decreased in North
America and Latin America versus
2012 (pg. 3).
CMCP+SAN technology
● The ingredients of CMCP+SAN are
more expensive than those of Big Red,
so a higher price would be needed to
maintain the same absolute and/or
percentage margin.
● When Colgate performed a simulated
test market to measure the potential
demand for an upgraded Big Red
product, it estimated that 4% of
current Big Red consumers did not
care for the “new” taste of
CMCP+SAN.
● Colgate can’t simply add SAN to the
existing Colgate Total® formulation,
due to technical hurdles.
Marketing
● In many markets, Big Red no longer
receives advertising support, so the
country managers need to divert funds
that were previously allocated to
higher-priced products like Colgate
Total® to promote CMCP+SAN.
● Country managers would also have to
offer a trade deal on CMCP+SAN to
Colgate’s retail customers or risk them
delisting existing stock-keeping units
(SKUs) to make space for
CMCP+SAN.
● CMCP+SAN’s formula similarity to
Big Red could make it easier to move
consumers to the new product, but
they might have difficulty
understanding the value proposition of
the higher-priced CMCP+SAN.

8. 7
technology which it referred to as Pro-
Argin™ technology.
● Colgate has performed two clinical
trials, in China and in Thailand.
● In a clinical trial, arginine proved to
reduce 20% more cavities than
fluoride over a two year period.
CMCP+SAN Positioning Strategy
● Colgate tested the new CMCP+SAN
product in 4 markets: India, Colombia,
Mexico, and the U.K.
● The product is meant for emerging
markets, but also tested well in
developed markets.
Marketing
● The package for CMCP+SAN is
purple to help it stand out on a shelf
whereas most packages are either red
or blue.
● Colgate’s team of public health
professionals are especially engaged in
the CMCP+SAN launch planning.
● Colgate created partnerships with
public health-focused organizations
and government health agencies to
promote the health care benefits of
CMCP+SAN to dentists, hygienists,
and dental schools.
● Regional managers are responsible for
developing and funding the marketing
efforts for their country’s product
portfolio, which helps the company
stay attuned to cultural differences.
● Thanks to the nine Consumer
Innovation Centers (CICs), Colgate’s
new products incorporate both global
innovations and local market
knowledge.
● In 2013, Colgate spent $267 million
on research and development activities
across all four of its businesses.
Sustainability Programs
● By 2013, Colgate has received
● Caries prevention was no longer
considered a “premium benefit,” so
consumers might be unwilling to pay a
higher price for additional caries
prevention (pg. 8).

9. 8
numerous accolades from independent
organizations for its various initiatives
(pg. 4).
● Colgate developed a Product
Sustainability Scorecard to measure its
progress and has set ambitious goals
for the future.
Community Outreach Programs
● In 1998, the first clinical study
measuring the effectiveness of Bright
Smiles, Bright Futures’ (BSBF) found
that children exposed to the
curriculum showed statistically
significant improvement compared to
controls (pg. 6).
Opportunities Threats
Toothpaste technology
● All major industry players have long
ago launched products with the
maximum amount of fluoride allowed
by health authorities. Yet caries
remain a significant threat to public
health in many countries, both
developing and developed. Thus
products that can solve this solution
have the potential to be highly
successful.
Market
● Brazil is the world’s third-largest oral
care market.
● 80% of Colgate’s revenue was
generated outside the U.S., with more
than 50% coming from emerging
markets.
● Latin America has the biggest net sales
by region for Colgate and is second in
organic sales growth.(pg.14)
Oral Care and Public Health
● Although oral health issues are more
common in poorer countries, oral
health is also a significant concern in
Oral Care and Public Health
● Caries protection is no longer
considered a “premium benefit” in the
category.
● Colgate faces the challenge of turning
the oral health conversation back to
caries. Although caries is still a key
public health issue, caries protection is
not a competitive differentiator within
the toothpaste category.
Pricing
● Consumer demand is highly sensitive
to price which could affect the success
of introducing a new, more premiumly
priced product; especially if Colgate
chooses the first solution: replace Big
Red with CMCP+SAN.

10. 9
high-income countries, often
accounting for 5% to 10% of total
public health spending.
● In the U.S. alone, children miss more
than 51 million school hours each year
for dental-related reasons, with poor
children suffering nearly 12 times
more restricted-activity days than
children from higher-income families.
● Dental caries, or cavities, are the most
common chronic disease worldwide.
● Dental caries can be prevented by
regular and thorough oral hygiene
practices, reduced sugar consumption,
and effective exposure to fluoride.

11. 10
Problem Statement
What positioning strategy should Colgate choose for launching their new Colgate Maximum
Cavity Protection plus Sugar Acid Neutralizer (CMCP+SAN) in Brazil?
Critical Factors
1. Product positioning - In order for CMCP+SAN to be successful in Brazil, Colgate needs to
convince consumers that caries prevention is still a point of differentiation within toothpaste
products.
2. Price - The price of the product will be directly related to the product positioning.
3. Cost -
a. Ingredients - The ingredients of CMCP+SAN are more expensive than those of the
base products. The costs of packaging and distribution may vary.
b. Advertising - The process of launching CMCP+SAN requires the advance cooperation
of the public relations, professional relations, and consumer marketing teams, and
involves investments in public and professional relations versus traditional consumer
market.
4. Competition - (both internal and external) - Internally, CMCP+SAN will compete with
Colgate’s other products, particularly Big Red and Colgate® Total. Externally, CMCP+SAN
will compete with all the other oral care brands, particularly Crest®.
5. Technology - The combination of 1.5% arginine, an insoluble calcium compound, and 1,450
ppm fluoride in CMCP+SAN prevents 20% more new cavities over a two-year period
compared to toothpaste with 1,450 ppm fluoride alone.
6. Economic situation - Due to the economic situation in Brazil consumer demand is highly
sensitive to price.
7. Market - CMCP+SAN will be launched in Brazil, the world’s third-largest oral care market,
and will later expand to the global market.

12. 11
Solution 1: Replace the base product
This solution involves the replacement of Big Red with CMCP+SAN. It this case, the new
toothpaste will be positioned as an anti-caries base product. Because the ingredients of
CMCP+SAN are more expensive than those of the existing base products, the price of this
product would be higher than the price of Big Red.
Target audience
CMCP+SAN will target those looking for premium cavity protection, but are more concerned
with the cheapest price. It will also target existing Colgate brand enthusiasts.
Pricing strategy
The price will be higher than the base price of Big Red. This is necessary because of the higher
cost of the ingredients for CMCP+SAN and the promotion and advertising budget (there was no
advertising spending on Big Red during the past several years).
The price for Big Red is R$2.05 and an even slight increase of price in terms of money will lead
to a significant increase of price in percentage terms, which is risky because of Brazilian demand
being highly sensitive to price due to the economic situation. Colgate holds approximately 70%
of the Brazilian market of toothpaste with regard to retail price and 62% of the market in terms
of amount of selling toothpaste. This indicates that the company sells more expensive toothpaste
and competitors have stronger positions within the Base Tier. Despite the fact that the Base Tier
segment is the biggest for Colgate (based upon volume sales in kilograms), the company risks
losing customers.
The price will be increased because of increased expenses, but the level of profit will be the same
($0.12 per kilogram). That means that the company will have the same amount of profit (if all
Big Red’s buyers switch to the new CMCP+SAN) or will lose money (if some of customers
decide that price is too high and switch to another brand).

13. 12
Advertising support
Replacement of the base toothpaste requires a higher price due to the more expensive ingredients
in CMCP+SAN. Therefore, this solution involves the least advertising and promotion expenses,
compared to the other two positioning solutions. Colgate plans to spend $3 million for a value-
priced product over the first three months and $5 million over the first year. There are included
costs for public relations activities, the professional relations budget, and consumer markets.
Shelf placement/point-of-purchase materials
Would replace the recognizable Big Red on the shelf. That should be a lower-medium shelf
level, because CMCP+SAN is a Base segment and should be placed below Premium and Mid-
Tier. It could be placed higher in the beginning until the end of the initial promotion period.
Product positioning
The toothpaste that gives the most effective cavity protection at the most valuable price point.
Packaging
Package in 90g packages - similar to Big Red, the new CMCP+SAN will maintain customers’
familiarity to the brand.
Competition
Other base toothpastes within the Colgate family and toothpastes of other leading producers.
Pros
● Replacing Big Red will cause less confusion between Big Red and CMCP+SAN, and
will reduce consumer questioning why they should or shouldn’t pay more for the
CMCP+SAN product.
● There is no media support of Big Red and CMCP+SAN can fill this hole.
Cons
● Customers are familiar with Big Red. It is difficult for them to switch from one base
product to another.
● The ingredients of CMCP+SAN are more expensive than those in Big Red and
CMCP+SAN would need to carry a higher price than Big Red in order to return the same
margin (pg. 8).
● Four percent of current Big Red consumers did not care for the “new” taste of
CMCP+SAN (pg. 7).
● In 2013 in Brazil, the base products volume share accounted for 29% of total volume
share. Introducing a new product may cause result in the loss of some customers loyal to
Big Red (pg.19).
● There was no advertising support of Big Red during the last several years and the
company will have to allocate advertising budget.

14. 13
Solution 2: Make CMCP+SAN a premium new product
Position CMCP+SAN as a new premium product, priced just below Colgate’s premium brand,
Colgate Total. The product would appeal to customers who seek a premium product with extra
caries protection. Those in favor of the approach argue that a patent-protected, anti-caries
toothpaste that is superior to fluoride provides a compelling value proposition to consumers and
should command a higher price than Big Red. However, others are concerned that
CMCP+SAN’s superior caries prevention would motivate some consumers to trade down from
Colgate Total®. Due to technical hurdles, Colgate can’t simply add SAN to the existing Colgate
Total® formulation.
Target audience
Those who value cavity protection the most when it comes to oral care and those willing to pay a
premium for superior caries protection.
Pricing strategy
This solution involves premium positioning. Colgate produces three toothpastes that are included
in the Premium Tier: Colgate Total, Colgate Sensitive Pro-Relief, and Colgate Luminous White.
By positioning CMCP+SAN as a premium toothpaste, it will compete with Colgate Total and the
differences in cost structure will be the following:
● Expenses for packaging and distribution should be at the same level as Colgate Total has
now ($0.36 and $0.15 respectively).
● Ingredients for CMCP+SAN are cheaper than ingredients for Colgate Total.
● Advertising and promotional expenditures are higher for the new product.
If the company chooses this strategy, the price of the new CMCP+SAN will be just below
Colgate Total. It is possible to achieve reduced profits per kilogram. However, this pricing
strategy creates a risk of switching from more expensive Colgate Total to less expensive, but still
premium new toothpaste. If it happens, the company’s profit will decrease.
Advertising support
Positioning CMCP+SAN as a premium product will require a bigger advertising budget, and

15. 14
Colgate plans to spend $6 million over the first three months and $15 million over the first year.
This budget will be divided between public relations, professional relations, and consumer
marketing teams.
Having a bigger budget for professional relations, Colgate will be able to involve more
professionals in the campaign and distribute more toothpaste samples via BSBF kits.
Shelf placement/point-of-purchase materials
Would be placed at the most prominent position on the shelf, alongside with Colgate Total to
catch customers’ attention for the first three months. After three months, it will be placed
beneath Colgate Total, but above Big Red because it is still a premium product.
Product positioning
The toothpaste that gives the most effective cavity protection at a premium price.
Packaging
Package in 70g packages - consumers may be more willing to buy a premium product if they
have to pay less for it (i.e., smaller quantity, less initial investment).
Competition
Colgate Total, other premium toothpastes.
Pros
● Most toothpaste category growth was driven by innovation in the premium tier, which
aimed to trade up consumers to higher-value products (pg. 3).
● CMCP+SAN contains a patent-protected, anti-caries formula featuring Arginine. It has
been clinically proven as superior to fluoride and could provide a compelling value
proposition to consumers. For this reason, it should command a higher price than Big
Red.
● Big Red and other baseline products still own their market share because the new product
does not threaten their already established markets.
● Positioning CMCP+SAN in the premium tier would reduce the risk of loss-making
cannibalization and significant trade-downs from the premium tier to the Mid-Tier (pg.
11).
Cons
● With the launch of CMCP+SAN, Colgate Brazil might have to allocate more funds to
Colgate Total to reemphasize its premium positioning (pg. 11).
● The lower price of CMCP+SAN and the superior caries prevention, compared to Colgate
Total, may trigger some consumers to trade down from the latter, and as a result cause
Colgate Total to lose long-term customers, and potentially lose its position as a leading
product (pg.8).

16. 15
Solution 3: Launch a line extension
Colgate could add a line extension to its existing anti-caries/Big Red products that would only
feature the CMCP+SAN technology. A line extension would allow CMSP+SAN to be priced
above the base product, but would be less likely to motivate trade-downs from premium-priced
Colgate Total®. Launching CMCP+SAN as a line extension of the existing anti-caries products
could ensure that superior cavity protection is accessible to consumers who need it the most,
which would produce greater public health benefits and, over time, could convince consumers to
trade up.
Target audience
Since Colgate strives to produce greater public health benefits, their audience are those who look
for premium cavity protection, and are more concerned with the cheapest price, but are able to
pay a higher price. It will also target existing Colgate brand enthusiasts. That may be people who
live in the poorest areas of Brazil with limited access to oral health facilities, aging populations,
or with high consumption of sugary foods and beverages.
Pricing strategy
Launching a line extension to its existing suite of anti-caries/Big Red products, this solution
involves the same spending for packaging and distribution as Big Red, but more expensive
ingredients. Price of the CMCP+SAN will be premium to base, but lower than price of the
toothpastes of Premium Tier (e.g. Colgate Total). CMCP+SAN could be positioned as a Mid-
Tier toothpaste based on the price level.
Advertising support
A line extension would allow CMCP+SAN to be priced above the base product and lower than
the premium product. There will need to be an increase in advertising and promotional spending
compare to the base segment, because Big Red no longer received advertising support, but there
costs per kilogram will be lower than the one for premium tier. Colgate plans to allocate
advertising budget between $3 million (for a value-priced product) and $6 million (for a
premium-priced product) over the first three months. That means that for mid-tier spending for

17. 16
advertising and promotion could be $4.5 million over the first three months or $11.25 million
over the first year.
This budget will be spent on establishing and maintaining professional relations, public relations,
and consumer marketing activities.
Shelf placement/point-of-purchase materials
CMCP+SAN would be placed between the Big Red and Colgate Total, with the Total on the top
of the shelf. It will be distributed to general grocery stores, and other “mom-and-pop” retail
outlets.
Product positioning
The toothpaste that gives the most effective cavity protection at a reasonable price point, without
the risk of consumers trading down from any other premium products. This toothpaste is more
efficient than the base Big Red, but its price is only slightly higher.
Packaging
Available in both 90g and 70g packages - this will entice consumers to try out the smaller
version first if they are sensitive to price, later if they like the new product they will move to a
bigger version.
Competition
Other effective fluoride toothpastes, other types of toothpastes for whitening, halitosis, gum care,
etc.
Pros
● A line extension would allow CMCP+SAN to be priced above the base product, but
avoid trading down from Colgate Total (pg. 8).
● Since CMCP+SAN is a product that ensures superior cavity protection, it will be
accessible to emerging markets where people need the products the most, which will
produce greater public health benefits.
● CMCP+SAN would be placed at eye-level-a high visibility location, before eventually
moving next to or above Big Red. (pg.13) This would increase Colgate brand awareness,
also introduce to the customers about the product new innovation.
Cons
● The formula’s similarity to Big Red would make it easier to move consumers to
CMCP+SAN, but they might have difficulty understanding the value proposition of the
higher-priced CMCP+SAN (pg. 8) because caries protection is no longer considered a
“premium benefit” in the category (e.g., all other toothpastes sold on the basis of caries
protection were value-priced), so consumers might be unwilling to pay a higher price for
additional caries protection (pg. 8).
● A new mid-tier toothpaste could prevent switching customers from Big Red directly to
Colgate Total®, because there will be another better, but cheaper toothpaste.

18. 17
Recommendation
Solution 3 - Launch a line extension
We recommend Colgate introduce CMCP+SAN as a line extension to its existing anti-caries/Big
Red products that would only feature the CMCP+SAN technology. A line extension would allow
CMCP+SAN to be priced above the base product, but would be less likely to motivate trade-
downs from premium-priced Colgate Total®. Launching CMCP+SAN as a line extension to the
existing anti-caries products would ensure that superior cavity protection is accessible to
consumers who need it the most, which would produce greater public health benefits and, over
time, could cause customers to trade up.
CMCP+SAN will be positioned as an advanced base product, because the price will be within
range of the mid-tier products due to its superior anti-caries technological advancements. In
order to ensure that consumers understand the value proposition of this new product, the
marketing, advertising, and PR efforts will need to demonstrate the continued need for anti-
caries products, and their value as preventative measures for consumers who have limited access
to oral health care facilities. By increasing the price of CMCP+SAN to just above the base level,
Colgate will have money in the operating budget to address these critical advertising and public
relations needs. “Caries prevention is important, but currently consumers and dentists aren’t that
focused on caries,” (p. 11). This solution will ensure that Colgate has the resources it needs to
address this issue through establishing and maintaining professional relations and advertising and
PR initiatives.
The new CMCP+SAN product will be packaged in both the normal 90g tubes and the 70g tubes.
The rationale for offering this product in a smaller tube size is that the smaller tube’s price will
be more comparable to current base tier products. Additionally, it will allow consumers to test
out this new product without investing a large quantity. If they decide the product is superior to
the existing products within the same tier, they may trade up to the slightly larger size. Later
Colgate may launch whitening and junior variants additionally.
By positioning CMCP+SAN as an advanced base product, Colgate could significantly improve
oral health for a much broader segment of the Brazilian population. By launching a new more
advanced base-tier product, Colgate may distribute it through BSBF kits and partnership with the
Brazilian Ministry of Health. While keeping the same level of profit, Colgate may execute its
oral health educational program, and partner with public health-focused organizations and
government health agencies to train dentists and hygienists to reach the in-need population in an
effective way. This strategy fits Colgate’s image of building sustainable communities.