Colgate Palmolive was considering launching a new precision toothbrush. They could position it as either a niche product targeting gum health or a mainstream product. As a niche product it would capture less of the market more slowly but with less risk, while mainstream would capture more of the market faster but with greater risk. They analyzed test marketing and financial projections. In the end, they recommended initially positioning it as a niche product to appeal to consumers concerned with gum health, then potentially expanding it mainstream later.

2. Colgate Palmolive
The Precision Toothbrush
CP was a global leader in household and
personal care products.
With sales of $6.06 Billion and gross profit of
$2.76 billion.
Colgate Palmolive (CP), a market leader in
the development and delivery of oral care
products

3. Problem Statement
Outlining the
Marketing strategy
(Positioning,
Branding and
Communications) to
the new toothbrush :
Colgate Precision

4. Colgate- Palmolive’s Oral
Care Business
CP offered two lines of toothbrushes in 1991—
the Colgate Classic and the Colgate Plus.
• Colgate Classic positioned in the “value”
segment and was CP’s original entry in the
toothbrush market
• Colgate Plus positioned as a higher-quality
product in the “professional” segment.

6. • CP’s International sales, account for
64% of sales and 67% of profits in
1991, showcase their brand Image.
• Precision Toothbrush launched by
CP is a Technical Innovation .
• Precision toothbrush prevent gum
diseases motivated the greatest
purchase intent among consumers.
STRENGTHS

7. • Introduction of Precision toothbrush
may cannibalize the sales of Colgate
Plus and Colgate Classic
• Media expenditure of the brand is
limited compared to its rivals
• Lack of dental endorsements for the
brand
WEAKNESS

8. • CP’s consumer research revealed that
46% of adult consumers are concerned
about the health of their gums and are
willing to pay premium for
new products addressing the issue.
• Super-premium category can help
increase market share
• Precision brushes could be channeled
through Dental Professionals to
increase their Brand Image.
OPPURTUNITIES

9. • Positioning Precision as a
mainstream toothbrush raised
concerns about the possible
cannibalization of Colgate
Plus.
• Because of the recent market
saturation, the various
producers of oral health care
products have rushed to offer
promotional incentives
including two-for-one, buy-
one-get-one-free and mail-
in refund coupon deals.
THREATS

11. Product Segments
Toothbrush Industry divided the three main segments on the basis
of price: value, professional and super-premium.
In 1992, three players dominated the U.S. toothbrush market
overall: Colgate-Palmolive and Johnson & Johnson, whose
brushes were positioned in the professional segment; and Oral-B,
whose brushes were positioned in the super-premium segment.
New Entrants :Procter & Gamble, Smithkline Beecham both
had positioned their new product launches in the super-premium
segment

12. Values
Retail Prices:
• Super-Premium Brushes, between $2.29 and $2.89, accounted
for 35% of unit volume and 46% of dollar sales.
• Professional brushes, priced between $1.59 and $2.09,
accounted for a corresponding 41% and 42%,
• Value brushes, priced on average at $1.29, accounted for 24%
and 12%.

13. Consumer Behavior
CP estimated that 82% of toothbrush purchases were unplanned, and research
showed that
consumers were relatively unfamiliar with toothbrush prices. Although
consumers were willing to
experiment with new toothbrushes
Buying Behavior of three groups:
1. Therapeutic brushers aimed to avoid oral care problems,
2. While cosmetic brushers emphasized preventing bad breath and/or ensuring
white teeth.
3. Uninvolved consumers were not motivated by oral care benefits and adjusted
their behavior only when
confronted by oral hygiene problems.

14. Psychographic Segmentation
Psychographic is the science of using
psychology and demographics to better
understand consumers. In this buyers are
divided into different groups on the basis
of psychological/personality
traits, lifestyle, or values

17. Major competitor brands in the super-premium segment included Oral-B,
Reach Advanced Design, Crest Complete, and Aquafresh Flex
• Oral-B relied heavily on professional endorsements and was known as “the
dentist’s toothbrush.”
• Johnson & Johnson (J&J) entered the U.S. toothbrush market in the 1970s
with the Reach brand
• Procter & Gamble (P&G) was the most recent entrant in the toothbrush
market with Crest Complete, an extension of the company’s toothpaste
brand name, Crest.
• Smithkline Beecham entered the U.S. toothbrush market, Aquafresh Flex
toothbrushes had flexible handles that allowed for gentle brushing.

18. Company Volume share(%) Value share(%) SKU's
Oral-B 23.1 30.7 27
Johnson & Johnson 19.4 21.8 18
Smithkline Beecham 0.9 1.1 6
Lever 7.2 6.6 5
Companies with their Volume share,
Value Share and SKU’S

19. Advertising and Promotion
• Increased advertising and promotion enhanced the
toothbrush category’s visibility which in turn fueled
consumer demand. Through a series a cleverly designed
promotions such as; giving away a free toothbrush with a
toothpaste purchase, mail-in premiums, buy-1 get-1 free,
coupons, etc.
• Colgate was able to successfully market their products.
One of their most accomplished advertisements was in-
store displays. By utilizing in-store displays sales
increased 90%, and when combining toothbrushes and
toothpastes within a display sales increased 170%.

21. Precision Marketing Mix
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.”
The task force had five goals:

22. • Understanding the varying techniques consumers used
when brushing their teeth
• Testing the between-teeth access of different toothbrush
designs
• Establishing an index to score clinical plaque-removal
efficacy at the gum line and between teeth.
• Creating a bristle configuration and handle design offering
maximum plaque- removing efficacy.
• Determining, through clinical and consumer research, the
efficacy and acceptance of the new toothbrush design.

23. Positioning
Niche Positioning Strategy:
• Targeted at consumers concerned about gum disease.
• As a Niche product, Precision would capture 3 % of toothbrush Market by End
of the year.
• CP could command a 15% price positioning. premium over Oral-B.
• Precision, positioned as Niche Product would be primarily carried by food and
Drug stores.
• Precision as a niche product would not only give Colgate enough time to build
up a stock of the product but would also be able to avoid taking the Children’s
Plus model off store shelves.

24. Mainstream Positioning Strategy:
• Had a Broader appeal
• As a Mainstream product, Precision would capture 10 % of toothbrush
Market by End of the year.
• This volume share was expected to increase to 14.7% in the second year
• Precision, positioned as Mainstream Product would be primarily occur
through mass merchandisers and club stores.

27. Income Pro forma:
Analysis of the Pro forma income statements shows the mainstream
positioning strategy will lose almost $6.7MM in year one, but earn
$16MM in year two whereas a niche strategy loses less money in year
one ($1.4MM) and makes $7.4MM in year two. Hence mainstream
positioning strategy will help CP in long term profits.

29. Branding
• CP 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.
• On the other hand, CP’s stated corporate strategy was to build on the
Colgate brand equity.

30. Arguments for launching precision as (a) a niche product and (b) a
mainstream brand
• CP had the option of either launching Colgate Precision as a niche
product or as a mainstream product. Both these options had
advantages and disadvantages and hence, this made it difficult for
the management to decide which route to choose
• The Colgate Plus product manager, John Phillips, argued that Plus
was the bread-and-butter of CP’s toothbrush line and claimed that
his mainstream brand should receive more rather than less support
if Precision was launched.

31. Communication and Promotions
Once the basic product design was established, four
concept tests conducted, 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

32. RECOMMENDATION
1. Position Precision toothbrush as a niche product
2. Appeal to therapeutic consumers
3. Market the product as providing superior and distinctive
oral care
FUTURE SCOPE
1. Can expand the toothbrush into mainstream market later
2. Can replace Oral-B as the leading brand in Super-
Premium range
3. Can expand into other oral care products for therapeutic
consumers

33. Disclaimer
MBA MARKETING INTERNSHIP
Created by ANSH BHARDWAJ, HBTU KANPUR under
the guidance of Prof. SAMEER MATHUR, IIM-
LUCKNOW