Detailed analysis of Colgate-Palmolive Company: The Precision Toothbrush ( Harvard business school) case study.

1. Colgate-Palmolive Company: The Precision
Toothbrush
Harvard business school case

2. Problem statement

3. To define positioning, branding, and communication
strategies for its new product
Colgate precision
As well as what the advertising and promotion budget
should be and how it should be broken down.

4. Key players

5. Susan Steinberg
• Precision product manager
Nigel Burton
• Division general manager
Reuben Mark
• CP’s C.E.O

6. Colgate precision
INTRODUCTION

7. •In 1992,Colgate-Palmolive set to launch it.
•It is developed for over three years.
•It is technologically superior toothbrush having
triple-action brushing effect.
•It removes an average 35% more plaque than other
leading brushes.

8. CP’s U.S. toothbrush business

9. The U.S. Toothbrush Market

10. Product segmentation &
positioning

11. Industry executives divided the toothbrush category
into three segments
•Value
•Professional
•Super- premium

13. Positioning
Precision was developed with the objective of creating the
best brush possible and as such, becoming a top-of-the
range, super-premium product.

14. Niche product
• It targets consumers concerned about
gum disease
Mainstream product
• It has broader appeal of being the most
effective brush available on the market

16. Capacity and Investment Costs

17. Production Costs and Pricing

18. •It included warehousing and transport costs.
•All sales to the trade were made at a discount of approximately 5%
•Eighty percent of sales through dental professionals would be priced
at $0.79 per unit; the remainder would be sold at $0.95.

19. Under Niche Positioning Strategy
CP would establish a factory list price to the trade of
$2.13, a premium over Oral-B regular and at parity with
Oral-B Indicator.
Best location on the retail shelves would be between the
Colgate Plus and Oral-B product lines, with the Colgate
Classic product line on the other side of Colgate Plus.
If positioned with 4 SKUs, it was unlikely that any
existing SKUs would be dropped.

20. Under Mainstream positioning strategy
CP would establish a factory list price to the trade of $1.85,
at parity with Oral-B regular.
It could be located separately from the other Colgate lines,
close to competitive super-premium toothbrushes such as
Aquafresh Flex and Crest Complete.
If positioned with 7 SKUs, would probably require dropping
one or more existing SKUs such as a slow-moving
children’s brush from the Plus line.

22. Competition

23. Major competitor brands in the super-premium
segment included
•Oral-B
•Reach Advanced Design
•Crest Complete
•Aquafresh Flex

25. Branding

26. Brand choice was based on
•Features
•Comfort
•Professional Recommendations

27. Reasons to buy toothbrush

28. Advertising and promotion

29. Media expenditure and share of voice

30. Competitor brands and their strategies

32. Display racks

33. Display Rack Capacity (brushes) Percentages of special Colgate
displays(%)
Counter unit 24 to 36 10
Floor stand 72 50
Sidekick 144 to 288 25
Top shelf 288 to 576 15
The CP toothbrush line held 25% to 40% of the
category shelf space in most stores.

34. Suggestion

35. Positioning
AS NICHE PRODUCT DURING ITS INTRODUCTORY AND
GROWTH LIFE CYCLE STAGES, LATER DURING THE
PRODUCTS’ MATURITY, IT SHOULD BE REPOSITIONED TO
THE MAINSTREAM PRODUCT

36. Reasons
•None of the 4 SKUs would be dropped when positions in niche
segment.
•In niche segment Precision retail shelves will be steup close to the
super-premium toothbrushes of the competitors, Colgate hopes to
make consumers aware about the additional benefits of Precision as
compared to the competitor’s niche brands.

37. Reasons (Contd..)
•If positioned as mainstream product, its production capacity would require
10 months lead-time and this sudden switch would also cause a shortage in
supply
•A negative result of channelling the Precision toothbrush through the
mainstream market is that the Children’s Plus model would need to be
dropped in order to make room for another product on shelf among the
other professional models. As a result, CP would also go another year
without any super-premium SKU on the market.

38. Communication
A TRIAL SHOULD BE INDUCED AS PER THE MARKET

39. In strong competitive markets
Free 5 oz. tube of Colgate toothpaste (retail value of $1.89) with the
purchase of a Precision brush
In strong Colgate markets
50%-off offer on any size of Colgate toothpaste (up to a value of
$1.00) in conjunction with a 50¢ coupon on the Precision brush.

40. Reason
Consumer research revealed that the more
test consumers were told about Precision
and how it worked, the greater their
enthusiasm for the product.

41. Branding
AS COLGATE PRECISION

42. Reason
•Colgate Precision name was consistently
viewed more favourably.
•it was deemed appropriate by 49% of
concept acceptors and appealing by 31%

43. Advertising and promotion
AS CONCEPT 4 OF PROTOTYPE ADVERTISEMENT

44. Prototype print advertisement

48. Reason
TEST 1:
(69+68+66)/3 = 67.67 % Probably Would Buy
(15+15+10)/3 = 11.67 % Definitely Would Buy
Conversion = 11.67/67.67 = 17.24%
TEST 2:
(80+71+74+68)/4 = 73.5% Probably Would Buy
(19+19+18+14)/4 = 17.5% Definitely Would Buy
Conversion = 23.81%

49. Reason (Contd..)
TEST 3:
(63+72+62+66)/4 = 65.75 % Probably Would Buy
(13+16+11+14)/4 = 13.5 % Definitely Would Buy
Conversion = 20.53%
TEST 4:
(87+61)/2 = 74% Probably Would Buy
(19+48)/2 = 24% Definitely Would Buy
Conversion = 32.43% (Maximum)

50. Budget
Category Allocation
Advertising $5 million
Promotion $6.2 million
Total $11.2 million

51. Disclaimer
Created by Saurabh Kumar, NIT Delhi , during a marketing
internship by Prof. Sameer Mathur, IIM Lucknow